Chapter

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
November 2011
Share
  • ShareShare
Show Summary Details

ISLAMIC REPUBLIC OF AFGHANISTAN

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article XIVYes.
Exchange Measures
Restrictions and/or multiple currency practicesThe IMF staff report for the second review under the three-year arrangement as part of the Poverty Reduction and Growth Facility states that, as of June 22, 2007, based on information available to the IMF staff, no exchange restrictions or multiple currency practices were in place. (Country Report No. 07/252)
Exchange measures imposed for security reasonsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of the Islamic Republic of Afghanistan is the afghani.
Exchange rate structure
UnitaryDa Afghanistan Bank (DAB), the central bank, reports a daily official afghani-dollar rate based on the average early morning rates in the free market of a sample of money changers.
Classification
Managed floating with no predetermined path for the exchange rateThe de jure exchange rate regime is managed floating. The exchange rate was stable from February 2006 to end-December 2007; it experienced some volatility during January–February 2008. In the absence of alternative monetary policy instruments, the DAB intervenes regularly in the foreign exchange market in the form of twice-weekly foreign exchange auctions. The primary goal of these auctions is to control the growth of currency in circulation. Subject to meeting this goal, the DAB also seeks to minimize intra-auction volatility of the exchange rate.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
AuctionDAB conducts twice-weekly foreign exchange auctions. The auctions are conducted on a first-price sealed-bid basis.
Fixingn.a.
Interbank marketThere are no restrictions on interbank transactions.
Forward exchange marketThere are no arrangements for forward cover against exchange rate risk.
References to legal instruments and hyperlinksLaw of Da Afghanistan Bank, 2003 (Article 35).
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currencyThe afghani must be used for all transactions and settlements of accounts unless the use of another currency is specified by the parties concerned. In practice, foreign currency is widely used.
For current transactions and paymentsn.a.
For capital transactionsn.a.
Use of foreign exchange among residentsYes.
Payments arrangements
Bilateral payments arrangements
OperativeYes.
InoperativeFollowing the Paris Club rescheduling agreement of July 31, 2006, the agreement with the Russian Federation has been superseded, and the authorities are in the process of concluding agreements with Paris Club members.
Regional arrangementsn.a.
Clearing agreementsn.a.
Barter agreements and open accountsn.a.
Administration of controlThe DAB is solely responsible for the formulation, adoption, and execution of the exchange rate policy and exchange arrangements. Before adopting an exchange rate policy or an exchange arrangement, the DAB is required to consult with the MOF. The DAB acts as the agent for the administration of all laws relating to exchange control. All returns, statements, accounts, and information required by the provision of any such law are transmitted through the DAB (Article 71, DAB Law).
Payments arrearsn.a.
Controls on trade in gold (coins and/or bullion)
On external tradeImports and reexports of gold are permitted, subject to regulations. Exports of gold bullion, silver, and jewelry require permission from the DAB and the MOF. Commercial exports of gold and silver jewelry and other articles containing small quantities of gold or silver do not require a license. Customs duties are payable on imports and exports of silver in any form, unless the transaction is made by, or on behalf of, the monetary authorities.
Controls on exports and imports of banknotesAny person who (1) leaves or arrives with, or (2) imports or exports by mail, courier, or otherwise more than Af 1 million in cash or negotiable bearer instruments without first making a report in writing to the relevant authority is in violation of the law and is punishable on conviction by a fine equal to the amount of cash held.
On exportsYes.
On importsYes.
References to legal instruments and hyperlinksAnti-Money-Laundering Law (2005); Supreme Council Resolution of the DAB Law on the Use of Foreign Currency.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Approval requiredYes.
Held abroadYes.
Approval requiredYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Approval requiredYes.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Approval requiredn.a.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetAlthough the government makes projections for future foreign exchange requirements, there is no mechanism in place for allocating actual foreign exchange holdings.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Positive listn.a.
Negative listn.a.
Open general licensesn.a.
Licenses with quotasn.a.
Other nontariff measuresTrade licenses are issued by the Ministry of Commerce.
Import taxes and/or tariffs
Taxes collected through the exchange systemn.a.
State import monopolyn.a.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesAll exporters must obtain a license from the Ministry of Commerce to engage in export.
Without quotasn.a.
With quotasn.a.
Export taxesn.a.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersForeign exchange for most private purposes may be acquired in the money bazaar from money changers licensed by the DAB or from licensed commercial banks.
Trade-related paymentsn.a.
Investment-related paymentsn.a.
Payments for traveln.a.
Personal paymentsn.a.
Foreign workers’ wagesn.a.
Credit card use abroadn.a.
Other paymentsn.a.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsn.a.
Surrender requirementsn.a.
Restrictions on use of fundsn.a.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsControls are applied based on the Anti-Money-Laundering Law.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securitiesn.a.
On money market instrumentsCapital notes (issued by the DAB) auctions are restricted to commercial banks and licensed money changers.
Purchase locally by nonresidentsYes.
On collective investment securitiesn.a.
Controls on derivatives and other instrumentsn.a.
Controls on credit operations
Commercial creditsn.a.
Financial credits
By residents to nonresidentsn.a.
To residents from nonresidentsFor these transactions, banks need prior DAB approval.
Guarantees, sureties, and financial backup facilitiesn.a.
Controls on direct investmentn.a.
Controls on liquidation of direct investmentn.a.
Controls on real estate transactionsn.a.
Controls on personal capital transactionsn.a.
References to legal instruments and hyperlinksInvestment Law; Transfer of Property Law; Banking Law; Anti-Money-Laundering Law.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThese transactions require prior approval of the DAB (based on the Banking Law).
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangen.a.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsn.a.
Interest rate controlsn.a.
Credit controlsn.a.
Differential treatment of deposit accounts held by nonresidentsn.a.
Investment regulationsn.a.
Open foreign exchange position limitsIndividual currency limitations are ±20% of regulatory capital for convertible currencies and ±5% of regulatory capital for nonconvertible currencies. The overall limitation is ±40% for all currencies and ±10% for nonconvertible currencies.
Provisions specific to institutional investors
Insurance companiesThe Insurance Law passed by the Cabinet in December 2005 does not contain any currency-matching regulations.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Pension fundsn.a.
Investment firms and collective investment fundsThe DAB is exclusively responsible for the regulation and supervision of securities service providers in accordance with the objectives specified. The DAB may supervise securities service providers and may according to regulation (1) subject securities service providers to prudential conditions and requirements under which securities services or any category of such services may be provided, including conditions and requirements designed to facilitate supervision by the DAB of securities service providers and to preserve the safety of the assets entrusted by the public to their care; (2) require securities service providers to report transactions exceeding in value a minimum amount set by the regulation to the Department of Agency of the State, designated by the regulation for that purpose; and (3) require that the funds and securities owed by a securities service provider (other than a bank) to its customers be segregated from the funds and securities credited to the accounts of other customers and from the assets and liabilities of that securities service provider. No such funds or securities may be used to discharge liabilities of other customers or liabilities of that securities service provider.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinksInsurance Law (2005); DAB Law, Chapter 10; Banking Law.
Changes during 2007
No significant changes occurred in the exchange and trade system.

ALBANIA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article XIVYes.
Exchange Measures
Restrictions and/or multiple currency practicesThe IMF staff report for the third review under the three-year arrangement under the Poverty Reduction and Growth Facility states that, as of Junm e 22, 2007, Albania’s exchange rate arrangement was free of exchange restrictions and multiple currency practices subject to IMF jurisdiction under Article VIII. However, the country still availed itself of the transitional arrangements under Article XIV and maintained exchange restrictions in the form of outstanding debit balances on inoperative bilateral payment agreements, which were in place before Albania became an IMF member. These relate primarily to debt in nonconvertible and formerly nonconvertible currencies, which the authorities were working to resolve by end-2007. (Country Report No. 07/244)
Exchange measures imposed for security reasonsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Albania is the Albanian lek.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate regime is independently floating; the exchange rate of the lek is determined on the basis of supply and demand in the foreign exchange market. The Bank of Albania (BOA) normally is not active in this market; intervention is limited to the following situations: (1) Severe and adverse movements in the exchange rate of the lek, which are cases of excess volatility in the domestic foreign exchange market; such situations are considered on a case-by-case basis by the Committee for Implementation of Monetary Policy, which aims to avoid intervention in the foreign exchange market. However, the seasonal increases in the supply of foreign currency in the summer months and in December, when Albanian emigrants spend holidays in Albania, and the lack of depth in the foreign exchange market, may result in fast appreciation over a short period, i.e., of more than 1% a day, lasting a maximum of two weeks, which may disrupt activity in the domestic foreign exchange market. The bid-ask spreads may widen up to 1%, and at times banks do not deal at all with each other. Interventions in these cases aim to restore calm to a disorderly market. (2) Considerable exchange rate misalignment with fundamentals: the lek is considered misaligned with fundamentals if there is a lengthy overshooting of the exchange rate. Interventions have never occurred for this reason. (3) A need to accumulate foreign reserves to meet the net international reserves (NIR) target; the NIR target is included each year in the BOA’s monetary program and in the agreements with the IMF. The BOA sets the official rate of the lek against the dollar and the euro every day, based on rates quoted by the most active and prominent domestic foreign exchange market operators. Exchange rates for currencies other than the dollar and the euro are calculated on the basis of dollar cross rates observed in international foreign exchange markets. The official rate of the lek vis-à-vis the principal foreign currencies is the rate used in settling customs obligations and in revaluing the foreign exchange positions of the BOA. Participants in the domestic foreign exchange market have no legal obligation to use the official rate in their transactions; however, the BOA requires commercial banks to use the official rate in converting the foreign currency positions reported in their monthly balance sheet data.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketn.a.
References to legal instruments and hyperlinksLaw No. 8269 of December 23, 1997, on the Bank of Albania; Regulation on the Procedure of Intervention of the Bank of Albania in the Domestic Foreign Exchange Market, approved by Supervisory Council Decision No. 75, dated October 11, 2006; www.bankofalbania.org.
Arrangements for Payments and Receipts
Prescription of currency requirementsPayment for all merchandise trade is made in convertible currencies. All contracts denominated and payable in foreign currencies are valid.
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsn.a.
Payments arrangementsAll transactions under bilateral payment agreements were suspended in 1992, and the settlement of clearing accounts is awaiting the outcome of negotiations.
Clearing agreementsAlbania maintains outstanding balances under inoperative bilateral agreements in nonconvertible currencies with Cuba, the Democratic People’s Republic of Korea, the Russian Federation, and Vietnam. Albania also maintains outstanding balances under inoperative bilateral clearing agreements in convertible currencies with Algeria, Cuba, Egypt, Greece, the Democratic People’s Republic of Korea, Serbia, and Vietnam.
Administration of controlThe BOA is vested with the power to administer exchange controls. The BOA is the only authority that has the right to (1) license, authorize, regulate, supervise, and revoke the licenses of foreign exchange market participants, as well as those of second-tier banks; (2) define the limits of their activities; and (3) regulate and supervise foreign exchange operations and international payments in order to prevent any participant from dominating the market and undermining the value of the lek through speculation. In accordance with anti-money-laundering legislation, banks are required to maintain records of all cash transactions in excess of the equivalent of lek 2 million and of all other transactions in excess of lek 20 million, and to report these to the authority in the MOF responsible for the prevention of money laundering.
Payments arrears
OfficialAlbania has outstanding debit balances under inoperative bilateral agreements with Algeria, Cuba, Greece, Serbia, and Vietnam. Arrears with Hungary, the Czech Republic, Romania, and the Slovak Republic have been rescheduled.
PrivateAlbania has incurred private payments arrears with creditors (banks and companies) in Austria, Belgium, Denmark, Greece, the Netherlands, Sweden, Switzerland, and the United Kingdom.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or traden.r.
On external tradeResidents and nonresidents may transfer standardized gold and precious metals to and from Albania only through entities specially licensed by the BOA. Residents and nonresidents are entitled to transfer nonstandardized gold and precious metals to and from Albania, subject to documentary requirements regarding the source; the purpose of the transfer; the quantity; and whether the transfer involves the return of the precious metals and, if so, the form in which they should be returned. There is no requirement for transfers of jewelry for personal use.
Controls on exports and imports of banknotes
On exports
Domestic currencyNatural and juridical persons are allowed to take out up to lek 50,000 a person in banknotes and coins. The BOA may authorize larger amounts.
Foreign currencyForeign natural persons may take abroad in cash or traveler’ s checks foreign exchange in an amount equal to the amount declared when entering the country. Albanian natural or juridical persons are not allowed to export amounts larger than the equivalent of lek 3.5 million. For export of amounts larger than lek 1 million, a declaration of the source is required.
On imports
Domestic currencyNatural and juridical persons are allowed to import up to lek 50,000 in domestic banknotes and coins. The BOA may authorize larger amounts.
Foreign currencyOn entering or exiting Albania, resident and nonresident individuals are required to declare cash, traveler’s checks, precious stones or metals, and antiques valued at lek 1 million or more.
References to legal instruments and hyperlinksRegulation No. 64 on Foreign Exchange Activities, dated July 30, 2003, as amended by Supervisory Council decision dated December 12, 2003; www.bankofalbania.org. Regulation on the Export and Import of Albanian Coins and Banknotes, adopted by Supervisory Decision No. 83, dated November 7, 2001.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksRegulation No. 64 on Foreign Exchange Activities, dated July 30, 2003, amended by decision of the Supervisory Council of the Bank of Albania, dated December 12, 2003; www.bankofalbania.org.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
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 imports
Letters of creditYes.
Import licenses used as exchange licensesYes.
OtherFor imports equal to or larger than the equivalent of lek 3.5 million, the following documents must be submitted: (1) an application for carrying out the transaction as well as a declaration specifying in detail the nature of the transaction; (2) a contract and an invoice (or a pro forma invoice) issued by the natural or juridical person supplying the goods; (3) a declaration that the underlying document has not been used to support previous transactions, which is to be issued by the natural or juridical person wishing to carry out the transaction with the bank; and (4) a customs clearance document (to be submitted within 3 to 12 months, depending on the settlement of the invoice).
Import licenses and other nontariff measures
Positive listYes.
Open general licensesYes.
Licenses with quotasAutomatic licensing restrictions are applied on fuel products to support the implementation of domestic technical standards.
Other nontariff measuresThe importation of the following products is prohibited: (1) dangerous waste, such as toxic corrosives, residual waste from explosives, and radioactive materials; (2) military poisons, chemical weapons, and other strong poisons; (3) narcotics and psychotropic substances; and (4) animal products from countries with cases of livestock diseases.
Import taxes and/or tariffsExcise taxes on domestic and imported goods are unified. Customs tariffs are applied to the c.i.f. value at rates of zero, 2%, 5%, 10%, and 15%. A customs tariff rate of 8% applies to the c.i.f. value.
State import monopolyNo.
References to legal instruments and hyperlinksLaw No. 9461, dated December 21, 2005, for the Nomenclature of Goods and Customs Tariffs; Guideline No. 7, dated December 21, 2005, on the Value-Added Tax of the Ministry of Finance. Law No. 8991, dated December 12, 2002, on approval of Customs Tariffs Levels, as amended by Law Nos. 9599, dated December 27, 2006; 9545, dated May 29, 2006; 9683, dated February, 6, 2007; and 9770, dated July 9, 2007.
Exports and Export Proceeds
Repatriation requirementsAll private and public companies or individuals operating in the export sector are required to repatriate their foreign exchange receipts.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport bans apply on copper and articles made thereof; works of art; arms and ammunitions, as well as their parts and accessories; and explosives and pyrotechnic products.
Without quotasYes.
Export taxesNo.
References to legal instruments and hyperlinksGuideline No. 3, dated January 30, 2006, on the Value-Added Tax of the Ministry of Finance.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersSupporting documents are required for transactions exceeding the equivalent of lek 3.5 million, including on the reasons for the transfer, the source of funds, and the payment of taxes.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Indicative limits/bona fide testYes.
Payments for travel
Indicative limits/bona fide testYes.
Personal payments
Indicative limits/bona fide testYes.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Credit card use abroad
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksRegulation No. 64 on Foreign Exchange Activities, dated July 30, 2003, amended by Decision No. 101, dated December 10, 2003; www.bankofalbania.org.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksRegulation No. 64 on Foreign Exchange Activities, dated July 30, 2003, amended by Decision No. 101, dated December 10, 2003; www.bankofalbania.org.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instrumentsPurchase of these instruments abroad by residents may be conducted through entities licensed by the BOA, subject to documentary requirements. For prudential reasons and money-laundering prevention, the BOA monitors and reviews these transactions.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.r.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
Controls on direct investment
Outward direct investmentThe regulations governing capital and money market instruments apply.
Controls on liquidation of directNo.
Controls on real estate transactions
Purchase abroad by residentsThe regulations governing capital and money market instruments apply.
Purchase locally by nonresidentsControls relate only to the purchase of land.
Controls on personal capital transactions
LoansThe regulations governing capital and money market instruments apply.
By residents to nonresidentsYes.
To residents from nonresidentsThese transactions are subject only to anti-money-laundering regulations.
Gifts, endowments, inheritances, and legacies
To residents from nonresidentsThese transactions are subject only to anti-money-laundering regulations.
References to legal instruments and hyperlinksRegulation No. 64 on Foreign Exchange Activities, dated July 30, 2003, amended by Decision No. 101, dated December 10, 2003; www.bankofalbania.org.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Lending is subject to capital controls.
Differential treatment of deposit accounts held by nonresidents
Credit controlsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThe limit is 20% of the bank’s capital for a single currency and 30% for all currencies.
Provisions specific to institutional investors
Insurance companiesn.r.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksRegulation on Credit Risk Management, applicable as of August 5, 2004; Regulation on Foreign Exchange Activities; Instruction No. 69 on Reporting of Foreign Exchange Transactions, as of August 23, 2003.
Changes during 2007
No significant changes occurred in the exchange and trade system.

ALGERIA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: September 15, 1997.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasonsNo.
References to legal instruments and hyperlinksYes.
Exchange Arrangement
CurrencyThe currency of Algeria is the Algerian dinar.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateThe external value of the Algerian dinar is determined in the interbank foreign exchange market, where the Bank of Algeria (BA) is the main seller. No margin limits are imposed on the buying and selling exchange rates in this market. However, the BA quotes its buying and selling rates for the Algerian dinar against the dollar with a spread of DA 0.015 in this market.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketThe exchange rate of the dinar is determined on the basis of supply and demand in the foreign exchange market, where the BA is the main seller.
Forward exchange marketAuthorized banks may provide forward cover to clients. However, they may cover the resulting positions only through foreign currency loans to nonfinancial entities.
References to legal instruments and hyperlinksOrdinance 03-11 of August 26, 2003, on Money and Credit (Articles 62 and 127); Regulation No. 95-08 of December 23, 1995, on the Exchange Market; Regulation No. 07-01 of February 3, 2007, on the rules applicable to current transactions with the rest of the world and foreign currency accounts; Regulation on Foreign Investment, June 6, 2005.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with countries with which no payments agreements are in force are made in convertible currencies. Payments under foreign supply contracts may be made in either the currency in use at the headquarters of the supplier or that of the country of origin of the merchandise, except transactions with Morocco, which may be effected in dollars through special clearing accounts maintained at the CBs of each country.
Controls on the use of domestic currencyAll invoicing and sales of goods and services in the national customs territory must be in Algerian dinars, except as provided by the prevailing regulations (Art. 5 of Regulation 07-01).
For current transactions and paymentsYes.
For capital transactionsn.a.
Use of foreign exchange among residentsYes.
Payments arrangements
Bilateral payments arrangements
Operativen.a.
Inoperativen.a.
Clearing agreementsSpecified commercial settlements with Morocco and Tunisia are made through a Moroccan dirham account at the Bank of Morocco and a Tunisian dinar account at the Bank of Tunisia.
Administration of controlThe Council on Money and Credit (monetary authority) delegates implementation of the exchange regulations to banks and financial institutions, which are exclusively authorized to handle foreign trade and exchange operations. The financial services of the Algerian Post Office are authorized, within the limits of the powers devolved to them by law (the law applicable to these services), to make some payments and transfers and repatriations of funds. The BA provides ex post control to ensure the legitimacy of transactions.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents may purchase, hold, and sell gold coins in Algeria for numismatic purposes. Unworked gold for industrial and professional use is distributed by the Agence nationale pour la distribution et la transformation de l’or et des autres métaux précieux (AGENOR); this agency is also authorized to purchase gold in Algeria and to hold, process, and distribute other precious metals.
On external tradeAGENOR is authorized to import and export precious metals, including gold. Gold used by dentists and goldsmiths is imported by AGENOR. Gold and other precious metals are included on the list of items importable by concessionaires.
Controls on exports and imports of banknotesUnless expressly authorized by the BA, the exportation and importation of any means of payment denominated in domestic currency is prohibited. However, travelers are authorized to export and/or import banknotes and coins in Algerian dinars up to an amount set by the BA.
On exports
Domestic currencyEffective November 7, 2007, resident travelers may take out up to DA 3,000 a person (previously DA 2,000).
Foreign currencyNonresident travelers may reexport any foreign currency they declared on entry, less any amounts legitimately surrendered to authorized intermediaries and exchange bureaus. Resident travelers may export foreign currency withdrawn from their foreign currency accounts up to €7,622 a trip for an unlimited number of trips a year.
On imports
Domestic currencyEffective November 7, 2007, resident travelers may import up to DA 3,000 a person (previously residents were allowed only to reimport domestic currency up to DA 2000).
Foreign currencyThere are no restrictions on the importation of foreign banknotes or traveler’s checks, but residents and nonresidents must declare any amount in excess of a threshold set by the BA when they enter Algeria.
References to legal instruments and hyperlinksRegulation 91-03 of February 20, 1991, Governing Imports and Exports of Goods and Services; Regulation 07-01of February 3, 2007, Regulating Current Transactions with the Rest of the World and Foreign Currency Accounts; Instruction No. 10-07 of November 7, 2007.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts may be freely credited with book transfers of convertible foreign exchange from abroad through the postal system or through banks, or with convertible foreign exchange that was imported and declared by the account holder on entry into the country, or with domestic book transfers from banks to bank accounts held by individuals. The accounts are remunerated at rates representing the average of the rates observed on the euro-currency market, not including margins between −2% and +1.25%, or for call deposits only, at rates representing the average of the overnight rates of either the discount rate or the monetary market rates prevailing in the country of the currency involved. Foreign exchange assets owned by banks and their clients are currently deposited in accounts at the BA, which manages these assets and pays interest on them.
Accounts may be debited freely for book transfers abroad only through the banking system. They may also be debited for purchases of Algerian dinars, book transfers in dinars, and purchases of convertible foreign exchange that will be physically exported by the account holder. Companies may also open foreign exchange accounts for receiving and making foreign exchange transfers, including the retained portion of their export proceeds. They may transfer funds in these accounts to other foreign exchange accounts, or use them to make payments in Algeria or abroad for goods and services needed for their activities.
Held abroadNo.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyThese accounts are permitted in limited cases, such as for embassies.
References to legal instruments and hyperlinksRegulation 07-01 of February 3, 2007, Regulating Current Transactions with the Rest of the World and Foreign Currency Accounts.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with foreign currency banknotes and other means of payment denominated in foreign currency, as well as with other Algerian-dinar-denominated funds that meet all requirements for transfers abroad. They may be debited without restrictions to make transfers abroad, to export through withdrawals of foreign banknotes, and to make dinar payments in Algeria. These accounts are remunerated at the same rates as resident foreign exchange accounts. Foreign exchange assets owned by banks and their clients are currently deposited in accounts at the BA, which manages these assets and pays interest on them. These accounts may not show a debit balance.
Domestic currency accountsEmbassies and foreign firms in Algeria may open accounts without prior authorization for making and receiving payments in relation to other business activity. Accounts pay no interest and cannot be in overdraft.
Convertible into foreign currencyYes.
Approval requiredOutward transfers require individual approval from the BA.
Blocked accountsIndividual suspense accounts may be opened without authorization and may be credited with payments from any country.
References to legal instruments and hyperlinksRegulation 07-01 of February 3, 2007, Regulating Current Transactions with the Rest of the World and Foreign Currency Accounts.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsPayments for imports of gold, other precious metals, and precious stones must be made from foreign currency accounts. External borrowing by importers for import financing purposes must be arranged through an authorized intermediary bank.
Advance payment requirementsExcept when otherwise indicated by the BA, down payments for imports may not exceed 15% of their total value. When a public agency, public enterprise, or ministry incurs expenditures for imports deemed to be urgent or exceptional, the bank may effect payment before exchange and trade control formalities have been completed.
Advance import depositsAlthough not mandatory, domiciled banks may require from the importer, as part of their normal commercial operations, a deposit in Algerian dinars up to the full value of the imports.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementWith the exceptions mentioned in Article 33 of Regulation 07-01 of February 3, 2007, imports are subject to obligatory domiciliation at an authorized intermediary bank, which an importer must establish by submitting to an authorized bank a commercial contract or pro forma invoice. Import payments may be made freely but only through the domiciled bank, which effects payments in foreign exchange and debits the importer’s account with corresponding amounts in Algerian dinars valued at the official exchange rate.
Preshipment inspectionYes.
Letters of creditYes.
OtherImporters willing to insure merchandise or capital goods transported by air or sea must purchase insurance from authorized Algerian insurers. However, this requirement does not apply to the following: (1) gift items; (2) material and equipment imported under the temporary admission regime; (3) goods, including capital goods, financed by international and regional institutions; and (4) goods imported under an agreement that renders the vendor liable for transportation risks.
Import licenses and other nontariff measures
Negative listA small number of imports are prohibited for religious or security reasons.
Other nontariff measuresJuridical and natural persons registered under the Commercial Register (including dealers and wholesalers) and having the required minimum capital may import goods and services without prior authorization.
Import taxes and/or tariffsImports are subject to tariffs of zero, 5%, 15%, and 30%.
State import monopolyNo.
References to legal instruments and hyperlinksRegulation 07-01 of February 3, 2007, Regulating Current Transactions with the Rest of the World and Foreign Currency Accounts.
Exports and Export Proceeds
Repatriation requirementsFor all exports, excluding hydrocarbons, proceeds must be repatriated within 120 days of delivery date of the goods.
Surrender requirements
Surrender to the central bankAll export proceeds from hydrocarbons and mineral products must be surrendered to the BA. Proceeds are considered to be surrendered when deposited in BA foreign correspondent banks. The value date of the deposit is the payment due date indicated in the invoice and/or trade contract.
Surrender to authorized dealersFifty percent of proceeds from exports of products other than hydrocarbons and mineral products must be surrendered to commercial banks; the remaining portion may be retained in a foreign currency account held in Algeria. Exporters may use the funds in these accounts for imports or other payments pertaining to their business, or they may transfer the funds to another foreign currency account.
Financing requirementsNo.
Documentation requirementsThe requirements are enforced in accordance with the terms of the contract.
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionYes.
Export licenses
Without quotasAll exports to Israel are prohibited, and certain exports are prohibited for social or cultural reasons regardless of destination.
Export taxesNo.
References to legal instruments and hyperlinksRegulation 07-01 of February 3, 2007, Regulating Current Transactions with the Rest of the World and Foreign Currency Accounts.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Indicative limits/bona fide testThe transfer abroad of profits is permitted, but only through an authorized intermediary and provided tax obligations have been met. Authorized intermediaries review requests for transfers and execute without delay transfers of dividends, profits, and proceeds from the sale of foreign investments and attendance and percentage fees for foreign directors.
Payments for travelResidents traveling abroad receive an annual foreign exchange allowance, and pilgrims traveling to Saudi Arabia receive an allowance in Saudi Arabian riyals; the amount may be provided in the form of checks that are cashed on arrival. Tickets purchased by nonresidents for travel abroad must be paid for with imported foreign exchange.
Prior approvalBona fide requests for amounts in excess of established limits are authorized on a case-by-case basis.
Indicative limits/bona fide testThe limit for nonbusiness trips is DA 15,000 or its equivalent a person a year. For business trips, per diem and transport allowances, respectively, are (1) DA 16,000 and DA 10,000 for executives, (2) DA 12,000 and DA 8,000 for mid-level staff, and (3) DA 10,000 and DA 6,000 for technical staff. For nonbusiness trips, the BA reviews and approves all bona fide requests for foreign exchange above the indicative limits.
Personal payments
Prior approvalTransfers of alimony payments are permitted, provided the arrangement was issued by an Algerian court and is enforceable in Algeria. BA authorization is required for payments relating to family support payments; limits are set on a case-by-case basis.
Quantitative limitsYes.
Indicative limits/bona fide testThe limits for medical costs are the equivalent of DA 15,900 for adults and DA 7,600 for children under 15 years of age. The limit for studies abroad is DA 9,000 a month between September 1 and June 30. Bona fide requests for amounts in excess of these annual limits are subject to review and approval by the BA.
Foreign workers’ wages
Indicative limits/bona fide testSubject to the laws and regulations governing the recruitment and employment of foreigners in Algeria, foreign workers recruited by the government and Algerian
economic agents have the right to transfer savings from their wages under conditions established by instruction of the BA.
Other payments
Indicative limits/bona fide testPayments for imports of technical, economic, and scientific magazines and periodicals are made in the context of domiciliation procedures. Payments of subscription fees are made on presentation of a subscription contract at the domiciliation window.
References to legal instruments and hyperlinksRegulation 07-01 of February 3, 2007, Regulating Current Transactions with the Rest of the World and Foreign Currency Accounts.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersFifty percent of receipts must be surrendered to banks.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksRegulation 07-01 of February 3, 2007, Regulating Current Transactions with the Rest of the World and Foreign Currency Accounts.
Capital Transactions
Controls on capital transactionsResidents may transfer capital abroad to finance activities that are complementary to those undertaken in Algeria. The Council on Money and Credit sets the conditions for implementation and issues authorization.
Repatriation requirementsYes.
Surrender requirementsn.a.
Controls on capital and money market instrumentsNonresidents may invest in shares or other investment securities. Transfers abroad of proceeds from the sale of these investments on the stock exchange or of the revenue generated by these investments are allowed, as long as they are conducted through an authorized intermediary.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsn.a.
Sale or issue abroad by residentsn.a.
On collective investment securities
Purchase locally by nonresidentsn.r.
Sale or issue locally by nonresidentsn.r.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.r.
Controls on derivatives and other instruments
Purchase locally by nonresidentsn.a.
Sale or issue locally by nonresidentsn.a.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsn.a.
Controls on credit operationsThere are controls on all credit transactions, guarantees, sureties, and financial backup facilities.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentForeign direct investment is permitted freely except in certain specified sectors, provided it conforms to the laws and regulations governing regulated activities and prior declaration is made to the authorities.
Controls on liquidation of direct investmentProceeds from disinvestment following the closing or relocation of a business operation may be transferred abroad through authorized banks and financial intermediaries only up to the verified portion of the foreign investment out of the total liquidated investment.
Controls on real estate transactionsThe regulations governing capital market instruments apply.
Purchase abroad by residentsYes.
Purchase locally by nonresidentsn.a.
Sale locally by nonresidentsn.a.
Controls on personal capital transactionsn.a.
References to legal instruments and hyperlinksOrdinance 03-11 of August 26, 2003, on Money and Credit (Article 126); Regulation 2000-03 on Foreign Investment; Regulation 2000-04 on Capital Transfers for Nonresident Portfolio Investment.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)n.a.
Lending locally in foreign exchangeBanks and financial institutions may on-lend foreign funds borrowed abroad.
Purchase of locally issued securities denominated in foreign exchangen.a.
Differential treatment of deposit accounts in foreign exchange
Interest rate controlsYes.
Differential treatment of deposit accounts held by nonresidents
Interest rate controlsYes.
Open foreign exchange position limitsAuthorized financial institutions may have open foreign exchange positions up to (1) 10% of their regulatory capital for any individual currency (short or long, whichever is highest), and (2) 30% of regulatory capital for all currencies combined (short or long positions, whichever is highest).
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsn.a.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2007
Arrangements for payments and receiptsNovember 7. The amount of domestic currency resident travelers are allowed to export or import was increased to DA 3,000 from DA 2,000 a person.
Imports and import paymentsFebruary 3. Exceptions were established to the obligatory domiciliation of imports at an authorized intermediary bank.

ANGOLA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article XIVYes.
Exchange Measures
Restrictions and/or multiple currency practicesThe IMF staff report for the 2007 Article IV consultation with Angola states that, as of August 6, 2007, Angola maintained exchange restrictions and multiple currency practices subject to approval under Article VIII, Sections 2 and 3. The identified exchange restrictions include a limit on the remittance of dividends and profits from foreign investments of up to $100,000 and the need for prior approval on business-related current invisible transactions. Multiple currency practices arise from the differential in spot exchange rates among the Bank of Angola’s currency auction, interbank market, and retail foreign exchange market. A foreign exchange stamp tax applicable to electronic remittances constitutes both an exchange restriction and a multiple currency practice. (Country Report No. 07/354)
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
Other security restrictionsYes.
References to legal instruments and hyperlinksInstruction 04/03 of February 7, 2003; www.bna.ao/default.aspx?c=164.
Exchange Arrangement
CurrencyThe currency of Angola is the Angolan kwanza.
Exchange rate structure
MultipleEffective August 6, 2007, the exchange rate structure was reclassified from unitary to multiple because of the multiplicity of the spot exchange rates in the Bank of Angola’s currency auction, the interbank market, and the retail foreign exchange market.
Classification
Conventional pegged arrangementThe BNA intervenes actively in the foreign exchange market in order to sterilize foreign currency inflows in the form of taxes paid by oil companies, which led to the stability of the kwanza exchange rate. The BNA publishes a reference rate daily, which is computed as the transaction-weighted average of the day’s rates negotiated with commercial banks.
Exchange taxForeign exchange operations are subject to a stamp duty of 0.15%. Transactions between banking institutions or involving banknotes and traveler’s checks are exempt from this duty.
Exchange subsidyNo.
Foreign exchange market
Spot exchange marketBanks are authorized to deal in foreign exchange at freely established rates among themselves, with the public, and with foreign exchange bureaus outside the sessions. Foreign exchange bureaus are authorized to deal only in banknotes and traveler’s checks, at freely established rates, with individuals, banks, and among themselves, provided they comply with all legislation.
Operated by the central bank
Allocationn.a.
AuctionThe BNA operates a foreign exchange auction every business day. The auctions follow the principles of a Dutch auction and all transactions are processed electronically. Participants, with the coordination of the BNA, can freely conduct foreign exchange purchases and sales on their own behalf or on behalf of the customers. The BNA, as a participant, may also purchase and sell foreign exchange. Purchasing bids, ranked from highest price to lowest, must be honored until the foreign exchange amount announced for sale has been exhausted. Sales are conducted at actual bid prices, and the appropriate fees are collected.
Fixingn.a.
Interbank marketBanks and exchange bureaus may deal in foreign exchange at freely astablished rates among themselves.
References to legal instruments and hyperlinksNotice 10/03 of August 22, 2003; www.bna.ao/default.aspx?c=148; Instruction 02/03 of February 7, 2003; www.bna.ao/docs/instrutivos/INSTRUTIVO. 02-2003.pdf; Instruction 03/03 of February 7, 2003; www.bna.ao/artigo.aspx? c=164&a=471.
Arrangements for Payments and Receipts
Prescription of currency requirementsPayments and receipts may be made in any convertible currency and executed through bank transfers, LCs, or financing and banking agreements.
Use of foreign exchange amongYes.
Payments arrangements
Bilateral payments arrangements
OperativeAgreements in effect with Brazil, China, and Israel are related to oil-backed financing collaterals.
Administration of controlThe BNA is the exchange authority and may delegate its powers to other entities that are authorized to engage in foreign exchange activities.
Payments arrears
PrivateAlmost all arrears have been settled. The settlement of the remaining supplier credits is under way.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents are permitted to hold and trade gold only in the form of jewelry.
On external tradeImports and exports of gold coins and bullion are restricted to the BNA.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of domestic currency are prohibited.
Foreign currencyResidents may take out up to the equivalent of $15,000 in foreign currency or traveler’s checks. Amounts exceeding this limit must be transferred through a bank.
On imports
Domestic currencyImports of domestic currency are effected only by the BNA.
Foreign currencyResidents may bring in up to the equivalent of $15,000 in foreign currency or traveler’s checks. Amounts in excess of this limit may be brought in with proof that the funds were legally obtained. For nonresidents, amounts in excess of $15,000 must be declared to the customs authorities on arrival. Banking institutions are free to import banknotes and traveler’s checks, but they must submit a monthly report to the BNA.
References to legal instruments and hyperlinksNotice 1/06 of January 10, 2006; Foreign Exchange Law 05/97 of June 27, 1997; www.bna.ao/docs/leis/Lei_Cambial.pdf; Organic Law of the Banco Nacional de Angola 06/97 of July 11, 1997; www.bna.ao/docs/leis/Lei_Organica.pdf; Notice 01/06 of January 20, 2006; www.bna.ao/artigo.aspx?c=200&a=457.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThese accounts may be opened by resident individuals and legal persons.
Held abroadNatural persons may hold these accounts without BNA approval. With BNA approval, legal persons are allowed to open foreign exchange accounts abroad, credit them with their export receipts, and debit them for payments for imports of goods and services and debt-service payments. With BNA authorization, diamond and other mineral companies are allowed to retain escrow accounts in banks abroad as a guarantee against foreign borrowing.
Approval requiredYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksForeign Exchange Law 05/97 of June 27, 1997; www.bna.ao/docs/leis/Lei_Cambial.pdf; Notice 04/99 of May 21, 1999; www.bna.ao/artigo.aspx? c=217&a=645; Notice 02/03 of February 7, 2003; www.bna.ao/docs/avisos/aviso. 02-2003.pdf.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with foreign currency imported from abroad, with the accrued interest, or with sums from nonresidents’ type A domestic currency accounts. They may be debited for the withdrawal or sale of foreign currency, payments for foreign currency expenditures, or the repatriation of amounts authorized by the BNA.
Domestic currency accountsNonresidents may open two types of domestic currency accounts: type A and type B. Type A accounts may be credited with the proceeds from sales of funds from foreign exchange accounts and, after obtaining prior BNA authorization, with receipts from the nonresidents’ activities in Angola. These accounts may be debited for payments of local expenses and against purchases of foreign currency to be deposited in a foreign currency account held by the same entity. Type B accounts may be credited only with receipts from nonresidents’ activity in the country (when authorized by the BNA) and may be debited for payment of local expenses.
Convertible into foreign currencyNo.
Blocked accountsNo.
References to legal instruments and hyperlinksForeign Exchange Law 05/97 of June 27, 1997; www.bna.ao/docs/leis/Lei_Cambial.pdf; Notice 04/99 of May 21, 1999; www.bna.ao/artigo.aspx? c=217&a=645.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionPreshipment inspection is required in the following cases: (1) imports by government institutions and public companies, as well as any other merchandise selected by the National Directorate of Customs for preshipment inspection; (2) imports of new and used cars; light-duty, cargo, and passenger vehicles; yachts and other leisure and sports boats and vessels; all other motorized vehicle as well as their parts and accessories; scrap metal; and receivers and transistors for radiotelephone and radio or television broadcasting; and (3) imports by juridical and natural persons of goods valued at more than the equivalent of $5,000 and $10,000, respectively, which must be registered with the preshipment inspection company for statistical purposes. Goods valued at less than $5,000 and $10,000 imported by juridical and natural persons, respectively, that do not require preshipment inspection may be imported only once every quarter.
Letters of creditYes.
Import licenses and other nontariff measures
Negative listThe legal framework lists goods that may not be imported, which include plants and animals from infected areas, toxic products, and certain drugs. There is a list of goods that require specific licenses from the Ministries of Health, Industry, or Agriculture. Imports of arms and ammunition are subject to authorization by the Ministry of the Interior. Imports for specific purposes may be exempt from customs tariffs.
Open general licensesImports must be registered under the REM (entry merchandise registration) system for statistical purposes.
Other nontariff measuresn.r.
Import taxes and/or tariffsThe tariff system consists of eight rates: 1%, 2%, 5%, 10%, 20%, 25%, 30%, and 35%.
Taxes collected through the exchange systemThe 0.15% stamp tax is collected through the exchange system.
State import monopolyOil products and derivatives may be imported only by the public oil company. Arms and ammunition for warfare may be imported only by the state.
References to legal instruments and hyperlinksDecree-Law 2/05; Notice 12/03 of August 28, 2003; www.bna.ao/docs/avisos/aviso.12-2003.pdf; Decree-Law 2/05, Decree 55; Instruction 08/99 of May 21, 1999; www.bna.ao/docs/instrutivos/INSTRUTIVO.08-1999.pdf.
Exports and Export Proceeds
Repatriation requirementsForeign companies are allowed to retain their export receipts abroad for payment of imports of goods and services, interest and profits transfer, and the amortization of capital. These companies must use funds from abroad for payment of royalties, taxes, and local expenses.
Surrender requirements
Surrender to the central bankTax payments by oil companies must be sold to the BNA.
Surrender to authorized dealersForeign exchange earnings from exports of goods and services by the non-oil sector must be surrendered to domestic banks. Diamond companies are allowed to retain in local banks the receipts from exports for payment for imports of goods and services. They may also retain part of their receipts abroad in escrow accounts, with BNA authorization, as a guarantee against foreign borrowing.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
DomiciliationYes.
Export licensesExports are not subject to licenses, but must be registered under the REM (exit merchandise registration) for statistical purposes. Reexports of goods other than personal belongings are prohibited. Exports of arms, ammunition, and cultural artifacts are prohibited. Special export regimes apply to aircraft, animals and animal products, works of art, and petroleum.
Export taxesExport taxes consist of six rates: 1%, 2%, 3%, 4%, 5%, and 10%.
References to legal instruments and hyperlinksNotice 12/03 of August 28, 2003; www.bna.ao/docs/avisos/aviso.12-2003.pdf; Decree-Law 2/05, Decree 55; Instruction 08/99 of May 21, 1999; www.bna.ao/docs/instrutivos/INSTRUTIVO.08-1999.pdf.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related paymentsService contracts with nonresidents in excess of $500,000 are subject to licensing.
Prior approvalYes.
Indicative limits/bona fide testn.r.
Investment-related payments
Prior approvalForeign investors are authorized by the BNA to remit profits and dividends, after payment of taxes and fulfillment of other legal requirements.
Indicative limits/bona fide testn.r.
Payments for travel
Quantitative limitsThe noncumulative monthly limit on outward transfers for personal travel or for business, health, education, scientific, or cultural purposes, in accordance with the subcategories that include private transactions, is set at $15,000 a person a trip, up to a maximum of $60,000 over a 12-month period.
Indicative limits/bona fide testn.r.
Personal payments
Quantitative limitsOutward transfers are allowed up to $15,000 a person a month up to a maximum of $60,000 over a 12-month period. Quantitative limits apply to transfers for maintenance of Angolans or foreigners residing abroad who are direct ascendants or descendants of residents of Angola.
Foreign workers’ wages
Indicative limits/bona fide testn.r.
Credit card use abroadOnly banks may issue credit cards.
Quantitative limitsUse of credit cards abroad is limited to the equivalent of $10,000.
Indicative limits/bona fide testn.r.
Other paymentsn.r.
References to legal instruments and hyperlinksInstruction 01/06 of January 6, 2006; www.bna.ao/artigo.aspx?c=201&a=466.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersService earnings must be surrendered to a bank, unless the depositor is authorized by the BNA to retain a certain proportion of the proceeds.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksForeign Exchange Law 05/97 of June 27, 1997; www.bna.ao/docs/leis/Lei_Cambial.pdf.
Capital Transactions
Controls on capital transactionsAll capital transactions are subject to BNA licensing. Capital transactions must be conducted through banks and require BNA approval and a capital import or export license.
Repatriation requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsControls apply to all these transactions.
Controls on derivatives and other instrumentsn.r.
Controls on credit operations
Commercial creditsOperations are subject to prior licensing by the BNA for registration purposes only; there is no binding commitment by the BNA.
By residents to nonresidentsSuppliers’ credits must be reported to the BNA for statistical purposes.
To residents from nonresidentsSuppliers’ credits must be reported to the BNA for statistical purposes.
Financial creditsFinancial credits are subject to licensing by the BNA.
Guarantees, sureties, and financial backup facilitiesControls apply to all these transactions.
Controls on direct investment
Outward direct investmentAngolan citizens are permitted to invest abroad, in accordance with the Exchange Law.
Inward direct investmentForeign investment is subject to the provisions of the Private Investment Law as well as foreign exchange laws and regulations, which are implemented by the National Agency for Private Investment. Special laws regulate investment in certain areas, including (1) oil and mineral exploration and (2) financial institutions. Foreign investment is prohibited in the following areas: (1) defense, domestic public order, and state security; (2) central banking and the issuing of currency; and (3) other areas reserved for the state.
Controls on liquidation of direct investmentForeign investors are guaranteed the right to transfer abroad the proceeds of the sale of investments, including capital gains and amounts owed to them after payment of taxes due.
Controls on real estate transactionsControls apply to all these transactions.
Controls on personal capital transactions
LoansControls apply to all these transactions.
Gifts, endowments, inheritances, and legaciesControls apply to all these transactions.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsYes.
References to legal instruments and hyperlinksPrivate Investment Law 11/03; BNA Instruction 01/2003 of February 7, 2003; Notice 04/03 of February 7, 2003; www.bna.ao/docs/avisos/aviso.04-2003.pdf; Foreign Exchange Law 05/97 of June 27, 1997; www.bna.ao/docs/leis/Lei_Cambial.pdf; Notice 04/05 of December 27, 2005; www.bna.ao/artigo.aspx? c=150&a=469; Instruction 01/06 of January 6, 2006; www.bna.ao/artigo.aspx? c=201&a=466.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending locally in foreign exchangeBanks may lend locally in foreign exchange.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe reserve requirement for demand deposits in foreign and domestic currencies is 15%. The coefficient of the reserve requirement for central government deposits in local currency is 100% and for local government deposits, 50%.
Liquid asset requirementsThe liquid asset requirement is 50% of the foreign exchange portfolio.
Differential treatment of deposit accounts held by nonresidents
Credit controlsn.r.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsBanks may hold daily foreign exchange positions of up to 20% of their own funds. Foreign exchange bureaus may hold active foreign exchange positions of up to 10 times their capital.
Provisions specific to institutional investors
Insurance companiesn.r.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksBNA Notice 06/2003 of February 7, 2003; BNA Notice 15/2003 of October 17, 2003; Law on Financial Institutions 13/05 of September 30, 2005; www.bna.ao/docs/leis/Lei_Instituicoes_Financeiras.pdf; Instruction 02/07 of April 18, 2007; www.bna.ao/artigo.aspx?c=216&a=632; Notice 06/03 of February 7, 2003; www.bna.ao/docs/avisos/aviso.06-2003.pdf; Notice 06/07 of September 26, 2007; www.bna.ao/artigo.aspx?c=215&a=762.
Changes during 2007
Exchange arrangementAugust 6. The exchange rate structure of Angola was reclassified from unitary to multiple.

ANTIGUA AND BARBUDA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: November 22, 1983.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)In accordance with UN Security Council resolutions, measures have been taken to freeze the assets of terrorists and terrorist organizations.
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Antigua and Barbuda is the Eastern Caribbean dollar, issued by the ECCB.
Exchange rate structureUnitary.
Classification
Currency board arrangementAntigua and Barbuda participates in a currency union with seven other members of the ECCU and has no separate legal tender. The Eastern Caribbean dollar is pegged to the U.S. dollar under a currency board arrangement at EC$2.70 per US$1. Effective January 1, 2007, the exchange rate arrangement of the ECCU countries has been reclassified to the category currency board arrangement 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.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketn.a.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of CARICOM countries must be made either in the currency of the country concerned or in Eastern Caribbean dollars. Exports to Jamaica are settled in U.S. dollars. Settlements with residents of other countries may be made in any foreign currency or in Eastern Caribbean dollars.
Use of foreign exchange amongYes.
Payments arrangements
Regional arrangementsAntigua and Barbuda is a member of CARICOM and the OECS.
Clearing agreementsYes.
Administration of controlThe MOF applies controls to all foreign exchange transactions.
Payments arrears
OfficialYes.
Privaten.a.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of
On exports
Domestic currencyExports of domestic currency outside the ECCU are subject to limits prescribed by the ECCB.
Foreign currencyYes.
On imports
Foreign currencyYes.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedExternal accounts may be opened, especially in tourism-oriented industries or in export trade where receipts are primarily in foreign currency and a large number of inputs are imported or financed with foreign currency.
Held domesticallyCommercial banks are required to report external account operations to the MOF on a monthly basis.
Approval requiredYes.
Held abroadn.a.
Approval requiredn.a.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedExternal accounts may be maintained in any currency and may be credited with receipts from sales of merchandise (whether from exports or local sales) or from remittances. Commercial banks are required to report external account operations to the MOF on a monthly basis.
Approval requiredYes.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Approval requiredYes.
Blocked accountsn.a.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPayments for authorized imports are permitted on application and submission of documentary evidence. All bona fide import payments are approved.
Domiciliation requirementYes.
Letters of creditYes.
Othern.a.
Import licenses and other nontariff measuresCertain goods require individual licenses, unless imported from CARICOM countries. Antigua and Barbuda complies with the CARICOM rules of origin.
Open general licensesMost goods may be freely imported under OGLs granted by the MOF and the Ministries of Industry and Commerce. Nonautomatic licensing is applied to products subject to quantitative restrictions.
Licenses with quotasQuantitative restrictions are applied to carbonated beverages, beer, stout, ale, and porter. In agriculture, quantitative restrictions are applied if there is domestic supply.
Other nontariff measuresn.a.
Import taxes and/or tariffsCustoms duty rates range from zero to 35% for nearly all items. The CARICOM CET is applied. As a result, tariffs on imports from CARICOM countries range from zero to 20%. There are no customs duties on a number of items, including milk and poultry. Some goods, including basic foods and agricultural goods, are exempt from customs duties. Other exemptions for machinery, equipment, and raw materials are granted on a case-by-case basis. There is a customs service charge with a maximum rate of 10%.
Taxes collected through the exchangen.a.
State import monopolyThere is a monopoly on imports of petroleum products.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsn.a.
Financing requirementsn.a.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
OtherYes.
Export licensesNo.
Export taxesReexports are not subject to any tax if transactions take place within the bonded area.
Collected through the exchange systemn.a.
Other export taxesn.a.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for certain categories of invisibles (related to authorized imports) do not require prior MOF approval. Approval is granted for all bona fide payments for invisibles. No controls apply to payments for freight, insurance, unloading and storage costs, administrative expenses, commissions, profits, and dividends.
Investment-related paymentsProfits may be remitted in full after compliance with corporate income tax payments. Verification is not applied in practice; the authorities, however, can decide to undertake such verification.
Personal paymentsInformation is not available on the transfer of pensions.
Prior approvalPayments related to family maintenance are permitted. Payments for alimony are allowed if provided for by contract.
Quantitative limitsPayments related to medical expenses and study abroad are permitted.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalThese remittances are allowed, if provided for by contract.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Credit card use abroadn.a.
Other payments
Prior approvalPayments for consulting and legal fees are allowed, if provided for by contract.
Quantitative limitsThe limit for subscriptions and membership fees is EC$10,000 a year.
Indicative limits/bona fide testYes.
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 requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsNo.
Controls on derivatives and otherNo.
Controls on credit operations
Financial credits
By residents to nonresidentsMOF approval is required for lending to nonresidents by commercial banks.
Controls on direct investment
Outward direct investmentLarge transfers abroad for investment purposes may be made in phases over time by the financial secretary.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsAn alien landholding license is required, and the purchase must be approved by the cabinet.
Controls on personal capital transactions
Transfer of gambling and prize earningsn.a.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsUnder the laws governing offshore financial institutions (1) the International Financial Sector Authority was created, with responsibility for licensing offshore financial institutions; (2) annual inspections of offshore financial institutions are conducted; (3) the minimum capital requirement for offshore banks is the equivalent of US$5 million, of which US$1.5 million is to be deposited in the domestic banking system; (4) all directors of a bank are to be natural persons, and at least one must be a national of Antigua and Barbuda; and (5) offshore banks are allowed to extend credit to the Antiguan and Barbudan government.
Borrowing abroadn.a.
Maintenance of accounts abroadn.a.
Lending to nonresidents (financial or commercial credits)MOF approval is required for these transactions.
Lending locally in foreign exchangen.a.
Purchase of locally issued securities denominated in foreign exchangen.a.
Investment regulationsn.a.
Open foreign exchange position limitsn.a.
Provisions specific to institutional investorsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2007
Exchange arrangementJanuary 1. The exchange rate arrangement of the ECCU countries was reclassified to the category currency board arrangement from the category exchange arrangement with no separate legal tender. The new classification reflects only a definitional change.

ARGENTINA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: May 14, 1968.
Exchange Measures
Restrictions and/or multiple currency practicesInformation is not publicly available.
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Argentina notified the IMF that it maintains restrictions in accordance with UN Security Council resolutions and EU regulations on preventing the financing of terrorism.
Other security restrictionsThe Central Bank of the Argentine Republic (BCRA) has instituted a system for enforcing sanctions of this type, whereby financial and exchange institutions are required, in accordance with decrees issued by the Argentine executive branch pertaining to UN Security Council resolutions on combating terrorism, to abide by the resolutions (and annexes thereto) issued by the Ministry of External Relations, International Trade, and Religious Affairs, once they are published in the Boletín Oficial.
References to legal instruments and hyperlinksConsolidated regulations on prevention of the financing of terrorism (Communications A 4218, 4273, 4342, 4384, 4425, 4459, 4521, 4548, and 4599, and C 40646). The aforementioned provisions (in Spanish) are available at the institutional website of the BCRA (www.bcra.gov.ar) by searching for “normativa” (laws), “textos ordenados” (regulations), or “comunicaciones” (communications), as applicable.
Exchange Arrangement
CurrencyThe currency of Argentina is the Argentine peso.
Exchange rate structure
DualAll foreign exchange transactions must take place in the free and unified foreign exchange market (MULC), according to Decree 260/2002, Communication A 3471. Beginning July 17, 2006, the exchange rate structure became dual because of a measure that required exporters who failed to sell their export proceeds within the prescribed period of time to sell the proceeds to the BCRA at the reference rate on the date of sale or the reference rate on the day the sale should have taken place, whichever was less favorable. This measure was suspended effective May 17, 2007.
Classification
Conventional pegged arrangementThe de jure exchange rate arrangement is independently floating, and the exchange rate of the Argentine peso is determined in the MULC by the free interplay of supply and demand. The BCRA intervenes in the foreign exchange market to cover some of the public sector’s external payment needs and to build sufficient international reserves to deal with cyclical pressures caused by endogenous or exogenous factors. Although the peso depreciated beyond the limits of a conventional peg in July 2007, since then it has remained within a 2% band. Reflecting the stability of the peso exchange rate owing to BCRA interventions, the de facto exchange rate arrangement of Argentina is classified as a conventional pegged arrangement.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange marketSpot transactions are carried out on the MULC and settled within 48 hours. The MULC is the only formal mechanism for foreign exchange transactions.
Interbank marketCommercial banks can trade freely on the foreign exchange market. The BCRA engages in transactions during all market hours.
Forward exchange marketThere are three forward markets; transactions on these markets are settled by netting in domestic currency.
References to legal instruments and hyperlinksCommunication A 3471; Decree 260/2002; www.bcra.gov.ar.
Arrangements for Payments and Receipts
Prescription of currency requirementsTransactions must be settled in freely convertible currencies.
Payments arrangements
Bilateral payments arrangements
InoperativeArgentina has agreements with Cuba and Malaysia. Payments between Argentina and those countries are settled on a voluntary basis. Transactions with Malaysia are settled through accounts at the BCRA and at the central bank of Malaysia. Transactions with Cuba are settled between the BCRA and the accounts specified in the agreements.
Regional arrangementsWithin the framework of the multilateral clearing system of the LAIA, payments between Argentina and other LAIA countries are settled voluntarily through payment agreements and a reciprocal credit mechanism.
Clearing agreementsYes.
Administration of controlExchange regulations are established by the BCRA in accordance with the policy set by the national executive. All exchange transactions must be carried out through specially authorized entities. These authorized entities include banks, exchange agencies, exchange houses, exchange offices, and financial companies. Each type of institution is subject to separate regulations.
Payments arrearsThere have been no exchange restrictions on the payment of either public or private financial debts abroad since May 6, 2003 (Communication A 3944).
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeSales of gold coins or bullion are subject to MULC exchange regulations.
On external tradeImports of gold bars are not restricted. Imports of gold by industrial users are subject to a statistical duty of 0.5% and a sales tax. Exports of coins and precious metal coins exceeding US$10,000 require BCRA approval and must be made through entities subject to supervision by the Superintendency of Financial and Exchange Entities.
Controls on exports and imports of banknotes
On exports
Foreign currencyExports of foreign currency exceeding US$10,000 require BCRA authorization and must be made through entities subject to supervision by the Superintendency of Financial and Exchange Entities.
On imports
Domestic currencyImports of domestic currency through outward foreign exchange transfers are subject to BCRA approval if the amount exceeds US$5,000 a calendar month.
Foreign currencyEntities authorized to deal in foreign exchange do not need BCRA authorization to engage in swap operations with banknotes with foreign financial entities, provided the foreign entity is a (1) foreign branch or office of a local official bank; (2) foreign banking entity in which a foreign government is the majority shareholder or sole owner; (3) multilateral development bank; (4) foreign bank authorized by the central bank to open branches in Argentina or to purchase shares in local banking entities; or (5) any other foreign bank whose parent or controlling company is located in one of the member countries of the Basel Committee for Banking Supervision and has at least an “A” rating from one of the risk-rating agencies registered with the BCRA.
References to legal instruments and hyperlinksCommunications A 3661, 3944, 4560, and 4662; Decree 1606/01; www.bcra.gov.ar.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyAuthorized banks may open time deposit accounts in dollars and euros. In addition, they may accept deposits of public and private securities and term investments in dollars and euros. In all cases, the appropriate identification requirements must be met (among other reasons, to prevent money laundering).
Approval requiredAuthorized banks may open deposit accounts in foreign currencies other than dollars with BCRA approval.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedThe regulations governing resident accounts apply.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance payment for imports of goods is permitted; however, there must be evidence that the goods have entered the national economy within 365 days of the advance payment or within 90 days of the spot payment (Communication A 4605).
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresNonautomatic import licenses are required for paper products, toys, washing machines, footwear, carpets, bicycles, motorcycles, refrigerators, and stoves.
Negative listRestrictions are in effect for security, hygiene, and public health reasons.
Open general licensesOGLs are required for a limited list of products.
Licenses with quotasTrade with Brazil in the automobile sector is subject to an administered trade regime. Under bilateral agreements, there are quotas with preferential tariffs for automobile sector products.
Other nontariff measuresNontariff barriers are not applied to intra-MERCOSUR trade. Argentina, however, applies a special regime to sugar imports with the authorization of MERCOSUR, pending agreement on a common regime for this sector. Imports of used and retreaded tires, some used capital goods, and secondhand clothing are prohibited, except by nonprofit organizations.
Import taxes and/or tariffsArgentina and MERCOSUR apply a CET to imports from the rest of the world that encompasses all products. The CET rates range from zero to 20%. Argentina is following a timetable for convergence with the CET for a list of computer and telecommunications products. The national list of exceptions, in accordance with Decision 38/05, now covers 100 products, with a maximum tariff of 35%.
State import monopolyNo.
References to legal instruments and hyperlinksCommunication A 4605; www.bcra.gov.ar.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirements
Surrender to the central bankEffective May 17, 2007, the requirement that exporters who failed to sell their export proceeds within the prescribed period of time sell the proceeds to the BCRA at the reference rate on the date of surrender or the reference rate on the day the sale should have taken place, whichever was less favorable, was suspended (Communication A 4668).
Surrender to authorized dealersExport proceeds must be sold on the MULC within certain specified time periods (Communications A 3473, A 4361, and A 4404). The time limits generally vary between 60 and 360 days from the date of shipment. Exceptions apply to exports of hydrocarbons (Decree 2703/2002) and minerals (Decree 417/2003).
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasLicenses are required for exports of arms, sensitive goods, and military equipment.
With quotasThere are quantitative restrictions on exports of protected animal species.
Export taxesEffective November 10, 2007, export duties ranging from 5% to 35% (previously, 20%) apply to all exports, except some fuels, for which, effective November 17, 2007, export duties of up to 45% (previously, 25%) apply. However, this duty is subject to a surcharge based on the international price of oil.
References to legal instruments and hyperlinksCommunications A 3473, A 3978, A 3990, A 4108, A 4361, A 4404, A 4420, A 4443, A 4641, and A 4639. Decrees 2703/2002 and 417/2003; www.bcra.gov.ar; Ministry of Economy and Production Resolutions 368/2007, 369/2007, and 396/2007 amending Decree 509/2007.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksCommunications A 3826, A 3859, and A 4177; www.bcra.gov.ar.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to the central bankEffective May 17, 2007, the requirement that exporters who failed to sell their export proceeds within the prescribed period of time must sell the proceeds to the BCRA at the reference rate on the date of sale or the reference rate on the day the sale should have taken place, whichever was less favorable, was suspended.
Surrender to authorized dealersAll foreign currency proceeds received for exports of services must be sold on the MULC, net of withheld amounts or discounts made abroad by the customer, within 135 business days of receipt (Communications A 3473 and A 4361). Firms servicing external debt through the MULC used for foreign direct investment authorized by the BCRA must furnish proof, prior to accessing the exchange market, that the returns on such assets or the proceeds from selling them have been surrendered and sold (Communication A 4634).
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksCommunications A 3473, A 4361, and A 4634 www.bcra.gov.ar.
Capital Transactions
Controls on capital transactionsAll foreign borrowing by the nonfinancial private sector and the financial sector involving bonds, loans (including securities swaps), and foreign lines of credit must be surrendered and settled on the MULC (Communications A 3712 and A 3972). The issuance of debt securities by the private sector denominated in foreign currency whose principal and interest cannot be paid exclusively in pesos in the country, must be underwritten in foreign currency and the funds obtained must be sold on the local market (Communications A 3820 and C 46971).
New financial debt entering the local foreign exchange market and extension of foreign debt of financial sector and nonfinancial private sector residents must be retained for a minimum period of 365 calendar days, with no possibility of prepayment prior to that period, regardless of the method of repayment of the foreign obligation and whether it involves access to the local exchange market (Communication A 4359). The requirement is waived for the correspondent account balances of ADs unless those balances constitute lines of credit, in which case they must comply with the requirements applicable to inflows of financial loans and for primary issues of debt securities that are offered publicly and listed on self-regulated markets.
Deposits for the unremunerated reserve requirement (URR) must be placed in local financial institutions in dollars and must cover 30% of the transaction, for items included in Communications A 4359, A 4377, and B 8599. Exceptions have been established by Communications A 4359, A 4377, A 4386, A 4427, A 4447, A 4507, A 4554, A 4574, A 4632, A 4633, A 4711, A 4724, B 8814, B 8901, B 8978, C 42303, C 42884, C 43075, C 44048, C 44670, and C 46394. The standards mentioned regulate the provisions adopted by Decree 616/05 and Ministry of Economy and Production Resolutions 365/05, 637/05, 731/06, 1076/96, and 141/07.
Residents other than financial sector institutions may access the MULC, subject to monthly caps, to purchase foreign exchange for the following purposes: real estate investment abroad, loans to nonresidents, direct investment abroad by residents, portfolio investment abroad by individuals, other investment abroad by residents, portfolio investment abroad by legal entities, purchases of foreign banknotes for domestic holdings, purchases of traveler’s checks, portfolio investment by mutual funds, purchases of banknotes by mutual funds, and grants (Communication A 4306). The monthly ceiling on the operations in all financial institutions is currently US$2 million (Communication A 4128), which may be higher if the peso amount paid by customers to purchase foreign exchange for these transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month. Investment exceeding the ceiling requires BCRA approval. Exempt from the ceiling are (1) direct investment abroad in the production of goods and nonfinancial services by resident enterprises on or before December 31, 2007 (extended by Communication A 4764 to June 30, 2008), provided the funds used to access the foreign exchange market are not the proceeds of foreign borrowing and the other conditions set out in Communication A 4669 are satisfied; (2) the payment of premiums, guarantees and corresponding payments, and futures, forwards, options, and other derivative transactions with the rest of the world listed in Communications A 4285, A 4440, and A 4743, in accordance with the terms and conditions of those regulations; and (3) portfolio investments abroad, if the funds are used specifically for (a) payment of the principal and interest of financial debts abroad within 360 days of accessing the foreign exchange market (Communications A 4178, A 4307, and A 4570); (b) the primary subscription in foreign currency of public securities issued by the national government (Communication A 4515); and (c) payment for merchandise imports, profits and dividends, or Argentine direct investment abroad, provided access to the foreign exchange market occurred on or before December 31, 2007 (extended to June 30, 2008, by Communication A 4764), and the other conditions of Communication A 4669 are satisfied.
The MULC may be accessed for the purpose of acquiring foreign assets only if the customer on the date of accessing the foreign exchange market does not have overdue principal and interest obligations abroad on any type of debt. The condition is not applicable to purchases of banknotes and traveler’s checks in amounts not exceeding the equivalent of US$10,000 a calendar month (Communications A 4349 and A 4390).
Sales of foreign exchange to nonresidents require BCRA approval if the amount exceeds US$5,000 a calendar month, except for (1) operations of international organizations, diplomatic and consular offices, and diplomatic personnel; (2) income received within the country from current operations; (3) income from services; and (4) repatriation of foreign direct investment in the nonfinancial private sector and liquidation by sale of inward portfolio investments not exceeding the equivalent of US$50,000 a month.
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersAll foreign borrowing by the nonfinancial private sector and the financial sector involving bonds, loans (including securities swaps), and foreign lines of credit must be sold in the MULC (Communications A 3712 and 3972). Funds obtained through the issuance of debt securities denominated in foreign currency by the private sector whose principal and interest cannot be paid exclusively in pesos in the country must be sold on the local market (Communications A 3820 and C 46971). Surrender and settlement on the exchange market may be carried out up to 365 calendar days from the date of disbursement of the funds, subject to the regulations in effect on the date of receipt of the foreign exchange by the local exchange market (Communication A 4643).
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsUnder the regulations of the National Securities Commission (CNV), foreign and Argentine issuers must meet the same requirements to make a public offering of securities in Argentina. Both must establish a permanent representative office and a domicile in Argentina to receive notices. Foreign issuers must state whether the securities are also being offered to the public in their country of origin and specify the initial and periodic information requirements to which they are subject. If the CNV believes that the regulations in the country of origin properly protect local investors and guarantee an adequate flow of information, the CNV may lower the requirements for those investors. The CNV may authorize foreign issuers on a case-by-case basis to submit only such information as they would periodically submit to the corresponding authority in their jurisdiction of origin. Issuers of public offerings of securities domestically and abroad must submit to the CNV in Spanish all information required by the entities authorizing the public offering and listing abroad (Chapter VII.1 of the CNV Regulations).
Purchase abroad by residentsA monthly ceiling of US$2 million applies, which may be higher if the peso amount paid by customers to purchase foreign exchange for various transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month. Investment exceeding the ceiling requires BCRA approval. Exempt from the ceiling are certain portfolio investments abroad.
Sale or issue abroad by residentsA 365-day URR applies, equivalent to 30% of the amount of foreign exchange exceeding US$2 million a calendar month (Communication A 4377). This restriction is waived if the funds are to be used for the purposes listed in Communication A 4711.
Bonds or other debt securities
Purchase locally by nonresidentsA 365-day 30% URR applies, in accordance with Decree 616/2005.
Sale or issue locally by nonresidentsUnder the CNV regulations, foreign and Argentine issuers must meet the same requirements to make a public offering of securities in Argentina. Both must establish a permanent representative office and a domicile in Argentina to receive notices. Foreign issuers must state whether the securities are also being offered to the public in their country of origin and specify the initial and periodic information requirements to which they are subject. If the CNV believes that the regulations in the country of origin properly protect local investors and guarantee an adequate flow of information, the CNV may lower the requirements for those investors. The CNV may authorize foreign issuers on a case-by-case basis to submit only such information as they would periodically submit to the corresponding authority in their jurisdiction of origin. Issuers of public offerings of securities domestically and abroad must submit to the CNV in Spanish all information required by the entities authorizing the public offering and listing abroad (Chapter VII.1 of the CNV Regulations).
Purchase abroad by residentsWith the exception of the primary subscription in foreign currency of public securities issued by the government (Communication A 4515), a ceiling of US$2 million a month applies to each resident, which may be higher if the peso amount paid by customers to purchase foreign exchange for the transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month.
Sale or issue abroad by residentsForeign exchange proceeds of issues abroad must be sold within one year (Communication A 3820). A minimum maturity requirement of 365 days also applies (except for primary issues of debt securities that are publicly offered and listed on self-regulated markets) (Communication A 4359).
On money market instrumentsThe regulations governing bonds or other debt securities apply. In accordance with Communication A 4359, the only permissible foreign borrowing operations with a maturity of less than one year are primary issues of debt securities that are publicly offered and listed on self-regulated markets.
Purchase locally by nonresidentsA 365-day 30% URR applies (except for primary issues that are publicly offered and listed, including those of the BCRA, the acquisition of public sector securities on the secondary market, or the primary subscription of debt issued by financial trusts, whether publicly offered or not, for energy infrastructure projects) (Ministerial Resolution 731/2006, Decree 616/2005 and supplementary regulations).
Sale or issue locally by nonresidentsCNV approval is required for public offerings, whether for the issuance or sale of securities. Issues of commercial paper must have a minimum maturity of seven days (Consolidated CNV Regulations, Chapter VI.13.2.1, Article 68).
Purchase abroad by residentsA ceiling of US$2 million a month applies to each resident, which may be higher if the peso amount paid by customers to purchase foreign exchange for these transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month.
Sale or issue abroad by residentsIn accordance with Communication A 4359, the only permissible foreign borrowing operations with a maturity of less than one year are primary issues of debt securities that are publicly offered and listed on self-regulated markets. For issues, surrender and settlement are required (Communications A 3820 and A 4643).
On collective investment securities
Purchase locally by nonresidentsA 365-day 30% URR applies (Decree 616/2005 and amendments).
Sale or issue locally by nonresidentsCNV approval is required for public offerings of the following securities, including current issues and previous issues to be offered for sale: (1) negotiable securities (Consolidated CNV Regulations, Chapter VII.2); (2) trust funds (Chapter XV); (3) mutual funds (Chapters XI, XII, XIII, and XIV).
Purchase abroad by residentsA ceiling of US$2 million a month applies to each resident, which may be higher if the peso amount paid by customers to purchase foreign exchange for these transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month (Communications A 4306 and A 4128).
Sale or issue abroad by residentsForeign exchange proceeds of issues abroad must be surrendered. (Communication A 3820).
Controls on derivatives and other instrumentsThere are no limits on private financial sector and nonfinancial sector arrangements in Argentina regarding futures operations on regulated markets and forward transactions, provided they are settled domestically by netting in domestic currency.
There are no limits on the following foreign transactions mentioned in Communication A 4285 and supplementary communications A 4440 and A 4743: (1) purchase of options to hedge variable-yield term deposits that comply with the requirements and terms stated in point 2.5 of the rules on term deposits and investments, when the options have been approved in accordance with point 2.5.3 of these rules; (2) foreign exchange hedging contracts entered into by financial institutions to cover their own long positions in the general foreign exchange position; (3) foreign exchange and interest rate hedging contracts entered into by the financial sector and the nonfinancial private sector to cover foreign liabilities declared and validated in accordance with the reporting requirements in Communication A 3602 and related provisions; (4) commodity price hedging contracts entered into by local exporters and/or importers providing coverage exclusively for Argentine foreign trade operations; (5) external financing transactions in the form of repos, provided they are arranged at the minimum terms applicable on the date of their negotiation—the minimum maturity for such transactions is 365 days; (6) hedging contracts between foreign currencies entered into by exporters to cover the risk of shipments pending payment; and (7) commodity price hedging contracts entered into by local financial institutions with the rest of the world, as counterpart of contracts sold to local customers to hedge cost change risks, in the conditions set out in Communication A 4743.
Operations carried out with the rest of the world through the exchange market, to cover the transactions listed in points (1)–(7) above, may be executed only as follows: (1) on recognized markets in international financial centers; (2) with foreign banks that meet the requirements in Communication A 4560; and (3) with financial institutions authorized under the regulations for this type of operation, if they are controlled by banks that meet the requirements in the preceding point. Access to the foreign exchange market for the remaining futures, forward, options, and other derivative transactions with the rest of the world requires BCRA approval, for both arrangement and subsequent payment. In order to pay premiums and/or establish the guarantee margins required in hedging contracts between foreign currencies, interest rates, and commodity prices through the MULC, the proceeds earned by the domestic customer from such operations or from the release of the established guarantee must be surrendered and settled on the MULC, within five business days following the close of the operation.
Purchase locally by nonresidentsThere are no limits on private financial and nonfinancial sector transactions in Argentina concerning futures operations on regulated markets and forward transactions, nor is BCRA approval required, provided they are settled domestically by netting in domestic currency. There are no limits on and BCRA approval is not required for operations with the rest of the world authorized by Communications A 4285, A 4440, and A 4743.
Sale or issue locally by nonresidentsCNV approval is required for public offerings (Consolidated CNV Regulations, especially Book 8, Chapter XXIV).
Purchase abroad by residentsSome futures, forward, options, and other derivative transactions with the rest of the world require BCRA approval, both for arrangement and subsequent payment (Communications A 4285, A4440, A 4560, and A 4743).
Sale or issue abroad by residentsSome futures, forward, options, and other derivative transactions with the rest of the world require BCRA approval, both for arrangement and subsequent payment (Communications A 4285, A4440, A 4560, and A 4743).
Controls on credit operations
Financial credits
By residents to nonresidentsA monthly ceiling of US$2 million applies, which may be higher if the peso amount paid by customers to purchase foreign exchange for these transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month. Investments exceeding the ceiling require prior BCRA approval.
To residents from nonresidentsBorrowing is allowed with a 365-day minimum indebtedness period. The incoming foreign exchange must be surrendered. If applicable, there is a 30% nontransferable URR (Decree 616/05; Communication A 4359). Access to the local foreign exchange market to service the external debt of the nonfinancial private sector in accordance with the regulations in Communication A 4177 and supplementary communications may occur (1) at any time within 365 calendar days prior to the due date, subject to compliance with the applicable minimum retention requirement; (2) more than 365 days in advance, if the applicable minimum retention requirement is fulfilled and one of the following conditions is met: (a) If the payment is not part of a debt restructuring process, the foreign currency used to prepay the external debt must not exceed the present value of the prepaid portion of the debt, or the prepayment must be offset in full with the receipt of new external financing whose present value does not exceed the prepaid portion of the debt. (b) If the payment is part of an external debt restructuring process, the new terms of the debt and the cash payment made may not entail an increase in the present value of the debt.
Controls on direct investment
Outward direct investmentA monthly ceiling of US$2 million applies, which may be higher if the peso amount paid by customers to purchase foreign exchange for these transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month. Investments exceeding the ceiling require prior BCRA approval. Exempt is direct investment abroad in the production of goods and nonfinancial services made by resident enterprises on or before December 31, 2007 (extended by Communication A 4764 to June 30, 2008), provided the funds used to access the foreign exchange market are not the proceeds of foreign borrowing and the other conditions in Communication A 4669 are satisfied.
Inward direct investmentThe deposit and minimum retention time requirements do not apply to foreign exchange imported by nonresidents for direct investment in Argentina. Foreign exchange imported for direct investment covers only those amounts that nonresidents apply to direct investment in Argentina, and the amounts they use specifically to purchase domestic assets that qualify as direct investment in accordance with the concepts used in international accounting, provided the importing institution can certify that the funds were specifically used in such transactions, based on its documentation.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsThe rules governing direct investment apply.
Purchase abroad by residentsA monthly ceiling of US$2 million applies, which may be higher if the peso amount paid by customers to purchase foreign exchange for these transactions does not exceed the peso equivalent of the sum of export duty payments plus three times the taxes on bank current account credits and debits paid by taxpayers to the Federal Public Revenue Administration during the second-to-last calendar month before the reporting month. Investments exceeding the ceiling require BCRA approval.
Purchase locally by nonresidentsPurchases of real estate in border areas by foreign investors require approval for the project from the Border Superintendency of the Ministry of Defense, for national security reasons.
Controls on personal capital transactionsThe rules governing legal entities apply.
Loans
To residents from nonresidentsBorrowing is allowed with a 365-day minimum indebtedness period. The incoming foreign exchange must be surrendered. If applicable, a nontransferable unremunerated deposit must be posted covering 30% of the amount settled (Decree 616/05; Communication A 4359).
References to legal instruments and hyperlinksCommunications A 3602, A 3712, A 3820, A 3972, A 4128, A 4177, A 4285, A 4306, A 4349, A 4359, A 4377, A 4386, A 4427, A 4440, A 4447, A 4507, A 4554, A 4570, A 4574, A 4632, A 4633, A 4643, A 4662, A 4669, A 4692, A 4711, A 4724, A 4743, B 8599, B 8814, B 8908, B 8978, C 42203, C 42884, C 43075, C 44048, C 46670, and C 46394; www.bcra.gov.ar.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThe regulations governing the nonfinancial sector apply.
Lending to nonresidents (financial or commercial credits)Credits granted by financial intermediaries must be used to finance investment, production, marketing, or consumption of goods and services for internal consumption or exportation.
Lending locally in foreign exchangeRules on the allocation of funds in foreign currencies establish that under certain conditions foreign currency deposits must be used for the following: (1) prefinancing and financing of exports to be made directly or through principals, trustees, or other brokers; (2) financing of investment projects, working capital, or goods that increase the value of or are related to the production of goods to be exported; (3) financing to manufacturers of goods to be exported, as final products or as part of other goods, by third-party purchasers, provided such transactions are secured or collateralized in foreign currency by the third-party purchasers; (4) financing of commercial borrowers importing capital goods to increase the production of goods to be sold domestically (borrowers should show a capacity to withstand an exchange rate depreciation in at least two scenarios); (5) debt securities or financial trust participation certificates whose underlying assets are loans made by the above-mentioned financial entities; (6) loans made from one financial entity to another; and (7) foreign currency debt securities or financial trust participation certificates, publicly listed under an authorization by the National Securities Commission, whose underlying assets are securities bought by the fiduciary and guaranteed by reciprocal guarantee companies, in order to finance export transactions. For foreign currency deposits exceeding the above-mentioned designations, an additional reserve requirement applies in that currency, to be held in cash or in the form of deposits with the BCRA.
Purchase of locally issued securities denominated in foreign exchangeThere are limits on the maximum amount of securities a bank may hold from a particular issuer. Pursuant to Communication A 3640, purchases for its own account of any other types of securities against delivery of foreign currency or another type of foreign asset that is considered part of the PGC (overall foreign exchange position) require prior BCRA approval, with the following exceptions: (1) settlements of repurchases of securities used for external financing in the form of repos; (2) transactions to cover the bank’s foreign exchange needs for the purchase and sale of securities on self-regulated stock exchanges and securities markets for their own operations or to cover the operations of resident and nonresident customers, as long as the net foreign exchange purchase on the domestic foreign exchange market to purchase these securities or the resulting net foreign exchange sale does not exceed the limits specified in Communication A 4433.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsDemand deposits are subject to a minimum cash requirement of 19% or 30%, depending on whether they are denominated in pesos or in foreign currency, respectively. Fixed-term deposits are subject to a reserve requirement that decreases according to the residual maturity, depending on the deposit currency.
Investment regulations
Abroad by banksTransactions are prohibited by policies on general lending.
Open foreign exchange position limitsThe overall foreign exchange position of financial institutions is made up of all the institution’s liquid foreign assets, namely, gold coins and bullion, foreign currency notes, demand deposits in banks abroad, investment in foreign public securities issued by OECD member countries with a sovereign debt rating of at least AA, and banking correspondents’ debit and credit balances. Also included are agreed purchases and sales of such assets pending settlement through exchange transactions with customers at terms of no more than 48 hours. The upper limit of the overall foreign exchange position is recalculated monthly and the update takes effect on the first business day of each month. The limit on banks’ dollar exposure is 15% of a bank’s net worth (responsabilidad patrimonial computable—RPC), and the upper limit of the overall foreign exchange position is set at 15% at the end of the second-to-last month preceding the month of the deadline for submission of the foreign exchange to the BCRA, under the rules of the corresponding reporting regime. It is increased by an amount equivalent in foreign currency to 5% of the institution’s total foreign exchange purchases and sales with customers in the second-to-last preceding calendar month, and by 2% of total demand and term deposits established and payable domestically in foreign exchange, excluding deposits held in custody, reported by the institution at the close of the second-to-last preceding calendar month. If the maximum calculated is less than US$5 million, the latter amount will be considered the lower limit of the established maximum. The lower limit is increased by US$7 million when the financial institution in question deals in foreign exchange and operates at 15 or more locations. In addition, it is increased by a maximum of US$2 million for holdings of banknotes in foreign currencies other than dollars and euros; up to a maximum of US$1 million for checks drawn on foreign banks purchased from third parties and not yet credited to the correspondent accounts; and up to a maximum of US$3 million for the balances of dollar or euro banknotes remitted to the U.S. Federal Reserve or the ECB that are still pending deposit 72 hours after their shipment (Communication A 4646).
The negative net overall position in foreign exchange—as a monthly average of daily balances converted to pesos at the reference exchange rate—may not exceed 30% of the preceding month’s RPC. Overages are subject to a charge equivalent to twice the accrued nominal annual interest rate resulting from auctions of BCRA instruments in dollars, or twice the 30-day LIBOR for operations in dollars, as reported for the last business day of the relevant month, whichever is greater.
The overall net position in foreign exchange comprises total assets and liabilities from financial intermediation in foreign currency and in foreign currency securities (spot and forward transactions), including derivative contracts related to these items, items recorded in the overall foreign exchange position, deposits in such currency in accounts held at the BCRA, and gold holdings and BCRA bills in dollars. Also included are forward operations entered into under master agreements within self-regulated markets in Argentina in which settlement is by netting, without physical delivery of the underlying asset. The position in currencies other than dollars is expressed in the currency in question by applying the applicable exchange rate published by the BCRA. Assets that are deductible for purposes of determining RPC are not included.
Provisions specific to institutional investorsThe regulations governing the nonfinancial private sector apply.
Insurance companies
Limits (max.) on securities issued by nonresidentsThe limit is the greater of 50% of the capital requirement or 50% of net commitments. The Superintendency of Insurance (SSN) may approve exceptions to this limit (Point 35.4 of the Insurance Sector General Regulations—SSN Resolution 29.211, amended by SSN Resolution 32.668).
Limits (max.) on investment portfolio held abroadThe limit is the greater of 50% of the capital requirement or 50% of net commitments. The SSN may approve exceptions to this limit (Point 35.4 of the Insurance Sector General Regulations—SSN Resolution 29.211, amended by SSN Resolution 32.668).
Limits (min.) on investment portfolio held locallyThe limit depends directly on the parameters in the previous point.
Currency-matching regulations on assets/liabilities compositionInsurers with liabilities derived from insurance and reinsurance contracts payable in foreign currency are required to establish appropriate technical reserves in the same currencies or other allowed currencies, as determined by the supervisory authorities (Law 20.091, Article 33).
Pension fundsPurchases of banknotes and foreign exchange by pension and retirement funds regulated by the Superintendency of Pension and Retirement Fund Administrators are exempt from the US$2 million a month ceiling on foreign investments abroad, in accordance with the conditions and limits in Communication A 4724.
Limits (max.) on securities issued by nonresidentsThe portfolio of foreign instruments may not exceed 10% of the total eligible funds.
Limits (max.) on investment portfolio held abroadThe portfolio of foreign instruments may not exceed 10% of the total eligible funds.
Limits (min.) on investment portfolio held locallyA minimum of 5% applies to eligible funds for investment in debt securities, financial trust participation certificates, and assets or other debt securities for the purpose of financing medium- and long-term production or infrastructure projects in Argentina. A minimum of 20% of the Pension and Retirement Fund administered by Nación AFJP must be invested in regional economies. The fund administrator may not, under any circumstances, invest a smaller percentage than the minimum established for this purpose.
Currency-matching regulations on assets/liabilities compositionThere are no regulations because the system operates on a defined contribution basis, which does not create an asset-liability mismatch.
Investment firms and collective investment funds
Limits (max.) on securities issued by nonresidentsThere is a 25% limit on mutual fund portfolio investments in securities that are publicly offered outside the purview of the CNV, but this limit does not apply to MERCOSUR countries and Chile (Decree 174/93, Article 13, and Chapter XI.15, Article 36, of the CNV Regulations). There are no limits on financial trusts.
Limits (max.) on investment portfolio held abroadThere is a 25% limit on securities issued abroad (with the exception of those issued by MERCOSUR countries and Chile, which are considered local securities). If a subsidiary of a foreign issuer issues securities and requests authorization from the CNV to offer them publicly, the securities are considered local because the issue principle applies (Law 24.083, Article 6). There are no limits on financial trusts.
Limits (min.) on investment portfolio held locallyWhen a mutual fund’s assets are made up of negotiable securities, a minimum of 75% of the investment must be made in assets issued and traded in Argentina, including those issued by MERCOSUR countries and Chile (Law 24.083, Article 6; Decree 174/93, Article 13; and Chapter XI.15, Article 36 of the CNV Regulations). There are no limits on financial trusts.
References to legal instruments and hyperlinksCommunications A 3645, A 4347, and A 4552; www.bcra.gov.ar; RG 517/07 of October 18, 2007; www.cnv.gov.ar/LeyesyReg/CNV/esp/RGC517-07.htm.
Changes during 2007
Exchange arrangementMay 17. The requirement that exporters who fail to sell their export proceeds within the prescribed period of time surrender the proceeds to the BCRA at the reference rate on the date of sale or the reference rate on the day the sale should have taken place, whichever was less favorable, was suspended.
Exports and export proceedsMay 17. The requirement that exporters who fail to sell their export proceeds within the prescribed period of time sell the proceeds to the BCRA at the reference rate on the date of sale or the reference rate on the day the sale should have taken place, whichever was less favorable, was suspended.
November 10. The maximum export duty applicable to all exports were raised to 35% from 20%.
November 17. The export duty on fuels was increased to 45% from 25%.
Proceeds from invisible transactions and current transfersMay 17. The requirement that exporters who fail to sell their export proceeds within the prescribed period of time sell the proceeds to the BCRA at the reference rate on the date of sale or the reference rate on the day the sale should have taken place, whichever was less favorable, was suspended.

ARMENIA

(Position as of February 29, 2008)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: May 29, 1997.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Financial transactions are restricted and accounts are frozen if they involve individuals or organizations included in the lists of terrorists maintained pursuant to (1) the relevant UN Security Council resolutions and (2) the list of current terrorist organizations designated by the U.S. secretary of state.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Armenia is the Armenian dram.
Exchange rate structureUnitary.
Classification
Managed floating with no predetermined path for the exchange rateAlthough Armenia continues to maintain a de jure independently floating exchange rate arrangement, the de facto exchange rate arrangement is classified as managed floating with no predetermined path for the exchange rate. The latter classification is a result of increased Central Bank of Armenia (CBA) interventions to resist short-term overappreciation. The CBA pursues a policy of implicit inflation targeting (IT) with the objective of moving to full-fledged IT over the medium term. The refinancing interest rate is the operational target and the CBA intervenes in the foreign exchange market to smooth excessive exchange rate volatility. Excessive volatility is defined as short-term/high-frequency exchange rate movements caused by “speculative” or “trend-following” elements, rather than underlying macroeconomic fundamentals, and which impose significant costs on the Armenian economy.
The official exchange rate is set as the weighted average of the buying and selling rates in the foreign exchange market and is used for accounting purposes and for those treasury operations that are connected with external debt service or create new external obligations. Foreign exchange entities use the official exchange rate for bookkeeping and revaluation purposes.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange marketForeign exchange transactions take place in the interbank and stock exchange markets. The CBA acts mainly in the stock exchange market.
Spot exchange market
Interbank marketPurchases and sales of foreign currency may be implemented through foreign exchange entities licensed by the CBA, including banks, foreign exchange dealers, credit institutions, and foreign exchange bureaus; or, in the case of the government, through the CBA itself, which acts as the government’s financial agent. Foreign exchange entities carry out foreign exchange transactions by setting their own buying and selling rates for major currencies against the dram without any restrictions.
Forward exchange marketResidents and nonresidents may freely negotiate forward exchange contracts for both commercial and financial transactions in all leading convertible currencies in the domestic exchange market and at major international foreign exchange markets. However, the forward exchange market in Armenia remains undeveloped, although some banks sign forward contracts in small amounts. The CBA conducts foreign exchange swaps as a short-term instrument.
References to legal instruments and hyperlinksThe Civil Code of the Republic of Armenia, effective May 5, 1998; the Law of the Republic of Armenia on Foreign Investments, effective July 31, 1994; the Law of the Republic of Armenia on Currency Regulation and Currency Control, effective June 28, 2005; the Law of the Republic of Armenia on the Central Bank of Armenia, effective June 30, 1996; the Law of the Republic of Armenia on Banks and Banking, effective June 30, 1996; the Law of the Republic of Armenia on Credit Organizations, effective May 29, 2002; Justification for the Adoption of Inflation Targeting Strategy by the Central Bank of Armenia, 2006; CBA announcement on the Central Bank Operations in the Financial Market, May 1998; Regulation 10, Licensing, Regulation, and Control of Foreign Exchange Purchase and Sale Operations, approved by CBA Executive Board Resolution 436-S December 20, 2002; Regulation 11 on Licensing, Regulation, and Control of Foreign Exchange Trading in Armenia, approved by CBA Executive Board Resolution 69 March 19, 2002; Regulation 12 on Licensing and Regulation of Foreign Exchange Dealer Trading, approved by CBA Executive Board Resolution 437-S December 17, 2002; www.cba.am; www.parliament.am.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsUnder the foreign exchange law, prices of and payments for goods, services, wages, and investments in statutory and share capital of legal entities are quoted and made in drams only; prices are advertised and paid in drams also. However, the following may be denominated and transacted in foreign currency: (1) gifts, donations, and bequests; (2) noncash payments for non-trade-related transactions; and (3) noncash payments for current and capital account transactions between legal entities, between sole entrepreneurs, and between legal entities and sole entrepreneurs. Nonresident natural persons and residents are prohibited from using foreign exchange as a means of payment within Armenia.
Payments arrangements
Bilateral payments arrangements
InoperativeArmenia maintains agreements with the Russian Federation and Turkmenistan.
Regional arrangementsArmenia is a signatory of the 1993 Treaty of Economic Union (with Azerbaijan, Belarus, Kazakhstan, the Kyrgyz Republic, Moldova, the Russian Federation, Tajikistan, and Uzbekistan), which provides for the eventual establishment of a customs union, a payments union, and cooperation on investment, industrial development, and customs procedures. Armenia also joined the Agreement on the Establishment of a Payments Union of CIS member countries. Armenia is a member of the Black Sea Economic Cooperation pact, together with Albania, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, the Russian Federation, Turkey, and Ukraine. Bilateral free trade agreements have been signed with Georgia, the Kyrgyz Republic, Moldova, the Russian Federation, Tajikistan, and Ukraine, though only the agreement with the Russian Federation is in operation. Armenia is a European Asian Economic Community observer.
Administration of controlThe CBA is the main body that formulates and administers exchange rate policy and issues foreign exchange regulations within Armenia. The CBA also has overall responsibility for currency control, in close collaboration with the Ministry of Finance and Economy (MOFE) and State Tax Service (STS). The CBA is responsible for control over the entities licensed by the CBA, including banks, foreign exchange dealers, credit institutions, foreign exchange bureaus, and other financial entities. The MOFE is responsible for supervision and control over the entities licensed by the MOFE. The STS is responsible for supervision and control over the activities of all other agents.
Payments arrears
Privaten.a.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeThe MOFE controls the retail trade of precious metals. In addition, the retail trade of precious metal items is subject to the permission of the chief of the respective community.
Controls on exports and imports of banknotes
On exportsIndividuals are authorized to transfer, deliver, and export securities and any cash currency, in both drams and foreign exchange, up to dram 5 million or the equivalent of $16,000 without any restriction. Exports of currency exceeding that amount are permitted through bank transfers.
Domestic currencyYes.
Foreign currencyYes.
References to legal instruments and hyperlinksThe Law of the Republic of Armenia on Currency Regulation and Currency Control, effective June 28, 2005; The Law of the Republic of Armenia on Local Self-Government (Article 40/7), effective May 7, 2002; the Law of the Republic of Armenia on Precious Metals (Article 4/1), effective May 23, 2006; CBA Board Resolution 386-S on Export and Import of Currency Values, effective July 29, 2005; www.cba.am; www.parliament.am.
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 hyperlinksThe Law of the Republic of Armenia on Currency Regulation and Currency Control, effective June 28, 2005; the Law of the Republic of Armenia on Banks and Banking, effective June 30, 1996; www.cba.am; www.parliament.am.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksThe Law of the Republic of Armenia on Currency Regulation and Currency Control, effective June 28, 2005; the Law of the Republic of Armenia on Banks and Banking, effective June 30, 1996; www.cba.am; www.parliament.am.
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 listImport licenses from the Ministry of Agriculture and the Ministry of Health are required and granted on a case-by-case basis to import drugs and other pharmaceuticals and pesticides. Imports of weapons, military equipment and parts, and explosives require special authorization from the government. A license from the MOFE is required for production, import, and trade of fireworks materials and for the trade, import, and export of natural or artificial diamonds, except diamonds that are mounted and set.
Import taxes and/or tariffsThere are two rates of customs duties: zero, which applies to most imports, and 10%, which applies to a variety of new materials and manufactured products. Products imported from countries in the CIS are exempt from import tariffs.
State import monopolyNo.
References to legal instruments and hyperlinksThe Customs Code of the Republic of Armenia, Article 102, effective July 6, 2000; the Law of the Republic of Armenia on Licensing, May 30, 2001; the Law of the Republic of Armenia on Amendments to the Law on Licensing, May 25, 2005; www.parliament.am; www.customs.am.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExport permits are required for medicines, wild animals, and plants. In addition, special government permission is required for the export of nuclear technology, nuclear waste, related nonnuclear products, and technology with direct military applications. Minimum threshold prices for the export of ferrous and nonferrous metals and the reexport of foreign-produced goods remain in force. A license from the MOFE is required for the trade, import, and export of natural or artificial diamonds, except diamonds that are mounted and set.
Export taxesNo.
References to legal instruments and hyperlinksThe Law of the Republic of Armenia on Currency Regulation and Currency Control, June 28, 2005; the Customs Code of the Republic of Armenia, Article 102, July 6, 2000; the Law of the Republic of Armenia on Amendments to the Law on Licensing, May 25, 2005; www.cba.am; www.parliament.am.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksThe Law of the Republic of Armenia on Currency Regulation and Currency Control, June 28, 2005; the Law of the Republic of Armenia on Banks and Banking, June 30, 1996; www.cba.am; www.parliament.am.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksThe Law of the Republic of Armenia on Currency Regulation and Currency Control, June 28, 2005; www.cba.am; www.parliament.am.
Capital Transactions
Controls on capital transactionsExcept for real estate, currently there are no controls on capital transactions. However, the CBA reserves the right to impose capital controls in order to maintain the stability of the financial system, prevent money laundering and terrorist financing, and lower economic risks.
Repatriation requirementsNo.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsNonresidents are prohibited by the constitution from acquiring land in Armenia.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksThe Constitution of the Republic of Armenia (with amendments), Article 31, July 5, 1995; the Law of the Republic of Armenia on Currency Regulation and Currency Control, June 28, 2005; the Law of the Republic of Armenia on Banks and Banking, June 30, 1996; the Law of the Republic of Armenia on Securities Market Regulation, July 6, 2000; www.cba.am; www.parliament.am.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsEffective February 25, 2008, a reserve requirement of 8% applies to deposits by residents and nonresidents in domestic currency, and a 12% reserve requirement applies to deposits in foreign currency (previously, a uniform 8% reserve requirement applied to deposits by residents and nonresidents in both foreign and domestic currency). Effective January 1, 2007, the reserve requirement on residents’ and nonresidents’ deposits is not remunerated (previously, they were remunerated at an annual rate of 3%).
Open foreign exchange position limitsEffective April 1, 2007, the limits on commercial banks’ open foreign exchange positions were removed. Previously, the following limits applied to the gross foreign exchange positions of commercial banks with respect to capital: (1) position in convertible currencies, 15%; (2) position in nonconvertible currencies, 5%; and (3) position in any currency, 10%.
Provisions specific to institutional investors
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksThe Law of the Republic of Armenia on Currency Regulation and Currency Control, June 28, 2005; the Law of the Republic of Armenia on Banks and Banking, June 30, 1996; the Law of the Republic of Armenia on Insurance Companies, June 11, 2004; www.cba.am; www.parliament.am.
Changes during 2007
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJanuary 1. The annual interest rate at which the reserve requirement is remunerated was reduced to zero from 3%.
April 1. The open foreign exchange position limits for commercial banks were removed.
Changes during 2008
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsFebruary 25. The reserve requirement for deposits in foreign currency was increased to 12% from 8%.

ARUBA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIYes.
Exchange Measures
Restrictions and/or multiple currency practicesThe IMF staff report for the 2005 Article IV consultation with the Kingdom of the Netherlandss—Aruba states that, as of April 11, 2005, Aruba maintained a foreign exchange restriction arising from the foreign exchange tax on payments by residents to nonresidents. This tax, which amounts to 1.3% of the transaction value, was introduced when Aruba was part of the Netherlands Antilles to generate revenue for the government. Aruba adopted it after gaining autonomy in 1986. Since then, it has served as a source of general tax revenue for the central government of Aruba. (Country Report No. 05/204)
Exchange measures imposed for security reasons
Other security restrictionsYes.
References to legal instruments and hyperlinksState Ordinance Foreign Exchange Commission (AB 1990 No. GT 5), Sanction Ordinance 2006 (AB 2007 no 24); www.cbaruba.org.
Exchange Arrangement
CurrencyThe currency of Aruba is the Aruban florin.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe de jure exchange rate arrangement is a conventional pegged arrangement. The florin is pegged to the dollar at Afl. 1.79 per $1. The Central Bank van Aruba (CBA) deals with local commercial banks within margins of 0.002795% on either side of parity.
Exchange taxA foreign exchange commission of 1.3% applies to all payments to nonresidents, including payments made through a foreign bank account or exchange office, checking account transfers in foreign currencies, and payments by a foreign company on behalf of residents settled through intercompany accounts. Certain payments, such as those for transactions settled in Antillean guilders and payments of certain government-related companies, are exempt from this commission.
Exchange subsidyNo.
Foreign exchange marketNo.
References to legal instruments and hyperlinksState Ordinance Governing the Monetary System (AB 1991 No. GT 34); State Decree for Fixing Parity of the Aruban Florin (AB 1992 No. GT 6); State Ordinance on Foreign Exchange Commissions (AB 1990 GT 5); www.cbaruba.org.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsLegal entities that hold a hotel or casino license are allowed to accept and return change in U.S. dollars and Venezuelan bolívares.
Payments arrangementsNo.
Administration of controlThe CBA administers foreign exchange control.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of domestic banknotes is prohibited.
Foreign currencyThe exportation of foreign banknotes requires a license, except for traveling purposes.
References to legal instruments and hyperlinksState Ordinance Governing the Monetary System; State Decree on Acceptance of Foreign Currency (AB 1991 No. GT 10); State Ordinance on Foreign Exchange Transactions (AB 1990 No. GT 6); www.cbaruba.org.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents are allowed to open foreign exchange accounts, provided these accounts are funded with foreign currency.
Held abroadThe opening of an account abroad must be reported to the CBA. Approval is not required, but holders of accounts abroad must apply to the CBA if they wish to be exempted from the requirement that they collect foreign claims as soon as they fall due and transfer and sell them to a local foreign exchange bank. Unless an exemption has been given, payments to nonresidents in foreign exchange should be made from an authorized bank’s account, or from an account of a foreign bank that operates in the country of the transaction, or to a nostro account of a nonresident held with the authorized bank.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyn.a.
References to legal instruments and hyperlinksState Ordinance on Foreign Exchange Transactions; Guidelines and Notices Concerning Foreign Exchange Transactions; www.cbaruba.org.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyBalances in these accounts are fully convertible.
Blocked accountsNo.
References to legal instruments and hyperlinksState Ordinance on Foreign Exchange Transactions; Guidelines and Notices Concerning Foreign Exchange Transactions; www.cbaruba.org.
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
Licenses with quotasThe importation of eggs may be subject to quotas, depending on the domestic supply.
Import taxes and/or tariffsYes.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsUnless exempted, residents are required to surrender export proceeds either by selling them to a foreign exchange bank or exchange office, against florins, within a period of eight working days after the day of receipt, or by depositing them into a foreign currency account with the CBA or a foreign exchange bank in the name of a resident.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxes
Other export taxesEffective February 1, 2007, exports of goods are subject to a turnover tax.
References to legal instruments and hyperlinksState Ordinance on Foreign Exchange Transactions; State Ordinance on Turnover Tax; www.cbaruba.org.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related payments
Prior approvalFor the transfer of dividends and profits, a declaration of the CBA is required.
Indicative limits/bona fide testInterest payments on all types of foreign loans may be effected if a permit has been obtained from the CBA for the loan. As regards profits and dividends, financial statements should be submitted to the CBA indicating the amount involved. In the case of depreciation of direct investments, a special license is required if the amount of the transaction exceeds the authorized ceiling.
References to legal instruments and hyperlinksState Ordinance on Foreign Exchange Transactions; www.cbaruba.org.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsUnless exempted, residents are required to surrender export proceeds either by selling to a foreign exchange bank or exchange office, against florins, within a period of eight working days after the day of receipt, or by depositing them into a foreign currency account with the CBA or a foreign exchange bank in the name of a resident.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksState Ordinance on Foreign Exchange Transactions; www.cbaruba.org.
Capital Transactions
Controls on capital transactionsTransactions of less than Afl. 300,000 or its equivalent in foreign currency a year for natural persons and Afl. 750,000 or its equivalent in foreign currency a year for juridical persons (excluding commercial banks and institutional investors) may be carried out without CBA authorization. These ceilings are applicable to all capital transactions with nonresidents; a special foreign exchange license issued by the CBA is required for capital transactions exceeding these ceilings.
Repatriation requirementsYes.
Surrender requirements
Surrender to the central bankThe CBA may require the divestment, repatriation, and surrender to the CBA of proceeds from direct investments by residents abroad.
Surrender to authorized dealersn.a.
Controls on capital and money market instrumentsThere are controls on all these transactions.
Controls on derivatives and other instrumentsControls apply to all these transactions.
Controls on credit operationsControls apply to all these transactions.
Controls on direct investment
Outward direct investmentThe CBA may require divestment, repatriation, and surrender of proceeds to the CBA.
Inward direct investmentYes.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsControls apply to all these transactions.
Controls on personal capital transactionsPersonal capital transactions must be effected through the banking system.
LoansControls apply to all these transactions.
Settlements of debts abroad by immigrantsYes.
References to legal instruments and hyperlinksState Ordinance on Foreign Exchange Transactions; Notice Concerning Foreign Exchange Transactions 02/K.1; www.cbaruba.org.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Lending to nonresidents (financial or commercial credits)A foreign exchange license is required for loans granted by commercial banks to nonresidents exceeding the amount of Afl. 1 million a year or its equivalent in foreign currency, as well as for certain transfers or sales of local financial instruments, such as loans, bonds, and notes, to nonresidents.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquid asset requirementsYes.
Investment regulations
In banks by nonresidentsThe CBA’s prior approval is required for any investor to hold or acquire a qualified holding in a bank or insurance company.
Open foreign exchange position limits
On resident assets and liabilitiesBanks are not allowed to have a negative foreign exchange position.
On nonresident assets and liabilitiesBanks are not allowed to have a negative foreign exchange position.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on investment portfolio held abroadAccording to the 40%–60% investment rule, a progressive scale is used to determine the required limit on investment abroad. Institutional investors are not allowed to invest abroad more than approximately 60% of their total liabilities for the first Afl. 10 million or its equivalent. The limit is 50% for the second Afl. 10 million in liabilities and 40% for the remaining funds.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionNo significant currency exposures are allowed.
Pension funds
Limits (max.) on investment portfolio held abroadThe regulations related to insurance companies apply.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionNo significant currency exposures are allowed.
Investment firms and collective investment funds
Limits (max.) on investment portfolio held abroadThe regulations related to insurance companies apply.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionInvestment companies do not yet fall under CBA supervision.
References to legal instruments and hyperlinksState Ordinance on Foreign Exchange Transactions; Guidelines and Notices Concerning Foreign Exchange Transactions; www.cbaruba.org.
Changes during 2007
Exports and export proceedsFebruary 1. Exports of goods were made subject to a turnover tax.

AUSTRALIA

(Position as of July 31, 2008)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: July 1, 1965.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Financial restrictions have been imposed against certain individuals associated with the Burmese regime; 12 entities and one individual associated with the Democratic People’s Republic of Korea; supporters of the former government of the Federal Republic of Yugoslavia; and ministers and senior officials of the Government of Zimbabwe. These financial restrictions are administered by the Reserve Bank of Australia (RBA), at the direction of the Australian Government.
Other security restrictionsPursuant to UN Security Council sanctions, financial restrictions have been imposed on certain listed individuals and entities with a connection to the following countries: the Islamic Republic of Afghanistan (Al-Qaida and the Taliban), Côte d’Ivoire, the Democratic Republic of the Congo, the Islamic Republic of Iran, the former government of Iraq, Liberia, and Sudan. Pursuant to UN Security Council terrorism-related resolutions, Australia has imposed financial restrictions to combat the financing of terrorism. It is prohibited for individuals or entities to hold, use, or deal in those assets or to make assets available to listed persons and entities. The list of entities and persons to which these measures apply is included on the consolidated list maintained by the Department of Foreign Affairs and Trade.
References to legal instruments and hyperlinksCharter of the United Nations Act 1945 and Associated Regulations; Banking (Foreign Exchange) Regulations 1959; Charter of the UN (Terrorism and Dealing with Assets) Regulations 2001; www.dfat.gov.au/un/unsc_sanctions/index.html; www.rba.gov.au/MarketOperations/International/FinancialSanctionsCashReporting.
Exchange Arrangement
CurrencyThe currency of Australia is the Australian dollar, which also circulates in several other countries, including Kiribati, Nauru, and Tuvalu.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the Australian dollar is market-determined. However, the RBA retains discretionary power to intervene in the foreign exchange market. In response to disorderly conditions in the foreign exchange market, the RBA has added liquidity by selling foreign exchange and purchasing Australian dollars during the past 12 months. The RBA publishes an indicative rate of the trade-weighted index for the Australian dollar based on market observations at 9 a.m., noon, and 4 p.m. daily.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketLicensed foreign exchange dealers may deal among themselves, with their customers, and with their overseas counterparts at mutually negotiated rates for both spot and forward transactions in any currency for trade- and nontrade-related transactions.
Forward exchange marketActive trading takes place in forward and futures contracts.
References to legal instruments and hyperlinksReserve Bank Act 1959: www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/current/bytitle/C276D47C3215A796CA256F71004DA82A?OpenDocument.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsAn Australian financial services license (AFSL) is generally required for foreign exchange transactions by residents, with some exceptions. Foreign exchange contracts are specifically classified as a “financial product” under the Corporations Act 2001 (Act). Thus, in recognition of the risk associated with the settlement period, foreign currency transactions that do not involve the immediate exchange of currency fall within the definition of a financial product. Accordingly, dealing, making a market, or giving advice regarding foreign exchange contracts is regulated by the Act and requires an AFSL. However, a contract to exchange one currency (whether Australian or not) for another that is to be settled immediately by the physical delivery of notes and/or coins in the second currency is specifically excluded from the definition of financial product. The Act, in conjunction with the Corporations Regulations 2001, contains further AFSL exemptions that specifically relate to foreign exchange contracts. Two relevant exemptions are (1) certain dealings in foreign exchange contracts as principal for the purpose of managing financial risk; and (2) overseas entities providing advice on, or making a market in, foreign exchange contracts to “professional investor” clients. Spot foreign exchange contracts are excluded from the definition of “derivative.” There are other exemptions contained in regulation 7.6.02AG of the Corporations Regulations 2001.
Payments arrangementsNo.
Administration of controlThe Australian Securities and Investments Commission (ASIC) is responsible for the licensing of all financial services providers, including foreign exchange dealers that deal in foreign currency contracts, by its administration of the AFSL regime.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)If the value of gold being bought or sold is greater than $A 10,000 or its equivalent, details of the transaction must be reported to the Australian Transaction Reports and Analysis Centre.
Controls on exports and imports of banknotesExportation and importation of notes and coins totaling more than the equivalent of $A 10,000 in domestic or foreign currency must be reported to customs for forwarding to the Australian Transaction Reports and Analysis Centre for purposes of combating money laundering and the financing of terrorism.
References to legal instruments and hyperlinksRegulation 7.6.02AG of the Corporations Regulations 2001.
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 accountsOnly accounts affected by international security restrictions or UN sanctions are blocked. If a nonresident is subject to bilateral sanctions under the Banking (Foreign Exchange) Regulations 1959 and holds an account in Australia, RBA approval is required for payments made to or from that account.
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 measures
Negative listImports of some products are allowed only with written authorization from the relevant authorities or if certain regulations are observed. Among the goods subject to control are narcotic, psychotropic, and therapeutic substances; firearms and certain weapons; certain chemicals and primary commodities; some glazed ceramic ware; rough diamonds; and various dangerous goods. These controls are maintained mainly to meet health and safety requirements; to meet certain requirements for labeling, packaging, or technical specifications; and to satisfy certain obligations arising from Australia’s participation in international commodity agreements or to meet obligations under UN Security Council sanctions regimes.
Import taxes and/or tariffsMost agricultural products enter Australia duty-free; the simple average applied tariff is 1.3% and the average limit is 5%. A general tariff of 5% applies to many manufactured goods, with the following exceptions: (1) The tariff on passenger motor vehicles and certain automotive components is 10% and is scheduled to be reduced to 5% by 2010. (2) Textiles, clothing, and footwear are subject to tariffs ranging from zero to 17.5%. Under the government’s post-2005 assistance arrangement for the textile, clothing, and footwear industry, tariffs on these products will be reduced to levels of 5% and 10% by January 1, 2010, and to 5% by January 1, 2015. Tariffs for a large range of goods have been abolished. Tariff concessions are available under the Tariff Concession System for most goods subject to a tariff, when it can be substantiated that there is no domestic manufacturer of substitutable goods. There are also a variety of concessions available for specific purposes, such as to accommodate split import consignments and to encourage investment in major projects. The ANZCERTA establishes free trade in goods between Australia and New Zealand. Australia has other free trade agreements (FTAs) with Singapore, Thailand, and the United States. Under the FTAs, goods originating in Singapore are duty-free. Tariffs on goods originating from Thailand and the United States are also duty-free with certain exceptions (e.g., textiles, clothing and footwear, and passenger motor vehicles). These duty rates are being phased out over 10 years commencing January 2005. The SPARTECA provides the Forum Island countries with nonreciprocal, duty-free access to most markets in Australia and New Zealand. All goods produced in the least developed countries and Timor-Leste may be imported free of duties and quotas.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport prohibitions and restrictions exist to give effect to quality control measures and the administration of UN Security Council sanctions and to meet obligations under international treaties and commitments under international arrangements. Australia’s export control policies reflect the government’s commitment to ensure that exports of defense and dual-use goods are consistent with Australia’s interests, international obligations, and commitments. Prohibitions also maintain adequate measures of control over designated cultural property, resources, flora, and fauna; secure conservation objectives; and respond to specific market distortions abroad. Remaining controls on primary products apply mainly to food and agricultural products. Rough diamonds may be exported only to countries participating in the Kimberley Process Certification Scheme (an international effort to eliminate the trade in “conflict diamonds”), and each rough diamond shipment must be accompanied by a Kimberley Process Certificate issued by the Department of Resources, Energy and Tourism. Kimberley Process Certificates certify that the rough diamond product is from a legitimate source and not involved in funding conflict. Export controls apply to uranium and related nuclear materials (including tantalum and mineral sands containing monazite) to ensure compliance with Australia’s nonproliferation policy obligations and safeguards regime. Restrictions also apply to certain other nuclear and related materials. Export permits for uranium and other nuclear and related materials are issued by the Department of Resources, Energy and Tourism. Export permits are required from the Australian Radiation Protection and Nuclear Safety Agency for the exportation of high-activity radioactive sources. Licenses are required for exports of unprocessed wood, including wood chips. Export restrictions are also applied to certain agricultural products to ensure exporters meet the import conditions imposed by other countries. This is regulated by the Australian Quarantine and Inspection Service, which is responsible for granting export licenses for meat, dairy products, eggs, live animals, fish, grains, and some vegetables and fruit. Export licensing requirements have been implemented at the request of industry on wine and brandy products in both bulk and bottled form, and are administered by the Australian Wine and Brandy Corporation. These act as a quality assurance measure to ensure that all wines exported from Australia are sound and of merchantable quality (free of obvious faults). Horticulture Australia Limited, a peak industry marketing body, administers export licensing requirements for apples, pears, dried grapes, and oranges to all export markets, and for mandarins, tangelos, grapefruit, lemons, and limes to the United States. Australia currently has three state trading enterprises (STEs), namely, AWB International Ltd (bulk wheat), the Rice Marketing Board for the State of New South Wales (rice), and the Western Australian entity, Grain Pool Pty Ltd (barley, canola, lupins in bulk shipments). AWB International Ltd is the only national body with the remaining two STEs operating at the state level. All three STEs have export powers for selected agricultural products.
With quotasAustralia imposes a total ban on exports of merino ewes, their genetic material, ova, and embryos to any country other than New Zealand. However, merino breeding rams purchased at designated export auctions and semen from rams included in the National Register of Semen Export Donors (administered by the Australian Association of Stud Merino Breeders) may be exported. Sales are subject to Department of Agriculture, Fisheries, and Forestry approval and an annual quota of 800 rams, with a provision for up to 100 rams to be placed on a semen donor register. Rams designated for collection of semen for export may not be physically exported. The export restrictions do not apply to merino rams intended for slaughter; however, the exportation of these rams is subject to controls to ensure that they do not enter breeding stocks and to a legal undertaking by the exporter to ensure that these exported merino rams will be slaughtered. There is no restriction on the exportation of merino rams or reproductive material to New Zealand.
Export taxesNo.
References to legal instruments and hyperlinksCustoms (Prohibited Exports) Regulations 1958; www.comlaw.gov.au/ComLaw/Legislation/LegislativeInstrumentCompilation1.nsf/0/96C3E8FFDD52E095CA257287001AC437?OpenDocument.
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 nonresidentsThe acquisition of shares and other securities of a participating nature, which may be affected by laws and policies on inward direct investment, may require notification to the Australian authorities.
Sale or issue locally by nonresidentsOffers of shares or other securities of a participating nature in Australia and providing financial services in relation to shares or other securities of a participating nature by residents or nonresidents are subject to Ch 7 of the Corporations Act.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsForeign governments, their agencies, and international organizations are not permitted to issue bearer securities and, when borrowing in the Australian capital market, must advise the Australian authorities of the details of each transaction after its completion. Offering debentures in Australia and providing financial services in relation to debentures by residents or nonresidents are subject to Ch 6D of the Corporations Act.
On money market instruments
Sale or issue locally by nonresidentsThe regulations governing bonds or other debt securities apply.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsThe regulations governing bonds or other debt securities apply. Offering derivatives in Australia and providing financial services in relation to derivatives by residents or nonresidents are subject to Ch 7 of the Corporations Act.
Controls on credit operations
Commercial credits
By residents to nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
Controls on direct investment
Inward direct investmentControls apply to (1) investments in banking, real estate, mass circulation and ethnic newspapers, broadcasting (including television), civil aviation, and uranium; (2) proposals falling within the scope of Australia’s Foreign Acquisitions and Takeovers Act 1975, which broadly covers acquisitions of urban land, acquisitions of partial or controlling interests in Australian companies or businesses with total assets valued at more than $A 100 million ($A 913 million for U.S. investors in nonsensitive sectors), and other arrangements relating to foreign control of companies and businesses; (3) proposals to establish new businesses or projects, where the total investment is $A 10 million or more for non-U.S. investors; (4) investment by foreign governments or their agencies; (5) investment to the extent that constituent states or territories of Australia exercise legislative and administrative control over such investment; (6) ownership of Australian flag vessels, except through an enterprise incorporated in Australia; and (7) investment in telecommunications to the extent that the Telstra Corporation Act 1991 limits aggregate foreign ownership in Telstra to 35%. The maximum individual foreign ownership allowed in Telstra is 5%.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsControls apply to the acquisition of real estate in Australia, except for the acquisition (1) of direct interest in nonresidential commercial real estate valued at less than $A 5 million or $A 50 million, where such real estate is not on the heritage list for non-U.S. investors, or $A 913 million for U.S. investors (heritage-listed or otherwise); (2) of interests in time-share schemes, where the entitlement of the foreign interest and any associates is less than four weeks a year; (3) of residential real estate by approved migrants, special category visa holders, and other foreign nationals entitled to permanent residence in Australia, including Australian permanent residents not ordinarily resident in Australia and special category visa holders buying through Australian companies and trusts; (4) by nonresident Australian citizens, either directly or indirectly through Australian companies and trusts; (5) of offices and residences by foreign government missions for use as official missions or residences for staff, subject to their sale to Australians or other eligible purchasers when no longer being used for those purposes; (6) of minority interests in public companies and trusts whose principal assets are composed of real estate, to the extent permitted by regulations under the Foreign Acquisitions and Takeovers Act; (7) of real estate by general insurance companies operating in Australia, where the acquisitions are made from the reserves of the companies and are within the prudential guidelines of the insurance commissioner; (8) by life insurance companies representing investment of their Australian statutory funds, by Australian pension funds of foreign employers, and by foreign-controlled charities or charitable trusts operating in Australia for the primary benefit of Australians; (9) of strata-titled hotel rooms in designated hotels, where each room is subject to a long-term hotel agreement; (10) of residential real estate by Australian citizens and their foreign spouses, when they purchase as joint tenants; and (11) of Australian urban land by foreign-controlled responsible entities acting on behalf of managed unit trusts and other public investment schemes registered under Ch 5C of the Corporations Law, when they are investing primarily for the benefit of fund investors or unit holders ordinarily resident in Australia.
Controls on personal capital transactions
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsTransfers may be subject to approval of the authorities in cases where the gift involves a foreign person obtaining an interest in Australian urban land.
References to legal instruments and hyperlinksCorporations Act.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsAn AFSL issued by the ASIC is generally required to provide financial products advice, deal in financial products (including securities, derivatives, and certain foreign exchange contracts), create a market for a financial product, operate a registered scheme, or provide custodial or depository service. The license is subject to specific obligations under Ch 7 of the Corporations Act, including the obligation to comply with the conditions of the license. Certain disclosure requirements apply in relation to retail clients. Authorized deposit-taking institutions are subject to prudential requirements, e.g., regulatory capital requirements, liquidity management, and credit concentration.
Investment regulations
In banks by nonresidentsApproval from the treasurer is required for any person or group—domestic or foreign—to acquire a 15% or larger share in a financial sector company, including authorized deposit-taking institutions and any nonoperating holding company for these institutions in Australia.
Provisions specific to institutional investors
Insurance companiesForeign-owned life insurance companies may operate only in the form of locally incorporated subsidiaries unless prescribed by regulation to be able to operate as a branch. Under the Life Insurance Act 1995, only U.S. life insurers are allowed to operate in Australia through branches. However, branches of foreign-incorporated life insurers operating prior to the introduction of the Life Insurance Act 1995 may continue to operate. Offering insurance products in Australia and providing financial services in relation to insurance products by residents or nonresidents are subject to Ch 7 of the Corporations Act. Effective July 1, 2008, the Financial Sector Legislation Amendment (Discretionary Mutual Fund and Direct Offshore Foreign Insurers) Act 2007 requires direct offshore foreign insurers (DOFIs) to be authorized insurers subject to Australia’s prudential regime. There are exemptions to make allowances for large businesses and global companies headquartered in Australia, as well as companies seeking insurance for typical risks or highly customized risk products.
Pension fundsThe Australian superannuation (pension) industry is regulated primarily under the Superannuation Industry (Supervision) Act 1993 (SIS Act). Under the SIS Act, all trustees (excluding trustees of self-managed pension funds and public sector pension schemes) must obtain a license from the Australian Prudential Regulation Authority (APRA) and register all funds under their trusteeship with the APRA
prior to accepting contributions. Offering pension products in Australia and providing financial services in relation to pension products by residents or nonresidents are subject to Ch 7 of the Corporations Act.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsAustralian regulation of collective investment funds does not impose investment restrictions of the type mentioned under this item. Instead it imposes high-level duties on managers of such funds, for example, to exercise a reasonable degree of care and diligence and to act in the best interests of members. Offering collective investment scheme products in Australia and providing financial services in relation to collective investment scheme products by residents or nonresidents are subject to Ch 7 of the Corporations Act.
References to legal instruments and hyperlinksFinancial Sector Legislation Amendment (Discretionary Mutual Fund and Direct Offshore Foreign Insurers) Act 2007.
Changes during 2007
No significant changes occurred in the exchange and trade system.
Changes during 2008
Provisions specific to the financial sector
Provisions specific to institutional investorsJuly 1. The Financial Sector Legislation Amendment (Discretionary Mutual Fund and Direct Offshore Foreign Insurers) Act 2007 requires DOFIs to be authorized insurers subject to Australia’s prudential regime. There are exemptions to allow for large businesses and global companies headquartered in Australia, as well as companies seeking insurance for typical risks or highly customized risk products.

AUSTRIA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: August 1, 1962.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
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 with respect to certain individuals associated with the Democratic Republic of the Congo, Côte d’Ivoire, the Islamic Republic of Iran, the former government of Iraq, the Democratic People’s Republic of Korea, Liberia, Myanmar, Sudan, 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 the Taliban and individuals and organizations associated with terrorism.
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Austria is the euro.
Exchange rate structureUnitary.
Classification
Independently floatingAustria participates in a currency union with 14 other members of the EMU and has no separate legal tender. The euro, the common currency, floats freely and independently against other currencies. Effective January 1, 2007, the exchange rate 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.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketYes.
Forward exchange marketForward exchange transactions are permitted.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with all countries may be made either in foreign currencies or through free euro accounts.
Payments arrangements
Bilateral payments arrangements
OperativeThere are no bilateral payments agreements; however, several bilateral agreements exist for the promotion and protection of investments, which include provisions on transfers among the signatories.
Administration of controlExchange transactions are effected through Austrian banks authorized by the Financial Market Authority (FMA).
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 non-euro-denominated deposits of private pension funds that would cause their total assets not denominated in euros to exceed 30% of their total assets. If the exchange risk is eliminated by means of hedging transactions, these investments may be counted as euro-denominated investments.
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 accountsYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsAccounts are affected by EU regulations and UN sanctions. EU regulations are addressed directly to the credit institutions of the member countries, which are responsible for compliance. This procedure applies to accounts of certain citizens of the Democratic Republic of the Congo, Côte d’Ivoire, the Islamic Republic of Iran, the former government of Iraq, the Democratic People’s Republic of Korea, Liberia, Myanmar, Sudan, and Zimbabwe; individuals linked to the former Federal Republic of Yugoslavia; the Taliban; and individuals and organizations associated with terrorism. In cases where there are no EU regulations, the Austrian National Bank (ANB) issues official announcements (regulations) to make provisions under Austrian law in accordance with UN sanctions or common positions under the common EU foreign and security policy. These official announcements are addressed to Austrian credit institutions. This procedure is currently in effect with regard to accounts belonging to terrorists with a residence in the EU.
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 measuresExport and import licenses must be issued by the Federal Ministry for Economic Affairs for industrial products and by the Federal Ministry of Agriculture and Forestry for agricultural products. As a member of the EU, Austria applies all import regulations based on the common commercial policy, i.e., import restrictions for industrial products in the textile and clothing sectors and statistical surveillance for products falling under the scope of the ECSC treaty. There are also regulations based on current EU law with regard to China for imports of some consumer products.
Positive listYes.
Licenses with quotasYes.
Import taxes and/or tariffsAustria applies the Common Import Regime of the EU.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesLicenses for exports must be obtained from the relevant ministry or, at the time of clearance, from the customs authorities. For most exports, licenses are not required. Export licenses are issued in accordance with the provisions of relevant EU trade agreements, the fulfillment of quotas under such agreements, and the needs of the Austrian economy.
Without quotasYes.
With 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 capi000tal and moneyIn some cases, there are reporting requirements to the Austrian National Bank.
On capital market securities
Shares or other securities of a participating nature
Purchase abroad by residentsControls apply to non-euro-denominated assets of private pension funds that would cause their total assets not denominated in euros to exceed 30% of their total assets. If the exchange risk is eliminated by means of hedging transactions, these investments may be counted as euro-denominated investments.
Bonds or other debt securities
Purchase abroad by residentsControls apply to non-euro-denominated assets of private pension funds that would cause their total assets not denominated in euros to exceed 30% of their total assets. If the exchange risk is eliminated by means of hedging transactions, these investments may be counted as euro-denominated investments.
On money market instruments
Purchase abroad by residentsControls apply to non-euro-denominated assets of private pension funds that would cause their total assets not denominated in euros to exceed 30% of their total assets. If the exchange risk is eliminated by means of hedging transactions, these investments may be counted as euro-denominated investments.
On collective investment securities
Purchase abroad by residentsControls apply to the purchase (1) by an insurance company of collective investment securities issued by non-EU residents if these assets are to form part of its technical provisions (other than those for unit-linked life insurance contracts) and (2) by private pension funds of non-euro-denominated collective investment securities that would cause their total assets not denominated in euros to exceed 30% of their total assets.
Controls on derivatives and other instruments
Purchase abroad by residentsControls apply to the purchase by private pension funds of non-euro-denominated derivatives and other instruments and claims that would cause their total assets not denominated in euros to exceed 30% of their total assets. If exchange risk is eliminated by means of hedging transactions, these investments may be counted as euro-denominated investments.
Controls on credit operations
Financial credits
By residents to nonresidentsControls apply to loans granted (1) to nonresidents, or for which the designated collateral is located abroad, if the asset in question is to form part of the guarantee funds of a local branch of a non-EU insurance company established in Austria; (2) to residents outside the EU or for which the designated collateral is located outside the EU, if the asset in question is to form part of the cover of the prescribed solvency margin for the local branch of a non-EU insurance company established in Austria or is to form part of the cover of the technical provisions of resident insurance companies; and (3) in currencies other than euros by private pension funds that would cause their total assets not denominated in euros to exceed 30% of their total assets.
Controls on direct investment
Inward direct investmentCertain controls apply to the following investments by nonresidents and residents who are not nationals of one of the countries of the EEA: the auditing, accounting, engineering, architectural, and legal professions; the transport and electric-power-generation sectors; and the acquisition of ships.
Controls on liquidation of directNo.
Controls on real estate transactions
Purchase abroad by residentsControls apply to the acquisition of real estate (1) abroad if the asset in question is to form part of the guarantee funds of a local branch of a non-EU insurance company established in Austria; (2) outside the EU if the asset in question is to form part of the cover of the prescribed solvency margin for a local branch of a non-EU insurance company established in Austria or is to form part of the cover of the technical provisions of resident insurance companies; and (3) outside Austria by a private pension fund, exceeding 30% of its total assets.
Purchase locally by nonresidentsThe acquisition of real estate is subject to approval by the local authorities.
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
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsReserve requirements apply only to deposits held in euros.
Liquid asset requirementsLiquid asset requirements apply only to deposits held in euros.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquid asset requirementsYes.
Open foreign exchange position limitsThe net amount of an open foreign exchange position must not exceed 30% of own funds at the end of any business day; the total sum of all open positions must not exceed 50% of own funds.
Provisions specific to institutional
Insurance companies
Limits (max.) on securities issued by nonresidentsControls apply to the purchase by an insurance company of collective investment securities issued by non-EU residents if these assets are to form part of its technical provisions (other than those for unit-linked life insurance contracts).
Limits (max.) on investment portfolio held abroadControls apply to (1) the acquisition of real estate outside the EU if the asset in question is to form part of the cover of the prescribed solvency margin for a local branch of a non-EU insurance company established in Austria or is to form part of the cover of the technical provisions of resident insurance companies; (2) the acquisition of real estate abroad if the asset in question is to form part of the guarantee funds of a local branch of a non-EU insurance company established in Austria; (3) loans granted to nonresidents, or for which the designated collateral is located abroad, if the asset in question is to form part of the guarantee funds of a local branch of a non-EU insurance company established in Austria; and (4) loans to residents outside the EU or for which the designated collateral is located outside the EU if the asset in question is to form part of the cover of the prescribed solvency margin for a local branch of a non-EU insurance company established in Austria or is to form part of the cover of the technical provisions of resident insurance companies.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionYes.
Pension fundsThe management board of the Pensionskasse (pension fund) ensures that pension fund managers responsible for investments are professionally qualified and have the relevant professional expertise, in particular in the areas of portfolio management and risk management and asset liability management, and that appropriate technical resources are available for risk management. Investments must adhere to prudential limits. The FMA establishes minimum standards pertaining to risk management, diversification of risk, reduction of risk, asset liability management, the type and content of reports submitted by the Pensionskasse substantiating that its risk management complies with the minimum standards, and the time frame for submitting the reports. The FMA may order that the reports be submitted at regular intervals.
Limits (max.) on securities issued by nonresidentsControls apply to non-euro-denominated assets of private pension funds that would cause their total assets not denominated in euros to exceed 30% of their total assets. If the exchange risk is eliminated by means of hedging transactions, these investments may be counted as euro-denominated investments.
Limits (max.) on investment portfolio held abroadControls apply to non-euro-denominated assets of private pension funds that would cause their total assets not denominated in euros to exceed 30% of their total assets. If the exchange risk is eliminated by means of hedging transactions, these investments may be counted as euro-denominated investments.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2007
Exchange arrangementJanuary 1. The exchange rate 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.

REPUBLIC OF AZERBAIJAN

(Position as of March 31, 2008)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: November 30, 2004.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
Other security restrictionsRestrictions have been imposed on financial transactions and accounts held by individuals or organizations associated with terrorism, pursuant to UN Security Council resolutions and to the list of current terrorist organizations maintained by the U.S. secretary of state.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Azerbaijan is the Azerbaijan manat. Old manat banknotes, in use before the new manat banknotes were introduced, are no longer in circulation as of January 1, 2007.
Exchange rate structureUnitary.
Classification
Crawling bandThe de jure exchange rate arrangement is a crawling band arrangement. In 2007, the Azerbaijan National Bank (ANB) appreciated the exchange rate against the dollar along a smooth path. Starting March 11, 2008, the authorities fixed the value of the manat vis-à-vis a euro-dollar composite. The weights of the currencies in the composite are regularly changed to increase the weight of the euro. Thus, effective March 11, 2008, the classification of the de facto exchange rate arrangement has been changed from a crawling peg to a crawling band.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketn.a.
Forward exchange marketForward transactions are effected through the Baku Interbank Currency Exchange. Currently, these transactions involve only dollars, euros, and Russian rubles.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsIn accordance with current legislation, settlements among residents within the country may be effected in foreign currencies only with approval from the ANB.
Payments arrangements
Bilateral payments arrangements
InoperativeAgreements with the CIS countries are inoperative.
Clearing agreementsAzerbaijan is a member of the Payment Union of the CIS, which is now inoperative.
Barter agreements and open accountsState-owned enterprises and enterprises in which the state has a major share of the authorized capital must register these agreements with the Ministry of Economic Development (MED).
Administration of controlThe ANB regulates foreign exchange transactions, conducts foreign currency operations, and administers official gold and convertible currency reserve holdings. The ANB also has overall responsibility for issuing licenses to deal in foreign exchange and to open foreign exchange accounts abroad; for regulating foreign exchange operations, including implementing and monitoring compliance with the law; and for establishing prudential rules governing foreign exchange operations. The MED regulates foreign trade, whereas the organization and operation of the customs agencies are regulated under the Law on Customs Services. Controls are also administered by authorized banks holding a license to effect foreign exchange transactions as agents of foreign exchange control.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeYes.
On external tradeA license from the MED is required to conduct international trade in gold.
Controls on exports and imports of banknotesThe exportation and importation of foreign banknotes are regulated by the ANB and the customs agencies.
On exports
Domestic currencyManat banknotes up to 50,000 may be taken out of the country.
Foreign currencyResident and nonresident individuals may export up to the equivalent of $10,000 and $1,000, respectively, without documentation but with a customs declaration, or up to $50,000 in currency that they brought into the country, also with a customs declaration. Effective June 21, 2007, banks may export foreign banknotes to OECD countries, the Russian Federation, and some other countries without any restrictions and without approval from the ANB.
On importsThere is no restriction on the importation of banknotes; however, a company importing banknotes should deposit the amount of banknotes imported in its cash account within 10 working days and in a bank account within 2 working days.
References to legal instruments and hyperlinksLaw of the Republic of Azerbaijan on Foreign Exchange Regulation of October 21, 1994, with amendments and addenda of 2007; Decree of the President of the Republic of Azerbaijan of December 29, 2006, on Approval of the List of Types of Activities Requiring Special Permission (a License) and Amounts of State Duty to Be Paid for the Special Permission (License); Regulations for Performing Operations with Precious Metals in the Republic of Azerbaijan and the Execution of Transactions as approved by Resolution of the Cabinet of Ministers of the Republic of Azerbaijan of October 25, 2004; Regulations for the Importation into the Republic of Azerbaijan and Exportation from the Republic of Azerbaijan of Foreign Exchange Assets by Individuals of March 18, 2002: Regulation on the Foreign Exchange Regime for Residents and Nonresidents of June 20, 2002, with amendments of June 21, 2007.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadResident enterprises may open and use foreign exchange accounts in banks abroad subject to ANB authorization, except in OECD countries, the Russian Federation, and some other countries, where no authorization is required. The opening and use of foreign exchange accounts in banks abroad by individuals are not regulated.
Approval requiredYes.
Accounts in domestic currency held abroad
Accounts in domestic currency convertible into foreign currencyNatural and juridical persons may purchase foreign exchange through ADs, and ADs may purchase foreign exchange in the foreign exchange market on their own account, in accordance with the regulations of the ANB. These regulations do not set any limits on these purchases.
References to legal instruments and hyperlinksRegulations on Setting Up Exchange Offices and Regulations on Exchange Operations of June 28, 2006.
Nonresident Accounts
Foreign exchange accounts permittedForeign exchange in these accounts may be transferred abroad or sold to banks for manat. Prior to opening an account, a nonresident legal entity must provide proof of its status issued by the Ministry of Justice.
Domestic currency accountsNonresident enterprises may open and operate accounts in manat and use them for domestic transactions only if they have a local branch or office.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsImport payments made more than 365 days prior to the delivery of goods or services require ANB approval; if the relevant goods are not imported, works not executed, or services not rendered, or if the prepayment is not returned within this period, the AD is required to report the transaction to the ANB and submit relevant documents.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listImports of certain listed goods (such as narcotics, explosives, weapons, and nuclear substances and waste) require special approval.
Import taxes and/or tariffsTariff rates of zero, 0.5%, 3%, 10%, and 15% apply. Some capital and input goods are subject to a 5% tariff. Imports of underinvoiced goods are subject to specific tariffs.
State import monopolyNo.
References to legal instruments and hyperlinksRegulation on Foreign Exchange Regime for Residents and Nonresidents in the Republic of Azerbaijan as approved by Decision of the Board of the National Bank of the Republic of Azerbaijan on May 27, 2002; Regulations Governing Export Import Operations in the Republic of Azerbaijan as approved by Decree of the President of the Republic of Azerbaijan on June 27, 1997.
Exports and Export Proceeds
Repatriation requirementsResidents are required to repatriate all proceeds from exports within 180 days and transfer them to a licensed bank in Azerbaijan within 10 days of receipt. Expenses, commissions, and taxes paid abroad relating to economic activities may be deducted from the proceeds prior to their being transferred to a licensed bank.
Financing requirementsYes.
Documentation requirementsAll export operations must be secured by a 100% prepayment, an irrevocable LC, or a bank guarantee.
Letters of creditYes.
GuaranteesYes.
Export licenses
Without quotasExports of scrap metal are prohibited.
Export taxes
Other export taxesThe export tax applies to domestic producers’ exports of crude oil and petroleum products. For crude oil, the basis for the export tax is the difference between the export price (excluding export costs) and the fixed domestic price of crude oil. For petroleum products, the basis is the difference between the export price (excluding export costs) and the ex-refinery price (also referred to as the intercompany price) for the products. The tax rate is 25%. A progressive export tax also applies.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Personal payments
Quantitative limitsThese transactions are permitted, subject to documentary requirements. Residents and nonresidents are free to transfer abroad for personal reasons up to the equivalent of $500 a day from accounts with ADs on declaration of purpose. Residents are free to transfer abroad the equivalent of up to $10,000 annually from accounts with ADs for the maintenance of close relatives (i.e., parents, spouses, children, siblings, and adopted children) on presentation of supporting documents. When authorized banks are assured of the legitimate nature of the transactions and on presentation of all supporting documents, transfers in excess of the indicative limit may be effected on confirmation of the transaction with the ANB.
Indicative limits/bona fide testYes.
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 requirementsYes.
Surrender requirementsn.a.
Controls on capital and money market instrumentsThe domestic circulation of foreign securities is subject to controls and monitoring.
On capital market securities
Shares or other securities of a participating nature
Purchase abroad by residentsThese transactions require ANB approval except, effective June 21, 2007, investments in OECD countries, the Russian Federation, and some other countries.
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 residentsThe regulations governing shares or other securities of a participating nature apply.
Controls on derivatives and other instrumentsThese instruments are not currently available, and legislation concerning derivatives has not been formulated.
Controls on credit operationsNo.
Controls on direct investment
Outward direct investmentThese transactions are subject to ANB approval, except, effective June 21, 2007, investment in OECD countries, the Russian Federation, and some other countries.
Inward direct investmentThe minimum authorized capital for existing insurance companies is manat 0.7 billion and for newly established insurance companies manat 1 million. There is no limit on direct foreign ownership. The minimum authorized capital for existing commercial banks was increased, effective January 1, 2007, to manat 8.2 million and, effective July 1, 2007, to manat 10 million from manat 6.4 million.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactions
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThese transactions are permitted, subject to documentary requirements. Residents are free to transfer abroad (1) for personal reasons, up to the equivalent of $500 a day from accounts with ADs on declaration of purpose, and (2) the equivalent of up to $10,000 annually from accounts with ADs for the maintenance of close relatives (i.e., parents, spouses, children, siblings, and adopted children) on presentation of supporting evidence.
Settlements of debts abroad by immigrantsThese transactions are subject to documentary requirements and must be based on a court ruling.
Transfer of assets
Transfer abroad by emigrantsThese transactions are subject to ANB approval, except, effective June 21, 2007, transfers made to OECD countries, the Russian Federation, and some other countries.
Transfer of gambling and prize earningsGambling is prohibited in Azerbaijan.
References to legal instruments and hyperlinksRegulation on the Foreign Exchange Regime for Residents and Non-residents of June 20, 2002, with amendments of June 21, 2007.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThere is a 10% reserve requirement on all deposit accounts, regardless of the currency involved. A system of reserve averaging for banks on an intraday basis for foreign currency deposits and for the maintenance period for manat deposits applies.
Liquid asset requirementsLiquid assets must be equal to at least 30% of current obligations with maturities in the current month, regardless of the currency involved.
Investment regulations
Abroad by banksThese transactions are subject to ANB approval, except, effective June 21, 2007, investments in OECD countries, the Russian Federation, and some other countries.
In banks by nonresidentsEffective January 1, 2007, all restrictions on direct foreign ownership of capital at banks have been removed. Previously, direct foreign ownership could not exceed 49% of capital.
Open foreign exchange position limitsThe limit on convertible currencies is 10% for each foreign currency, up to an aggregate limit of 20%. The limit on nonconvertible currencies is 7% for each currency, up to an aggregate limit of 15%.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsn.r.
Limits (max.) on investment portfolio held abroadn.r.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2007
Exchange arrangementJanuary 1. Old manat banknotes, in use before the new manat banknotes were introduced, are no longer in circulation.
Arrangements for payments and receiptsJune 21. Banks were permitted to export foreign banknotes to OECD countries, the Russian Federation, and some other countries without any restrictions and without approval from the ANB.
Capital transactions
Controls on capital and money market instrumentsJune 21. Investments by residents in OECD countries, the Russian Federation, and some other countries were exempted from ANB approval.
Controls on direct investmentJanuary 1. The minimum authorized capital for existing commercial banks was increased to manat 8.2 million from manat 6.4 million.
January 1. All restrictions on direct foreign ownership in the capital of banks were removed.
June 21. Direct investments by residents in OECD countries, the Russian Federation, and some other countries were exempted from ANB approval.
July 1. The minimum authorized capital for existing commercial banks was increased to the equivalent of manat 10 million from manat 8.2 million.
Controls on personal capital transactionsJune 21. Transfer of assets by emigrants to OECD countries, the Russian Federation, and some other countries were exempted from ANB approval.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJanuary 1. All restrictions on direct foreign ownership in the capital of banks were removed.
June 21. Investments by banks in OECD countries, the Russian Federation, and some other countries were exempted from ANB approval.
Changes during 2008
Exchange arrangementMarch 11. The classification of the de facto exchange rate arrangement was changed from a crawling peg to a crawling band.

THE BAHAMAS

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: December 5, 1973.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
Other security restrictionsYes.
References to legal instruments and hyperlinksAfghanistan Order, Public Notice published October 22, 2003; Public Notice dated October 2, 2003; International Obligations (Economic and Ancillary Measures) Act, 1993; International Obligations (Economic and Ancillary Measures, Afghanistan) Order, 2001; Exchange Control Regulations (Iraq) Directions, 1990.
Exchange Arrangement
CurrencyThe currency of The Bahamas is the Bahamian dollar.
Other legal tenderCommemorative gold coins in denominations of B$10, B$20, B$50, B$100, B$150, B$200, B$250, B$1,000, and B$2,500 and silver coins denominated B$10 and B$25 are legal tender but do not circulate. The U.S. dollar circulates concurrently with the Bahamian dollar.
Exchange rate structure
DualIn addition to the official exchange market, there is a market in which investment currency may be negotiated among residents through the Central Bank of The Bahamas (CBB). The use of investment currency is prescribed for the purchase of foreign currency securities from nonresidents and direct investments outside The Bahamas. The current premium bid and offer rates are 12.5% and 10%, respectively. The premium on approved purchases of securities and foreign real estate may be 12.5%. In certain circumstances, the CBB may permit residents to retain and use foreign currency from other sources to make outward investments. Certain external investments (including investment in foreign stocks by company-based retirement funds) may be effected at the official exchange rate without paying the investment currency premium.
Classification
Conventional pegged arrangementThe de jure exchange rate arrangement is a conventional pegged arrangement. The Bahamian dollar is pegged to the U.S. dollar, the intervention currency, at par. Buying and selling rates for the pound sterling are also officially quoted, with the buying rate based on the rate in the New York market; the selling rate is 0.5% above the buying rate. The Central Bank of The Bahamas (CBB) deals only with commercial banks. For transactions with the public, commercial banks are authorized to charge a commission of 0.50% buying and 0.75% selling per US$1, and 0.50% buying or selling per £1.
Exchange taxA stamp tax of 1.5% is applied to all outward remittances.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Operated by the central bankIn addition to the official exchange market, there is a market in which investment currency may be negotiated among residents through the CBB. The CBB deals only with commercial banks. For transactions with the public, commercial banks are authorized to charge a commission of 0.50% buying and 0.75% selling per US$1, and 0.50% buying or selling per £1.
Interbank marketn.a.
Forward exchange marketCommercial banks may provide forward cover for residents who are due to receive or must pay in foreign currency under a contractual commitment. Commercial banks may not, however, sell foreign currency spot to be held on account to cover future requirements without the CBB’s permission. ADs may deal forward in foreign currency with nonresidents without prior approval from the CBB. Commercial banks may execute forward deals among themselves at market rates, but they must ensure when carrying out all forward cover arrangements that their open spot or forward position does not exceed 10% of the respective bank’s capital base
References to legal instruments and hyperlinksChapter 360—Exchange Control Regulations; Stamp Act, with amendments; Banks and Trust Companies (Foreign Currency Position) Regulations, 2005; www.centralbankbahamas.com/public/ForCurrency05.pdf.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe exchange control system of The Bahamas makes no distinction among foreign territories. Settlements with residents of foreign countries may be made in any foreign currency or in Bahamian dollars through an external account. Foreign currency is defined as all currencies other than the Bahamian dollar.
Controls on the use of domestic currencyNonresidents may not access domestic currency for capital purposes; however, they may have access to domestic currency up to a certain limit for working capital in businesses they operate.
For current transactions and paymentsn.a.
For capital transactionsn.a.
Use of foreign exchange among residentsOfficially, all settlements between residents must be in domestic currency.
Payments arrangements
Regional arrangementsThe Bahamas is a member of CARICOM, but it does not participate in the common market.
Administration of controlExchange control is administered by the CBB, which delegates to ADs the authority to approve allocations of foreign exchange for certain current payments, including payments for imports up to the equivalent of B$500,000. The approval authority for cash gifts up to the equivalent of B$10,000 a year is delegated to authorized banks.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents, other than ADs, are not permitted to hold or deal in gold bullion. However, residents who are known users of gold for industrial purposes may, with the approval of the CBB, meet their current industrial requirements. There is no restriction on residents’ acquisition or retention of gold coins.
On external tradeADs are not required to obtain licenses for bullion or coins, and no import duty is imposed on these items. Commercial imports of gold jewelry do not require a license and are duty-free, although a 10% stamp tax is required. A 1.5% stamp tax payable to customs is also required on commercial shipments of gold jewelry from any source.
Controls on exports and imports of banknotes
On exports
Domestic currencyA traveler may export banknotes up to a total of B$200.
Foreign currencyBahamian travelers need CBB approval to export foreign banknotes.
On imports
Domestic currencyImportation is subject to CBB approval.
References to legal instruments and hyperlinksChapter 360—Exchange Control Regulations; www.bfsb-bahamas.com/legislation.
Resident Accounts
Foreign exchange accounts permittedPermission from the CBB is required to open and hold these accounts. Permission is normally granted to persons earning substantial amounts of foreign exchange who make regular payments abroad.
Held domesticallyYes.
Approval requiredYes.
Held abroadYes.
Approval requiredYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksChapter 360—Exchange Control Regulations; Guidelines to ADs regarding operation of domestic currency and foreign currency accounts.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with payments in foreign currency from residents of The Bahamas with the specific permission of the CBB, payments in foreign currency from nonresidents, and foreign currency receipts arising from dealings between nonresidents and ADs. These accounts may be interest-bearing. Accounts may be debited for payments to residents or nonresidents, for payments to other foreign currency accounts, and for payment of foreign currency costs involved in dealings between nonresidents and ADs.
Approval requiredYes.
Domestic currency accountsWith the prior approval of the CBB, authorized banks may also open external accounts in Bahamian dollars for nonresident companies that have local expenses in The Bahamas and for nonresident investors. Authorized banks may freely open external accounts denominated in Bahamian dollars for winter residents and for persons with residency permits who are not gainfully employed in The Bahamas. Foreign nationals who have been granted temporary resident status are treated in some respects as nonresidents but are not permitted to hold external accounts in Bahamian dollars. External accounts in Bahamian dollars are expected to be funded entirely from foreign currency originating outside The Bahamas, but income from registered investments may also be credited to these accounts with the approval of the CBB. These accounts may not bear interest.
Convertible into foreign currencyThese accounts are freely convertible into foreign currency.
Approval requiredNonresidents may maintain external Bahamian dollar accounts with ADs with CBB permission; however, no approval is required for conversion into foreign currency.
Blocked accountsNo.
References to legal instruments and hyperlinksChapter 360—Exchange Control Regulations; Guidelines to ADs regarding operation of domestic currency and foreign currency accounts.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPrior approval from the CBB is required to make payments for non-oil imports exceeding the equivalent of B$500,000, irrespective of origin, except in the Family Islands, where this authority is delegated to clearing bank branches. This approval is normally given automatically on submission of pro forma invoices or other relevant documents proving the existence of a purchase contract.
Domiciliation requirementTransactions must be domiciled with a local AD.
OtherThe Customs Department import form must be completed, as part of the application process.
Import licenses and other nontariff measures
Negative listThe importation of certain commodities is prohibited or controlled for social, humanitarian, or health reasons. For all imports of agricultural products, a permit must be obtained from the Ministry of Agriculture. All other goods may be imported without a license. Customs entries are subject to a stamp tax of 7%.
Open general licensesOGLs must comply with the Agricultural Manufactories Act.
Other nontariff measuresSanitary or phytosanitary restrictions apply.
Import taxes and/or tariffsImport duties vary from zero to 210%. The tariff rate on most goods is 35%, and the average tariff rate is 31%. Stamp duties on imports vary from 2% to 7%. There is no import duty on certain tourism-related goods, but these goods are subject to stamp duties ranging from 8% to 20%.
State import monopolyNo.
References to legal instruments and hyperlinksStamp Tax Act; Agricultural Manufactories Act; Chapter 360—Exchange Control Regulations.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersExport proceeds must be offered for sale to an AD as soon as the goods have reached their destination or within six months of shipment; alternatively, export proceeds may be used in any manner acceptable to the CBB. Exemption from surrender requires CBB approval.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExport licenses are not required, except for crawfish, conch, and arms and ammunition.
With quotasn.a.
Export taxesNo.
References to legal instruments and hyperlinksExport Manufacturing Industries Encouragement Act; Tariff Act; Fisheries Resources (Jurisdiction and Conservation) Act; Chapter 360—Exchange Control Regulations.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersThere are no restrictions on current payments. However, there are limits on the approval authority delegated to commercial banks by the CBB. ADs may make payments to nonresidents on behalf of residents for certain services and other invisibles, such as commissions, royalties, education, and non-life-insurance premiums, within specified limits. CBB approval is required for payments in excess of those limits or for categories of payments not delegated to commercial banks. A CBB-issued personal allowance card must be presented to ADs to record foreign currency purchases.
Trade-related payments
Prior approvalCBB approval is required for transactions of more than B$25,000 for unloading and storage costs and commissions.
Quantitative limitsYes.
Indicative limits/bona fide testAn indicative limit of B$25,000 applies for most transactions.
Investment-related payments
Prior approvalFor all investments with approved status, permission is given on application for the transfer.
Payments for travel
Prior approvalYes.
Quantitative limitsADs may provide up to B$10,000 or its equivalent a person a trip for tourism and other personal travel. The limit on travel for educational purposes is B$10,000 a person a trip. For business or professional travel, the limit is B$50,000 a person a year. The allowance for tourist travel excludes the cost of fares and travel services, which is normally paid in Bahamian dollars to a travel agent in The Bahamas. Foreign exchange obtained for travel and any unused balance must be surrendered within one week of issue or, if the traveler is still abroad, within one week of returning to The Bahamas.
Indicative limits/bona fide testYes.
Personal paymentsThere is no limit for medical expenses.
Quantitative limitsADs may provide up to B$25,000 or its equivalent for educational payments to institutions (B$2,500 a transaction if paid to the student), family maintenance, and alimony payments. CBB approval is required for amounts exceeding this limit.
Indicative limits/bona fide testYes.
Foreign workers’ wages
Prior approvalYes.
Quantitative limitsThe limit is 50% of wages and salaries.
Indicative limits/bona fide testIf commitments outside The Bahamas are more than 50% of wages and salaries, additional amounts may be remitted. Temporary residents may also repatriate all their accumulated savings resulting from their employment in The Bahamas.
Credit card use abroad
Prior approvalApproval is required for residents to hold an international credit card. Cards may not be used to pay for life insurance premiums and capital items.
Indicative limits/bona fide testCredit card transactions are subject to bona fide tests.
Other payments
Prior approvalPrior approval from the CBB is required for payments exceeding the equivalent of B$25,000 for professional services charges, subscriptions, membership fees, royalties, registration of patents, serial rights, and advertising.
Quantitative limitsYes.
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksChapter 360—Exchange Control Regulations.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsResidents are obliged to collect all proceeds without delay.
Surrender requirements
Surrender to authorized dealersAll foreign currency proceeds must be offered for sale to an AD on receipt. Foreign exchange obtained for travel and any unused balance must be surrendered within one week of issue or, if the traveler is still abroad, within one week of returning to The Bahamas.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksChapter 360—Exchange Control Regulations.
Capital Transactions
Controls on capital transactionsThe premium on approved purchases of securities and foreign real estate is 12.5%. Cross-listing of Bahamian and foreign companies in CARICOM exchanges is allowed, and limited foreign investments by the National Insurance Board (the public pension fund) are authorized.
Repatriation requirementsYes.
Surrender requirements
Surrender to the central bankYes.
Surrender to authorized dealersForeign exchange loans by nonresidents to residents must be converted by an AD to Bahamian dollars, unless exemption is granted by the CBB.
Controls on capital and money market instrumentsAll outward capital transfers require exchange control approval, and outflows of resident-owned capital are restricted. Inward transfers by nonresidents, which are encouraged, are required to be processed through the exchange control approval procedure, although the subsequent use of the funds in The Bahamas may also require authorization. Nonresidents may invest in obligations of companies listed on the Bahamas International Securities Exchange (BISX) up to an aggregate of 10% of the respective issue or offering. They may also invest in public sector securities for which the CBB acts as registrar, subject to an overall limit of B$100,000 a person or entity.



Effective June 11, 2007, operational guidelines apply to issuance of nonsponsored Bahamian depository receipts (BDRs). Proposed product offerings must be established under the supervision of the Securities Commission before the CBB is approached for foreign exchange to fund external portfolios. Additional rules are as follows: (1) Mutual funds are permitted to retain foreign currency cash in their portfolios up to the maximum percentage of the overall assets, as specified or disclosed in the investment policy statements or strategies of the funds. (2) Purchases and sales of foreign exchange against Bahamian dollar facilities must be executed through the CBB. (3) Individual brokers or dealers may pool the foreign exchange allotted to them each quarter, but the resources may not be traded in any commercial sense, because this would be seen as constituting a parallel market in foreign exchange. (4) The CBB prohibits the accumulation of unused quarterly allocations of brokers or dealers.
On capital market securitiesThe Mutual Funds Act and a regulation that provides for licensing of mutual fund administrators and the registration of mutual funds are enforced. The Securities Industry Act authorizes the Securities Commission to regulate the stock exchange and stock exchange operations.
Shares or other securities of a participating natureResident companies may invest in equities of BISX-listed companies, up to a limit of 10% of the issue or offering for each investing entity. Resident companies may invest in other private and public sector securities, without limit.
Purchase locally by nonresidentsIn principle, inward investment by nonresidents is unrestricted. However, the consent of the CBB is required for the issue or transfer of shares in a Bahamian company to a nonresident and for the transfer of control of a Bahamian company to a nonresident. The extent of such approvals generally reflects the government’s economic and investment policy guidelines.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsResidents employed by offshore and foreign-based institutions in The Bahamas may invest in employee stock options or share purchase plans through the official exchange market up to the equivalent of B$10,000 a person a year, on a noncumulative basis for contributory plans. Otherwise, residents are not permitted to purchase foreign currency securities with official exchange, export proceeds, or other current earnings; payment must be made with investment currency. All purchases, sales, and swaps of foreign currency securities by residents require permission from the CBB and are normally effected through authorized agents, who are free to act on behalf of nonresidents in relation to such transactions without any further approval from the CBB, at a 12.5% premium. All foreign securities purchased by residents of The Bahamas must be held by, or drawn to the order of, an AD.
Sale or issue abroad by residentsSale proceeds from resident-held foreign currency securities that were registered at the CBB prior to December 31, 1972, or that were acquired through the investment currency market, are eligible for sale in the investment currency market. Unregistered securities may be offered for sale at the official rate of exchange.
Bonds or other debt securities
Purchase locally by nonresidentsNonresident buyers of Bahamian-dollar-denominated securities must fund the acquisition of such securities from foreign currency sources. Interest, dividends, and capital payments on these securities may not be remitted outside The Bahamas, unless the holdings have been properly acquired by nonresidents.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instrumentsThe regulations governing shares or other securities of a participating nature apply.
On collective investment securitiesThe regulations governing shares or other securities of a participating nature apply.
Controls on derivatives and other instrumentsThe regulations governing shares or other securities of a participating nature apply.
Controls on credit operations
Commercial credits
By residents to nonresidentsA resident company wholly owned by nonresidents is not allowed to raise fixed capital in Bahamian dollars, although approval may be granted to obtain working capital in local currency. If the company is partly owned by residents, the amount of local currency borrowing for fixed capital purposes is determined in relation to residents’ interest in the equity of the company. However, companies set up by nonresidents primarily to import and distribute products manufactured outside The Bahamas are not allowed to borrow Bahamian dollars from residents for either fixed or working capital; instead, they must provide all their financing in foreign currency. Banks and other lenders resident in The Bahamas must have permission to extend loans in domestic currency to any corporate body (other than a bank) that is resident in The Bahamas but is controlled directly or indirectly by nonresidents. Foreign currency loans are normally permitted on application.
To residents from nonresidentsResidents other than authorized banks must obtain permission to borrow foreign currency from nonresidents. Residents must also obtain permission to pay interest on, and to repay the principal of, foreign currency loans by conversion of Bahamian dollars. When permission is granted for residents to accept foreign currency loans, it is conditional on the currency being offered for sale without delay to an AD, unless the funds are required to meet specifically authorized payments to nonresidents.
Financial creditsControls apply to all these transactions.
Guarantees, sureties, and financial backup facilitiesControls apply to all these transactions.
Controls on direct investment
Outward direct investmentThe use of official exchange for direct investment abroad is limited to B$1 million a person or entity, with an overall limit of B$5 million a transaction, which may be met once every three years. This limit applies to investments from which the additional benefits that are expected to accrue to the balance of payments from export receipts, profits, or other earnings within 18 months of the investment will be at least equal to the total amount of the investment and will continue thereafter. Investments abroad that do not meet the above criteria may be financed by foreign currency borrowed on suitable terms, subject to individual approval from the CBB; by foreign currency purchased in the investment currency market; or by the retained profits of foreign subsidiary companies. Permission is not given for investments that are likely to have adverse effects on the balance of payments.
Inward direct investmentCBB approval is required. Foreign investments in domestic insurance companies and pension funds are not permitted.
Controls on liquidation of direct investmentIn the event of a sale or liquidation, nonresident investors are permitted to repatriate the proceeds, including any capital appreciation, through the official foreign exchange market.
Controls on real estate transactions
Purchase abroad by residentsResidents require the specific approval of the CBB to buy property outside The Bahamas; such purchases, if for personal use, may be made only with investment currency, and approval is limited to one property a family. Incidental expenses connected with the purchase of property for personal use may normally be met with investment currency. Expenditures necessary for the maintenance of the property or arising directly from its ownership may, with permission, be met with foreign currency bought at the current market rate in the official foreign exchange market.
Purchase locally by nonresidentsForeigners intending to purchase land for commercial purposes or property larger than five acres in size must obtain a permit from the Investments Board. If such an application is approved, payment for the purchase may be made either in Bahamian dollars from an external source or in foreign currency. Nonresidents wishing to purchase property for residential purposes may do so without prior approval but are required to obtain a certificate of registration from the Investments Board on completion of the transaction.
Sale locally by nonresidentsApproval from the CBB is required.
Controls on personal capital transactions
LoansControls apply to all these transactions.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsThe maximum amount an emigrant may transfer abroad is the equivalent of B$250,000 a family a year. Excess amounts may be approved by the CBB on an individual basis.
Transfer of gambling and prize earningsResidents are not allowed to remit funds earned from gambling.
References to legal instruments and hyperlinksChapter 360—Exchange Control Regulations; Chapter 351—Lotteries and Gaming (Amendment) Act, 2001.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Lending to nonresidents (financial or commercial credits)Prior exchange control approval is required if local real estate is offered as collateral.
Lending locally in foreign exchangeExchange control approval is required to make loans to residents in foreign exchange.
Open foreign exchange position limitsThe limit is 10% of the authorized bank’s capital base.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadYes.
Pension funds
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadYes.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksBanks and Trust Companies (Equity Investments) Regulations, 2005; Banks and Trust Companies (Large Exposures) Regulations, 2006; Chapter 360—Exchange Control Regulations; www.bfsb-bahamas.com.
Changes during 2007
Capital transactions
Controls on capital and money market instrumentsJune 11. Operational guidelines were circulated for issuance of nonsponsored BDRs, requiring that the proposed product offerings be established under the supervision of the Securities Commission before the CBB is approached for foreign exchange to fund external portfolios.

KINGDOM OF BAHRAIN

(Position as of December 31, 20007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: March 20, 1973.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 20007.
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Measures have been taken to combat the financing of terrorists and terrorism, including the freezing of assets of certain individuals and organizations, pursuant to UN Security Council resolutions, and the Central Bank of Bahrain (CBB) requires all licensed banks to ensure diligence in examining their financial dealings with certain persons and organizations.
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of the Kingdom of Bahrain is the Bahrain dinar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe dinar is pegged to the dollar at the rate of BD 1 per $2.659. The CBB does not deal with the public. The spread (buying and selling rate) for the official exchange rate is BD 0.375–0.377 per $1 (2000 basis points).
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange marketIn addition to banks, foreign exchange dealers operate in the foreign exchange market.
Spot exchange market
Operated by the central bank
AllocationThe CBB provides a facility for selling dollars to retail banks.
Auctionn.a.
Fixingn.a.
Interbank marketBanks may freely determine their exchange rates in transactions with customers.
Forward exchange marketThe CBB monitors the forward exchange transactions of commercial banks through the open position of banks’ monthly returns.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsAll settlements with Israel are prohibited. Otherwise, no requirements are imposed on exchange payments or receipts.
Payments arrangements
Bilateral payments arrangements
OperativeA free trade agreement is in effect with the United States.
Regional arrangementsBahrain is a member of the GCC Customs Union.
Administration of controlThere is no exchange control legislation. The CBB is the successor to the Bahrain Monetary Authority (BMA). The CBB and Financial Institution Law replaced the BMA Law of 1973 and the Insurance Law (Legislative Decree No. 17 of 1987).
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On external tradeImports of gold jewelry are subject to a 5% customs duty, but gold ingots are exempt. Brokers doing business in gold and other products must obtain CBB approval before they can register with the Ministry of Commerce.
Controls on exports and imports of banknotesThe Directorate General of Customs maintains records of imports and exports of currency or negotiable instruments exceeding the permitted limits and forwards the information to the CBB for further investigation.
References to legal instruments and hyperlinksCBB and Financial Institution Law.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadNo.
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 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 imports
Domiciliation requirementIf required documents are not available, imported goods may be released with a written promise to submit the documents at a later date.
Import licenses and other nontariff measures
Negative listLicenses are required for imports of arms, ammunition, and alcoholic beverages. All imports from Israel are prohibited. Imports of a few commodities are prohibited from all sources for reasons of health, public policy, or security. Imports of cultured pearls are prohibited.
Other nontariff measuresMandatory government procurement policies give preference to goods produced in the Kingdom of Bahrain and GCC member countries, provided the quality and prices of these goods are within specified margins of the prices of imported substitutes (10% for goods produced in Bahrain and 5% for goods produced in GCC member countries).
Import taxes and/or tariffsAll imported goods, with the exception of vegetables, fruits, fresh and frozen fish, meat, books, and magazines, are subject to a customs duty of 5%. Ad valorem rates of 1000% apply on tobacco products and 125% on alcoholic beverages, although evaluations based on quantity or weight may result in higher specific duties.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsIn accordance with the GCC Common Customs Law, exports of goods are subject to documentation requirements.
Export licensesAll exports to Israel are prohibited.
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 fundsProceeds from invisibles from Israel are prohibited.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsThere are no exchange controls on capital receipts or payments by residents or nonresidents, but transactions in money market instruments are regulated to prevent money laundering. Payments may not be made to or received from Israel.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securitiesThe capital market is subject to anti-money-laundering legislation.
Shares or other securities of a participating natureThe CBB Law and its accompanying regulations provide for certain controls based on international best practices.
Purchase locally by nonresidentsCitizens of GCC countries may own up to 1000% of the listed shares of a Bahraini joint-stock company; others may own up to 49%. The percentage of ownership by non-GCC nationals may be increased, subject to approval from the minister of commerce and industry. However, non-GCC nationals may purchase, sell, or own up to 1000% of the shares of the following five companies: Arab Banking Corporation, Investcorp Bank, Bahrain Middle East Bank, Taib Bank, and Arab Insurance Group. Purchases, sales, and ownership of shares are subject to the provisions of the Anti-Money-Laundering Law.
Sale or issue locally by nonresidentsThe CBB Law regulates the sale and issue of securities by residents and nonresidents.
Purchase abroad by residentsThere are no restrictions on these transactions, provided the regulations of the foreign jurisdiction concerned are satisfied.
Sale or issue abroad by residentsThe CBB may object to the issuance of securities.
Bonds or other debt securitiesThe issuance of bonds and other debt securities is subject to the CBB Law and regulations and the Commercial Companies Law. Sales of listed bonds and other debt securities are subject to the Bahraini Stock Exchange (BSE) Law and the CBB Guidelines on the Issuing, Offering, and Listing of Debt Securities.
Sale or issue locally by nonresidentsThe CBB Law and the CBB Guidelines on the Issuing, Offering, and Listing of Debt Securities apply.
Purchase abroad by residentsThe regulations governing the purchase abroad of shares or other securities of a participating nature by residents apply.
Sale or issue abroad by residentsNo restrictions apply, provided there is no objection by the CBB.
On money market instrumentsn.a.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentGCC nationals are allowed to own up to 1000% of the shares of domestic enterprises. Non-GCC nationals are allowed to own up to 1000% of the shares of domestic (locally incorporated) companies and branches of foreign incorporated companies, with the exception of a small number of activities contained in the negative list, and those restrictions that apply to the ownership of publicly listed companies.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsThere are no restrictions on ownership of real estate by GCC nationals (either natural or juridical persons). Nonresidents (both natural and juridical persons) are allowed to own buildings and property only in locations specified in Council of Ministers Regulation No. 5/2001, which include most of the prestigious and tourist areas. Commercial, tourism, and industrial companies, as well as banking and financial institutions licensed to operate in Bahrain, may own real estate without restriction.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksCBB Law 20006; Commercial Companies Laws; Law 2001; BSE Law; Anti-Money-Laundering Law; CBB regulations; CBB Guidelines on the Issuing, Offering, and Listing of Debt Securities; Council of Ministers Regulation 5/2001.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsBanks are subject to special rules regarding the payment of dividends and the remittance of profits. Licensed offshore banking units may engage freely in transactions with nonresidents; transactions with residents are not normally permitted.
Lending to nonresidents (financial or commercial credits)Yes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsBahrain maintains a differential reserve requirement: dinar deposits are subject to a reserve requirement of 5%.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Open foreign exchange position limitsBanks are allowed to set their own limits.
Provisions specific to institutional investersNo.
References to legal instruments and hyperlinksn.a.
Changes during 20007
No significant changes occurred in the exchange and trade system.

BANGLADESH

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: April 11, 1994.
Exchange Measures
Restrictions and/or multiple currency practicesThe IMF staff report for the 2007 Article IV consultation with Bangladesh states that, as of May 31, 2007, Bangladesh maintained a restriction on the convertibility and transferability of proceeds of current international transactions in nonresident taka accounts. (Country Report No. 07/234)
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Banks and other financial institutions have been instructed to block all capital transfers and to freeze financial assets of individuals, groups, and organizations associated with terrorism, pursuant to the relevant UN Security Council resolutions.
Other security restrictionsBanks and other financial institutions have been instructed to implement UN Security Council Resolution No. 1747 (2007).
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Bangladesh is the Bangladesh taka.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Bangladesh Bank (BB) intervenes in the foreign exchange market to limit undue fluctuations in the exchange rate. Against the backdrop of significant interventions, the exchange rate arrangement has been maintained within a 2% band. Thus, effective January 1, 2007, the classification of the de facto exchange rate arrangement has been changed from managed floating with no predetermined path for the exchange rate to a conventional pegged arrangement.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Interbank marketThere is an active interbank foreign exchange market where banks are free to buy or sell spot.
Forward exchange marketADs may buy and sell foreign currency forward in accordance with international practices. Currency swaps and forward exchange transactions of ADs with nonbank customers must be backed by approved underlying commercial transactions. ADs must cover at least 50% of their forward sales with forward purchases. The remaining portion may be covered by interbank forward purchases and spot purchases of export bills of exchange. In addition, forward sales associated with swap transactions are not required to be covered by forward purchases. Although the limits on outstanding swap transactions have been relaxed, counterparty limits on swap transactions between ADs are determined according to core risk management guidelines prescribed by the BB through Banking Regulation and Policy Department Circular No. 17, dated October 17, 2003.
References to legal instruments and hyperlinksBanking Regulation and Policy Department Circular No. 17, dated October 17, 2003.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements normally take place in convertible currencies and, in some cases, through nonresident taka accounts. Settlements with ACU member countries must be effected through the ACU and in units denominated in AMUs (equivalent in value to the dollar). Payments for imports may be made to any country (with the exception of countries from which imports are prohibited). They may be made (1) in taka for credit in Bangladesh to a nonresident bank account of the country concerned, (2) in the currency of the country concerned, or (3) in any freely convertible currency. Export proceeds must be received in freely convertible foreign exchange or in taka from a nonresident taka account.
Controls on the use of domestic currencyControls apply to the use of domestic currency for current and capital transactions and payments.
Use of foreign exchange among residentsYes.
Payments arrangements
Bilateral payments arrangements
OperativeThere is an operative bilateral payments arrangement with Myanmar.
Regional arrangementsBangladesh is a member of the ACU.
Clearing agreementsYes.
Administration of controlForeign exchange policy is administered by the BB in accordance with general policy formulated in consultation with the MOF. Banks are licensed as ADs in foreign exchange. The chief controller of imports and exports of the Ministry of Commerce is responsible for registering exporters and importers and for issuing import policy orders (IPOs). Registered importers may operate under the terms of an IPO under LCs. LC authorization forms (LCAFs) are issued by ADs and do not require separate import licenses.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeThere are no restrictions on the internal sale, purchase, or possession of gold or silver ornaments (including coins) and jewelry, but gold and silver may not be held in any other form, except by licensed manufacturers or dentists.
On external tradeThe importation and exportation of gold and silver require special permission. However, women may bring in or take out any amount of personal jewelry worn by them or in their personal luggage, without prior approval. Exports of gold jewelry and imports of gold and silver for the export or manufacture of jewelry are allowed under the Jewelry Export Scheme.
Controls on exports and imports of banknotes
On exports
Domestic currencyA resident or nonresident may take out up to Tk 500 in domestic currency.
Foreign currencyResidents may take out foreign currency and traveler’s checks up to the amount of their travel allocation, and up to the equivalent of $5,000 brought in without declaration when returning from a visit abroad. Nonresidents may take out the foreign currency and traveler’s checks they declared on entry or up to the equivalent of $5,000 brought in, without declaration. Foreign tourists may reconvert unspent taka at ADs on production of documentary evidence that the taka were acquired through conversion of foreign exchange brought into the country.
On imports
Domestic currencyThe importation of Bangladesh currency exceeding Tk 500 is prohibited.
Foreign currencyForeign currency traveler’s checks and foreign currency notes may be brought in freely up to the equivalent of $5,000, but larger amounts must be declared to customs on arrival in Bangladesh.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents returning from abroad may bring in any amount of foreign currency and may maintain a resident foreign currency deposit account (RFCD) with the foreign exchange brought in. However, proceeds of exports of goods and services from Bangladesh or commissions arising from business deals in Bangladesh may not be credited to such accounts. Balances in these accounts are freely transferable abroad and may be used for travel in the usual manner. These accounts may be opened in dollars, euros, pounds sterling, and yen. Foreign currency accounts may also be opened (1) by local and joint-venture contracting firms executing projects financed by a foreign donor or international agency; (2) by returning nonresident Bangladeshis who did not open or maintain a foreign currency deposit account while abroad with foreign exchange brought in from abroad within six months of the date of their return to take up permanent residence in Bangladesh; (3) in the name of diplomatic missions in Bangladesh and their expatriate personnel, the UN and its agencies, and diplomatic bonded warehouses (duty-free shops); and (4) in the name of resident Bangladesh nationals working for foreign or international organizations in Bangladesh, if their salaries are paid in foreign currency. Exporters may deposit a certain percentage of the repatriated export proceeds in Exporters’ Retention Quota accounts.
Held abroadResidents who opened an account abroad when residing abroad may retain it after returning to Bangladesh.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyADs may open convertible taka accounts in the name of foreign organizations or nationals (i.e., diplomatic missions, UN organizations, nonprofit international bodies, foreign contractors, and consultants) engaged for specific projects of the government or government agencies and their expatriate personnel who are resident in Bangladesh. These accounts may be credited with foreign currency brought in or remitted from abroad or transferred from a foreign currency account or another convertible taka account. These accounts may be debited for (1) local payments in taka, (2) remittances abroad in convertible currency, (3) transfers to foreign currency accounts or other convertible taka accounts, and (4) credits to nonconvertible taka accounts.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedBangladesh nationals residing abroad; foreign nationals, companies, and firms registered or incorporated abroad; banks and other financial institutions, including institutional investors; officers and staff of Bangladesh missions, government institutions, autonomous bodies, and commercial banks posted abroad or transferred to international or regional agencies may open and maintain during their assignment abroad nonresident foreign currency deposit accounts that bear interest and are denominated in dollars, euros, pounds sterling, or yen. These accounts may be credited in initial minimum amounts equivalent to $1,000 ($25,000 for foreigners) with remittances in convertible currencies and transfers from existing foreign currency deposit accounts maintained by Bangladesh nationals abroad. The accounts earn interest if their terms range from one month to one year. The balance, including interest earned, may be transferred in foreign exchange by the account holder to any country or to any foreign currency deposit account maintained by Bangladesh nationals abroad. The balances in the accounts, which are freely convertible into taka, must be reported monthly by banks to the BB. The accounts may be maintained as long as the account holders desire. Nonresident Bangladesh nationals who did not open or maintain a foreign currency deposit account while abroad may open an RFCD with foreign exchange brought in from abroad within six months of the date of their return to take up permanent residence in Bangladesh. All nonresident accounts are regarded for exchange control purposes as accounts related to the country in which the account holder is a permanent resident. (The accounts of the UN and its agencies are treated as resident accounts.)
Domestic currency accountsForeign missions and embassies and their expatriate personnel, foreign airline and shipping companies, and international nonprofit organizations in Bangladesh may open interest-bearing convertible taka accounts, but the interest earned may be disbursed in local currency only. Taka accounts of individuals, firms, or companies residing outside Bangladesh are designated as nonresident accounts. For portfolio investments in Bangladesh through the stock exchange, a nonresident may open a nonresident investor’s taka account (NITA) with any AD with foreign exchange remitted from abroad through normal banking channels or through transfer of funds from a foreign currency account. The balance in the NITA may be used freely to buy Bangladesh shares and other securities. These balances are also freely transferable to foreign currency accounts opened in the names of (1) Bangladesh nationals residing abroad and Bangladesh nationals working and earning abroad, including self-employed Bangladesh migrants residing abroad; (2) foreign nationals residing abroad or in Bangladesh; (3) foreign firms registered abroad and operating in Bangladesh or abroad; and (4) foreign missions and their expatriate employees. Balances in these accounts are remittable abroad in equivalent foreign exchange.
Convertible into foreign currencyFunds from NITAs and convertible taka accounts may be converted freely.
Blocked accountsAmounts in nonresident taka accounts originating from unapproved payments may be blocked by the BB.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance payments for permissible imports of goods and services may be effected by ADs without prior BB permission provided there is a repayment guarantee from a bank abroad. However, advance payments of up to the equivalent of $2,500 for imports of books, journals, or lifesaving medicines do not require a repayment guarantee.
Documentation requirements for release of foreign exchange for importsADs have been instructed to observe the following procedures to avoid irregularities during importation through land ports: (1) Only one port of entry (land port) is to be named in the LC. (2) A copy of the LC and subsequent amendments, if any, including other relevant information, is to be sent to the land port authority. (3) Specimen signatures of the officials working at the import-export desks of the ADs concerned, along with their contact phone and fax numbers, are to be supplied to all land ports. (4) A list regarding entry of goods into Bangladesh, a certified invoice, and a bill of entry evidencing entry of goods into Bangladesh are to be collected directly from the land ports involved by ADs’ agents or representatives with the purpose of creating and maintaining a database accessible by all ADs. (5) LCs must not contain any reimbursement or debit authority; rather, they should stipulate the following payment terms: “on receipt of documents complying with credit terms, we shall effect payment as per instructions of negotiating bank or collecting bank.” (6) LCs covering more than $5,000 or its equivalent should be sent through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system to the advising bank.
Domiciliation requirementYes.
Preshipment inspectionAll imports require inspection, with a few exceptions.
Letters of creditPayment against imports is generally permissible only under irrevocable LCs. However, a consignment of perishable food items not exceeding $7,500 or its equivalent in value does not require an LC. Capital machinery and industrial raw materials may also be imported without LCs and without limit on value. Recognized export-oriented units operating under the bonded warehouse system may import up to four months’ requirements of their raw and packing materials by establishing import LCs without reference to an export LC. They may also effect such imports by opening back-to-back LCs (either on a sight basis under the Export Development Fund, or for up to 180 days on a usance basis) against export LCs received by them. ADs may establish LCs on an f.o.b. basis without the approval of the BB, subject to certain conditions. Foreign exchange for authorized imports is provided automatically by ADs when payments are due.
Import licenses used as exchange licensesLC authorization forms are issued by ADs and do not require a separate import license.
OtherADs are not permitted to open new LCs for importers who have failed to submit within the stipulated time period the bills of entry of imports or customs-certified invoices as evidence of actual importation of such goods.
Import licenses and other nontariff measuresAll importers (including all government departments, with the exception of the Ministry of Defense) are required to obtain LCAFs for all imports. Under the authority of the IPO issued by the chief controller, importers are allowed to effect imports against LCAFs that are issued for imports under bilateral trade or payments agreements and for imports under tied-aid programs. LCAFs are otherwise valid worldwide, except for imports from Israel and imports transported on Israeli flag vessels, which are prohibited. Goods must be shipped within 18 months of the date of issuance of LCAFs in the case of machinery and spare parts, and 12 months in the case of all other items.
Positive listItems not specified in the negative list of the IPO may be imported freely, provided the importer has a valid import registration certificate.
Negative listThe negative list contains 26 items in about 359 categories at the four-digit level of the harmonized system codes. The importation of these items is restricted or prohibited for public safety, health, religious, environmental, security, or social reasons, or if similar items are produced locally.
Open general licensesAll items not on the negative list may be imported freely by registered importers.
Licenses with quotasUnless otherwise specified in the IPO, industrial units approved on a regular basis are allowed to import up to 300% of their regular import entitlement of items whose importation is banned for commercial purpose and that are importable by industrial consumers only. Industrial units approved on an ad hoc basis are allowed to import up to the maximum value, not exceeding 100% of their half-yearly import entitlement.
Import taxes and/or tariffsThere are four tariff bands: zero, 10%, 15%, and 25%. A number of goods are subject to supplementary duties. Effective July 1, 2007, the infrastructure development surcharge has been eliminated.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports must be repatriated within four months of shipment unless otherwise permitted by the BB.
Surrender requirements
Surrender to authorized dealersExporters are required to sell to ADs 90% of the proceeds from exports of ready-made garments and other goods with high import content, and 50% of the proceeds from exports of merchandise and computer data entry and software services. They may use retained earnings for bona fide business purposes, such as business travel abroad; establishment and maintenance of offices abroad; participation in trade fairs and seminars; and imports of raw materials, spare parts, and capital goods. Fully foreign-owned industries and joint ventures or Bangladesh industries, other than in the garment industry, located in EPZs are allowed to retain 100% and 80%, respectively, of their export earnings in a foreign currency deposit account. Joint ventures and Bangladesh industries in the ready-made garment sector located in EPZs may retain 75% of their export earnings in a foreign currency deposit account.
Financing requirementsNo.
Documentation requirementsBesides bills of lading and airway bills issued by the carriers concerned, negotiation of export bills may also take place against Forwarders’ Cargo Receipts (FCRs) and House Air Way Bills (HAWBs) issued by freight forwarders, provided (1) the export LC and the export sale contract specifically provide for negotiation of export bills of exchange against the FCR or HAWB issued by a freight forwarder and (2) the freight forwarder issuing the FCR or HAWB is operating in Bangladesh with authorization from the BB under section 18A of the FER Act of 1947.
Letters of creditIn addition to LCs, exports under contract are allowed.
DomiciliationYes.
OtherYes.
Export licensesAccording to Export Policy 2006-2009, exports of 16 items are banned. Two products are exportable under certain conditions. Some of these items are restricted for nontrade reasons, whereas others are restricted to ensure adequate supply in the domestic market.
Without quotasYes.
Export taxesExports of jute are taxed.
Other export taxesYes.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles related to authorized trade transactions are generally not restricted.
Trade-related paymentsPayment abroad of commissions and remittances for operational expenses is subject to indicative limits and bona fide checks.
Prior approvalUp to 5% of export receipts (up to 33.3% in the case of books) may be remitted abroad for commissions without prior approval of the BB.
Indicative limits/bona fide testYes.
Investment-related payments
Indicative limits/bona fide testADs are allowed to remit dividends to nonresident shareholders without prior approval of the BB on receipt of applications from the companies concerned. Applications must be supported by an audited balance sheet; a profit and loss statement; and a board resolution declaring to their head offices dividends from profits earned from foreign firms, banks, insurance companies, and other financial institutions operating in Bangladesh. These remittances are, however, subject to ex post checks by the BB. No approval is required for remittances on loans if the loan agreements have been cleared by the Board of Investment (BOI).
Payments for travel
Quantitative limitsThe indicative limit for personal travel by resident Bangladeshis to countries other than Bhutan, India, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka is $3,000 a person a year or its equivalent; the allowance for air travel to these seven countries is $1,000 a year. Up to $1,500 may be released to individuals traveling abroad with a one-way ticket if it is for valid job or migration purposes. The indicative limit for business travel is $6,000 a person a year or its equivalent for new exporters; established exporters are permitted to use balances held under the Export Retention Scheme (10% of exports of ready-made garments and 50% of other export proceeds). Manufacturers producing for the domestic market and importers are granted business travel allowances equivalent to 1% of turnover as declared in tax returns and 1% of the value of imports, respectively. There is an annual ceiling of $5,000 or its equivalent in both cases. Amounts in excess of these limits require documents attesting to the bona fide nature of the transaction.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalPrior approval is required for the transfer of pensions.
Quantitative limitsUp to $10,000 or its equivalent may be obtained for medical expenses without prior approval. Larger amounts require approval of the BB after submission of supporting documents.
Indicative limits/bona fide testForeign exchange for education is available up to the cost of tuition and living expenses, as estimated by the educational institution concerned. Prior permission is not required for the remittance of fees for approved undergraduate, postgraduate, and professional courses. Foreign exchange is available for the support of dependents abroad, on presentation of a certificate from the Bangladesh embassy in the country concerned, up to a reasonable level, which is based on prevailing prices. Applications for foreign exchange for studies abroad and for family maintenance are approved on verification of their validity.
Foreign workers’ wages
Quantitative limitsForeign nationals may remit freely up to 50% of their net salary in connection with service contracts approved by the government. The entire amount of their earned leave pay and savings may also be freely remitted.
Indicative limits/bona fide testYes.
Credit card use abroadResident Bangladesh nationals may use international credit cards abroad.
Prior approvalGeneral approval is given for credit card use by (1) exporters against the foreign exchange retention entitlement, (2) residents against the annual indicative travel entitlement, and (3) residents against balances held in resident foreign currency deposit accounts.
Quantitative limitsYes.
Other payments
Prior approvalYes.
Quantitative limitsPrior permission is not required for the remittance of royalties and technical fees by firms registered with the BOI (1) up to 6% of the cost of imported machinery or (2) up to 6% of the previous year’s sales as declared in income tax returns for ongoing concerns.
Indicative limits/bona fide testIndustrial enterprises producing for local markets may remit up to 1% of sales receipts declared in the previous year’s tax return for the purpose of training and consultancy.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersExporters of services must sell to ADs 95% of the proceeds (50% of proceeds from computer services) and may use retained earnings for bona fide business purposes. Bangladesh nationals working abroad may retain their earnings in foreign currency accounts or in nonresident foreign currency deposit accounts. Unless specifically exempted by the BB, all Bangladesh nationals who reside in Bangladesh must sell any foreign exchange coming into their possession, whether held in Bangladesh or abroad, to an AD within one month of the date of acquisition. However, returning residents may keep, in foreign currency accounts opened in their names, foreign exchange they brought in, provided the foreign exchange does not represent proceeds from exports from Bangladesh or commissions earned from business activities in Bangladesh. Residents may retain up to $5,000 or its equivalent brought into the country without declaration. Foreign nationals residing in Bangladesh for more than six consecutive months are required to sell within one month of the date of acquisition any foreign exchange representing their earnings with respect to business conducted in Bangladesh or services rendered while in Bangladesh.
Restrictions on use of fundsRetained foreign exchange may be used for travel abroad or bona fide business purposes.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersResidents must repatriate and sell to ADs the foreign exchange proceeds from all approved capital transactions abroad.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsNonresidents may buy Bangladesh securities through stock exchanges against payment in freely convertible currency remitted from abroad through banking channels.
Sale or issue locally by nonresidentsProceeds from sales, including capital gains and dividends earned on securities purchased in Bangladesh, may be remitted abroad in freely convertible currency. Nonresidents may not issue securities in Bangladesh.
Sale or issue abroad by residentsThese transactions are subject to prior approval of the Securities and Exchange Commission. Prior BB approval is required for securities denominated in foreign currency.
Bonds or other debt securities
Sale or issue locally by nonresidentsNonresidents are not allowed to issue such instruments. However, they may sell their holdings issued and purchased locally.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instrumentsControls apply to all these transactions.
On collective investment securities
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsNonresidents are not allowed to issue such instruments. However, they may sell their holdings issued and purchased locally.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsThese transactions are subject to prior approval of the Securities and Exchange Commission. Prior BB approval is required for instruments denominated in foreign currency.
Controls on derivatives and other instruments
Purchase locally by nonresidentsThese transactions are not allowed.
Sale or issue locally by nonresidentsThese transactions are not allowed.
Purchase abroad by residentsADs may acquire hedging instruments abroad against exchange rate risk on underlying trade transactions.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsExport payments deferred for more than 120 days require BB authorization.
To residents from nonresidentsCommercial credits may be used by residents for imports of industrial raw materials (180 days) and capital machinery (360 days) without approval.
Financial credits
By residents to nonresidentsExcept in certain cases, credits are subject to prior BB approval.
To residents from nonresidentsADs may obtain short-term loans and overdrafts from overseas branches and correspondents for a period not exceeding seven days at a time. Industrial enterprises may borrow funds or make deferred payments for imports for a period beyond 360 days, with prior BOI approval.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsOn behalf of residents, banks may issue guarantees or sureties in favor of nonresidents for permissible current transactions.
To residents from nonresidentsReceipt of guarantees or sureties by residents from abroad requires full disclosure of the underlying transaction.
Controls on direct investment
Outward direct investmentAll outward transfers of capital require approval. For resident-owned capital, approval is granted only in exceptional cases.
Inward direct investmentInvestments, except in the industrial sector, require approval. The Foreign Private Investment (Promotion and Protection) Act provides for the protection and equitable treatment of foreign private investment, indemnification, protection against expropriation and nationalization, and guarantee of repatriation of investment. There is no ceiling on private investment. Tax exemptions are granted for periods of up to nine years, depending on location.
Controls on liquidation of direct investmentLiquidation of direct investment through the NITA or transfers of Bangladesh shares and securities from one nonresident holder to another nonresident holder do not require prior BB approval. However, proceeds from the disinvestment of nonresidents’ equity investments in unlisted public limited companies and in private limited companies may be repatriated with prior BB permission, since there may not be any established market value for such investments at the time of a disinvestment. When a nonresident liquidates an investment through a sale to a resident investor, the net asset value of the shares of the company is used as the basis for calculating the repatriation of proceeds.
Controls on real estate transactions
Purchase abroad by residentsRemittances of funds for these purchases are not permitted.
Purchase locally by nonresidentsPurchases of real estate by a nonresident with funds from abroad are allowed.
Sale locally by nonresidentsRepatriation of sales proceeds is subject to prior approval by the BB, which is not normally granted.
Controls on personal capital transactions
Loans
By residents to nonresidentsThese transactions are not allowed.
To residents from nonresidentsThese transactions are not allowed.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsTransfers of title to nonresidents by way of inheritances are not restricted, but income and sales proceeds from such assets are not normally transferable abroad and must be used locally with prior BB authorization.
To residents from nonresidentsA resident Bangladesh national must obtain prior approval from the government to receive gifts or endowments from a foreign donor. Inheritances must be reported to the BB. Net current income from estates inherited abroad must be repatriated.
Settlements of debts abroad by immigrantsThese transactions are normally not allowed, except for repayments on borrowing for industrial investments in accordance with BOI guidelines.
Transfer of assetsThese transactions are not allowed, except for movable personal assets.
Transfer abroad by emigrantsThese transactions are not allowed, except for normal travel allowances for residents.
Transfer into the country by immigrantsThese transactions are permitted, subject to a requirement that transfers exceeding $5,000 or its equivalent must be declared.
Transfer of gambling and prize earningsGambling is prohibited in Bangladesh.
References to legal instruments and hyperlinksForeign Private Investment (Promotion and Protection) Act.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsBB approval is not required for taka advances through the purchase of checks from foreign embassies, international organizations, or foreign nationals employed by them and drawn on their accounts abroad. Term loans in taka for capacity expansion of resident companies owned by foreigners may be extended or renewed by banks without approval of the BB, provided (1) the term loan in taka does not exceed, as a percentage of total term borrowing, the percentage of equity of the company held by Bangladesh nationals and companies not owned or controlled by foreigners; and (2) total debt of the company does not exceed a 50:50 debt-equity ratio. Borrowing proposals not conforming to these regulations require prior approval of the BB. ADs are permitted to extend working capital facilities to type B (joint venture) units of EPZs for the procurement of components needed for up to four months worth of production on the basis of the banker-customer relationship and the customer’s ability to repay from export proceeds.
Borrowing abroadThe regulations governing financial credits apply.
Maintenance of accounts abroadThe maintenance of these accounts is subject to notification to the BB.
Lending to nonresidents (financial or commercial credits)Lending to nonresidents is not allowed, except with prior BB approval and in specific cases.
Lending locally in foreign exchangeLending is subject to prior approval from the BB. ADs are permitted to use up to 50% of nonresident foreign currency deposit balances for (1) loans to exporters for settlement of back-to-back sight LCs for imports of inputs and (2) discounting usance bills of wholly foreign-owned (type A) and joint venture (type B) EPZ units against input supplies to exporters. Industrial enterprises may borrow funds or make deferred payments for imports for a period beyond 360 days, with prior BOI approval.
Purchase of locally issued securities denominated in foreign exchangePurchases are subject to prior approval from the BB.
Differential treatment of deposit accounts in foreign exchange
Interest rate controlsBanks are required to maintain interest rates on foreign currency deposits in line with international market rates.
Differential treatment of deposit accounts held by nonresidents
Interest rate controlsADs are authorized to allow interest payments on ACU dollar accounts maintained with ADs by their correspondent banks in other ACU member countries.
Open foreign exchange position limitsIn accordance with BB limits, ADs’ net open positions may not exceed 12.5% of their capital.
Provisions specific to institutional investors
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2007
Exchange arrangementJanuary 1. The classification of the de facto exchange rate arrangement was changed from managed floating with no predetermined path for the exchange rate to a conventional pegged arrangement.
Imports and import paymentsJuly 1. The infrastructure development surcharge was eliminated.

BARBADOS

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: November 3, 1993.
Exchange Measures
Restrictions and/or multipleNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasonsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Barbados is the Barbados dollar.
Other legal tenderGold coins with face values of B$50, B$100, B$150, B$200, and B$500 are legal tender and are in limited circulation.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Barbados dollar is pegged to the U.S. dollar, the intervention currency, at B$2 per US$1. Buying and selling rates for the Canadian dollar, euro, and pound sterling are also officially quoted on the basis of their cross-rate relationships to the U.S. dollar. The quoted rates include commission charges of 0.125% buying and 1.75% selling against the U.S. dollar, and 0.1875% buying and 1.8125% selling against the Canadian dollar, euro, and pound sterling.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange marketCertain businesses are allowed to exchange foreign currency.
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketn.a.
Forward exchange marketThe Central Bank of Barbados (CBB) periodically obtains forward cover in the international foreign exchange market to cover or hedge its own or the central government’s exchange risks associated with foreign exchange loans that are not denominated in U.S. dollars. Commercial banks are allowed to obtain forward cover in international markets. The CBB and commercial banks enter into swap transactions in U.S. dollars, whereas commercial banks switch freely among nonregional currencies.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements with residents of countries outside the CARICOM area may be made in any foreign currency or through an external account in Barbados dollars. Settlements with residents of CARICOM member countries other than Jamaica, Suriname, and Trinidad and Tobago may be made in the currency of the CARICOM country. Settlements with residents of Jamaica, Suriname, and Trinidad and Tobago may also be made in U.S. dollars. CBB permission is required for retail outlets to issue change in the same foreign currency in which purchases are made.
Controls on the use of domestic currency
For current transactions and paymentsYes.
For capital transactionsn.a.
Use of foreign exchange among residentsn.a.
Payments arrangements
Bilateral payments arrangementsn.a.
Regional arrangementsBarbados is a member of CARICOM.
Clearing agreementsUnder clearing arrangements with regional monetary authorities, the CBB currently sells only three CARICOM country currencies: the Bahamian dollar, the Eastern Caribbean dollar, and the Belize dollar. The Trinidad and Tobago, Guyana, and Jamaica dollars float against the U.S. dollar, and the CBB sets indicative selling rates based on rates supplied by the monetary authorities of these countries. These rates are applicable only to government transactions.
Barter agreements and open accountsn.a.
Administration of controlExchange control applies to all countries, except those in the OECS, and is administered by the CBB, which delegates to ADs the authority to approve normal import payments and foreign exchange for cash gifts. Further authority is delegated to commercial banks with respect to current account transactions ranging from B$7,500 to B$250,000. Effective May 15, 2007, commercial banks may release foreign exchange up to B$10,000 for payments for imports to Barbados. Commercial banks may allow the transfer of funds to CARICOM countries with respect to all current transactions except those for which special limits or restrictions apply. Trade controls are administered by the Ministry of Commerce, Consumer Affairs, and Business Development (MCCABD). The authority to approve payments to OECS countries is delegated to ADs.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents, other than the monetary authorities, ADs, and industrial users, are not permitted to hold or acquire gold in any form other than jewelry or coins for numismatic purposes. Any gold acquired in Barbados must be surrendered to an AD, unless exchange control approval is obtained for its retention.
On external tradeThe importation of gold by residents is permitted for industrial purposes and is subject to customs duties and charges. Licenses to import gold are issued by the MCCABD. Exchange control permission is required to export gold.
Controls on exports and imports of banknotes
On exports
Domestic currencyTravelers may take out up to B$500.
Foreign currencyTravelers may take out up to the equivalent of B$1,000. Nonresident visitors may export freely any foreign currency they brought in.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallySubject to specific conditions under delegated authority, ADs may maintain foreign currency accounts in the names of individuals and companies resident in Barbados whose annual earnings are at least B$50,000 and B$100,000, respectively. Certain receipts and payments may be credited and debited to foreign currency accounts under conditions established at the time the account is opened. Other credits and debits require individual approval. When authority has not been delegated to ADs, the permission of the CBB is required. ADs may maintain foreign currency accounts for returning Barbadian nationals up to the equivalent of B$100,000, provided the funds credited to such accounts represent foreign currency earnings from abroad. Companies operating in Barbados and earning a minimum of the foreign currency equivalent of B$100,000 a year are allowed to maintain foreign currency accounts up to the equivalent of B$50,000 without reference to the CBB.
Approval requiredApproval is given on the basis of the anticipated frequency of receipts and payments in foreign currency.
Held abroadYes.
Approval requiredYes.
Accounts in domestic currency held abroadPermission of the CBB is required.
Accounts in domestic currency convertible into foreign currencyPermission of the CBB is required.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedThe regulations governing resident accounts apply. Effective January 1, 2007, non-Barbadian nationals employed in the offshore sector are classified as nonresidents.
Domestic currency accountsThese accounts may be credited with the proceeds from the sale of foreign currencies, transfers from other external accounts, bank interest, and payments by residents for which the CBB has given general or specific permission. The accounts may be debited for payments to residents of Barbados for the cost of foreign exchange required for travel or business purposes and for any other payment covered by delegated authority to ADs. Other debits and any overdrafts require individual approval.
Convertible into foreign currencyBalances on external accounts are convertible.
Approval requiredNonresident holders of foreign currency accounts are not required to obtain central bank approval to remit funds abroad when the funds were not the result of payment for trade or nontrade transactions.
Blocked accountsThe CBB may require certain payments in favor of nonresidents that are ineligible for transfer to be credited to blocked accounts. Balances in blocked accounts may not be withdrawn without approval, other than for the purchase of approved securities.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsADs may release foreign exchange up to the equivalent of B$250,000 (c.i.f.) for advance payments for imports into Barbados. Commercial banks may allow transfers of funds to CARICOM countries with respect to prepayment for imports from CARICOM countries. Other advance payments require the prior approval of the CBB.
Advance import depositsn.a.
Documentation requirements for release of foreign exchange for importsEffective May 15, 2007, ADs were authorized to release foreign exchange up to B$10,000 for imports to Barbados.
Domiciliation requirementn.a.
Preshipment inspectionn.a.
Letters of creditn.a.
Import licenses used as exchange licensesn.a.
OtherPayments for authorized imports are permitted on application and submission of documentary evidence (invoices and customs warrants) to ADs; payments for imports of crude oil and its derivatives are subject to the approval of the CBB.
Import licenses and other nontariff measuresCertain imports require individual licenses. Some items on the import-licensing list may be freely imported throughout the year, whereas others are subject to temporary restrictions (particularly agricultural products, which tend to be subject to seasonal restrictions). Individual licenses are also required for imports of commodities that are subject to the provisions of the Oils and Fats Agreement, to which Barbados, Dominica, Grenada, Guyana, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago are signatories, whether the goods are being imported from CARICOM countries or from elsewhere. Special licensing arrangements have been made for the regulation of trade between Barbados and other CARICOM countries in 22 agricultural commodities.
Negative listn.a.
Open general licensesn.a.
Licenses with quotasNot all goods that are subject to licensing are subject to quantitative restrictions or import surcharges.
Other nontariff measuresn.a.
Import taxes and/or tariffsCustoms duties corresponding to the fourth phase of the CARICOM CET are in the range of 5% to 20%. A VAT of 15% is levied. Tariffs ranging from 20% to more than 200% apply to imports of prepared meats, detergents, and T-shirts.
State import monopolyChicken heads, backs, and necks; onions; and sugar may be imported only by the Barbados Agricultural Development and Marketing Corporation, and milk may be imported only by the Pine Hill Dairy.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsProceeds must be repatriated within six months.
Surrender requirements
Surrender to authorized dealersProceeds must be sold to an AD within six months, but exporters may apply for exemptions.
Financing requirementsn.a.
Documentation requirementsn.a.
Export licensesSpecific licenses are required for the exportation of certain goods to any country, including rice, sugarcane, rum, molasses, certain other food products, sewing machines, Portland cement, and petroleum products. All other goods may be exported without a license.
Without quotasYes.
With quotasExports of sugar to the United Kingdom and the United States are subject to bilateral export quotas, as are exports of rum to the EU.
Export taxesn.a.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related payments
Prior approvalApproval is required for amounts above the quantitative limits.
Quantitative limitsCommercial banks may approve all payments for insurance, freight, advertising, commissions, and fees relating to imports. Commercial banks must report these transfers to the CBB. The limit on unloading, storage costs, and administrative expenses is B$250,000 a transaction.
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalFor payments of profits and dividends to residents of non-CARICOM countries, approval is required for amounts above B$250,000.
Quantitative limitsThe limit for principal and interest payments is B$50,000 a year for individuals. Commercial banks are permitted to approve all payments abroad of profits and dividends to nonresident beneficiaries in and residents of CARICOM countries.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsADs have full authority to release foreign exchange to residents, without limit, for travel within CARICOM countries. For travel outside CARICOM countries, the limits are B$7,500 a person a calendar year for private travel, and B$750 a day for business travel, up to B$50,000 a person a calendar year. Commercial banks have the authority to approve all payments for cash currency swaps by in-port ships and cruise liners.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalApproval is required for amounts above the limit. Payments for medical treatment and studies abroad require approval from a commercial bank based on appropriate documentation.
Quantitative limitsThere are no limits on payments for medical treatment or studies abroad. Effective May 15, 2007, the limit on cash gifts is B$10,000 (previously, B$5,000) a person a year; the limit for alimony and other maintenance is B$50,000 a person a year. Nonresidents may have their pensions remitted to them while residing outside Barbados. Commercial banks may approve all payments with respect to bequests or inheritances that are due to beneficiaries resident in CARICOM countries, under the terms of the wills of persons who were resident or under the rules governing resident intestates for exchange control purposes. Beneficiaries residing outside CARICOM countries are permitted to transfer abroad bequests or inheritances at the rate of B$100,000 a year. Commercial banks must, however, continue to report such transfers to the CBB.
Indicative limits/bona fide testYes.
Foreign workers’ wagesCommercial banks may, without prior approval of the CBB, allow transfers of funds for payment of management services provided by residents of CARICOM countries.
Prior approvalYes.
Quantitative limitsNonresidents are allowed to remit amounts to cover commitments while employed in Barbados.
Indicative limits/bona fide testYes.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe limits are the same as for travel.
Indicative limits/bona fide testYes.
Other paymentsCommercial banks are permitted to approve all payments abroad for charges and fees with respect to granting and registration of patents, designs, and trademarks. Commercial banks are permitted to approve all payments abroad for entrance and subscription fees due to nonresident credit and travel card companies.
Prior approvalApproval is required for amounts above the limit.
Quantitative limitsThe limit is B$50,000 for subscriptions and membership fees a person a year, and B$100,000 for consulting and legal fees for each nonresident beneficiary. No limits apply for subscriptions to magazines, books for personal use, returns and refunds of deposits, and reimbursements of overpaid accounts and insufficient postage payments.
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersForeign currency proceeds from invisibles must be sold to ADs.
Restrictions on use of fundsn.a.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsCapital account transactions with the ECCB area denominated in Eastern Caribbean dollars are free from controls, except for transactions in debt issues of OECS governments.
Repatriation requirementsEarnings on securities and money market instruments purchased abroad by residents must be repatriated.
Surrender requirements
Surrender to authorized dealersEarnings on securities and money market instruments purchased abroad by residents must be surrendered to ADs.
Controls on capital and money market instrumentsEffective January 1, 2007, transactions in interest-based securities (i.e., corporate bonds, commercial paper, and government securities) denominated in regional currencies no longer require CBB approval. Securities listed on the Barbados Stock Exchange (BSE) may be approved by the BSE, and transactions in unlisted securities may be approved by the commercial banks, provided these are denominated in regional currencies.
On capital market securitiesPurchases and sales of shares and securities of companies cross-listed and cross-traded on any CARICOM stock exchange are permitted without limit.
Shares or other securities of a participating natureThe BSE is authorized to approve all investments in corporate securities in the form of equities cross-listed and cross-traded on CARICOM stock exchanges.
Purchase locally by nonresidentsThe issuance and transfer to nonresidents of securities registered in Barbados require exchange control approval, which is freely given, provided an adequate amount of foreign currency is brought in for their purchase.
Sale or issue locally by nonresidentsEffective May 15, 2007, authority is delegated to commercial banks to approve, without the prior approval of the CBB, applications related to remittance of the proceeds from the sale of unlisted equity investments up to the amount registered with the CBB.
Purchase abroad by residentsThese purchases require exchange control approval, and certificates of title must be lodged with an authorized depository in Barbados, except for regional securities purchased through the Securities Exchange of Barbados.
Sale or issue abroad by residentsExchange control approval is required.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
On money market instruments
Purchase locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue abroad by residentsYes.
On collective investment securities
Purchase locally by nonresidentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsControls apply to all these transactions.
Controls on credit operationsThe approval of the CBB is required for all credit operations. However, ADs may approve applications by domestically owned parent companies for permission to borrow funds from CARICOM and/or non-CARICOM sources for the purpose of investing in the operations of their CARICOM subsidiaries and/or affiliates.
Controls on direct investmentDirect investments require exchange control approval.
Outward direct investmentEffective January 1, 2007, commercial banks are authorized to approve investments in private and public unlisted securities in CARICOM countries.
Inward direct investmentYes.
Controls on liquidation of direct investmentLiquidation of proceeds is permitted, provided evidence documenting the validity of the remittance is submitted, all liabilities related to the investment have been discharged, and the original investment was registered with the CBB. Effective May 15, 2007, commercial banks are authorized to approve, without the prior approval of the CBB, applications related to remittance of the proceeds from the sale of unlisted equity investments up to the amount registered with the CBB.
Controls on real estate transactions
Purchase abroad by residentsPurchases require exchange control approval.
Purchase locally by nonresidentsNonresidents may acquire real estate in Barbados for private purposes with funds from foreign currency sources; local currency financing is not ordinarily permitted.
Sale locally by nonresidentsEffective May 15, 2007, commercial banks are authorized to approve, without the prior approval of the CBB, applications related to remittance of the proceeds from the sale of real estate, up to the amount registered with the CBB. Effective September 7, 2007, ADs are authorized to approve, without prior reference to the CBB, the remittance of the proceeds from sale of real estate in Barbados involving transactions between two or more nonresidents and settled through their accounts abroad. Previously, proceeds from the realization of such investments equivalent to the amount of foreign currency brought in was allowed to be repatriated freely. Capital sums realized in excess of this amount could be repatriated on the basis of a calculated annual rate of return on the original foreign investment as follows: for the past 5 years, at 8%; for the 5 years immediately preceding the past 5 years, at 5%; and for any period preceding the past 10 years, at 4%. Amounts in excess of the sum so derived were restricted to remittances of B$30,000 a year.
Controls on personal capital transactions
LoansCommercial banks in Barbados may approve applications for the transfer of funds for personal loans, maintenance, and financial assistance from Barbados to CARICOM countries without prior approval from the CBB.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThe annual limit for gifts is B$10,000, effective, May 15, 2007 (previously, B$5,000), and B$100,000 for endowments, inheritances, and legacies.
Settlements of debts abroad by immigrantsYes.
Transfer of assets
Transfer abroad by emigrantsThe limit is B$100,000.
Transfer of gambling and prize earningsNonresidents may take out winnings.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadAny borrowing abroad by ADs to finance their domestic operations requires the approval of the CBB. ADs may assume short-term liability positions in foreign currencies for the financing of approved transfers with respect to both trade and nontrade transactions. ADs are required to sell 25% of their foreign currency borrowings to the CBB. ADs may approve borrowing by domestically owned parent companies from CARICOM and/or non-CARICOM sources to invest in the operation of their CARICOM subsidiaries and/or affiliates.
Maintenance of accounts abroadAccounts must be maintained with overseas correspondent banks.
Lending to nonresidents (financial or commercial credits)Exchange control permission is required.
Purchase of locally issued securities denominated in foreign exchangeInvestment in local securities requires CBB approval.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe reserve requirement ratio on deposits in foreign exchange is 21%, of which 16% must be maintained in stipulated government securities and 5% in cash.
Liquid asset requirementsA foreign currency reserve requirement is in place, calculated on the foreign currency deposits held at ADs, merchant banks, and trust and finance companies, to be deposited at the CBB. There is no liquidity requirement on deposits in foreign exchange. The liquid asset requirement for domestic currency deposits in commercial banks is 17%, of which 12% must be placed in government securities and 5% in cash.
Credit controlsn.a.
Differential treatment of deposit accounts held by nonresidentsNonresident deposit accounts are treated the same as resident deposit accounts. Differential treatment is based on whether the amount is in domestic currency.
Investment regulationsn.a.
Open foreign exchange position limitsLimits on working balances are set by the CBB. Those on other assets and liabilities are controlled through the Exchange Control Act. If a bank has a short position in forward transactions, it may maintain a long spot position equivalent to 10% of the short position in forward transactions or 5% of the gross spot liabilities, whichever is higher. If a bank does not have a short position in forward transactions, it may maintain a long spot position equivalent to 5% of the gross spot liabilities. Banks must report weekly to the Foreign Exchange and Export Credits Department of the CBB.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadYes.
Pension funds
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadApproval is required for investment of pension funds abroad. A 6% tax is levied on portfolio investments of pension funds with foreign companies that are not registered with the Barbados Supervisor of Insurance.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2007
Arrangements for payments and receiptsMay 15. Commercial banks were authorized to release foreign exchange up to B$10,000 for payments for imports to Barbados.
Nonresident accountsJanuary 1. Non-Barbadian nationals working in the offshore sector were classified as nonresidents.
Imports and import paymentsMay 15. ADs were authorized to release foreign exchange up to B$10,000 for imports to Barbados.
Payments for invisible transactions and current transfersMay 15. The limit on cash gifts was increased to B$10,000 from B$5,000 a person a year.
Capital transactions
Controls on capital and money market instrumentsJanuary 1. The CBB approval requirement for transactions in interest-based securities (i.e., corporate bonds, commercial paper, and government securities) denominated in regional currencies was eliminated. The BSE was allowed to approve securities listed under the BSE, and commercial banks were allowed to approve transactions in unlisted securities, provided these are denominated in regional currencies.
May 15. Authority was delegated to commercial banks to approve, without prior approval of the CBB, applications related to remittance of the proceeds from the sale of unlisted equity investments up to the amount registered with the CBB.
Controls on direct investmentJanuary 1. Commercial banks were allowed to approve investments in private and public unlisted securities in CARICOM countries.
Controls on liquidation of direct investmentMay 15. Commercial banks were allowed to approve, without prior approval of the CBB, applications related to remittance of the proceeds from the sale of unlisted equity investments up to the amount registered with the CBB.
Controls on real estate transactionsMay 15. Commercial banks were allowed to approve, without prior approval of the CBB, applications related to remittance of the proceeds from the sale of real estate up to the amount registered with the CBB.
September 7. ADs were allowed to approve, without prior reference to the CBB, the remittance of the proceeds from the sale of real estate in Barbados involving transactions between two or more nonresidents and settled through their accounts abroad.
Controls on personal capital transactionsMay 15. The annual limit on cash gifts was increased to B$10,000 from B$5,000.

BELARUS

(Position as of February 29, 2008)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: November 5, 2001.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
Other security restrictionsIn accordance with UN resolutions, there are restrictions on financial transactions with individuals and organizations associated with terrorist activities.
References to legal instruments and hyperlinksLaw of the Republic of Belarus No. 426-Z of July 19, 2000, on Anti–Money Laundering and Combating the Financing of Terrorism; Instruction on Procedures for the Suspension by Banks and Nonbank Financial and Credit Institutions of Certain Financial Transactions (Resolution of the Board of the NBRB No. 34 of March 13, 2006); www.nbrb.by/Legislation/ForExRegul.
Exchange Arrangement
CurrencyThe currency of Belarus is the Belarusian rubel.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe de jure exchange rate arrangement is a pegged exchange rate within horizontal bands. Since January 1, 2008, the National Bank of the Republic of Belarus (NBRB) has been maintaining the exchange rate of the Belarusian rubel within a symmetrical horizontal band vis-á-vis the dollar (±2.5%) relative to the exchange rate of the Belarusian rubel against the dollar at the start of the year. Before that date, in addition to the dollar, the Belarusian rubel maintained a de jure target vis-á-vis the Russian ruble within a horizontal band of ±4%. Since the rubel exchange rate vis-á-vis the dollar stayed within a 2% band, the de facto exchange rate arrangement remains a conventional pegged arrangement.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange marketThe purchase and sale of foreign currency for Belarusian rubels and for other foreign currency is carried out in the foreign exchange market through authorized banks. There is no parallel currency market.
Spot exchange marketMost of the transactions in the foreign exchange market are spot transactions.
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketBanks freely determine the exchange rates for the purchase and sale of foreign currency in their transactions with clients. The NBRB does not impose limits on the exchange rates at which foreign currency is purchased, sold, or converted in the foreign exchange market.
Forward exchange marketThe forward market is regulated by the same provisions as the spot market.
References to legal instruments and hyperlinksBanking Code of the Republic of Belarus; Statute of the NBRB; www.nbrb.by; Annual Monetary Policy Guidelines for the NBRB; www.nbrb.by/publications/ondkp.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements of transactions between residents and nonresidents are effected in any foreign currency for which the NBRB establishes an official exchange rate against the Belarusian rubel. Settlements in other currencies and Belarusian rubels are effected if provided for by intergovernmental agreements between the CBs of both parties to the settlement. Settlements in rubels between residents and nonresidents of countries with such arrangements may be effected through nonresident accounts in domestic banks or through correspondent accounts in rubels of nonresident banks with authorized banks in Belarus. Settlements with nonresidents in rubels are also allowed, whether or not there is an intergovernmental agreement, provided settlements are effected through a nonresident rubel account at a bank in Belarus.
Controls on the use of domestic currencyControls apply to the use of domestic currency for current and capital transactions and payments.
Use of foreign exchange among residentsSettlements between residents in foreign currency are prohibited, except in cases established by the foreign exchange law.
Payments arrangements
Bilateral payments arrangements
OperativeIn accordance with intergovernmental agreements between the NBRB and the CBs of the Baltic countries and most CIS countries (except Azerbaijan and Uzbekistan), settlements are effected in the national currencies of the parties involved and in freely convertible currencies. Some of the agreements also allow settlements in currencies of other CIS countries. Pursuant to a correspondent account agreement, the NBRB opened a correspondent account for the Interstate Bank and provides access to the NBRB’s automated system for interbank settlements. The Interstate Bank makes and receives payments in Belarusian rubels on its own behalf and on behalf of its clients.
Regional arrangementsBelarus has arrangements with Moscow and various other regions in the Russian Federation. Belarus participates in the Agreement on the Establishment of a Payment Union of CIS Member States.
Clearing agreementsAn agreement with Uzbekistan provides for the equal exchange of cotton for strategic goods from Belarus. There are also agreements with Moldova and Ukraine.
Barter agreements and open accountsYes.
Administration of controlThe exchange regulation authorities are the Council of Ministers and the NBRB; the exchange control authorities are the Council of Ministers, the NBRB, the State Control Committee, and the State Customs Committee. The exchange control agents are banks, customs offices, bodies of the state administration, and state organizations subordinate to the government of Belarus and oblast (local) governments.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents (other than banks) are required to have a license issued by the MOF to engage in transactions in precious metals and stones. Banking operations in precious metals and stones require a license issued by the NBRB; nonbanking operations in precious metals and stones are subject to licensing by the MOF.
On external tradeLicenses for residents to export precious metals and stones are issued by the Ministry of Trade (MOT) with the approval of the MOF.
Controls on exports and imports of banknotes
On exports
Domestic currencyResident and nonresident individuals may export up to the equivalent of 500 base units established in Belarus. A base unit was equal to 35,000 rubels at the end of 2007. Individuals may export rubels to the territory of customs union member states without restrictions on the amount and without mandatory declaration.
Foreign currencyResident and nonresident individuals may freely export the equivalent of $10,000; amounts greater than this require a permit. Exports of foreign currency exceeding the equivalent of $3,000 are subject to declaration. Exports of foreign currencies to countries participating in the customs union are unrestricted.
On imports
Domestic currencyResident and nonresident individuals may import up to the equivalent of 500 base units established in Belarus. Individuals may import rubels from the territory of customs union member states without restrictions on the amount and without declaration.
Foreign currencyThere are no limits on imports of foreign currency by resident and nonresident individuals; amounts in excess of $10,000 or its equivalent are subject to declaration.
References to legal instruments and hyperlinksLaw No. 226-3 on Foreign Exchange Regulation and Foreign Exchange Control of July 22, 2003; Regulation No. 72 on the Performance of Foreign Exchange Transactions, adopted April 30, 2004; Instruction No. 73/78 on the Procedure for the Importation, Exportation, and Remittance of Foreign Currency, Belarusian Rubels, Payment Documents in Foreign Currency, Documentary Securities in Belarusian Rubels, and Foreign Currency by Individuals across the Customs Border of the Republic of Belarus, adopted April 30, 2004; www.nbrb.by/Legislation/ForExRegul.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents may open foreign currency accounts at banks authorized to deal in foreign exchange without declaring the sources of their foreign exchange.
Held abroadYes.
Approval requiredNBRB approval is required for all residents (except banks) to open accounts in nonresident banks abroad, with the exception of accounts used to record credit transactions, accounts to service diplomatic and other official representative offices of Belarus, and accounts of representative offices of residents at banks of Eurasian Economic Community (EEC) member countries in the domestic currency of the EEC member on whose territory the account of the representative office is opened (notification is required). Banks may open accounts with nonresident banks with NBRB approval for the maintenance of representative offices or other structural offices. In all other instances, NBRB approval is not required for banks. Individuals residing abroad do not require approval to open accounts.
Accounts in domestic currency held abroadNBRB approval is required for residents to open domestic currency accounts abroad.
Accounts in domestic currency convertible into foreign currencyResident legal entities may purchase foreign currency without restrictions (1) to effect settlements with nonresidents with respect to current foreign exchange transactions (with the exception of foreign exchange transactions involving the provision of a loan to a nonresident for a term up to 180 days); (2) to effect settlements with nonresidents with respect to capital transactions (with the exception of foreign exchange transactions associated with capital outflows); (3) to pay for business travel and training expenses abroad; (4) to effect settlements with banks; and (5) to perform other transactions specified by the NBRB.
References to legal instruments and hyperlinksLaw No. 226-3 on Foreign Exchange Regulation and Foreign Exchange Control of July 22, 2003; Instruction No. 112 on the Procedure for the Performance of Foreign Exchange Transactions Involving Legal Entities and Individual Entrepreneurs, adopted July 28, 2005; Regulation No. 72 on the Performance of Foreign Exchange Transactions, adopted April 30, 2004; www.nbrb.by/Legislation/ForExRegul.
Nonresident Accounts
Foreign exchange accounts permittedNonresident legal entities may maintain foreign exchange accounts with authorized banks in Belarus. Transactions on a current (settlement) account in foreign currency of nonresident legal entities may be performed without restrictions based on the type of transaction (including for foreign exchange transactions associated with the purchase and sale of foreign currency). The source of the funds may be receipts from abroad; proceeds from the sale of goods and services in Belarus, including sales to residents; debt-service payments; interest earned on balances on the accounts; funds from other foreign exchange accounts of nonresidents in Belarus; and earnings from investments and from other operations with residents and nonresidents. These accounts may be debited for purchases of goods and services and for investments, as well as for payments to residents and nonresidents. Funds from these accounts may be freely repatriated or exchanged for rubels at the exchange rate applicable to the transactions (specifically at the official rate, at the purchase or sale rate, or at a rate established by agreement of the parties) through authorized banks, provided rubels are deposited with Belarusian banks.
Domestic currency accountsNonresident legal entities may open type T (settlement) and type S (investment in government securities) accounts. A nonresident may open a T account for foreign currency transactions only in the name of its representative office (branch). Transactions on a T account are performed without restriction, depending on the type of transaction (including transactions involving the purchase and sale of foreign currency). Funds from T accounts may be used to purchase foreign currency, goods and services, bonds, shares in enterprises, privatization vouchers, and as payment for current transactions. Funds in S accounts are used for investment in securities issued by the Belarusian government and the NBRB.
Convertible into foreign currencyBalances in T and S accounts may be converted into foreign currency.
Blocked accountsNo.
References to legal instruments and hyperlinksLaw No. 226-3 on Foreign Exchange Regulation and Foreign Exchange Control of July 22, 2003; Regulation No. 944 on the Procedure for the Investment of Funds by Nonresidents in Government Securities of the Republic of Belarus and NBRB Securities, adopted September 4, 1997; Instruction No. 112 on the Procedure for the Performance of Foreign Exchange Transactions Involving Legal Entities and Individual Entrepreneurs, adopted July 28, 2005; Regulation No. 72 on the Performance of Foreign Exchange Transactions, adopted April 30, 2004; www.nbrb.by/Legislation/ForExRegul.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsEffective March 6, 2007, no restrictions apply to advance payments from residents to nonresidents, up to $500,000 (previously, $3 million). Advance payments for goods or services exceeding the equivalent of $500,000 require one of the following: (1) a foreign bank guarantee or reserve LC, (2) an insurance agreement of voluntary insurance of entrepreneurial risk, (3) permission from the NBRB. Permission from the MOT is required for payments for imported services more than 90 days in advance of the performance of the services and for imported goods more than 60 days in advance of receipt. Permission from the MOT and approval of (registration with) the NBRB are required for advance payments of more than 180 days.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresLicenses are required for imports of the following goods: white sugar (only from the Russian Federation), insecticides, fungicides, herbicides, antigermination substances and regulators of plant growth, nonconsumable alcohol (products with an ethyl alcohol content of more than 7%, including perfumes and cosmetics, antiseptic medical and veterinary substances with an ethyl alcohol content of more than 80%), and alcoholic beverages.
Negative listThere are prohibitions against importation of production and consumption waste that cannot be processed or used in Belarus and on printed matter, audiovisual materials, and other media containing information that may harm the political or economic interests or security of Belarus or the health and morals of Belarusian citizens, and ozone-depleting substances and/or products containing ozone-depleting substances, as indicated in Annexes A and B to the Montreal Protocol on Substances That Deplete the Ozone Layer of September 16, 1987.
Licenses with quotasQuotas were abolished on tobacco products on October 18, 2007, and on alcoholic products, effective February 29, 2008.
Other nontariff measuresEffective June 30, 2007, quantitative restrictions on imports of seafood and fish were abolished, and an exclusive right to import seafood and fish was introduced. Previously, quantitative restrictions were applied to seafood and fish.
Import taxes and/or tariffsBelarus has abolished customs controls and customs processing of goods originating in Belarus and the Russian Federation and trading between Belarus and the Russian Federation. Goods originating from countries with which Belarus has a free trade agreement may be imported into Belarus free of duty. Regular (base) import duty rates apply to countries with MFN status. Import duties at twice the base rates are imposed on goods imported from countries that Belarus has not granted MFN status and on goods whose country of origin cannot be established. Seasonal customs duties apply to certain vegetables. Some consumer and industrial goods are subject to higher import customs duty rates. Indirect taxes (VAT and excise taxes) are collected on trade with all states, including the Russian Federation, according to the country-of-destination principle. VAT and excise taxes are imposed on imports into Belarus if required under law, and a customs processing fee is imposed. Precious metal ingots imported by banks for banking operations and by legal persons for sale to banks are exempt from customs duties and VAT; also exempt are sales by legal persons to banks, transactions between banks, and sales by banks to individuals.
State import monopolyNo.
References to legal instruments and hyperlinksLaw of the Republic of Belarus No. 226-Z of July 22, 2003, on Foreign Exchange Regulation and Foreign Exchange Control; Decree of the President of the Republic of Belarus No. 7 of January 4, 2000, on Improvement of the Procedure for the Performance and Monitoring of Foreign Trade Transactions; Instruction on the Performance of Advance Payments under Foreign Trade Agreements (Resolution of the Board of the NBRB No. 153 of August 28, 2003); Resolution of the Council of Ministers of the Republic of Belarus No. 1267 of September 27, 2006, on Licensing of Foreign Trade in Certain Types of Goods; www.nbrb.by/Legislation/ForExRegul/; Law of the Republic of Belarus No. 2151-XII of February 3, 1993, on the Customs Tariff; Resolution of the Council of Ministers of the Republic of Belarus No. 218 of March 18, 1997, on Establishment of Bans and Restrictions on the Shipment of Goods across the Customs Border of the Republic of Belarus; Resolution of the Council of Ministers of the Republic of Belarus No. 865 of June 28, 2002, on Approval of Import Customs Duty Rates; Order of the President of the Republic of Belarus No. 699 of December 31, 2007, on the Establishment of Import Customs Duty Rates; Order of the President of the Republic of Belarus No. 361 of June 30, 2007, on State Regulation of Importation of Fish, Seafood, and Processed Products Thereof; Decree of the President of the Republic of Belarus No. 4 of October 18, 2007, on State Regulation of Imports of Tobacco Raw Materials and Tobacco Products and Amendments and Addenda to Decree of the President of the Republic of Belarus No. 28 of December 17, 2002; Decree of the President of the Republic of Belarus No. 3 of February 29, 2008, on Several Measures for State Regulation of Production, Circulation, and Advertising of Beer, Alcoholic Products, and Tobacco Products.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports of goods and services must be repatriated within 90 days of the date of shipment, and proceeds from other exports of goods and services produced by residents under commission contracts must be repatriated within 180 days. Longer time periods require MOT permission and approval of (registration with) the NBRB. If the delay exceeds 180 days, permission is required from the MOT with approval of the NBRB.
Surrender requirementsMonetary resources from exports of goods and services and from the sale of goods and services to individuals are subject to surrender. The surrender requirement is 30%.
Surrender to authorized dealersThe sale of foreign exchange proceeds occurs through trading on exchanges.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesIn addition to export licenses, other restrictive measures apply to exports. These include the following: (1) Minimum export prices apply to raw and sawed timber; wooden railroad ties; salt; evaporated milk and cream; beef; pork; white sugar; casein; flax and flax fiber; cattle rawhide; mink, fox, and Arctic fox skins; and mineral fertilizers. (2) Only certain business entities may export certain types of woods. (3) There are prohibitions against exports of medical raw materials that grow in the wild; plants and animals of types listed in the Red Book of the Republic of Belarus and their parts and derivatives (except for those cultivated or raised in captivity); historical and cultural valuables; scrap and waste of ferrous, nonferrous, and precious metals for industrial use, including semifinished and prefabricated goods, by individuals; printed matter, audiovisual materials, and other media containing information that may harm the political or economic interests or security of Belarus or the health and morals of its citizens; and ozone-depleting substances and/or products containing ozone-depleting substances indicated in Annexes A and B to the Montreal Protocol on Substances That Deplete the Ozone Layer of September 16, 1987.
Without quotasExports of the following goods are effected on the basis of licenses issued by the MOT with the approval of relevant government authorities: cereals, corn, flax seeds and rapeseeds, raw amber, pyrites, ores and concentrates of precious metals, certain chemical elements, precious metals in a colloidal state, alloys of precious metals, oil and oil products, rawhide and cattle hides, pearls, precious natural stones, various articles made of precious metals, certain base metals, and amber and products thereof.
With quotasLicenses from the MOT are required for exports of the following goods: fabrics made of wool yarn; cotton thread, yarn, and fabric; thread from chemical fibers; yarn and fabric made of artificial and synthetic fibers and blended fibers; cable and rope products; terry cloth towels and similar terry cloth fabrics; interwoven and interlock fabrics; socks and hosiery articles; knitted clothing and accessories; textile clothing and accessories; blankets, throws, and bed, table, bath, and kitchen linens; dishcloths; curtains, window shades, and bedspreads; sacks; paper bags; floor cleaning fabrics; and sets consisting of fabrics and yarn (only for goods to be exported to the EU and Turkey, in accordance with quotas set by the EU and Turkey); and mineral fertilizers and ferrous and nonferrous metal waste, scrap, and, effective August, 10, 2007, exports of sugar and products containing sugar to the Russian Federation.
Export taxesExports of goods, including to the Russian Federation, are subject to VAT at a zero rate and are exempt from excise taxes. Export customs duties are applied to a restricted list of raw materials when they are exported to countries outside the EEC. Export customs duties are collected on petroleum products exported outside Belarus and the Russian Federation.
References to legal instruments and hyperlinksLaw of the Republic of Belarus No. 226-Z of July 22, 2003, on Foreign Exchange Regulation and Foreign Exchange Control; Decree of the President of the Republic of Belarus No. 7 of January 4, 2000, on Improvement of the Procedure for the Performance and Monitoring of Foreign Trade Transactions; Decree of the President of the Republic of Belarus No. 452 of July 17, 2006, on Mandatory Surrender of Foreign Currency; Resolution of the Council of Ministers of the Republic of Belarus No. 1267 of September 27, 2006, on Licensing of Foreign Trade in Certain Types of Goods; www.nbrb.by/Legislation/ForExRegul; Decree of the President of the Republic of Belarus No. 717 of December 5, 2006, on Export Customs Duty Rates for Timber and Products Manufactured Therefrom; Decree of the President of the Republic of Belarus No. 60 of January 31, 2007, on Export Customs Duty Rates; Resolution of the Council of Ministers of the Republic of Belarus No. 218 of March 18, 1997, on Establishment of Bans and Restrictions on the Shipment of Goods across the Customs Border of the Republic of Belarus; Resolution of the Council of Ministers of the Republic of Belarus No. 864 of June 28, 2002, on Approval of Export Customs Duty Rates; Resolution of the Ministry of the Economy of the Republic of Belarus No. 256 of December 2, 2002, on Approval of a List of Minimum Prices for Certain Types of Exports Produced in the Republic of Belarus; Resolution of the Council of Ministers of the Republic of Belarus No. 1012 of August 10, 2007, on Licensing of Sugar Exports to the Russian Federation; Order of the President of the Republic of Belarus No. 700 of December 31, 2007, on the Establishment of Export Customs Duty Rates; Resolution of the Council of Ministers of the Republic of Belarus No. 366 of March 24, 2007, on Establishment of Export Customs Duty Rates.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Investment-related payments
Prior approvalEffective February 26, 2008, payments associated with the leasing of real estate outside Belarus are subject to notification to the NBRB (under foreign exchange legislation, these transactions are considered capital transactions). Previously, these payments required permission from the NBRB.
References to legal instruments and hyperlinksLaw No. 226-3 on Foreign Exchange Regulation and Foreign Exchange Control of July 22, 2003; Regulation No. 72 for the Performance of Foreign Exchange Transactions, adopted April 30, 2004; www.nbrb.by/Legislation/ForExRegul.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from exports of services must be repatriated by legal persons within 90 days, and proceeds from exports of services by residents under commission contracts must be repatriated within 180 days. MOT permission is required for deferrals of 90 to 180 days. Permission from the MOT and approval of (registration with) the NBRB are required for periods exceeding 180 days.
Surrender requirementsMonetary resources from exports of goods and services and from the sale of goods and services to individuals are subject to surrender requirements. The surrender requirement is 30% of proceeds.
Surrender to authorized dealersThe sale of foreign exchange proceeds occurs through trading on exchanges.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksLaw No. 226-3 on Foreign Exchange Regulation and Foreign Exchange Control of July 22, 2003; Decree No. 311 of the President of the Republic of Belarus on Improvement of the Foreign Exchange Surrender Procedure, adopted June 2, 1997; Decree No. 7 of the President of the Republic of Belarus on Improvement of the Procedure for the Performance and Monitoring of Foreign Trade Transactions, adopted January 4, 2000.
Capital Transactions
Controls on capital transactionsCapital transactions by residents may require NBRB permission, registration, or notification or may in some cases be made freely. Most capital transactions by residents associated with outflows of capital are subject to NBRB permission or registration, whereas transactions involving inflows of capital are generally subject to notification to the NBRB. Capital transactions by nonresidents are not restricted.
The legislation governing the securities market does not define “securities of a participating nature” or “collective investment securities.”
Repatriation requirementsIn case of a delay in payment of more than 180 days, a deferral of receipt of proceeds from export transactions must be granted by the MOT, with approval of the NBRB (under foreign exchange legislation, these transactions are considered capital transactions).
Surrender requirements
Surrender to authorized dealersThe sale of foreign exchange proceeds occurs through trading on exchanges.
Controls on capital and money market instrumentsThe government and the NBRB establish quotas and procedures for clearing the securities of foreign issuers for circulation in Belarus and quotas and procedures for clearing securities of issuers under the jurisdiction of Belarus for circulation outside Belarus. State registration of securities is required with the Securities Department of the MOF, with the exception of government securities and securities of the NBRB for placement on the domestic market. The NBRB regulates the issuance of certificates of deposit and saving certificates by banks. These may be issued in domestic currency. Banks may not export bank certificates. The Council of Ministers of the Republic of Belarus regulates procedures for the issuance, circulation, and redemption of other types of securities.
On capital market securities
Shares or other securities of a participating naturePurchase or sale of Belarusian issuers’ shares by nonresidents does not require permission from the securities market regulator.
Purchase locally by nonresidentsThe purchase of shares of Belarusian issuers by nonresidents does not require a license from the NBRB or the securities market regulator.
Sale or issue locally by nonresidentsA permit from the NBRB is not required for these transactions. A certificate of registration is required for the placement of securities in Belarus.
Purchase abroad by residentsA permit from the NBRB and a registration certificate for the placement of foreign securities in the domestic market is required for these transactions.
Sale or issue abroad by residentsForeign placement of shares of domestic issuers does not require permission from the securities market regulator. Notification of the NBRB is required.
Bonds or other debt securities
Purchase locally by nonresidentsThe purchase of bonds of Belarusian issuers by nonresidents does not require a license from the NBRB or the securities market regulator.
Sale or issue locally by nonresidentsA permit from the NBRB is not required for these transactions. It is, however, necessary to obtain a certificate of registration for the placement of bonds in Belarus.
Purchase abroad by residentsA permit from the NBRB and a registration certificate are required for the placement of foreign securities in the domestic market.
Sale or issue abroad by residentsForeign placement of bonds of domestic issuers does not require a permit from the securities market regulator. Notification of the NBRB is required.
On money market instruments
Purchase locally by nonresidentsAn NBRB permit is not required.
Sale or issue locally by nonresidentsAn NBRB permit is not required.
Purchase abroad by residentsAn NBRB permit is required.
Sale or issue abroad by residentsNBRB notification is required.
On collective investment securities
Purchase locally by nonresidentsAn NBRB permit is not required.
Sale or issue locally by nonresidentsAn NBRB permit is not required.
Purchase abroad by residentsAn NBRB permit is required.
Sale or issue abroad by residentsNBRB notification is required.
Controls on derivatives and other instruments
Purchase locally by nonresidentsAn NBRB permit is not required.
Sale or issue locally by nonresidentsAn NBRB permit is not required.
Purchase abroad by residentsAn NBRB permit is required.
Sale or issue abroad by residentsNBRB notification is required.
Controls on credit operations
Commercial credits
By residents to nonresidentsApproval is required for the deferral of receipt of proceeds from exports of goods and services and for the deferral of receipt of imports of goods and services that have been paid for. For deferrals of 90 to 180 days, the permit is issued by the MOT; for deferrals of more than 180 days, a permit from the MOT and approval of (registration with) the NBRB are required. The same procedures apply to advance payments.
Financial credits
By residents to nonresidentsAn NBRB permit is required if the credit is for longer than 180 days.
To residents from nonresidentsAn NBRB permit is required for credits longer than 180 days if one of the following conditions is present: (1) Effective February 26, 2008, a credit agreement with a nonresident nonbank lender establishes an obligation to make additional payments (previously, these credits were subject to notification). (2) Effective February 26, 2008, the interest rate is higher than 12% (previously, 11%) for dollars or euros, or higher than 3% of the relevant CB refinancing rate for other currencies. (3) The funds are to be used to pay the obligations of a resident borrower, bypassing the resident’s account. (4) Repayment is to be made from a source other than the resident borrower’s account. (5) The credit is provided by a resident of an offshore zone. For credits longer than 180 days, notification of the NBRB is required.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsEffective February 26, 2008, the provision by residents to nonresidents of guarantees and sureties is subject to NBRB permission. Previously, these transactions required only notification.
To residents from nonresidentsNotification of the NBRB is required.
Controls on direct investment
Outward direct investmentAn NBRB permit is required.
Inward direct investmentA permit from the NBRB is not required. Foreign investments must be registered with the relevant local governments. Financial institutions must also register them with the NBRB. Insurance institutions, including those with foreign investments, must also be registered with the MOF. Certain activities require special approval (license). When establishing an enterprise with foreign investment, the proportion of a foreign investor’s share is not restricted, except for shares in insurance companies, which may not exceed 49%. Foreign investors’ share in the authorized capital of all insurance organizations must not exceed 30%.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsAn NBRB permit is required. Effective February 26, 2008, payments associated with the leasing of real estate outside Belarus are subject to NBRB notification (previously, permission from the NBRB was required).
Purchase locally by nonresidentsNBRB notification is required.
Sale locally by nonresidentsAn NBRB permit is not required for these transactions.
Controls on personal capital transactions
Loans
By residents to nonresidentsAn NBRB permit is required for loans with maturities of more than 180 days.
References to legal instruments and hyperlinksLaw No. 226-3 on Foreign Exchange Regulation and Foreign Exchange Control of July 22, 2003; Regulation No. 72 on the Performance of Foreign Exchange Transactions, adopted April 30, 2004; Resolution of the Council of Directors of the NBRB No. 178 of July 12, 2006, on Interest Rate Ceilings for Credits (Loans) from Nonresidents above Which a Permit from the NBRB Is Required; Law of the Republic of Belarus of March 12, 1992, on Securities and Stock Markets; Resolution of the MOF of the Republic of Belarus No. 112 of September 12, 2006; Resolution of the Securities Committee under the Council of Ministers of the Republic of Belarus No. 09/P of April 11, 2006; Order of the President of the Republic of Belarus No. 277 of April 28, 2006; Resolution of the Council of Ministers of the Republic of Belarus and the NBRB No. 1753/22 of December 29, 2006; Resolution of the Council of Directors of the NBRB No. 42 of February 14, 2008, on the Level of Interest Rates in Foreign Exchange Transactions Associated With Capital Movements Performed by Residents Above Which a Permit from the NBRB Is Required.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsBanks and nonbank financial and credit institutions with an appropriate banking license may purchase and sell foreign currency. Banks may perform these transactions without restriction within the limits of their open foreign exchange position. A banking license is required to engage in banking operations.
Maintenance of accounts abroadA permit from the NBRB is required to open accounts for the maintenance of representative offices and branches of banks.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsThe reserve requirement for domestic currency deposits of legal entities and foreign currency deposits is 8%. The reserve requirement for domestic currency deposits of individuals is 4.5%. There are no reserve requirements for nonresident banks.
Liquid asset requirementsn.a.
Interest rate controlsn.a.
Credit controlsn.a.
Differential treatment of deposit accounts held by nonresidentsn.a.
Investment regulations
Abroad by banksNBRB approval is required.
In banks by nonresidentsThe foreign exchange legislation does not restrict these transactions.
Open foreign exchange position limitsThe following limits based on a bank’s equity capital have been established on open foreign exchange positions: (1) an overall open foreign exchange position of 20%; (2) an open foreign exchange position of 10% for each type of foreign currency on balance-sheet accounts and off-balance-sheet accounts; and (3) an open foreign exchange position of 10% on forward transactions for each foreign currency. Limits are computed as a whole by type of foreign currency regardless of whether assets or liabilities belong to a resident or nonresident.
Provisions specific to institutional investorsLimits may be established by the Council of Ministers and the NBRB.
Insurance companiesInsurance companies are required to obtain permission from the MOF to (1) increase the amount of their authorized capital using funds from foreign investors and/or their subsidiaries and (2) transfer shares in their authorized capital to foreign investors and/or their subsidiaries. The share of foreign investors in the authorized capital of an insurance company may not exceed 49%, and foreign investors’ share of the authorized capital of all insurance organizations must not exceed 30%.
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadThe establishment of separate subdivisions outside Belarus by insurance companies or insurance brokers and the participation in the establishment of foreign insurance companies or insurance brokers require permission from the MOF in accordance with legislation.
Limits (min.) on investment portfolio held locallyYes.
Currency-matching regulations on assets/liabilities compositionn.a.
Pension fundsn.a.
Investment firms and collective investment fundsControls are administered by the Securities Department of the MOF. The legislation provides for the establishment of investment funds; however, there are no investment funds in the country at this time. Specialized investment funds that handled registered “property” privatization vouchers ceased operations on May 1, 2004. The financial assets of an investment fund (cash and government securities) must be equivalent to at least €500,000.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroad.n.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinksLaw of the Republic of Belarus No. 226-Z of July 22, 2003, on Foreign Exchange Regulation and Foreign Exchange Control; www.nbrb.by/Legislation/ForExRegul.
Changes during 2007
Imports and import paymentsMarch 6. The ceiling for unrestricted advance payments by residents to nonresidents was decreased from the equivalent of $3 million to $500,000.
June 30. Quantitative restrictions on imports of seafood and fish were abolished and an exclusive right to import seafood and fish was introduced.
October 18. Licensing of tobacco products and quotas on tobacco products were abolished.
Exports and export proceedsAugust 10. Exports of sugar and products containing sugar to the Russian Federation became subject to licenses from the MOT.
Changes during 2008
Exchange arrangementJanuary 1. The NBRB began targeting the rubel to the exchange rate of the dollar within the earlier band of ±2% around central parity.
Imports and import paymentsFebruary 29. Quotas on alcoholic products were abolished.
Payments for invisible transactions and current transfersFebruary 26. Payments associated with the leasing of real estate outside Belarus became subject to NBRB notification (previously, permission from the NBRB was required).
Capital transactions
Controls on credit operationsFebruary 26. The procedure was changed from NBRB notification to NBRB permission for (1) credits obtained by residents from nonbank nonresidents for a period of more than 180 days if the credit agreement establishes an obligation to make additional payments; and (2) guarantees and sureties provided by residents to nonresidents.
February 26. The interest rate ceiling above which credits to residents are subject to NBRB approval was raised to 12% (previously, 11%) for dollars and euros.
Controls on real estate transactionsFebruary 26. Payments associated with the leasing of real estate outside Belarus became subject to NBRB notification (previously, permission from the NBRB was required).

BELGIUM

(Position as of December 31, 2007)

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, 2007.
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)In accordance with EU Council regulations, certain restrictions are maintained on the making of payments and transfers for current international transactions. These include the freezing of funds and economic resources of certain individuals of Belarus, Bosnia and Herzegovina, Côte d’Ivoire, Croatia, and the former Federal Republic of Yugoslavia; certain individuals and entities of the Democratic Republic of the Congo, the Islamic Republic of Iran, Iraq, the Democratic People’s Republic of Korea, Lebanon, Liberia, Myanmar, Sudan, the Syrian Arab Republic, and Zimbabwe; and persons and entities associated with Osama bin Laden, Al-Qaida, the Taliban, and certain other persons, groups, and entities, with a view to combating terrorism.
Other security restrictionsYes.
References to legal instruments and hyperlinksCouncil Regulation (EC) No. 765/2006, as amended; Council Regulation (EC) No. 1763/2004, as amended; Council Regulation (EC) No. 1183/2005, as amended; Council Regulation (EC) No. 560/2005, as amended; Council Regulation (EC) No. 1210/2003, as amended; Council Regulation (EC) No. 305/2006, as amended; Council Regulation (EC) No. 872/2004, as amended; Council Regulation (EC) No. 817/2006, as amended; Council Regulation (EC) No. 1184/2005, as amended; Council Regulation (EC) No. 881/2002, as amended; Council Regulation (EC) No. 2580/2001, as amended; Council Regulation (EC) No. 2488/2000, as amended; Council Regulation (EC) No. 314/2004, as amended.
Exchange Arrangement
CurrencyThe currency of Belgium is the euro.
Exchange rate structureUnitary.
Classification
Independently floatingBelgium participates in a currency union with 14 other members of the EMU and has no separate legal tender. The euro, the common currency, floats freely and independently against other currencies. Effective January 1, 2007, the exchange rate 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.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketYes.
Forward exchange marketBanks may engage in spot and forward exchange transactions in any currency, and they may deal among themselves and with residents and nonresidents in foreign notes and coins.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currencyFor anti-money-laundering reasons, the sale price of real estate may be paid only by means of a bank transfer or check, except for an amount not exceeding 10% of the sale price and as long as this amount is not higher than €15,000. The price of a sale by a merchant for a product whose total value is equal to or greater than €15,000 may not be paid in cash.
Payments arrangementsNo.
Administration of controlNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesEffective June 15, 2007, in accordance with EC Regulation No. 1889/2005, cash controls have been implemented based on a mandatory declaration system for amounts of cash entering or leaving the EU with a value of €10,000 or more. Travelers entering or leaving the EU and carrying more than € 10,000 are required to make a declaration to the relevant authorities of the member country through which the traveler is entering or leaving the EU. The authorities must keep a record of such information and report it to their national financial intelligence unit. The obligation to declare is not fulfilled if the traveler makes no declaration or if the information provided is incorrect or incomplete. In order to check compliance with the regulation, the national authorities have the right to search natural persons, their baggage, and their means of transportation. In the event of failure to comply with the declaration obligation, cash may be confiscated.
The EC regulation requires member countries to impose penalties for failure to comply with the declaration obligation. If there are indications that cash is related to illegal activity, authorities of one member country may exchange information with authorities in other member countries. Under the framework of existing agreements on mutual administrative assistance, information obtained under the EC regulation may also be communicated to a third country in compliance with relevant national and Community provisions on the transfer of personal data to third countries. The EC regulation does not apply to physical cross-border transportation from one EU member state to another (i.e., intra-Community transportation). Such transportation is not considered “cross-border” for the purposes of the EC regulation; the EC regulation only harmonizes the system for the EU’s external borders.
On exportsYes.
On importsYes.
References to legal instruments and hyperlinksArticles 10bis and 10ter of the Law of January 11, 1993, Preventing the Use of the Financial System for Purposes of Laundering Money and Terrorism Financing; www.juridat.be; Royal Decree of October 5, 2006, on Certain Measures Relating to the Control of Cross-Border Movement of Cash (Belgian Official Gazette, 27/10/2006); Regulation (EC) No. 1889/2005 of October 26, 2005, on Controls on Cash Entering or Leaving the Community.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadControls apply to deposits held with financial institutions not supervised by the authorities of an EU country if these deposits are to form part of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing insurance companies’ investment of the assets that cover their technical provisions.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksLaw of March 22, 1993, on the Legal Status and Supervision of Credit Institutions; www.juridat.be. Royal Decree of February 22, 1991, on General Regulation of the Supervision of Insurance Companies.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsThese accounts are affected by international security restrictions. The accounts held in the names of the Taliban and terrorist organizations are still blocked, as are accounts of certain officials of Zimbabwe and certain persons linked with Liberia.
References to legal instruments and hyperlinksTaliban and Terrorist Organizations: Council Regulation (EC) No. 881/2002 of May 27, 2002, Imposing Certain Specific Restrictive Measures Directed against Certain Persons and Entities Associated with Osama bin Laden, the Al-Qaida Network, and the Taliban, and repealing Council Regulation (EC) No. 467/2001 Prohibiting the Exportation of Certain Goods and Services to Afghanistan, Strengthening the Flight Ban, and Extending the Freezing of Funds and other Financial Resources with respect to the Taliban of Afghanistan; Zimbabwe: Council Regulation (EC) No. 314/2004, dated February 19, 2004, Concerning Certain Restrictive Measures with Respect to Zimbabwe; Liberia: Council Regulation (EC) No. 872/2004 dated April 29, 2004, Concerning Further Restrictive Measures in Relation to Liberia; http://europa.eu.int.
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 listIndividual licenses are required for certain imports from some non-EU countries, including many textile and steel products, diamonds, and weapons. All other products are free of license requirements.
Licenses with quotasAlong with other EU countries, the Belgium-Luxembourg Economic Union applies quotas to a number of textile products from Belarus, China, the Democratic People’s Republic of Korea, Kosovo, and Montenegro and to a number of steel products from Kazakhstan, the Russian Federation, and Ukraine.
Import taxes and/or tariffsBelgium applies the Common Import Regime of the EU to imports of most agricultural and livestock products from non-EU countries.
State import monopolyYes.
References to legal instruments and hyperlinksCouncil Regulation (EC) No. 517/94 on Common Rules for Imports of Textile Products from Certain Third Countries Not Covered by Bilateral Agreements; http://europa.eu.int.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are required for only a few products (mostly of a strategic nature), for weapons, and for diamonds.
Without quotasYes.
Export taxesNo.
References to legal instruments and hyperlinksCouncil Regulation (EC) No. 1334/2000, Setting up a Community Regime for the Control of Exports of Dual-Use Items and Technology; http://europa.eu.int.
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 abroad by residentsControls apply to the acquisition of (1) securities not traded on a regulated market and negotiable within a period exceeding three months, except securities issued by financial institutions headquartered in the EU (for private pension funds only with the approval of the occupational pension supervisor), if these assets are to form part of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund; (2) securities not traded on a regulated market, negotiable within a period exceeding three months, and issued by financial institutions headquartered in the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (3) securities not traded on a regulated market and negotiable within a period not exceeding three months, except securities issued by financial institutions headquartered in the EU, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; and (4) securities not traded on a regulated market, negotiable within a period not exceeding three months, and issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing investments by insurance companies for the assets that cover their technical provisions.
Bonds or other debt securities
Purchase abroad by residentsControls apply to the acquisition of (1) securities not traded on a regulated market and negotiable within a period exceeding three months, except securities issued by financial institutions headquartered in the EU (for private pension funds only with the approval of the occupational pension supervisor), if these assets are to form part of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund; (2) securities not traded on a regulated market, negotiable within a period exceeding three months and issued by financial institutions headquartered in the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (3) securities not traded on a regulated market and negotiable within a period not exceeding three months, except securities issued by financial institutions headquartered in the EU, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; and (4) securities not traded on a regulated market, negotiable within a period not exceeding three months and issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing investments by insurance companies for the assets that cover their technical provisions.
On money market instruments
Purchase abroad by residentsControls apply to the acquisition of money market securities not traded on (1) a regulated foreign financial market and negotiable within a period exceeding three months, except securities issued by financial institutions headquartered in the EU (for private pension funds only with the approval of the occupational pension supervisor), if these assets are to form part of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund; (2) a regulated foreign financial market, issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (3) a regulated market and negotiable within a period not exceeding three months, except securities issued by financial institutions headquartered in the EU, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; and (4) a regulated market and negotiable within a period not exceeding three months, issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing investments by insurance companies for the assets that cover their technical provisions.
On collective investment securities
Purchase abroad by residentsControls apply to the acquisition of securities issued by collective investment funds not regulated by EU authorities if these assets are to form more than 10% of the cover of the technical reserves of an insurance company. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing investments by insurance companies for the assets that cover their technical provisions.
Controls on derivatives and other instruments
Purchase abroad by residentsControls apply to the purchase of or swap operations in instruments and claims not traded on a regulated foreign financial market (1) negotiable within a period exceeding three months, except liabilities of financial institutions headquartered in the EU (for private pension funds only with the approval of the occupational pension supervisor), if these assets are to form part of the cover of the technical reserves of an insurance company or of the assets representative of the liabilities of a private pension fund; (2) negotiable within a period exceeding three months and issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (3) negotiable within three months, except liabilities of financial institutions headquartered within the EU, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; and (4) issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing investments by insurance companies for the assets that cover their technical provisions.
Controls on credit operations
Financial credits
By residents to nonresidentsControls apply to credits and loans granted to (1) nonresident borrowers, other than financial institutions headquartered in the EU, with a residual maturity exceeding three months, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; and (2) nonresident financial institutions headquartered in the EU, with a residual maturity exceeding three months, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing investments by insurance companies for the assets that cover their technical provisions.
Controls on direct investment
Inward direct investmentNo authorization is required for inward direct investment in Belgium, except for the acquisition of Belgian flag vessels by shipping companies that do not have their principal office in Belgium and investment by non-EU nationals in accounting and legal services.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksRoyal Decree of February 22, 1991, on General Regulation of the Supervision of Insurance Undertakings.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsNo.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsControls apply to the acquisition of (1) capital market securities not traded on a regulated market and negotiable within a period exceeding three months, except securities issued by financial institutions headquartered in the EU, if these assets are to form part of the cover of the technical reserves of an insurance company; (2) capital market securities not traded on a regulated market, negotiable within a period exceeding three months, and issued by financial institutions headquartered in the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (3) capital market securities not traded on a regulated market and negotiable within a period not exceeding three months, except securities issued by financial institutions headquartered in the EU, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; (4) capital market securities not traded on a regulated market, negotiable within a period not exceeding three months, and issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (5) money market securities not traded on a regulated foreign financial market and negotiable within a period exceeding three months, except securities issued by financial institutions headquartered in the EU, if these assets are to form part of the cover of the technical reserves of an insurance company; (6) money market securities not traded on a regulated foreign financial market and issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (7) money market securities not traded on a regulated market and negotiable within a period not exceeding three months, except securities issued by financial institutions headquartered in the EU, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; (8) money market securities not traded on a regulated market, negotiable within a period not exceeding three months, and issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; and (9) securities issued by collective investment funds not regulated by EU authorities, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company. Royal Decree of February 22, 1991, on general regulation of the supervision of insurance companies contains detailed rules governing investments by insurance companies for the assets that cover their technical provisions. It includes the principles that govern the investment activity, details on the localization of the assets, categories of assets in which investments can be made, and quantitative limits for a number of these categories and the valuation rules for these assets.
Limits (max.) on investment portfolio held abroadControls apply to credits and loans granted to (1) nonresident borrowers, other than financial institutions headquartered in the EU and with a residual maturity exceeding three months, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; (2) nonresident financial institutions headquartered in the EU and with a residual maturity exceeding three months, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; and (3) swap operations in instruments and claims not traded on a regulated foreign financial market (a) negotiable within a period exceeding three months, except liabilities of financial institutions headquartered in the EU, if these assets are to form part of the cover of the technical reserves of an insurance company; (b) negotiable within a period exceeding three months and issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company; (c) negotiable within three months, except liabilities of financial institutions headquartered within the EU, if these assets are to form more than 10% of the cover of the technical reserves of an insurance company; and (d) issued by financial institutions headquartered within the EU, if these assets are to form more than 20% of the cover of the technical reserves of an insurance company. Assets covering the liabilities of an insurance company may not be held outside the EEA, unless the National Bank of Belgium (NBB) or a credit institution or investment firm governed by the law of a EU member country and authorized to carry out the activity of a depository attests that it holds these covering assets at a credit institution or investment firm established outside the EEA, the authorization of which the Banking, Finance and Insurance Commission (CBFA) deems equivalent to its own.
Currency-matching regulations on assets/liabilities compositionThese regulations are maintained, but the introduction of the euro has considerably reduced their significance. The EU allows its member countries to maintain such regulations.
Pension funds
Limits (max.) on securities issued by nonresidentsControls apply to the acquisition of financial instruments (capital and money market securities and derivative instruments) not traded on a regulated market, and negotiable within a period exceeding three months, except securities issued by financial institutions headquartered in the EEA, with the approval of the supervisory authority, if these assets are to form part of the assets covering the liabilities of a private pension fund.
Limits (max.) on investment portfolio held abroadAssets covering the liabilities of a pension fund may not be held outside the EEA, unless the NBB or a credit institution or investment firm governed by the law of an EU member country and authorized to carry out the activity of a depository attests that it holds these covering assets at a credit institution or investment firm established outside the EEA whose authorization the CBFA deems equivalent to its own.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionAssets covering the liabilities of a pension fund must be denominated in a currency that is convertible without restriction into euros, except for the currency of the liabilities, up to the amount of the latter.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksRoyal Decree of January 12, 2007, on the Prudential Supervision of Institutions for Occupational Retirement Provision: www.cbfa.be/eng/bpv/wg/pdf/rd_bdv.pdf; Royal Decree of February 22, 1991, on General Regulation of the Supervision of Insurance Companies.
Changes during 2007
Exchange arrangementJanuary 1. The exchange rate 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 receiptsJune 15. In accordance with EC Regulation No. 1889/2005, cash controls were implemented based on a mandatory declaration system for amounts of cash entering or leaving the EU with a value of €10,000 or more.

BELIZE

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: June 14, 1983.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasonsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Belize is the Belize dollar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe Belize dollar is pegged to the U.S. dollar, the intervention currency, at the rate of BZ$1 per US$0.5. The Central Bank of Belize (CBB) quotes daily rates for the Canadian dollar, the pound sterling, and a number of currencies of CARICOM member countries.
Exchange taxA stamp duty of 1.25% is levied on all conversions from the Belize dollar to a foreign currency.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketCommercial banks are allowed to buy and sell foreign exchange at the official rate. Since the closing of exchange houses, all transactions in foreign exchange have to be conducted through ADs (i.e., commercial banks, the postmaster general, the accountant general, and Belize Global Travel Services).
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsEPZ businesses may use only U.S. dollars for all transactions except payments for labor, which may be made in domestic currency.
Controls on the use of domestic currencyControls apply to the use of domestic currency for current and capital transactions and payments.
Use of foreign exchange among residentsResidents with earnings in foreign exchange may pay their taxes, utility bills, and other expenses in U.S. dollars.
Payments arrangements
Regional arrangementsBelize is a member of CARICOM.
Clearing agreementsBelize participates in the CMCF.
Administration of controlThe CBB is responsible for administering exchange controls, which apply to transactions with all countries. Authority covering a wide range of operations is delegated to commercial banks in their capacity as ADs. All applications for foreign exchange processed by ADs are regularly forwarded to the CBB for audit and record keeping. Capital transactions are subject to CBB approval.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On domestic ownership and/or tradeResidents may not hold monetary gold except with specific authorization from the CBB.
On external tradeMonetary gold may not be imported or exported without the approval of the CBB.
Controls on exports and imports of banknotes
On exports
Domestic currencyEach traveler may take abroad up to BZ$500. Amounts beyond this limit require the approval of the CBB, which is liberally granted when justified.
Foreign currencyThe amount of foreign currency that each resident traveler may take abroad is limited. Nonresidents may take out the equivalent of BZ$500 or the amount imported.
On imports
Domestic currencyEach traveler may bring in BZ$500.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyDomestic commercial banks are authorized to open foreign currency accounts for residents. The CBB reserves the right to prohibit specific accounts.
Approval requiredYes.
Held abroadForeign currency accounts held abroad must be approved by the CBB.
Approval requiredYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedOnly international banks may maintain foreign currency accounts for nonresidents.
Domestic currency accountsNonresidents are allowed to have domestic currency accounts with domestic commercial banks. These accounts may be credited with proceeds from the sale of foreign currency.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetYes.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsPrepayments for imports require authorization from the CBB.
Letters of creditYes.
OtherYes.
Import licenses and other nontariff measures
Negative listFor reasons of health, standardization, and protection of domestic industries, import licenses from the Ministry of Industry are required for a number of goods, mostly food and agricultural products and certain household and construction products; such licenses are granted liberally.
Import taxes and/or tariffsCustoms duties corresponding to the fourth phase of the CARICOM CET range from 5% to 20%, with a number of items (particularly agricultural inputs) entering duty-free. Imports by most of the public sector and certain nonprofit entities, imports of an emergency or humanitarian nature, and goods for reexport are exempt from import duties; goods originating from the CARICOM area are also exempt. Some items are subject to revenue-replacement duties ranging from 5% to 25%. An environmental tax of 2% is levied on a broad range of imports. Specific duties and surcharges apply to certain products.
State import monopolyThe Belize Marketing Board has an import monopoly on rice, potatoes, onions, and carrots.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirements
Surrender to the central bankThe CBB requires the direct surrender of sugar export proceeds.
Surrender to authorized dealersExport proceeds must be surrendered to ADs no later than six months after the date of shipment, unless otherwise directed by the CBB.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExport licenses are required for live animals, excluding pets; fish, crustaceans, and mollusks, excluding agricultural species; lumber and logs; beans; citrus fruits; and sugar.
Export taxes
Other export taxesTransshipments are subject to a 1.5% customs administration fee.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related paymentsThere are controls on the payment of commissions.
Prior approvalFor the payment and transfer of commissions, approval is granted by the CBB, subject to clearance by the Commissioner of Income Tax (CIT).
Investment-related payments
Prior approvalPayments of interest are subject to CBB approval and clearance by the CIT; these require a copy of the loan agreement and amortization schedule and proof of the loan disbursement. For transfer of profits and dividends, an income statement and a declaration of dividends must be presented along with clearance by the CIT.
Payments for travel
Quantitative limitsThe following limits are in effect: (1) for nonbusiness travel by residents, the equivalent of BZ$6,000 a person a trip; (2) for business travel by residents, BZ$500 a person a day; (3) for medical travel, BZ$6,000 a person a trip; and (4) for business or nonbusiness travel by nonresidents, BZ$500 a person a year, unless payment is made from an external account or from proceeds of foreign currency. Resident travelers are required to sell their excess holdings of foreign currencies to an AD on returning to Belize. The CBB reserves the right to waive these limits.
Indicative limits/bona fide testYes.
Personal paymentsPayments related to medical costs are made directly to a doctor or hospital with original invoices or bills supporting the application.
Prior approvalFor the transfer of pensions and payments for family maintenance and alimony, CBB approval and CIT clearance are required.
Quantitative limitsThe limit for gifts is BZ$1,000 a person a year or its equivalent.
Indicative limits/bona fide testForeign exchange is provided by ADs for payment of correspondence courses when applications are properly documented.
Foreign workers’ wages
Prior approvalApproval for remittance of wages is granted by the CBB, subject to clearance by the CIT.
Other payments
Prior approvalFor the transfer of consulting and legal fees, approval is granted by the CBB, subject to clearance by the CIT.
Indicative limits/bona fide testSimilar requirements apply for subscriptions and membership fees for study abroad.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersProceeds must be sold to an AD.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsAll capital transfers require the approval of the CBB, but controls are administered liberally.
Repatriation requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsControls apply to all these transactions.
Controls on derivatives and other instrumentsControls apply to all these transactions.
Controls on credit operations
Commercial creditsControls apply to all these transactions.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsEPZ developers, EPZ businesses, commercial free zone (CFZ) developers, and CFZ businesses may obtain loans or advances up to US$1 million from offshore banks. Loans or advances in excess of this amount require written CBB approval.
Guarantees, sureties, and financial backup facilitiesControls apply to all these transactions.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentInward direct investment must be registered with the CBB if the profits are to be repatriated in the future.
Controls on liquidation of direct investmentRepatriation of proceeds requires clearance by the CIT.
Controls on real estate transactionsControls apply to all these transactions. There is a land speculation tax of 5% of the unimproved value of land holdings exceeding 300 acres.
Controls on personal capital transactions
LoansControls apply to all these transactions.
Gifts, endowments, inheritances, and legaciesControls apply to all these transactions.
Settlements of debts abroad by immigrantsYes.
Transfer of assetsControls apply to all these transactions.
Transfer of gambling and prize earningsThe repatriation of gambling proceeds by nonresidents requires clearance by the CIT.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeYes.
Purchase of locally issued securities denominated in foreign exchangeYes.
Differential treatment of deposit accounts held by nonresidentsNonresidents are required to use offshore banks.
Liquid asset requirementsThe liquid asset requirement is 20%.
Provisions specific to institutional investors
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2007
No significant changes occurred in the exchange and trade system.

BENIN

(Position as of March 31, 2008)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasons
Other security restrictionsA framework has been established at the WAEMU regional level to combat the financing of terrorism in the member countries of the union. The framework facilitates the enforcement of the decisions on the freezing of funds made by the Sanctions Committee of the UN Security Council, based on the list of persons and entities established by that committee. Effective April 6, 2007, the Council of Ministers of the Union adopted Decision No. 09/2007/CM/UEMOA amending Decision No. 14/2006/CM/UEMOA of September 8, 2006, on the list of persons, entities, and organizations affected by the freezing of assets and other financial resources in the context of combating the financing of terrorism in the member countries of the WAEMU. Effective March 28, 2008, the uniform law on combating the financing of terrorism in the member countries of the WAEMU has been adopted by the WAEMU Council of Ministers. On the same date, the WAEMU Council of Ministers adopted Decision No. 09/2008/CM/UEMOA amending Decision No. 09/2007/CM/UEMOA of April 6, 2007, on the list of persons, entities, and organizations affected by the freezing of assets and other financial resources in the context of combating the financing of terrorism in the member countries of the WAEMU.
References to legal instruments and hyperlinksRegulation No. 14/2002/CM/UEMOA by the WAEMU Council of Ministers of September 19, 2002; Uniform law on Combating the Financing of Terrorism in the Member States of the WAEMU, adopted by the WAEMU Council of Ministers on March 28, 2008; www.uemoa.int/actes/Default.htm; www.uemoa.int/actes/2002/reglement_14_2002_CM_UEMOA.htm; www.bceao.int.
Exchange Arrangement
CurrencyThe currency of Benin is the CFA franc.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementBenin participates in a currency union with seven other members of the WAEMU and has no separate legal tender. The CFA franc is pegged to the euro, the intervention currency, at the fixed rate of CFAF 655.957 per €1. Exchange rates for other currencies are derived from the rates for the currency concerned in the Paris foreign exchange market vis-à-vis the euro. Effective January 1, 2007, the exchange rate arrangement of the WAEMU countries has been reclassified to the category conventional pegged arrangement 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 taxA bank commission of 0.3% applies to transfers to all countries outside the WAEMU. The proceeds of this commission must be surrendered to the treasury. In addition, banks may charge a commission of up to 2% on over-the-counter exchange for euros.
Exchange subsidyNo.
Foreign exchange market
Spot exchange marketAuthorized intermediaries (authorized intermediary banks and authorized nonelectronic exchange dealers) freely determine the buying and selling rates of foreign currencies, with the exception of the euro, which must be traded against the CFA franc at the official fixed rate of CFAF 655.957 per €1. Authorized intermediaries must comply with the provisions in effect concerning the financial conditions for engaging in nonelectronic exchange operations with euro banknotes and issue a transaction receipt for any operation with a customer. In addition, in order to ensure that customers have satisfactory information, authorized intermediaries must (1) post at their windows, at all times, the rates effectively applied for the various currencies, and (2) indicate, also by posting, that exchange operations require the presentation of a transaction receipt.
Operated by the central bank
AllocationAuthorized foreign exchange dealers may purchase foreign exchange from the BCEAO.
Interbank marketForeign exchange transactions between ADs are permitted.
Forward exchange marketResidents may contract forward exchange cover for payments related to imports and exports of goods and services. Forward cover may be contracted only in the currency of settlement stipulated in the commercial contract. Maturities must correspond to the due date of the import or export payment stipulated in the commercial contract.
References to legal instruments and hyperlinksTreaty of November 14, 1973, Establishing the WAMU; Cooperation Agreement of December 4, 1973, between the French Republic and the Member Republics of the WAMU and its amendments; Convention on the Operations Account of December 4, 1973, and its amendment; Regulation No. R09/98/CM/UEMOA of December 20, 1998, on the External Financial Relations of the WAEMU Member States and BCEAO Instructions Handed down in Implementation of that Regulation; General List of Conditions Applicable to Banks and Financial Institutions; www.bceao.int; www.uemoa.int/actes/1998/reglement_09_1998_CM_UEMOA.htm; www.bceao.int/internet/bcweb.nsf/pages/bar1.
Arrangements for Payments and Receipts
Prescription of currency requirementsBenin is linked to the French Treasury through an Operations Account, through which settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC member countries and the Comoros) are made, mainly in euros; however, other currency units may also be used. Settlements with other WAEMU countries are unrestricted and made in CFA francs.
Controls on the use of domestic currency
For capital transactions
Transactions in derivatives and other instrumentsYes.
Use of foreign exchange among residentsThe CFA franc is the only legal tender, and residents may not use foreign exchange for domestic transactions.
Payments arrangements
Bilateral payments arrangements
InoperativeYes.
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases and sales of foreign currencies and euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Clearing agreementsA multilateral clearing agreement exists in the context of the WAMA among the countries of the WAEMU, Cape Verde, The Gambia, Ghana, Guinea, Liberia, Mauritania, Nigeria, and Sierra Leone. All payments related to current transactions between the member bank countries may be effected under the clearing arrangements. However, this excludes transactions specified by the committee of governors of the CBs of ECOWAS members and payments related to the exportation from a member country to another member country of finished products originating in countries whose CB or monetary authority is not a member of the WAMA.
Administration of controlExchange control is administered jointly by the MOF and the BCEAO. Most of the authority to supervise foreign exchange transactions is delegated to authorized banks, which are required to report these operations to the MOF. The BCEAO is also authorized to collect—either directly or through banks, financial institutions, the postal administration, or judicial agents—information necessary to compile balance of payments statistics. Customs officers monitor outflows of foreign exchange and confirm importation and exportation of goods. All residents of WAEMU countries are treated as residents of Benin for the purposes of financial transactions. All foreign exchange operations with foreign countries must be effected through authorized intermediary banks, the postal administration, or the BCEAO. No supporting documents are required for transfers up to the equivalent of CFAF 300,000. Within the framework of the regional financial market, the placement and solicitation of foreign and domestic securities in Benin require RCPSFM authorization.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On external tradeImports and exports of gold require MOF authorization. Exempt from this requirement are (1) imports by or on behalf of the treasury or the BCEAO, (2) imports of manufactured articles containing minor quantities of gold (such as gold-filled or gold-plated articles), and (3) imports by travelers of gold objects up to a combined weight of 500 grams. Both licensed and exempt imports of gold are subject to customs declaration.
Controls on exports and imports of banknotes
On exports
Domestic currencyCFA franc banknotes may be exported freely by travelers. The shipment of CFA franc banknotes by authorized intermediary banks to their correspondents is unrestricted. However, BCEAO repurchases of exported banknotes are still suspended. Thus, authorized intermediary banks may not accept shipments of CFA franc banknotes from their correspondents located outside the WAEMU area.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers is permitted up to the equivalent of CFAF 500,000; the reexportation of foreign banknotes above this ceiling requires documentation demonstrating either the importation of the foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits in local banks.
On imports
Foreign currencyResidents and nonresidents may bring in any amount of foreign banknotes and coins (except gold coins) of countries outside the Operations Account area. Residents bringing in foreign banknotes and foreign currency traveler’s checks exceeding the equivalent of CFAF 300,000 must declare them to customs on entry and sell them to an authorized intermediary bank within eight days. Nonresident travelers must declare to customs foreign currency exceeding the equivalent of CFAF 1 million on entry and exit.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed down in Implementation of That Regulation; www.uemoa.int/actes/1998/reglement_09_1998_CM_UEMOA.htm; www.bceao.int.
Resident Accounts
Foreign exchange accounts permittedResidents may open foreign currency accounts with MOF authorization, after BCEAO consent.
Held domesticallyYes.
Approval requiredYes.
Held abroadYes.
Approval requiredIndividuals traveling abroad may open bank accounts to receive foreign currency legitimately exported during their travel or earned during their stay abroad. However, residents are required to repatriate assets held in these accounts within 30 days of their return. In all other cases, MOF authorization, after BCEAO approval, is required to open an account abroad.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed down in Implementation of That Regulation; www.uemoa.int/actes/1998/reglement_09_1998_CM_UEMOA.htm; www.bceao.int.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Approval requiredNonresident accounts denominated in foreign currency other than euros are subject to BCEAO authorization. Before opening these accounts, nonresidents must present documentation proving their status and actual residence.
Domestic currency accountsBecause the BCEAO has suspended the repurchase of banknotes circulating outside the WAEMU, nonresident accounts may not be funded with BCEAO banknotes or banknotes from a note-issuing authority with an Operations Account with the French Treasury. These accounts may not be overdrawn without MOF authorization. Transfers of funds between nonresident accounts are not restricted.
Convertible into foreign currencyAuthorized intermediaries may approve requests for the opening of nonresident accounts in CFA francs and in euros, depending on the status and effective residence of the applicant. The holding by nonresidents of accounts denominated in foreign currency other than euros is subject to BCEAO authorization. Regulation No. R09/98/CM/UEMOA of December 20, 1998, governs domestic currency accounts convertible into foreign currency as well as foreign currency accounts
Blocked accountsNo.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed down in Implementation of That Regulation; http://www.uemoa.int/actes/1998/reglement_09_1998_CM_UEMOA.htm; www.bceao.int.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsAdvance payments for imports require authorization, and importers may not acquire foreign exchange until the date of the payment specified in the contract.
Documentation requirements for release of foreign exchange for importsImporters may purchase foreign exchange for import payments after establishing bank payment order accounts and submitting supporting documents, but no earlier than eight days before shipment if a documentary credit is opened, or on the due date of payment if the products have already been imported.
Domiciliation requirementAll import transactions from outside the CFA franc zone exceeding CFAF 5 million must be effected through an authorized bank.
Preshipment inspectionAll imports arriving by sea and exceeding CFAF 3 million, and overland imports exceeding CFAF 1.5 million, are subject to inspection.
OtherExchange authorization, invoices, and export-import cards are required.
Import licenses and other nontariff measures
Positive listn.a.
Negative listCertain imports (e.g., narcotics) are prohibited from all sources.
Other nontariff measuresn.a.
Import taxes and/or tariffsThe CET of the WAEMU consists of four rates (zero, 5%, 10%, and 20%). Imports are also subject to a statistical fee of 1%, and a community solidarity levy of 1% is applied to imports from outside the WAEMU. In addition, a cyclical import tax and a degressive protection tax may be applied to particular products for a given period. Imports from countries that are not ECOWAS members are subject to a community levy of 0.5%.
State import monopolyNo.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed down in Implementation of That Regulation; Regulation No. 02/97/CM/UEMOA of November 28, 1997, establishing the CET of the WAEMU; Decision A/DEC.17/01/06 adopting the CET of the ECOWAS; www.uemoa.int/actes/1998/reglement_09_1998_CM_UEMOA.htm; www.uemoa.int/actes/reglement%202_97_cm.htm; www.bceao.int.
Exports and Export Proceeds
Repatriation requirementsResident economic agents are required to collect and repatriate to the domicile bank in the country of origin the proceeds from the sale of goods abroad within a period of one month starting from the due date of the payment. Settlement in CFA francs may not be made in the form of banknotes or by debiting a foreign franc account. The due date of the payment is the date indicated in the commercial contract. It must usually be within 120 days of shipment of the goods. The domicile bank is required to repatriate the export proceeds through the BCEAO.
Surrender requirements
Surrender to the central bankExport proceeds must be surrendered by ADs to the BCEAO within 30 days of the payment due date, which may not exceed 120 days after shipment of the goods.
Surrender to authorized dealersProceeds must be surrendered to authorized banks within 30 days of the payment due date. Authorized intermediaries must then surrender the foreign exchange to the BCEAO by transfer through the bank of issue.
Financing requirementsNo.
Documentation requirementsAll export transactions require a customs declaration.
Letters of creditYes.
DomiciliationAll export transactions of more than CFAF 5 million, except those between WAEMU countries, must be domiciled with an authorized intermediary bank.
OtherYes.
Export licenses
Without quotasExports are permitted on the basis of a simple authorization from the Directorate of Foreign Trade, which issues a certificate of origin as needed. Exports of diamonds, gold, and all other precious metals, however, require MOF authorization, with the exception of articles with minimal gold content, travelers’ personal effects weighing less than 500 grams, and coins (fewer than 10 pieces, regardless of their face value and denomination).
With quotasExports of teakwood and other varieties of unprocessed wood and charcoal are prohibited.
Export taxesNo.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed down in Implementation of That Regulation.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersTransfers for invisible transactions to France, Monaco, and countries with an Operations Account in the French Treasury may be made freely. Payments and receipts made by foreign ships on stopovers in WAEMU countries or by WAEMU ships abroad are considered current transactions. Payments and transfers for current transactions may be made freely through authorized intermediaries. Transfers exceeding CFAF 300,000 are subject to documentation requirements.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related paymentsAuthorized banks may transfer profits and interest payments based on supporting documentation.
Prior approvalPayments for depreciation of direct investments require MOF authorization, because this type of depreciation is not specifically mentioned in the regulations.
Indicative limits/bona fide testOutward transfers of proceeds from the liquidation of investments may be made by authorized banks, subject to presentation of supporting documents.
Payments for travel
Quantitative limitsResidents traveling for tourism or business purposes to non-WAEMU countries may take out banknotes other than CFA franc notes up to the equivalent of CFAF 2 million a person; larger amounts may be taken out in the form of traveler’s checks, certified checks, or other means of payment.
Indicative limits/bona fide testResident travelers must present a travel document and a valid passport or a national identity card to an AD (intermediary bank or exchange bureau) before foreign exchange will be issued.
Personal payments
Indicative limits/bona fide testAll personal payments may be conducted through an authorized bank, subject to presentation of supporting documents.
Foreign workers’ wages
Indicative limits/bona fide testPayments abroad related to wages, salaries, and honoraria; contributions and benefits; pensions and work-related activities; and service contracts are generally authorized on presentation of the appropriate documentation.
Credit card use abroadThe use of credit cards is allowed only when issued by specialized institutions.
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed down in Implementation of That Regulation.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions with non-WAEMU countries must be repatriated.
Surrender requirements
Surrender to the central bankADs must surrender residents’ proceeds from invisible transactions to the BCEAO. At the request of the BCEAO, ADs must sell to it, in exchange for currency that it issues, all holdings in euros or other foreign currencies in their establishments.
Surrender to authorized dealersAll proceeds from invisible transactions with non-WAEMU countries must be surrendered to an AD within one month. Resident travelers must declare to customs any foreign means of payment in excess of the equivalent of CFAF 300,000 and must surrender it to an authorized intermediary bank within eight days of their
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed down in Implementation of That Regulation; www.uemoa.int/actes/1998/reglement_09_1998_CM_UEMOA.htm; www.bceao.int.
Capital Transactions
Controls on capital transactionsCapital transactions between WAEMU countries are unrestricted. Outward capital transfers require MOF authorization, except in the case of (1) amortization of debts and repayment of short-term loans granted to finance industrial and commercial operations, and (2) payments for the purchase of options. Capital receipts from non-WAEMU countries, however, are generally permitted.
Repatriation requirementsYes.
Surrender requirements
Surrender to the central bankADs must surrender residents’ proceeds in foreign currencies to the BCEAO.
Surrender to authorized dealersProceeds from the sale or liquidation of investments in foreign assets by residents must be surrendered to authorized intermediary banks within one month.
Controls on capital and money market instrumentsRCPSFM authorization is required for the following operations: (1) issuing or marketing of securities and real assets of foreign entities, (2) canvassing, and (3) publicity or advertising for investment abroad. Securities and mutual funds issued outside the WAEMU by a private or public entity that is not a resident of a member country may not be listed on a regional securities exchange.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsThese purchases are subject to declaration to the MOF for statistical purposes.
Sale or issue locally by nonresidentsThe issuance of securities and the sale of corporate or foreign securities by nonresidents are subject to RCPSFM authorization. Effective November 8, 2007, in implementation of a decision of the WAEMU Council of Ministers, dated April 6, 2007, the conditions for authorizing nonresident entities to raise funds by public offering in the WAEMU were amended. There are no controls on the sale of securities resulting from divestiture of an investment in the form of a transfer between a nonresident and a resident, but such sales are subject to the regulations governing the financial settlement of the operation. Settlement of securities transactions by transfer abroad or by credit to a nonresident account requires submission of an exchange authorization to the MOF for approval, accompanied by supporting documentation.
Purchase abroad by residentsThe purchase of foreign securities by residents and the transfer abroad of funds for this purpose are subject to MOF authorization. Authorization is not required for purchases of foreign securities whose issuance or offering for sale in WAEMU countries has been authorized by the RCPSFM.
Sale or issue abroad by residentsResidents may sell local corporate securities abroad. If these operations result in foreign control of domestic establishments, foreign investors are required to make a declaration to the MOF. The sale of securities for liquidation of an investment abroad must be declared to the MOF for statistical purposes. Issuance of securities abroad must be made through an authorized intermediary bank.
Bonds or other debt securitiesThe regulations governing shares or other securities of a participating nature apply.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsIssuance of securities constituting a loan by residents to nonresidents must be made through an authorized bank and must be reported to the MOF for statistical purposes.
On money market instrumentsThe regulations governing shares or other securities of a participating nature apply.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsResidents may sell money market instruments abroad. The sale of securities for the liquidation of an investment abroad must be declared to the MOF for statistical purposes.
On collective investment securitiesThe regulations governing shares or other securities of a participating nature apply.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on derivatives and other instrumentsThese instruments are subject to general regulations that apply to securities and investments. Residents may freely purchase abroad or from nonresidents call or put options for primary commodities or securities transactions. Residents may not purchase commodities or securities on foreign markets for delivery in a put option contract. Put options must be on assets that can be acquired locally by the resident seller for delivery abroad in execution of the contract.
Controls on credit operationsBorrowing by residents from nonresidents must be conducted through authorized intermediaries (whenever borrowed funds are made available for use in the country), unless otherwise indicated by the MOF.
Commercial credits
By residents to nonresidentsThere are no controls on credits related to exports of goods, provided the date on which payment falls due is not more than 120 days after the date of shipment. The transfer of funds abroad for this purpose is subject to MOF authorization.
To residents from nonresidentsThere are no controls on these credits, and repayments of commercial credits are generally approved, subject to the presentation of documents attesting to the validity of the commercial operation or of the services rendered, as well as the payment due date.
Financial credits
By residents to nonresidentsThese credits require MOF approval. Outward transfers to service such facilities require an exchange authorization, subject to the approval of the BCEAO acting on behalf of the MOF and substantiated by documentation.
To residents from nonresidentsThere are no controls on these credits, but they must be reported for statistical purposes. The necessary funds must be transferred from abroad through an authorized agent. There are no controls on repayment of loans, provided the authorized agent handling the settlement is furnished with documentation attesting to the validity of the transaction.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsThe granting of guarantees and sureties is subject to MOF approval. Transfers abroad of funds to service these facilities require an exchange authorization, subject to MOF approval, and submission of supporting documents.
To residents from nonresidentsThese facilities may be granted freely, although the funds required for servicing them must be transferred abroad by an authorized bank. If, however, these transactions take place between a resident direct investment company and its parent company located abroad, they are considered to be direct investments and therefore require prior declaration to the MOF.
Controls on direct investmentDirect investment implies control of a company or enterprise. Mere participation is not considered direct investment unless it exceeds 20% of the capital of a company whose shares are quoted on a stock exchange. All investment abroad by residents, including investment through foreign companies under the direct or indirect control of residents of Benin and investment by foreign branches or subsidiaries of companies established in Benin, requires MOF authorization.
Outward direct investmentAll investment abroad by residents is subject to MOF authorization. At least 75% of such investment must be financed by foreign loans. Authorization is not required for purchases of foreign securities whose issuance or offering for sale in WAEMU countries has been authorized by the RCPSFM.
Inward direct investmentForeign direct investment, including by resident companies that are directly or indirectly under foreign control and by branches or subsidiaries of foreign companies, must be reported to the MOF for statistical purposes.
Controls on liquidation of direct investmentThe liquidation of investments abroad must be reported to the MOF for statistical purposes. Reinvestment of the proceeds of liquidation is subject to MOF authorization. If reinvestment is not authorized, the liquidation proceeds must be repatriated within one month through an authorized intermediary. The sale of foreign investments by nonresidents is unrestricted but must be reported to the MOF for statistical purposes.
Controls on real estate transactions
Purchase abroad by residentsThese purchases require MOF authorization.
Purchase locally by nonresidentsPurchases for purposes other than direct investment in a business, branch, or company are allowed. They require a declaration to the MOF for statistical purposes.
Sale locally by nonresidentsSales by nonresidents to residents require submission of supporting documentation to the authorized intermediary that handles the settlement and must be declared to the MOF.
Controls on personal capital transactionsPersonal capital transactions between residents and nonresidents must be made through the BCEAO, the postal service, or an authorized intermediary bank, unless authorization is obtained from the MOF.
LoansThe regulations governing securities and investments apply.
By residents to nonresidentsThese transactions require MOF authorization. The individuals concerned may not engage in such operations as a professional occupation without first being licensed and included on the list of financial institutions.
To residents from nonresidentsThese transactions may be made freely, but are subject to declaration for statistical purposes to the MOF when granted and when repaid.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsThese transactions may be made freely, but are subject to declaration for statistical purposes to the MOF when granted and when repaid.
To residents from nonresidentsThese transactions are subject to declaration.
Settlements of debts abroad by immigrantsImmigrants with resident status must obtain MOF authorization to settle debts contracted abroad while they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsThese transactions require MOF authorization.
Transfer into the country by immigrantsForeign accounts of nonresidents (in foreign currencies or CFA francs) who become residents must be closed. However, these residents may maintain abroad bank accounts opened and financial assets acquired while they were nonresidents. New transfers to these accounts require MOF approval.
Transfer of gambling and prize earningsThese transfers are generally authorized, subject to the presentation of supporting documents and compliance with the relevant provisions on combating money laundering.
References to legal instruments and hyperlinksRegulation No. R09/98/CM/UEMOA of December 20, 1998, and BCEAO Instructions Handed Down in Implementation of That Regulation; Law No. 2006-14 of October 31, 2006, on Combating Money Laundering. www.uemoa.int/actes/1998/reglement_09_1998_CM_UEMOA.htm; www.bceao.int.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadFor statistical purposes, these transactions must be declared to the MOF when they are granted and when they are repaid.
Maintenance of accounts abroadBanks and financial institutions are authorized to open accounts with their correspondent banks for settling transactions for their own account or the accounts of their customers. However, banks are not authorized to hold in these accounts amounts that exceed their current requirements.
Lending to nonresidents (financial or commercial credits)Commercial lending is allowed. Financial credits are subject to MOF authorization following BCEAO approval.
Lending locally in foreign exchangeNo explicit regulations exist regarding these transactions, but MOF authorization is required with the approval of the BCEAO.
Purchase of locally issued securities denominated in foreign exchangeThese purchases require RCPSFM authorization, after MOF approval.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsOrdinary debtor accounts, other debtor deposit accounts, and loan accounts are included in the assessment base for reserve requirements.
Credit controlsLoans of any kind, CFA franc overdrafts, and, in general, any advances granted to nonresidents are subject to MOF authorization, after BCEAO approval. These claims are included in the external position of banks and financial institutions, which is subject to special monitoring.
Differential treatment of deposit accounts held by nonresidentsMonetary regulations make no distinction among resident deposit accounts, nonresident deposit accounts, and foreign deposit accounts.
Credit controlsAny overdraft or advance granted to a nonresident requires authorization by the MOF with approval of the BCEAO.
Investment regulationsThe regulations governing direct investment apply.
Abroad by banksYes.
In banks by nonresidentsThese operations are subject to MOF authorization. The banking law stipulates that investment by individuals in a bank that changes the blocking minority and/or the majority of voting rights are subject to authorization by the MOF.
Open foreign exchange position limitsNo prudential ratios apply. Open positions result from special dispensations.
Provisions specific to institutional investors
Insurance companiesControls are imposed by the CIMA Code.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadThe CIMA Code does not allow insurance companies to invest abroad.
Limits (min.) on investment portfolio held locallyThe CIMA Code includes specific rules for the use of insurance companies’ technical reserves.
Currency-matching regulations on assets/liabilities compositionThe CIMA Code specifies that liabilities in a given currency must be covered by assets denominated in the same currency.
Pension fundsn.a.
Investment firms and collective investment funds
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinksDecision No. CM/04/04/2007 of April 6, 2007, Concerning the Authorization Issued by the Authority in Charge of Regulating External Financial Relations for the WAEMU Countries, required for nonresident entities offering securities to the public in the WAEMU; Instruction No. 12/07/RC of November 8, 2007, Concerning the Authorization Required for Nonresident Entities Wishing to Raise Funds by Public Offering in the WAEMU.
Changes during 2007
Exchange measuresApril 6. The Council of Ministers of the Union adopted Decision No. 09/2007/CM/UEMOA amending Decision No. 14/2006/CM/UEMOA of September 8, 2006, on the list of persons, entities, or organizations affected by the freezing of assets and other financial resources in the context of combating the financing of terrorism in the member countries of the WAEMU.
Exchange arrangementJanuary 1. The exchange rate arrangement of the WAEMU countries was reclassified to the category conventional pegged arrangement from the category exchange arrangement with no separate legal tender. The new classification reflects only a definitional change.
Capital transactions
Controls on capital and money market instrumentsApril 6. The WAEMU Council of Ministers adopted Decision No. CM/04/04/2007 on the authorization required for nonresident entities offering securities to the public in the WAEMU.
November 8 The BCEAO published Instruction No. 12/07/RC on the authorization required for nonresident entities to raise funds by public offering in the WAEMU.
Changes during 2008
Exchange measuresMarch 28. The WAEMU Council of Ministers adopted Decision No. 09/2008/CM/UEMOA, amending Decision No. 09/2007/CM/UEMOA of April 6, 2007, on the list of persons, entities, or organizations affected by the freezing of assets and other financial resources in the context of combating the financing of terrorism in the member countries of the WAEMU. The uniform law on combating the financing of terrorism in the member countries of the WAEMU was adopted by the WAEMU Council of Ministers.

BHUTAN

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article XIVYes.
Exchange Measures
Restrictions and/or multiple currency practicesThe IMF staff report for the 2007 Article IV consultation with Bhutan states that, as of September 20, 2007, Bhutan maintained exchange restrictions in connection with: (1) the availability of foreign exchange for travel, invisibles, and private transfers; (2) foreign exchange balancing requirements on remittances of income from foreign direct investment; and (3) the availability of foreign exchange for importers who have not provided evidence that goods for which payments have been made were actually imported. Changes to Bhutan’s import licensing rules in 2005, which introduced new foreign exchange balancing requirements for certain imports, gave rise to exchange restrictions subject to IMF approval under Article VIII, Section 2(a). (Country Report No. 07/350)
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Banking institutions have been instructed to freeze all capital transfers and financial assets of individuals, groups, and organizations associated with terrorism, pursuant to the relevant UN Security Council resolutions. In addition, financial institutions are required to report to the Royal Monetary Authority (RMA) any financial transactions linked to terrorist groups.
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Bhutan is the Bhutanese ngultrum.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe ngultrum is pegged to the Indian rupee at par. The rates for currencies other than the Indian rupee are determined on the basis of the prevailing exchange rates of the Indian rupee (average rate) against the currencies concerned. Indian rupee banknotes and coins circulate freely in Bhutan.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange marketNo.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsTrade transactions between Bhutan and India may be conducted only in ngultrum or Indian rupees.
Use of foreign exchange among residentsExcept for payments for duty-free goods, handicraft items, and ticket purchases from Druk Air (Royal Bhutan Airlines) by foreigners, all payments in Bhutan must be made in local currency.
Payments arrangements
Bilateral payments arrangements
OperativeThe Agreement on Trade and Commerce with India requires that all transactions between Bhutan and India be made in ngultrum or Indian rupees.
Clearing agreementsBhutan is a member of the ACU.
Administration of controlThe MOF has delegated to the RMA the authority to release foreign exchange (other than Indian rupees) for current transactions. The RMA is responsible for approving the use of foreign exchange for payments for current transactions and implementing the surrender requirements for proceeds from merchandise exports. Payments and transfers by residents to nonresidents other than in cash and traveler’s checks must be channeled through authorized banks in Bhutan.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On external tradeImports of gold and silver by Bhutanese citizens require authorization from the RMA.
Controls on exports and imports of banknotesImports and exports of cash and securities above a certain limit are subject to a declaration of value at the customs point of entry into and departure from Bhutan.
On exports
Domestic currencyExports exceeding Nu 5,000 require permission from the RMA.
Foreign currencyExports of convertible foreign currency legally imported or purchased from authorized banks are allowed freely. Exports of Indian rupees are allowed except for Re 500 and Re 1,000 banknotes.
On imports
Domestic currencyImports exceeding Nu 5,000 require approval by the RMA.
Foreign currencyImports of convertible foreign currencies are permitted freely, but amounts exceeding the equivalent of $10,000 are subject to customs declaration. Imports of Indian rupees are allowed except for Re 500 and Re 1,000 banknotes.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThe following categories of persons are permitted to open and maintain dollar-denominated foreign currency accounts with authorized banks in Bhutan: (1) diplomatic missions in Bhutan and their expatriate employees, (2) representative offices of donor agencies and their expatriate employees, (3) third-country contracting firms and their expatriate employees engaged in executing projects financed by donor agencies, (4) any person who is a national of a third country and resides in Bhutan, (5) foreign direct investment companies incorporated in Bhutan under the 2002 Foreign Direct Investment Policy, and (6) local industries approved by the Ministry of Trade and Industry.
Approval requiredYes.
Held abroadBhutanese nationals are not permitted to hold foreign exchange accounts abroad. These accounts are permitted only for residents who are foreign nationals.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedNo.
Domestic currency accountsYes.
Convertible into foreign currencyThese accounts are permitted, but only for nonresidents who are foreign nationals.
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 imports
Domiciliation requirementYes.
Letters of creditYes.
Import licenses used as exchange licensesYes.
Import licenses and other nontariff measuresA license is required for the importation of capital and intermediate goods from countries other than India. Such licenses are governed by the Rules and Procedures for Imports of Goods from Third Countries issued by the Department of Trade of the Ministry of Trade and Industry. Foreign exchange for all payments related to licensed merchandise imports is automatically made available by authorized banks against import licenses. Capital imports from third countries by foreign direct investors must be financed by their own convertible foreign exchange resources. According to the Bhutan Import House Guidelines, Import House may import one 20-foot container or equivalent once every three months.
Negative listYes.
Import taxes and/or tariffsImports from countries other than India are subject to tariffs. Imports from India are subject only to Bhutanese sales tax.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersProceeds in currencies other than the Indian rupee must be surrendered to authorized banks in Bhutan.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationYes.
Preshipment inspectionYes.
OtherYes.
Export licenses
Without quotasYes.
With quotasYes.
Export taxesExports to countries other than India receive an export tax rebate at rates ranging from 5% to 20% of the c.i.f. value, with the lowest rates applying to unprocessed primary products and the highest rates applying to processed products.
Collected through the exchange systemn.a.
Other export taxesn.a.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAll invisible payments, other than those made in Indian rupees, must be approved by the RMA. The RMA is authorized to set limits on foreign exchange for payments for invisible transactions.
Trade-related payments
Prior approvalYes.
Indicative limits/bona fide testYes.
Investment-related paymentsUnder the 2002 Foreign Direct Investment Policy, foreign direct investors may remit profits and dividends from net earnings only in convertible foreign currency.
Prior approvalYes.
Indicative limits/bona fide testYes.
Payments for travel
Prior approvalYes.
Quantitative limitsTravel allowances are limited to the equivalent of $3,000 a ticketed passenger a calendar year. In the case of business travel, a country-specific per diem covering accommodation is provided to travelers. There are no time limits for business travel.
Indicative limits/bona fide testYes.
Personal paymentsAllowances for educational fees and tuition are given based on the statements provided by the institutions. Students may also purchase foreign exchange for a monthly stipend of $900 and a one-time settling-in allowance of $1,500 or the equivalents. The settling-in allowance and three monthly stipends may be purchased in advance. For medical expenses, foreign exchange may be purchased to cover the cost of treatment and medicine and for living expenses abroad, subject to referral by a local physician for treatment abroad other than in India.
Prior approvalYes.
Quantitative limitsYes.
Foreign workers’ wages
Prior approvalForeign nationals employed directly by a public or private organization in Bhutan, with prior approval of the Royal Government of Bhutan, are permitted to remit their salaries and savings in foreign exchange through an authorized bank.
Quantitative limitsThe RMA may set limits on any or all such remittances as it deems necessary.
Credit card use abroad
Prior approvalYes.
Quantitative limitsThe RMA may set limits on any or all such payments as it deems necessary.
Indicative limits/bona fide testYes.
Other payments
Prior approvalYes.
Quantitative limitsThe RMA may set limits on any or all such payments as it deems necessary.
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsForeign exchange proceeds of any receipts or holdings by Bhutanese citizens and companies should be repatriated to Bhutan by transferring such claims and funds to authorized banks in Bhutan.
Surrender requirements
Surrender to authorized dealersAll receipts from invisible transactions in currencies other than the Indian rupee must be surrendered to ADs.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsAll capital transactions must be approved by the RMA. Resident individuals are not allowed to acquire or engage in capital transactions abroad.
Repatriation requirementsYes.
Surrender requirements
Surrender to authorized dealersYes.
Controls on capital and money market instrumentsControls apply to all transactions in capital and money market instruments.
Controls on derivatives and other instrumentsControls apply to all these transactions.
Controls on credit operationsAll credit operations are subject to controls.
Controls on direct investment
Outward direct investmentYes.
Inward direct investmentUnder the 2002 Foreign Direct Investment Policy, direct investment in convertible foreign exchange may be made in (1) manufacturing, with a minimum investment of $1 million, of which 20% to 70% may be foreign investor equity; and (2) services, with a minimum investment of $500,000, of which 20% to 70% may be foreign investor equity. Other collaboration in different forms, such as technical and marketing collaboration, and franchises for use of trade names, patents, and trademarks, are allowed with prior permission of the Ministry of Trade and Industry.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsControls apply to all real estate transactions.
Controls on personal capital transactions
LoansControls apply to all these transactions.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
Settlements of debts abroad by immigrantsYes.
Transfer of assetsControls apply to all these transactions.
Transfer of gambling and prize earningsYes.
References to legal instruments and hyperlinks2002 Foreign Direct Investment Policy.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadBorrowing abroad requires prior authorization from the Royal Government of Bhutan.
Maintenance of accounts abroadYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsDirect investment in convertible foreign exchange may be made in services with a minimum investment of $500,000, of which 20% to 70% may be foreign investor equity.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on investment portfolio held abroadYes.
References to legal instruments and hyperlinksn.a.
Changes during 2007
No significant changes occurred in the exchange and trade system.

BOLIVIA

(Position as of April 30, 2008)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: June 5, 1967.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2007.
Exchange measures imposed for security reasonsNo.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Bolivia is the boliviano.
Other legal tenderThe dollar may be used in financial transactions.
Exchange rate structureUnitary.
Classification
Crawling pegThe de jure exchange rate arrangement of Bolivia has been a crawling peg regime for more than two decades, characterized by small fluctuations for which no prior notice is given. The official selling rate is determined by the Central Bank of Bolivia (CBB) as the floor price on the foreign exchange auctions (“bolsín”). In setting the exchange rate, the CBB aims to ensure a rate consistent with moderate inflation and to mitigate external and internal inflation pressures, given the country’s dollarized economy, in which the price of the dollar is still used as a benchmark for the price of nontradable goods. Against the backdrop of a strong external position, the CBB reversed the crawl of the exchange rate in July 2005 and has been appreciating the exchange rate at a modest pace. After a period of stability, during which the arrangement was classified as a conventional peg, the boliviano appreciated more steadily starting April 30, 2007. Thus, effective December 1, 2007, the classification of the de facto exchange rate arrangement has been changed from a conventional pegged arrangement to a crawling peg vis-à-vis the dollar.
Exchange taxEffective October 1, 2007, the CBB introduced a 1% commission on all transfers of foreign exchange to the private sector, except for export transactions taking place through the CBB. Effective January 2, 2008, the CBB applies a 1% service charge on transfers from abroad to the financial system through the CBB except (1) operations through the CBB for exporters and remittances equal to or less than $1,000, and (2) operations through the financial system for diplomatic corps, cooperation agencies, and international organizations, and remittances equal to or less than $1,000.
Exchange subsidyNo.
Foreign exchange marketThe spread between the buying and selling rates of the boliviano against the dollar is Bs 0.10. Although the modest widening of the CBB exchange rate spread has spurred development of a private foreign exchange market, its impact remains limited.
Spot exchange market
Operated by the central bank
Allocationn.a.
AuctionThe Monetary and Exchange Policy Committee (CPMC) determines the amount of foreign exchange to be auctioned and the range of weekly variation in the floor price below which the CBB will not accept any bids. This floor price, which is expressed in dollars, is the official exchange rate. The CBB board determines the difference between the selling rate and a buying rate, which is currently Bs 0.10, based on the CPMC recommendations. The private sector may participate in the auctions (with a minimum bid of $100,000 or its equivalent) through financial institutions that have accounts with the CBB.
Fixingn.a.
Interbank marketIn the present environment of a current account surplus, it is more common for the CBB to acquire foreign exchange from the financial system at the buying rate for the day, without any restriction as to the amount.
References to legal instruments and hyperlinksBoard Resolution 144/2002 (Approving Exchange Regulations); Board Resolution 092/2005 (Amending Exchange Regulations); www.bcb.gov.bo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Regional arrangementsPayments between Bolivia and the other LAIA countries may be made through accounts maintained with each other by the CBB and the CBs of the countries concerned, within the framework of the multilateral clearing system of the LAIA.
Clearing agreementsYes.
Administration of controlNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)Gold may be traded freely, subject to the following tax scale in accordance with the gross value of the sale of gold bullion: 7% for official quotations larger than $700 a troy ounce; between 4% and 7% for official quotations between $400 and $700 a troy ounce, calculated as a 0.01 factor multiplied by the official quotation; and 4% for official quotations of less than $400 a troy ounce.
Controls on exports and imports of banknotesNo.
References to legal instruments and hyperlinksLAIA Reciprocal Payments and Credits Arrangement; www.aladi.org/NSFALADI/CONVENIO.NSF; Law 1777, dated March 17, 1997 (Mining Code); www.mineria.gov.bo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency heldNo.
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 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 imports
Letters of creditLCs must be opened at a bank in the Bolivian banking system.
Import licenses and other nontariff measures
Negative listCertain imports are controlled for reasons of public health or national security.
Import taxes and/or tariffsBolivia applies an import tariff of 10% on consumer goods. Tariffs of zero and 5% are applied to capital goods, in accordance with approved lists. A zero rate is also applied to imports of books and printed materials. Donated food, including wheat, is exempt from the import tariff.
In order to supply the domestic food market, the government (1) adopted a temporary customs duty of zero on imports of food items, including wheat, wheat flour, rice, and corn, as well as live animals and beef (effective April 1, 2007, July 2, 2007, August 15, 2007, October 1, 2007, and October 31, 2007, respectively); and (2) effective November 14, 2007, authorized the Executive Secretariat of the PL-480 Program to purchase, import, and market semimilled and wholly milled rice intended for domestic consumption. As of February 27, 2008, an exceptional and temporary reduction (for one year) of the customs duty to zero was introduced on imports of food commodities, including corn, rice, wheat flour, and butter. Effective April 1, 2008, a new tariff structure with customs duty rates of zero, 5%, 10%, 15%, and 20% was introduced.
State import monopolyNo.
References to legal instruments and hyperlinksD.S. 29090 of April 4, 2007, 29128 of July 2, 2007, 29228 of August 15, 2007, 29291 of October 1, 2007, 29327 of October 31, 2007, 29460 of February 27, 2008, 29340 of November 14, 2007, and 29349 of November 28, 2007.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsEffective February 27, 2008, an exceptional and temporary prohibition was introduced against exports of certain food commodities in the family basket and those used as production inputs for the domestic market—beef, chicken, wheat, and corn—for one year. In addition, as of March 19, 2008, exports of edible oils were prohibited for a period of one year.
Export licensesNo.
Export taxesNo.
References to legal instruments and hyperlinksD.S. 29460 of February 27, 2008, and 29480 of March 19, 2008.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersA temporary financial transactions tax applies (until mid-2009) to inward transfers or shipments of money made through authorized financial institutions except through current or savings accounts and/or through institutions legally established in Bolivia that provide fund transfer services. The tax applies to all foreign currency deposits, both principal and interest (with deposits and withdrawals considered taxable events) as well as to shares in investment funds, including redemption of shares and earnings. The rate is 0.15%. The most important exemptions from this tax are (1) savings accounts of individuals, up to $2,000, (2) credits and debits to accounts with financial institutions or with the CBB held by entities governed by the Securities Market Law, and (3) redemptions and earnings of shares in investment funds with balances (in local or foreign currency) less than or equal to $2,000.
Investment-related payments
Indicative limits/bona fide testThere are no restrictions on capital inflows and outflows, nor on outward remittances of dividends, interest, and royalties with respect to technology transfers or under other business categories. All remittances or transfers are subject to payment of the taxes prescribed by law. When income of Bolivian origin is paid to beneficiaries abroad, the taxed net profit must be equivalent to 50% of the total amount paid or remitted. Those who pay or remit such items to beneficiaries abroad must apply a single and final withholding at the rate of 25% of the presumed taxed net profit.
References to legal instruments and hyperlinksLaw No. 2646 and other related provisions; Investment Law No. 1182, dated September 17, 1990; Law No. 1606 amending Law No. 843, dated December 22, 1994; Law 3446 of July 21, 2006; Supreme Decree No. 28815 of July 26, 2006; www.impuestos.gov.bo.
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 transactionsThere are no restrictions on outward remittances of dividends, interest, or royalties with respect to technology transfers or under other business categories. All remittances or transfers are subject to the payment of taxes prescribed by law.
Repatriation requirementsNo.
Controls on capital and money market instrumentsThe only instruments that may be publicly offered on the Bolivian securities market are those that are listed on certain foreign securities exchanges identified as such by the Superintendency of Pensions, Securities, and Insurance (SPVS), provided they comply with the registration and disclosure requirements outlined in the law. In addition, only securities authorized by the SPVS may be traded on the over-the-counter market.
Financial investments abroad are regulated by the SPVS, which has authority to determine amounts, risk levels, financial risk coverage operations, allowable foreign securities markets, investment types, investment limits, and procedures.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsBy law, investment in securities issued abroad may not exceed 50% of resources for investment by insurance companies. Pursuant to a board resolution, the CBB each year sets the maximum amount for investment abroad by insurance companies, which is currently 12% (10% in 2007). Pension fund administrators may invest abroad a maximum of 12% of the value of each individual capitalization fund. Open investment funds may invest up to 20% of their total portfolio in international financial markets. In the case of closed investment funds whose nominal value at the time of issue is less than $20,000, the limit is 40% of the total portfolio. If the nominal value of the share is larger, the limit is up to 100% of the total portfolio.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsBy law, investment in securities issued abroad may not exceed 50% of resources for investment by insurance companies. Pursuant to a board resolution, the CBB each year sets the maximum amount for investment abroad by insurance companies, which is currently 12% (10% in 2007). Pension fund administrators may invest abroad a maximum of 12% of the value of each individual capitalization fund. Open investment funds may invest up to 20% of their total portfolio in international financial markets. In the case of closed investment funds whose nominal value at the time of issue is less than $20,000, the limit is 40% of the total portfolio. If the nominal value of the share is larger, the limit is up to 100% of the total portfolio.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsBy law, investment in securities issued abroad may not exceed 50% of resources for investment by insurance companies. Pursuant to a board resolution, the CBB each year sets the maximum amount for investment abroad by insurance companies, which is currently 12% (10% in 2007). Pension fund administrators may invest abroad a maximum of 12% of the value of each individual capitalization fund. Open investment funds may invest up to 20% of their total portfolio in international financial markets. In the case of closed investment funds whose nominal value at the time of issue is less than $20,000, the limit is 40% of the total portfolio. If the nominal value of the share is larger, the limit is up to 100% of the total portfolio.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsBy law, investment in securities issued abroad may not exceed 50% of resources for investment by insurance companies. Pursuant to a board resolution, the CBB each year sets the maximum amount for investment abroad by insurance companies, which is currently 12% (10% in 2007). Pension fund administrators may invest abroad a maximum of 12% of the value of each individual capitalization fund. Open investment funds may invest up to 20% of their total portfolio in international financial markets. In the case of closed investment funds whose nominal value at the time of issue is less than $20,000, the limit is 40% of the total portfolio. If the nominal value of the share is larger, the limit is up to 100% of the total portfolio.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsAll foreign credits, including suppliers’ credits to government agencies and autonomous entities, and credits to the private sector with official guarantees are subject to authorization by the national congress, which is obtained by the MOF. All cash proceeds of borrowing from foreign public sector agencies are channeled through the CBB. Commercial and financial credits to the private sector without official guarantees are not subject to authorization but must be reported to the CBB for statistical purposes.
Commercial credits
To residents from nonresidentsYes.
Financial credits
To residents from nonresidentsYes.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
References to legal instruments and hyperlinksInvestment Law 1182 (1990); Exchange Market Law 1834 (1998); Regulatory Standards for Investment; www.spvs.gov.bo.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutions
Borrowing abroadShort-term foreign liabilities are subject to reserve requirements, except for liabilities incurred solely for foreign trade operations and provided assets and liabilities are fully matched for each transaction.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsA cash reserve requirement rate of 2% applies to time deposits, savings account deposits, and deposits with a maturity (fixed-term deposits—FTDs) of up to 60 days in local currency and in housing development units (UFVs). FTDs with a maturity of less than 360 days in foreign currency and in local currency indexed to the dollar (MVDOL) are subject to a cash reserve requirement of 2%. Effective February 25, 2008, deposits in local currency and UFVs with maturities of less than 360 days are also subject to a cash reserve requirement of 2%.
Liquid asset requirementsA cash reserve requirement of 12% applies to demand deposits, savings account deposits, and deposits with a maturity of up to 720 days in foreign currency and in MVDOL. In addition, there is a marginal cash reserve requirement of 7.5% applied to the difference between deposits recorded in foreign currency and MVDOL and of 60% (effective August 2, 2007; previously, effective January 15, 2007, it was reduced from 80% to 70%) of the level recorded on March 31, 2005. There is an offset mechanism that reduces the additional reserve requirement in foreign currency by increments in deposits in local currency and UFVs above the level as of March 31, 2005. This difference in the reserve requirements and the offset mechanism aims to provide a greater incentive for accepting deposits in local currency.
Effective February 25, 2008, the percentage used to calculate the additional reserve requirement is being reduced gradually from 60%, and fixed-term deposits in local currency with maturities of up to 360 days are subject to a cash reserve requirement of 10%.
Investment regulations
Abroad by banksBanks may engage in investment abroad for the purpose of setting up banks, branches, or agencies; this investment must not exceed 40% of their net worth.
Open foreign exchange position limitsEffective January 1, 2008, financial institutions may maintain a short foreign exchange position up to the equivalent of 70% (previously, 80%) of the book value of their net worth less fixed assets (patrimonio contable neto de activos fijos).
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsBy law, investment in securities from issuers established abroad may not exceed 50% of resources for investment. Pursuant to a board resolution, the CBB each year sets the maximum amount for investments abroad by insurance companies, which is currently 12% (10% in 2007).
Limits (max.) on investment portfolio held abroadYes.
Pension funds
Limits (max.) on investment portfolio held abroadThe maximum pension fund administrators may invest abroad is 12% of the value of each individual capitalization fund.
Investment firms and collective investment funds
Limits (max.) on investment portfolio held abroadOpen investment funds may invest up to 20% of their total portfolio in international financial markets. In the case of closed investment funds whose nominal value at the time of issue is less than $20,000, the limit is 40% of their total portfolio. If the nominal value of the share is larger, the limit is up to 100% of their total portfolio.
References to legal instruments and hyperlinksLaw on Banks 1488, Article 43, updated May 5, 2004; Administrative Resolution SPVS-IP No. 038/2002, Article 6(d); Board Resolution No. 048/2005 (Approving New Regulations to Govern the Legal Reserve Requirements); Board Resolution No. 076/2003 (Approving Amendments to the Regulations Governing Exchange Positions in the Financial System); Insurance Law; Regulations for the Insurance Law; Board Resolution No. 006/2006 (Approving Maximum Limits for Foreign Investment by Insurance Companies); Law on Pensions; Administrative Resolution SPVS-IV No. 421 (Regulations Governing Investment Funds and Investment Fund Administrators); CBB Board Resolution No. 118/2006 of December 12, 2006; Board Resolution 156/2007, issued in December 2007; Decree 122/2007 of September 25, 2007; www.bcb.gov.bo; www.sbef.gov.bo; www.spvs.gov.bo.
Changes during 2007
Exchange arrangementOctober 1. The CBB introduced a 1% commission on all foreign transfers to the private sector, except for export transactions taking place through the CBB.
December 1. The classification of the de facto exchange rate arrangement was changed from a conventional pegged arrangement to a crawling peg vis-à-vis the dollar.
Imports and import paymentsApril 1. In order to supply the domestic food market, the government adopted a temporary customs duty of zero on imports of wheat.
July 2. In order to supply the domestic food market, the government adopted a temporary customs duty of zero on imports of wheat flour.
August 15. In order to supply the domestic food market, the government adopted a temporary customs duty of zero on imports of rice.
October 1. In order to supply the domestic food market, the government adopted a temporary customs duty of zero on imports of corn.
October 31. In order to supply the domestic food market, the government adopted a temporary customs duty of zero on imports of live animals and beef.
November 14. The government authorized the Executive Secretariat of the PL-480 Program to purchase, import, and market semimilled and wholly milled rice intended for domestic consumption.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJanuary 15. The reference rate for calculating the additional reserve requirement in foreign currency and MVDOL was reduced to 70% from 80%.
August 2. The reference rate for calculating the additional reserve requirement in foreign currency and MVDOL was reduced to 60% from 70%.
Changes during 2008
Exchange arrangementJanuary 2. The CBB introduced a 1% service charge on transfers from abroad to the financial system through the CBB except (1) operations through the CBB for exporters and remittances equal to or less than $1,000, and (2) operations through the financial system for diplomatic corps, cooperation agencies, and international organizations, and remittances equal to or less than $1,000.
Imports and import paymentsFebruary 27. An exceptional and temporary reduction of the customs duty to zero was introduced on imports of food commodities, including corn, rice, wheat flour, and butter for one year.
April 1. A new tariff structure with customs duty rates of zero, 5%, 10%, 15%, and 20% was introduced.
Exports and export proceedsFebruary 27. An exceptional and temporary prohibition was introduced against exports of certain food commodities in the family basket and those used as production inputs for the domestic market—beef, chicken, wheat, and corn—for one year.
March 19. Exports of edible oils were prohibited for a period of one year.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJanuary 1. The threshold for the short foreign exchange position for financial institutions was reduced from 80% to 70% of the book value of their net worth.
February 25. Deposits in local currency and UFVs with maturities of less than 360 days became subject to a cash reserve requirement of 2%.
February 25. The percentage used to calculate the additional reserve requirement began to be reduced gradually from 60%.
The fixed-term deposits in local currency with maturities of up to 360 days became subject to a cash reserve requirement of 10%.
Provisions specific to institutional investorsJanuary 1. The maximum amount for investment abroad by insurance companies in 2008 was set by the CBB at 12%.

BOSNIA AND HERZEGOVINA

(Position as of December 31, 2007)

Status under IMF Articles of Agreement
Article XIVYes.
Exchange Measures
Restrictions and/or multiple currency practicesThe IMF staff report for the 2007 Article IV consultation with Bosnia and Herzegovina states that, as of June 29, 2007, Bosnia and Herzegovina maintained restrictions on payments and transfers for current international transactions resulting from measures taken with respect to frozen foreign currency deposits. (Country Report No. 07/268)
Exchange measures imposed for security reasons
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
Other security restrictionsIn accordance with the relevant UN Security Council resolutions, restrictions have been imposed on certain financial transactions related to listed terrorist groups.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Bosnia and Herzegovina is the convertible marka.
Other legal tenderEuro banknotes and coins also circulate and are used for cash payments.
Exchange rate structureUnitary.
Classification
Currency board arrangementThe convertible marka is pegged to the euro at the rate of KM 1 per €0.51129.
Exchange taxNo.
Exchange subsidyNo.
Foreign exchange market
Spot exchange market
Operated by the central bank
Allocationn.a.
Auctionn.a.
Fixingn.a.
Interbank marketn.a.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirements
Controls on the use of domestic currencyControls apply only to prevent money laundering.
Payments arrangementsNo.
Administration of controlCompanies wishing to engage in foreign trade must register with the relevant ministry.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyYes.
Foreign currencyExports of foreign currency and securities denominated in foreign currency are regulated, with specific conditions prescribed by the relevant ministry.
On imports
Domestic currencyYes.
Foreign currencyThere are no restrictions on imports of foreign currency and securities in foreign currency.
References to legal instruments and hyperlinksLaw on the Central Bank of Bosnia and Herzegovina; www.cbbh.ba.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyIndividuals and legal entities may hold foreign exchange accounts with commercial banks without restriction or approval.
Held abroadYes.
Approval requiredExporters who are legal entities may open accounts, but approval is required from the relevant ministry.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyYes.
References to legal instruments and hyperlinksLaw on Foreign Currency Business Operations in the Federation of Bosnia and Herzegovina; Law on Foreign Currency Business Operations in Republika Srpska; www.fbihvlada.gov.ba/bosanski/zakoni/1998/zakoni/44%20b%20zakon.htm; www.narodnaskupstinars.net/lat/zakoni/zakon.php?id_zakona=201.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents may open foreign exchange accounts with commercial banks.
Domestic currency accountsNonresidents may open accounts in domestic currency with commercial banks.
Convertible into foreign currencyYes.
Blocked accountsAccounts are blocked in accordance with the law that regulates money laundering and the financing of terrorism.
References to legal instruments and hyperlinksLaw on Foreign Currency Business Operations in the Federation of Bosnia and Herzegovina; Law on Foreign Currency Business Operations in Republika Srpska.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for imports
Advance payment requirementsImports must arrive within 90 (or 60) days of the date of the advance payment.
Documentation requirements for release of foreign exchange for importsCommercial banks may require documents verifying the purpose of the transaction before effecting payment.
Import licenses and other nontariff measuresThere are no import quotas for any product. All imports are free of licensing requirements, except those that relate to public security; the health of people, plants, and animals; articles of artistic or historic value; industrial-commercial property; and the disposal of drugs and scrap.
Positive listYes.
Negative listThere is no official list of prohibited imports, but the Council of Ministers may establish such a list as circumstances require.
Open general licensesYes.
Other nontariff measuresMeasures related to security and public health apply.
Import taxes and/or tariffsImport tariffs range from zero to 15%, with an average unweighted rate of 6%.
State import monopolyNo.
References to legal instruments and hyperlinksLaw on Foreign Trade Policy; www.fipa.gov.ba.
Exports and Export Proceeds
Repatriation requirementsExport proceeds must be collected and repatriated in full within 60 (or 90) days of the date of exportation. This period may be extended for 60 days with permission from the relevant ministry.
Financing requirementsNo.
Documentation requirementsExporters must be authorized to engage in foreign trade. Customs authorities require that exporters provide documents accompanying the goods; in some cases, documents verifying the origin of the goods are also required. Approval from the Ministry of Foreign Trade is required for exports of military equipment, blood, narcotics and medicines containing narcotics, and other pharmaceutical products.
Preshipment inspectionYes.
Export licensesExports are free of restrictions, except for certain products, such as weapons, drugs, and works of art, for which permits are required.
Without quotasYes.
Export taxesNo.
References to legal instruments and hyperlinksLaw on Foreign Currency Business Operations in the Federation of Bosnia and Herzegovina; Law on Foreign Currency Business Operations in Republika Srpska; Law on Foreign Trade Policy.
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 fundsIn accordance with an agreement with Germany, the Central Bank of Bosnia and Herzegovina provides documentation to Germany on pensions from Germany paid by commercial banks under German jurisdiction to workers in Bosnia and Herzegovina.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsSecurities market participants must be authorized to trade in the organized markets, in accordance with the laws on securities transactions.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securitiesDomestic securities may be purchased and sold domestically only through an authorized domestic participant in the securities market.
Shares or other securities of a participating natureControls apply to all these transactions.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Financial credits
By residents to nonresidentsFinancial credits by residents to nonresidents are not allowed.
To residents from nonresidentsResidents may obtain financial credits from nonresidents and for that purpose open accounts and hold funds abroad with the submission of a copy of the contract to the relevant ministry.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsPrudential regulations on banks apply.
Controls on direct investment
Inward direct investmentForeign equity ownership is not limited, but investments above 49% in the production of arms, ammunition, explosives for military use, and military equipment, and in the dissemination of public information must be registered with the relevant ministry.
Controls on liquidation of direct investmentOutstanding tax balances must be paid on liquidation.
Controls on real estate transactions
Purchase locally by nonresidentsA reciprocity agreement applies to countries that were part of the former Federal Republic of Yugoslavia. There are no limitations for other nonresidents.
Controls on personal capital transactions
LoansLoans to nonresidents are not allowed.
By residents to nonresidentsYes.
To residents from nonresidentsResident natural persons are required to obtain financial credits through authorized domestic banks.
Gifts, endowments, inheritances, and legaciesControls apply to all these transactions.
Transfer of assets
Transfer abroad by emigrantsYes.
Transfer of gambling and prize earningsYes.
References to legal instruments and hyperlinksLaw on Foreign Currency Business Operations in the Federation of Bosnia and Herzegovina; Law on Foreign Currency Business Operations in Republika Srpska; Law on Securities in the Federation of Bosnia and Herzegovina; Law on Securities in Republika Srpska.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsThe Foreign Exchange Entity Law and the Banking Law regulate these transactions.
Lending to nonresidents (financial or commercial credits)Domestic commercial banks may not extend such credits.
Purchase of locally issued securities denominated in foreign exchangeThere are no locally issued securities denominated in foreign exchange.
Open foreign exchange position limitsBanks may hold foreign currency positions up to 30% of their regulatory capital.
Provisions specific to institutional investors
Insurance companies
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.r.
Currency-matching regulations on assets/liabilities compositionn.r.
Pension fundsn.a.
Investment firms and collective investment fundsSecurities of a particular company may not comprise more than 10% of the total assets of an investment fund.
Limits (max.) on securities issued by nonresidentsn.a.
Limits (max.) on investment portfolio held abroadn.a.
Limits (min.) on investment portfolio held locallyn.a.
Currency-matching regulations on assets/liabilities compositionn.a.
References to legal instruments and hyperlinksLaw on Foreign Currency Business Operations in the Federation of Bosnia and Herzegovina; Law on Foreign Currency Business Operations in Republika Srpska; Law on Banks in the Federation of Bosnia and Herzegovina; Law on Banks in Republika Srpska; www.fba.ba/en/laws; www.abrs.ba/propisi/propisi_eng.htm.
Changes during 2007
No significant changes occurred in the exchange and trade system.