Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

GREECE

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: July 22, 1992.
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)Certain restrictions apply on certain payments and transfers in accordance with EU regulations and UN Security Council resolutions.
Other security restrictionsIn accordance with EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained on financial transactions with respect to the former government of Iraq; public bodies, corporations or agencies, and other natural or legal persons listed in certain EU regulations; and certain individuals associated with the previous government of the former Federal Republic of Yugoslavia. Specific sanctions are in force against the former Federal Republic of Yugoslavia to support the implementation of the mandate of the International Criminal Tribunal for the Former Yugoslavia. Financial sanctions also apply with respect to President Lukashenko and certain officials of Belarus (effective May 14, 2006), the Democratic Republic of the Congo, Côte d’Ivoire, Liberia, Myanmar (restrictive measures against Myanmar were renewed effective May 29, 2006), Sudan, and Zimbabwe. Financing of and financial assistance related to military activities in Somalia are prohibited. Restrictions also apply on financial transactions with respect to Osama bin Laden, Al-Qaida, the Taliban, and other individuals and organizations associated with terrorism.
References to legal instruments and hyperlinksEU Council Regulations, as amended: (EC) 2488/2000, 2580/2001, 881/2002, 1210/2003, 314/2004, 872/2004, 1763/2004, 305/2005, 560/2005, 1183/2005, 1184/2005, 817/2006, and 765/2006.
Exchange Arrangement
CurrencyThe currency of Greece is the euro.
Exchange rate structureUnitary.
Classification
Independently floatingGreece 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 marketForward cover is provided by resident credit institutions to their customers in all major currencies at freely negotiable terms and market rates.
References to legal instruments and hyperlinksLaw 2842/2000; Regulations (EC) 1103/1997, 974/1998, and 2868/1998 regarding Introduction of the Euro.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlThere are no exchange controls. Resident credit institutions are authorized to carry out all the necessary formalities for the settlement of all transactions with nonresidents and are required to provide to the Bank of Greece (BOG) all the statistical information necessary to compile the balance of payments.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeNatural and juridical persons, residents, and nonresidents are free to purchase and sell gold coins and/or bars that are not used for commercial and industrial purposes. This gold may be purchased by and sold to the BOG and/or any other credit institution operating in Greece authorized to carry out transactions in foreign exchange.
Controls on exports and imports of banknotesNo.
References to legal instruments and hyperlinksLaw 2076/1992, Credit Institutions-Banking Law; Regulation (EC) 80/1998 and Law 2771/1999 (Article 15) regarding Gold; Presidential Decrees 96/1993 and 104/1994 regarding Abolition of Exchange Controls; Laws 2609/1998 and 2832/2000 by which the Statute of the Bank of Greece was ratified; Article 55C of Law 2832/2000 regarding Obligation for Statistical Requirements.
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 part of the technical reserves of an insurance company.
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 part of the technical reserves of an insurance company.
Accounts in domestic currency convertible into foreign currencyResidents are permitted to convert deposits in domestic currency held with resident credit institutions into foreign currency deposits.
References to legal instruments and hyperlinksLaw 2076/1992, Credit Institutions-Banking Law; Law 400/1970 regarding Insurance Companies; Presidential Decrees 96/1993 and 104/1994 regarding Abolition of Exchange Controls.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksLaw 2076/1992, Credit Institutions-Banking Law; Presidential Decrees 96/1993 and 104/1994 regarding Abolition of Exchange Controls.
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 measuresImport licenses are required for some specific products from certain low-cost countries under EU surveillance. Imports of certain items, such as medicines, narcotics, and motion picture films are governed by special regulations, which are in accordance with EU regulations.
Licenses with quotasYes.
Other nontariff measuresYes.
Import taxes and/or tariffsNo.
State import monopolyNo.
References to legal instruments and hyperlinksRegulations (EC) 111/2005 and 1277/2005, and Directive (EC) 109/1992 Regarding Imports; Presidential Decrees 96/1993 and 104/1994 Regarding Abolition of Exchange Controls.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
References to legal instruments and hyperlinksPresidential Decrees 96/1993 and 104/1994 Regarding Abolition of Exchange Controls.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksPresidential Decrees 96/1993 and 104/1994 Regarding Abolition of Exchange Controls.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksPresidential Decrees 96/1993 and 104/1994 Regarding Abolition of Exchange Controls.
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 also to the purchase of shares and other securities of a participating nature in certain sectors that may be affected by the laws on inward direct investment and establishment.
Purchase abroad by residentsControls apply to the purchase of securities issued by non-EU residents if these assets are to form part of the technical reserves of an insurance company.
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 part of the technical reserves of an insurance company.
On money market instruments
Purchase abroad by residentsControls apply to the acquisition of securities issued by non-EU residents if these assets are to form part of the technical reserves of an insurance company.
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 part of the technical reserves of an insurance company.
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 part of the technical reserves of an insurance company.
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 part of the technical reserves of an insurance company.
Controls on direct investment
Inward direct investmentControls apply to (1) acquisition of real estate in border regions; (2) investment in the mining sector, unless concession of mineral rights is granted; (3) establishment of a representative office or a branch of a foreign bank, unless an authorization is granted; (4) ownership of more than 49% of the capital of a Greek airline company by non-EU investors; (5) ownership of more than 49% of the capital of a Greek flag vessel for maritime transport or fishing purposes by non-EU investors; (6) ownership of more than 25% of the capital of a television (including cable television) company or a radio broadcasting company by non-EU investors; and (7) investment by non-EU nationals in the legal sector.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsControls apply to the acquisition of real estate outside the EEA if the asset in question is to form part of the technical reserves of an insurance company or a local branch of a non-EU insurance company established in Greece.
Purchase locally by nonresidentsControls apply to the acquisition of real estate in border regions.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksLaw 1892/1990 Development Law, as amended and supplemented; Law 400/1970, Regulation (EC) 98/1978, and Presidential Decree 288/2002 Regarding Insurance Companies; Laws 2328/1995, 310/2005, and 3414/2005 Regarding Radio and Television Broadcasting Companies; Regulations (EC) 2407/1992 and 2408/1992, and Laws 2065/1992 (Article 40) and 2408/1992 Regarding Airline Companies; Presidential Decree 11/2000 and Laws 2538/1997 (Article 59) and 3577/1992 Regarding Maritime Transport or Fishing; Presidential Decrees 96/1993 and 104/1994 Regarding Abolition of Exchange Controls.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investorsThere are certain prudential provisions that differ according to the type of institutional investor.
Insurance companies
Limits (max.) on securities issued by nonresidentsControls apply to the purchase of capital market, money market, and collective investment securities issued by non-EU residents if these assets are to form part of the technical reserves of an insurance company.
Limits (max.) on investment portfolio held abroadControls apply to (1) the 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, (4) purchase of securities issued by non-EU residents, and (5) the acquisition of real estate outside the EEA if the asset in question is to form part of the technical reserves of resident insurance companies or a local branch of a non-EU insurance company established in Greece.
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 nonresidents and not listed on the Athens Exchange.
Special controls apply to second pillar Occupational Pension Funds (OPFs). These funds are allowed to invest in shares, bonds, and corporate bonds listed on regulated markets and issued in Greece or in another member state of the EU or the EEA; shares in mutual funds and UCITS that fall under Directive 85/611/EEC and operate in any EU or EEA member state; as well as government bonds, treasury bills, bank deposits, and real estate.
OPFs, as long-term investors, are allowed to invest in the above-mentioned instruments within prudent limits and may decide accordingly, and in a manner aimed at ensuring diversification and a high return on their investment choices, on the proportion of each instrument included in their investment portfolio.
In particular, each OPF is allowed to invest up to 70% of the assets that form part of the technical reserves or of the whole portfolio for the OPF in which the members bear the investment risks in shares, negotiable securities treated as shares, and corporate bonds listed in regulated markets, and may decide the proportions of these securities that make up their investment portfolio. It is self-evident that the 70% limit applies to the total volume of shares, negotiable securities treated as shares, and corporate bonds. Amounts of up to 5% of the 70% limit may be invested in shares that are not listed on the stock exchange if those who have issued them are governed by Greek law or the law of another member state of the EU or the EEA and if they publish financial statements verified by certified accountants.
Moreover, amounts up to 5% may be invested in investment funds and new financial products.
Limits (max.) on investment portfolio held abroadControls apply to the purchase of securities issued by nonresidents and not listed on the Athens Exchange.
Special controls apply to second pillar OPFs. These funds are allowed to invest in shares, bonds, and corporate bonds issued in Greece or in another member state of the EU or the EEA listed on regulated markets; shares in mutual funds and UCITS that fall under Directive 85/611/EEC and operate in any EU or EEA member state; as well as government bonds, treasury bills, bank deposits, and real estate.
OPFs, as long-term investors, are allowed to invest in the above-mentioned instruments within prudent limits and may decide accordingly, and in a manner aimed at ensuring diversification and a high return on their investment choices, on the proportion of each instrument included in their investment portfolio.
In particular, each OPF is allowed to invest up to 70% of the assets that form part of the technical reserves or of the whole portfolio for the OPF in which the members bear the investment risks in shares, negotiable securities treated as shares, and corporate bonds listed in regulated markets, and may decide the proportions of these securities that make up their investment portfolio. The 70% limit applies to the total volume of shares, negotiable securities treated as shares, and corporate bonds. Amounts of up to 5% of the 70% limit may be invested in shares that are not listed on the stock exchange if those who have issued them are governed by Greek law or the law of another member state of the EU or the EEA and if they publish financial statements verified by certified accountants.
Moreover, amounts up to 5% may be invested in investment funds and new financial products.
Limits (min.) on investment portfolio held locallyControls apply if the assets for these investments are to form more than 23% of the pension funds’ reserves.
Currency-matching regulations on assets/liabilities compositionIn the case of second pillar OPFs, each fund is allowed to invest up to 30% of the assets that form part of the technical reserves in assets denominated in currencies other than those of their liabilities.
Investment firms and collective investment funds
Limits (max.) on securities issued by nonresidentsInvestment firms may invest freely in securities listed on regulated markets; they are also allowed to invest without any limit in securities not listed on regulated markets, provided this form of investment is included in their authorization. However, investment firms that are members of the Athens Exchange may invest in securities not listed on regulated markets, on approval of the Hellenic Capital Market Commission. Such a requirement is not necessary for investment firms that are not members of the Athens Exchange.
Investment firms that are members of the Athens Exchange can participate in the share capital of other foreign investment firms up to the amount of 20% of their own funds, provided that their share capital is at least ⊬2,934,702.86 or its equivalent.
Collective investment funds may invest freely in securities listed abroad; these funds are classified as domestic or foreign funds, according to their investment policy: if domestic, a fund must invest at least 65% of its net asset value (NAV) in domestic products; if foreign, it must invest at least 65% of its NAV in foreign products.
Limits (max.) on investment portfolio held abroadn.a.
References to legal instruments and hyperlinksLaw 400/1970 with its amendments, Regulation (EC) 98/1978, and Presidential Decree 288/2002 Regarding Insurance Companies; Laws 1902/1990, 2042/1992, 2374/1996, 2676/1999, 3029/2002 (Article 7), and 3385/2005 (Article 12) Regarding Pension Funds; Laws 2579/1998 and 2396/1996 Regarding Investment Firms and Hellenic Capital Market Commission’s Rule 1/317/2004; Presidential Decrees 96/1993 and 104/1994 Regarding Abolition of Exchange Controls.
Changes during 2006
Exchange measuresMay 14. Financial sanctions were imposed against President Lukashenko and certain officials of Belarus.
May 29. Financial sanctions and restrictive measures against Myanmar were renewed.
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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