Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

ITALY

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: 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)The assets of certain senior officials of the governments of Myanmar and Zimbabwe have been frozen.
Other security restrictionsIn accordance with EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained with respect to former Liberian President Taylor and his associates, President Lukashenko and certain officials of Belarus, Slobodan Milosevic and certain other individuals associated with the government of the former Federal Republic of Yugoslavia, Myanmar, Zimbabwe; Osama bin Laden, Al-Qaida, the Taliban, and other individuals and organizations associated with terrorism; and certain persons impeding the peace process and breaking international law in the conflict in the Darfur region. Financing of and financial assistance related to military activities in Somalia and the Democratic Republic of the Congo are prohibited. Financial assistance related to military activities in Sudan is prohibited. Funds and economic resources in the Syrian Arab Republic and Lebanon (both with certain exemptions), of persons and entities associated with Liberia’s former President Taylor, and of individuals who constitute a threat to peace and national reconciliation in Côte d’Ivoire are frozen. Funds and economic resources of persons indicted by the International Criminal Tribunal for the Former Yugoslavia (ICTY) are frozen.
References to legal instruments and hyperlinksEU regulations (www.europa.eu); Decree No. 369 of October 12, 2001; Law No. 431 of December 14, 2001 (www.italia.gov.it).
Exchange Arrangement
CurrencyThe currency of Italy is the euro.
Exchange rate structureUnitary.
Classification
Independently floatingItaly 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 marketPremiums and discounts in the forward exchange market are left to the interplay of market forces.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Clearing agreementsItaly maintains clearing accounts with Croatia and Slovenia. The accounts are used for trade in cross-border areas. The balances in these accounts may be used only to finance trade between certain districts of Croatia and Slovenia and the Italian provinces of Trieste and Gorizia. The balances are not transferable. There is no automatic mechanism through which outstanding balances are settled within 90 days. Only Italy is allowed to maintain a debit balance on these accounts.
Administration of controlResidents are allowed to conduct foreign exchange transactions freely, with settlements to be effected either indirectly—through the Bank of Italy, other financial intermediaries, or the Poste Italiane S.p.a.—or directly by drawing on external accounts or by offsetting debts and credits vis-à-vis other residents or nonresidents. Operators and intermediaries must transmit, for statistical purposes, data to the Ufficio Italiano dei Cambi (UIC) on those foreign transactions that exceed the equivalent of €12,500, by filling out a foreign exchange statistical return.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeDomestic purchases and sales of gold exceeding the equivalent of €12,500 must be declared to the UIC.
On external tradePurchases and sales of gold exceeding the equivalent of €12,500 must be declared to the UIC.
Controls on exports and imports of banknotesResidents and nonresidents are allowed to take into or out of the country unlimited amounts of cash and securities in euros and/or foreign currency. For fiscal and anti-money laundering purposes, the transfer of cash and/or securities exceeding the equivalent of €12,500 must be declared in writing when departing for or entering from a non-EU country, and the declaration must be submitted to a border customs office. When departing for or entering from an EU country, this declaration must be submitted to a bank, customs office, post office, or a customs guard station within 48 hours after entry into Italian territory or 48 hours prior to departure from Italian territory. For transfers by mail, the declaration must be submitted within 48 hours after receipt or at the time of mailing. The declaration has to be sent to the UIC by banks, customs offices, post offices, or customs guard stations.
On exportsYes.
On importsYes.
References to legal instruments and hyperlinksTrade Agreement between Yugoslavia and Italy, dated March 3, 1955; Law No. 7, dated January 17, 2000; Decree Law No. 167, dated June 1990; Law No. 227, dated August 1990; www.uic.it.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksMinisterial Decree, April 27, 1990.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksMinisterial Decree, April 27, 1990.
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 measuresImports are governed by EU regulations, according to which imports of most products, except for textiles and some products originating from China, are free of licensing and quantitative restrictions. Imports from non-EU countries of most products covered by the CAP are subject to variable import levies. Common EU regulations are also applied to imports of most other agricultural and livestock products from non-EU countries. Payments for imports are not regulated, but are subject to the general rules cited in the section on administration of control.
Negative listYes.
Licenses with quotasYes.
Import taxes and/or tariffsYes.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExports to non-EU countries are permitted freely, with the exception (1) of high-technology products included in an EU regulation of oil extracted from the seabed and (2) of agricultural products governed by EU regulations, which are subject to ministerial authorization.
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 hyperlinksMinisterial Decree, April 27, 1990.
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 instrumentsEffective January 25, 2007, the obligation to report to the supervisory authority and to attach the corresponding prospectuses of public offerings of financial products in Italy has been eliminated.
On collective investment securities
Sale or issue locally by nonresidentsThe offering of securities issued by mutual funds that are not covered by EU directives is subject to authorization.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentControls apply to the acquisition (1) of majority participation or controlling interest in companies that publish daily newspapers and periodicals; (2) of licenses granted to audiovisual communications enterprises having their headquarters in a non-EU member country; (3) of majority participation by non-EU residents in companies licensed for television and radio broadcasting, and participation by non-EU residents in companies having no legal entity and licensed for television and radio broadcasting; (4) by foreigners of aircraft in Italy and foreign ownership exceeding one-third of the share capital of companies possessing such aircraft; and (5) by foreigners other than EU residents of a majority interest in Italian flag vessels or of a controlling interest in ship-owning companies having their headquarters in Italy and the establishment of branches, agencies, etc., of securities investment companies.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksLegislative Decree No. 58, dated February 24, 1998; www.bancaditalia.it; Legislative Decree No. 303, dated December 29, 2006, effective January 25, 2007.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on investment portfolio held abroadPortfolio investments abroad by life insurance companies and pension funds are subject to prudential regulations.
Currency-matching regulations on assets/liabilities compositionYes.
Pension funds
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadPortfolio investments abroad by pension funds are subject to prudential regulations.
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.
Capital transactions
Controls on capital and money market instrumentsJanuary 25. The obligation to report to the supervisory authority and to attach the corresponding prospectuses of public offerings of financial products in Italy was eliminated.

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