Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

ST. VINCENT AND THE GRENADINES

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 24, 1981.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
Other security restrictionsn.a.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of St. Vincent and the Grenadines is the Eastern Caribbean dollar, issued by the ECCB.
Exchange rate structureUnitary.
Classification
Currency board arrangementSt. Vincent and the Grenadines 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 subsidyn.a.
Forward exchange marketNo.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of member countries of CARICOM may be made in any currency. Settlements with residents of other countries may be made in any foreign currency or through an external account in Eastern Caribbean dollars.
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsn.a.
Payments arrangements
Regional arrangementsSt. Vincent and the Grenadines is a member of CARICOM.
Clearing agreementsYes.
Administration of controlExchange control is administered by the MOF and applies to all countries outside the ECCB area. The MOF delegates to ADs the authority to approve some import payments and certain other payments. Exchange controls are not applied to payments for authorized imports.
Payments arrears
OfficialA moratorium has been sought on some debt payments relating to shipyards, pending settlement of issues under dispute with creditors.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents are permitted to acquire and hold gold coins for numismatic purposes only.
On external tradeImports of gold are permitted under license by the MOF for industrial purposes only.
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.
Foreign currencyn.a.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedn.a.
Held domesticallyn.a.
Approval requiredn.a.
Held abroadn.a.
Approval requiredn.a.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyn.a.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be opened by nonresidents with the authorization of the MOF and credited with funds only in the form of remittances from overseas. Prior permission of the MOF is required to credit these accounts with remittances in Eastern Caribbean dollars, foreign currency notes and coins, and payments by residents. These accounts may be debited for payments abroad without prior authorization from the MOF. The operating banks must submit quarterly statements of the accounts to the MOF.
Approval requiredYes.
Domestic currency accountsExternal accounts may be opened for nonresidents with the authorization of the MOF. They are maintained in Eastern Caribbean dollars and may be credited with inward remittances in foreign currency and with transfers from other external accounts. Credits and debits to these accounts are subject to the regulations governing foreign exchange accounts.
Convertible into foreign currencyn.a.
Approval requiredYes.
Blocked accountsn.a.
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 for authorized imports are permitted on application and submission of documentary evidence and, where required, a license.
Domiciliation requirementn.a.
Preshipment inspectionn.a.
Letters of creditn.a.
Import licenses used as exchange licensesn.a.
OtherYes.
Import licenses and other nontariff measuresMost goods may be imported freely. Imports of some goods that compete with typical exports of other member countries of CARICOM and the OECS are subject to licensing.
Positive listn.a.
Negative listImports of certain goods that compete with locally made products are prohibited.
Open general licensesn.a.
Licenses with quotasn.a.
Other nontariff measuresn.a.
Import taxes and/or tariffsIn accordance with the fourth phase of the CARICOM CET, import tariff rates range from zero to 20%. In addition, imports are subject to a consumption tax ranging from 5% to 50% and levied on the tariff-inclusive value of imports. Goods imported from CARICOM member countries are exempt from import tariffs and are subject only to the consumption tax. A customs service charge of 4% is imposed on the c.i.f. value of all imported goods, with certain exceptions.
Taxes collected through the exchange systemn.a.
State import monopolyn.a.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsAll export proceeds must be surrendered within six months of receipt.
Surrender to the central bankn.a.
Surrender to authorized dealersn.a.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesSpecific licenses are required for the exportation to any destination of some agricultural goods included in the CARICOM marketing protocol and in the CARICOM Oils and Fats Agreement. The licenses are issued by the Ministry of Trade, which, in some cases, has delegated its authority to the St. Vincent Central Marketing Corporation. Exports of goats, sheep, and lobsters are subject to licensing to prevent depletion of stocks.
Without quotasn.a.
With quotasn.a.
Export taxesNo.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Payments for travel
Quantitative limitsThe limits are the equivalent of EC$2,500 a year for travel outside the ECCB area, and EC$6,000 a year for business travel.
Indicative limits/bona fide testThese allocations may be increased with the authorization of the MOF.
Personal paymentsInformation is not available on the transfer of funds for pensions, family maintenance, and alimony.
Foreign workers’ wagesn.a.
Credit card use abroadn.a.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsYes.
Surrender to the central bankn.a.
Surrender to authorized dealersn.a.
Restrictions on use of fundsn.a.
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 instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsResidents are normally not permitted to purchase foreign currency securities abroad for private purposes.
Sale or issue abroad by residentsn.a.
Bonds or other debt securities
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Purchase locally by nonresidentsn.a.
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 nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Controls on credit operations
Commercial credits
By residents to nonresidentsMOF approval is required.
To residents from nonresidentsn.a.
Financial credits
By residents to nonresidentsMOF approval is required.
To residents from nonresidentsn.a.
Guarantees, sureties, and financial backup facilitiesn.a.
Controls on direct investment
Outward direct investmentYes.
Controls on liquidation of direct investmentThe remittance of proceeds is permitted, subject to the discharge of liabilities related to the investment.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsn.a.
Controls on personal capital transactions
Loansn.a.
Gifts, endowments, inheritances, and legaciesn.a.
Settlements of debts abroad by immigrantsn.a.
Transfer of assetsn.a.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAny borrowing abroad by ADs to finance their domestic operations requires the approval of the MOF.
Maintenance of accounts abroadn.a.
Lending to nonresidents (financial or commercial credits)n.a.
Lending locally in foreign exchangen.a.
Purchase of locally issued securities denominated in foreign exchangen.a.
Differential treatment of deposit accounts in foreign exchangen.a.
Differential treatment of deposit accounts held by nonresidentsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Provisions specific to institutional investorsn.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.

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