Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

FINLAND

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: September 25, 1979.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)In accordance with the relevant UN Security Council resolutions, measures have been taken to freeze the accounts of the Taliban and of listed individuals and organizations associated with terrorism.
Other security restrictionsIn accordance with EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained on the making of payments and transfers for current international transactions with respect to Myanmar, certain individuals associated with the previous governments of Iraq and the former Federal Republic of Yugoslavia, and Zimbabwe. Financing of and financial assistance related to military activities in Somalia are prohibited. Restrictions also apply on transfers with respect to members of Al-Qaida and the Taliban, and individuals and organizations associated with terrorism. Imports of diamonds and sawed wooden goods from Liberia are subject to economic sanctions.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Finland is the euro.
Exchange rate structureUnitary.
Classification
Independently floatingFinland participates in a currency union with 12 other members of the EMU and has no separate legal tender. Effective January 1, 2007, the exchange arrangement of the EMU countries has been reclassified to the category independently floating 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 taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsn.a.
Payments arrangementsNo.
Administration of controlThere are no exchange controls. Import licensing is administered by the National Board of Customs. Export licensing relating to international export control regimes is administered by the trade department or foreign trade division of the Ministry of Trade and Industry.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadControls apply to deposits of funds with financial institutions regulated by non-EU authorities if these assets are to form more than 5% of the cover of the technical reserves by an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Accounts in domestic currency held abroadControls apply to deposits of funds with financial institutions regulated by non-EU authorities if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listYes.
Licenses with quotasThe following products are subject to quantitative import restrictions and require an import license when imported into the EU: agricultural products; certain steel products subject to bilateral agreements with the Russian Federation and Ukraine; certain steel products subject to autonomous community quotas for Kazakhstan; specific textile products subject to bilateral agreements with third countries, and particular third-country textile products subject to autonomous community quotas; and certain Chinese industrial products subject to autonomous community quotas.
Import taxes and/or tariffsNo.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required only for exports of goods related to international export control regimes and are administered by the Ministry of Trade and Industry. The sale of arms is strictly controlled by the Ministry of Defense.
Without quotasYes.
Export taxesNo.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsControls apply only to the purchase of shares or other securities of a participating nature, which may be affected by laws on inward direct investment.
Purchase abroad by residentsControls apply to the purchase of securities issued by non-EU residents if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Bonds or other debt securities
Purchase abroad by residentsControls apply to the purchase of securities issued by non-EU residents if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
On money market instruments
Purchase abroad by residentsControls apply to the purchase of securities issued by non-EU residents if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
On collective investment securities
Purchase abroad by residentsControls apply to the purchase of securities issued by non-EU residents if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Controls on derivatives and other instruments
Purchase abroad by residentsControls apply to the purchase of or swap operations in instruments and claims issued by or contracted with non-EU residents if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Controls on credit operations
Financial credits
By residents to nonresidentsControls apply to credits and loans granted to non-EU residents if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Controls on direct investment
Inward direct investmentControls apply to (1) the establishment of branches of foreign companies, unless an authorization is granted; (2) investment in an enterprise engaged in activities involving nuclear energy or nuclear materials; (3) investment in enterprises operating an airline, unless otherwise implied by international agreements to which Finland is a party; (4) ownership of Finnish flag vessels, including fishing vessels, except through an enterprise incorporated in Finland; and (5) investment in auditing companies or companies and partnerships providing certain legal services by non-EU residents. In addition, acquisition of shares giving at least one-third of the voting rights in a Finnish defense enterprise to a single foreign owner requires prior confirmation by the Ministry of Defense; approval may be denied, but only if the safeguarding of public defense is jeopardized.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsControls apply to the acquisition of real estate located outside the EU if these assets are to form more than 5% of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Purchase locally by nonresidentsAcquisition of real estate for recreational purposes or as a secondary residence is allowed for nonresidents who have not previously been residents of Finland for at least five years. Controls apply only to the acquisition by nonresidents of real estate for recreational purposes or for secondary residences in the Åland Islands.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Open foreign exchange position limitsPrudential regulations that are harmonized with EU directives apply.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsControls apply to the purchase of capital or money market and collective investment securities issued by non-EU residents if these assets are to form more than 5% of the cover of the technical reserves of an insurance company.
Limits (max.) on investment portfolio held abroadControls apply to the (1) purchase of or swap operations in instruments and claims issued by or contracted with non-EU residents; (2) credits and loans granted to non-EU residents; (3) deposits of funds with financial institutions regulated by non-EU authorities; and (4) acquisition of real estate located outside the EU, if these assets are to form more than 5% of the cover of the technical reserves of an insurance company.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionYes.
Pension funds
Limits (max.) on securities issued by nonresidentsControls apply to the purchase of securities issued by non-EU residents if these assets are to form more than 5% of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Limits (max.) on investment portfolio held abroadControls apply to the (1) purchase of or swap operations in instruments and claims issued by or contracted with non-EU residents; (2) credits and loans granted to non-EU residents; (3) deposits of funds with financial institutions regulated by non-EU authorities; and (4) acquisition of real estate located outside the EU, if these assets are to form more than 5% of the assets representative of the liabilities of a private pension fund administering statutory pension schemes.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsn.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 EMU countries was reclassified to the category independently floating from the category exchange arrangement with no separate legal tender. The new classification reflects only a definitional change.

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