Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

DEMOCRATIC REPUBLIC OF THE CONGO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: February 10, 2003.
Exchange Measures
Restrictions and/or multiple currency practicesThe staff report for the Staff Monitored Program states that as July 5, 2006, the Democratic Republic of the Congo maintained measures that give rise to one restriction and one multiple currency practice (MCP) subject to Fund approval under Article VIII of the Fund’s Articles of Agreement. The exchange restriction involves an outstanding net debit position vis-à-vis other contracting members under the inoperative regional payments agreement with the Economic Community of the Great Lakes Countries (CEPGL). The multiple currency practice involves a fixed exchange rate set on a quarterly basis applying to transactions through the bilateral payments agreement (BPA) with Zimbabwe. (Country Report No. 06/259)
International security restrictionsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of the Democratic Republic of the Congo is the Congo franc.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the Congo franc is determined by supply and demand in the foreign exchange market. The Central Bank of the Democratic Republic of the Congo (BCC) publishes the daily average exchange rate, which is based on the combined average of the amounts and rates applied in market transactions, as reported by exchange bureaus and banks. The BCC, while observing the international reserves target in the monetary program, intervenes to smooth exchange rate fluctuations, but not against market fundamentals. Charges or commissions are not assessed on interbank market transactions. In their transactions with customers, commercial banks and financial institutions may charge an exchange commission not exceeding 1%. The spread between the buying and selling rates for foreign banknotes set by the commercial banks and financial institutions in the foreign exchange market must not exceed 5%.
Exchange taxA charge of 0.02% is levied by the BCC on any payment made or received by licensed banks, to or from abroad, irrespective of the status of the originator or the beneficiary.
Exchange subsidyNo.
Forward exchange marketExchange market participants may engage in spot and/or forward operations. Forward operations are completed on contract maturity. Congo franc equivalents for exchange transactions are calculated at rates agreed to between contracting parties. They are paid on the agreed date and, by choice of the contracting parties, through a clearinghouse, credit to an account, or cash payment. The contractual maturity of forward operations must take account of holidays in the Democratic Republic of the Congo and abroad.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Operation of the BCC; Democratic Republic of the Congo Exchange Regulations of February 13, 2003; Agreement Organizing the Exchange Market in the Democratic Republic of the Congo.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions in the Democratic Republic of the Congo may be expressed and carried out in domestic currency or in one of nine currencies and units of account listed by the BCC. Exchange operations conducted in the context of international agreements are subject to provisions of the relevant agreements.
Use of foreign exchange among residentsThere are no restrictions on the holding of foreign currency. The provision of services can be valued and remunerated in domestic currency. However, residential rent, education, and health-related expenditures, and the costs of water and electricity consumption are set and paid only in domestic currency when they relate to transactions between residents.
Payments arrangementsExchange operations conducted in the context of international agreements are subject to provisions of the relevant agreements.
Bilateral payments arrangements
InoperativeThere is an inoperative agreement with Zimbabwe.
Regional arrangementsThe Democratic Republic of the Congo is a member of COMESA, the SADC, the CEPGL, and the CEEAC.
Clearing agreementsWithin the CEPGL, the Democratic Republic of the Congo has payments agreements using the clearing mechanism. Payments are made through SDR-denominated accounts among the CBs of the Democratic Republic of the Congo, Rwanda, and Burundi (inoperative).
Administration of controlForeign exchange transactions must be conducted through the BCC or authorized intermediaries. The BCC also supervises authorized banks and nonbank intermediaries and regulates the foreign exchange positions of banks. The required supporting documentation must be presented for all operations involving revenue transfers, current transfers, capital movements, and international payments in amounts exceeding $10,000.00.
Payments arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeOnly nationals of the Democratic Republic of the Congo are allowed to purchase, transport, sell, or hold gold within the country outside of areas covered by exclusive mining concessions. Foreign individuals or legal entities may do so only on behalf of, and for the account of, authorized marketing agencies.
On external tradeExports of gold by authorized marketing agencies do not require prior authorization from the BCC. However, they must comply with the Kimberley Process and require, in addition to an export declaration made through a licensed bank, a CEEAC appraisal certificate and a certificate of origin. In addition to prefinancing, the repatriation of proceeds from exports of gold must be effected within 10 days from the date of shipment
Controls on exports and imports of banknotes
On exports
Foreign currencyTravelers exiting the country are authorized to carry foreign exchange not exceeding $10,000 or its equivalent in other currency, except if they are in international transit or on a service mission. Travelers must declare the amounts of foreign exchange carried. Transfers of amounts exceeding $10,000 must be effected through a bank.
Foreign banknotes representing part of the exchange position of a licensed bank must be transferred abroad through the central bank. The transferring bank is required to apply in writing to the BCC for authorization, specifying the amounts to be exported by foreign currency and the name and address of the recipient correspondent bank abroad.
On imports
Foreign currencyResidents and nonresidents entering the country may bring in an unlimited amount of banknotes and other means of payment in foreign currency, but amounts exceeding $10,000 or its equivalent must be declared.
Foreign currency banknotes must be imported through a bank, based on written BCC authorization. All foreign currency imported in this way through a licensed bank is deemed to be part of that bank’s exchange position.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyLicensed banks are permitted to open foreign currency accounts for residents without prior approval from the BCC.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyBalances in domestic currency may be converted into foreign currency without restriction by agreement between the account holder and the bank.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Operation of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003; Law No. 04/016 of July 19, 2004, on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).
Nonresident Accounts
Foreign exchange accounts permittedLicensed banks are permitted to open foreign currency accounts for nonresidents without prior approval from the BCC. These accounts may be demand or time deposit accounts, interest bearing, and credited or debited without restriction.
Domestic currency accountsLicensed banks are permitted to open domestic currency accounts for nonresidents without prior approval from the BCC. The accounts may be demand or time deposit accounts, interest bearing, and credited or debited without restriction.
Convertible into foreign currencyBalances of domestic currency accounts originating from legitimate international transactions can be converted and transferred.
Blocked accountsNo.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Operation of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003; Law No. 04/016 of July 19, 2004, on AML/CFT.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsA licensed bank may make advance payment for fuel imports based on a pro forma invoice, a contract entailing such a requirement, and a letter pursuant to which an oil distributor undertakes to provide the bank in a timely fashion with a Congolese Control Office (OCC) certificate, a final invoice, a customs warehouse declaration, and any other supporting documents for the transaction.
A licensed bank may also make payments for other goods on the basis of payment orders of their importer customers, a contract and/or pro forma invoice entailing a preshipment and/or predelivery payment clause, OCC certificate, letter of commitment, and advance payment refund guarantee for goods that are to be made to order.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementEffective March 18, 2006, merchandise imports, except those relating to cross-border trade and regardless of the method of financing involved, require prior submission of an exchange document (“IB” declaration form) to a licensed bank. Effective March 18, 2006, under special exchange arrangements, corporate holders of mining rights and oil production companies may import goods only after submission of IB and EB global declaration forms. They may also hold a given amount of their earnings in accounts abroad. In accordance with letters D15/Gouv. Nos. 344 and 382, effective March 13 and 18, 2006, under the new payment arrangements for imports of fuel and other goods, banks may make payments, prior to shipment and/or on arrival, on the basis of a payment order and a cover letter in which the importer undertakes to submit the ad hoc supporting documents within a specified time frame.
Preshipment inspectionImports are subject to a preshipment inspection. The amount, invoice price, and quality of imports must be verified and approved by the foreign agents of the OCC. Verification certificates are not required for import values (f.o.b.) of up to the equivalent of $2,500 a shipment.
Letters of creditRules on import payments follow generally accepted international payment modes.
Import licenses used as exchange licensesAn import declaration duly validated by a licensed bank serves as authorization to import and/or to make payment in favor of a foreign supplier.
OtherYes.
Import licenses and other nontariff measures
Positive listThe importing of certain products—primarily coins, commemorative coins, banknotes, secondhand materials for investment, arms and ammunition, and explosives—requires the prior authorization of specific government departments.
Negative listCertain imports, including narcotics, materials contrary to public morals, and certain alcoholic beverages, are prohibited.
Open general licensesFor urgent imports of goods that have the same tariff classification and whose characteristics are unknown at the time of exchange document validation, economic operators may use the IB global declaration form. In the box for the tariff classification, the IB global declaration form should indicate the first two digits of the tariff classification for the goods.
Import taxes and/or tariffsThe tax and customs services determine and collect import taxes and duties.
State import monopolyNo.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Operation of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003; Letter D15/Gouv. No. 00010 of January 5, 2006; Letter D15/Gouv. Nos. 344 and 382 of March 13, 2006, and March 18, 2006, respectively.
Exports and Export Proceeds
Repatriation requirementsExport or reexport proceeds must be repatriated within 30 days of the date of shipment, except in the case of proceeds of nonindustrial gold and diamonds, which must be received at the concerned bank within 10 days of the date of shipment. Proceeds from exports on consignment must be repatriated as soon as the goods have been sold and by no later than the deadline for the EB form.
Surrender requirementsExporters are not required to surrender their export proceeds to banks or to the BCC. If they do surrender them, the terms, conditions, and arrangements are to be jointly agreed to by the bank and its customers.
Financing requirementsNo.
Documentation requirementsExport transactions, except in the case of cross-border trade, and regardless of the financing method involved, require the prior submission to a licensed bank of an exchange document (EB declaration form).
Letters of creditYes.
DomiciliationYes.
Preshipment inspectionExports require inspection certificates of quality, quantity, and price. EB declaration forms must be submitted with the following documents: lot ready for export report, quality certificate (coffee), appraisal certificate (precious materials), and certificate of origin (precious materials).
Export licensesExport declaration requirements are for statistical purposes only.
Without quotasYes.
Export taxes
Collected through the exchange systemThe BCC imposes an exchange control fee of 0.02% on export proceeds surrendered to banks and on exports for which no foreign currency proceeds have been repatriated.
Other export taxesThe tax and customs services collect export taxes and duties.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Functioning of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for current invisible transactions are authorized on the basis of the submission to a licensed bank of an exchange document called the “IS” declaration form for imports of services, attaching the contract of service and/or invoice as well as any other supporting documents. The transactions pertaining to the transfer of income or current transfer in an amount exceeding $10,000 also require the submission of an “RC” form to a licensed bank. Parties submitting the form must attach all necessary supporting documents.
Trade-related paymentsTrade-related payments (e.g., freight, insurance) are made on the basis of declaration form IB when the import is c.i.f. When the import is f.o.b., the insurance is paid on the basis of form IS, along with the cost of unloading and warehousing.
Indicative limits/bona fide testIndicative limits or bona fide tests are applied to payments of freight, insurance, and commissions.
Investment-related paymentsProfits, dividends, interest, rental income, etc., earned in the Democratic Republic of the Congo may be transferred only through licensed banks, and in accordance with contractual provisions.
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal paymentsCurrent transfers may be made only through licensed banks for academic and tuition fees, living expenses, medical expenses, contributions, and pension and retirement expenses.
Indicative limits/bona fide testYes.
Foreign workers’ wagesForeign workers’ income and remuneration earned in the Democratic Republic of the Congo may be transferred through licensed banks.
Indicative limits/bona fide testYes.
Other paymentsPayments for subscriber fees, membership fees, gifts in kind and in cash, and subscriptions are permitted.
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Functioning of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003; Law No. 04/016 of July 19, 2004, on AML/CFT.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsFor proceeds from exports of services, licensed banks are required to complete a declaration of foreign currency receipts. Exporters are required to obtain payment from foreign buyers for services based on the ES declaration form. They must repatriate payments through a licensed bank. The ES declaration, duly stamped by the licensed bank, serves as an authorization for the export of services with the requirement to receive payments for the invoiced amounts.
Surrender requirementsExporters of services are not required to surrender export revenues to banks or to the BCC. If they do surrender them, the terms, conditions, and arrangements shall be jointly agreed to by the bank and its customers.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Operation of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003; Law No. 04/016 of July 19, 2004, on AML/CFT; Law No. 003/2002 of February 2, 2002, on the Activities and Supervision of Credit Institutions.
Capital Transactions
Controls on capital transactionsInward and outward capital transactions exceeding the equivalent of $10,000 are permitted on the submission of an RC declaration form to a licensed bank. The capital involved must represent the proceeds of lawful transactions.
Repatriation requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsIndividuals and legal entities must first inform the BCC in writing of their intention to attract funds through any of the following activities: (1) exports for sale; (2) offers for sale; (3) offers for subscription; (4) offers for swap or purchase; or (5) swaps and issuance of (a) shares, securities, or founders’ shares; (b) savings or capitalization bonds; (c) bonds and other securities, regardless of the identity of the borrower; (d) certificates or shares in joint investment funds; (e) other financial claims or similar financial instruments; and (f) all paper representative of such assets.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsOnly BCC-licensed individuals or legal entities may carry out the functions of securities intermediaries.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsThese transactions require prior authorization from the BCC.
Bonds or other debt securitiesThese transactions are permitted only for authorized individuals or legal entities.
On money market instrumentsThese transactions are permitted only for authorized individuals or legal entities.
On collective investment securitiesThese transactions are permitted only for authorized individuals or legal entities.
Controls on derivatives and other instrumentsThese transactions are permitted only for authorized individuals or legal entities.
Controls on credit operationsResidents may borrow abroad only for investment in the Democratic Republic of the Congo.
Commercial creditsControls apply to all these transactions.
Financial creditsControls apply to all these transactions.
Guarantees, sureties, and financial backup facilities
To residents from nonresidentsYes.
Controls on direct investmentInward direct portfolio investment is permitted, subject to the submission of an RC declaration form.
Outward direct investmentControls apply in accordance with the Investment Code.
Inward direct investmentControls apply in accordance with the Investment Code.
Controls on liquidation of direct investmentThe repatriation of foreign capital brought in under the provisions of the Investment Code is permitted, subject to prior BCC authorization, only at the time of liquidation, nationalization, or partial or total transfer of shares.
Controls on real estate transactionsControls apply to all these transactions.
Controls on personal capital transactions
LoansControls apply to all these transactions.
Gifts, endowments, inheritances, and legaciesThese transactions are permitted only through a licensed bank.
Settlements of debts abroad by immigrantsYes.
Transfer of assetsControls apply to all these transactions.
Transfer of gambling and prize earningsYes.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Operation of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003; Law No. 04/016 of July 19, 2004, on AML/CFT; Banking Law No. 003/2002 of February 2, 2002; Law No. 272/0004 of January 24, 1972.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsBanks are required to observe a minimum capital-risk ratio of 25%.
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Bridge loans are authorized without the prior consent of the BCC.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsBanks must ensure that foreign exchange liabilities resulting from resident and nonresident foreign exchange accounts have sufficient funding to guarantee payments on demand in favor of account holders.
Liquid asset requirementsYes.
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquid asset requirementsYes.
Credit controlsYes.
Open foreign exchange position limitsLimits on the foreign exchange positions of each bank are determined by the BCC. Banks are required to continuously observe the following: (1) a maximum ratio of 5% between their long or short position in each foreign currency and their capital and (2) a maximum ratio of 15% between their short position in all foreign currencies and their capital.
Provisions specific to institutional investors
Investment firms and collective investment fundsOnly BCC-licensed individuals or legal entities may carry out the functions of securities intermediaries.
References to legal instruments and hyperlinksLaw No. 67/272 of June 23, 1967, Defining the Regulatory Authority of the Central Bank in Exchange Matters; Law No. 05/2002 of May 7, 2002, on the Establishment, Organization, and Operation of the Central Bank of the Democratic Republic of the Congo; Democratic Republic of the Congo Exchange Regulations, dated February 13, 2003; Law No. 04/016 of July 19, 2004, on AML/CFT; Banking Law; Instruction No. 14, on Prudential Rules Governing the Management of Banks.
Changes during 2006
Imports and import paymentsMarch 18. In accordance with letters D15/Gouv. Nos. 344 and 382, under the new payment arrangements for imports of fuel and other goods, banks may make payments, prior to shipment and/or on arrival, on the basis of a payment order and a cover letter in which the importer undertakes to submit the ad hoc supporting documents within a specified time frame.
March 18. Merchandise imports, except those relating to cross-border trade and regardless of the method of financing involved, required prior submission of an exchange document (“IB” global import license form) to a licensed bank.
March 18. Under special exchange arrangements, corporate holders of mining rights and oil production companies were allowed to import goods after submission of IB and EB global declaration forms. They were also allowed to hold a given amount of their earnings in accounts abroad.

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