Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

GERMANY

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of February 28, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
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 EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained with respect to certain persons acting in violation of the arms embargo with regard to the Democratic Republic of the Congo; certain persons and entities associated with Côte d’Ivoire; effective May 18, 2006, President Lukashenko and certain officials of Belarus; effective February 9, 2007, persons, organizations, and entities associated with proliferation-related activities in the Islamic Republic of Iran; individuals and entities associated with the former government of Iraq; certain individuals associated with the former government of Liberia; certain individuals and entities associated with the government of Myanmar as well as capital transactions with respect to certain state-owned enterprises in Myanmar; certain persons impeding the peace process and breaking international law in the conflict in the Darfur region in Sudan; certain individuals associated with the previous government of the former Federal Republic of Yugoslavia or indicted by the International Criminal Tribunal for the former Yugoslavia (ICTY); and members of the government of Zimbabwe and legal persons, entities, or bodies associated with those members. Restrictions also apply on transfers with respect to Osama bin Laden, the AlQaida network, the Taliban, and other individuals and organizations associated with terrorism.
Financing and financial assistance related to military activities in Côte d’Ivoire, the Democratic Republic of the Congo, Lebanon (effective September 25, 2006), Liberia, Myanmar, Somalia, Sudan, Uzbekistan, and Zimbabwe are prohibited. Also, financing and financial assistance related to equipment that might be used for internal repression in Côte d’Ivoire and Uzbekistan are prohibited.
Other security restrictionsYes.
References to legal instruments and hyperlinksBelarus: Council Regulation (EC) No. 765/2006; Burma/Myanmar: Council Regulation (EC) No. 817/2006; Côte d’Ivoire: Council Regulations (EC) Nos. 174/2005 and 560/2005, as amended; Democratic Republic of the Congo: Council Regulations (EC) Nos. 889/2005 and 1183/2005, as amended; ICTY: Council Regulation (EC) No. 1763/2004, as amended; Iran: Order of the Federal Ministry for Economy and Technology, effective February 9, 2007; Iraq: Council Regulations (EC) Nos. 1210/2003 and 1799/2003, as amended; Lebanon: Council Regulation (EC) No. 1412/2006; Liberia: Council Regulations (EC) Nos. 234/2004 and 872/2004, as amended; Somalia: Council Regulation (EC) No. 147/2003, as amended; Sudan: Council Regulations (EC) Nos. 131/2004, 838/2005, and 1184/2005, as amended; individuals and organizations associated with terrorism: Council Regulation (EC) No. 2580/2001, as amended, and Council Decision 2006/379/EC 2005/428/CFSP; Uzbekistan: Council Regulation (EC) No. 1859/2005; Osama bin Laden, the Al-Qaida network, and the Taliban: Council Regulation (EC) No. 881/2002, as amended; individuals associated with the previous government of the former Federal Republic of Yugoslavia: Council Regulation (EC) No. 2488/2000, as amended; Zimbabwe: Council Regulation (EC) No. 3214/2004, as amended.
Exchange Arrangement
CurrencyThe currency of Germany is the euro.
Exchange rate structureUnitary.
Classification
Independently floatingGermany 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 marketResidents and nonresidents may freely negotiate forward exchange contracts for both commercial and financial transactions in all leading convertible currencies in the domestic exchange market and in international foreign exchange markets. Germany has no officially fixed rates in the forward exchange market. All transactions are negotiated at free market rates.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlAll banks in Germany are permitted to carry out foreign exchange transactions.
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 on deposits of funds by insurance companies and pension funds with financial institutions regulated by non-EU authorities if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Accounts in domestic currency held abroadControls apply on deposits of funds by insurance companies and pension funds with financial institutions regulated by non-EU authorities if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
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 accountsYes.
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 importation of certain textile goods and steel products is subject to the EU’s annual global quota.
Import taxes and/or tariffsNo.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirements
OtherYes.
Export licenses
Without quotasCertain exports (mostly military and dual-use goods) are subject to individual, global, or general licensing. The customs authorities exercise control over export declarations.
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 transactionsControls are imposed on the following capital transactions with certain state-owned enterprises in Myanmar: (1) the granting of any financial loan or credit to these enterprises; (2) the acquisition of bonds, certificates of deposit, warrants, or debentures issued by these enterprises; and (3) the acquisition or extension of a participation in these enterprises, including the acquisition in full of such enterprises or the acquisition of shares and securities of a participating nature.
Repatriation requirementsNo.
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 nonresidentsYes.
Purchase abroad by residentsControls apply to the purchase by insurance companies and pension funds of securities issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsControls apply to the purchase by insurance companies and pension funds of securities issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
On money market instruments
Purchase abroad by residentsControls apply to the purchase by insurance companies and pension funds of money market instruments with maturities exceeding 12 months issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
On collective investment securities
Purchase abroad by residentsControls apply to the purchase by insurance companies and pension funds of collective investment securities issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Controls on derivatives and other instruments
Purchase abroad by residentsControls apply to the purchase by insurance companies and pension funds of securities issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Controls on credit operations
Financial credits
By residents to nonresidentsControls apply to the granting by insurance companies and pension funds of credits to non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentControls apply to (1) investment in air transport enterprises, requiring (in accordance with Council Regulation (EEC) No. 2407/92) that these enterprises be owned directly or through majority ownership (at least 51%) by member states and/or nationals of member states of the EU and that an enterprise must notify its licensing authority within 14 days of any change in the ownership of any single shareholding that represents 10% or more of the total shareholding; (2) acquisition of a German flag vessel, except through an enterprise incorporated in Germany or in another member state of the EU; (3) investment in the broadcasting (radio and television) sector, except through a subsidiary incorporated in a German state, as required for both residents and nonresidents; and (4) the role of depository banks for investment funds of capital investment companies, which is (in accordance with Directive 86/611/EEC) not permitted to branches of nonresident financial institutions whose head office is outside the EU, except for funds not covered by EU Directive 85/611/EEC and not sold in other EU member states.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsControls apply to the acquisition of real estate outside the EU by insurance companies and pension funds if the assets in question are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksInvestment Act.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investorsThere are certain provisions for prudential regulation of portfolios of life insurance and pension funds.
Insurance companies
Limits (max.) on securities issued by nonresidentsControls apply to the purchase by insurance companies of capital or money market and collective investment securities issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Limits (max.) on investment portfolio held abroadControls apply to the (1) purchase by insurance companies of money market instruments with maturities exceeding 12 months issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets, (2) granting by insurance companies of credits to non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets, (3) deposits of funds by insurance companies with financial institutions regulated by non-EU authorities if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets, and (4) acquisition of real estate outside the EU by insurance companies if the assets in question are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Currency-matching regulations on assets/liabilities compositionThe restricted assets have to be invested in assets denominated in the same currency in which the obligations under the insurance contracts have to be fulfilled.
Pension funds
Limits (max.) on securities issued by nonresidentsControls apply to the purchase by pension funds of securities issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Limits (max.) on investment portfolio held abroadControls apply to the (1) purchase by pension funds of money market instruments with maturities exceeding 12 months issued by non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets, (2) granting by pension funds of credits to non-EU residents if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets, (3) deposits of funds by pension funds with financial institutions regulated by non-EU authorities if these assets are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets, and (4) acquisition of real estate outside the EU by pension funds if the assets in question are to form more than 5% of their guarantee assets or more than 20% of their other restricted assets.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionThe restricted assets have to be invested in assets denominated in the same currency in which the obligations under the insurance contracts have to be fulfilled.
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.
Currency-matching regulations on assets/liabilities compositionThere are currency-matching regulations for old-age provision investment funds.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Exchange measuresMay 18. Restrictions were imposed on transactions with President Lukashenko and certain officials of Belarus.
September 25. Financing and financial assistance related to military activities in Lebanon were prohibited.
Changes during 2007
Exchange measuresFebruary 9. Restrictions were imposed on transactions with respect to certain persons, organizations, and entities associated with proliferation-related activities in the Islamic Republic of Iran.
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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