Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

EQUATORIAL GUINEA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Equatorial Guinea is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at the fixed rate of CFAF 655.957 per €1. Exchange transactions in euros between the BEAC and commercial banks take place at the same rate. Buying and selling rates for certain other foreign currencies are also officially posted, with quotations based on the fixed rate for the euro and the rates for the currencies concerned in the Paris exchange market. A commission of 0.5%, excluding VAT, is levied on transfers to countries that are not members of the BEAC. This commission is not levied on transfers relating to central and local government operations, payments for imports covered by a duly issued license and domiciled with a bank, scheduled repayments on loans properly contracted abroad, travel allowances paid by the government and its agencies for official missions, and payments of insurance premiums.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause Equatorial Guinea is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC members and the Comoros) are made freely in CFA francs, euros, or the currency of any other Operations Account country. Settlements with all other countries are usually made through correspondent banks in France in the currencies of those countries or in euros through foreign accounts.
Controls on the use of domestic currencySince September 1993, the BEAC has suspended the repurchase of its bank notes circulating outside the territories of the CFA franc zone.
For current transactions and payments
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Payments arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account. Exchange regulations of CAEMC member countries are harmonized.
Administration of controlExchange control is administered by the Directorate General of Banks, Insurance, and Reinsurance (DBIR) of the Ministry of Economy, Commerce, and Small and Medium- Sized Enterprises (MECSMSE).
International security restrictions
In accordance with UN sanctionsYes.
Payments arrears
OfficialYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are free to hold, acquire, and dispose of gold in any form in CAEMC member countries. Newly mined gold must be declared to the Ministry of Mining (MM), which authorizes either its exportation or its sale in the domestic market. Imports or exports of gold from or to countries outside the CAEMC are subject to authorization by the MM.
Controls on external tradeExports are allowed only to France and countries that maintain an Operations Account with the French Treasury. Exports of gold to other countries require prior authorization from the MM. Exempt from the requirement of MM authorization are (1) imports and exports by or on behalf of the monetary authorities, and (2) imports and exports of manufactured articles containing a small quantity of gold (such as gold-filled or gold-plated articles). Both licensed and exempt imports of gold are subject to customs declaration.
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents traveling for tourism or business purposes to countries in the CFA franc zone are allowed to take out BEAC banknotes in unlimited amounts.
Foreign currencyAll travelers crossing the CAEMC border must declare to customs all foreign exchange and securities exceeding the equivalent of CFAF 1 million. Residents may reexport foreign banknotes up to the amount declared at the time of entry; the reexport of foreign banknotes above this ceiling requires documentation demonstrating their origin. Resident travelers may take with them foreign exchange without authorization, according to preestablished schedules based on the reason for travel; amounts in excess of the schedule require authorization.
On imports
Foreign currencyResident and nonresident travelers may bring in any amount of banknotes and coins issued by the BEAC, the Bank of France, the ECB, or any bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign banknotes and coins (except gold coins) of countries outside the Operations Account area. Since 1994, the BEAC no longer purchases banknotes and loans from the BEAC’s area of issue from any other central bank.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResident legal entities may open foreign exchange accounts with MOF authorization and BEAC approval. However, these accounts may not be funded by CFA franc income in cash or by debiting an account in CFA francs.
Held abroadYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are allowed to open and maintain these accounts. However, these accounts must be reported to the DBIR and must not have debit balances.
Domestic currency accountsBecause the BEAC suspended the repurchase of its banknotes circulating outside the territories of the CFA franc zone, BEAC banknotes received by the foreign correspondents of authorized banks and mailed to the BEAC agency in Equatorial Guinea by the Bank of France or the BCEAO may not be credited to foreign accounts in euros.
Convertible into foreign currencyThese accounts may be converted, but prior approval is required.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsThere are no restrictions on import financing, but certified bank documents are required.
Minimum financing requirementsYes.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions exceeding the equivalent of CFAF 5 million must be domiciled with an authorized bank. Import transactions by residents involving goods for use outside Equatorial Guinea must be domiciled with a bank in the country of final destination.
Letters of creditYes.
Import licenses and other nontariff measuresImport licenses are not required, except for imports of gold.
Negative listImports of some goods are prohibited for security, health, or safety reasons.
Import taxes and/or tariffsEquatorial Guinea applies the common duty rates of the UDEAC on imports from nonmembers (5% for basic necessities, 10% for raw materials and capital goods, 20% for intermediate and miscellaneous goods, and 30% for consumer goods), except for rates imposed on a limited number of luxury goods (15% to 40%). Duties on imports from UDEAC members are set at 20% of those for imports from nonmembers. Fiscal duties and turnover taxes are also applied to imports.
State import monopolyn.a.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to all countries must be repatriated within 30 days of the payment date stipulated in the sales contract. Oil companies are exempt from this repatriation requirement.
Surrender requirementsExport proceeds must be surrendered within 30 days following repatriation.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationExport transactions valued at the equivalent of CFAF 5 million or more must be domiciled with an authorized bank. Exports to all countries are subject to domiciliation requirements and the presentation of appropriate documents.
Export licensesNo.
Export taxesYes.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments may be made freely, but require prior declaration. All operations valued at the equivalent of CFAF 5 million or more must be domiciled with an authorized bank. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when the underlying transactions have been approved.
Trade-related payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testThese apply to the payment of freight and insurance costs.
Investment-related payments
Prior approvalYes.
Quantitative limitsThe transfer of rental income from real property owned in Equatorial Guinea by foreign nationals is permitted for up to 50% of the income declared for taxation purposes, net of tax.
Indicative limits/bona fide testThese apply to payments of profit and dividends.
Payments for travel
Prior approvalYes.
Quantitative limitsResidents traveling for tourism or business purposes to countries in the CFA franc zone are allowed to take out BEAC banknotes in any amount. The allowances for travel to countries outside the CFA franc zone are subject to the following regulations: (1) for tourist travel, the limit is the equivalent of CFAF 200,000 a day an adult, with a maximum ceiling of CFAF 1 million—the limit is half that amount for children under 10 years old; (2) for business travel, the limit is the equivalent of CFAF 500,000 a day a person a trip, with a maximum of CFAF 10 million a person a trip; (3) for education, the limit is the equivalent of CFAF 5 million a student for six months, plus tuition expenses; (4) for official mission travel, the limit is the equivalent of the per diem allowances paid by the government—if the per diems are less than CFAF 200,000 a day, allowances are the same as for tourist travel; (5) for medical treatment, the limit is the equivalent of CFAF 250,000, with a maximum of CFAF 5 million (a higher amount may be provided if justified); and (6) for any other travel, the allowances are the same as for tourist travel. Requests for allowances in excess of these limits are granted when necessary justification is provided. The reexportation by nonresident travelers of all means of payment registered in their names is not restricted, subject to documentation showing that they were purchased with funds drawn from a foreign account in CFA francs or with other foreign exchange.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsThe transfer abroad of wages within the CAEMC is unrestricted; transfers outside the CAEMC are permitted upon presentation of appropriate documentary evidence (e.g., a pay voucher for the relevant period and work contract). Requests to transfer family assistance payments are authorized when justified.
Indicative limits/bona fide testYes.
Credit card use abroadThe use of credit cards, which must be issued by resident financial intermediaries and approved by the MECSMSE, is limited to the ceilings for tourist and business travel allowances.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from transactions in invisibles with France, Monaco, and the Operations Account countries may be retained. All amounts due from residents of other countries for services and all income earned in those countries from foreign assets must be collected within one month of the due date.
Surrender requirementsProceeds earned in countries outside the CFA franc zone must be surrendered within one month of collection if received in foreign currency.
Restrictions on use of fundsn.a.
Capital Transactions
Controls on capital transactionsCapital transactions must be reported to the DBIR.
Controls on capital and money market instrumentsNo exchange controls apply to capital transfers between Equatorial Guinea and France, Monaco, and the Operations Account countries. Capital transfers to all other countries require exchange control approval, but there are no controls on capital receipts from such countries, except for foreign direct investment and borrowing that are subject to registration.
On capital market securities
Shares or other securities of a participating nature
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instrumentsThe regulations governing bonds or other debt securities apply.
On collective investment securitiesThe regulations governing bonds or other debt securities apply.
Controls on derivatives and other instrumentsThe regulations governing bonds or other debt securities apply.
Controls on credit operationsControls apply to all credit operations.
To residents from nonresidentsYes.
Controls on direct investmentCertain privileges are granted to approved direct investments, including the unrestricted transfer abroad of debt payments and net profits.
Outward direct investmentYes.
Inward direct investmentYes.
Controls on liquidation of direct investmentA bona fide test is applied.
Controls on real estate transactionsControls apply to all real estate transactions.
Controls on personal capital transactionsControls apply to all these transactions.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Investment regulations
Abroad by banksYes.
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyYes.
Other controls imposed by securities lawsn.a.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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