Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

SPAIN

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of February 28, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: July 15, 1986.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Exchange restrictions have been imposed in accordance with EU regulations and UN Security Council resolutions.
Other security restrictionsIn accordance with the relevant UN Security Council resolutions, certain restrictions are maintained with respect to the Democratic Republic of the Congo, the former government of Iraq, Myanmar, certain individuals associated with the previous government of the former Federal Republic of Yugoslavia, and Zimbabwe. Financing of and financial assistance related to military activities in Somalia are prohibited. Restrictions also apply on transfers with respect to Al-Qaida, the Taliban, and individuals and organizations associated with terrorism.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Spain is the euro.
Exchange rate structureUnitary.
Classification
Independently floatingSpain participates in a currency union (EMU) with 12 other members of the EU. Effective January 1, 2007, the exchange arrangement of the EMU countries has been reclassified to the category independently floating 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 marketOptions and futures in euros are traded in major financial markets.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangementsNo.
Administration of controlPayments and receipts between residents and nonresidents may be made freely. For statistical and administrative purposes, all payments, receipts, and transfers between residents and nonresidents exceeding €12,500 and made through credit institutions must be declared to the Ministry of Economy (MOE) and the Bank of Spain (BOS). In the case of cash payments and receipts, the threshold, for money laundering control purposes, is set at €10,000, effective February 13, 2007 (previously, €6,010). However, under special circumstances, the MOE may impose restrictions to protect the national interest or to comply with the rules of international organizations.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesEffective February 13, 2007, imports and exports of banknotes in excess of the equivalent of €10,000 (previously, €6,010) must be declared for anti–money laundering purposes. Imports and exports of banknotes by banks and other authorized financial institutions require prior notification to the BOS.
References to legal instruments and hyperlinksRoyal Decree 1816/1991, www.boe.es/g/es/bases_datos/doc.php?coleccion=iberlex&id=1991/30763; Order 27 December 1991, www.boe.es/g/es/bases_datos/doc.php?coleccion=iberlex&id=1991/30911&codmap=; Order EHA 1439/2006, www.boe.es/boe/dias/2006/05/13/pdfs/A18498-18505.pdf.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadCollections and payments between residents and nonresidents through credits or debits to these accounts may be made freely. However, for statistical and administrative purposes, account holders are required to report the opening and closing of such accounts and to provide information pertaining to credit and debit activities in the accounts above certain amounts.



Controls apply to deposits of funds with credit entities established outside the EU, if the assets in question are to form part of the cover of the technical reserves of an insurance company.
Accounts in domestic currency held abroadThe requirements on foreign exchange accounts held abroad also apply to euro accounts abroad. Controls apply to deposits of funds with credit entities established outside the EU, if the assets in question are to form part of the cover of the technical reserves of an insurance company.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksCircular 3/2006, www.bde.es/normativa/circu/CEC200603.pdf.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksCircular 1/1994, www.bde.es/normativa/circu/c199401.pdf.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listSpain applies the EU common import regime. In addition, imports of certain defense materials require prior authorization from the General Secretary of Foreign Trade.
Open general licensesYes.
Licenses with quotasIn accordance with EU regulations, Spain requires licenses with quotas for certain imports, such as steel and textile products, depending on the country of origin.
Import taxes and/or tariffsSpain applies the EU Common Customs Tariff.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExports of certain defense materials require prior authorization from the general secretary of foreign trade.
Export taxesNo.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
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 nonresidentsControls apply to the purchase of shares and other securities of a participating nature, which may be affected by laws on inward direct investment and establishment.
Purchase abroad by residentsControls apply to the purchase of securities that are not admitted for trading on a regulated market if the assets in question are to form part of the cover of the technical reserves of an insurance company, except for (1) securities issued or guaranteed by international organizations to which an EU member state belongs; and (2) fixed income securities, provided that a real guarantee or unconditional and several surety has been given on these securities by a credit entity or an insurance entity, which is authorized to operate through an establishment in an EU member state, or when the shares of the issuing company are traded on a regulated market.
Bonds or other debt securities
Purchase abroad by residentsThe regulations governing shares or other securities of a participating nature apply.
On money market instruments
Purchase abroad by residentsThe regulations governing shares or other securities of a participating nature apply.
On collective investment securities
Purchase abroad by residentsControls apply to the holdings of collective investment bodies established outside the country if the assets in question are to form part of the cover of the technical reserves of an insurance company.
Controls on derivatives and other instruments
Purchase abroad by residentsControls apply to operations in instruments and claims on a foreign market if the assets in question are to form part of the cover of the technical reserves of an insurance company, except for (1) mortgage market assets and securities issued by companies established in the EU and traded on a regulated OECD market; (2) bills of exchange and notes, when issued, accepted, endorsed without a nonresponsibility clause, or secured by credit entities authorized to operate through an establishment in the EU. These assets may also be secured by insurance provided by insurance entities authorized to operate through an establishment in the EU; (3) shares of credit entities, brokerage companies and agencies, and insurance and reinsurance entities to the extent that they are subject to authorization and supervision by an EU member state control authority; and (4) derivative instruments, such as options, futures, and swaps, in connection with assets representing the technical provisions, to the extent that they help to reduce the investment risk or permit effective management of the portfolio, if (a) the instruments are traded on a regulated derivatives market, or (b) the counterparts are financial establishments controlled by the EU authorities or subject to the prudential control of supranational bodies to which Spain belongs and they deal habitually and professionally with such transactions and are sufficiently solvent.
Controls on credit operations
Commercial creditsFor statistical and administrative purposes, residents other than banks are required to report to the BOS commercial credits to or from nonresidents exceeding €600,000 and with a maturity of more than one year.
Financial creditsFor statistical and administrative purposes, residents other than banks are required to report to the BOS financial credits to and from nonresidents exceeding €3 million.
By residents to nonresidentsControls apply to credits and loans granted by residents to nonresidents if the assets in question are to form part of the cover of the technical reserves of an insurance company, except for (1) credits or quotas or parts thereof granted to companies domiciled in the EU whose shares are admitted for trading on a regulated OECD market; (2) credits secured by a credit entity or insurer authorized to operate through an establishment in an EU member state; (3) financing granted to public corporations of the EU, provided they offer sufficient guarantee in terms of security, in the quality either of the borrower or of the guarantees provided; (4) mortgage credits, provided these are first mortgages, taken on real estate located in the EU; (5) pledge credits, provided the object of the guarantee is in turn suitable for cover of technical provisions; (6) credits with reinsurers for their participation in the claims provision, to the extent that deposits were not received because of them; and (7) credits for interest income and dividends accrued and not matured, and those that have matured and are pending collection but are not likely to be collected, provided in all cases that they originate in suitable assets.
Controls on direct investment
Inward direct investmentControls apply on investments originating in non-EU member countries by governments, official institutions, and public enterprises and on investments in air transport, broadcasting (including television), telecommunication services other than telephone services, strategic minerals, gaming, lotteries, lotto and casinos, and legal services.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsControls apply to the acquisition of real estate outside the EU if the assets in question are to form part of the cover of the technical reserves of an insurance company.
Purchase locally by nonresidentsYes.
Controls on personal capital transactions
LoansFor statistical and administrative purposes, residents other than banks are required to report to the BOS loans to and from nonresidents exceeding €3 million.
References to legal instruments and hyperlinksCircular 6/2000, www.bde.es/normativa/circu/c200006.pdf.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadFinancial credits obtained must be reported to the BOS.
Lending to nonresidents (financial or commercial credits)Residents must report to the BOS loans granted to nonresidents.
Lending locally in foreign exchangeThis type of operation is subject to the rules and regulations governing interest rates and commissions, rules of procedure, customer information, and publications applicable to credit institutions.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Investment regulations
In banks by nonresidentsEU investors, even though they may be authorized credit institutions in other EU countries, must give prior administrative notice. Non-EU institutions may be denied authorization if corporate credit institutions do not enjoy reciprocity in the country of origin of the investor.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsControls apply to (1) the purchase of securities that are not admitted for trading on a regulated market if the assets in question are to form part of the cover of the technical reserves of an insurance company, except for (a) securities issued or guaranteed by international organizations to which an EU member state belongs; and (b) fixed-income securities, provided a real guarantee or unconditional and several surety has been given on these securities by a credit entity or an insurance entity, which is authorized to operate through an establishment in an EU member state, or when the shares of the issuing company are traded on a regulated market; and (2) holdings of collective investment bodies established outside the EU, if the assets in question are to form part of the cover of the technical reserves of an insurance company.
Limits (max.) on investment portfolio held abroadControls apply to (1) deposits of funds with credit entities established outside the EU, if the assets in question are to form part of the cover of the technical reserves of an insurance company; (2) operations in instruments and claims on a foreign market, if the assets in question are to form part of the cover of the technical reserves of an insurance company, except for (a) mortgage market assets and securities issued by companies established in the EU and traded on a regulated OECD market; (b) bills of exchange and notes when issued, accepted, endorsed without a nonresponsibility clause, or secured by credit entities authorized to operate through an establishment in the EU. These assets may also be secured by insurance provided by insurance entities authorized to operate through an establishment in the EU; (c) shares of credit entities, brokerage companies and agencies, and insurance and reinsurance entities, to the extent that they are subject to authorization and supervision by an EU member state control authority; and (d) derivative instruments, such as options, futures, and swaps, in connection with assets representing the technical provisions, to the extent that they help to reduce the investment risk or permit effective management of the portfolio, if (i) the instruments are traded on a regulated derivatives market, or (ii) the counterparts are financial establishments controlled by the EU authorities or subject to the prudential control of supranational bodies to which Spain belongs, and they deal habitually and professionally with such transactions and are sufficiently solvent; and (3) credits and loans granted by residents to nonresidents if the assets in question are to form part of the cover of the technical reserves of an insurance company, except for (a) credits or quotas or parts thereof granted to companies domiciled in the EU whose shares are admitted for trading on a regulated OECD market; (b) credits secured by a credit entity or insurer authorized to operate through an establishment in an EU member state; (c) financing granted to public corporations of the EU, provided they offer sufficient guarantee in terms of security, in the quality either of the borrower or of the guarantees provided; (d) mortgage credits, provided these are first mortgages, taken on real estate located in the EU; (e) pledge credits, provided the object of the guarantee is in turn suitable for cover of technical provisions; (f) credits with reinsurers for their participation in the claims provision, to the extent that deposits were not received because of them; and (g) credits for interest income and dividends accrued and not matured, and those that have matured and are pending collection but are not likely to be collected, provided in all cases that they originate in suitable assets.
Currency-matching regulations on assets/liabilities compositionRegulations differ according to the type of institutional investor.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
No significant changes occurred in the exchange and trade system.
Changes during 2007
Exchange arrangementJanuary 1. The exchange arrangement of the EMU countries was reclassified to the category independently floating from the category exchange arrangement with no separate legal tender. The new classification reflects only a definitional change.
Arrangements for payments and receiptsFebruary 13. Imports and exports of banknotes in excess of the equivalent of €10,000 (previously, €6,010) must be declared for anti–money laundering purposes.



February 13. For cash payments and receipts, the threshold for money laundering control purposes was set at €10,000 (previously, €6,010).

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