Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

NEW ZEALAND

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: August 5, 1982.
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)Measures have been taken to prohibit dealing with or making available to any person assets of the Taliban and of other designated individuals and organizations associated with terrorism, in accordance with the relevant UN Security Council resolutions.
Other security restrictionsA prohibition has been imposed on dealing with or making available to any person assets of the former government of Iraq, except for transfers to the Development Fund for Iraq or as authorized by the minister of foreign affairs and trade. A prohibition also applies within New Zealand and on New Zealand citizens abroad against dealing with or making available to any persons assets or funds belonging to the former Taylor regime in Liberia and its associates.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of New Zealand is the New Zealand dollar.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the New Zealand dollar is determined on the basis of supply and demand in the foreign exchange market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesExports and imports of banknotes, coins, and traveler’s checks exceeding $NZ 10,000 or its equivalent require customs documentation (Border Cash Report).
References to legal instruments and hyperlinksFinancial Transactions Reporting Act of 1996.
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 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 listImport prohibitions and restrictions affect some 70 products or classes of products—primarily plants, animals, and products considered dangerous to human health or not in the public interest.
Import taxes and/or tariffsFor nonprimary produce, tariffs apply to imported products that compete with New Zealand’s domestic production. Most primary produce competing with New Zealand’s domestic production is admitted free of tariff. Overall, 95% of imports (by value) are free of duty.



Tariffs on imports from nonpreferential sources are generally in the range of 6% to 7%. Under New Zealand’s unilateral tariff reduction program, these tariffs (along with 10% tariffs) will gradually be reduced to 5% by July 2008. Higher tariff rates of 17% on clothing, footwear, carpets, ambulances, and motor homes will gradually be reduced to 10% by 2009.



New Zealand also provides tariff preferences on a multilateral, bilateral, and regional basis. Tariffs on goods originating from Brunei Darussalam, Chile, and Thailand were reduced to 10% on January 1, 2007, and will gradually be reduced further to become duty-free on January 1, 2010. Goods originating from Australia, Canada, Singapore, least developed countries, and Forum Island countries are free of duty. Eligible imports from developing countries are also granted tariff preferences.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExport prohibitions and restrictions have been introduced to protect New Zealand’s culture (e.g., on antiquities) and economy (e.g., on the export of certain horticultural products, kiwifruit, dairy products, and animal products) and to enable New Zealand to comply with international agreements that the New Zealand government has signed (e.g., on hazardous waste). Certain items classified as strategic goods may be exported only when specific requirements have been met and an export permit has been issued. For conservation reasons, there are also restrictions or prohibitions on exports of various animals and plants.
With 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 nonresidentsNo person who is not a New Zealand national may acquire, without the consent of the minister of finance (the Kiwi shareholder), 49.9% or more of the shares of Telecom Corporation of New Zealand Ltd., or an interest in equity securities that confers 10% or more of the total voting rights in Air New Zealand Ltd.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentConsent is required under



(1) Section 12 of the Overseas Investment Act 2005 for the acquisition by an overseas person or an associate of an overseas person of (a) an interest in sensitive land; and (b) rights or interests in securities of a person (A), if A owns or controls (directly or indirectly) an interest in sensitive land and as a result of the acquisition the overseas person or the associate has a 25% or more ownership or controlling interest in A, or an increase in an existing 25% ownership or controlling interest in A, or A becomes an overseas person. “Sensitive land” investments must meet an “investor” test and generally be for the benefit of New Zealand or a group of New Zealanders. If the sensitive land is more than five hectares, the benefit must be substantial and identifiable. If the sensitive land is farmland, it must be advertised in accordance with the Overseas Investment Regulations 2005, unless exempted.



(2) Section 13 of the Overseas Investment Act 2005 for (a) the acquisition by an overseas person or an associate of an overseas person of rights and interests in the securities of a person (A), if as a result of the acquisition the overseas person or the associate has a 25% or more ownership or controlling interest in A, or an increase in an existing 25% or more controlling interest in A, and the value of the securities or consideration or the value of the assets of A and its 25% or more subsidiaries exceeds $NZ 100 million; (b) the establishment by an overseas person of a business in New Zealand if the business is carried out for more than 90 days in any year (whether consecutively or in aggregate) and the total expenditure expected to be incurred before establishing that business exceeds $NZ 100 million; and (c) the acquisition by an overseas person or an associate of an overseas person of property (including goodwill and other intangible assets) in New Zealand used in carrying out business in New Zealand if the total value of the consideration exceeds $NZ 100 million. “Significant business asset” investments must meet an investor test.



(3) Section 57B of the Fisheries Act 1996 for the acquisition by an overseas person or an associate of an overseas person of (a) an interest-in-fishing quota; or (b) rights or interests in securities of a person (A) if A owns (directly or indirectly) an interest-in-fishing quota and as a result of the acquisition the overseas person or the associate has a 25% or more ownership or controlling interest in A, or an increase in a 25% or more ownership or controlling interest in A, or A becomes an overseas person. Fishing quota investments must meet an investor test and meet a national interest test.



No person who is not a New Zealand national may acquire, without the consent of the minister of finance (the Kiwi shareholder), 49.9% or more of the shares of Telecom Corporation of New Zealand Ltd., or an interest in equity securities that confers 10% or more of the total voting rights in Air New Zealand Ltd.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsFor foreign investment in certain types of land, the investor must meet an investor test, and the investment generally must also be for the benefit of New Zealand or a group of New Zealanders. If the sensitive land is more than five hectares, the benefit must be substantial and identifiable. Consent is required for acquisitions of the following: non-urban land exceeding five hectares; land on specified islands exceeding 0.4 hectare; land on all other islands (other than the North or South Island); the foreshore or seabed; land including or adjoining the bed of a lake exceeding 0.4 hectare; land containing or adjoining land held for conservation purposes, reserves, public parks, recreation, open space, or historic or heritage areas; land adjoining the foreshore in excess of 0.2 hectare; land adjoining regional parks; land adjoining certain listed land under section 37 of the Overseas Investment Act 2005; land of more than 0.4 hectare adjoining a sea or lake; and land of more than 0.4 hectare adjoining an esplanade reserve, recreation reserve, road, or Maori reservation.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksOverseas Investment Act 2005; Fisheries Act 1996.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investors
Pension fundsn.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
Imports and import paymentsJanuary 1. Tariffs on goods originating from Brunei Darussalam, Chile, and Thailand were reduced to 10%.

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