Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

FIJI

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

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: August 4, 1972.
Exchange Arrangement
CurrencyThe currency of Fiji is the Fiji dollar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe external value of the Fiji dollar is determined on the basis of a weighted basket of currencies comprising the Australian dollar, the yen, the New Zealand dollar, the euro, and the U.S. dollar. The relative weights are based on three-year moving averages of Fiji’s direction of trade and are reviewed annually. The exchange rate of the Fiji dollar in terms of the U.S. dollar, the intervention currency, is fixed daily by the Reserve Bank of Fiji (RBF) on the basis of quotations for the U.S. dollar and other currencies included in the basket.
Exchange tax
No.No.
Forward exchange marketForward exchange facilities are provided by banks for trade transactions for periods of up to six months for exporters and up to nine months for importers. The amount of a bank’s forward sales is limited to the amount of forward purchases.
Arrangements for Payments and Receipts
Prescription of currency requirementsAlthough no specific requirements exist, settlements must be made in convertible currencies acceptable to both countries.
Payments arrangements
Regional arrangementsFiji participates in the following arrangements: the Fiji/Vanuatu Bilateral Trade Arrangement, the Melanesian Spearhead Group Trade Agreement, PACER, and PICTA.
Administration of controlExchange control is administered by the RBF, acting as an agent of the government; the RBF delegates to ADs the authority to approve current payments and transfers up to specified limits. Documentary evidence is required for some payments.
International security restrictionsn.a.
Payments arrearsn.a.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents may freely purchase, hold, and sell gold coins but not gold bullion.
Controls on external tradeThe exportation of gold coins, except coins and collectors’ pieces for numismatic purposes, requires specific permission from the RBF. The importation of gold, other than gold coins, from all sources requires a specific import license from the MOF; these are restricted to authorized gold dealers. Gold coins and gold bullion are exempt from fiscal duty but are subject to a 10% VAT. Gold jewelry is also exempt from fiscal duty but is subject to a 10% VAT and is not under licensing control. Samples of gold and gold jewelry sent by foreign manufacturers require import licenses if their value exceeds F$200. Exports of gold jewelry are free of export duty but require licenses if their value exceeds F$20,000. Exports of gold bullion are subject to an export duty of 3%.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports are allowed up to F$500 a trip for travel-related purposes only.
Foreign currencyExports are allowed up to the amount declared at the time of arrival. Local travelers are allowed to take out up to the equivalent of F$20,000 in foreign currency (inclusive of a minimum of F$500 in local currency) for each overseas round trip. The limit applicable to a one-way trip is the equivalent of F$5,000.
On imports
Domestic currencyTravelers may freely bring in Fiji banknotes, but must declare them to customs or immigration officials on arrival.
Foreign currencyTravelers may freely bring in foreign currency banknotes, but must declare them to customs or immigration officials on arrival in order to export the unused balance on departure.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts are permitted, but prior approval is required. Resident individuals may open these accounts without RBF approval for amounts up to the equivalent of F$20,000; resident businesses require RBF approval to open accounts for amounts exceeding F$100,000.
Held abroadThese accounts are permitted, but prior approval is required.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited freely with the account holders’ salaries (net of tax), with interest payable on the account, or with payments from other external accounts. Commercial banks are allowed to open foreign currency accounts for regional and international organizations.
Domestic currency accountsThese accounts may be credited freely with the account holders’ salaries (net of tax); with interest payable on the account; with payments from other external accounts; with the proceeds of sales of foreign currency or foreign coins by the account holder; and with Fiji banknotes that the account holder brought into Fiji, acquired by debit to an external account, or acquired through the sale of foreign currency in the country during a temporary visit. External accounts may also be credited with payments by residents for which either general or specific authority has been given. External accounts may be debited for payments to residents of Fiji, transfers to other external accounts, payments in cash in Fiji, and purchases of foreign exchange. Authorized banks are allowed to credit to domestic currency accounts the full amount of the proceeds from sales of Fiji assets. Other unspecified funds up to F$1,000 a month may be deposited.
Convertible into foreign currencyYes.
Blocked accountsn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAuthorized banks may approve up to a delegated limit equivalent to F$1 million of advance payments for imports, if such payments are required by the supplier. Payments exceeding this limit are subject to RBF approval, which is readily given upon submission to the RBF of the pro forma invoice indicating the requirement for advance payment.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted upon application and submission of documentary evidence to ADs, who may allow payments for goods that have been imported under either a specific import license or an OGL.
Domiciliation requirementsYes.
Letters of creditYes.
Import licenses and other nontariff measuresEffective January 1, 2004, payments for oil imports require prior approval from the RBF. Imports of poultry and poultry products and lubrication oils from any source require a specific import license. The Ministry of Commerce, Business Development, and Investment (MCBDI) is responsible for issuing import licenses, with the exception of those for gold and timber. Import licenses and other nontariff measures for gold are issued by the MOF; for timber, they are issued by the Ministry of Forestry. A wide range of consumer goods is imported by national cooperative societies under a joint arrangement with six other Pacific Island countries. Import licenses for cyclonic building materials are jointly issued by the Department of Fair Trading and Consumer Affairs and the MOF.
Negative listThe importation of a few commodities is prohibited for security, health, or public policy reasons.
Licenses with quotasImport licenses for frozen chicken from the United States are issued based on quotas.
Other nontariff measuresAll imports must meet required technical standards on labeling, packaging, and expiration date requirements. All agricultural and forestry products are subject to quarantine clearance.
Import taxes and/or tariffsEffective January 1, 2004, import tariffs are zero, 3%, 15%, and 27% (previously, zero, 3%, 10%, 15%, 20%, and 27%).
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsExporters are required to collect the proceeds from exports within six months of the date of shipment of the goods from Fiji and may not, without specific permission, grant more than six months’ credit to a nonresident buyer. Customs is delegated to process and approve all exports of goods with no monetary return.
Surrender requirementsAuthorized banks may approve the offset of foreign exchange earnings against merchandise imports and other business payments up to the full amounts payable.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesExport licenses are issued by the customs department and monitored by the Comptroller of Customs. Specific licenses are required only for exports of sugar, wheat bran, copra meal, certain types of lumber, certain animals, and a few other items. The MCBDI is responsible for issuing export licenses for trochus shells, petroleum, and petroleum products. Irrespective of export-licensing requirements, however, exporters are required to obtain a permit for exports of commercial consignment of goods with an f.o.b. value of more than the equivalent of F$2,000; this permit is required for exchange control purposes.
Export taxesA 3% export duty is levied on exports of sugar, gold, and silver.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersExcept for certain payments that are allowed up to specified limits, above which RBF approval is required, authorized banks may approve all payments. Documentary evidence is required for amounts above the equivalent of F$2,000. Insurance transfers are subject to the approval of the Insurance Unit of the RBF and are then delegated to authorized banks.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related paymentsEffective January 1, 2005, payment of interest is allowed, provided prior approval for the loan was granted by the RBF, if the loan is in excess of F$5 million (previously, F$2 million).
Quantitative limitsEffective January 1, 2005, authorized banks may approve up to F$500,000 (previously, effective January 1, 2004, the limit was raised to F$150,000 from F$100,000) a year for dividend and profit remittances or the withdrawal of investments. Remittances of payments exceeding these limits require RBF approval, which is readily granted. Authorized banks may approve the full amount of payments due for commissions and royalty payments.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsAmounts exceeding the equivalent of F$20,000 a person with a round-trip ticket require RBF approval. Amounts exceeding the equivalent of F$5,000 a person with a one-way ticket require RBF approval.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsAuthorized banks may make payments up to the full amount for medical expenses if the payment is made directly to an institution. If the payment is made to the beneficiary, the limit is F$20,000 a year.
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsResidents are required to sell all their foreign currency receipts to an AD within one month of their return.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsCertain capital transfers in excess of the delegated limit require RBF approval for commercial banks. Effective January 1, 2005, investments by nonresidents for amounts up to the equivalent of F$5 million (previously, F$2 million) require authorization from either the South Pacific Stock Exchange (for investments in listed companies) or commercial banks (for investments in Fiji dollar–denominated deposits). Some of the funding for these investments must originate from abroad or from earnings in Fiji.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsDomestic companies are allowed to invest abroad up to the equivalent of F$100,000 a company a year. The maximum limit for individual is F$20,000 a family a year.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesThere are controls on all transactions in bonds or other debt securities.
On money market instrumentsThere are controls on all transactions in money market instruments.
On collective investment securitiesThere are controls on all transactions in collective investment securities.
Controls on derivatives and other instrumentsThere are controls on all derivatives transactions.
Controls on credit operationsEffective January 1, 2005, residents must obtain prior permission from the RBF to borrow abroad amounts exceeding the equivalent of F$5 million (previously, effective January 1, 2004, the limit was increased to F$2 million from F$500,000) in foreign currency. RBF permission is also required for any up-front fees payments. Local borrowings or guarantees by nonresident-controlled business entities are restricted to F$10 million, and those by nonresident individuals are restricted to F$500,000. Effective January 1, 2005, authorized banks may provide up to F$500,000 (previously, effective January 1, 2004, the limit was increased to F$150,000 from F$100,000) of the amount due for scheduled foreign currency loan repayments. Credit operations exceeding these limits require RBF approval.
Commercial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe authority to limit bank guarantees is fully delegated to commercial banks provided that in the event of default or cancellation of guarantee, funds are not allowed to be transferred abroad.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentEffective January 1, 2004, overseas investment by nonbank financial institutions is suspended. Previously, nonbank financial institutions could invest abroad up to the equivalent of F$1 million. The limit on overseas investment for individuals and families is F$20,000 a taxpayer a year, and the limit on investment abroad by local companies is F$100,000 a year.
Inward direct investmentForeign investment in Fiji is expected to be financed from nonresident sources. Such foreign investment may be given “approved status,” which guarantees the right to repatriate dividends and capital.
Controls on liquidation of direct investmentTransactions exceeding the delegated limits for authorized banks require permission from the RBF, which is readily granted upon evidence that the investment funds originated abroad and the relevant documentary evidence is provided. Nonresident-owned companies are permitted to repatriate the proceeds from sales of assets and capital gains on investments.
Controls on real estate transactions
Purchase abroad by residentsThe purchase of personal property abroad for investment purposes is not permitted.
Purchase locally by nonresidentsApproval by the Ministry of Lands and the Native Land Trust Board is required for purchases of state-owned property and designated Native Lease properties. Settlements offshore of sale transactions in which both parties are nonresidents require RBF permission.
Sale locally by nonresidentsControls on settlements are effected to safeguard local interest before proceeds from sales are remitted abroad.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsEffective January 1, 2005, all transfers exceeding the equivalent of F$200,000 by emigrants require prior RBF approval (previously, effective January 1, 2004, the limit was increased to F$150,000 from F$100,000).
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadADs must obtain permission from the RBF to borrow abroad.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)The limit for lending to a newly established company or a branch of a company in Fiji (other than a bank) that is controlled directly or indirectly by persons who reside outside Fiji is F$10 million. Lenders are also allowed to authorize temporary overdrafts without reference to the RBF, provided full clearance of overdrafts is carried out within 30 days. Borrowing by nonresident individuals is delegated to lending institutions and commercial banks for amounts up to F$500,000.
Lending locally in foreign exchangeEffective January 1, 2005, banks and nonbank financial institutions may lend foreign currency up to the equivalent of F$5 million (previously, F$2 million) to any resident of Fiji without specific permission from the RBF.
Purchase of locally issued securities denominated in foreign exchangeYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsAn individual (together with his or her relatives) may own up to 15% of the voting shares of a bank or credit institution. Ownership through a company may be up to 30%. This does not preclude the establishment of branches or subsidiaries incorporated in Fiji of 100% nonresident-controlled financial institutions.
Open foreign exchange position limitsNet open position limits in terms of each bank’s actual capital are set at the greater of 12.5% or the equivalent of F$0.4 million for each currency, and up to an aggregate of 25% or from F$0.8 million to a maximum of F$7.5 million, for all foreign currencies.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadEffective January 1, 2004, offshore investment by the Fiji National Provident Fund (FNPF) is suspended. Previously, offshore investment by the FNPF was limited to the equivalent of F$10 million.
Other controls imposed by securities lawsn.a.
Changes During 2004
Imports and import paymentsJanuary 1. Import tariff rates were changed to zero, 3%, 15%, and 27% from zero, 3%, 10%, 15%, 20%, and 27%.
January 1. Payments for oil imports were made subject to prior RBF approval.
Payments for invisible transactions and current transfersJanuary 1. The maximum amount that authorized banks could approve for dividend and profit remittances including the withdrawal of investment was increased to F$150,000 a year from F$100,000.
Capital transactions
Controls on credit operationsJanuary 1. The maximum amount that authorized banks could approve for foreign currency loan repayments was increased to the equivalent of F$150,000 from F$100,000.
January 1. The maximum amount of borrowing abroad that requires prior RBF approval was increased to the equivalent of F$2 million from F$500,000.
Controls on direct investmentJanuary 1. Overseas investment by nonbank financial institutions was suspended.
Controls on personal capital transactionsJanuary 1. The amount of transfers by emigrants for which RBF approval is required was increased to the equivalent of F$150,000 from F$100,000.
Provisions specific to institutional investorsJanuary 1. Offshore investment by the FNPF was suspended.
Changes During 2005
Payments for invisible transactions and current transfersJanuary 1. The maximum amount of a loan that requires RBF approval for payment of interest was increased to F$5 million from F$2 million.
January 1. The maximum amount that authorized banks could approve for dividend and profit remittances or the withdrawal of investment was increased to F$500,000 a year from F$150,000.
Capital transactionsJanuary 1. The maximum amount of investment by nonresidents that requires authorization from either the South Pacific Stock Exchange or commercial banks was increased to the equivalent of F$5 million from F$2 million.
Controls on credit operationsJanuary 1. The maximum amount that authorized banks could approve for foreign currency loan repayments was increased to the equivalent of F$500,000 from F$150,000.
January 1. The maximum amount of borrowing abroad that requires prior RBF approval was increased to exceeding the equivalent of F$5 million from F$2 million.
Controls on personal capital transactionsJanuary 1. The amount of transfers by emigrants for which RBF approval is required was increased to the equivalent of F$200,000 from F$150,000.
Provisions specific to commercial banks and other credit institutionsJanuary 1. Banks and nonbank financial institutions could lend foreign currency up to the equivalent of F$5 million (previously, F$2 million) to any resident of Fiji without specific permission from the RBF.

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