Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

FIJI

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: August 4, 1972.
Exchange Measures
Restrictions and/or multiple currency practicesInformation is not publicly available.
International security restrictions
Other security restrictionsn.a.
References to legal instruments and hyperlinksn.a.
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 taxNo.
Exchange subsidyNo.
Forward exchange marketForward exchange facilities are provided by banks. The amount of a bank’s forward sales is limited to the amount of forward purchases.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsAlthough no specific requirements exist, settlements must be made in convertible currencies acceptable to both countries.
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsn.a.
Payments arrangements
Bilateral payments arrangementsn.a.
Regional arrangementsFiji participates in the following arrangements: the Fiji/Vanuatu Bilateral Trade Arrangement, the Melanesian Spearhead Group Trade Agreement, PACER, and PICTA.
Clearing agreementsn.a.
Barter agreements and open accountsn.a.
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. Effective November 6, 2006, and December 6, 2006, several measures have been implemented to tighten controls on various foreign exchange transactions.
Payments arrearsn.a.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents may freely purchase, hold, and sell gold coins but not gold bullion.
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 the equivalent of 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. Effective November 6, 2006, local travelers are allowed to take out up to the equivalent of F$5,000 (previously, F$20,000) in foreign currency (inclusive of a maximum of F$500 in local currency) for each overseas round-trip, without RBF approval. 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.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyEffective December 6, 2006, the opening of these accounts by local individuals and locally registered business entities requires RBF permission. Previously, no RBF approval was required for resident individuals up to the equivalent of F$20,000 and resident businesses up to F$100,000.
Approval requiredYes.
Held abroadThese accounts are permitted, but prior RBF approval is required.
Approval requiredYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksn.a.
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, and 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. Effective December 6, 2006, authorized banks are allowed to credit to domestic currency accounts up to F$50,000 of the proceeds from sales of Fiji assets. Previously, the full amount of the proceeds could be credited to these accounts. Other unspecified funds up to F$200 (previously, F$1,000) a month may be deposited.
Convertible into foreign currencyYes.
Blocked accountsn.a.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsEffective December 6, 2006, RBF permission is required to offset foreign exchange earnings against foreign currency payables other than payment for imports already landed in Fiji. Previously, no such requirement applied.
Minimum financing requirementsn.a.
Advance payment requirementsEffective December 6, 2006, advance payments and prepayments of imports require RBF permission. Previously, authorized banks were allowed to approve up to a delegated limit equivalent to F$1 million advance payments for imports, if such payments were required by the supplier. Payments exceeding this limit were subject to RBF approval, which was readily given on submission to the RBF of the pro forma invoice indicating the requirement for advance payment.
Advance import depositsn.a.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted on 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 requirementYes.
Preshipment inspectionn.a.
Letters of creditYes.
Import licenses used as exchange licensesn.a.
Othern.a.
Import licenses and other nontariff measuresPayments for oil imports require prior approval from the RBF. Imports of poultry, 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 for labeling, packaging, and expiration date requirements. All agricultural and forestry products are subject to quarantine clearance.
Import taxes and/or tariffsThe import tariffs are zero, 3%, 15%, and 27%.
Taxes collected through the exchange systemn.a.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
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 requirements
Surrender to authorized dealersEffective December 6, 2006, RBF permission is required to offset foreign exchange earnings against foreign currency payables other than payment for imports already landed in Fiji. Previously, authorized banks were allowed to 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 complete an export license form for exports of more than the equivalent of F$20,000; this form is required for exchange control purposes.
Without quotasn.a.
With quotasn.a.
Export taxesA 3% export duty is levied on exports of sugar, gold, and silver.
Collected through the exchange systemn.a.
Other export taxesn.a.
References to legal instruments and hyperlinksn.a.
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. Effective December 6, 2006, documentary evidence is required for amounts above the equivalent of F$500 (previously, F$2,000). Effective December 6, 2006, insurance transfers are no longer delegated to authorized banks. Approval is required from the Insurance and Exchange Control Units of the RBF.
Trade-related payments
Prior approvalEffective December 6, 2006, trade-related payments may be approved by authorized banks up to the equivalent of F$50,000 an application. Amounts exceeding this limit require prior approval by the RBF.
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalEffective December 6, 2006, dividend payments, profit remittances, and withdrawal of investments require RBF permission. Previously, effective November 6, 2006, the amount of dividend payments, profit remittances, or withdrawal of investments that authorized banks could approve was decreased to the equivalent of F$100,000 from the equivalent of F$500,000. Remittances exceeding these limits required RBF approval.
Quantitative limitsEffective December 6, 2006, payment of interest and principal requires RBF approval. Previously, interest payments were free and principal loan repayments were allowed up to the equivalent of F$500,000 an amount due, as scheduled. Effective December 6, 2006, authorized banks may approve payments due for commissions and royalty payments only up to the equivalent of F$50,000 a payment. Previously, authorized banks could approve the full amount of such payments.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsEffective November 6, 2006, amounts exceeding the equivalent of F$5,000 (previously, F$20,000) a person with a round-trip ticket require RBF approval.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Quantitative limitsEffective December 12, 2006, authorized banks may make payments up to the equivalent of F$50,000 (previously, the full amount) for medical or educational expenses if the payment is made directly to an institution. If the payment is made to an individual, the limit is the equivalent of F$500 (previously, F$20,000) a year. Effective November 6, 2006, the maximum amount that authorized banks may approve for personal remittances, including wedding expenses, family maintenance, lottery tickets, and miscellaneous expenses, was reduced to the equivalent of F$2,000 a person a year (previously, F$10,000). Effective December 6, 2006, it was further reduced to the equivalent of F$500 a person a year.
Indicative limits/bona fide testYes.
Credit card use abroad
Quantitative limitsEffective December 6, 2006, a limit up to the equivalent of F$5,000 a month applies to payments by credit card and a limit up to the equivalent of F$200 a month applies on foreign currency cash withdrawals by resident credit card holders. For debit cards, the limits are F$5,000 and F$100 a month, respectively. Amounts exceeding these limits require prior RBF approval.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersResidents are required to sell all their foreign currency receipts to an AD within one month of their return.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsCertain capital transfers in excess of the delegated limit require RBF approval for commercial banks. Investments by nonresidents in amounts up to the equivalent of F$5 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 abroad or from earnings in Fiji.
Repatriation requirementsn.a.
Surrender requirementsn.a.
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 nonresidentsEffective December 6, 2006, withdrawal of investments requires RBF approval.
Purchase abroad by residentsEffective December 6, 2006, offshore investments by nonbank financial institutions, companies, and individuals are suspended. Previously, domestic companies, other than nonbank financial institutions, were allowed to invest abroad up to the equivalent of F$100,000 a company a year. The maximum for individuals was 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 operationsResidents must obtain prior permission from authorized banks to borrow abroad amounts exceeding the equivalent of F$5 million in foreign currency. RBF permission is also required for any up-front fee payments. Effective December 6, 2006, authorized banks may provide up to the equivalent of F$50,000 (previously, F$500,000) of the amount due for scheduled foreign currency loan repayments. Local borrowing by nonresidents is subject to equity contribution from external services as follows: (1) 50% to acquire properties with no development plans and (2) 25% to finance the purchase of land for construction of residences or the purchase of properties in approved investment zones. These applications require RBF approval. Effective December 6, 2006, local borrowing and guarantees by nonresident-controlled business entities are restricted to the equivalent of F$1 million (previously, F$10 million). Credit operations exceeding these limits require RBF approval.
Commercial creditsControls apply to all these transactions.
Financial creditsControls apply to all these transactions.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsBank guarantees on trade-related transactions are fully delegated to commercial banks. For other types of guarantees, RBF approval is required if this will result in future outflows in the event of default.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentOverseas investment by nonbank financial institutions has been suspended. Effective December 6, 2006, overseas investment by individuals and companies was also suspended. Previously, the limit on overseas investment for individuals and families was F$20,000 a taxpayer a year, and the limit on investment abroad by local companies was 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 investmentEffective December 6, 2006, withdrawal of investments requires RBF approval. Previously, transactions exceeding the equivalent of FS$0.5 million required permission from the RBF, which was readily granted on evidence that the investment funds originated abroad and the relevant documentary evidence was provided. Nonresident-owned companies were 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 interests before proceeds from sales are remitted abroad.
Controls on personal capital transactions
LoansControls apply to all these transactions.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsEffective December 6, 2006, a limit of F$500 or its equivalent applies to gifts to nonresidents. RBF approval may be granted for amounts exceeding the limit.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsEffective December 6, 2006, emigration allowances require RBF approval. Previously, only transfers exceeding the equivalent of F$200,000 by emigrants required prior RBF approval.
Transfer of gambling and prize earningsYes.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
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)Effective December 6, 2006, the limit on 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 the equivalent of F$1 million (previously, 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. Local borrowing by nonresidents is subject to equity contribution from external services as follows: (1) 50% to acquire properties with no development plans and (2) 25% to finance the purchase of land for construction of residences or the purchase of properties in approved investment zones. These applications require RBF approval.
Lending locally in foreign exchangeBanks and nonbank financial institutions may lend foreign currency up to the equivalent of F$5 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
Insurance companies
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadOffshore investment by the Fiji National Provident Fund has been suspended.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Arrangements for payments and receiptsNovember 6. Local travelers were allowed to take out up to the equivalent of F$5,000 in foreign currency for each overseas round-trip, without RBF approval. The limit for a oneway trip was set at F$5,000.
November 6. Several measures were implemented to tighten controls on foreign exchange transactions.
December 6. Several measures were implemented to tighten controls on foreign exchange transactions.
Resident accountsDecember 6. RBF approval was required for the opening of foreign exchange accounts by resident individuals and businesses.
Nonresident accountsDecember 6. The amount that could be credited to nonresidents’ Fiji dollar accounts from the sale of local assets was reduced to F$50,000. The limit on the amount that could be credited in other unspecified funds was set at F$200.
Imports and import paymentsDecember 6. RBF permission was required to offset foreign exchange earnings against foreign currency payables other than payment for imports already landed in Fiji.
December 6. RBF permission was required for advance payments and prepayments of imports.
Exports and export proceedsDecember 6. RBF permission was required to offset foreign exchange earnings against foreign currency payables other than payment for imports already landed in Fiji.
Payments for invisible transactions and current transfersNovember 6. The amount of dividend payments, profit remittances, or investment withdrawal that authorized banks can approve was decreased to the equivalent of F$100,000 from F$500,000.
November 6. The travel allowance was reduced to the equivalent of F$5,000 a person with a round-trip ticket, from F$20,000.
November 6. The limit on personal remittances that authorized banks can approve was reduced to the equivalent of F$2,000 a person a year.
December 6. Insurance transfers were made subject to approval by the Insurance and Exchange Control Units of the RBF.
December 6. Authorized banks were given authority to approve trade-related payments up to the equivalent of F$50,000.
December 6. RBF approval was required for all dividend payments, profit remittances, and withdrawal of investments.
December 6. RBF approval was required for payment of interest and principal.
December 6. Payments for commissions and royalty payments authorized banks can approve were limited to the equivalent of F$50,000 a payment.
December 6. The limit on personal remittances that authorized banks can approve was reduced to the equivalent of F$500 a person a year.
December 6. Payments by credit card were limited to the equivalent of F$5,000 a month and foreign currency cash withdrawal to F$200 a month. For debit cards, the limits were set at F$5,000 and F$100 a month for payments and foreign currency cash withdrawal, respectively.
December 6. Documentary evidence was required for amounts exceeding the equivalent of F$500.
December 12. The limit that can be approved by authorized banks for medical or educational expenses paid directly to institutions was reduced to the equivalent of F$50,000 a year and F$500 if paid directly to individuals.
Capital transactions
Controls on capital and money market instrumentsDecember 6. Offshore investments by nonbank financial institutions, companies and individuals were suspended.
December 6. RBF approval was required for withdrawal of investments.
Controls on credit operationsDecember 6. The limit authorized banks can provide on the amount due for scheduled foreign currency loan repayments was reduced to the equivalent of F$50,000 (previously, F$500,000).
December 6. Local borrowing and guarantees by nonresident-controlled business entities were restricted to F$1 million.
Controls on direct investmentDecember 6. Overseas investment by individuals and companies was suspended.
Controls on liquidation of direct investmentDecember 6. RBF approval was required for withdrawal of investments.
Controls on personal capital transactionsDecember 6. RBF approval was required for emigration allowances.
December 6. A limit of F$500 or its equivalent was applied to gifts to nonresidents. RBF approval may be granted for amounts exceeding the limit.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsDecember 6. The limit on 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 was set at the equivalent of F$1 million.

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