Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

CENTRAL AFRICAN REPUBLIC

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of January 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
Other security restrictionsn.a.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency issued within the CAEMC, which is legal tender in the Central African Republic and the other member countries, is the CFA franc.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Central African Republic participates in a currency union with five other members of the CAEMC and has no separate legal tender. The 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 are made 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 in the Paris exchange market for the currencies concerned. Effective January 1, 2007, the exchange regime of the CAEMC countries has been reclassified to the category conventional pegged arrangement from the category exchange arrangement with no separate legal tender. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender. The new classification thus reflects only a definitional change, and is not based on a judgment that there has been a substantive change in the exchange regime or other policies of the currency union or its members.
Exchange taxA commission of 0.5%, excluding VAT, is levied on all transfers to countries that are not members of the BEAC, except those made for the account of the treasury and for the expenses of students.
Exchange subsidyNo.
Forward exchange marketThe CAEMC area does not have a forward exchange market.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currencyWithin the CAEMC, the CFA franc is used freely for payments and receipts in current and capital transactions and payments. Settlement with all countries other than CAEMC member states must be made through correspondent banks, in one of the currencies of the two parties or in any other currency accepted by the two parties to the transaction.
Payments arrangements
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases and sales of foreign currencies and euros against CFA francs are ultimately settled through a debit or credit to the Operations Account. Exchange regulations of member countries in the CAEMC are harmonized.
Administration of controlThe Ministry of Finance and Budget (MOFB) is responsible for administering foreign exchange regulations and may delegate all or a portion of its power to the BEAC, to the Banking Commission in Central Africa (COBAC), and to authorized intermediaries.
Authorized intermediaries are usually delegated to administer foreign transactions and are responsible for checking the validity of transactions, collecting statistics, and reporting to the monetary authorities. The tasks delegated must not include some types of transactions. The BEAC ensures exchange regulation surveillance, evaluates cover against exchange risk, studies matters for which advice may be requested when foreign exchange accounts are opened by some resident legal entities, and monitors the repatriation of export proceeds. COBAC must ensure that the authorized intermediaries comply with the specific provisions of these regulations to ensure that they are properly implemented and do not destabilize the CAEMC banking system.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On external tradeImports and exports of gold require a license, which is seldom granted. In practice, imports and exports are made by an authorized purchasing office. Exempt from prior authorization are (1) imports and exports by or on behalf of the treasury 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 license-free imports of gold are subject to customs declaration. Certain companies have been officially appointed as Offices for the Purchase, Import, and Export of Gold and Raw Diamonds, and imports and exports are made by these offices.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of CFA francs issued by the BEAC outside the CAEMC area are prohibited. When traveling outside the CAEMC, travelers must use means of payment other than BEAC banknotes. Nevertheless, resident travelers may carry with them a maximum of CFAF 100,000 when exiting the CAEMC.
Foreign currencyResident or nonresident travelers crossing the borders of the CAEMC must, on entry or exit, declare to customs their foreign currency, securities, or assets in amounts exceeding CFAF 1 million. When leaving the CAEMC, nonresident travelers may take with them foreign currency up to a maximum equivalent to the amount they declared on entry to the CAEMC.
On imports
Domestic currencyImports of CFA francs issued by the BEAC outside the CAEMC area are prohibited. Resident travelers may import up to CFAF 100,000 on entry to the CAEMC.
Foreign currencyResident and nonresident travelers of the CAEMC may import banknotes and coins issued by any other bank of issue, without restriction, but must file a customs declaration for any currency or securities exceeding CFAF 1 million.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents are not authorized to open foreign currency accounts within the CAEMC.
Approval requiredThe MOFB may authorize certain resident legal entities to open foreign currency accounts with the prior consent of the BEAC.
Held abroadn.r.
Approval requiredn.r.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedAccounts in foreign currencies for nonresidents may be opened freely within the CAEMC. Authorized intermediaries are allowed to open such accounts for nonresidents, provided they inform the monetary authorities.
Domestic currency accountsAccounts in CFA francs for nonresidents may be opened freely within the CAEMC. Authorized intermediaries are allowed to open such accounts for nonresidents, provided they inform the monetary authorities.
Convertible into foreign currencyNo.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsImport payments are made in accordance with the contractual terms of the underlying transaction.
Documentation requirements for release of foreign exchange for importsFor import payments not exceeding CFAF 100 million, the authorized intermediary must require a pro forma invoice or some other kind of supporting document. When payments of imports exceed this threshold, authorized intermediaries must ensure that the transaction is properly settled and also examine the supporting documents. Nevertheless, legally registered legal entities and declared or certified liberal professionals may be exempt from the requirement to produce supporting documents, provided they present an annual estimate of imports corroborated by a business forecast.
Domiciliation requirementAll imports exceeding CFAF 5 million must be domiciled with a resident authorized intermediary.
Preshipment inspectionPreshipment inspection is required for all imports above CFAF 1 million or its equivalent.
Letters of creditn.a.
Import licenses used as exchange licensesImport declarations are required for all imports, and the import license entitles importers to purchase the necessary foreign exchange, provided the shipping documents are submitted to the authorized bank.
Othern.a.
Import licenses and other nontariff measures
Negative listImports of firearms of any origin are prohibited.
Open general licensesImports of petroleum products are limited to one company.
Licenses with quotasNinety percent of sugar imports are under a single license.
Other nontariff measuresTaxes and duties on sugar imports must be paid in advance.
Import taxes and/or tariffsThe CAEMC CET applies on imports from non-CAEMC countries. There are four rates: 5% for essential commodities, 10% for capital goods and inputs, 20% for intermediates, and 30% for consumer goods.
Taxes collected through the exchange systemAuthorized intermediaries are responsible for withholding and repaying to the monetary authority all related taxes and fees established by law.
State import monopolyn.a.
References to legal instruments and hyperlinksImport duties: Act 7/93-UDEAC-556-CD-SEI of June 21, 1993, amending the CET and establishing the procedures for implementing the Generalized Preferential Tariff in the CAEMC, as well as Act 5/94-UDEAC-556-CD-56 of December 19, 1994, amending some of its articles.
Fees: Act 6/93-UDEAC-556-CD-SEI establishing the rate corridor for the TCA and the excise duty in the CAEMC, as well as Act 2/96-UDEAC-556-CD-58 amending some of its articles.
Exports and Export Proceeds
Repatriation requirementsExport earnings originating in countries that are not members of the CAEMC must be collected and repatriated within 30 days following the date stipulated in the contract through the domiciling bank, with the central bank acting as intermediary.
Surrender requirements
Surrender to the central bankExport earnings collected in foreign currencies must be surrendered to the BEAC within 30 days following collection.
Financing requirementsn.a.
Documentation requirementsDomiciliation files must contain an export contract; an exchange commitment by which the exporter agrees to repatriate all sums deriving from their exports within one month of the due date for payment; and a customs export document, duly signed by customs staff. After clearance, the file must also be supplemented with a surrender of foreign exchange certificate and a related credit advice from the BEAC. All export transactions outside the CAEMC in excess of CFAF 5 million must be domiciled with an authorized bank.
Letters of creditn.a.
Guaranteesn.a.
DomiciliationAll export transactions outside the CAEMC in excess of CFAF 5 million must be domiciled with an authorized bank.
Preshipment inspectionPreshipment inspection for timber, diamonds, and gold is required.
Othern.a.
Export licensesAll exports require a declaration.
Without quotasYes.
With quotasn.a.
Export taxesAn export tax is applied to timber, diamonds, and gold.
Collected through the exchange systemAuthorized intermediaries are responsible for withholding and repaying to the monetary authority all related taxes and fees established in the law.
Other export taxesYes.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related paymentsUnder CAEMC foreign exchange regulations, there are no restrictions on service transactions. These transactions are subject to the same conditions as the underlying trade transactions.
Indicative limits/bona fide testSupporting documents must be provided, and authorized intermediaries must ensure that transactions for amounts exceeding CFAF 100 million are properly settled.
Investment-related paymentsTransfers of capital income outside the CAEMC in the form of profits, dividends, interest, fees, etc., payable to nonresidents may be made freely, provided the underlying transaction was authorized or not subject to authorization.
Indicative limits/bona fide testSupporting documents must be provided.
Payments for travelOn trips outside the CAEMC, travelers must use means of payment other than BEAC banknotes (foreign currencies, traveler’s checks, cashier’s checks, bank or postal transfers, etc.).
Indicative limits/bona fide testIndicative limits are established for over-the-counter foreign exchange allocations to residents traveling outside the CAEMC. Indicative thresholds are set according to the type of travel (business, study, leisure, and medical travel, and official missions). However, all substantiated requests are granted, regardless of the amount. Authorized intermediaries are required to serve their customers to the extent that foreign exchange is available, check the validity of the supporting documents presented, and report to the appropriate authorities.
Personal payments
Indicative limits/bona fide testTransfers may be made freely on presentation of supporting documents.
Foreign workers’ wagesOn presentation of their pay slips, resident foreign workers may be authorized to transfer a portion of their net remuneration outside the CAEMC.
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testSupporting documents must be provided.
Credit card use abroadThe use of credit cards is similar to a transfer and is not subject to the regulations governing invisible transactions and current transfers.
Quantitative limitsThe use of credit cards, which must be issued by resident financial intermediaries and approved by the Ministry for the Economy, Finance, Planning, and International Cooperation (MEFPIC), is limited to the ceilings set for tourism and business travel.
Indicative limits/bona fide testBona fide requests for allowances in excess of limits are normally granted.
Other payments
Indicative limits/bona fide testSupporting documents must be provided.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsAmounts owed by nonresidents for services and all revenue from foreign assets earned outside the CAEMC must be collected through an authorized bank within 30 days following the due date.
Surrender requirements
Surrender to the central bankIf the amounts are collected in foreign currencies, they must be surrendered to the BEAC no later than 30 days after receipt thereof.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsMovements of capital within the CAEMC are not subject to exchange controls. Transactions between the CAEMC and third countries may be made freely, provided they are not in breach of provisions prohibiting the financing of drugs and all other forms of trafficking prohibited under the laws in effect in the CAEMC. Some borrowings, loans, and direct investments, as well as the issue, advertising, or sale of foreign securities within the CAEMC, may be subject to administrative controls and require prior authorization from the appropriate authorities.
Repatriation requirementsYes.
Surrender requirements
Surrender to the central bankYes.
Controls on capital and money market instrumentsCapital transfers between the Central African Republic, France, and the Operations Account countries are free of exchange control, provided they are not related to activities prohibited under CAEMC regulations. Capital transfers to all other countries require exchange control approval and are restricted, but capital transfers from these countries are permitted freely.
On capital market securitiesThe issue, advertising, or sale of foreign securities issued by foreign enterprises and representing either a fraction of their capital (stock) or a loan made to them (bonds) is subject to prior approval by the MEFPIC. Exempt from authorization are operations in connection with (1) loans and (2) shares similar to securities, when the issuing, advertising, or offering for sale in the Central African Republic has previously been authorized.
Shares or other securities of a participating nature
Purchase locally by nonresidentsn.r.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
Bonds or other debt securities
Purchase locally by nonresidentsn.r.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
On money market instruments
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
On collective investment securities
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Controls on derivatives and other instruments
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial creditsBorrowings directly related to the delivery of services abroad, whether by resident individuals or legal entities, or to the financing of commercial transactions between the CAEMC and the rest of the world, or even between foreign countries involving resident individuals or enterprises, or loans where the outstanding debt does not exceed CFAF 100 million, are not subject to prior authorization from the MOFB. Controls apply to all other commercial credit operations.
Financial creditsResidents may generally freely grant financial credits to or borrow from nonresidents. Prior authorization is required, however, when (1) borrowings are guaranteed by the government or made by public and quasi-public enterprises, (2) the total outstanding debt of a resident borrower exceeds CFAF 100 million, and (3) the total outstanding amount of the loan granted by a resident lender exceeds CFAF 100 million. Loans of less than CFAF 100 million and each repayment must be reported to the MEFPIC within 30 days of the operation, unless the total outstanding amount of all loans contracted abroad by the borrower is less than CFAF 500,000 or its equivalent.
By residents to nonresidentsLoans exceeding CFAF 100 million require prior authorization unless they are granted by a resident authorized bank.
To residents from nonresidentsWhen the total outstanding debt of a borrower exceeds CFAF 100 million, prior authorization from the appropriate authorities is required. The same applies to borrowings guaranteed by the government or made by public and quasi-public enterprises.
Guarantees, sureties, and financial backup facilitiesn.a.
Controls on direct investment
Outward direct investmentDirect investment abroad by residents is not restricted, provided the amount of the transactions does not exceed CFAF 100 million or it is in the form of an increase in capital resulting from the reinvestment of undistributed profits. Only authorized banks may verify and execute these transactions. Direct investments abroad by residents in amounts exceeding CFAF 100 million must be declared to the MEFPIC 30 days before they are made.
Inward direct investmentDirect investment from abroad in the Central African Republic is not restricted, provided the amount of the transactions does not exceed CFAF 100 million or it is in the form of an increase in capital resulting from the reinvestment of undistributed profits. Only authorized banks may verify and execute these transactions. Direct investments from abroad exceeding CFAF 100 million must be declared to the MEFPIC 30 days before they are made.
Controls on liquidation of direct investmentThe liquidation of foreign direct investments in the Central African Republic and abroad in amounts exceeding CFAF 100 million must be declared to the MEFPIC 30 days before liquidation.
Controls on real estate transactionsThis category of transactions is not subject to specific regulations. It is implicitly subject to the same regulatory provisions as transactions involving the direct investment of financial assets.
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsn.a.
Controls on personal capital transactions
Loans
By residents to nonresidentsResident individuals may freely grant loans to nonresidents provided the total outstanding debt does not exceed CFAF 100 million. Amounts exceeding CFAF 100 million must be declared to the MEFPIC 30 days before the transaction in order to receive prior authorization.
To residents from nonresidentsResident individuals may freely borrow from nonresidents provided the total outstanding debt per borrower does not exceed CFAF 100 million. Amounts exceeding CFAF 100 million must be declared to the MEFPIC 30 days before the transaction in order to receive prior authorization.
Gifts, endowments, inheritances, and legaciesn.r.
Settlements of debts abroad by immigrantsn.r.
Transfer of assetsn.r.
Transfer of gambling and prize earningsn.r.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBorrowings contracted by resident authorized banks with nonresidents, as well as the repayment thereof, do not require prior authorization, but must be declared to the MEFPIC and the BEAC within 30 days following their transaction.
Maintenance of accounts abroadn.a.
Lending to nonresidents (financial or commercial credits)Loans granted by resident authorized banks to nonresidents, as well as the repayment thereof, do not require prior authorization, but must be declared to the MEFPIC and the BEAC within 30 days following their transaction.
Lending locally in foreign exchangen.a.
Purchase of locally issued securities denominated in foreign exchangen.a.
Differential treatment of deposit accounts in foreign exchangen.a.
Differential treatment of deposit accounts held by nonresidentsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Provisions specific to institutional investorsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
No significant changes occurred in the exchange and trade system.
Changes during 2007
Exchange arrangementJanuary 1. The exchange arrangement of the CAEMC countries was reclassified to the category conventional pegged arrangement from the category exchange arrangement with no separate legal tender. The new classification reflects only a definitional change.

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