Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

ST. KITTS AND NEVIS

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
Share
  • ShareShare
Show Summary Details

(Position as of January 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: December 3, 1984.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictionsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of St. Kitts and Nevis is the Eastern Caribbean dollar, issued by the ECCB.
Exchange rate structureUnitary.
Classification
Currency board arrangementSt. Kitts and Nevis participates in a currency union with seven other members of the ECCU and has no separate legal tender. The Eastern Caribbean dollar is pegged to the U.S. dollar, under a currency board arrangement, at EC$2.70 per US$1. Effective January 1, 2007, the exchange arrangement of the ECCU countries has been reclassified to the category currency board arrangement 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 marketNo.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of ECCB countries must be effected in Eastern Caribbean dollars.
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsn.a.
Payments arrangements
Regional arrangementsSt. Kitts and Nevis is a member of CARICOM.
Clearing agreementsYes.
Administration of controlExchange control is administered by the MOF and applies to transactions with all countries. The ECCB has lifted the requirement of MOF approval for foreign currency transactions exceeding the equivalent of EC$250,000. However, the authorities have not yet implemented this measure. The procedure is applied for statistical purposes. Arrangements are being made to collect the relevant statistics by other means.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of domestic currency outside the ECCU are subject to limits prescribed by the ECCB.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedU.S. dollar accounts may be operated freely, but permission of the MOF is required to maintain other foreign currency accounts.
Held domesticallyYes.
Approval requiredThese accounts may be credited only with foreign currency earned or received from abroad, but may be debited freely. A minimum balance of US$1,000 must be maintained at all times to maintain a U.S. dollar account. Permission is normally granted only to major exporters.
Held abroadNo.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedThe regulations governing resident accounts apply.
Approval requiredPermission to operate foreign currency accounts is normally granted only to foreign nationals whose primary residence is not in St. Kitts and Nevis.
Domestic currency accountsNo.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsThe ECCB has lifted the requirement for MOF approval of foreign currency transactions exceeding the equivalent of EC$250,000. However, the authorities have not yet implemented this measure. The procedure is applied for statistical purposes only, until other ways of collecting information can be established.
Advance import depositsn.a.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports payable in foreign currency are permitted on presentation of an invoice to a bank.
OtherYes.
Import licenses and other nontariff measuresIndividual licenses are required for imports that compete with local products, unless the imports come from CARICOM member countries.
Negative listYes.
Open general licensesMost goods are imported under OGLs.
Import taxes and/or tariffsSt. Kitts and Nevis applies the third phase of the CARICOM CET, and the maximum external tariff is 25%. A customs surcharge of 6% is levied on all imports, except for some importers benefiting from tax concessions, for whom the surcharge is 12% of imports (c.i.f.).
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersExport proceeds must be deposited into an ECCB currency account or an approved U.S. dollar account.
Financing requirementsNo.
Documentation requirements
Preshipment inspectionThe Customs Department carries out preshipment inspections.
Export licensesSpecific licenses are required for the exportation of certain goods to any destination. However, the regulations governing export licenses are not formally enforced.
Without quotasYes.
With quotasYes.
Export taxesExport duties are levied on a few products.
Other export taxesYes.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThe ECCB has lifted the requirement of MOF approval for foreign currency transactions exceeding the equivalent of EC$250,000. However, the authorities have not yet implemented this measure.
Trade-related paymentsControls apply to all these transfers.
Investment-related paymentsProfits and dividends may be remitted in full, subject to confirmation of registration by the commissioner of inland revenue for income tax purposes. Payment of amortization of loans or depreciation of direct investments is made through the ECCB, based on information from the treasury.
Payments for travelControls apply to all these transfers.
Personal paymentsControls apply to all these transfers.
Foreign workers’ wagesControls apply to all these transfers.
Credit card use abroadControls apply to all these transfers.
Other paymentsControls apply to all these transfers.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersProceeds must be sold to a bank or deposited into an approved U.S. dollar account if the proceeds are in U.S. dollars.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsThe ECCB lifted the requirement of MOF approval for foreign currency transactions exceeding the equivalent of EC$250,000; however, the authorities have not yet implemented this measure. The procedure is applied for statistical purposes only until other ways of collecting information can be established.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsAn Alien Land Holding license is required for the purchase of equity shares.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThe regulations governing the sale or issue of capital market securities by nonresidents apply.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
On money market instruments
Sale or issue locally by nonresidentsThe regulations governing the sale or issue of capital market securities by nonresidents apply.
Purchase abroad by residentsThe regulations governing the sale or issue of capital market securities by nonresidents apply.
On collective investment securities
Purchase locally by nonresidentsThe regulations governing the sale or issue of capital market securities by nonresidents apply.
Sale or issue locally by nonresidentsThe regulations governing the sale or issue of capital market securities by nonresidents apply.
Sale or issue abroad by residentsThe seller of the instruments must be licensed under the Banking Act.
Controls on derivatives and other instrumentsAt present, there is no market in derivatives and other instruments.
Controls on credit operations
Financial credits
By residents to nonresidentsMOF approval is required.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilitiesControls apply to all these transactions.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentInvestment in equity requires an Alien Land Holding license.
Controls on liquidation of direct investmentThe remittance of proceeds from the liquidation of direct investment is permitted, subject to the discharge of any liabilities related to the investment.
Controls on real estate transactions
Purchase abroad by residentsPurchasing real estate abroad for private purposes is not normally permitted.
Purchase locally by nonresidentsNonresidents require an Alien Land Holding license to purchase real estate; however, some exemptions are in place to stimulate investment.
Controls on personal capital transactions
Transfer of gambling and prize earningsYes.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)MOF approval is required for these transactions.
Lending locally in foreign exchangeMOF approval is required, and is granted only in the case of projects generating foreign exchange to service the loan.
Purchase of locally issued securities denominated in foreign exchangeLocally issued securities must be denominated in Eastern Caribbean dollars. The purchase of locally issued securities denominated in foreign currencies requires MOF approval.
Provisions specific to institutional investors
Pension 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 ECCU countries was reclassified to the category currency board arrangement from the category exchange arrangement with no separate legal tender. The new classification reflects only a definitional change.

    Other Resources Citing This Publication