Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

SWEDEN

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: February 15, 1961.
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)In accordance with EU regulations and the relevant UN Security Council resolutions, certain restrictions are maintained on transactions with respect to natural and legal persons, public bodies, and entities related to the previous government of Iraq; Myanmar; certain individuals associated with the previous government of the former Federal Republic of Yugoslavia and individuals indicted by the International Criminal Tribunal for the Former Yugoslavia; the individual members of the government of Zimbabwe; the former president of Liberia; certain persons in the Democratic Republic of the Congo, Côte d’Ivoire, and Sudan who are designated by the UN Sanctions Committee; certain persons suspected of involvement in the assassination of the former Lebanese Prime Minister Rafik Hariri; and any natural and legal persons associated with them. Financing of and financial assistance related to military activities in Somalia and Uzbekistan are prohibited. Restrictions also apply on transfers with respect to the Taliban and individuals and organizations associated with terrorism.
References to legal instruments and hyperlinkshttp://ec.europa.eu/comm/external_relations/cfsp/sanctions/measures.htm.
Exchange Arrangement
CurrencyThe currency of Sweden is the Swedish krona.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the krona is determined on the basis of supply and demand in the foreign exchange market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Official cover of forward operationsSveriges Riksbank—the central bank—and certain government agencies participate in the forward exchange rate market.
References to legal instruments and hyperlinksSveriges Riksbank Act (1988:1385); Currency Rate Policy Act (1998:1404).
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Regional arrangementsSweden is a member of the EU.
Administration of controlNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadControls apply to deposits of funds with nonresident financial institutions if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
Accounts in domestic currency held abroadControls apply to deposits of funds with nonresident financial institutions if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsExternal krona accounts may be held by nonresidents domiciled abroad, including persons who have become nonresidents after emigrating. These accounts may be used for payments and transfers, and may be converted into any foreign currency.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
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 measuresImports of most iron and steel products from countries outside the EU are subject to licensing for surveillance purposes. Some imports of textiles and clothing from Uzbekistan are subject to licensing for surveillance purposes. Effective January 1, 2006, licensing for surveillance purposes of imports of textiles and clothing (other than those under quota) from China has been abolished. Effective February 1, 2006, licensing for surveillance purposes of imports of shoes from China has been abolished.
Licenses with quotasAgricultural and fishery products are subject to import licensing. Some iron and steel products from Kazakhstan, the Russian Federation, and Ukraine are subject to quotas. Some imports of textiles and clothing from Belarus, China, the People’s Democratic Republic of Korea, Kosovo, and Montenegro are subject to quotas.
Other nontariff measuresImport restrictions apply to certain categories of food, as well as to narcotic drugs, weapons, live animals, radioactive materials, and other items.
Import taxes and/or tariffsAlcohol, tobacco, and mineral oils are subject to import taxes and customs duties.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasYes.
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 instrumentsControls apply only on the purchase locally by nonresidents of shares or other securities of a participating nature and of money market instruments.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsControls apply to shares or other securities of a participating nature that may be affected by laws on inward direct investment in fishing and civil aviation.
Purchase abroad by residentsControls apply to the purchase of securities issued by nonresidents if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
Bonds or other debt securities
Purchase abroad by residentsControls apply to the purchase of securities issued by nonresidents if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
On money market instruments
Purchase locally by nonresidentsYes.
Purchase abroad by residentsControls apply to the purchase of securities issued by nonresidents if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
On collective investment securities
Purchase abroad by residentsControls apply to the purchase of securities issued by nonresidents if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
Controls on derivatives and other instruments
Purchase abroad by residentsControls apply to the purchase of or swap operations in instruments and claims issued by or contracted with nonresidents if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
Controls on credit operations
Financial credits
By residents to nonresidentsControls apply to credits and loans granted to nonresidents if these assets are to form more than 20% of the cover of the technical reserves of an insurance company or are to form part of the assets representative of the technical reserves of a private pension fund.
Controls on direct investment
Inward direct investmentControls apply to (1) investment to carry out air cabotage and international air transport, and acquisition of aircraft registered in an EEA member country, except through an enterprise incorporated in Sweden; (2) acquisition of 50% or more of Swedish flag vessels, except through an enterprise incorporated in Sweden. A ship may fly the flag of Sweden even if the holder is not a Swedish national or legal person. The preconditions for this are as follows: (a) the ship is entered with the Swedish Register of Ships, (b) the ship forms a part of an economic activity set up in Sweden, and (c) the operation of the ship is supervised and managed from Sweden and the ship is more than 50% owned by a national of a country within the EEA or by a legal person established in accordance with the legislation of that country and has its registered office, headquarters, or principal place of business within that area; (3) investment, whether directly or indirectly through residents, in the fields of transport and communications, unless a license, concession, or similar authorization is granted; (4) investment in the accounting sector by non-EEA or Swiss residents exceeding 25%; (5) investment in a corporation or partnership carrying out the activities of an advokat by non-EEA or Swiss residents, unless the Swedish Bar Association grants a waiver. The limitation applies to ownership of law firms carrying out business under the title of advokat; (6) owners of publishing or printing companies who are citizens of a country outside the EEA. The legal owner must be established according to the legislation in a country in the EEA and should reside in that area. There is also a residency requirement for the responsible editor; (7) rail transport services (passenger transportation). Only international groups involved in railway undertakings established in an EEA member country have operating rights between the countries where the undertakings are established. If one of the undertakings is established in Sweden, the group has operating rights between Sweden and the EEA country where the other undertaking of the group is established; (8) the establishment of a limited liability company (joint-stock company) with one or more founders. A founding party must either reside in the EEA or be an EEA legal entity. A partnership may be a founding party if each party resides in the EEA. Exceptions to these requirements may be granted if it can be proven that residency is not necessary. Similar conditions prevail for the establishment of all types of legal entities; and (9) depositories of the assets of investment funds. Only firms with a registered office in the community may act as depositories of the assets of investment funds.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsControls apply to the acquisition of real estate located outside Sweden if the asset in question is to form more than 20% of the cover of the technical reserves of an insurance company or is to form part of the assets representative of the technical reserves of a private pension fund.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Investment regulations
Abroad by banksYes.
Open foreign exchange position limitsFor prudential reasons, general guidelines exist for credit institutions’ and securities firms’ net positions in foreign currencies. These guidelines stipulate limits both on positions in a single currency—15% of the capital base—and on the total net position of all currencies—30% of the capital base.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsControls apply to the purchase of capital, money market, and collective investment securities issued by nonresidents if these assets are to form part of the cover of the technical reserves of an insurance company.
Limits (max.) on investment portfolio held abroadControls apply to assets covering technical provisions of an insurance company, including (1) deposits of funds with nonresident financial institutions; (2) purchase of or swap operations in instruments and claims issued by or contracted with nonresidents; (3) credits and loans granted to nonresidents; and (4) acquisition of real estate located outside Sweden if these assets are to form more than 20% of the cover of the technical reserves of an insurance company.
Currency-matching regulations on assets/liabilities compositionControls apply to the purchase of capital, money market, and collective investment securities issued by nonresidents if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; i.e., a maximum of 20% of assets may be denominated in currencies other than the currency in which the liabilities are denominated.
Pension funds
Limits (max.) on investment portfolio held abroadControls apply to assets that form part of the assets representative of the technical reserves of a private pension fund located outside Sweden.
Currency-matching regulations on assets/liabilities compositionControls apply if assets are to form part of the assets representative of the technical reserves of a private pension fund. Risks related to currency matching must be limited.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Imports and import paymentsJanuary 1. Licensing for surveillance purposes of imports of textiles and clothing (other than those under quota) from China was abolished.



February 1. Licensing for surveillance purposes of imports of shoes from China was abolished.

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