Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

COMOROS

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 restrictionsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of the Comoros is the Comorian franc.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Comoros participates in the franc zone area. The Comorian franc is pegged to the euro at CF 491.96775 per €1. Exchange rates are officially quoted on the basis of the fixed rate of the Comorian franc for the euro and the Paris exchange market rates for other currencies.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketForward cover against exchange rate risk is authorized by the Central Bank of the Comoros (CBC) and is provided to traders for up to three months by a commercial bank that is authorized to conduct this transaction.
References to legal instruments and hyperlinksMonetary Cooperation Agreement of November 23, 1979; CBC Circular 2/99 establishing parity between the euro and the Comorian franc.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause the Comoros is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (franc zone area members) are made in euros or the currency of any other Operations Account country. Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries or in euros through foreign Comorian franc accounts.
Controls on the use of domestic currencySettlements in domestic currency abroad require prior approval of the CBC.
For current transactions and paymentsSettlements abroad in banknotes are not allowed.
For capital transactionsn.a.
Use of foreign exchange among residentsThe use of foreign exchange among residents is prohibited. Any foreign currency acquired must be converted at authorized financial institutions.
Payments arrangements
Regional arrangementsThe Comoros is a member of COMESA and the RIFF.
Clearing agreementsYes.
Administration of controlThe minister of finance and budget has sole authority in exchange control matters but has delegated certain exchange control powers to the CBC and to authorized banks. Exchange control is administered by the CBC. The Ministry of Finance and Budget supervises borrowing and lending abroad, inward direct investment, and all outward investment. With the exception of transactions relating to gold, the country’s exchange control measures do not apply to (1) France (and its overseas departments and territories) and Monaco and (2) all other countries whose banks of issue are linked with the French Treasury by an Operations Account (franc zone area members). Statistical reporting is required to monitor speculative transactions.
Payments arrears
OfficialYes.
Privaten.a.
Controls on trade in gold (coins and/or bullion)
On external tradeImports and exports of gold bullion or coins require prior authorization. Exports and imports of articles containing gold are subject to declaration, but transfers of personal jewelry within the limit of 500 grams a person are exempt from such declaration.
Controls on exports and imports of banknotes
On exports
Domestic currencyA limit of CF 750,000 applies to exports to countries outside the franc zone.
Foreign currencyResidents traveling to France, Monaco, and the Operations Account countries may take out the equivalent of CF 750,000 in banknotes and any amount in other means of payment. Residents traveling to countries other than France, Monaco, and the Operations Account countries may take out any means of payment up to the equivalent of CF 750,000 a person a trip. Any amount in excess of these limits is subject to CBC approval, which is granted if supporting documentation is provided. Nonresident travelers may export the equivalent of CF 750,000 in banknotes and any means of payment issued abroad in their name without providing documentary justification. Other cases are authorized pursuant to the exchange regulations when supporting documents are produced.
On imports
Domestic currencyNo controls apply to imports of Comorian francs, euro banknotes, or banknotes of countries connected to the French Treasury through the Operations Accounts.
Foreign currencyResident travelers are required to surrender all foreign exchange to an authorized intermediary within one month of return. Nonresidents bringing in foreign currency banknotes are required to declare them to customs on entry.
References to legal instruments and hyperlinksDecree 87-005/PR of January 16, 1987, regulating financial relations between the Comoros and other countries; CBC Directives 6 and 7 implementing Decree 87-005/PR.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts are permitted, but prior approval is required.
Approval requiredYes.
Held abroadThese accounts are permitted, but prior approval is required.
Approval requiredYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyPrior authorization is required.
References to legal instruments and hyperlinksCBC Directive implementing Decree 87-005/PR.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts are permitted, but prior approval is required.
Approval requiredYes.
Domestic currency accountsYes.
Convertible into foreign currencyNonresidents may open accounts denominated in Comorian francs in authorized banks.
Blocked accountsYes.
References to legal instruments and hyperlinksCBC Directive implementing Decree 87-005/PR.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementAll import transactions must be domiciled with an authorized bank if the value is the equivalent of CF 500,000 or more.
Preshipment inspectionYes.
Letters of creditYes.
Import licenses used as exchange licensesImport licenses are not required. Importers are required to submit a foreign trade data sheet on imports.
Othern.a.
Import licenses and other nontariff measuresThe importation of most goods, except for those originating from member countries of the EU, Monaco, and the Operations Account countries, is subject to notification for statistical purposes.
Negative listThe importation of certain goods from all countries is prohibited for health or security reasons.
Import taxes and/or tariffsThe 2007 Budget Law introduced the following customs duties on imports, effective January 1, 2007: (1) a single import tax of zero, 5%, and 20%; and (2) presumptive taxation of less-than-container loads (miscellaneous products). Previously, import duty rates were zero, 20%, 30%, and 40% for general merchandise (c.i.f. valuation). The import duty rate for tobacco is 180% and that for spirits is 250%. An administrative fee of 3% is levied on imports that are exempt from duty. The duty for noncommercial imports is 21% (c.i.f. valuation).
State import monopolyState monopolies exist for hydrocarbons and ordinary rice.
References to legal instruments and hyperlinksCBC Directive 11 of December 16, 1991, on the exchange regulation, implementing Decree 87-005/PR; Budget Law.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to foreign countries must be repatriated within 30 days of the expiration of the commercial contract.
Surrender requirements
Surrender to authorized dealersProceeds must be sold immediately after repatriation to an authorized bank.
Financing requirementsNo.
Documentation requirementsWith a few exceptions, exports to any destination do not have licensing requirements.
Letters of creditYes.
DomiciliationAll export transactions must be domiciled with an authorized bank if the value is equivalent to CF 500,000 or more.
Preshipment inspectionPreshipment inspection is required by customs regulations.
Othern.a.
Export licensesNotification is required for statistical purposes.
Without quotasYes.
Export taxesExport taxes on vanilla, cloves, and ylang-ylang are set annually with rates dependent on market conditions. The 5% export tax on cash crops (vanilla, cloves, and ylang-ylang) was suspended to support the sector as a result of depressed world prices for these commodities.
Other export taxesTaxes are levied on specific tourism services.
References to legal instruments and hyperlinksCBC Directive 10 of December 16, 1991, on the exchange regulation, implementing Decree 87-005/PR; Budget Law.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles to France, Monaco, and the Operations Account countries are permitted freely. Payments for invisibles related to authorized imports are not restricted. All other payments, except investment-related transfers, are subject to indicative limits or bona fide tests.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related paymentsRepatriation of dividends and other earnings from nonresidents’ direct investments is authorized and guaranteed under the Investment Code.
Payments for travel
Quantitative limitsYes.
Indicative limits/bona fide testResidents traveling to countries other than France, Monaco, and the Operations Account countries may take out any means of payment up to the equivalent of CF 750,000 a person a trip. Any amount in excess of these limits is subject to the prior approval of the CBC on submission of supporting documentation.
Personal paymentsThese transactions are authorized on presentation of supporting documents.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvaln.a.
Quantitative limitsThe limits for tourist and business travel apply.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksLaw 80-07 Regulating Banks and Financial Institutions; Law 80-08 on Currency and the CBC’s Role in Supervising Banks, Financial Institutions, Credit Institutions, and Exchange Offices; CBC Directives 2 and 6, implementing Decree 87-005/PR.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from transactions with France, Monaco, and the Operations Account countries may be retained. All amounts due from residents of other countries with respect to services and all income earned in those countries from foreign assets must be repatriated within one month of the due date or date of receipt.
Surrender requirements
Surrender to authorized dealersExport proceeds in foreign currency must be sold to an authorized bank.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsCapital transfers between the Comoros and France, Monaco, and the Operations Account countries are, in principle, free of exchange control. Capital transfers to all other countries require exchange control approval, but capital receipts from these countries are permitted freely.
On capital market securitiesCBC authorization is required to effect these transactions.
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesControls apply to all these transactions.
On money market instrumentsn.r.
On collective investment securitiesn.r.
Controls on derivatives and other instrumentsn.r.
Controls on credit operations
Commercial credits
By residents to nonresidentsCredits must have a maximum maturity of 90 days.
To residents from nonresidentsYes.
Financial creditsControls apply to all these transactions.
Guarantees, sureties, and financial backup facilitiesControls apply to all these transactions.
Controls on direct investment
Outward direct investmentControls relate to the approval of the underlying transactions, not to payments or receipts.
Controls on liquidation of direct investmentYes.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Controls on personal capital transactions
Loans
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legaciesControls apply to all these transactions.
Settlements of debts abroad by immigrantsSettlement of debt is permitted upon presentation of supporting documentation.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsYes.
References to legal instruments and hyperlinksLaw 95-015/AF containing the Investment Code.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Lending is permitted for economic activities in the Comoros.
Lending locally in foreign exchangeSuch lending does not take place in practice.
Purchase of locally issued securities denominated in foreign exchangeThere is no local market for these securities.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Provisions specific to institutional investorsThere is no local market for these transactions.
Pension fundsn.a.
Investment firms and collective investment funds
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
References to legal instruments and hyperlinksLaw 80-07 Regulating Banks and Financial Institutions; Law 80-08 on Currency and the CBC’s Role in Supervising Banks, Financial Institutions, Credit Institutions, and Exchange Offices.
Changes during 2006
No significant changes occurred in the exchange and trade system.
Changes during 2007
Imports and import paymentsJanuary 1. Under the 2007 Budget Law, import duties were reduced to zero, 5%, and 20% (previously, zero, 20%, 30%, and 40%).

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