Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

SAMOA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: October 6, 1994.
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 Samoa is the Samoa tala.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe exchange rate is determined on the basis of a fixed relationship with a weighted basket of currencies of Samoa’s main trading partners—the Australian dollar, euro, Fiji dollar, New Zealand dollar, and U.S. dollar. The weights are based on the distribution of trade, private remittances, and travel transactions of Samoa. The Central Bank of Samoa (CBS) has the authority to make discretionary exchange rate adjustments against the currency basket within a margin of up to ±2%.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketCommercial banks are permitted to make forward exchange contracts.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsThe domestic use of foreign currencies is subject to CBS approval.
Payments arrangements
Regional arrangementsSamoa participates in PACER and PICTA.
Administration of controlOverall responsibility for the administration of exchange control rests with the CBS, which delegates part of its powers to AD banks and selected foreign exchange dealers. In principle, all payments to nonresidents require CBS approval. However, only commercial banks are empowered to approve current payments without limits, provided there are documents to support these transactions. Money transfer companies, however, are allowed transactions up to SAT 100,000 for import payments only; every other transaction is also subject to limits. All capital payments require CBS approval. Money exchange, money transfer companies, and commercial banks are allowed to exchange cash to purchase or sell foreign exchange equivalent to SAT 20,000 an individual.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyResidents are allowed to export SAT 2,000 as part of their travel allowance.
Foreign currencySamoan residents are allowed to export the equivalent of SAT 20,000 in foreign currency. Nonresidents may export the amount of foreign currency they brought into the country. Commercial banks exporting excess foreign currency cash must also seek approval from the CBS.
On imports
Foreign currencyAmounts in excess of the equivalent of SAT 10,000 must be declared at the port of entry.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984; Exchange Control Regulations, 1999; www.cbs.gov.ws.
Resident Accounts
Foreign exchange accounts permittedResidents who earn foreign exchange in the normal course of their business may open, with the approval of the CBS, external or foreign currency deposit accounts with one of the four AD banks.
Held domesticallyYes.
Approval requiredYes.
Held abroadThe CBS does not permit residents to hold foreign exchange accounts abroad and will grant approval only for special cases in which a resident needs it for medical expenses or for education abroad.
Approval requiredApplicants seeking approval must provide the necessary documents to support the application.
Accounts in domestic currency held abroadNo accounts in domestic currency can be held abroad.
Accounts in domestic currency convertible into foreign currencyCBS approval is required to convert these accounts.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984.
Nonresident Accounts
Foreign exchange accounts permittedSubject to CBS approval, nonresidents who earn foreign exchange may open a foreign currency deposit account if there is a need to settle overseas commitments.
Approval requiredYes.
Domestic currency accountsThese accounts are permitted, but prior approval is required.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Letters of creditCommercial banks may also accept an invoice from the importer instead of LCs.
Import licenses and other nontariff measures
Positive listYes.
Negative listThe importation of a few products is prohibited for reasons of security or health.
Import taxes and/or tariffsImport duties are levied on an ad valorem basis on c.i.f. values. There are four general rates of duty—zero, 5%, 8%, and 20%. Duties on machinery and agricultural imports are generally 8% or lower, whereas the duty on motor vehicles is 20%. In addition, an import excise tax is applied to imports of alcohol, soft drinks, tobacco, petroleum, and passenger cars. Enterprises producing for export may receive full or partial exemption from duties and excise taxes on inputs and capital equipment.
Taxes collected through the exchange systemThere is a VAT on goods and services.
State import monopolyNo.
References to legal instruments and hyperlinksCustoms Act, 1977; Central Bank of Samoa Act, 1984.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersExport proceeds must be surrendered to the ADs no later than two months from the date of shipment to countries other than American Samoa; export proceeds from goods shipped to American Samoa must be surrendered to the ADs within four weeks of the date of shipment.
Financing requirementsNo.
Documentation requirements
Letters of creditIn addition to LCs, commercial invoices, certificates of value and origin, and bills of lading are now accepted by commercial banks for documentation requirements.
Preshipment inspectionThe customs department carries out this inspection of export documents.
Export licenses
Without quotasAll exports require export licenses issued by the customs department and export form “E” issued by the CBS for exchange control purposes. Exports may be prohibited by the director of agriculture on grounds of low quality, or by order of the head of state to alleviate domestic shortages.
Export taxesNo.
References to legal instruments and hyperlinksExchange Control Regulations, 1999; Customs Act, 1977.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersADs have the authority to approve any amount for all current payments, as long as the applicants provide documentary proof that capital transactions are not involved. The CBS’s approval process governing the remittance of invisible payments involves only the determination of whether a transaction is bona fide.
Trade-related paymentsADs now have the responsibility of approving these payments, provided applicants submit documentary proof.
Investment-related paymentsThere are no limits on the amount remitted abroad; however, the resident individual or company remitting abroad these investment-related payments must seek CBS approval and provide documentary proof for the amounts of these payments.
Prior approvalYes.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalYes.
Quantitative limitsResidents and expatriates traveling overseas are entitled to purchase from commercial banks a foreign currency allowance equivalent to SAT 20,000 a person a trip; children under 15 years of age are entitled to 50% of the adult allowance. Larger amounts may be purchased with CBS approval.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalYes.
Indicative limits/bona fide testAlthough no limit is set on remittances to cover expenses for medical treatment abroad, documentary evidence must be provided to support requests for such remittances. There is no specific limit on costs to study abroad, but the amount requested must be supported by documentary evidence confirming that the beneficiary is enrolled at an educational institution abroad and that costs are in line with the prevailing costs in the country of study.
Foreign workers’ wages
Prior approvalExpatriate workers with local contracts of one year and longer are considered residents and need CBS approval if they wish to repatriate their net earnings. Earnings not repatriated during the contract may be repatriated at the end of the contract.
Indicative limits/bona fide testYes.
Credit card use abroadControls apply to all these transfers.
Other payments
Prior approvalYes.
Quantitative limitsYes.
Indicative limits/bona fide testThere are specific limits on subscriptions and membership fees, and amounts requested must be supported by documentary evidence.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersAll proceeds must be surrendered to the ADs. On their return, resident travelers must sell to banks all unused foreign exchange they bring in.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984; Exchange Control Regulations, 1999.
Capital Transactions
Controls on capital transactionsMost capital transactions require approval by the CBS. All outward capital transfers by residents require the specific approval of the CBS. Local money markets have begun to develop, following the introduction of open market operations by the CBS. A capital market in foreign currencies has not yet been developed in Samoa.
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securitiesControls apply to all these transactions.
On money market instruments
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsThe liberalization of the financial sector led to the elimination of all direct CBS controls on credit operations. Commercial banks now handle the responsibility of regulating and monitoring their own credit operations.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentThe Ministry of Commerce, Industry and Labor has controls on inward foreign direct investment. It has responsibility for registering and monitoring these investments.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsControls apply to all these transactions.
Controls on personal capital transactions
LoansControls apply to all these transactions.
Gifts, endowments, inheritances, and legaciesControls apply to all these transactions.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsIndividuals must provide documentary proof of the source of funds and documentary proof of the destination of funds. For the remittance of these large sums, CBS approval is required.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984; Financial Institutions Act 1996; Money Laundering Prevention Act, 2007.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Insurance companiesA law was approved recently authorizing the Financial Institutions Department of the CBS to handle prudential supervision of insurance companies but it may not come into effect until mid-2007.
Limits (max.) on investment portfolio held abroadYes.
Pension funds
Limits (max.) on investment portfolio held abroadYes.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksCentral Bank of Samoa Act, 1984; Financial Institutions Act, 1996; Money Laundering Prevention Act, 2007; Proceeds of Crime Act, 2007; Mutual Legal Assistance in Criminal Matters Act, 2007; Suppression and Prevention of Terrorism, 2002.
Changes during 2006
No significant changes occurred in the exchange and trade system.

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