Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

REPUBLIC OF SERBIA

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

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: May 15, 2002. The Republic of Serbia joined the IMF as the Federal Republic of Yugoslavia on December 20, 2000. The State Union of Serbia and Montenegro ceased to exist following the Republic of Montenegro’s declaration of independence on June 3, 2006. Effective July 12, 2006, the IMF determined that the Republic of Serbia continues the membership of the Union.
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 restrictionsAs a member of the UN, Serbia observes and implements all mandatory measures of UN resolutions.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Serbia is the dinar.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateEffective August 30, 2006, the National Bank of Serbia (NBS) adopted a new monetary policy regime. The new framework, which uses the two-week repo rate as the main monetary policy instrument, is anchored by the announcement of core inflation objectives, anticipating eventual transition to full-fledged inflation targeting. The exchange rate regime aims at gradually converging toward free floating of the dinar, with eventual full-fledged inflation targeting.



The Monetary Policy Program for 2006 envisaged that the NBS would gradually start to withdraw from exchange transactions, which implies that the licensed exchange offices would be redirected to commercial banks. Hence, effective August 7, 2006, the NBS allows licensed exchange offices to conclude agreements with either a bank, the NBS, several banks, a bank and the NBS, or several banks and the NBS.



The NBS intervenes in the fixing sessions, with the goals of attaining moderate excessive daily exchange rate volatility and guiding exchange rate expectations. As of August 7, 2006, the time of the fixing session was changed from 11:30 a.m. to 2:30 p.m. to stimulate banks to effect most of their trade before the fixing session. The rate set at a fixing session applies to transactions conducted at the fixing session.



Effective August 8, 2006, the exchange rate of the dinar against the euro is determined at the start of each business day at the level that was set at the fixing sessions on the previous day. That exchange rate represents the official middle exchange of the dinar against the euro, and it applies on that business day. Exchange rate lists for the official middle exchange rate of the dinar for foreign exchange and foreign cash are applied from 8:00 a.m. on a given business day until the publication of subsequent exchange rate lists.



NBS purchases and sales of foreign exchange outside the fixing session take place within margins of ±0.3% for noncash transactions and ±0.7% for cash transactions.



Effective August 26, 2006, instead of charging a commission on NBS foreign exchange sales at the fixing session, the NBS introduced a commission for organizing the fixing session, which is 0.1% and is charged on each realized transaction.



A commission of 0.15% applies on sales of convertible foreign currencies (banknotes), except for the dollar, for which the commission is 2%. Effective March 5, 2007, the NBS stopped conducting trade in foreign cash currencies other than the euro, dollar, and Swiss franc with banks and licensed exchange offices. Banks are free to fix their own buying and selling rates for foreign exchange on the basis of supply and demand, but must observe the cross rates prevailing in the international market. Banks may buy and sell foreign exchange on the interbank market outside the fixing session at mutually agreed upon rates, and they may set the commissions for these services freely.



Effective January 1, 2007, the NBS stopped foreign exchange operations with resident and nonresident natural persons at its foreign offices and at automated teller machines in order to decrease its foreign exchange cash operations.



Effective March 5, 2007, the exchange rate of the dinar against the euro is fixed at the start of each business day at the level of the weighted average exchange rate of the dinar against the euro, based on total interbank spot trade recorded on the previous business day, including trade in the fixing session. The exchange rate calculated in this way represents the official middle rate of the dinar against the euro and it applies on that business day.



According to the 2007 Policy Program of the NBS, the NBS may intervene in the foreign exchange market to (1) limit daily volatility, but not to resist cumulative pressure over a longer period; (2) contain potential threats to financial and price stability; and (3) safeguard an adequate level of international reserves.
Exchange taxNo.
Exchange subsidyExport incentives were abolished, except incentives for agricultural and food products. Exchange subsidies are offered only for certain agriculture and food industry exports, at rates ranging from 5% to 20%.
Forward exchange marketForward purchases and sales of foreign exchange are permitted, provided their terms of delivery are other than spot dates but not more than one year from the day of concluding the purchase/sale contract.
Official cover of forward operationsn.r.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Decision on the Conditions and Manner of Operation of the Foreign Exchange Market (RS Official Gazette Nos. 67/06, 71/06, 81/06, 116/06, and 24/07); Decision on Terms and Conditions for Performing Exchange Operations (RS Official Gazette Nos. 67/06, 116/06, and 24/07); Decision on Types of Foreign Exchange and Foreign Cash to Be Purchased and Sold in the Foreign Exchange Market (RS Official Gazette No. 24/07); Decision on the Purchase of Foreign Cash of EMU Countries (RS Official Gazette Nos. 81/06, 116/06, and 24/07); Decision on Uniform Fees Charged for Services Provided by the National Bank of Serbia (RS Official Gazette Nos. 91/03, 133/03, 58/04, 75/04, 99/04, 106/04, 136/04, 24/05, 51/05, 83/05, and 108/05); www.nbs.yu; Law on Foreign Trade Transactions (RS Official Gazette No. 101/05); www.mier.sr.gov.yu; Decree on the Use of Funds for Providing Subsidies to Producers of Agricultural and Food Products for the Period January–March 2007 (RS Official Gazette No. 6/07); www.minpolj.sr.gov.yu.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currency
For current transactions and paymentsPayments for current international transactions may be made and received in dinars under conditions prescribed by the decision of the NBS on the conditions and manner of conducting international payment transactions.
For capital transactionsPayments may be made and received in dinars for all capital transactions allowed by the Foreign Exchange Law, under conditions prescribed by the decision of the NBS on the conditions and manner of conducting international payment transactions.
Transactions in capital and money market instrumentsYes.
Transactions in derivatives and other instrumentsYes.
Credit operationsEffective February 10, 2007, banks are allowed to extend credits in dinars to nonresidents under conditions prescribed by the NBS. Previously, loans in dinars between residents and nonresidents were not allowed.
Use of foreign exchange among residentsPayments among residents must be effected in dinars. In exceptional cases, payments may be effected in foreign exchange, according to the Foreign Exchange Law.
Payments arrangementsNo.
Administration of controlExchange control is carried out by the state authorities and the NBS. Natural persons, legal entities, entrepreneurs, agencies, and organizations are subject to these controls. The Foreign Exchange Inspectorate of Serbia exercises exchange control over the foreign trade operations of residents and nonresidents.



Customs authorities control the export and import of foreign and local currencies, securities, and gold taken out or brought into Serbia or transmitted by mail or other means. They also control the export of foreign exchange by authorized banks. Exchange operations may be conducted by authorized commercial banks or ADs, provided they meet reporting requirements. Commercial banks are allowed to effect all domestic payments for services.
Payments arrears
OfficialAn agreement has been reached with Paris Club creditors to reduce the debt to official bilateral creditors and with London Club creditors to reduce debt to commercial banks. Discussions are ongoing with other official bilateral creditors to obtain debt relief on terms similar to those granted by Paris Club creditors. Activities have been launched to regulate the remaining small part of debt to London Club creditors under terms similar to those granted by the London Club.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeOnly gold producers may engage in domestic trade in unrefined gold.
On external tradeExports and imports of coins and bullion by the NBS and of gold by residents are subject to the regime for goods exports and imports.
Controls on exports and imports of banknotesExports and imports of dinars and foreign currency are allowed under the same conditions and procedures as those for personal and physical transfer of legal tender to and from abroad.
On exports
Domestic currencyEffective August 5, 2006, residents and nonresidents may take out of Serbia banknotes in amounts up to the dinar equivalent of €5,000 a person (previously, 120,000 dinars).



Resident natural persons or legal entities may take up to three sets of dinars out of Serbia for numismatic purposes with NBS approval. Residents may take dinars out of Serbia for the purpose of testing automatic teller machines, provided they guarantee that the banknotes will be returned when the testing is completed or, at the latest, within three months after the bills are received. To take out NBS-issued commemorative coins, residents must have written permission from the NBS, and foreign persons must complete a customs certificate and present an invoice from a licensed supplier. Other banks may take dinars out from Serbia freely for the purpose of sale to foreign banks on the condition that they submit to the customs authority two copies of the payment order, one of which is retained for supervision purposes.
Foreign currencyEffective August 5, 2006, resident natural persons may take abroad foreign currency and checks up to €5,000 (previously, €2,000). At the time of emigrating from Serbia, a resident natural person may take foreign cash in the amount of not more than €15,000 based on evidence of emigration. A nonresident natural person may take abroad foreign cash in the amount of up to €5,000. If a nonresident takes dinars and foreign cash abroad at the same time, the sum of these must not exceed €5,000. Nonresident natural persons may take abroad more than €5,000 foreign cash if the amount has been declared on entering Serbia. if the amount has been withdrawn from a foreign exchange account or foreign exchange passbook in a local bank, or if the amount has been acquired by selling dinars obtained through the use of a payment card in Serbia as evidenced by prescribed documents. Authorized banks are not required to obtain the approval of the NBS to export foreign currency for replenishing their accounts with foreign correspondent banks. However, the bank must submit to the customs authority two copies of the order for the transfer of foreign currency for certification and must store one certified copy of the order for control purposes.
On imports
Domestic currencyEffective August 5, 2006, residents and nonresidents may bring in dinars up to the dinar equivalent of €5,000 a person (previously, 120,000 dinars).



In exceptional cases, residents and nonresidents may import domestic banknotes exceeding this amount, provided the banknotes were purchased at a foreign bank and the purchase receipt is presented to the customs office for inspection upon entering the country.



The NBS may import domestic banknotes that were exported for the purpose of sale to foreign banks.



Banks may import dinars that have not been sold abroad; the customs authority restamps the originally stamped order on dinar export.
Foreign currencyResident and nonresident natural persons may import foreign cash freely. However, nonresidents must report amounts exceeding €5,000 to the customs authorities, which issue the respective certificate. Banks may import foreign currency freely.
References to legal instruments and hyperlinksLaw on the National Bank of Serbia (RS Official Gazette Nos. 72/03 and 55/04); Foreign Exchange Law (RS Official Gazette No. 62/06); Decision on the Requirements for Effecting Personal and Physical Transfers of Means of Payment to and from Abroad (RS Official Gazette No. 67/06); as of February 10, 2007, Decision on Terms and Procedures for Approving Bank Dinar-Denominated Credits to Nonresidents in the Republic of Serbia (RS Official Gazette No. 16/07); Decision on Conditions and Manner of Arranging Payments Made, Payments Received, and Transfers under Current and Capital Transactions in Foreign Currency and Dinars (Official Gazette of FRY No. 25/02); Guidelines for Implementation of Decisions on Conditions and Manner of Arranging Payments Made, Payments Received, and Transfers under Current and Capital Transactions in Foreign Currency and Dinars (RS Official Gazette No. 94/04); as of April 1, 2007, Decision on Terms and Manner of Performing International Payment Transactions (RS Official Gazette No. 24/07); Guidelines for Implementation of Decision on Terms and Manner of Performing International Payment Transactions (RS Official Gazette No. 24/07); www.nbs.yu; Decision on the Designation of Goods Whose Export, Import or Entry into Trade Are Regulated by Specially Prescribed Conditions (RS Official Gazette No. 114/05); www.mier.sr.gov.yu.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResident natural persons, legal entities, entrepreneurs, and branches of foreign legal entities may hold foreign exchange accounts freely and perform all kinds of current and permitted capital transactions abroad.



Government agencies and organizations may hold foreign exchange accounts only with the NBS, unless otherwise stipulated by a special law or an international agreement or with approval of the minister of finance, for payments that cannot be effected through the NBS, provided this is required by the specific characteristics of the beneficiary’s activities. Banks may hold foreign currency only with other authorized banks and the NBS.
Held abroadEffective August 5, 2006, resident natural persons may hold foreign currency in accounts with foreign banks freely in cases prescribed by the NBS when (1) sent abroad for professional training and education, (2) appointed to work in a state mission abroad, or (3) emigrating from Serbia. Previously, only foreign citizens residing in Serbia for more than one year and diplomatic, consular, and other representative offices abroad, as well as their employees and their families, were allowed to keep foreign exchange on accounts abroad freely. Banks may hold foreign exchange accounts without approval of NBS.
Approval requiredEffective February 10, 2007, subject to the approval of the NBS, residents may keep foreign exchange in accounts abroad for (1) performing construction work; (2) covering current costs of representative offices and branches of legal entities; (3) financing exploration works; (4) investing in insurance companies; (5) making guarantee deposits; (6) using foreign financial credits for payment of imports of goods and services, and for repayment of previously used foreign credits (refinancing), if the disbursement of such credits is conditional upon holding funds with a foreign bank; (7) purchasing securities; (8) collecting payments against court decisions; and (9) covering costs of residing abroad for medical treatment. Previously, the number of cases for residents’ accounts abroad was lower.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Decision on the Conditions of Opening and Manner of Maintaining Foreign Exchange Accounts of Residents (RS Official Gazette No. 67/06); Decision on the Terms of Permitting Residents to Hold Foreign Exchange in an Accounts Abroad (Official Gazette of FRY No. 25/2002); Decision Specifying the Terms and Manner in which Residents May Hold Foreign Exchange in Bank Account Abroad (RS Official Gazette No. 16/07, effective February 10, 2007); Decision of Payment, Collection of Payments, Paying in and Paying out in Foreign Cash (RS Official Gazette No. 9/07, effective January 16, 2007); www.nbs.yu.
Nonresident Accounts
Foreign exchange accounts permittedNonresident natural persons and legal entities may hold foreign exchange accounts with authorized banks in the form of demand and time deposits. Deposits may be held in currencies traded on the domestic foreign exchange market. Deposits to foreign currency accounts may be made with transfers or, in certain cases, with cash.



Account holders may use the foreign exchange in their accounts to make dinar payments in Serbia, to transfer foreign exchange abroad, and to make foreign exchange payments abroad or domestically, in accordance with existing regulations.



Domestic payments, collections, and transfers in foreign currency involving these accounts are permitted only in cases specified in the Foreign Exchange Law.



A bank may not cancel or return to the foreign exchange account any dinar disbursements effected from foreign currency accounts of foreign persons. On the request of a nonresident, banks may return dinars from the nonresident’s dinar account to a nonresident’s foreign exchange account for transferring abroad.



Citizens of Serbia who have resided abroad for more than one year are considered nonresidents.
Domestic currency accountsNonresidents may hold domestic currency acquired through authorized transactions in current and deposit accounts with authorized banks.
Convertible into foreign currencyNonresidents may freely convert dinars acquired in accordance with the Foreign Exchange Law into foreign currency.
Blocked accountsNo.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Decision on the Manner of Maintaining Foreign Exchange Passbooks and Foreign Exchange Accounts of Resident and Nonresident Natural Persons in Banks (RS Official Gazette No. 94/04); Decision on the Terms of Opening and Manner of Maintaining Nonresident Accounts (RS Official Gazette No. 16/07, effective February 10, 2007); Decision on the Foreign Currencies and Foreign Currency Effective Money Purchasable at the Foreign Exchange Market (RS Official Gazette No. 23/03); Decision on Types of Foreign Exchange and Foreign Cash to Be Purchased and Sold in the Foreign Exchange Market (RS Official Gazette No. 24/07, effective of March 5, 2007); www.nbs.yu.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Minimum financing requirementsPayments for imports of goods and services are free of restrictions, provided documentary proof is submitted.
Advance payment requirementsThere are no restrictions on advance payments for imports of goods or services; however, effective July 27, 2006, residents are obliged to import goods or services within 180 days following the day of the advance payment. Otherwise, residents are obliged to repatriate the prepaid sum immediately, and not later than 5 days following the 180-day deadline. Imports of prepaid goods and services with a contracted period exceeding 180 days (previously, 90 days) from the date of advance payment are deemed to be credit transactions, which should be recorded with the NBS, and are subject to provisions on deadlines and the procedure, specified in a decision based on the Foreign Exchange Law. Residents may import books, magazines, newspapers, and other publications within 12 months from the date of advance payment without recording it as a foreign credit transaction with the NBS. Effective January 31, 2007, procedures for recording and reporting imports with a contracted deadline exceeding 180 days from the date of advance payment are simplified, and the documentary requirements are reduced.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementPayments for imports may be effected through authorized banks. Residents are allowed to make payments for imports with their own foreign exchange funds held with an authorized bank or by purchasing foreign exchange on the foreign exchange market without restriction through an authorized bank. Residents are obligated to provide the bank with the standard import documentation.
Preshipment inspectionYes.
Import licenses and other nontariff measuresThe number of items subject to licensing is 273. Licenses are required for armaments (including firearms, sport and hunting arms, and ammunition), explosives and raw materials used in explosives, military equipment, certain precious metals, narcotic drugs, and goods that are subject to international agreements.



Licenses for export, import, and transit of goods that are subject to international agreements are issued by the competent institutions, and the list of such goods includes narcotics; precursors; ozone-layer-damaging substances; dangerous waste; endangered plant and animal species; and protected rare, thinned, endemic, and endangered plant and animal species.
Positive listAn estimated 97.34% of all tariff items may be imported freely. Goods not on the control list are free to be imported and exported.
Negative listImports of used vehicles that do not comply with standards of the EU and hazardous waste materials are prohibited. Used motor vehicles may be imported if they satisfy traffic security, human environment protection, and protection of human health. Imports of dangerous waste material and certain poisons are prohibited.
Licenses with quotasThe government does not issue specific licenses with value or volume quotas.
Other nontariff measuresYes.
Import taxes and/or tariffsThe import tariff schedule has a maximum import duty of 30% and a simple average rate of under 10%.
State import monopolyNo.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Decision on Conditions and Manner of Arranging Payments Made, Payments Received, and Transfers under Current and Capital Transactions in Foreign Currency and Dinars (Official Gazette of FRY No. 25/02); Guidelines for Implementation of Decisions on Conditions and Manner of Arranging Payments Made, Payments Received, and Transfers under Current and Capital Transactions in Foreign Currency and Dinars (RS Official Gazette No. 94/04); Decision on Terms and Manner of Performing International Payment Transactions (RS Official Gazette No. 24/07, effective April 1, 2007); Guidelines for Implementation of Decision on Terms and Manner of Performing International Payment Transactions (RS Official Gazette No. 24/07); Decision on the Registration Method, Time Limits, and Forms for Registration and Recording of the External Credit Operations in Article 9, Paragraph 3 and Article 10, Paragraph 3 of the Foreign Exchange Law (RS Official Gazette No. 132/2004); Decision on the Deadlines and Procedure of Recording Foreign Credit Transactions under Article 4, Paragraph 2 and Article 5, Paragraph 3 of the Law on Foreign Exchange Operations (RS Official Gazette No. 11/07, effective January 31, 2007); www.nbs.yu; Law on Foreign Trade Transactions (RS Official Gazette No. 101/2005); Decision on Determination of Goods for which Import, Export, and Release into Circulation Specific Conditions are prescribed (RS Official Gazette No. 114/2005); www.mier.sr.gov.yu.
Exports and Export Proceeds
Repatriation requirementsEffective July 27, 2006, residents must collect receipts from the exports of goods and services within 180 days (previously, 90 days) following the clearance of the exported goods or the day of rendering the services. Proceeds from the sale of goods located abroad must be repatriated within 180 days from the payment. The export of goods and services with a contracted period for collection of payment of more than 180 days (previously, 90 days) following customs clearance of goods and/or after the date when a service was rendered, as well as the export of goods or services of which the proceeds were not repatriated within 180 days, are deemed to be credit transactions, which must be recorded with the NBS, and are subject to provisions on deadlines and procedures of recording as specified in the relevant decisions. Effective January 31, 2007, transactions related to air, railway, highway, and sea and river transport services; postal and telecommunications services; cross-border electricity trade and distribution transactions; health care services for nonresidents, regulated by international agreements; as well as exports and imports of books, magazines, journals, and other publications (subscription) with a contracted term of collection up to one year, are not deemed transactions subject to recording with the NBS.
Financing requirementsNo.
Documentation requirements
DomiciliationCollection of funds from the exports of goods and services must be effected through authorized banks.
Preshipment inspectionYes.
Export licensesOut of the total 10,268 tariff items, the free export regime applies to 10,010 items (or 97.49%). After the adoption of the new Law on Customs Tariff, which includes 10,290 items, and according to the new control list, the license regime will consist of 84 items or 0.8% of the total number of customs tariff items (i.e., 99.2% of goods belong to the free export regime).
Without quotasExport licenses under scheme D are required for 258 (or 2.51% of total) items, including 65 items formerly subject to tariffs. These are required for armaments (including firearms, sport and hunting arms, and ammunition), explosives and raw materials used in explosives, military equipment, cultural goods, narcotic drugs, certain precious metals, and goods that are subject to international agreements.
Export taxesNo.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Decision on the Registration Method, Time Limits, and Forms for Registration and Recording of the External Credit Operations in Article 9, Paragraph 3 and Article 10, Paragraph 3 of the Foreign Exchange Law (RS Official Gazette No. 132/2004); Decision on the Deadlines and Procedure of Recording Foreign Credit Transactions under Article 4, Paragraph 2 and Article 5, Paragraph 3 of the Law on Foreign Exchange Operations (RS Official Gazette No. 11/07, effective January 31, 2007); Decision on Conditions and Manner of Arranging Payments Made, Payments Received, and Transfers under Current and Capital Transactions in Foreign Currency and Dinars (Official Gazette of FRY No. 25/02); Guidelines for Implementation of Decisions on Conditions and Manner of Arranging Payments Made, Payments Received, and Transfers under Current and Capital Transactions in Foreign Currency and Dinars (RS Official Gazette No. 94/04); Decision on Terms and Manner of Performing International Payment Transactions (RS Official Gazette No. 24/07, effective April 1, 2007); Guidelines for Implementation of Decision on Terms and Manner of Performing International Payment Transactions (RS Official Gazette No. 24/07) www.nbs.yu; Law on Foreign Trade Transactions (RS Official Gazette No. 101/2005); Decision on Determination of Goods for which Import, Export, and Release into Circulation Specific Conditions are Prescribed (RS Official Gazette No. 114/2005); www.mier.sr.gov.yu.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersDocumentary requirements must be satisfied. Natural persons are permitted to make payments for current transactions, including imports of goods and services that are permitted by law.
Payments for travelEffective August 5, 2006, for the purpose of travel, a resident natural person may take foreign cash or traveler’s checks abroad in the total amount of €5,000 (previously, €2,000), and payment cards in unlimited amounts.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testEffective August 5, 2006, all transactions require documentary evidence, except for transfers of less than €8,000 (previously, €5,000) a month for family support. Transfers exceeding €8,000 may be effected on the basis of standard documentation, such as residence permit, work permit, student visa, etc., and evidence that the family member has a third degree of kinship (birth certificate, marriage certificate).
Foreign workers’ wagesThese transactions may be made freely after payment of the appropriate taxes.
Indicative limits/bona fide testYes.
Credit card use abroadEffective August 5, 2006, the use of credit cards is free. Previously, it was restricted to current transactions.
Prior approvalYes.
Quantitative limitsYes.
Other payments
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Decision on the Requirements for Effecting Personal and Physical Transfers of Means of Payment to and from Abroad (RS Official Gazette No. 67/06); www.nbs.yu.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsEffective February 10, 2007, the requirement on the repatriation of profits by legal entities operating abroad was eliminated. The repatriation requirement applies to residents holding foreign exchange in accounts abroad on approval by the NBS. These persons must repatriate means of payment in 30 days following completion of the activity for which the NBS approval was issued. Previously, all proceeds were subject to repatriation requirement.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); www.nbs.yu; Law on Foreign Trade Transactions (RS Official Gazette No. 101/05); www.mier.sr.gov.yu.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsEffective July 27, 2006, the repatriation requirement on the profits of direct investment abroad was eliminated. Previously, the repatriation requirement applied to all residents who earned foreign exchange abroad or transferred foreign exchange abroad but retained the unused balance. Residents must inform the Foreign Exchange Inspectorate about the profits earned abroad.
Controls on capital and money market instrumentsThe Securities Committee supervises the activities of security market participants at the national level.
On capital market securitiesThe Securities Committee regulates trading in shares and long-term securities.
Shares or other securities of a participating natureThe Securities Committee controls the issuing of and trading in shares or other securities of a participating nature.
Purchase locally by nonresidentsThese transactions are permitted, except for shares of domestic companies involved in weapons production or trading activities, unless the majority of shares of a joint-venture company is owned by a resident investor.
Sale or issue locally by nonresidentsThese transactions are implicitly permitted in accordance with the Law on Securities Market.
Purchase abroad by residentsResident legal entities, entrepreneurs, and natural persons may effect payments for the purpose of buying equities abroad. Payments must be performed through the dealer’s bank.
Sale or issue abroad by residentsThese transactions are not controlled, but the procedures are regulated.
Bonds or other debt securitiesThe Securities Committee controls the issuing of and trading in long-term debt instruments.
Purchase locally by nonresidentsEffective July 27, 2006, nonresidents may effect payment for the purpose of purchasing long-term debt securities in line with the Law on Securities Market. Previously, payments on these transfers were controlled.
Sale or issue locally by nonresidentsThese transactions are not explicitly controlled, but the related payments must be performed through the dealer’s bank.
Purchase abroad by residentsEffective July 27, 2006, residents may effect payment for the purpose of purchasing long-term debt securities issued by OECD member countries and international financial organizations, and other long-term debt securities in accordance with the regulation of the NBS on the level of risk (rating) and issuer country. Residents may effect payment for the purpose of purchasing domestic securities denominated in foreign currency and issued abroad.
Sale or issue abroad by residentsThese transactions are not controlled, but related payments are regulated.
On money market instruments
Purchase locally by nonresidentsThese transactions are prohibited.
Sale or issue locally by nonresidentsThese transactions are not explicitly controlled, but related payments are regulated.
Purchase abroad by residentsThese transactions are not explicitly controlled, but related payments are not permitted unless the purchaser is the NBS or an authorized bank under conditions prescribed by the NBS.
Sale or issue abroad by residentsThese transactions are prohibited.
On collective investment securities
Purchase locally by nonresidentsThese transactions are permitted according to the Investment Fund Law and the Voluntary Pension Fund Law.
Sale or issue locally by nonresidentsNonresidents must be registered according to the Investment Fund Law and the Voluntary Pension Fund Law.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.r.
Controls on derivatives and other instrumentsEffective July 27, 2006, payments for the purchase of financial derivatives are regulated by the Foreign Exchange Law. Previously, because the Foreign Exchange Law did not regulate payments in respect of financial derivatives, the provisions regulating payments with respect to short-term and long-term securities were applied. Effective July 27, 2006, banks and other residents may effect payments for the purpose of purchasing financial derivatives in Serbia under the conditions prescribed by the NBS.
Purchase locally by nonresidentsEffective July 27, 2006, nonresidents may effect payments for the purpose of purchasing financial derivatives under the conditions prescribed by the NBS. Previously, nonresidents were not allowed to purchase such instruments.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsPayments for the purpose of purchasing financial derivatives in organized markets abroad may be effected by the NBS.
Sale or issue abroad by residentsYes.
Controls on credit operationsForeign credit transactions must be recorded with the NBS. Effective January 26, 2007, the procedure of recording foreign credit transactions was simplified and the related documentary requirement was reduced.
Commercial credits
By residents to nonresidentsResident legal entities and entrepreneurs may extend commercial credits to nonresidents without restrictions.
To residents from nonresidentsResident legal entities and entrepreneurs may obtain commercial credits from nonresidents without restrictions.
Financial credits
By residents to nonresidentsResident legal entities other than authorized banks may extend financial loans to nonresidents only out of profits generated by the residents’ businesses abroad, provided the nonresident debtor is a majority owner of the resident, and the resident legal entity contracts and acquires collateral instruments for the payment from the nonresident.
To residents from nonresidentsResidents may borrow funds from nonresidents without any restrictions if the proceeds of the credit are used for the payment of imports of goods and services; for financing construction work abroad, concluded by residents within the scope of their activity; and for the repayment of previously obtained external credits (refinancing). Residents may borrow funds from nonresidents for other purposes as well, in the manner and under the conditions determined by the NBS. Effective January 10, 2006, the ceiling (previously, €1.9 billion) for these credits has been abolished. The terms of such credits must not be shorter than 13 months (with an obligatory grace period of 6 months) from every disbursement, except for credits intended for agriculture. The terms of the credits intended for agriculture may be shorter than 13 months, and the obligatory grace period must be 3 months from every disbursement. Effective February 10, 2006, foreign borrowing by leasing companies is subject to a minimum reserve requirement of 10% of the reserve base.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsResident legal entities other than authorized banks may issue warranties and other means of collateral under credit operations between two nonresidents abroad only out of profits generated by the residents’ businesses abroad, under the condition that the nonresident debtor is a majority owner of the resident, and provided the resident legal entity contracts and acquires from the nonresident collateral instruments.
To residents from nonresidentsNonresidents may issue guarantees and sureties to residents under credits granted by residents to nonresidents.
Controls on direct investmentInvestments may be in the form of (1) foreign exchange, (2) in kind, (3) intellectual property rights, or (4) securities and other property rights.
Outward direct investmentEffective July 27, 2006, the repatriation requirement on profits generated abroad was eliminated. However, the Foreign Exchange Inspectorate must be informed about the profit.
Inward direct investmentA nonresident foreign investor may invest in assets in a domestic enterprise to acquire a share in the fixed capital of a domestic enterprise. A foreign investor may exchange established claims against a share of capital and/or stock of a debtor company.
Controls on liquidation of direct investmentProceeds from liquidation of direct investment may be transferred abroad without control, provided all tax liabilities have been settled.
Controls on real estate transactions
Purchase abroad by residentsEffective January 10, 2006, payments for the purpose of acquiring ownership of real estate by residents abroad may be made freely in line with the law on legal ownership relations.
Purchase locally by nonresidentsEffective January 10, 2006, payments for the purpose of acquiring ownership of real estate by nonresidents may be made freely in line with the law on legal ownership relations. The previous requirement that payments must be made in foreign currency was eliminated.
Sale locally by nonresidentsProceeds from these transactions may be transferred abroad freely, provided tax liabilities have been settled.
Controls on personal capital transactions
LoansResident natural persons are not allowed to lend to or borrow from nonresidents.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsResidents may transfer currency gifts abroad up to the amount of €3,000.
To residents from nonresidentsThese transactions are free but are subject to anti–money laundering regulations.
Settlements of debts abroad by immigrantsImmigrants who have resided in the country for up to one year may freely transfer payments abroad to settle debt in their home country, on acquisition of resident status, based on evidence of such debt and request for residence registration with the competent authority in Serbia.
Transfer of assets
Transfer abroad by emigrantsEffective August 15, 2006, emigrants may take abroad foreign currency up to the equivalent of €15,000 (previously €2,000) based on evidence of emigration; any remaining funds must be transferred through the banking system.
Transfer into the country by immigrantsImmigrants may freely transfer assets into the country.
Transfer of gambling and prize earningsEarnings from lotteries may be transferred abroad after payment of all tax obligations.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Decision on the Requirements for Effecting Personal and Physical Transfers of Means of Payment to and from Abroad (RS Official Gazette No. 67/06); Decision on the Terms of Permitting Residents to Hold Foreign Exchange in an Account Abroad (Official Gazette of FRY No. 25/2002); Decision Specifying Terms and Manner in which Residents May Hold Foreign Exchange in Bank Account Abroad (RS Official Gazette No. 16/07, effective February 10, 2007); Decision on the Conditions of Purchasing Foreign Short-Term Securities (Official Gazette of FRY No. 25/02); Decision on Terms and Manner in which Banks May Buy Foreign Short-Term Securities in Foreign and Domestic Markets (RS Official Gazette No. 16/07, effective February 10, 2007); Decision on Reporting Requirements in International Operations (Official Gazette of FRY No. 25/02); Guidelines for the Implementation of the Decision on Reporting Requirements in International Operations (Official Gazette of FRY No. 55/02); Decision on Reporting Requirements in International Operations; Guidelines for the Implementation of the Decision on Reporting Requirements in International Operations (RS Official Gazette No. 24/07, effective March 3, 2007); Decision on the Procedure and Terms of Utilizing External Financial Loans for the Purposes Referred to in Article 21, Paragraph 2 of the Law on Foreign Exchange Operations (RS Official Gazette No. 81/06); Decision on the Manner, Deadlines, and Forms Used in Registering and Recording International Credit Transactions (Official Gazette of FRY No. 61/99); Decision on the Procedure, Deadlines, and Forms Used in Recording Foreign Credit Transactions (RS Official Gazette No. 9/07, effective January 26, 2007); www.nbs.yu; Law on Foreign Trade Transactions (RS Official Gazette No. 101/05); Law on Foreign Investments (Official Gazette of FRY Nos. 03/02 and 05/03); www.mier.sr.gov.yu; Law on the Market of Securities and Other Financial Instruments (Official Gazette of FRY No. 65/02, RS Official Gazette, Nos. 57/03 and 55/04); Law on Banks (RS Official Gazette No. 107/05); Investment Fund Law (RS Official Gazette No. 46/06); Voluntary Pension Fund Law (RS Official Gazette No. 85/05) www.mfin.sr.gov.yu.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsOn October 1, 2006, the new regulatory framework for banks’ operations was created based on the new Law on Banks, bylaws, and other regulations. The bylaws and other regulations include provisions on classification of on-balance-sheet assets and off-balance-sheet items, capital adequacy, risk management (including more detailed definition of bank compliance risk), granting preliminary approvals for bank founding and subsequent issuing of full operating licenses, approvals for acquiring bank shares, detailed conditions and manner of conducting bank supervision by the NBS, and regulations on external bank audit. Also, to eliminate the risk that may arise as a consequence of banks’ noncompliance with the regulations preventing money laundering and financing of terrorism, banks are legally obliged to adopt the “know your customer” procedure.
Borrowing abroadOnly banks that have received NBS authorization to perform international operations may conclude credit agreements with nonresidents. These transactions must meet the requirements set by the regulations governing banking operations and foreign credit transactions. Effective May 10, 2006, the NBS raised the statutory reserve requirement on commercial banks’ foreign borrowing with a maturity of up to two years to 60% from 40%. Effective January 10, 2007, the statutory reserve requirement was lowered to 45% from 60%, unifying the reserve requirements on all external debt, regardless of maturity. Effective February 10, 2006, foreign borrowing by leasing companies is subject to a minimum reserve requirement of 10% of the reserve base.
Maintenance of accounts abroadAuthorized banks may hold foreign currency abroad only in accounts with banks.
Lending to nonresidents (financial or commercial credits)Banks may provide credits in dinars to nonresidents in the manner and under conditions prescribed by the NBS. Authorized banks may extend loans in foreign currency to nonresidents, provided that they contract and acquire from the nonresident payment collateral instruments. Such loans must be recorded with the NBS.
Lending locally in foreign exchangeBanks may extend to resident legal entities and entrepreneurs credits in foreign currency for the payment of import of goods and services from abroad, and to resident natural persons for the purchase of real estate in the country.
Purchase of locally issued securities denominated in foreign exchangePurchases are regulated.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsForeign exchange savings deposits made by individuals are included in the required reserves base at a rate of 40%. The reserve base also includes foreign exchange loans at a rate of 45% (previously, 60%).
Liquid asset requirementsEffective January 10, 2007, the NBS applied a uniform reserve requirement ratio of 45% to all foreign currency deposits, regardless of maturity, as well as to foreign-currency-indexed dinar deposits. The only exception to this rule is the 40% reserve requirement maintained on obligations with respect to foreign currency savings deposits with domestic banks.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsEffective June 10, 2006, the NBS raised the statutory reserve requirement for nonresident dinar deposits to 60% from 18%, unifying it with the rate for commercial banks’ foreign borrowing with a maturity of up to two years. Effective January 10, 2007, the rate was lowered to 45%.
Investment regulations
Abroad by banksNBS approval is required and issued under the conditions set in the decision on the granting of approval for capital investment in a bank abroad.
In banks by nonresidentsNBS approval is required for the acquisition of 5% to 20%, 20% to 33%, 33% to 50%, and over 50% of voting rights.
Open foreign exchange position limitsA bank’s open foreign exchange position is limited to 30% of its capital.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsInsurance companies may not trade securities issued by nonresidents.
Limits (max.) on investment portfolio held abroadEffective January 1, 2007, insurance companies may deposit and invest up to 20% of core capital abroad.
Limits (min.) on investment portfolio held locallyThe technical reserves assets may be deposited and invested according to the following limits: (1) in bonds or other debt securities that are traded in the organized securities market (of the same issuer), life–35%, non-life–25%; (2) in shares that are traded in the organized securities market, life–25%, non-life–20%; (3) in bonds or other debt securities and shares that are not traded in the organized securities market (of the same issuer), life–5%, non-life–5%; (4) in bank deposits (with one bank), life–20%, non-life–25%; and (5) in real estate (in one piece of real estate), life–30%, non-life–10%.
Currency-matching regulations on assets/liabilities compositionThe company is obliged to deposit and invest the assets of the technical reserve in a manner that ensures that in accordance with the type of insurance activities it performs, the maturity of deposited and invested assets correspond to the obligations of the company for which technical reserves are formed.
Pension funds
Limits (max.) on securities issued by nonresidentsEffective March 27, 2006, the assets of a pension fund may be invested up to 10% in securities issued by nonresidents. The maximum levels, conditions, and manner of investing voluntary pension fund assets were determined.
Limits (max.) on investment portfolio held abroadn.r.
Limits (min.) on investment portfolio held locallyThese investments are regulated by the Law on Voluntary Pension Funds.
Currency-matching regulations on assets/liabilities compositionn.r.
Investment firms and collective investment fundsSecurities trading must take place on an organized exchange, with the exception of secondary trading in fixed-income securities.
Limits (max.) on securities issued by nonresidentsEffective December 11, 2006, 30% of the fund’s assets may be invested abroad, according to the regulation of the Committee on Securities.
Limits (max.) on investment portfolio held abroadEffective December 11, 2006, 30% of the fund’s assets may be invested abroad, according to the regulation of the Committee on Securities.
Limits (min.) on investment portfolio held locallyThese investments are regulated by the provisions of the Investment Fund Law.
References to legal instruments and hyperlinksForeign Exchange Law (RS Official Gazette No. 62/06); Law on the Settlement of the Public Debt of the FRY Arising from the Citizens’ Foreign Exchange Savings (Official Gazette of FRY No. 36/02); Law on Banks (RS Official Gazette No 107/2005); Decision on the Cessation of Validity of the Decision on the Conditions and Manner of Securing the Liquidity of Payment of Natural Persons’ Foreign Exchange Deposits with Banks (RS Official Gazette No. 109/05); Decision on Banks’ Required Reserves Held with the NBS (RS Official Gazette Nos. 48/04, 86/04, 90/04, 136/04, 46/05, 69/05, 77/05, 80/05, 86/05, 91/05, 95/05, 102/05, and 109/05); Decision on the Procedure and Terms of Utilizing External Financial Loans for the Purposes Referred to in Article 21, Paragraph 2 of the Law on Foreign Exchange Operations (RS Official Gazette No. 81/06); Decision on the Manner, Deadlines, and Forms Used in Registering and Recording International Credit Transactions (Official Gazette of FRY No. 61/99); Decision on the Procedure, Deadlines and Forms Used in Recording Foreign Credit Transactions (Official Gazette No. 9/07, effective January 26, 2007); www.nbs.yu; Investment Fund Law (RS Official Gazette No. 46/06); Voluntary Pension Fund Law (RS Official Gazette No. 85/05); www.mfin.sr.gov.yu; Regulation on Investment Funds (RS Official Gazette No. 110/06); www.sec.sr.gov.yu.
Changes during 2006
Status under IMF articles of agreementJuly 12. The Republic of Serbia continued the IMF membership of the Union.
Exchange arrangementAugust 7. Under the Monetary Policy Program for 2006, the NBS allowed the licensed exchange offices to conclude agreements with either a bank, the NBS, several banks, a bank and the NBS, or several banks and the NBS.



August 7. The time of the fixing session was changed from 11:30 a.m. to 2:30 p.m. to stimulate banks to effect most of their trade before the fixing session. The rate set at a fixing session applied to transactions conducted at the fixing session. The NBS intervened in the fixing sessions, with the aims of moderating excessive daily exchange rate volatility and guiding exchange rate expectations.



August 8. The exchange rate of the dinar against the euro was fixed at the start of each business day at the level set at the fixing sessions on the previous day. That exchange rate represents the official middle exchange of the dinar against the euro, and it applies on that business day. Exchange rate lists for the official middle exchange rate of the dinar for foreign exchange and foreign cash are applied from 8:00 a.m. on a given business day until the publication of subsequent exchange rate lists.



August 26. The NBS introduced a 0.1% commission, charged on each realized transaction, for organizing the fixing session, instead of charging commission on the NBS foreign exchange sales at the fixing session.



August 30. The NBS adopted a new monetary policy regime for eventual transition to full-fledged inflation targeting.
Arrangements for payments and receiptsAugust 5. The limit on the import and export of dinars was increased to the dinar equivalent of €5,000 from 120,000 dinars. The limit on the export of foreign currency was increased to €5,000 from €2,000.
Resident accountsAugust 5. Resident natural persons were allowed to hold foreign exchange accounts abroad freely when (1) sent abroad for professional training and education; (2) appointed to work in state missions abroad; or (3) emigrating from Serbia.
Imports and import paymentsJuly 27. The deadline for import of goods and services paid in advance was prolonged to 180 days from 90 days. According to the new Foreign Exchange Law, the import of prepaid goods and services with a contracted period exceeding 180 days from the date of advance payment was deemed to be a credit transaction to be recorded with the NBS.
Exports and export proceedsJuly 27. The deadline for repatriation of proceeds from exports was prolonged to 180 days from 90 days. According to the new Foreign Exchange Law, the export of goods and services with a contracted period of collection exceeding 180 days following customs clearance of goods and/or the date when a service was rendered, as well as the export of goods or services under which the collection has not been made within the mentioned deadline, were deemed to be credit transactions to be recorded with the NBS.
Payments for invisible transactions and current transfersAugust 5. The use of credit cards abroad became free.



August 5. The amount residents were allowed to take abroad for travel purposes was increased to €5,000 from €2,000.



August 5. The amount of foreign exchange that residents can freely transfer abroad through banks based on family support was increased to €8,000 from €5,000.
Capital transactionsJuly 27. The repatriation requirement on the profits of direct investment abroad was eliminated.
Controls on capital and money market instrumentsJuly 27. The types of securities that residents may purchase abroad and nonresidents may purchase in Serbia on the capital market were specified. Nonresidents were allowed to purchase long-term debt securities in line with the Law on Securities Market. Residents were allowed to buy long-term debt securities issued by OECD member countries and international financial organizations, and other long-term debt securities in accordance with NBS regulations on risk (rating) and issuer country.
Controls on derivatives and other instrumentsJuly 27. A legal basis on financial derivatives trade was provided. Nonresidents and residents were allowed to purchase instruments under the conditions prescribed by the NBS.
Controls on credit operationsJanuary 10. The previous €1.9 billion ceiling on external loans for conversion into dinars was eliminated.



February 10. Foreign borrowing by leasing companies became subject to a 10% minimum reserve requirement.
Controls on direct investmentJuly 27. Residents were no longer required to repatriate profits from direct investment abroad; however, they must inform the Foreign Exchange Inspectorate about the profit.
Controls on real estate transactionsJanuary 10. The requirement that the purchase of real estate is to be paid with foreign exchange funds was eliminated.
Controls on personal capital transactionsAugust 15. The amount of foreign currency that may be exported by an emigrant was raised to €15,000.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJanuary 10. The new Decision on the Procedure and Terms of Utilizing External Financial Loans for the Purposes Referred to in Article 21, Paragraph 2 of the Law on Foreign Exchange Operations eliminated the ceiling for utilizing external loans for conversion into dinars, and maintaining bank liquidity.



February 10. Foreign borrowing by leasing companies became subject to a 10% minimum reserve requirement.



May 10. The NBS raised the statutory reserve requirement on commercial banks’ foreign borrowing with a maturity of up to two years to 60% from 40%.



June 10. The NBS raised the statutory reserve requirement for nonresident dinar deposits to 60% from 18%, unifying it with the rate for commercial banks’ foreign borrowing with a maturity of up to two years.



October 1. The new regulatory framework for banks’ operations was created based on the new Law on Banks, bylaws, and other regulations. The bylaws and other regulations included provisions on classification of on-balance-sheet assets and off-balance-sheet items, capital adequacy, risk management (including more detailed definition of bank compliance risk), granting preliminary approvals for bank founding and subsequent issuing of full operating licenses, approvals for acquiring bank shares, detailed conditions and manner of conducting bank supervision by the NBS, and regulations on external bank audit. Also, to eliminate the risk that may arise as a consequence of banks’ noncompliance with the regulations preventing money laundering and financing of terrorism, banks were legally obliged to adopt the “know your customer” procedure.
Provisions specific to institutional investorsMarch 27. The maximum levels, conditions, and manner of investing voluntary pension fund assets were determined. Pension funds were allowed to invest in securities issued by nonresidents up to 10% of their assets.



December 11. Investment funds were allowed to invest 30% of the fund’s assets abroad, according to the regulation of the Committee on Securities.
Changes during 2007
Exchange arrangementJanuary 1. The NBS stopped foreign exchange operations with resident and nonresident natural persons at its foreign offices and automatic teller machines in order to decrease its foreign cash operations.



March 5. The exchange rate of the dinar against the euro was fixed at the start of each business day at the level of the weighted average exchange rate of the dinar against the euro based on total interbank spot trade, recorded on the previous business day, including trade in the fixing session. The exchange rate calculated in this way represents the official middle exchange of the dinar against the euro and it applies on that business day.



According to the 2007 Policy Program of the NBS, the NBS could intervene in the foreign exchange market aiming at limiting daily volatility, but not resisting cumulative pressure over a longer period; containing potential threats to financial and price stability; and safeguarding an adequate level of international reserves.



The NBS stopped conducting trade in foreign cash currencies other than euro, dollar, and franc with banks and licensed foreign offices.
Arrangements for payments and receiptsFebruary 10. Banks were allowed to approve dinar credits to nonresidents in Serbia.
Resident accountsFebruary 10. The number of cases under which residents may hold foreign exchange in the account with banks abroad on approval issued by NBS was increased.
Imports and import paymentsJanuary 31. The procedures for recording and reporting imports with a deadline of more than 180 days were simplified and the documentary requirements were reduced.
Exports and export proceedsJanuary 31. Certain transactions under international agreements and related to publications with a contractual period of up to one year were not deemed to be transactions subject to recording with the NBS.
Proceeds from invisible transactions and current transfersFebruary 10. The repatriation requirement on profits by legal entities operating abroad was eliminated.



February 10. Residents holding foreign exchange in foreign bank accounts were required to repatriate the remaining funds following 30 days after completion of the activity for which the NBS approval was issued.
Capital transactions
Controls on credit operationsJanuary 26. According to the new Decision on the Procedure, Deadlines, and Forms Used in Recording Foreign Credit Transactions, the procedure of recording foreign credit transactions was simplified and documentary requirements were reduced.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJanuary 10. The NBS applied a uniform reserve requirement ratio of 45% to all foreign currency deposits, regardless of maturity, as well as on foreign-currency-indexed dinar deposits except for foreign currency savings deposits of individuals, which are subject toa 40% reserve requirement.



January 10. The statutory reserve requirement for nonresident dinar deposits was lowered to 45% from 60%.
Provisions specific to institutional investorsJanuary 1. Insurance companies were allowed to deposit and invest up to 20% of core capital abroad.

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