Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

ST. LUCIA

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: May 30, 1980.
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. Lucia is the Eastern Caribbean dollar, issued by the ECCB.
Exchange rate structureUnitary.
Classification
Currency board arrangementSt. Lucia 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 must be made in either Eastern Caribbean dollars or U.S. dollars.
Controls on the use of domestic currency
For capital transactions
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsYes.
Use of foreign exchange among residentsn.a.
Payments arrangements
Regional arrangementsSt. Lucia is a member of CARICOM.
Clearing agreementsYes.
Administration of controlThe MOF is responsible for policy decisions related to exchange control, and its banking section is responsible for administration of control. Commercial banks have been delegated the authority to approve payments and transfers exceeding the equivalent of EC$250,000; in the case of imports with proper customs documentation, banks may approve transactions for any amount.
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 permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Minimum financing requirementsn.a.
Advance import depositsn.a.
Documentation requirements for release of foreign exchange for importsPayments in foreign currency for authorized imports are permitted on application to a local bank and submission of a customs certificate of entry.
OtherYes.
Import licenses and other nontariff measures
Negative listCertain agricultural and manufactured products require individual licenses. There are three types of licenses, for (1) goods originating from CARICOM and the OECS, (2) goods from outside these areas, and (3) goods imported directly from non-OECS countries.
Licenses with quotasn.a.
Import taxes and/or tariffsManufactured goods originating in CARICOM and the OECS are exempt from import duties. All imported goods are subject to a consumption tax and a service charge of 5%, except for fertilizers, for which the rate is 0.2%. Live animals, eggs, fish, meat, milk, fertilizers, and most agricultural and manufacturing machinery are exempt from import duties. For non-CARICOM imports, the fourth phase of the CARICOM CET applies at a maximum rate of 20%.
State import monopolyThe importation of rice, flour, and sugar in bulk form is a state monopoly.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesExport licensing is required for certain primary products.
Without quotasYes.
With quotasn.a.
Export taxesA special fee of US$0.02 a barrel is applied to reexports of petroleum.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related paymentsControls apply to all these transfers.
Investment-related payments
Prior approvalYes.
Quantitative limitsWith the approval of the MOF, profits may be remitted in full, subject to confirmation by the comptroller of inland revenue and the National Insurance Scheme that liabilities have been discharged. However, in cases where profits are deemed to be high, the MOF reserves the right to phase remittances over a reasonable period.
Indicative limits/bona fide testYes.
Payments for travelControls apply to all these transfers.
Personal paymentsControls apply to all these transfers.
Foreign workers’ wagesControls 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 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 nonresidentsn.r.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Purchase locally by nonresidentsn.r.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsn.r.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
On collective investment securities
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Controls on derivatives and other instruments
Purchase locally by nonresidentsThese transactions require approval from the MOF.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
Controls on credit operationsThere are controls on all categories of credit operations.
Commercial credits
By residents to nonresidentsThese credits require the approval of the MOF. Applications for nonresident loans are submitted by ADs (or other financial intermediaries) to the MOF on behalf of the applicant.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsApproval of the MOF is required, except for loans to nonresident St. Lucians. Applications are submitted by ADs on behalf of the applicant.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilitiesControls apply to all these transactions.
Controls on direct investment
Outward direct investmentYes.
Controls on liquidation of direct investmentn.a.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsApproval is not required for nonresident St. Lucians.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
Loans
By residents to nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsn.a.
To residents from nonresidentsYes.
Settlements of debts abroad by immigrantsn.a.
Transfer of assets
Transfer abroad by emigrantsn.a.
Transfer into the country by immigrantsn.r.
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
Borrowing abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeLending is restricted to Eastern Caribbean dollars or U.S. dollars.
Purchase of locally issued securities denominated in foreign exchangePurchases are restricted to securities denominated in Eastern Caribbean dollars or U.S. dollars.
Differential treatment of deposit accounts in foreign exchange
Credit controlsn.a.
Differential treatment of deposit accounts held by nonresidents
Credit controlsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Provisions specific to institutional investorsInstitutional investors may invest up to 10% of their statutory deposits in government securities of CARICOM.
Insurance companies
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionFor every U.S. dollar liability, there must be an equivalent U.S. dollar asset.
Pension funds
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsFunds raised from the issue of securities must be invested locally.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.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