Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

UNITED STATES

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: December 10, 1946.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictionsThe Department of the Treasury (Treasury) administers economic sanctions programs involving certain direct or indirect commercial transactions with Cuba, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, Liberia, Myanmar, Sudan, the Syrian Arab Republic, Zimbabwe, certain persons undermining democratic processes or institutions in Belarus (effective June 19, 2006), certain persons contributing to the conflict in the Democratic Republic of the Congo (effective October 30, 2006), certain persons contributing to the conflict in Côte d’Ivoire (effective February 8, 2006), certain persons contributing to the conflict in Darfur (effective April 27, 2006), certain persons associated with the former Iraqi regime, indictees designated by the International Criminal Tribunal for the Former Yugoslavia and certain persons associated with the government of the former Federal Republic of Yugoslavia, persons who threaten international stabilization efforts in the Western Balkans, foreign terrorists who threaten to disrupt the Middle East peace process, governments supporting terrorism, foreign terrorist organizations, designated global terrorists, designated weapons of mass destruction proliferators and their supporters, and designated narcotics traffickers and kingpins, as specified under the following: (1) the Cuban Assets Control Regulations; (2) the Iranian Assets Control Regulations and the Iranian Transactions Regulations; (3) the Iraqi Sanctions Regulations; (4) the Foreign Assets Control Regulations; (5) the Former Liberian Regime of Charles Taylor Sanctions Regulations; (6) the Burmese Sanctions Regulations; (7) the Sudanese Sanctions Regulations; (8) the Syrian Sanctions Regulations; (9) the Zimbabwe Sanctions Regulations; (10) effective February 8, 2006, Executive Order 13396 (Blocking Property of Certain Persons Contributing to the Conflict in Côte d’Ivoire); (11) effective April 27, 2006, Executive Order 13400 (Blocking Property of Certain Persons in Connection with the Conflict in Sudan’s Darfur Region); (12) effective June 19, 2006, Executive Order 13405 (Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus); (13) effective October 30, 2006, Executive Order 13413 (Blocking Property of Certain Persons Contributing to the Conflict in the Democratic Republic of the Congo); (14) the Federal Republic of Yugoslavia (the former Republic of Serbia and Montenegro) Milosevic Sanctions Regulations and residual provisions of the Federal Republic of Yugoslavia (the former Republic of Serbia and Montenegro) Kosovo Sanctions Regulations; (15) Executive Order 13304 (Termination of the Emergencies with respect to Yugoslavia and Modification of Executive Order 13219) and the Western Balkans Stabilization Regulations; (16) the Terrorism Sanctions Regulations; (17) the Terrorism List Government Sanctions Regulations; (18) the Foreign Terrorist Organizations Sanctions Regulations; (19) the Global Terrorism Sanctions Regulations; (20) the Narcotics Trafficking Sanctions Regulations; and (21) the Foreign Narcotics Kingpin Sanctions Regulations; and (22) Executive Order 13382 (Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters).



The Treasury has administrative responsibility for blocked accounts of most sanctions targets. The comprehensive sanctions with respect to the former Federal Republic of Yugoslavia have been lifted with respect to present transactions with persons other than specific members of the government, their associates, and individual war criminals. However, certain funds and other properties blocked under these sanctions programs remain blocked until provision is made to address claims or encumbrances with respect to such funds and property, including the claims of the successor states of the former Federal Republic of Yugoslavia. (Most of these assets have been unblocked.) The Treasury also prohibits trade in rough diamonds with countries that do not participate in the Kimberley Process Certification Scheme (under the Rough Diamonds Control Regulations); restricts certain offshore transactions involving strategic merchandise to certain countries, under the Transaction Control Regulations; prohibits imports into the United States from certain entities that proliferate nuclear, biological, or chemical weapons, under the Weapons of Mass Destruction Trade Control Regulations; and asserts protective jurisdiction over property and property interests of the government of the Russian Federation that are in the United States and directly related to the implementation of the Highly Enriched Uranium Agreements under the Highly Enriched Uranium Assets Control Regulations.
In accordance with IMF Executive Board Decision No. 144-(52/51)Certain restrictions are imposed on the making of payments and transfers for current international transactions. The Foreign Assets Control Regulations permit most transactions with the Democratic People’s Republic of Korea and its nationals, and a review procedure for the importation of goods therefrom has been established. The assets of the following are blocked, and certain transactions with them are prohibited: specified foreign persons and foreign persons later determined to have committed or to pose a significant risk of committing acts of terrorism that threaten national security, foreign policy, the U.S. economy, or the security of U.S. nationals; persons owned or controlled by, or acting for or on behalf of, terrorists or their supporters; persons providing assistance or financial, material, or technological support for, or financial or other services to, or in support of, terrorists or acts of terrorism; and persons otherwise associated with any of the foregoing persons.
Other security restrictionsThe Treasury administers economic sanctions programs on the basis of UN Security Council Resolutions Nos. 1267, 1363, 1373, and 1390 involving certain direct or indirect financial or commercial transactions with Iraq, the former Republic of Serbia and Montenegro, and persons associated with terrorism.
References to legal instruments and hyperlinkshttp://treas.gov/offices/enforcement/ofac; http://treas.gov/offices/enforcement/ofac/programs; http://treas.gov/offices/enforcement/lists.
Exchange Arrangement
CurrencyThe currency of the United States is the U.S. dollar.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the dollar is determined freely in the foreign exchange market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Bilateral payments arrangements
OperativeYes.
Regional arrangementsThe United States is a member of NAFTA and the NAFA.
Administration of controlNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On external tradeNo controls are imposed, except on the countries, groups of persons, and individuals to which international security restrictions apply.
Controls on exports and imports of banknotesIndividuals leaving or entering the United States with more than the equivalent of $10,000 in domestic or foreign currency, traveler’s checks, money orders, or negotiable bearer securities must declare these to customs at the point of exit or entry.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsCuban nationals, Sudan, certain individuals and entities from Belarus (effective June 19, 2006), certain individuals and entities from the Democratic Republic of the Congo (effective October 30, 2006), certain individuals and entities from Côte d’Ivoire (effective February 8, 2006), certain persons contributing to the conflict in Darfur (effective April 27, 2006), Liberia, Myanmar, Zimbabwe, proliferators of weapons of mass destruction and their supporters, specially designated global terrorists, foreign terrorists who threaten to disrupt the Middle East peace process, foreign terrorist organizations, persons indicted by the International Criminal Tribunal for the Former Yugoslavia and specific persons associated with the government of the former Federal Republic of Yugoslavia, specially designated narcotics traffickers and kingpins, and foreign persons who threaten international stabilization efforts in the Western Balkans. Certain accounts blocked pursuant to economic sanctions against the Islamic Republic of Iran, the Democratic People’s Republic of Korea, and the former Federal Republic of Yugoslavia remain blocked, notwithstanding an end to most blocking sanctions related to those nations.
References to legal instruments and hyperlinkshttp://treas.gov/offices/enforcement/ofac; http://treas.gov/offices/enforcement/ofac/programs; http://treas.gov/offices/enforcement/lists.
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 listThe importation of most goods and services originating in Cuba, the Islamic Republic of Iran, or Sudan; goods of Myanmar origin; and some goods that were produced or provided by certain entities that proliferate nuclear, biological, or chemical weapons is prohibited unless specifically authorized by the Treasury. Imports from the Democratic People’s Republic of Korea require prior notification to and approval from the Office of Foreign Assets Control. The importation of rough diamonds from any country is prohibited unless they are controlled through the Kimberley Process Certification Scheme.
Open general licensesControls apply to the importation of certain foodstuffs and carpets from the Islamic Republic of Iran.
Licenses with quotasQuotas apply to textile and apparel imports through bilateral agreements with several non-WTO members: Belarus, the Russian Federation, Ukraine, and Vietnam. These agreements remain in effect until terminated by mutual consent, expiration, or WTO accession of the other party. In accordance with the special textile safeguard paragraph in China’s WTO Accession Agreement, the United States imposed import controls on several categories of textile and apparel imports from China. Under the same provision, effective January 1, 2006, the United States and China negotiated a bilateral agreement to limit imports of textiles and apparel from China during 2006–08. That provision in the Accession Agreement expires at end-2008.
Import taxes and/or tariffsImport tariffs are generally low, with higher-than-average rates for imports of beverages and tobacco, textiles and clothing, and leather and footwear. As a result of the Uruguay Round, all tariff lines are bound.
State import monopolyNo.
References to legal instruments and hyperlinksInformation on the volume level of the quotas and the quota fill rates is available at www.cbp.gov/xp/cgov/import/textiles_and_quotas/textile_status_report/archived/2006_year_rpt.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesThe Department of Commerce (DOC) controls the export and reexport of dual-use products, technology, and software for reasons of national security, foreign policy, nonproliferation, and short supply. Except for shipment to U.S. territories and possessions, which are treated as part of the United States, most exports outside the United States are subject to the Export Administration Regulations. Several agencies of the U.S. government maintain export controls on products other than dual-use articles and services. For example, the Treasury prohibits exports of certain types of goods, services, and technology to specifically sanctioned countries and recipients, and certain exports to sanctioned countries are subject to licenses that are issued on a case-by-case basis, pursuant to established policies and procedures. Likewise, the Department of Agriculture controls the export of livestock, dairy, and poultry items.
Without quotasAmmunition for military use may be exported only under a license issued by the Office of Defense Trade Controls in the Department of State. The DOC administers controls on exports of crime-control items, detection equipment, and related technologies to most countries that depend on these commodities.
Export taxesNo.
References to legal instruments and hyperlinkswww.bis.doc.gov/ComplianceAndEnforcement/index.htm; www.ustreas.gov/offices/enforcement/ofac/programs/index.shtml.
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 nonresidentsLaws on inward direct investment apply to purchases in the United States by nonresidents. The control applies only to purchases by nonresidents of securities that may be restricted by laws on inward direct investment and on establishment in the nuclear energy, maritime, communications, air and land transport, and shipping industries. There are some restrictions specific to state legislative jurisdiction in the banking, securities, and insurance sectors.
Sale or issue locally by nonresidentsPublic offers and sales of securities in the United States or to U.S. residents by foreign private issuers are generally prohibited by the Securities Act of 1933 and the Securities Exchange Act of 1934 unless registered. The use of small business registration forms and a small issues exemption from registration by nonresident issuers is also restricted.
Bonds or other debt securities
Sale or issue locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
On money market instruments
Sale or issue locally by nonresidentsThe regulations governing shares or other securities of a participating nature may apply.
On collective investment securities
Sale or issue locally by nonresidentsPublic offers made in the United States or to U.S. residents by foreign investment companies are prohibited under the Investment Company Act, unless an order from the Securities and Exchange Commission (SEC) authorizing such offers is first obtained and the offer is then registered with the SEC.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Financial credits
By residents to nonresidentsThe Johnson Act prohibits, with certain exceptions, persons within the United States from dealing in financial obligations or extending loans to foreign governments that have defaulted on payments of their obligations to the U.S. government. The act does not apply to those foreign governments that are members of both the IMF and the World Bank.
Controls on direct investment
Outward direct investmentThere are controls on investment transactions with or involving Cuba and Cuban nationals; the Islamic Republic of Iran; Myanmar; Sudan; persons who commit, threaten to commit, or support terrorism; foreign terrorists who disrupt the Middle East peace process; persons indicted by the International Criminal Tribunal for the Former Yugoslavia and persons associated with the government of the former Federal Republic of Yugoslavia; certain persons undermining democratic processes or institutions in Belarus (effective June 19, 2006); certain persons contributing to the conflict in the Democratic Republic of the Congo (effective October 30, 2006); certain persons contributing to the conflict in Côte d’Ivoire (effective February 8, 2006); certain persons contributing to the conflict in Darfur (effective April 27, 2006); proliferators of weapons of mass destruction and their supporters; specially designated narcotics traffickers; and foreign persons who threaten international stabilization efforts in the Western Balkans.
Inward direct investmentLaws on inward direct investment apply to purchases in the United States by nonresidents. This control applies only to investments that may be restricted by laws on inward direct investment and establishment in the nuclear energy, maritime, communications, air and land transport, and shipping industries. Foreign acquisitions of control that threaten to impair national security may be suspended or prohibited. Investments involving ownership interest in banks are subject to federal and state banking laws and regulations. However, there are controls on investment transactions with Cuba and Cuban nationals; the Islamic Republic of Iran; Myanmar; Sudan; persons who commit, threaten to commit, or support terrorism; foreign terrorists who disrupt the Middle East peace process; persons indicted by the International Criminal Tribunal for the Former Yugoslavia and persons associated with the government of the former Federal Republic of Yugoslavia; certain persons undermining democratic processes or institutions in Belarus (effective June 19, 2006); certain persons contributing to the conflict in the Democratic Republic of the Congo (effective October 30, 2006); certain persons contributing to the conflict in Côte d’Ivoire (effective February 8, 2006); certain persons contributing to the conflict in Darfur (effective April 27, 2006); proliferators of weapons of mass destruction and their supporters; specially designated narcotics traffickers; and foreign persons who threaten international stabilization efforts in the Western Balkans. The Omnibus Trade Act contains a provision, the Exon-Florio Amendment, authorizing the president to suspend or prohibit foreign acquisitions, mergers, and takeovers in the United States if the president determines that the foreign investor might take action that would threaten to impair national security and if existing laws, other than the International Emergency Economic Powers Act and the Exon-Florio Amendment itself, are not, in the president’s judgment, adequate or appropriate to protect national security.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsOwnership of agricultural land by foreign nationals or by corporations in which foreign owners have an interest of at least 10% or substantial control must be reported to the Department of Agriculture. Certain states in the United States impose various controls on foreign nationals’ purchases of land within their borders.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksA.2.a.1.b: Securities Act, 15 U.S.C. § 77a et seq.; 15 U.S.C. § 78a et seq; A.2.c.2: Investment Company Act, 15 U.S.C. § 80a-1 et seq.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Investment regulationsBanks are subject to prudential oversight in these areas.
Open foreign exchange position limitsThe foreign currency positions of banks, whether overall or with respect to individual currencies, are not subject to quantitative limitations, but banks are subject to prudential oversight. In addition, large foreign exchange market participants are required to report their holdings of five major foreign currencies and dollars weekly, monthly, or quarterly.
Provisions specific to institutional investors
Pension fundsMost private sector U.S.-based pension plans are subject to the Employee Retirement Income Security Act of 1974 (ERISA). Except with respect to securities issued by a plan’s sponsor (or an affiliate), and real estate leased to a sponsor (or an affiliate), ERISA does not impose specific quantitative limits on the percentage of plan assets that may be invested in particular types of assets. Instead, ERISA establishes a set of general principles (e.g., prudence and diversification) that plan fiduciaries must observe in making and holding plan investments. ERISA also provides that no fiduciary may maintain the indicia of ownership of any assets of a plan outside the jurisdiction of the courts of the United States, except as authorized by the secretary of labor by regulations.
Limits (max.) on investment portfolio held abroadYes.
References to legal instruments and hyperlinksEmployee Retirement Income Security Act of 1974 (ERISA, 29 U.S.C. 1001 et seq.); other related regulations are found at 29 C.F.R. 2550.404b-1.
Changes during 2006
Exchange measuresFebruary 8. The president issued Executive Order 13396 blocking property of certain persons contributing to the conflict in Côte d’Ivoire.



April 27. The president issued Executive Order 13400 blocking property of certain persons contributing to the conflict in Darfur.



June 19. The president issued Executive Order 13405 blocking property of certain persons undermining democratic processes or institutions in Belarus.



October 30. The president issued Executive Order 13413 blocking property of certain persons contributing to the conflict in the Democratic Republic of the Congo.
Nonresident accountsFebruary 8. The president issued Executive Order 13396 blocking property of certain persons contributing to the conflict in Côte d’Ivoire.



April 27. The president issued Executive Order 13400 blocking property of certain persons contributing to the conflict in Darfur.



June 19. The president issued Executive Order 13405 blocking property of certain persons undermining the democratic processes or institutions in Belarus.



October 30. The president issued Executive Order 13413 blocking property of certain persons contributing to the conflict in the Democratic Republic of the Congo.
Imports and import paymentsJanuary 1. In accordance with China’s WTO Accession Agreement, the United States and China negotiated a bilateral agreement to limit imports of textiles and apparel from China during 2006–08, which will expire at end-2008.
Capital transactions
Controls on direct investmentFebruary 8. The president issued Executive Order 13396 blocking property of certain persons contributing to the conflict in Côte d’Ivoire.



April 27. The president issued Executive Order 13400 blocking property of certain persons contributing to the conflict in Darfur.



June 19. The president issued Executive Order 13405 blocking property of certain persons undermining democratic processes or institutions in Belarus.



October 30. The president issued Executive Order 13413 blocking property of certain persons contributing to the conflict in the Democratic Republic of the Congo.

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