Chapter

Countries Operating Under Article XIV

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1959
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Afghanistan

Exchange Rate System

There is no agreed par value for the Afghani. There are two official exchange rates—a first category rate of Afg 20.00 buying, Afg 20.25 selling, per US$1, and a second category rate of Afg 28.00 buying, Afg 28.35 selling, per US$1—and a fluctuating free market. No transactions take place at the second category selling rate and the other official rates apply to specified transactions only. Allocations at the second category rate for certain consumer goods imported by the Government Monopolies Department are made at an effective rate of Afg 30.35 (the second category rate plus an exchange tax of Afg 2) and all other allocations at the second category rate are made at an effective rate of Afg 32.35 (the second category rate plus an exchange tax of Afg 2 and a levy of Afg 2 used for export promotion). Other effective rates arise from the obligation to surrender certain percentages of the proceeds from exports of karakul, cotton, wool, and six other commodities in mixed proportions at the specified official rates, combined with the possibility of selling the balance at the fluctuating free market rate. All other transactions take place at the fluctuating free market rate. (See Table of Exchange Rates, below.)

Administration of Control

Foreign exchange is controlled by Da Afghanistan Bank, the central bank of Afghanistan. The control is facilitated by the existence of certain companies specializing in the export of such commodities as karakul and cotton.

Prescription of Currency

Transactions with countries with which Afghanistan has bilateral payments agreements1 must be effected in the foreign currencies specified in the agreements. The proceeds of exports of karakul, cotton, and wool must be obtained in fully convertible or externally convertible European currencies; alternatively, proceeds of exports of cotton and wool to agreement countries may be obtained in agreement currencies. There is also a bilateral trade and payments arrangement with India, under which exports to India are settled in Indian rupees, which must in turn be used for imports from that country. There are no other prescription of currency requirements.

Imports and Import Payments

There are no quantitative restrictions on imports, but import licenses are required for imports from countries with which trade and payments agreements are in force. Exchange is provided for imports for government development projects at the first category rate and for essential industrial imports and certain other essential imports at the second category rate. Some import payments at the second category rate are subject to an exchange tax of Afg 2; in addition, a surcharge of Afg 2 is levied on all other imports at this rate. Other imports have to be financed in the free market.

Payments for Invisibles

Government payments for invisibles and payments to foreigners on government contracts in Afghanistan are made at the first category rate. Foreigners employed in Afghanistan may, after having sold 30 per cent of their salaries in foreign exchange for afghanis at the first category rate, have the remainder transferred abroad. A few invisibles may be remitted at the first or the second category rate (see Table of Exchange Rates, below). All other authorized payments are settled at the free market rate. Travelers leaving Afghanistan may not take out more than Afg 500 in domestic banknotes.

Exports and Export Proceeds

Exports to countries with which trade and payments agreements are in force require export licenses. Proceeds from exports of karakul, cotton, and wool have to be surrendered partly at the official rates; the balance may be sold at the free market rate or used to import essential goods. However, proceeds of exports of cotton and wool to bilateral agreement countries must be surrendered entirely at the official rates. The proceeds of exports of karakul must be received in fully convertible currencies or externally convertible European currencies. Partial surrender requirements at official rates apply to exports of six other commodities; the balance, and exchange proceeds from all other exports, may be sold in the free market.

Proceeds from Invisibles

Foreigners employed in Afghanistan and paid in foreign exchange must surrender at least 30 per cent of their earnings to Da Afghanistan Bank at the first category rate in order to obtain local currency for their local expenses; the remainder may be sold in the free market. Exchange from diplomatic establishments is purchased at the first category rate. Exchange receipts from other transactions may be sold in the free market. Travelers entering Afghanistan may bring in banknotes not exceeding Afg 500.

Capital

Foreign capital permitted to be invested in Afghanistan, either jointly with Afghan capital or otherwise, must be conducive to the prosperity and economic and technical advancement of the country even if it does not receive special privileges. Under the Foreign Investment Law of April 24, 1954, the remittance of profits and the repatriation of registered capital in respect of all approved foreign investments in industry, mining, public works, agriculture, and transportation are guaranteed. If such capital has been entered and registered at the second category rate, remittances may be made at that rate (effective rate, Afg 32.35); if capital is registered as having been entered through the free market, the transfer guarantee is in terms of the free market rate.

Table of Exchange Rates (as at December 31, 1958)(of ghanis per U.S. dollar)
BuyingSelling
20.00(First Category Rate)

30% of salaries of foreign employees. Exchange bought by Da Afghanistan Bank from diplomatic establishments.
20.25(First Category Rate)

Budgetary expenditures of the Government. Purchases of monetary gold. Imports (including freight and insurance) and other payments for government development projects. Certain students’ expenses abroad.
26.16(68% at First Category Rate, 17% at Second Category Rate, and 15% at Free Market Rate)

Exports of karakul.
26.40(20% at First Category Rate and 80% at Second Category Rate)

Exports of cotton and wool to bilateral agreement countries, other than India.
28.00(Second Category Rate)

Registered capital.
28.35(Second Category Rate)
30.24(11% at First Category Rale, 68% at Second Category Rate, and 15% at Free Market Rate)30.35(Second Category Rate plus Afg 2 Exchange Tax)
Exports of cotton and wool to other than bilateral agreement countries.Imports of sugar and petroleum products by the Government Monopolies Department (including freight and insurance).
42.40 (40% at Second Category Rate and 60% at Free Market Rate)

Exports of sesame seeds.
32.35(Second Category Rate plus Ajg 2 Exchange Tax and Ajg 2 Surcharge)

Essential imports (including freight and insurance): industrial equipment; automobiles and parts; cotton piece goods for cooperative depots; imports by municipalities; other essential goods (tea, cement, medicines) to counter domestic price increases. Business travel by industrial importers; medical expenses; other students’ expenses abroad; some pilgrims’ travel. Capital registered at Afg 28.00 and profits thereon.
45.60(20% at First Category Rate and 80% at Free Market Rate)

Exports of sheepskins and goatskins.
48.40(15% at Second Category Rate and 86% at Free Market Rate)

Exports of carpets and flaxseed.
48.80(10% at First Category Rate and 90% at Free Market Rate)

Exports of casings.
52.00 (approx.) (Fluctuating Free Market Rate)

All other receipts.
52.00 (approx.) (Fluctuating Free Market Rate)

All other authorized payments.

Changes during 1958

January 31. A new payments agreement with the Federal Republic of Germany was signed. Effective March 22, 1958, payments between the two countries would be made in freely convertible deutsche mark, U.S. dollars, Canadian dollars, or free Swiss francs.

September 21. The selling rate for the Government Monopolies Department’s imports of sugar and petroleum products was depreciated from Afg 22.25 to Afg 30.35 per US$1. (This decision was taken on March 22, 1959, with retroactive effect.)

September 29. Fifteen per cent of the proceeds of exports of karakul, cotton, and wool in fully convertible currencies or externally convertible European currencies could be sold at the free market rate or used to import essential goods.

Argentina1

Exchange Rate System

The par value of Argentine Pesos 18 = US$1 is applied only to the proceeds of exports effected before December 30, 1958 and payments for imports contracted for before that date. All other exchange transactions are settled through the free exchange market, in which the rate is determined by the free play of market forces. The free market rate on January 12, 1959 was M$N 66.60 per US$1.

Administration of Control

Exchange controls are administered by the Central Bank of Argentina. Exchange may be bought and sold only at institutions (including banks, financial firms, and exchange dealers) authorized expressly for this purpose. Purchases and sales of gold and foreign currencies, including foreign banknotes, may be made without restriction in the free exchange market.

Prescription of Currency

Under the bilateral agreements concluded by Argentina with various countries,2 merchandise transactions (and, under some of the agreements, transactions in invisibles) are settled in agreement dollars according to the country of destination or origin of the goods. Transactions with other countries must be settled in convertible (including externally convertible) currencies.

Imports and Import Payments

Imports are free of import and exchange licensing, and exchange to pay for them may be obtained in the free market. Special surcharges of 20 per cent and 40 per cent are payable before customs clearance on the c.i.f. value of imports of goods on Lists 2 and 3, respectively. The surcharge on goods not on Lists 1, 2, or 3 is 300 per cent. Certain imports are also subject to advance deposits: 500 per cent for automobiles, certain luxury goods, and other goods produced in Argentina; 150 per cent or 300 per cent for certain raw materials and manufactures; and 50 per cent or 300 per cent for machinery and motors in general. These deposits are held for 180 days from the date of customs clearance. Some imports from Bolivia, Brazil, Chile, Paraguay, and Uruguay are exempt from the surcharges and advance deposits.

Payments for Invisibles

Payments for invisibles may be made freely through the free market.

Exports and Export Proceeds

Exports are not subject to controls other than those arising from the enforcement of surrender requirements. Exporters must sell exchange received from exports within 30 days after shipment of the goods; they may also sell the exchange before the goods are shipped, against presentation of the shipping documents. Special taxes (“withholding percentages”) of 20 per cent and 10 per cent are applied to the proceeds of exports of goods on List 4 and List 5, respectively.

Proceeds from Invisibles

Exchange derived from invisibles may be sold without restriction in the free market.

Capital

Inward and outward capital transfers by residents or nonresidents are free. The corresponding exchange transactions are settled through the free market.

Changes during 1958

The system described in the preceding sections came into effect at the end of the year. The principal changes that were made in the system existing prior to that time were, in general, as follows: changes in the percentages withheld from the proceeds of certain exports; the introduction of different proportions for the purchase and sale of foreign exchange in the official and free markets; transfers of commodities from the official to the free market; changes in aforos (the values established for exchange control purposes); changes in the system of import licensing; and modifications in the advance deposits required on imports. Details of some of these and other changes are given below.

January 2. Importers, in order to clear goods, were required to make advance deposits with a bank in Argentina of 20 per cent of the f.o.b. value for goods imported through the official market and 100 per cent for goods imported through the free market. Exemption was granted for imports of fuels and newsprint, and of industrial machinery and equipment imported under the regulations of May 24 and July 22, 1957. These deposits would not be returned in less than 120 days from the date they were made.

January 10. The “withholding percentage” applied to the proceeds of exports of greasy wool was eliminated.

February 12. The “withholding percentages” applied to the proceeds of exports of sheepskins and slipes were eliminated.

March 15. Settlements with Spain were to be made in agreement dollars.

March 25. The proceeds of exports of poultry and vegetables could be negotiated in the free market.

March 27. Imports of industrial machinery, whatever their origin, were exempted from the requirement of an advance deposit.

April 28. Exchange would be made available in the official market to cover 60 per cent of the value of imports of book paper, India paper, and coated paper, for the printing of books, magazines, newspapers, and pamphlets of general interest; the remaining 40 per cent could be obtained through the free market.

May 2. The issuance of exchange licenses, authorizations for customs clearance, the approval of forms for imports of industrial machinery, and the extension, replacement, or supplementing of licenses already granted were suspended. In subsequent weeks, outstanding licenses were revalidated and new licenses issued for a few products.

May 14. Finland was included in the multilateral trade and payments arrangements applicable to certain Western European countries (the “Paris Club”).

May 21. Imports of products originating in neighboring countries were exempted from the suspensions imposed on May 2.

July 28. The proceeds of exports of beef in various forms, chilled, frozen, cured, and salted Iamb and mutton, dried sheepskins, and greasy wool were permitted to be negotiated 65 per cent in the official market and 35 per cent in the free market. The proceeds of an extensive number of other exports were permitted to be negotiated 50 per cent in the official market and 50 per cent in the free market.

August 1. The Central Bank resumed the granting of exchange licenses (official market) and of authorizations for customs clearance (free market) for essential goods. Two lists of import commodities were issued: those on List 1 were to be paid for 50 per cent through the free market and 50 per cent through the official market and the essential commodities comprising List 2 were to be paid for entirely through the free market. Goods on List 1 were exempt from the requirement of an advance deposit, but for goods on List 2, with the exception of motors, an advance deposit of 100 per cent was required.

August 25. Payments of up to 75 per cent through the official market were authorized for information services rendered by news agencies on and after January 1, 1958.

September 9. Minimum export prices for a number of major exports—mainly meats and meat products and hides—were established. The percentage of the minimum export price to be negotiated in the official market would be either 65 per cent or 50 per cent, with the balance negotiable in the free market (the percentages established on July 28—see above). Any proceeds in excess of the minimum export price could also be negotiated in the free market.

September 11. It was announced that authorized institutions were permitted to conduct arbitrage operations in the currencies of the multilateral payments system against Argentine-Soviet agreement dollars.

September 12. Minimum export prices for wool exports were established. It was announced that 65 per cent of the minimum price of greasy wool, and 50 per cent of the minimum price of washed, carbonized, and combed wool and slipes, would be negotiable in the official market, with the balance in each case negotiable in the free market. Any proceeds in excess of the minimum export price could also be negotiated in the free market. For shipments before November 30, 1958, rebates of 15 per cent for greasy wool and 10 per cent for washed, carbonized, and combed wool and slipes were granted.

September 19. The exchange treatment established on August 1 for imports of goods on List 1 (50 per cent payable through the official market and 50 per cent payable through the free market) was extended to all articles, except fuel and lubricants, still included in the list of imports entitled to exchange from the official market. The aforos which had been established for some of these items were abandoned.

November 7. For transactions through the free exchange market, in agreement dollars, with Bulgaria, Czechoslovakia, East Germany, Hungary, Israel, Poland, Rumania, Spain, the U.S.S.R., and Yugoslavia, the system in use for neighboring countries was introduced, applying the exchange rates set daily by the Central Bank and canceling the system of arbitrage between agreement dollars and the multilateral currencies.

December 30. A comprehensive stabilization program was announced, including a reform of the restrictive system. The multiple rate structure was replaced by a single, fluctuating rate. The system of aforos was abolished and, except for the requirement that export proceeds must be surrendered, all controls over imports and exports were removed. At the same time, surcharges and/or advance deposits were established for certain imports and “withholding percentages” were established for the proceeds of some exports. Transactions in invisibles and capital could be effected without restriction.

Note.—On January 12, 1959, the stabilization program announced on December 30, 1958 (see above) was put into effect and operations were resumed in the free exchange market.

Australia1

Exchange Rate System

The exchange rate system is unitary, based on the par value of Australian Pound 1 = US$2.24. Official rates are fixed for transactions in sterling: £A 125 buying, and £A 125/10/- selling, per UK£100. The authorized banks quote their own rates for other currencies, including the U.S. dollar, based on market quotations in London and New York.

Administration of Control

The Commonwealth Bank of Australia administers the exchange control on behalf of the Commonwealth Treasurer, but considerable discretionary powers are delegated to the trading banks authorized to handle foreign exchange transactions. Import and export licensing is administered by the Department of Trade and the Department of Customs and Excise, which are in consultation with the Treasury and the Commonwealth Bank on foreign currency aspects.

Prescription of Currency

The Commonwealth Bank, by notices in the Commonwealth Gazette, prescribes the currency that may be accepted for exports to each foreign country or monetary area. Conformity to this prescription is one of the conditions on which the Department of Customs and Excise issues the export license. For payments for imports and other outward payments, the same type of currency prescription operates through central bank directions to the authorized banks. The form of prescription in both cases follows that of the United Kingdom and other Sterling Area countries. All payments to and from Sterling Area countries must be made in sterling or another Sterling Area currency. Payments for imports from countries outside the Sterling Area may be made (1) by crediting sterling to an External Account; (2) in Australian currency through the account of a bank in the country of origin of the goods with a bank in Australia; or (3) in any foreign currency. For exports to countries outside the Sterling Area, sterling from an External Account, or Australian currency from appropriate accounts, as for imports, must be obtained; alternatively, any specified currency that is freely transferable to Australia may be accepted.

Nonresident Accounts

There is no formal classification, as in the United Kingdom, of the accounts of nonresidents—i.e., those residents outside the Sterling Area—because of the relatively few accounts involved; but the same principles as in the United Kingdom apply. Transfers are allowed freely, on application, between the accounts of residents of countries outside the Sterling Area. All credits to nonresident accounts are subject to approval, which is granted in the same circumstances and subject to the same conditions as if a transfer to the country of residence of the account holder were involved.

Payment in sterling to an External Account in the United Kingdom is always an alternative method of payment. The use of this method ensures the payee’s ability to acquire his own currency if desired. When, however, amounts have been left indefinitely in Australia on nonresident account, they might be regarded as capital if transfer should be sought.

Imports and Import Payments

Apart from goods exempt from licensing, the most important being petroleum products and certain basic materials, imports of all goods require import licenses, which are issued by the Department of Customs and Excise in collaboration with the Department of Trade. Imports of a range of basic materials and capital equipment are licensed by various methods on a nondiscriminatory basis. At the end of 1958, about 40 per cent of total imports were either exempt from licensing or licensed without discrimination regarding the source of supply.2 Licenses for other imports from the dollar area are issued either on an administrative or on a quota basis and are confined mainly to imports regarded as essential. Licenses for some imports from all other countries are granted either freely or on a replacement basis, but most imports from these countries are licensed either on an administrative or on a quota basis. Licenses for goods from non-dollar sources may be used to import the goods from any non-dollar country. All licenses are valid for 12 months.

For all permitted imports, the provision of foreign exchange or permission to credit Australian currency to a nonresident account is automatic, provided the prescription of currency requirements are observed.

Payments for Invisibles

All payments in respect of invisibles come under exchange control, but approval is given freely for most items and the control operates largely to prevent unauthorized capital transfers. However, expenditure abroad for such items as advertising, insurance of local risks, and newspaper representation is subject to administrative decision. For royalties and service charges, approval for transfer is given provided the contract giving rise to the commitment was entered into prior to control or subsequently with exchange control permission, where necessary. Remittances for family maintenance are limited to UK£80 a month for each remittor up to three months in advance. For tourist travel, there is an exchange allowance of UK£1,300 in any 12 months, of which up to UK£650 may be made available for travel in countries outside the Sterling Area. For business travel, exchange is made available at the rate of UK£15 a day up to a limit of UK£1,500 for each person in any period of 12 months, of which up to UK£900 may be made available for travel in countries outside the Sterling Area; requests for larger amounts are subject to administrative decision. Limits are also placed on other noncontractual transfers, such as donations and movements of emigrants’ funds; the treatment of applications for such transfers is, however, relatively liberal, and any limitations may be regarded as complementary to the control over capital movements. Not more than £A 25 in Australian notes may be taken out of Australia by a traveler.

Exports and Export Proceeds

With minor exceptions, all exports require licenses issued by the Department of Customs and Excise. A condition of these licenses is that full proceeds must be received in a currency and within a period approved by the Commonwealth Bank. To assist supervision, there is a further condition that all shipping documents, bills of lading, etc., must be drawn to the order of and delivered to the Commonwealth Bank or a trading bank acting as its agent. Unless payment is to be received in a currency and within a period corresponding to those stipulated by the Commonwealth Bank, the exporter’s bank will not clear the documents without specific exchange control approval.

Proceeds from Invisibles

Proceeds from invisibles received in U.S. dollars, as well as U.S. or Canadian dollars in banknote or check form, must be offered for sale within specified periods. Other holdings and proceeds from invisibles in other currencies (except Sterling Area currencies) must be reported and may be disposed of only with permission, but their surrender is not compulsory.

Capital

All transfers of capital from Australia require specific exchange control approval. Transfers of resident capital to countries outside the Sterling Area are not allowed other than in exceptional cases. Approval is normally granted for the repatriation of capital by nonresidents; however, no advance commitments are given in such cases.

There are no restrictions on the receipt of capital funds from abroad, except that residents must obtain prior exchange control approval before incurring a liability to a resident of a country outside the Sterling Area.

Foreign securities owned by Australian residents (other than rights to receive payment in the United States or in U.S. dollars) need not be surrendered but they must be reported. This obligation does not cover securities whose principal and interest are payable in a currency of the Sterling Area or securities expressed in Canadian dollars and registered in Australia, provided the securities are held within the Sterling Area. The export of securities and transactions in foreign securities are subject to specific exchange control approval.

Changes during 1958

March 5. Restrictions on the purchase of sterling notes by banks in Australia were removed; also removed was the limit of UK£10 on the amount of sterling notes that could be sold as part of an approved allocation of exchange for travel in the Sterling Area.

April 1. Sixteen items, mainly basic raw materials, were exempted from licensing and banks were authorized to sell foreign exchange to pay for such imports. The licensing procedure for certain dollar imports was simplified by the use of quotas instead of administrative licensing, and discrimination against dollar imports was reduced.

April 18. The amount of Australian notes that a traveler may take out of Australia was increased from £A 4 to £A 25.

July 25. Banks were authorized to approve forward exchange contracts to cover exports or imports for periods of up to six months, instead of three months, as previously.

August 1. Discrimination against dollar imports was reduced by the licensing of further items, mainly of capital equipment, without discrimination regarding the source of supply. A few more items were freed from import licensing.

December 1. Discrimination against dollar imports was further reduced by increasing the number of commodities licensed without discrimination regarding the source of supply and of those exempt from import licensing.

Note.—The following changes were made on January 19, 1959: Payments for imports from countries outside the Sterling Area could be made in any currency. The proceeds of exports to countries outside the Sterling Area could be accepted in External Account sterling or in any specified currency. Discrimination against payments for invisibles to dollar area countries was removed.

Austria1

Exchange Rate System

The par value is Austrian Schillings 26.00 = US$1. The official limits for the U.S. dollar are S 25.80 buying, and S 26.20 selling, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for externally convertible European currencies2 vary between limits resulting from the U.S. dollar rate for the schilling in relation to the dollar rates for the other currencies. The forward premiums and discounts are left to the interplay of market forces. Special arrangements for exchange transactions in Egyptian pounds and Spanish account dollars give rise to other rates.

Administration of Control

Export or import licenses for goods listed in the Foreign Trade Law, if required, must be procured from the competent ministry, viz., the Federal Ministry of Trade and Reconstruction (Licensing Office), the Federal Ministry of Agriculture and Forestry, or the Federal Ministry of the Interior. The Austrian National Bank administers the import control and issues the exchange licenses where required.

Prescription of Currency

Settlements with countries in the dollar area are made in U.S. dollars, Canadian dollars, or externally convertible European currencies,2 or through Free Schilling Accounts. Settlements with European countries whose currencies are externally convertible, as well as settlements with Argentina, Brazil, Finland, Paraguay, and Uruguay, may be made in any fully convertible currency or any externally convertible European currency, or through Free Schilling Accounts. However, settlements with Uruguay are made mainly in sterling and, for the time being, payments to Finland cannot be made in French francs. Settlements with countries with which Austria has bilateral payments arrangements are made as follows: with Bulgaria, Czechoslovakia, East Germany, Greece, Hungary, Poland, Rumania, Spain, Turkey, the U.S.S.R., and Yugoslavia, through clearing accounts expressed in U.S. dollars; and with the Egyptian Region of the United Arab Republic, in Egyptian pounds.

Nonresident Accounts

The two main categories of nonresident account in schillings are described in the following paragraphs.

1. Free Schilling Accounts originate from the sale of gold, gold coins, fully convertible currencies, and externally convertible European currencies by a nonresident to the Austrian National Bank or to an Austrian authorized bank. With a few exceptions, disposal of these accounts is permitted freely, including transfers from one Free Schilling Account to another and the conversion of balances on such accounts into any foreign currency. Residents of countries in the dollar area, and authorized banks in Belgium-Luxembourg, Denmark, France, the Federal Republic of Germany, Italy, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, Finland, Argentina, Brazil, Paraguay, and Uruguay, may maintain such accounts with Austrian authorized banks, and all permissible settlements with these countries may be made through such accounts.

2. Blocked Accounts accrue from various categories of payments that have been made in favor of nonresidents and are not allowed to be transferred abroad. Balances on these accounts may not be used in Austria except as permitted under general or individual license. However, if these accounts are held with authorized banks, they may be debited freely for payments in Austria on behalf of the account holder for the following purposes: (a) donations (e.g., to relatives for personal aid, or to social, religious, or similar institutions) or maintenance payments to residents eligible for such payments, up to S 1,500 monthly for each beneficiary, total withdrawals not to exceed S 6,000 a month; (b) payments to residents of certified claims arising in connection with the opening or the administration of a Blocked Account or other blocked property of the account holder (e.g., bankers’ commissions, handling charges, deposit fees); (c) payments of taxes and other public fees and charges and legal counsel and notary fees owed by the account holder in Austria; (d) travel expenses in Austria of the account holder and his family and accompanying servants, up to S 5,000 weekly for each person; (e) payments for the maintenance of graves; (f) payments for real estate and related rights; and (g) purchases of Austrian securities. The transfer abroad of the sales proceeds plus capital appreciation of Austrian securities purchased with funds in Blocked Accounts is permitted to sellers residing in OEEC countries, provided that these securities have been held for at least five years before sale, and this applies also to the proceeds arising from the liquidation of other investments that have been made with funds from Blocked Accounts. All Blocked Accounts as of December 31, 1958 may be transferred to residents of countries with which transactions are settled in fully convertible currencies or externally convertible European currencies, as well as to residents of Greece (for funds blocked after May 1945), Spain, Turkey, and the United Arab Republic (Egyptian Region). In addition, accounts in foreign currency blocked prior to September 15, 1946 may be transferred abroad.

Imports and Import Payments

Import licenses are required only for goods listed in the Foreign Trade Law that are not included in the OEEC liberalization. Goods imported from and originating in countries that settle with Austria in fully convertible currencies or externally convertible European currencies may be paid for without an exchange license; this applies also to imports from Greece and Turkey if the settlement is made through the relevant clearing account. In order to make payments related to such imports, importers may utilize freely their retained export and other proceeds in fully convertible currencies or externally convertible European currencies, or in Greek or Turkish clearing dollars, respectively, held with Austrian foreign exchange dealers, or they may purchase such currencies freely from the authorized banks.

Compensation (barter) transactions are, in general, permitted with countries with which Austria has no payments or clearing arrangements if there is no other way of settling payments. Such transactions are subject to individual licensing by the Austrian National Bank and the Federal Ministry of Trade and Reconstruction.

Payments for Invisibles

Payments to countries with fully convertible currencies or externally convertible European currencies and to Greece and Turkey for nearly all transactions in invisibles are liberalized. For other payments, licenses are generally granted after taking into account the terms of existing bilateral agreements and such other considerations as the principle of reciprocity, hardship cases, and the availability of foreign exchange. For payments connected with the international transport of goods, export commissions, installations, and services, licenses are granted freely.

Residents traveling as tourists to countries settling their payments with Austria in fully convertible currencies or externally convertible European currencies, as well as to Greece and Turkey, may receive yearly allocations of exchange up to the equivalent of S 7,150. Persons going abroad may take with them S 10,000 in Austrian currency and any amount in foreign currency.

Exports and Export Proceeds

Licenses for exports that are regulated under the Foreign Trade Law have to be procured from the competent ministry, viz., the Federal Ministry of Trade and Reconstruction (Licensing Office), the Federal Ministry of Agriculture and Forestry, or the Federal Ministry of the Interior; goods exported by way of compensation (barter) are subject to licensing by the Federal Ministry of Trade and Reconstruction. In the issuance of export licenses, due consideration is given to the provisions of any relevant bilateral trade agreements and the fulfillment of quotas established in accordance with such agreements, and to the needs of the Austrian economy.

In principle, exports effected and export claims must be declared and the export proceeds surrendered. However, the exporter need not surrender the export proceeds if he has had these amounts credited to a foreign exchange account kept with an Austrian authorized bank; the use of these amounts is, however, subject to the same conditions as those applying to other outgoing payments. The following items are exempt from the general obligation to surrender export proceeds: (1) claims and proceeds kept in accounts with Austrian authorized banks in a fully convertible currency or an externally convertible European currency—such exchange may be used freely for conversion into any other of those currencies or for payment of the holder’s debts to creditors in countries with fully convertible currencies or externally convertible European currencies, as far as such payments are permitted under general or individual licenses; (2) claims and proceeds arising from exports to the Egyptian Region of the United Arab Republic and collected through a “collector account” established in accordance with the Austrian-Egyptian payments agreement of July 6, 1953, as well as those resulting from exports to Spain and collected in Spanish account dollars—such exchange may be sold at free rates through authorized banks to Austrian residents who hold valid exchange licenses for payments to Egypt or Spain, respectively.

Proceeds from Invisibles

In general, exchange receipts from invisibles have to be surrendered within eight days from the date of collection, with the exception of currencies held with Austrian banks and other credit institutions and proceeds credited to an account under the agreement with Egypt or Spain (see section on Exports and Export Proceeds, above). A number of institutions, such as insurance companies and patent offices, are granted open licenses to use their exchange proceeds for payments on their own account.

Persons entering Austrian territory are free to bring in Austrian or foreign currency without limit.

Capital

Investments in Austria by nonresidents are generally permitted if made in fully convertible currencies or externally convertible European currencies or out of originally owned blocked schilling balances. For all other investments, and for loans by nonresidents to residents, special licenses are required. These licenses are granted after careful scrutiny of each case, the interests of the national economy as a whole being taken into consideration. Foreign exchange brought in for these purposes must, in principle, be surrendered. The capital and capital proceeds arising from investments may be retransferred. Proceeds from sales by nonresidents of securities, enterprises, and real estate and related rights, as well as other payments not permitted to be transferred abroad, are usually credited to Blocked Accounts (see section on Nonresident Accounts, above). The transfer of capital abroad by residents is subject to approval, which is granted only in exceptional cases. Transfers to OEEC countries of exchange representing dowries and emigrants’ funds are limited to the equivalent of US$10,000. The transfer of inheritances is permitted to OEEC countries and Canada up to a countervalue of $10,000 a year and to the United States without limitation.

An open license has been granted for such transactions as (1) the export of securities for the purpose of realizing rights and claims thereunder abroad, (2) the export of nonresident-owned securities, and (3) the export of resident-owned foreign securities for sale abroad (the proceeds must be declared). Nonresidents may acquire Austrian securities against payment in fully convertible currencies or externally convertible European currencies or to the debit of Free Schilling Accounts or Blocked Accounts. The proceeds of sales of such securities, if the securities were acquired against fully convertible currencies or externally convertible European currencies or to the debit of Free Schilling Accounts, and amortization and earnings on such securities maturing after July 1, 1950, may be transferred to owners residing in countries with fully convertible currencies or externally convertible European currencies.

Changes during 1958

March 28. Settlements between Austria and Brazil were permitted to be made also through schilling agreement accounts. Previously, such payments could be made only in the currencies of other members of the multilateral arbitrage system (i.e., excluding cruzeiros and schillings).

July 1. The use of Blocked Accounts was extended: Whereas previously only 25 per cent could be used for the purchase of fixed-interest-bearing Austrian securities, all the balance on such an account could now be used for the purchase of Austrian shares as well as of fixed-interest-bearing Austrian securities. Also, authorization would be granted to transfer to any OEEC country the liquidation proceeds, including capital appreciation, of investments made with blocked funds after July 1, 1958 and not liquidated within five years, as well as of securities acquired in the same manner after July 1, 1958 that mature or are not sold within five years; this provision would not apply to the utilization of blocked funds acquired for investment purposes.

September 4. Blocked schilling balances as of August 30, 1958 belonging to residents of the dollar area or the EPU area, as well as those belonging to residents of Spain or the United Arab Republic (Egyptian Region), were permitted to be transferred to the owner’s country of residence without restriction. In addition, balances in foreign currency blocked prior to September 15, 1946 were permitted to be transferred abroad.

September 23. The percentage of liberalized imports from the United States and Canada was increased from 40 to 45 (based on 1953 imports); the percentage of liberalized imports in the industrial sector was increased to around 90 per cent and some food items, such as dried vegetables, canned fruits, and cheese, were added to the list of liberalized imports.

Note.—The following changes took place early in 1959:

January 2. The existing schilling agreement accounts related to OEEC countries, Finland, Argentina, Brazil, Paraguay, and Uruguay were transformed into Free Schilling Accounts. Balances on these accounts became convertible into any currency and transferable to any other Free Schilling Account. Such accounts could now originate from sales by nonresidents of any externally convertible European currency, as well as from sales of gold, gold coins, and fully convertible currencies. Foreign exchange dealings on the Vienna Stock Exchange were extended to U.S. dollars, Canadian dollars, and Portuguese escudos and operations in these currencies were no longer centralized in the National Bank. Iceland and Portugal were no longer considered as bilateral payments agreement countries.

January 12. Blocked schilling balances as of December 31, 1958 belonging to residents of countries with which settlements are made in fully convertible currencies or externally convertible European currencies could be transferred to Free Schilling Accounts; and those belonging to residents of Greece, Spain, Turkey, or the United Arab Republic (Egyptian Region) could be transferred to the owner’s country of residence, within the framework of the relevant bilateral payments agreement.

February 17. Following the introduction of external convertibility, the National Bank revised the existing foreign exchange regulations and introduced simplifications and relaxations: All restrictions on payments for imports from countries with fully convertible or externally convertible European currencies were withdrawn. Imports could be paid for and export proceeds received in any fully convertible currency or externally convertible European currency. The liberalization measures for invisibles and the exchange allocation for tourist travel were extended to all countries with which payments are settled in fully convertible currencies or externally convertible European currencies. Austrian foreign exchange dealers were allowed to hold foreign exchange accounts in the dollar area and to deal in foreign notes and coins; foreign notes and coins were now quoted on the Vienna Stock Exchange.

Belgium-Luxembourg1

Exchange Rate System

The par values are Belgian Francs and Luxembourg Francs 50 = US$1. There are two exchange markets—official and free. Current transactions are settled through the official market and financial (i.e., capital and certain current) transactions are settled through the free market, although for a few current transactions there is a choice between the two exchange markets.

In the official exchange market, only authorized banks may carry out exchange transactions permitted in that market. The currencies in the official market are U.S. dollars, Canadian dollars, Czechoslovak korunas, and the externally convertible European currencies (see section on Prescription of Currency, below). The spot exchange rate for the U.S. dollar fluctuates within official limits of BF 49.625 buying, and BF 50.375 selling, per US$1; the rates for the other currencies fluctuate between limits resulting from the U.S. dollar rate for the Belgian franc in relation to the U.S. dollar rates for the other currencies. Forward rates are left to the interplay of market forces. Authorized banks in Belgium-Luxembourg may deal with other authorized banks in any foreign currency against Belgian and Luxembourg francs, and with nonresidents in any of the currencies listed above (except Czechoslovak korunas) against any of them.

Residents may sell exchange derived from certain transactions of a noncommercial nature in the free market and they may use exchange purchased in the free market for all payments except current transactions with bilateral countries. In the free market, all currencies may be bought and sold at freely fluctuating rates. U.S. dollars, Canadian dollars, and externally convertible European currencies acquired in the free market may be sold in the official market, but no other transfers between the two markets are permitted. Exchange transactions in connection with the free gold market are also carried out in the free exchange market. Rates in the free market correspond to rates in free exchange markets in other countries.

Exchange Control Territory

The Belgian Monetary Area, which consists of Belgium, Luxembourg, the Belgian Congo, and the Trust Territory of Ruanda-Urundi, is treated as a single exchange control territory in relation to countries with which Belgium and Luxembourg have concluded payments agreements. Although the Belgian Congo and the Trust Territory of Ruanda-Urundi have their own exchange control system, very few restrictions are in force between the Belgian-Luxembourg Economic Union on the one side and the Belgian Congo and the Trust Territory of Ruanda-Urundi on the other.

Administration of Control

The ultimate responsibility for the administration of exchange control in the Belgian-Luxembourg Economic Union is exercised by the Institut Belgo-Luxembourgeois du Change, which is the central exchange control authority for the Union. Administrative powers for most payments and transfers are delegated to authorized banks, but in special cases authorized banks must submit requests for authorization to the central authority.

Prescription of Currency

No distinction is made in the regulations between U.S. and Canadian dollars and externally convertible European currencies.2 The prescription of currency requirements operate to ensure that settlements for current transactions with countries with which Belgium and Luxembourg have bilateral payments agreements (see below) pass through the appropriate Bilateral Accounts; that settlements for current transactions with other countries are channeled through the official market or, where payments in Belgian or Luxembourg francs are involved, through Convertible Accounts; and that capital transfers are channeled through the free market or, where payments in Belgian or Luxembourg francs are involved, through Financial Accounts.

All inward and outward transactions are classified in four groups, which may be summarized as follows: List A covers merchandise, transport expenses, other commercial expenses including insurance, and industrial expenses (e.g., costs of processing); List B covers settlements of transport and travel firms, salaries, pensions, fees, subscriptions, collateral for current trade transactions, and public administration payments; List C covers administration expenses, income on securities, loans, etc., rents, exploitation rights, and the repatriation of certain, foreign, long-term investments; List D covers gifts, life insurance payments, family maintenance, capital investments, the liquidation of investments, dealings in gold, emigrants’ funds, inheritanees, the forward covering of merchandise, collateral for noncommercial or capital transactions, travel expenses, and all transactions not in any of the other three lists.

Foreign countries are divided into two groups: (1) the bilateral countries—Czechoslovakia, Rumania, Spain, Turkey, and the U.S.S.R.—and (2) the convertible area—all other countries.

Summary of Permissible Methods of Settlement for Foreign Payments3
Transaction

List
Country

Group
Foreign

Currency
Exchange

Market
Nonresident

Account in Francs
Outward Payments
A, B, and CConvertibleAnyOfficial or freeAny
BilateralBilateral4
DAnyAnyFreeFinancial or Bilateral4
Inward Payments
A and BAnyConvertible5OfficialConvertible or Bilateral4
CAnyConvertible5 OtherOfficial or free Free
Convertible, Financial, or Bilateral4
DAnyConvertible5 OtherOfficial or free Free
Convertible or Financial

The permissible methods of settlement for foreign payments are summarized in the accompanying table. There is a choice between the official and the free market for U.S. dollars, Canadian dollars, or externally convertible European currencies received from transactions in List C or D or paid for transactions in List A, B, or C; such payments if made in Belgian or Luxembourg francs can also be settled through a Financial or a Convertible Account.

Nonresident Accounts

Belgian or Luxembourg franc accounts of nonresidents are classified in three types. The use of these accounts, in addition to their use for the settlement of transactions with residents as indicated in the last column of the table above, is outlined below.

1. Convertible Accounts. These accounts are not denominated by the country of residence of the account holder, and may be opened in the name of any nonresident. They may be credited with proceeds from the sale in the official market by a nonresident of U.S. dollars, Canadian dollars, or externally convertible European currencies to authorized banks in Belgium-Luxembourg. Balances on Convertible Accounts may be transferred freely to any nonresident account or be converted into any currency in the official or the free market.

2. Bilateral Accounts. These are the accounts of authorized banks in bilateral countries (see section on Prescription of Currency, above). They may be credited with proceeds from the sale by a nonresident of U.S. dollars, Canadian dollars, or externally convertible European currencies in the official market. Balances on Bilateral Accounts may be transferred to other Bilateral Accounts of the same nationality. Belgian or Luxembourg francs in Bilateral Accounts related to Czechoslovakia may be exchanged against Czechoslovak korunas in the official market.

3. Financial Accounts. These accounts are not denominated by the country of residence of the account holder, and may be opened for any nonresident. They are primarily for capital transfers and traveling expenses, although other specified settlements, such as those related to dealings in gold, may be made through them. Balances on Financial Accounts may be transferred only to other Financial Accounts. Financial Accounts may be credited with proceeds from the sale by a nonresident of gold or any currency in the free market and of U.S. dollars, Canadian dollars, or externally convertible European currencies in the official market. They are exchangeable into gold or any currency at free market rates.

Imports and Import Payments

Imports of certain goods from any country outside the Belgian Monetary Area require import licenses; lists of these goods are published and made effective by Belgian and Luxembourg ministerial orders. Imports of all goods from Albania, Bulgaria, Mainland China, Czechoslovakia, East Germany, Hungary, North Korea, Poland, Rumania, Spain, Turkey, the U.S.S.R., North Viet-Nam, and Yugoslavia are subject to license. For goods not requiring a license, only a simple form completed by the importer giving notification of the import is required. No further documentation is required for imports not exceeding BF 10,000 in value. The authorized bank is required to make certain that payment is made by one of the methods laid down in the regulations (see section on Prescription of Currency, above). Where the requirements are not fulfilled, the authorized bank submits a request to the central exchange control authority for special permission.

Payments for Invisibles

For payments for transactions in invisibles, if they are to be made through the official exchange market or by crediting Belgian or Luxembourg francs to a nonresident account other than a Financial Account, supporting documents must be presented to an authorized bank and, in some cases, the approval of the central exchange control authority is required. Payments for certain invisibles may be made only through the free market or by crediting Belgian or Luxembourg francs to a Financial Account. For certain transactions there is a choice of exchange market and of type of nonresident account through which the payment may be made (see section on Prescription of Currency, above).

Exports and Export Proceeds

Some exports require an export license issued by the trade control authorities; lists of these goods are published and made effective by Belgian and Luxembourg ministerial orders. All exports to Albania, Bulgaria, Mainland China, Czechoslovakia, East Germany, Hungary, North Korea, Poland, Rumania, Spain, Turkey, the U.S.S.R., North Viet-Nam, and Yugoslavia are subject to license. For goods not requiring a license, only a simple form completed by the exporter giving notification of the export is required. No further documentation is required for exports not exceeding BF 10,000 in value. The authorized bank is required to make sure that export proceeds are received in accordance with the regulations (see section on Prescription of Currency, above). Export proceeds in Canadian dollars, U.S. dollars, or externally convertible European currencies must, within eight days of receipt, be surrendered to an authorized bank, or deposited in a “commercial” account with an authorized bank if they are to be used later for current payments authorized to be made in these currencies.

Proceeds from Invisibles

Exchange proceeds from invisibles connected with certain commercial transactions (Lists A and B—see section on Prescription of Currency, above) received in Canadian dollars, U.S. dollars, or externally convertible European currencies must be surrendered, i.e., sold in the official exchange market. Alternatively, they may be held in a “commercial” account with an authorized bank if they are to be used later for current payments authorized to be made in these currencies. Receipts in dollars or externally convertible European currencies from other transactions (Lists C and D) may be retained or sold in the official or the free market. All other exchange proceeds may be retained or sold in the free market.

Capital

All capital transactions may be carried out freely through the free market or by settlement in Belgian or Luxembourg francs through the Financial Account of a nonresident. In addition, incoming capital may be received in U.S. dollars, Canadian dollars, or externally convertible European currencies through the official market or in Belgian or Luxembourg francs to the debit of a Convertible Account. There are arrangements by which the exchange control authorities may guarantee the repatriation of approved foreign investments that are made in Belgium-Luxembourg in accordance with the general regulations governing incoming payments, and if such capital has been brought in through the official market, it may be repatriated through that market. All transactions in securities by residents or nonresidents are free, but financial settlements must conform to the general regulations.

Banknotes

Transactions in banknotes may be carried out freely by all residents and nonresidents at freely fluctuating rates. Banknotes may be imported and exported without restriction, but they may not be used to settle foreign transactions other than tourism, banknote arbitrage, and the purchase and sale of gold. Domestic banknotes and proceeds from the sale in the free market of foreign banknotes sent to authorized banks by foreign travelers in Belgium-Luxembourg or by persons residing abroad may be credited freely to the Financial Accounts of nonresidents.

Changes during 1958

January 1. Bulgaria ceased to be treated as a bilateral country and was included in the transferable area.

February 3. Payments to the transferable area for transactions in List C could be made through the free market in any currency, and not only in EPU currencies, as previously.

March 1. Uruguay ceased to be treated as a bilateral country and was included in the transferable area. All Belgian-Luxembourg payments to Uruguay or for Uruguayan goods were, however, to be made exclusively in Belgian francs through a centralized account held by the Bank of the Republic of Uruguay with the National Bank of Belgium.

May 10. In accordance with a new payments agreement with Japan, signed April 30, 1958, settlements between the Belgian Monetary Area and Japan were to be made in Belgian francs or sterling. Japan was no longer treated as being in the convertible area and was included in the transferable area. The requirement of a special document (“Japexport”) in order to pay for imports from Japan was abolished.

July 1. Yugoslavia ceased to be treated as a bilateral country and was included in the transferable area.

September 1. The Egyptian Region of the United Arab Republic ceased to be treated as a bilateral country and was included in the transferable area; the alternative facility of making settlements in Egyptian pounds was, however, maintained.

September 2. The requirement of a license for all imports from and exports to the Egyptian Region of the United Arab Republic was removed.

September 18. The requirement that payments to Uruguay could be made only through a centralized account (see March 1, above) was canceled. Settlements with Uruguay could now be made in the same way as settlements with other countries in the transferable area.

October 5. The requirement of an import license was removed for certain goods, but imposed for imports of these goods and a few others from Japan.

December 29. Authorized banks were permitted to conclude both spot and forward transactions in U.S. dollars, Canadian dollars, and externally convertible European currencies against any of those currencies. Externally convertible European currencies purchased in the free market could be sold in the official market; previously, this facility had applied only to dollars. Balances on Transferable Accounts could now be used to buy dollars, as well as externally convertible European currencies, in the official market and could now, like balances on Convertible Accounts, be transferred to any nonresident account.

Note.—The following changes took place early in 1959:

March 4. Poland ceased to be treated as a bilateral country and was included in the transferable area.

April 1. The prescription of currency requirements applicable to the convertible area were applied to all except bilateral countries, and the regulations applicable to U.S. dollars and Canadian dollars were applied to all currencies in the official market except Czechoslovak korunas. All Transferable Accounts became Convertible Accounts. Payments related to travel expenses abroad were no longer permitted through the official market but only through the free market, except for settlements between transport and travel companies holding a general authorization from the exchange control authority.

April 1. Hungary ceased to be treated as a bilateral country and was included in the convertible area.

Bolivia

Exchange Rate System

The par value of Bolivianos 190 = US$1, established on May 14, 1953, is not applied to any transactions under the present exchange system, and the value of the boliviano is determined in a fluctuating free market. All sales of foreign exchange by the commercial banks and the licensed foreign exchange dealers are subject to an exchange tax of 2 per cent. On December 31, 1958, the fluctuating free market rate was Bs 11,935 per US$1; hence, the effective selling rate was Bs 12,175 per US$1.

Administration of Control

The control system is administered by the Central Bank of Bolivia. As agent of the Ministry of Finance, the Bank executes and controls an annual exchange budget for imports to be made by the Government and its agencies.

Prescription of Currency

Payments for transactions with other countries are usually made in U.S. dollars or other convertible currencies. Payments for exports and imports under trade and payments agreements continue to be subject to the provisions of these agreements, while they remain in force.1

Imports and Import Payments

Imports by the Government and its agencies are governed by an exchange budget and are paid for with exchange purchased from the Central Bank at the rate of the day. Private imports are free of import and exchange licensing, and exchange to pay for such imports may be obtained freely at the current free market rate plus the 2 per cent exchange tax. An advance deposit in U.S. dollars of from 60 per cent to 20 per cent of the c.i.f. value, to be held for one year, is required for imports of automobiles and other vehicles.

Payments for Invisibles

Payments for invisibles may be made freely at the current free market rate plus the 2 per cent exchange tax.

Exports and Export Proceeds

Exports are not subject to license. The Bolivian Mining Corporation is responsible for exports of the minerals produced in its own mines. Exports of minerals produced by private mines are effected, for the most part, through the Mining Bank. The Bolivian Government Petroleum Corporation is responsible for exports of petroleum.

All exchange receipts from exports by the Government and its official agencies are surrendered to the Central Bank at the free market rate, except that the Mining Corporation retains part of its exchange receipts for its own use. Proceeds from other exports may be sold to commercial banks or to authorized exchange houses at the free market rate, or they may be retained by the exporter. Taxes (regalias) on exports are payable in convertible currency.

Proceeds from Invisibles

Exchange derived from invisibles may be sold at the free market rate.

Capital

Inward and outward capital transfers by residents or nonresidents are free of control. The corresponding exchange transactions may be settled freely at the free market rate plus, for outward transfers, the 2 per cent exchange tax.

Changes during 1958

In the course of the year, the bilateral accounts of the central banks of Bolivia and Brazil with each other were closed and transactions between the two countries were placed on a convertible currency basis.

October 1. An exchange tax of 2 per cent was applied to all sales of foreign exchange to the public by the commercial banks and the exchange houses.

December 1. An advance deposit of from 60 per cent to 20 per cent of the c.i.f. value, to be held for one year, was required for imports of automobiles and other vehicles.

Brazil1

Exchange Rate System

The par value is Brazilian Cruzeiros 18.50. = US$1. The official rates are Cr$18.36 buying, and Cr$18.92 selling, per US$1. However, the effective rates for most private import transactions are obtained by adding to the Cr$18.92 rate the prices of the related exchange certificates obtained at auction. These prices and, consequently, the effective rates fluctuate. Preferential imports, as well as government payments and certain services, are paid for at the official rate plus a fixed surcharge. Imports of newsprint also benefit from preferential rates. There are three categories of export commodities on which bonuses are paid. The proceeds of exports not included in one of these categories may be sold in a fluctuating free market. All transactions in invisibles not directly related to the movement of goods and most capital transactions also take place at the fluctuating free market rate. (See Table of Exchange Rates, below.)

Administration of Control

The control system is operated by the Bank of Brazil under the direction of the Council of the Superintendency of Money and Credit (SUMOC). The Exchange Department of the Bank authorizes incoming and outgoing payments related to most trade transactions and to capital transactions in specified cases; it organizes the auctions of exchange for imports, establishes the total amount and the distribution among the various cities in Brazil where the exchange is auctioned, and issues exchange certificates. Government departments and public entities are requested to present to the Exchange Department semiannual estimates of their needs for imports and service payments; with these estimates as a basis, the Council of the SUMOC fixes the maximum quota to be utilized by them. The Foreign Trade Department of the Bank of Brazil issues export and import licenses, determines the percentage of the total exchange auctioned to be distributed to each category of import commodity, and exercises control over prices, weights, measures, classifications, and types in export and import operations subject to license. The Customs Policy Council presides over changes in the categories of import commodities, subject to the approval of the Ministry of Finance. All sales and purchases of exchange pass through banks authorized for this purpose. With the exception of proceeds of exports authorized for negotiation in the free market, export proceeds must be sold by the banks to the Bank of Brazil, which provides the exchange needed for imports.

Prescription of Currency

Prescription of currency is in principle related to the currency of the country of origin of imports and to the currency of the country of final destination of exports, unless otherwise specifically prescribed or authorized. Settlements with the dollar area, Austria, Belgium-Luxembourg, France, the Federal Republic of Germany, Italy, the Netherlands, and the United Kingdom may be made in the currency of any of these countries or in U.S. dollars. Settlements with payments agreement countries are made through the relevant agreement accounts, usually maintained in clearing dollars. Bilateral payments agreements with Denmark and Sweden require that settlements be made in the currency of the respective country; agreements requiring settlements to be made in clearing dollars are in effect with Argentina (except fruit), Bolivia, Chile, Czechoslovakia, Finland, East Germany, Hungary, Israel, Norway, Poland, Portugal, Rumania, Spain, Turkey, Uruguay, and Yugoslavia; and an agreement with Iceland requires settlements in clearing sterling. Fruit trade with Argentina is settled in cruzeiros. Settlements with Japan are made in convertible sterling. Settlements with countries with which Brazil has no payments agreements or arrangements are usually made in U.S. dollars or other freely convertible currencies.

Imports and Import Payments

Only imports of goods in the Special Category (see 4, below) and a few other specified imports require import licenses. Licenses for Special Category imports are granted freely to holders of exchange certificates, purchased at auction, provided the application complies with the regulations in force; the licenses are prerequisites for obtaining exchange at the official rate. Privileged imports, most of which require import licenses, are authorized within global quotas established in an exchange budget. Imports and import payments may be divided into the groups described in the following paragraphs.

1. Specified commodities for which payment, if necessary, is not effected through the auction system: In this group are specified government imports, wheat, petroleum and petroleum derivatives, maps, books, newspapers, and magazines, and equipment, components, and spare parts for oil research and production of crude oil, for the printing industry, and for investment considered essential to economic development or national security. These imports are subject to a surcharge of Cr$81.08 per US$1 or the equivalent in other currencies, with the exception of government imports not considered essential to economic development or national security, which are subject to a surcharge not lower than the weighted average of actual bids in the related category. Imports of newsprint, which are effected at the official rate plus surcharges, are also included in this group.2 Exchange for all these imports is allocated in the exchange budget approved by the Council of the SUMOC.

2. Imports of parts of motor vehicles to be assembled in Brazil according to plans approved by the Government: Until June 30, 1959, these imports are subject to fixed surcharges calculated separately for different currencies and added to the official rate.

3. Imports of production goods financed abroad: These may be authorized if the Council of the SUMOC is satisfied that they are in the national interest and are paid for with genuine foreign financing with amortization of not less than 5 years. If the importer is a Brazilian resident, these imports may be authorized if the annual payment installments do not exceed 20 per cent of the total value financed. Exchange for imports of these goods may be granted by the Exchange Department of the Bank of Brazil at the official rate, provided the importer pays the surcharge, which is equal to the weighted average bid in the General Category (see 4, below). However, the commitment on the part of the Exchange Department to provide exchange depends on the availability of exchange, and the amounts corresponding to the obligations assumed must be earmarked.

4. All other imports: These are subject to the purchase of exchange certificates at auction. For the purpose of allocating exchange in accordance with essentiality, these imports are classified in two categories: (1) General Category—raw materials, equipment, and other production goods, as well as goods for general consumption whose supply in the domestic market is not satisfactory—and (2) Special Category—other goods.

Payment for exchange certificates purchased at auction must be made within 5 working days beginning with the second working day following that of purchase. Application for an import license (for goods in the Special Category) and for a certificate of exchange cover (for goods in the General Category) must be filed with the proper department within 30 days following the purchase of exchange certificates, and the goods must be shipped within the period of validity of the import license or the certificate of exchange cover. As a rule, an importer may not purchase more than US$50,000 worth of exchange certificates at any single auction, but there is no limit on the amount that may be purchased of most bilateral agreement currencies. U.S. dollars and the “multilateral currencies”3 are acquired by bidding for certificates denominated in dollars; successful bidders may obtain any of these currencies. Minimum premiums for inconvertible currencies are established each week on the basis of actual bids for dollars during the previous week. The lowest and highest premiums for dollars (120 days’ delivery) actually obtained at the auctions held in Rio de Janeiro on January 27, 1959 were as follows: General Category, Cr$227.00 (lowest) and Cr$249.00 (highest), and Special Category, Cr$351.00 (lowest and highest), per US$1. Special auctions are held periodically for certificates for the import of separately listed goods used in agriculture (fertilizers, insecticides, etc.), of automobiles, and of fruits from Uruguay.

Payments for Invisibles

Payments for expenses incidental to trade are made at the same effective rates and subject to the same conditions as the corresponding imports or exports; but exchange is not provided for the insurance of goods in Brazil or where import licenses have been issued on a c. & f. basis. Payments for all other transactions in invisibles are made through the free market. Travelers may take out freely domestic and foreign currency notes.

Exports and Export Proceeds

All exports are subject to export license, with the exception of coffee exports, which are subject to authorization by the Brazilian Coffee Institute. Export licenses are granted without limitation except when (1) the export is contrary to national security or to obligations arising from international agreements, (2) payment is to be made in ah inconvertible currency the acceptance of which is considered by the Exchange Department of the Bank of Brazil to be inconvenient, or (3) an accumulation of stocks to guarantee domestic supplies is advisable. All exports are subject to shipping permits issued by the Exchange Department.

Export proceeds must be surrendered to an authorized bank, which in turn must sell the proceeds to the Bank of Brazil. However, mining companies are permitted to retain abroad a percentage, which is determined by the Council of the SUMOC, of their export proceeds to service registered loans used for payments of goods and services to develop their industry. Exports are classified in three categories, for each of which a bonus has been established, as follows (in cruzeiros per US$1):

  • Category I (raw coffee and roasted coffee, whole or ground): Cr$41.64

  • Category II (cocoa beans and derivatives and castor beans): Cr$51.64

  • Category III (specified commodities)4: Cr$81.64

The proceeds of all exports not specifically listed in these three categories are negotiable in the fluctuating free market.

Proceeds from Invisibles

Exchange proceeds from most invisibles are sold through the free market. Travelers may bring in domestic and foreign currency notes freely.

Capital

Investments. The inflow and outflow of foreign investments are effected at the free market rate. Imports by foreign investors of groups of equipment, or, exceptionally, of equipment intended to complete or improve the capacity of existing groups, may be authorized provided there is sufficient proof that no payment therefor will be transferred abroad.

Financing. Repayments of principal and transfers of interest not exceeding 8 per cent per annum may be made at the official rate, plus a surcharge which is presently Cr$81.08 per US$1 or the equivalent in other currencies, for the following: loans, credits, and other financing of unquestionable interest to the national economy, and loans, credits, and financing related to investments in the petroleum industry and the printing industry and to investments considered necessary to the economic development and security of the country, obtained abroad and registered by the Council of the SUMOC. This privilege is granted provided the original capital has been applied abroad in the acquisition of equipment licensed expressly for that purpose, or applied abroad for the payment of contractual services approved by the Council of the SUMOC. The Council may also authorize registration of loans covering imports considered of national interest other than those referred to above. Repayments of principal and transfers of interest are subject to a surcharge not lower than the weighted average of actual bids in the General Category of imports.

Table of Exchange Rates (as at January 31, 1959)(cruzeiros per U.S. dollar)
BuyingSelling
18.36(Official Rate)18.92(Official Rate)
18.50(Parity Rate)
Government and other official receipts.26.92(Official Rate plus Surcharge)5
Imports of newsprint by printers whose publications weigh 80 grams or less.
38.92(Official Rate plus Surcharge)5
60.00(Official Rate plus Cr$41.64 Bonus)Imports of newsprint by other printers.
Category I exports.
70.00(Official Rate plus Cr$51.64 Bonus)
Cateeorv II exports.
100.00(Official Rate plus Cr$81.64, Bonus)100.00(Official Rate plus Cr$81.08 Surcharge)
Category III exports.Government payments. Preferential imports, including specified government imports, wheat, imports for the petroleum industry and the printing industry, petroleum and petroleum derivatives, etc. Amortization and interest on registered loans, credits, and financing.
142.50(Fluctuating Free Market Rate)146.50(Fluctuating Free Market Rate)
All incoming capital. Most invisibles, including travel exchange. Minor exports, including all those not specifically listed in Category I, II, or III. Other items not included in the official market.All capital transactions, and income thereon, not effected at preferential rates. All nontrade invisibles.
245.92-267.92(Official Rate plus Cr$227-249 Auction Premium)6
General Category imports.
369.92(Official Rate plus Cr$351 Auction Premium)6
Special Category imports.

Changes during 1958

February 13. Interbank operations among Brazilian banks were prohibited, except for those carried out to cover sales to or purchases from customers in the free market; such sales or purchases are permitted up to a maximum of twice the buying and selling operations of each bank directly with the public.

February 15. Surcharges of 10 per cent and 25 per cent, respectively, of the surcharge payable on preferential imports were levied on payments for (1) imports of newsprint by printers whose publications weigh no more than 80 grams and (2) imports of newsprint by other printers. The surcharge on preferential imports being Cr$32.50 per US$1 (or the equivalent in other currencies), the surcharges on the two categories of newsprint were Cr$3.25 and Cr$8.125, respectively, per US$1, resulting in effective rates of Cr$22.07 and Cr$26.95 per US$1. The surcharges were to be increased by the same amount every six months until the effective rates reached the level of the “cost of exchange,” i.e., the weighted average of the bonuses paid to exporters plus the official exchange rate.

February 27. The Austrian schilling was permitted to be used for settlements with the “multilateral currency” countries. Austria had been included in this group of countries since July 4, 1956, but payments had been effected in sterling through the purchase at auction of exchange certificates denominated in ACL dollars (see Ninth Annual Report on Exchange Restrictions, page 58).

March 17. Mining companies were permitted to retain abroad a percentage (determined by the Council of the SUMOC) of their export proceeds to service registered loans used for payments of goods and services to develop the industry.

April 1. A trade and payments agreement was concluded with Yugoslavia.

June. Auctions of ACL dollars would henceforth be held on the basis of 120 days’ delivery instead of spot delivery.

June 10. Proceeds from exports of precious and semiprecious stones and books, magazines, and newspapers printed in Brazil became negotiable in the free market.

June 10. Export proceeds were reclassified in four categories and the fixed bonuses were revised to apply to export proceeds in all currencies, as follows (in cruzeiros per US$1): Category I, coffee beans—Cr$18.70; Category II, cocoa beans and derivatives—Cr$24.70; Category III, cotton linters and residual products of the processing of textiles in general and of spinning and weaving, leaf tobacco, castor beans, manganese ore, carnauba wax, ouricuri wax, unmanufactured sawn pinewood (including laths and squares), finely cut or processed yerba maté, and raw hides—Cr$51.64; and Category IV, all products not included in the other three categories—Cr$73.64. The special exchange rate of Cr$103 per US$1 for exports of textiles was eliminated. At least 70 per cent of the cost of production of exports of manufactured goods must be accounted for by Brazilian labor and raw materials.

June 10. A fixed surcharge of Cr$40 per US$1 was set for imports of newsprint and paper (in accordance with the law of August 14, 1957), certain maps, books, newspapers, magazines, and other publications, wheat, petroleum and petroleum derivatives, government payments, and payments for amortization and interest approved as of this date. A fixed surcharge of Cr$51.18 per US$1 was set for imports of equipment for prospecting and producing petroleum and payments for services connected with prospecting and producing petroleum, for imports of fertilizer, insecticides, publishing equipment, and equipment essential for development, and for payments for amortization and interest approved after this date.

July 1. A trade and payments agreement with Rumania was concluded.

July 1. The variable coffee export bonus was altered. The bonus became payable on the basis of a 3 per cent increase in the total cruzeiro return, calculated at the Cr$37.06 rate for each U.S. dollar that the sales price exceeds $40 per 60-kilogram bag.

August 14. The surcharges on payments for imports of newsprint were increased from 10 per cent and 25 per cent, to 20 per cent and 50 per cent, of the surcharge payable on other preferential imports, in accordance with the arrangements outlined under February 15, above, and adjusted by the change in the import surcharge on June 10 (see above).

August 22. Raw hides were moved from Category III of exports to Category IV.

September 1. An agreement was signed with Argentina authorizing settlement in cruzeiros for imports and exports of fruit.

September 1. Auction offerings of U.S. dollars and ACL dollars were reduced by 20 per cent.

September 1. It was announced that unlimited quantities of Danish agreement kroner and clearing dollars of Czechoslovakia, Finland, Hungary, Norway, or Spain could be purchased at the exchange auctions. Formerly, there had been a limit equivalent to US$50,000 for each importer at any one time. (Later in the year, Poland, Bolivia, Israel, Iceland, and Chile were added to this list.)

September 23. A trade and payments agreement was signed with East Germany.

September 30. A special auction of certain clearing account currencies was announced for almonds, hazelnuts, chestnuts, walnuts, fresh fruit, dried or dehydrated fruit, wines, and unfermented alcoholic beverages.

October 4. A single, fixed surcharge of Cr$61.18 was set for those imports and payments previously subject to surcharges of Cr$40 and Cr$51.18 (see June 10, above). The following imports were also made subject to this surcharge: equipment and parts for the development of the manufacture of agricultural machinery, the installation of silos and packing house plants, the manufacture of fertilizers and insecticides, the production, transmission, and distribution of electric power, and the production of coal.

October 4. Certain export items in Category III were shifted to a new Category IV, which included the following: sugar; cotton, raw or ginned; peanuts, with or without shells; babassu-nut kernels; animal hair and bristles; meat, meat preparations, and meat by-products in general; Brazil nuts, with or without shells; hog bristles; hides and skins, raw, of domestic animals; sleepers; pig iron; French beans; soybeans; leaf tobacco; jute fiber, raw or processed; greasy or washed wool; cotton linters and residual products thereof; wood other than pine (in logs, sawn or planed); menthol; iron ore; cottonseed oil; oil of peppermint; linseed oil (including seeds); castor oil; oiticica oil; tung oil (including seeds); crude mineral oil and derivatives thereof; residual products of the processing of cotton; textile scraps and waste; sisal (fiber and wadding); oilcake (excluding cocoa cake). Proceeds of exports not in Categories I through IV were permitted to be negotiated in the free market.

November 4. An agreement with Japan provided that settlements between Brazil and Japan would be made in sterling.

Note.—The following changes took place in January 1959:

January 3. By virtue of an increase in the stamp tax, the official market selling rate was changed to Cr$18.92 per US$1.

January 10. Exports were classified in three categories and the fixed bonuses in cruzeiros per U.S. dollar or the equivalent in other currencies were established as follows: Category I (raw coffee and roasted coffee, whole or ground), Cr$41.64 per US$1; Category II (cocoa beans and derivatives and castor beans), Cr$51.64 per US$1; and Category III (comprising in a general way the items formerly in Categories III and IV), Cr$81.64 per US$1. Other export proceeds continued to be negotiated in the free market. The variable bonus arrangement for coffee was eliminated.

January 10. The import surcharge for preferential imports was changed to Cr$81.08 per US$1.

January 21. Auctions for ACL dollars, previously required for payment for imports from “Hague Club” countries, were combined with auctions for U.S. dollars. Holders of dollar certificates were permitted to purchase U.S. dollars or any “Hague Club” currency (see footnote 3).

Burma1

Exchange Rate System

The par value is Burmese Kyats 4.76190 = US$1. The kyat has a fixed relationship to the pound sterling of K 13.333 = £1. Rates for other currencies are determined on the basis of the kyat-sterling rate and the rates for other currencies in London, maintained within official limits.

Administration of Control

Exchange control is administered by the Exchange Control Board. Import and export controls are managed by the Directorate of Imports and Exports under the administrative control of the Ministry of Trade Development, but export control is also exercised by the State Agricultural Marketing Board and the State Timber Board, according to the commodities concerned. The registration of exporters and importers is carried out by the Registration Board.

Prescription of Currency

Burma is a member of the Sterling Area and has prescription of currency requirements similar to those of the United Kingdom and other Sterling Area countries. Payments to other parts of the Sterling Area must be made in sterling or a Sterling Area currency; payments to bilateral payments agreement countries,2 through bilateral accounts denominated in sterling; payments to other countries, in sterling through an External Account, in any non-sterling currency, or by crediting kyats to the account of a resident of a country outside the Sterling Area. Prescription of currency requirements for receipts are the same as those for payments, except that if foreign currency is obtained it must be one of the specified currencies.

Imports and Import Payments

Imports of all goods are subject to license. If evidence of importation has been or will be presented, the authorized banks automatically provide exchange (see section on Prescription of Currency, above) to pay for permitted imports. Unless specially exempted, importers must be registered with the official Registration Board.

Payments for Invisibles

All payments for invisibles are subject to license. In general, payments for items connected with trade are allowed and payments for other purposes are considered on a case-to-case basis. Remittances of income arising from investment are permitted freely on application, subject to presentation of evidence that all taxes due in Burma have been paid. Travelers may take out not more than the equivalent of K 100 in the currency of the country of destination, excluding Mainland China.

Exports and Export Proceeds

Burma has a list of prohibited exports: iron and steel, brass, copper and aluminum and scraps thereof, foreign manufactures, and commodities of local origin which it is desired to conserve for local requirements. No license is required for the export of commodities not specifically included in the lists of items subject to license, but the exporter must obtain the export proceeds in a manner satisfactory to the exchange control authorities (see section on Prescription of Currency, above). In general, exporters are required to surrender their foreign exchange proceeds to an authorized exchange dealer. Unless specially exempted, exporters must be registered with the official Registration Board.

Proceeds from Invisibles

Exchange receipts arising from invisibles must be surrendered.

Capital

Foreign business enterprises are permitted to repatriate their capital, on clear evidence of having finally wound up business in Burma. Short-term or seasonal capital that has come into Burma with the approval of the exchange control may be repatriated without evidence that the owner has finally wound up business in Burma. Foreign nationals are allowed to repatriate all their personal assets when they retire. Foreign insurance companies operating in Burma are permitted to remit their surplus funds to their home offices. When payments in favor of nonresidents are not permitted to be transferred abroad, the authorities can allow such payments to be credited to blocked accounts. The use of balances on blocked accounts is subject to individual permit.

Residents usually are not permitted to remit funds abroad for investment.

The import, export, and transfer of securities involving nonresident interests are subject to individual license.

Changes during 1958

February 27. The bilateral agreement with East Germany expired and settlements were placed on a transferable sterling basis.

March 11. A revised agreement with Hungary provided for the liquidation of the existing bilateral accounts by May 11, 1958 and for settlements to be made in future in transferable sterling.

March 21. Authorized banks could not open letters of credit for imports of goods on open general license without prior permission when the goods were to be shipped from a country other than the country of origin of the goods. Importers exempt from opening letters of credit for goods on open general license were required to obtain prior approval of the exchange control before placing orders.

August 15. Goods on Open General Licenses Nos. I, III, and IV were made subject to quota restrictions.

August 28. Imports under open general license were no longer subject to the prior approval of the exchange control if the importers had been issued quota certificates for such imports.

November 28. Prior approval of the exchange control was no longer required for imports of certain items, such as printer’s ink, agricultural implements, mineral oils, motor spirit, and tortoise shell.

Note.—On January 2, 1959, all existing open general licenses for imports were withdrawn and four new ones were issued in their place: Open General License No. I contains 22 items which may be imported without restriction from any country. Open General License No. II covers imports of fresh fish caught by Burmese, containers, machinery and parts thereof previously exported for repairs, and exposed photographic films and plates previously exported. Open General License No. III permits the import of newspapers, periodicals, books, maps, etc., from non-dollar countries. Open General License No. IV permits the import of groundnut oil from non-dollar countries, provided it is imported under a letter of credit. The requirement of prior approval of the exchange control for opening letters of credit in respect of goods on open general license was abolished.

On January 7, 1959, the prescription of currency requirements were simplified, following similar changes in the United Kingdom.

Ceylon1

Exchange Rate System

The par value is Ceylon Rupees 4.76190 = US$1. The exchange rate system is uniform, the rate for the U.S. dollar being based on the fixed sterling-Ceylon rupee rate and the sterling-U.S. dollar rate in London, maintained between official limits. The market rates as at December 31, 1958 were Cey Rs 4.7375 buying, and Cey Rs 4.7550 selling, per US$1.

Administration of Control

Exchange control is administered by the Exchange Control Department of the Central Bank of Ceylon. All transactions in foreign exchange in Ceylon must be made through authorized dealers, which are banks authorized to transact business in foreign currencies in accordance with the exchange control regulations prescribed by the Controller of Exchange. Remittances may also be made through post offices, under permits issued by the Controller of Exchange. Imports and export licensing is handled by the Controller of Imports and Exports.

Prescription of Currency

The regulations prescribing the currencies to be received from abroad in payment for exports and transactions in invisibles and those to be used for outgoing payments are in many respects similar to the regulations of the United Kingdom and other Sterling Area countries. Imports from the Sterling Area may be paid for in any Sterling Area currency. Imports from other countries may be paid for by crediting sterling or Ceylon rupees to a sterling External Account or an External Rupee Account, or in the currency of the country of export. Payments for exports to the Sterling Area may be accepted in any Sterling Area currency. Payments for exports to other countries may be accepted in sterling or Ceylon rupees from a sterling External Account or an External Rupee Account, or in any specified currency. Settlements with countries with which there are bilateral payments agreements2 must be effected through the relevant bilateral accounts. Transactions involving deviation from the general regulations require the prior approval of the Controller of Exchange.

Nonresident Accounts

The regulations governing nonresident accounts differentiate between the accounts of banks and of persons and firms abroad. Although there are no specific provisions to enable the individual nonresident to obtain conversion into his own currency of amounts credited to his account, transfers for banks and correspondents from rupee accounts in Ceylon to corresponding Sterling Area Accounts, or to corresponding sterling External Accounts, are allowed.

Imports and Import Payments

With the exception of a few items, such as firearms for use by the armed forces, imports of goods are subject to regulation. However, many commodities are governed by open general licenses and may be imported freely without individual license. Open General License No. 1 permits the free import of all goods (except some 30 items) from all countries except those in the dollar area3 and certain other countries.4 Open General License No. 2 permits the free import of over 200 essential items from the dollar area. Open General License No. 4 covers certain goods which may be imported freely from the countries covered by Open General License No. 1 with the exception of specified OEEC countries.5 Open General License No. 5 permits the import of Maldive fish from the Maldive Islands. Most of the goods covered by open general licenses may be imported freely from certain countries6 under general import licenses, which are issued only to registered Ceylonese traders. Other imports, with some exceptions, may be effected only under general import licenses, which are issued only to registered Ceylonese traders. Other imports, with some exceptions, may be effected only under individual licenses, and policy concerning their issue is announced annually. In most cases, such licenses are issued freely to registered Ceylonese traders; they may also be issued to other importers on the basis of past performance. For a number of commodities, mostly those which are being produced locally, no licenses are issued. Some essential items, such as sugar, flour, and rice, are imported only on government account.

An authorized dealer may approve an application to remit foreign exchange or to credit a nonresident account when the applicant furnishes, or undertakes to furnish, evidence of importation and cost of goods, together with a valid importer’s and exchange control copy of the import license. When the goods are under open general license, the applicant must have made a declaration to that effect on the application. The currency and method of payment must normally be in accordance with the regulations (see section on Prescription of Currency, above).

Payments for Invisibles

All payments for invisibles are subject to exchange license. The authorized dealers may sell foreign exchange in accordance with a detailed set of regulations. Payments for freight and other services in connection with the international transport of goods are allowed. Payments for international travel fares are permitted, provided certain conditions are met. Payments for business travel are allowed on application, subject to certain restrictions on the frequency of such travel. The allocation of exchange for tourist travel is subject to basic rations, which are different in respect to various groups of non-dollar countries; however, no basic ration is allocated for tourist travel to the dollar area. Other remittances of a personal nature are granted for reasonable requirements for education, travel, health, or family reasons. Business remittances to any country normally are approved, particularly when they are of a recurring or contractual nature, e.g., insurance premiums on policies denominated in foreign currency. Emigrants (Ceylonese nationals) to a Sterling Area country are permitted to transfer their assets up to £7,500 per family unit, but repatriates are permitted to transfer their net assets in full within one year before or after departure, after which repatriates qualify for the same treatment as nonresident investors. Remittances of profits and dividends by nonresidents are permitted freely.

Travelers may export foreign exchange declared at the time of entry. The export of Ceylon currency notes is limited to Cey Rs 50 per person per six months.

Exports and Export Proceeds

For purposes of exchange control, licenses issued by the Controller of Exchange are required for all commercial exports; in addition, export licenses issued by the Controller of Imports and Exports are required for all but a few commodities and for all exports to Albania, Austria, Hungary, and the U.S.S.R. Licenses for exports to Bulgaria, China (Taiwan), Czechoslovakia, Poland, and Rumania are issued only to registered Ceylonese traders. Exports of certain manufactured goods and re-exports of foreign manufactured articles are allowed only under special permit. Re-exports of nonmonetary gold, silver, and diamonds are allowed only in special circumstances.

Licenses for commercial exports are issued by the Controller of Exchange, provided he is satisfied that payment representing fair value for the goods will be received in Ceylon, usually within six months from the date of shipment, in an approved manner. The currencies and methods in which payments for exports must be received are stipulated in the exchange control regulations (see section on Prescription of Currency, above) and the foreign exchange must be surrendered.

Proceeds from Invisibles

Proceeds from invisibles must be received in accordance with the prescription of currency requirements applicable to export proceeds.

Travelers are not restricted in the amounts of foreign funds they may carry into Ceylon in the form of travel credit instruments, but they are obliged to declare, upon entering, their holdings of currency notes and coins. The import of sterling notes in excess of £40 is allowed only with the permission of the Controller of Exchange, and the import of Indian and Pakistan currency notes, as well as of Ceylon notes, is restricted to a maximum of Rs 75, of which Pakistan notes should not exceed Rs 50. No restriction on the import of other currency notes and coins is in force.

Capital

Certain capital movements between Ceylon and the rest of the Sterling Area are permitted under existing exchange control regulations, namely, the voluntary repatriation, subject to certain limitations, of investments of persons resident in the rest of the Sterling Area, the transfer of savings by persons temporarily resident in Ceylon and returning to another Sterling Area country for permanent residence, and the transfer to Ceylon of capital held in the rest of the Sterling Area by Ceylonese nationals. Also, transfers of capital to Ceylon are permitted for direct investment in Ceylonese businesses or for the establishment of branches or agencies of concerns resident in the United Kingdom or other parts of the Sterling Area, if the authorities are satisfied that such transfers are of economic advantage to Ceylon.

Different regulations cover capital movements between Ceylon and countries outside the Sterling Area. Generally, inward transfers for investment in approved projects are permitted freely, subject to compliance with the prescription of currency regulations. Outward remittances of a capital nature, e.g., to purchase securities, properties, or annuities abroad, are restricted. Securities owned by residents and on which the principal, interest, or dividends are payable (or the holder has an option to require payment of the principal, interest, or dividends) in either U.S. dollars or Canadian dollars have to be registered with the Controller of Exchange, and no person is allowed, except with the permission of the Minister of Finance, to sell or transfer such securities. Since the end of 1949, capital invested in Ceylon by a resident of a country outside the Sterling Area may be repatriated up to the amount of the original investment plus appreciation, provided the investment had received prior approval.

Changes during 1958

January 1. Goods originating in Mainland China or China (Taiwan) could be imported by registered Ceylonese traders under open general license.

February 8. A bilateral trade and payments agreement was concluded with the U.S.S.R.

March 13. Imports of sarong cloth manufactured from artificial silk or other synthetic fibers were made subject to individual license.

March 14. Licensing requirements were removed for imports of spare parts and accessories of bicycles, other than frames and forks, from any country except Albania, Austria, Bulgaria, Mainland China, China (Taiwan), Czechoslovakia, East Germany, the Federal Republic of Germany, Hungary, Japan, Poland, Rumania, Spain, the U.S.S.R., and Yugoslavia.

March 17. Imports of Rangoon diamonds (imitation stones) were made subject to licenses, which would be granted at the discretion of the Controller of Imports and Exports only to manufacturing jewelers who are registered Ceylonese traders.

March 17. Imports of plain envelopes were made subject to individual license.

March 28. Details were published of the local securities in which blocked funds may be invested.

May 19. Imports of electric lamp bulbs were made subject to individual license.

May 21. The Government’s attitude toward foreign private investment in Ceylon was restated.

June 23. Goods originating in the U.S.S.R. could be imported by registered Ceylonese traders under general import license.

July 3. Imports of hulling and polishing machines and parts thereof were made subject to individual license.

July 7. Exports to the following countries by registered Ceylonese traders could be made in future under general export license: Albania, Austria, Bulgaria, Mainland China, China (Taiwan), Czechoslovakia, Hungary, Poland, Rumania, and the U.S.S.R.

July 23. The limit on the amount of sterling notes which may be imported into Ceylon was raised from £10 to £40.

October 10. Imports of popadams were made subject to license.

November 5. Restrictions on imports of four items from the dollar area were eliminated, namely, confectionery; toys and parlor games; beer, ale, porter, and all other malt liquors; and whisky. Imports of beedies were made subject to individual license.

November 16. Imports of sarongs and sarong cloth manufactured from cotton or artificial silk or other synthetic fibers were prohibited.7

Note.—On January 9, 1959, all rupee accounts of residents of countries outside the Sterling Area, other than accounts subject to special restrictions, were unified and designated External Rupee Accounts, following similar measures taken in the United Kingdom on December 29, 1958. The prescription of currency arrangements with respect to countries in the new External Account area were simplified as follows: Imports may be paid for in sterling or Ceylon rupees to the credit of a sterling External Account or an External Rupee Account, or in the currency of the country of export. Payments for exports may be accepted in sterling or Ceylon rupees from a sterling External Account or an External Rupee Account, or in any specified currency. The regulations governing methods of settlement for transactions within the Sterling Area were not changed.

Chile1

Exchange Rate System

The par value of Chilean Pesos 110 = US$1, established on October 5, 1953, is not applied to any transactions under the present exchange system. No new par value has been proposed.

There is a tax of 2 per cent on sales of exchange by banks or by persons or entities authorized to cover import transactions or to issue drafts.

The Central Bank of Chile deals in exchange only with the Government and its agencies (including autonomous agencies) and with authorized banks. It will freely buy and sell the following currencies: U.S. dollars, pounds sterling, Argentine agreement dollars, Swiss francs, and such other exchange or payments agreement account currencies2 as it may decide from time to time. The Central Bank buys and sells agreement account currencies only occasionally; but it is the sole buyer and seller of Argentine agreement dollars. The Central Bank determines the rate of exchange for these transactions in accordance with supply and demand.

The authorized banks may deal spot in any currency (including agreement account currencies) with their clients or with other authorized banks and, within specified limits, forward up to 90 days in any currency to cover import or export transactions.

Administration of Control

The Foreign Exchange Commission (Comisión de Cambios Internacionales) is in charge of the operation of the exchange system. Some functions of the Commission have been delegated to local commissions in important cities. Under Article 8 of Law 12084, the Foreign Exchange Commission must propose to the Ministry of Finance a list of permitted import goods and payments, which is made effective by a Supreme Decree of the Ministry. Any modification of the list is also made by Supreme Decree of the Ministry, on the proposal of the Foreign Exchange Commission. The commercial banks and various exchange dealers, tourist agencies, and hotels are authorized as dealers in the exchange market.

Prescription of Currency

Payments for transactions with Argentina, Bolivia, Brazil, Ecuador, France, Portugal, Spain, and Yugoslavia must be made according to the method and in the currency established in the regulations that give effect to the terms of the payments or compensation agreements with those countries. Exports of copper by the large companies must be paid for in U.S. dollars or other currencies as specially authorized by the Copper Department. Large iron ore mining enterprises have to provide U.S. dollars to pay for income taxes and costs of production. Exports of iron ore by small and medium-sized companies and all other transactions may be settled in any currency, irrespective of the country of origin or destination of the payment. Authorized banks may freely convert any currency into U.S. dollars, sterling, or Swiss francs, but may not convert these currencies into a currency other than these without specific approval for each conversion.

Imports and Import Payments

Only goods specified by the Ministry of Finance in a list of permitted imports may be imported. All other imports are prohibited (for imports of chemical products, a definite list of prohibited items has been established). Imports are not subject to license.

Importers must make an advance deposit, for which a certificate is issued by the Central Bank. This certificate is required by a bank before it may handle an import transaction and is also used to obtain consular authorization for shipment of the goods from the country of origin. Both the advance deposit certificate and the consular authorization are required for customs clearance at the port of entry into Chile. Some authorized imports also require a certificate of necessity from the Ministry of Economy. Government departments and agencies require permission from the Ministry of Finance for imports other than for national defense. A tax of 2 per cent on sales of exchange by banks or by persons or entities authorized to cover import transactions or to issue drafts is collected by the banks and deposited in the Treasury of the Republic for the Foreign Exchange Commission and other government agencies.

Advance deposits may be made in local currency, in short-term U.S. dollar obligations issued by the Treasury of the Republic, or, provided the deposit is subject to retention for at least 30 days, in U.S. dollars. The amount of the advance deposit is fixed from time to time by the Foreign Exchange Commission as a percentage—currently up to 5,000 per cent—of the value of the import in Chilean pesos converted at the rate of exchange that the Commission establishes weekly for this purpose on the basis of the rate in the exchange market in the preceding week. For goods imported on a consignment basis, an advance deposit equivalent to the full value of the import is required. For goods imported on a deferred payments basis (for which the authorization of the Foreign Exchange Commission is required), an advance deposit equivalent to each payment is required, and all deposits are retained for 30 days. For goods imported on a cash basis, ten categories have been established for the purpose of determining the percentage of advance deposit payable; these categories, and the advance deposit required for each, are as follows:

  • Category A (crude petroleum, diesel and fuel oil, lubricating oil, benzine and gasoline, kerosene, rubber, sugar, certain antibiotics, etc.): 5 per cent

  • Category B (cellulose woodpulp, some antibiotics, Manila and jute fibers, some chemicals, certain machinery and equipment, etc.): 50 per cent

  • Category C (paraffin, raw cotton, coffee, tea, yerba maté, newsprint, chemical products, spare parts for machinery, etc.): 100 per cent

  • Category D (scientific and technical books and magazines, etc.): 150 per cent

  • Category E (tools, etc.): 200 per cent

  • Category F (other magazines and books, etc.): 300 per cent

  • Category G (tires and tubes, etc.): 400 per cent

  • Category H (agricultural machinery, etc.): 600 per cent

  • Category I (domestic and industrial sewing machines and industrial machinery, etc.): 1,000 per cent

  • Category J (automobiles, station wagons, buses, pick-up trucks, jeeps, typewriters, calculators, etc.): 5,000 per cent

The advance deposit is retained for 30 days or 90 days, depending on the essentiality of the goods.

The advance deposit certificate, duly signed by the importer, serves as a guarantee for the authorized bank to cover the sale of exchange. However, banks are not allowed to sell the exchange until 30 days after the date of shipment of the goods, and then only the amount of foreign exchange specified in the advance deposit certificate; they may, however, make forward sales to cover imports in Categories A and B. Payments are subject to the prescription of currency requirements. If the import transaction is not completed, the amount of the deposit less the tax is refunded against surrender of the advance deposit certificate. Imports by the large companies concerned with mining iron, copper, nitrates, or iodine, imports by government departments and agencies, imports under loans or credits from the Export-Import Bank of Washington or the International Bank for Reconstruction and Development, imports under the Surplus Agricultural Commodities Agreement with the United States, and imports of capital goods are exempt from the advance deposit requirements. Immediate exchange cover is provided for all imports from Argentina, Bolivia, Brazil, Ecuador, France, Portugal, Spain, and Yugoslavia and these imports are also exempt from the advance deposit requirements.

Payments for Invisibles

The authorized dealers may sell exchange to cover payments for all invisibles. There is a tax of 2 per cent on all sales of exchange.

Exports and Export Proceeds

All goods may in principle be exported freely; however, some items are prohibited or subject to quota, and in order to enforce these requirements and to ensure the repatriation of export proceeds, all exports must be registered with the Foreign Exchange Commission.

The proceeds of certain exports must be received in a prescribed currency (see section on Prescription of Currency, above). For all exports except those by the large copper and iron mines and the Nitrate and Iodine Sales Corporation (COVENSA), it is stipulated by law that, within a period of 90 days from the date of shipment or within such period as may, in special cases, be established, exporters must repatriate in instruments of international exchange the total value of their exports and must liquidate this value within 10 days from its repatriation, through an authorized bank or entity. The large copper companies are, however, required to sell to the Central Bank the necessary foreign exchange to meet their domestic costs of production. Payments for exports on a cash, collection, or consignment basis must be arranged through an authorized bank, which must specifically contract with the exporter to buy the exchange proceeds. The bank issues a certificate that payment has been made or arranged in an approved manner, to enable clearance of the export through customs.

Proceeds from Invisibles

Receipts of exchange from invisibles arising from trade transactions must be sold in the exchange market along with the export proceeds. Exchange from other invisibles, including tourism, may be sold or retained.

Capital

Large mining companies (copper, iron, nitrates, and iodine) may freely remit interest, dividends, and amortization on invested capital up to the amount of their exchange receipts that they are not required to surrender or use to pay local taxes.

Under the terms of a decree of November 10, 1953 (amended February 2, 1954), foreign capital brought into Chile in the form of foreign exchange, raw materials, or equipment, when invested in approved enterprises, is given the following guarantees and exemptions: (1) repatriation of the capital after 5 years in annual quotas not exceeding 20 per cent per annum of the value of the investment; (2) transfers abroad of earnings on the investment, for a period of at least 10 years, and possibly up to 20 years; (3) exemption from customs duties on new machinery for industries not already existing in Chile which use domestic raw materials in a proportion of at least 80 per cent; (4) guarantees for at least 10 years against changes in taxes, for investments intended for the establishment of basic industries not already existing in Chile; (5) the right to reassess capital for tax purposes in accordance with fluctuations in the rate of exchange from year to year. Earnings on such capital, if reinvested in Chile, enjoy the rights and exemptions indicated under (2) and (5), above.

Capital is granted favorable treatment when invested (1) in export industries which can compete in the international market without government assistance; (2) in production for the domestic market of goods which at present must be imported, also without government assistance; or (3) in industries using a proportion (at least 80 per cent) of domestic raw materials to provide goods for the domestic market at reduced cost for the consumer. The Foreign Investment Commission supervises capital imports.

Exchange operations related to foreign capital covered by the decree of November 10, 1953 have to be effected through authorized banks. For other investments, transfers may be made freely through the exchange market.

Changes during 1958

January 1. A new trade and payments agreement with Ecuador became effective.

January 7. Motorcars, whisky, wine, beer, and cider were no longer classified as luxury goods and were freed from the 10 per cent maximum quota for such imports in the free zones of southern Chile.

February 7. It was announced that advance deposits on imports made after this date would be retained for a minimum period of 90 days. The deposits were increased for 93 items, including certain types of machinery, tools, and equipment. For 46 items, the deposit was raised from 5 per cent of the value of the goods to 100 per cent; the other items, previously included in three different categories to which deposits of 100, 150, and 200 per cent applied, were included in the category requiring a deposit of 400 per cent.

February 9. It was announced that foreign exchange could not be covered until 20 days after the date of shipment as recorded on the bill of lading, except for imports from specified countries of whose currencies a surplus was held. Commercial banks were authorized to sell exchange for forward delivery up to 90 days to pay for goods imported by government departments, even before the goods were shipped. Banks were authorized to make forward sales of exchange to private importers for not more than 90 days to pay for goods on which the advance deposit is less than 100 per cent, but the amount of the forward sales may be only the portion of the value not covered by the advance deposit. Forward exchange contracts for goods from Portugal and Spain were permitted for a maximum period of 180 days.

February 12. The tax on the sale of foreign exchange by banks or by persons or entities authorized to cover import transactions or to issue drafts was raised from 1 per cent to 2 per cent of the amount purchased.

March 28. Banks were permitted to make forward sales, to cover imports in Categories A and B only, from exchange derived from exports already shipped; spot purchases to cover such sales were limited to 20 per cent. For this purpose, a shipment was considered to be eligible for exchange 30 days after the date of the bill of lading. (See also February 9, above.)

April 15. Exports on consignment of pedigreed bulls and frozen lamb were permitted.

April 16. Imports of motorcars and station wagons by Chilean officials appointed to posts abroad were permitted without advance deposit.

April 16. It was announced that recipients of scholarships from a Chilean university or a foreign organization to study abroad for a minimum of three months would be authorized to obtain up to US$100 a month or US$1,000 a year in foreign exchange at the banking free rate.

May 26. As a temporary measure, pending revision of the import regulations, importers were required to make advance deposits equal to 10,000 per cent of the c.i.f. value of all imports.

June 4. A revised list of advance deposits required for permitted imports to be paid for on a cash basis was issued. This list was divided into ten categories with advance deposits ranging from 5 per cent for Category A to 5,000 per cent for Category J. Although Category A was retained, no items were listed in this category, and only a few essential items were listed in Category B (for which the advance deposit is 50 per cent). Advance deposits for imports in Categories A and B were to be retained for 30 days, for imports in Category C, 30 or 90 days depending on the item, and for all other categories, 90 days.

June 11. The Foreign Exchange Commission authorized the commercial banks to operate in the brokers’ free market for nontrade transactions.

June 12. A few items, e.g., petroleum products, natural and synthetic rubber, raw sugar, and some antibiotics, were transferred from Category B to Category A, i.e., the category for which an advance deposit of 5 per cent is required (see June 4, above).

July 8. Exports of a number of items, including oleaginous oils, jute cloth, refined sugar, metallurgical coke, cotton yarn, combed wool yarn, and tires and tubes, were prohibited for the period July 1-December 31, 1958. Export quotas were established for coke, cement, cotton and wool waste, cod-liver oil, and specified pharmaceutical products.

July 17. A trade and payments agreement was signed with Portugal.

August 20. Certain import and export privileges were granted for 15 years to Pisagua, Iquique, Taltal, and Chañaral: Imports of machinery, fuels, equipment, and raw materials for mining, manufacturing, and other industries would be permitted at the banking free rate and would not be subject to limitation or advance deposits or other restrictions.

August 29. The trade and payments agreement with Italy was canceled.

September 5. Exchange cover was authorized for imports from the Egyptian Region of the United Arab Republic, including buses, lorries, chassis for buses or lorries, and jeeps. The Foreign Exchange Commission also recommended that advance deposits be accepted for permitted imports from “hard currency” countries to be paid for in Egyptian pounds, provided that the latter are not negotiated at a discount greater than the difference between the Central Bank’s quotations for Egyptian pounds and the other currency involved.

September 9. For imports on consignment, advance deposits equivalent to the full value of the import were to be retained for a minimum of 30 or 90 days, depending on the merchandise.

October 2. Certain trucks were included in the motor vehicles that could be imported with immediate exchange cover in Spanish agreement dollars.

October 9. Imported goods damaged in transit, if subject to advance deposits of 100 per cent or less, could be replaced without an additional advance deposit.

October 15. Certain import and export privileges were granted to Arica: Goods included in the list of permitted imports and certain machinery, equipment, fuels, and raw materials could be imported at the banking free rate and other goods could be imported at the brokers’ free rate, without being subject to advance deposits or other restrictions.

October 16. Automobiles received as gifts from a foreign government or an international agency were added to the list of goods that universities could import without an advance deposit.

October 28. The advance deposit for imports of certain bicycle parts and spare parts was raised from 200 per cent to 5,000 per cent. Immediate exchange cover could no longer be obtained for imports of bicycle parts from soft currency countries, and advance deposits for imports of bicycle parts from certain soft currency countries would no longer be returned immediately.

November 28. All exchange operations were suspended.

December 10. The Central Bank changed the exchange rate in the banking free market from Chil$837 to Chil$989 per US$1, and exchange operations were resumed. It was announced that advance deposits for imports could be made in domestic currency, in short-term

U.S. dollar obligations issued by the Treasury of the Republic, or, if the deposit is subject to retention for at least 30 days, in U.S. dollars.

Note.—Effective January 27, 1959, the Foreign Exchange Commission permitted the authorized banks to buy and sell exchange for any transaction in the brokers’ free market, which had the effect of creating a single exchange market.

China (Taiwan)

Exchange Rate System

No par value for the New Taiwan Dollar has been established with the Fund. The official rates are NT$36.08 buying, and NT$36.38 selling, per US$1; these rates, at which most transactions take place, result from the addition of the value of a foreign exchange certificate (NT$11.50 buying, NT$11.60 selling, per US$1) to the nominal exchange rates of NT$24.58 buying, and NT$24.78 selling, per US$1. The rates for currencies other than the dollar are determined by the Bank of Taiwan on the basis of the parity relationship of each currency to the U.S. dollar.

Administration of Control

The authority for exchange control policy is vested in the Foreign Exchange and Trade Control Commission. The decisions of the Commission are implemented by the Bank of Taiwan, through which all sales and purchases of foreign exchange must be effected.

Prescription of Currency

Export receipts must be obtained in U.S. dollars, Hong Kong dollars, sterling, or, in a few cases, Malayan dollars or other foreign currencies approved by the exchange control authorities. Payments may be made in U.S. dollars or sterling, but these currencies generally are not provided for payments to countries whose currencies the Bank of Taiwan holds. There are no legal obligations prescribing the channel of payment to persons abroad (except for Japan, trade with which is conducted through special settlement accounts under the terms of an agreement).

Nonresident Accounts

The exchange control system does not differentiate between the accounts of residents and those of nonresidents.

Imports and Import Payments

All imports require individual import licenses, which are issued to registered importers under a three-month allocation system. Imports of certain specified luxuries are prohibited, and imports of specified commodities which may be produced locally or of which there are sufficient stocks are classified in a control list. Importers are classified as traders, industrial end-users, or direct end-users. Import allocations for traders are based on a general commodity budget, for industrial end-users on their production needs, and for direct end-users on their needs of specified goods.

When the import license is granted, the holder is automatically entitled to obtain the necessary foreign exchange from the Bank of Taiwan.

Payments for Invisibles

Payments to nonresidents for family maintenance are restricted by a monthly quota fixed by the authorities. Permission to effect payment for such trade items as freight and insurance is determined by the approval to import the related commodities. Application for exchange for invisibles must be made to the Remittance Department of the Foreign Exchange and Trade Control Commission, which passes its recommendations to the Commission for final decision. In general, reasonable amounts of foreign exchange are granted for reinsurance premiums and for travel other than for pleasure. Travelers leaving Taiwan may take with them no more than US$200 in foreign currency and no more than NT$500 in Taiwan currency.

Exports and Export Proceeds

All exports require licenses, which are granted to exporters after the Bank of Taiwan has examined and verified the amount of foreign exchange involved in the export.

The currencies in which export proceeds must be received are prescribed. Export proceeds must be surrendered at the nominal rate of NT$24.58 per US$1. In addition, exchange certificates equivalent to the f.o.b. value of the proceeds are issued. These exchange certificates are valid for foreign payments for 180 days, and may be sold to the Bank of Taiwan during this period and for an additional 30 days at NT$11.50 per US$1.

Proceeds from Invisibles

All proceeds from invisibles must be surrendered to the Bank of Taiwan. Travelers may bring in any amount of foreign currency and either hold or surrender it. The import of domestic currency is limited to NT$500 for each traveler.

Capital

Capital payments due to nonresidents normally are not permitted, and repatriation of foreign capital is allowed only in special circumstances. In accordance with the Foreign Investment Law of July 14, 1954, new foreign investments approved by the authorities are guaranteed (1) free transfer of profits in the original currency of the investment, (2) repatriation of capital (including reinvested earnings), two years after the investment has been made, at a yearly rate not exceeding 15 per cent of the total investment, and (3) immunity from expropriation for ten years, where the foreign investment constitutes at least 51 per cent of the total investment.

New capital investments abroad by residents are prohibited. Residents are permitted to hold foreign exchange representing capital receipts in an account in foreign currency and may dispose of this exchange by surrendering it to the Bank of Taiwan for local currency or using it to make payments abroad.

Changes during 1958

March 1. The preferential rate was adjusted from NT$34 to NT$35 per US$1.

April 1. The preferential rate was adjusted from NT$35 to NT$36 per US$1.

April 14. Official rates of NT$24.58 buying, and NT$24.78 selling, per US$1, were established and other rates and the defense tax of NT$3.13 were abolished. The official rates were made applicable to major exports and essential imports, and to invisibles for account of the Government. The official rates plus the value (NT$11.50 buying, NT$11.60 selling) of an exchange certificate were applied to the settlement of all other exports, imports, and invisibles.

November 21. The exchange transactions previously effected at the official rates would in future take place at the rates of NT$36.08 buying, and NT$36.38 selling, per US$1.

Colombia1

Exchange Rate System

The par value of Colombian Pesos 1.94998 = US$1, established December 17,1948, is not applied to any transactions under the present exchange system. For payments for the f.o.b. value of imports and 80 per cent of the freight costs, students’ remittances, official nontrade payments, and interest on debts and service on capital registered before June 17, 1957, the rate of exchange is determined at auctions held by the Bank of the Republic. This rate is referred to as the “certificate” rate, but exchange certificates are no longer issued. The selling rate at the auction on January 31, 1959 was Col$6.40 per US$1. The auction rate also applies to payments for crude petroleum bought for refining in Colombia (for which the refiners must pay in dollars), with the exception of petroleum produced by the Colombian Petroleum Enterprises, which is the exclusive property of the Enterprises.

A fixed “certificate” rate, which on January 31, 1959 was Col$6.10 per US$1, applies to the exchange proceeds of major exports and to registered capital of the petroleum and metal-extracting industries. This rate, however, may be changed from time to time in line with movements in the auction rate. There is also a free market where all other transactions take place. On January 31, 1959, the selling rate in the free market was Col$8.12 per US$1.

There is an exchange tax of 15 per cent on the proceeds of exports of coffee, bananas, raw cowhides, and precious metals, and an exchange tax of 2 per cent on all other exports; and there is a remittance tax of 10 per cent (which has to be paid with U.S. dollars from the free market) on all payments made through the certificate market, except certain official nontrade payments, students’ remittances, payments for imports for the petroleum and metal-extracting industries, and payments for imports of specified goods provided they are re-exported. (See Table of Exchange Rates, below.)

Administration of Control

To import from, export to, or make payments to, foreign countries, prior application for registration of the transaction must be made at the Exchange Registration Office, which is responsible to the Bank of the Republic. Purchases of “certificate” exchange must be made at the auctions of the Bank of the Republic and may be made through the commercial banks, which act as authorized agents of the Bank of the Republic. An Exchange Regulation Fund, operated by the Exchange Commission, regulates operations in the “certificate” market. The Superintendency of Imports controls imports that are subject to prior licensing.

Prescription of Currency

Payments and receipts related to international transactions are normally effected in U.S. dollars. Settlements with Denmark, Ecuador, Finland, or Spain for commercial transactions must be made through a clearing account in accordance with the provisions of the relevant bilateral payments agreement. Under the agreement with Denmark, goods originating in third countries and purchased in one of the agreement countries may be settled through the agreement account by mutual consent of the partners. There are also agreements concluded by the National Federation of Coffee Growers with Czechoslovakia, France, and East Germany.

Nonresident Accounts

Commercial banks are authorized to debit and credit the accounts of nonresidents.

Imports and Import Payments

There are a list of goods whose import is prohibited, a list of goods whose import is subject to prior licensing by the Superintendency of Imports, and a list of goods that may be imported freely.

Prior import registration is required for all imports; if the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. An advance deposit of 1 per cent is required for registration of imports of capital goods and spare parts not destined for resale; imports under clearing agreements concluded for the foreign marketing of coal and products of Acerias Paz del Río S.A., subject to the exchange and trade regulations; foodstuffs imported by the National Institute of Supply, with approval of the competent ministry, for Colombia’s normal needs; imports exempt from advance deposits under laws, decrees, or resolutions in effect before the coming into force of Law No. 1 of 1959, provided they comply with the regulations and are authorized by the Ministry of Finance and Public Credit; sacramental wine imported by the dioceses in quantities considered reasonable by the Bank of the Republic; and imports of books, newspapers, and magazines of a scientific or literary nature which will contribute to the culture or entertainment of the Colombian people. For all other imports, an advance deposit of 100 per cent of the peso value of the import has to be paid in cash as a prerequisite to import registration; this deposit is returned 60 days after the goods have been cleared through customs. The National Government has power in the event of a special emergency to allow import registrations for imports from countries with which Colombia has a marked trade deficit only if these countries purchase stated amounts of Colombia’s exports.

Prior exchange registration is required for all payments for imports; this is granted in f.o.b. terms upon submission of the import registration and evidence that the goods have entered Colombia. A remittance tax of 10 per cent (which has to be paid with U.S. dollars from the free market) is applied to payments for all imports except those for the petroleum and metal-extracting industries, imports of specified goods provided they are re-exported, and imports by the National Government and by some official and semiofficial institutions. Importers, or commercial banks acting on their behalf, may purchase “certificate” exchange covering the value of their imports at the auctions held by the Bank of the Republic. Permitted imports may also be paid for through the free market, in which case the payment is exempt from the 10 per cent remittance tax.

Potatoes, wheat, spelt, maslin, and flours made thereof, rice, barley, corn, wheat groats, and some legumes and vegetables may be imported only by the Corporation for the Protection of Agricultural Products.

Payments for Invisibles

Payments by the National Government for services, installments of principal and interest on all official external medium-term and long-term debts and on external medium-term and long-term debts registered before June 17, 1957 and owed by semiofficial or private entities, and repatriation of and service on foreign capital registered before June 17, 1957 are made at the “certificate” rate. At its discretion, the Bank of the Republic may arrange for freight and insurance costs connected with imports to be paid either at the “certificate” rate or in the free market. In practice, 80 per cent of the freight on imports covered by registrations for which exchange will be provided is payable with “certificate” exchange and insurance must be paid for with free market dollars. Exchange at the “certificate” rate is also granted to students abroad engaged in postgraduate studies, taking professional courses not available in Colombia, or studying art; to persons sent by official or semiofficial institutions to study their specialties; and to persons holding scholarships in foreign countries and needing an additional amount for living expenses. Students’ remittances are exempt from the 10 per cent tax on payments at the “certificate” rate, as are certain official nontrade payments. Payments for all other invisibles must be made through the free market. To aid in developing new coffee markets abroad, the National Coffee Fund may sell coffee for foreign currencies which are not. freely convertible but which may be used for payments for services, expenses of students and other residents abroad, technical missions, purchases of real estate by Colombian diplomatic or consular missions abroad and equipment of those missions, and other similar purposes.

Exports and Export Proceeds

Prior application for registration is required for all exports. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted.

The foreign exchange proceeds of exports of coffee, bananas, raw cowhides, and precious metals must be surrendered to the Bank of the Republic for pesos at the fixed “certificate” rate less an exchange tax of 15 per cent. The proceeds of all other exports are negotiated at the average buying rate in the free market for the preceding week less an exchange tax of 2 per cent. However, a law of January 1959 provides for special exchange rates to be applied to the proceeds of exports of refined petroleum products and of exports consisting in part of imported raw materials. Minimum surrender prices are established for exports of coffee (US$75 per 70-kilogram bag) and bananas (US$1.05 per bunch for exports to the United States and US$56 per ton for exports to Europe). These minimum surrender prices also serve as the basis for the collection of the exchange tax. Exports of coffee are subject to quotas, which are established on a monthly basis.

Proceeds from Invisibles

Exchange receipts from invisibles must be negotiated in the free market.

Capital

Incoming foreign capital for the petroleum and metal-extracting industries may be registered and must be surrendered at the fixed “certificate” rate; it is entitled to repatriation and remittance of profits. Other incoming capital (which cannot be registered) and remittance of profits and repatriation of capital (unless it was registered before June 17, 1957) must be negotiated in the free market.

Table of Exchange Rates (as at January 31, 1959)(pesos per UJS. dollar)
BuyingSelling
5.185(Fixed “Certificate” Rate less 15% Exchange Tax)

Exports of coffee, bananas, raw cowhides, and precious metals.
6.10(Fixed “Certificate” Rate)

Registered capital of the petroleum and metal-extracting industries.
6.40(“Certificate” Rate)

Imports for the petroleum and metal-extracting industries. Imports of specified goods provided they are re-exported. Certain imports by official and semiofficial institutions. Most government payments. Students’ remittances.
7.89(“Fluctuating” Rate4 less 2% Exchange Tax)

All other exports.
7.21(“Certificate” Rate plus 10% Remittance Tax)2 All other imports (f.o.b. value)3 and 80 per cent of the freight costs. Interest on debts and service on capital registered before June 17, 1957.
8.11(Fluctuating Free Market Rate)

Invisibles. Unregistered capital.
8.12(Fluctuating Free Market Rate)

Other invisibles. Unregistered capital.

Changes during 1958

February 18. Advance deposit requirements were amended. In future, advance deposits would not be returned to the importer until 60 days after the goods had reached a Colombian port. The amount of the advance deposit would be calculated at a rate of exchange based on the average certificate rate for the preceding two-week period.

February 19. A decree of the National Government provided that for customs clearance of goods covered by import registrations accepted before this date additional advance deposits, equivalent to certain percentages of the import value, would be required to be made with the Bank of the Republic. These deposits would not be returned until 30 days after the goods had received customs clearance. Exemptions could be granted, but in those cases the advance deposit made before approval of the import registration would also not be returned until 30 days after the goods had received customs clearance.

March 26. A number of changes were introduced in the exchange system under Decree No. 80. Negotiable exchange certificates would no longer be issued against the proceeds of exports; exporters would receive the peso equivalent of their export exchange, less the appropriate export tax, at a fixed rate (determined by the Bank of the Republic at Col$6.10 per US$1 on March 27), which could not be changed for 120 days. For payments authorized through the “certificate” system, the Bank of the Republic would sell at public auction nonnegotiable “certificate” exchange against its available exchange receipts. The “certificate” rate would no longer apply to payment of 80 per cent of freight on imports and exchange for this purpose would have to be purchased entirely in the free market. The 10 per cent tax on remittances abroad had to be paid with U.S. dollars from the free market, instead of at the “certificate” rate, as previously. Also under Decree No. 80, exporters of coffee were required to deliver without compensation to the National Federation of Coffee Growers a quantity of pergamino coffee equivalent to 10 per cent of excelso coffee intended for export. (On April 12, this percentage became 15.) The minimum surrender price for exports of coffee was reduced from US$100 to US$85 per 70-kilogram bag.

April 11. The list of freely permitted imports was substantially reduced and many items were transferred from the list of goods subject to prior import license to the list of prohibited imports.

June 10. A total of 230 items were transferred from the list of goods subject to prior import license to the free import list, and certain types of trucks and chassis for buses and trucks, when imported from the United States, were transferred from the list of prohibited imports to the prior import license list.

June 24. Various, miscellaneous items were transferred from the free import list and the prohibited import list to the prior import license list.

July 17. The minimum surrender price for exports of coffee was reduced from US$85 to US$81 per 70-kilogram bag.

August 21. The minimum surrender price for exports of coffee was reduced from US$81 to US$78 per 70-kilogram bag.

December 2. The minimum surrender price for exports of coffee was reduced from US$78 to US$75 per 70-kilogram bag.

Note.—The following changes were introduced in January 1959:

January 16. Law No. 1 of 1959 established a new official rate for proceeds of minor exports, which would vary in line with fluctuations in the free market rate. Also, authority was given to the Bank of the Republic to arrange for freight and insurance costs connected with imports to be paid through either the official or the free market, as circumstances require. The Government was given power in the event of a special emergency to accept registrations for imports from countries with which Colombia has a marked trade deficit only if these countries purchase stated amounts of Colombia’s exports. To aid in developing new coffee markets abroad, the National Coffee Fund could now sell coffee for foreign currencies which are not freely convertible but which can be used for payments for services, expenses of students and other residents abroad, technical missions, purchases of real estate by Colombian diplomatic or consular missions abroad and equipment of those missions, and other similar purposes. The law also gave authority for proceeds from exports of manufactures with an import component to be converted at various fluctuating rates representing mixtures between the official and the free market rates, and for a new exchange rate treatment to be given to the proceeds from exports of refined petroleum, whereby the refineries would pay out of their own exchange earnings their foreign exchange costs other than for crude oil imports (for which payment would be made through the official auction market) and the Bank of the Republic would auction the remainder for their account; as at January 31, 1959, however, these provisions had not been implemented.

January 23. Decree No. 144 of 1959, clarified by Decree No. 206 of 1959 (January 28), provided that 80 per cent of freight could be paid for at the “certificate” rate, and that this would apply only to imports covered by import registrations for which exchange will be provided and for which applications are submitted within 180 days from the date of the bill of lading.

January 28. A resolution provided that the advance deposit required for import registration would be 1 per cent for food products imported by the National Institute of Supply, capital goods and spare parts imported by official, semiofficial, or public service institutions and not destined for resale, imports under certain clearing agreements, and some others in very special cases.

Costa Rica

Exchange Rate System

The par value is Costa Rican Colones 5.615 = US$1. A multiple rate system arises from the coexistence of an official and a free market. The official rates are Ȼ 5.60 for exports, and Ȼ 5.67 for essential imports, per US$1. The selling rate in the free market, covering all other imports and almost all invisibles, has been maintained at Ȼ 6.65 per US$1 since July 23, 1952. The use of this market for part of the proceeds of some exports results in an additional effective rate of Ȼ 6.27 per US$1 (see Table of Exchange Rates, below).

Administration of Control

The exchange control system is operated by the Central Bank of Costa Rica, and all official market transactions must be licensed by the Bank, which processes applications for payments in chronological order. Purchases and sales of official market exchange are made through the Central Bank or through authorized banks. Free market transactions are made through the commercial banks or through private dealers, independently of the Central Bank, but the Central Bank has the right to operate in the free market for the purpose of trying to regulate the rate of exchange in that market.

Prescription of Currency

Nearly all exchange transactions in Costa Rica are effected in U.S. dollars. Costa Rica does not maintain any payments or clearing agreements with other countries.

Imports and Import Payments

An importer may order any goods from abroad and have them entered through the Costa Rican customs without control or restriction. Control over payments for imports is exercised only in respect of essential imports paid for at the official rate; these imports consist of some 512 items included in a “List of Primary Needs” and represent approximately 45 per cent of total imports.

An exchange license from the Central Bank must be obtained to effect payments for imports at the official market rate. In general, these licenses are issued automatically and without delay. Payments for nonessential and luxury imports must be made through the free market, where the importer may purchase the necessary exchange without limitation. Under contracts signed with the Costa Rican Government, foreign-owned banana companies may effect certain essential imports in lieu of surrendering exchange from their exports.

Payments for Invisibles

Payments permitted at the official selling rate are government payments, earnings of up to 10 per cent annually on registered foreign capital invested after January 20, 1933 (other than earnings on foreign investments governed by special contracts), and specified expenses of students who are taking specialized courses abroad and are registered with the Central Bank. All of these transactions require exchange licenses, which are obtainable upon submission to the Central Bank of an application with appropriate substantiating documents. Payments for all other invisibles are not controlled and are made through the free market.

Exports and Export Proceeds

The Central Bank supervises exports to assure a supply of exchange for the official market. Export licenses from the Central Bank are necessary for the physical exportation of merchandise, and they are granted if the exporter agrees to surrender the exchange proceeds at the official rate; the Bank may require the exporter to provide a guaranty in this respect. Exports of goods which are in short supply domestically may be restricted. There is a list of strategic materials whose export to communist-dominated countries is prohibited.

Exchange proceeds from exports, with certain exceptions, must be surrendered at the official rate. However, under the Law on Free Exchange for Exports, exporters of bananas produced by Costa Rican enterprises, livestock, meat, cacao in the bean or manufactured, shrimp, cotton, leather articles, books and other printed matter, yeast, and some other products of minor importance may retain 65 per cent of their export exchange for sale in the free market; this results in an effective rate of Ȼ 6.27 per US$1. Under contracts with the Government, foreign-owned banana companies may retain from their export proceeds foreign exchange for depreciation of equipment, profits, imports of essential goods, and payment of the export tax; the remainder is surrendered at the official rate.

Re-exports of foreign goods are subject to the regulations applying to exports; but if the goods have been imported at the free market rate, this rate will apply to their re-export.

Proceeds from Invisibles

Exchange receipts from insurance indemnities that arise from insurance whose premiums were covered in the official market, receipts by the Government and public entities, and sales of exchange by foreign concessionnaires whose contracts require such sales in the official market, have to be surrendered at the official rate. Receipts from other invisibles may be sold in the free market.

Capital

Residents may freely receive and make transfers of capital without limitation at the free market rate. Residents may also sell exchange at the official rate, but outward transfers of capital through the official market require the approval of the Central Bank and are subject to the conditions and limitations governing that market. Exchange receipts from foreign capital registered with the Central Bank must be surrendered at the official rate. The granting of official market exchange for amortization of registered foreign capital is subject to exchange licensing by the Central Bank, which decides on the applications on a case-to-case basis and in the light of the availability of exchange for that purpose. Foreign enterprises that produce export goods and are considered advantageous to the economy may be granted the right by the Central Bank to remit at the official rate amortization, profits, and interest on investments they have brought into the country through the free market. However, such authorizations are limited to the amounts set for that purpose by the Central Bank in its foreign exchange budget and are restricted by the fact that the total remittances of an enterprise may not exceed the total amount of its sales of foreign exchange during a specified period. Certain foreign-owned investments are dealt with individually under special contracts. There are no limitations on the receipt or payment of unregistered foreign capital through the free market.

Table of Exchange Rates (as at December 31, 1958)(colones per U.S. dollar)
BuyingSelling
5.60(Official Rate)

All exports except those at the 0 6.27 rate. Certain invisibles. Registered capital.
5.67(Official Rate)

Essential imports.

Government payments. Students’ expenses. Registered capital.
6.27(35% at Ȼ 5.60 and 65% at Free Market Rate)

Certain exports by special authorization from the Central Bank.
6.63(Free Market Rate)

All other receipts.
6.65(Free Market Rate)

All other payments.

Changes during 1958

During the year, various changes were made in the list of commodities benefiting from the Law on Free Exchange for Exports (see section on Exports and Export Proceeds, above), as follows: paper bags (included in February), parasols and umbrellas (included in March), fiberglass sheets (included in June), stockings, socks, and amoebicidal products (excluded in June), clothing manufactured in Costa Rica (included in September), eggs (benefit expired in October), chickens (benefit expired in November), cotton (included November 30), balsam of Peru (benefit expired in December).

March 12. The special mixing arrangement for cacao and cacao products, i.e., 1 per cent at Ȼ 5.60 and 99 per cent at Ȼ 6.63, was eliminated. These export proceeds were then permitted to be negotiated 35 per cent at Ȼ 5.60 and 65 per cent at Ȼ 6.63.

Denmark

Exchange Rate System

The par value is Danish Kroner 6.90714 = US$1. The official limits for the U.S. dollar are DKr 6.8575 buying, and DKr 6.9575 selling, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for the externally convertible European currencies (see section on Prescription of Currency, below) vary between limits resulting from the dollar rate for the Danish krone in relation to the dollar rates for the other currencies. The forward premiums and discounts are left to the interplay of market forces.

Denmark operates a dollar export incentive scheme which takes the form of negotiation at a premium of special transferable import rights given to exporters to the dollar area when they surrender their dollar export proceeds (see section on Exports and Export Proceeds, below).

Exchange Control Territory

The Danish Monetary Area comprises Denmark, Greenland, and the Faroe Islands.

Administration of Control

Exchange control is administered by the National Bank of Denmark, which is the central exchange control authority. However, administrative powers for most payments and transfers are delegated to the authorized exchange dealers, i.e., the banks and stock exchange brokers who are members of the Copenhagen Stock Exchange. Foreign direct investments in Denmark require permission from the Ministry of Commerce.

Licenses for imports and exports, when they are required, are issued by the Directorate of Supply (an agency of the Ministry of Commerce), the Ministry of Agriculture, or the Ministry of Fisheries.

Prescription of Currency

For exchange control purposes, countries are divided into two groups: the bilateral account countries,1 and the convertible area (all other countries). Payments to countries in the convertible area may be made in any foreign currency or by crediting Danish kroner to any Convertible or Bilateral Krone Account (see section on Nonresident Accounts, below). Payments from these countries may be received in the currency of the country concerned, U.S. dollars, Canadian dollars, any externally convertible European currency,2 or in Danish kroner from any Convertible Krone Account. Settlements with the bilateral account countries must be made in accordance with the payments agreement between Denmark and the country concerned, usually in Danish kroner through a Bilateral Krone Account.

Nonresident Accounts

The accounts held in Danish kroner by nonresidents are divided into three types: Convertible Krone Accounts, held by residents of the convertible area, Bilateral Krone Accounts, held by residents of the bilateral account countries, and Krone Accounts IV (capital accounts), comprising all other nonresident Krone Accounts. Convertible and Bilateral Krone Accounts may be opened by authorized foreign exchange dealers for foreign banks and insurance companies. Convertible Krone Accounts for other than banks and insurance companies may be opened by authorized exchange dealers only under certain conditions, while the opening of Bilateral Krone Accounts for other than banks and insurance companies requires special authorization.

Convertible Krone Accounts may be debited for transfers to other Convertible Krone Accounts or to Bilateral Krone Accounts, and for purchases of any foreign currency. They may be credited with transfers from other Convertible Krone Accounts and with the proceeds of sales of U.S. dollars, Canadian dollars, and externally convertible European currencies.

Bilateral Krone Accounts may be debited for transfers to other Bilateral Krone Accounts of the same country and for the purchase of the currency of that country. They may be credited with transfers from any Convertible Krone Account, or from another Bilateral Krone Account of the same country, or with the proceeds of sales of the currency of that country, U.S. dollars, Canadian dollars, or externally convertible European currencies.

Krone Accounts IV are generally used for the crediting of nonresidents’ capital. Balances on these accounts may be used freely for a wide range of payments in Denmark and may be transferred abroad within the limits set for capital transfers (see section on Capital, below). Transfers between Krone Accounts IV of different nationality require permission, which is given according to fixed rules, but such transfers are in general permitted between residents of the same country and between residents of countries in the convertible area.

Imports and Import Payments

Most imports from the dollar area, OEEC countries and their associated territories, and Finland are free of import license. Licenses are required for most imports from other countries but they are issued freely for most of the commodities that may be imported free of license from the dollar area, OEEC countries and their associated territories, and Finland. A few goods may be imported from nondollar countries by purchasing a “title to import license” (see section on Exports and Export Proceeds, below).

Import declarations, when certified by the customs authorities, serve as authorization to pay for the corresponding goods and the related shipping expenses. However, the authorized dealers may effect payment before clearance of the goods if the importer submits a statement promising to present the import declaration later. Payments for imports may be made freely in accordance with the Ministry of Commerce’s Executive Order on Exchange Regulations. Foreign exchange may be made available only by the National Bank or—insofar as payments agreements do not prevent them from effecting foreign exchange transactions—by authorized exchange dealers. The method and currency for payments to bilateral account countries (see footnote 1) are prescribed.

Payments for Invisibles

The authorized exchange dealers are permitted to effect freely most payments for invisibles; only in a few cases is approval from the National Bank required. Transfers of up to DKr 500 for any noncommercial purpose are permitted freely. Foreign exchange for travel is allocated liberally (see section on Changes during 1958, November 3, below).

Travelers may take out freely DKr 500 in domestic banknotes and coins, any amount in foreign banknotes, and any amount in other Danish or foreign means of payment. The DKr 500 limit may be exceeded by nonresidents, who may export any amount in Danish banknotes and coins derived from sales of foreign currency in Denmark or brought in by them when they entered Denmark.

Exports and Export Proceeds

Exports of major agricultural and fishery products and of a few industrial products to OEEC and dollar area countries, and most exports to countries outside the OEEC and dollar areas, require export licenses, which are issued by the Directorate of Supply (an agency of the Ministry of Commerce), the Ministry of Agriculture, or the Ministry of Fisheries. Certain exports are subject to restrictive licensing to safeguard the fulfillment of bilateral obligations, to avoid excessive credits to importing countries, to serve strategic purposes, to avoid re-export and transit transactions involving loss of dollars or externally convertible currencies, and to secure the domestic supply of essential goods.

Foreign exchange proceeds from exports must be transferred to Denmark unless the National Bank permits otherwise. If recipients show evidence to the Bank that they need foreign exchange to meet their own future commitments, or to maintain their business, or for necessary purposes abroad, the Bank may exempt them from the general obligation to surrender their exchange proceeds. Transferred foreign exchange must be offered for sale to the National Bank or to an authorized exchange dealer within eight days after receipt. The currency to be received for exports is prescribed.

Exporters of most goods delivered to countries listed as belonging to the dollar area (or delivered to U.S. and Canadian military forces stationed outside the dollar area) and paid for in U.S. or Canadian dollars (or in Danish kroner from a U.S. or Canadian Convertible Krone Account) obtain, against surrender of their dollar receipts at the official rate of exchange, a “title to import license” for 7½ per cent of their export proceeds. This “title to import license” carries the right to import, against payment at the official rate of exchange, otherwise restricted goods from OEEC countries and their associated territories, Argentina, Brazil, Bulgaria, Chile, Czechoslovakia, Finland, Hungary, Israel, Poland, Rumania, the Spanish Monetary Area, the U.S.S.R., and Yugoslavia. These import rights are transferable. The price of the titles is stabilized at 80 per cent of their face value, through the following mechanism: if the demand for titles exceeds the supply at the stabilized price, the Government sells titles (called “L-titles”) at a price of 80 per cent of the face value; if the supply of titles exceeds the demand, the Government purchases them at that price.3

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be transferred to Denmark unless the National Bank permits otherwise (see section on Exports and Export Proceeds, above). Transferred foreign exchange must be offered for sale to the National Bank or to an authorized exchange dealer within eight days after receipt.

Travelers may bring into Denmark any amount in domestic banknotes and coins, foreign banknotes, and other Danish or foreign means of payment.

Capital

Residents have an obligation to transfer to Denmark receipts realized from assets abroad. Residents are permitted, by payment into a nonresident Krone Account IV, to grant to close relatives abroad gifts and inheritance advances without limitation and loans up to DKr 25,000 a year. Danish emigrants are granted an exchange allowance of DKr 7,000 per person; they acquire nonresident status after three years’ stay abroad. Transfers abroad may be approved by the authorized banks (1) for Danish debtors who have issued bonds abroad for payment of interest on, redemption of, or repurchase of, their own bonds and (2) for utilization of rights of subscription to foreign shares, share certificates, etc., provided that the applicant had acquired the securities as a gift or an inheritance while he resided abroad as a nonresident, or had acquired them with the National Bank’s permission. Permission from the National Bank is required for other transfers abroad of a capital nature by residents.

Nonresident Danish or former Danish nationals may credit capital transfers to nonresident Krone Accounts IV without limitation. Funds in such accounts may be invested freely in Danish portfolio securities that are payable exclusively in Danish kroner, or they may be used for family loans up to DKr 25,000 a year. Funds belonging to nonresident Danish nationals may also be invested in real estate. Nonresident foreign nationals may credit Krone Accounts IV with amounts needed to use subscription rights on Danish securities held in portfolio, and to grant loans to their families up to DKr 25,000 a year. Other transfers of capital from abroad by nonresidents require permission from the National Bank or, for direct investments, from the Ministry of Commerce, which authorizes such investments on a liberal basis.

All payments of a capital nature due to nonresidents have to be credited to Krone Accounts IV. Amounts placed in Krone Accounts IV held by residents of the Uniscan countries (Norway, Sweden, and the United Kingdom, including other Sterling Area countries) and Finland may be transferred abroad without limitation. Inheritances may be transferred to the United States without limitation, and to any country other than the United States, Finland, and the Uniscan countries up to a maximum of DKr 75,000 per account holder per calendar year. Dowries may be transferred to any country other than Finland and the Uniscan countries up to a maximum of DKr 75,000 per account holder per calendar year. Other amounts may be transferred abroad up to a maximum of DKr 25,000 per account holder per calendar year; however, if the account holder is a foreign national who, after having had permanent residence in Denmark, has returned to his country of origin, DKr 75,000 per family may always be transferred during any one calendar year.

The repatriation of direct investments made by nonresidents in Denmark is permitted freely if the proceeds are obtained from the sale of the investment to a resident and if the investment had been made with the permission of the Danish monetary authorities after January 1, 1950 with (1) funds transferred from abroad, (2) business balances of a current nature representing merchandise, freight, commissions, dividends, etc., held in Denmark by nonresidents, or (3) funds arising from merchandise deliveries from abroad.

In general, transfers of nonresident capital assets in Denmark are permitted between residents of the same country, between residents of the Uniscan countries and Finland, and between residents of countries in the convertible area other than Uniscan countries (see section on Prescription of Currency, above).

Imports and exports of securities require permission from the National Bank. Imports of Danish securities payable only in Danish kroner are permitted if they have been owned by a nonresident for some years; exports of Danish and foreign securities owned by nonresidents are normally permitted also. Nonresidents are permitted to reinvest the proceeds of sales or redemptions of Danish securities in Danish bonds payable exclusively in Danish kroner. Nonresident-owned Danish securities held in Denmark may be sold freely.

Changes during 1958

February 4. In accordance with a new agreement with Mainland China, all payments between the two countries were to be on a multilateral basis.

February 26. A number of import commodities were shifted from the regional free list to the general free list, raising the liberalization percentage for dollar imports from 55 to 66 (based on private imports in 1953).

May 9. Nonresident accounts for current payments (Krone Accounts I, II, and III) were reclassified, according to monetary area, as Convertible Krone Accounts, Transferable Krone Accounts, and Bilateral Krone Accounts, and prescription of currency regulations were simplified accordingly. Krone Accounts IV remained unchanged.

May 9. Payments to and from Poland were no longer required to be made through a sterling account with the National Bank, and could now also be made according to the rules for payments to and from countries in the transferable area.

June 2. The limit (DKr 500) on the import of Danish banknotes and coins was abolished. The limit of DKr 500 on the export of Danish banknotes and coins was retained for residents; but nonresidents could export any amount in Danish banknotes and coins derived from sales of foreign currency in Denmark or brought in by them on entry.

June 2. The exchange allocation for emigrants was raised from DKr 3,500 to DKr 7,000 for each person.

October 22. The rules governing transfers of capital income and contractual amortization to Danish nationals residing abroad, and of inheritances, dowries, and surrender values of life assurance policies, were liberalized to the extent requested in the OEEC liberalization code.

November 3. Allocations of exchange for business travel to the dollar area would be made on the same terms as those for travel to other countries. The allowance for tourist travel to the dollar area was raised from US$100 to US$500 annually for each person.4

December 29. The Danish krone was made externally convertible. The rate for the U.S. dollar was allowed to fluctuate within limits fixed at DKr 6.8575 buying, and DKr 6.9575 selling, per US$1, and the National Bank was prepared to buy and sell U.S. dollars at these rates. The authorized banks were free to execute arbitrage transactions in U.S. dollars and currencies convertible into U.S. dollars. Transferable Krone Accounts were transformed into Convertible Krone Accounts, and the prescription of currency regulations were simplified accordingly.

Ecuador

Exchange Rate System

The par value is Ecuadoran Sucres 15.00 = US$1. This rate applies to most major exports, including coffee and cocoa, and a few minor exports, essential and semiessential imports (List 1), nontrade payments by the Government, registered private and official capital, and certain other specified transactions. A multiple currency practice arises since, along with the official market, there is a free market for most minor exports, most transactions in invisibles, unregistered capital, and nonessential and luxury imports (List 2). Other rates result from the mixing arrangements applied to the exchange proceeds of exports of fish, pharmaceuticals, bananas, shrimp, and other shellfish. (See Table of Exchange Rates, below.)

Administration of Control

The Monetary Board classifies goods according to the exchange market through which they must be settled. The authorities of the Central Bank of Ecuador control and supervise the transactions permitted to pass through the official market. All transactions that do not qualify for this market may enter the free market—conducted by exchange houses and private banks—where such transactions are free of supervision by the exchange control authorities.

Prescription of Currency

In principle, exchange proceeds must be received in U.S. dollars, but bilateral agreements with Argentina, Chile, Colombia, France, Italy, and Spain require payment through special accounts, denominated in U.S. dollars, at the central banks of the countries concerned.

Imports and Import Payments

Prior import licenses are required for substantially all imports other than those representing official foreign loans, those of certain foreign companies, and samples and gifts up to a value of US$40, but the licenses are issued freely. Imports are divided into two categories—essential and semiessential goods (List 1) and nonessential and luxury goods (List 2). All goods not included in these two lists are prohibited. The Monetary Board is authorized to make shifts between the lists and to add new goods to them.

An import license granted by the Exchange Department of the Central Bank for goods on List 1 carries the right to purchase the required foreign exchange at the official rate. Legally, the Central Bank must act on an application within three days, stating any advance deposit that must be paid before the license is issued. For imports of essential and semiessential goods (List 1), no advance deposits are required but payment to the Central Bank of an ad valorem tax of 5 per cent of the c.i.f. value is a prerequisite to granting of the license. For imports of some nonessential and luxury goods (List 2), foreign exchange to cover the total value of the import must be purchased in the free market, and this exchange, in percentages that vary between zero and 100 per cent, together with an ad valorem tax of 10 per cent of the c.i.f. value of the import, must be deposited with the Central Bank prior to the issuance of the import license. The Central Bank issues the import license as soon as the importer has made the advance deposit that is required and has paid the percentage consular fee applicable to the import.

Payments for Invisibles

Payments for most invisibles are made through the free market and are not subject to exchange control. Certain invisibles may be paid for at the official rate but require an exchange license from the Central Bank, which grants such licenses for the following items: contractual interest payments, repayments on loans, and other obligations abroad which are registered with the Central Bank; payments of dividends, profits, interest, and amortization on registered private foreign investments, up to 12 per cent annually, as a minimum; indispensable payments and remittances of the Government and official entities; and foreign exchange required by persons taking specialized courses abroad, provided that such persons register with the Central Bank and that the amounts do not exceed passenger fares, expenses of travel, tuition, and a maximum of US$100 a month for living expenses.

Exports and Export Proceeds

All exports other than those of certain foreign mining companies require licenses—which are issued by the Central Bank-—to ensure, among other things, the surrender of export proceeds that are subject to sale at the official rate. The official rate applies to the proceeds of such major products as coffee and cocoa and to a few minor exports, including hides and skins. The proceeds of most minor exports may be sold in the free market.

Exporters of bananas are required to surrender at the official rate the following amounts of their exchange earnings: (1) $1.00 per stem from exports to Europe, Latin America, or New Zealand shipped from any port at any time of the year, and also from exports to other countries shipped from the ports of Esmeraldas and Bahia de Caráquez in the period from June 6 through October 31, 1958; and (2) $1.20 per stem from exports to countries outside Europe, Latin America, and New Zealand shipped from ports other than Esmeraldas and Bahia de Caráquez in the period from May 13 through October 31, and $1.50 per stem from such exports during November and December. Furthermore, up to 15 per cent of a shipment of bananas to Latin American countries may consist of substandard stems (seven or eight hands), and exporters may sell the entire proceeds from these substandard stems in the free market. For up to 4,000 stems per week and per exporter of substandard stems shipped to border Peruvian cities, payment may be received in sucres or soles and exporters may sell the proceeds in the free market. Under these conditions, it is estimated that exporters of bananas surrender, on the average, about 40 per cent of their export proceeds at the official rate and sell in the free market, or retain, the other 60 per cent.

From the proceeds of each metric ton of fish (except the tuna variety called “barrilete”) that is exported, $100 has to be surrendered at the official rate. Proceeds above this amount may be sold in the free market, as may the entire proceeds of exports of “barrilete.” For the proceeds of exports of shrimp, the surrender requirement is $300 per metric ton (at current market prices, it is estimated that this requirement amounts to approximately 25 per cent of total export proceeds), and for the proceeds of exports of shellfish other than shrimp, it is $100 per metric ton. (See Table of Exchange Rates, below.)

Proceeds from Invisibles

Receipts from invisibles are sold through the free market and are not subject to control by the exchange control authorities.

Capital

Receipts of foreign capital may enter at the official rate if they are for approved purposes and are registered with the Central Bank. Registered capital and earnings of up to 12 per cent as a minimum may be transferred annually at the official rate (see section on Payments for Invisibles, above). Foreign capital for official investments, and foreign capital in the form of foreign exchange sold by foreign companies for the purpose of obtaining local currency to pay local salaries, taxes, and other charges, has to be surrendered at the official rate if the capital is to be registered. The Central Bank may refuse to register capital. Unregistered capital is free to enter through the free market in unlimited quantities. Foreign capital entering in the form of machinery, tools, etc., is treated like foreign monetary capital and requires a license, except when it represents foreign official loans or the capital of certain foreign companies under contractual agreements with the Government. Machinery, equipment, implements, materials, and other similar items brought into the country as foreign investments and intended for the development of national production are exempt from taxes if such exemption is authorized by the Ministry of the Treasury; their re-export is free and exempt from duties.

Table of Exchange Rates (as at December 31, 1958)(sucres per U.S. dollar)
BuyingSelling
15.00(Official Rate)15.15(Official Rate)
Most major exports, including coffee and cocoa, and a few minor exports. Registered private capital. Official loans. Government receipts.List 1 imports (c.i.f. value). Nontrade payments by the Government. Interest, profits, dividends, and amortization on registered capital. A few other invisibles.
15.3261
Exports of bananas.
15.551
Exports of fish.
15.666(60% at Official Rate and 40% at Free Market Rate)
Exports of pharmaceutical products.
16.3311
Exports of shellfish other than shrimp.
16.3321
Exports of shrimp.
16.665(Free Market Rate)216.665(Free Market Rate)2
Most minor and marginal exports. Invisibles. Unregistered capital.List 2 imports. Most invisibles. Unregistered capital.

Changes during 1958

January 30. Imports of many products listed in Monetary Board Regulation No. 241 were exempted from the requirement of an advance deposit of the foreign exchange necessary to import List 2 merchandise.

January 31. The sale in the free market of foreign exchange arising from exports of coffee-hulling machinery manufactured in Ecuador was authorized.

February 11. About 90 items on the customs tariff were exempted from the requirement of an advance deposit of the foreign exchange necessary for the import of merchandise on List 2. For about 40 items on the customs tariff, the requirement was reduced to 50 per cent; the other 50 per cent has to be deposited on application for reimbursement of the first 50 per cent.

April 25. For imports of approximately 60 items on the customs tariff, the advance deposit was reduced to 50 per cent.

May 13. From proceeds of shipments of bananas through ports other than Esmeraldas and Bahia de Caráquez to countries outside Europe, Latin America, and New Zealand, exporters were required to surrender $1.20 per stem at the official rate.

June 6. Between this date and October 31, 1958, exporters of bananas were required to surrender at the official rate only $1.00 per stem on exports through the ports of Esmeraldas and Bahia de Caráquez to markets not in Europe, Latin America, or New Zealand.

June 6. Imports of cut tobacco, classified in List 2, were exempted from the requirement of an advance deposit.

July 23. The sale in the free market of foreign exchange from exports of kapok was authorized.

July 27. The advance deposit for imports of about 60 items, which had been 50 per cent since April 25, 1958, was reduced to 25 per cent.

August 19. The advance deposit for imports of merchandise in about 80 customs tariff items was reduced from 100 per cent to 50 per cent. Certain imports were exempted from advance deposits.

October 7. The sale in the free market of foreign exchange from exports of certain building materials of reinforced concrete for prefabricated houses was authorized.

October 23. The sale in the free market of foreign exchange from exports of latex was authorized.

November 25. The sale in the free market of foreign exchange from exports of brown sugar (panela) was authorized.

December 10. Imports of merchandise in 2 customs tariff items were exempted from the advance deposit requirement.

December 10. Foreign exchange from exports of livestock on the hoof and salted or frozen meat, provided they had been authorized by the Minister of Development, could be sold in the free market.

December 17. The prohibition on exports of scrap iron was lifted and the sale in the free market of foreign exchange from such exports was authorized.

Ethiopia

Exchange Rate System

The par value is Ethiopian Dollars 2.48447 = US$1. The official rates are Eth$2.4750 buying, and Eth$2.5250 selling, per US$1; the official selling rate represents a spread of more than 1 per cent from the par value.

Administration of Control

All transactions in foreign exchange must be effected through the State Bank of Ethiopia. All payments abroad and exports are subject to the supervision of the Exchange Controller, whose office is a department of the State Bank.

Prescription of Currency

Outgoing payments must normally be made in foreign exchange appropriate to the country of the recipient. The net proceeds of exports must be received in the currency of the country of final destination if such currency is freely convertible. For exports to other countries, payment may be in the currency of the country of final destination, if that currency is acceptable to the Exchange Controller, or, otherwise, in any freely convertible currency. Receipts from Italy are acceptable in sterling as well as in Italian lire.

Imports and Import Payments

There are no import licenses, but payments abroad for imports require exchange licenses, which are granted freely for all goods in the currency appropriate to the country of origin. Application for an exchange license must be made prior to the arrival of the goods. Although the exchange license states that “method of payment must be letter of credit unless otherwise permitted,” cash-against-documents, mail-transfer, and telegraphic-transfer payments are, for the most part, allowed.

Payments for Invisibles

Payments for invisibles require exchange licenses. Invisibles connected with trade transactions are treated on the same basis as the goods to which they relate. Exchange for education abroad is granted within reasonable limits on a case-to-case basis. Foreign employees under contract with the Ethiopian Government may remit currently a maximum of 35 per cent of their salaries. Remittances by other foreign employees or personnel for family maintenance are permitted on a graduated scale, rising to 25 per cent of income. Subject to proper provision having been made for local taxation, foreign companies may remit dividends on their invested and reinvested capital in the currency of the original investment; for approved projects, they may also transfer amortization at the rate of 10 per cent per annum. Emigrants’ allowances and transfers of legacies are permitted up to Eth$70,000 or the equivalent in foreign currency. For larger sums, reference has to be made to the Foreign Exchange Advisory Committee; the policy of the Committee in such cases is to spread the total transfer over a period of years so that the amount transferred in any one year does not exceed Eth$70,000.

Persons traveling abroad are granted foreign exchange in the currency of the country of destination on a case-to-case basis ; they may take with them a maximum of Eth$150 in Ethiopian banknotes.

Exports and Export Proceeds

All commodities require export licenses. When applying for a license, an exporter must state the amount of foreign exchange he expects to receive and he must submit sales contracts. The granting of the license by the Exchange Controller enables the goods to pass through customs. The licensing system is used to ensure that foreign exchange receipts are surrendered to the State Bank of Ethiopia and that export proceeds are received in an appropriate currency (see section on Prescription of Currency, above).

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Persons may bring in a maximum of Eth$150 in Ethiopian banknotes. All foreign exchange must be declared by travelers on entry, and its subsequent use or re-export is subject to license.

Capital

All receipts of capital in the form of foreign exchange must be surrendered. There is no discrimination regarding the currencies in which foreign investments are accepted. Special concessions are made to approved new enterprises financed by foreign capital, including exemption from taxes for a period of five years, admission of all imports of machinery free of duty, and permission to foreign investors for the remittance abroad of earned profits after taxation (see section on Payments for Invisibles, above). Upon liquidation, transfer of the entire imported capital and reinvested profits is permitted in the original currency, provided that in any one year no more than Eth$70,000 is transferred. All payments to foreign countries on account of capital are subject to individual exchange license. Foreign exchange is granted for repayment abroad of matured capital and for the obligations of temporary residents. Foreign employees may remit all savings upon retirement. Other types of capital transfer are handled on a case-to-case basis.

Changes during 1958

April 21. All outgoing payments to Italy had to be made in lire, in accordance with an agreement of March 5, 1956. For incoming payments from Italy, sterling continued to be prescribed.

December 30. The official buying and selling rates for the U.S. dollar were fixed on the basis of a spread of 1 per cent from the rate of Eth$2.50 per US$1.

December 31. The system whereby minimum prices were established for exports and the special regulations applicable to repatriation of proceeds of coffee exports were rescinded. Exporters were now required to submit sales contracts and to repatriate the net proceeds of sales in the currency of the country of final destination, if such currency is freely convertible. For exports to countries where this is not applicable, payment could be in the currency of the country of final destination, if that currency is acceptable to the Exchange Controller, or, otherwise, in any freely convertible currency.

December 31. Payments from Italy (see April 21, above) could be received in Italian lire as well as in sterling.

December 31. The remittance of dividends on foreign capital invested or reinvested in approved projects was permitted without restriction, subject only to submission of properly audited accounts and to provision having been made for local taxation.

Finland

Exchange Rate System

The par value is Finnish Markkas 320 = US$1. The official buying and selling rates for the U.S. dollar vary within ¾ per cent on either side of the par value. Market rates for the externally convertible European currencies other than the French franc1 vary between limits resulting from the U.S. dollar rate for the Finnish markka in relation to the dollar rates for the other currencies. Official, fixed, buying and selling rates are applied to some currencies. Forward premiums and discounts are left to the interplay of market forces. Authorized banks are permitted to effect arbitrage operations with one another and with their authorized correspondents abroad in a number of currencies.

Administration of Control

The Bank of Finland operates the exchange control system. Foreign exchange may be purchased only from the Bank of Finland or authorized exchange dealers (commercial banks). The administration of import licensing is handled by an office subordinate to the Ministry of Commerce, the Licensing Office, which is presided over by a Licensing Board composed of government officials.

Prescription of Currency

In general, the prescription of currency requirements are designed to ensure that the methods of payment conform to the provisions of existing payments agreements.2 Sterling is a key currency in Finnish trade with western countries, and Finland uses the facilities of the External Account arrangements (see section on Nonresident Accounts in the survey on the United Kingdom). Payments to and from the European countries with externally convertible currencies, except France, may be made in any of their currencies.1

Nonresident Accounts

Four categories of nonresident account in Finnish markkas are operated under the control of the Bank of Finland.

1. A-Accounts are held by foreign banks and, subject to approval of the Bank of Finland, by other nonresidents. A-Accounts may be credited with the proceeds of sales of U.S. dollars, Canadian dollars, and free Swiss francs, with transfers from other A-Accounts and from B-Accounts, and with authorized payments by residents. They may be debited for transfers to any other nonresident account, for purchases of any foreign currency, and for authorized payments in Finland.

2. B-Accounts are held by foreign banks, insurance companies, shipowners, and aviation companies, whose head offices are located in certain countries.3 Residents of other countries may also maintain B-Accounts, if permission is obtained. B-Accounts may be credited with the proceeds of sales to an authorized bank of externally convertible European currencies except French francs, with transfers from A-Accounts or other B-Accounts, and with authorized payments by residents. They may be debited for transfers to any other nonresident account, for purchases from authorized banks of fully convertible currencies and of externally convertible European currencies except French francs, and for authorized payments in Finland.

3. C-Accounts comprise all nonresident accounts not designated as A-Accounts, B-Accounts, or Blocked Accounts. C-Accounts are designated geographically according to the country of residence of the account holder. Transfers between C-Accounts related to the same country are permitted freely. C-Accounts held by residents of the United States or Canada may be credited only with the proceeds of sales to authorized banks of U.S. dollars, Canadian dollars, or free Swiss francs and with transfers from A-Accounts; they may be debited for transfers to A-Accounts related to the same country and for purchases from an authorized bank of the currency of the country of residence of the account holder. C-Accounts held by residents of countries other than the United States and Canada may be credited with the proceeds of sales of U.S. dollars, Canadian dollars, and externally convertible European currencies, except French francs, and with transfers from A-Accounts or B-Accounts; and some C-Accounts may be debited for transfers to B-Accounts related to the same country and for purchases from an authorized bank of the currency of the country of residence of the account holder. C-Accounts held by residents of countries with which Finland maintains payments agreements may be debited for purchases of the currency provided for in the relevant payments agreement. Where transfers from C-Accounts to A-Accounts or B-Accounts are not permitted, C-Accounts may be debited for authorized payments in Finland.

A-Accounts, B-Accounts, and C-Accounts may bear interest not exceeding that customarily paid by Finnish banks on sight or time deposit accounts, but they may not be index-tied. If the holder of a B-Account or a C-Account changes his country of residence, the status of his account does not change automatically.

4. Blocked Accounts comprise all nonresident accounts in Finnish markkas not designated as A-Accounts, B-Accounts, or C-Accounts, other nonresident claims and assets not permitted to be settled in foreign currency, all nonresident investments and other property in Finland, as well as the proceeds arising from their liquidation, and income from blocked funds. All credits to Blocked Accounts are subject to approval. The authorized banks, however, are permitted to credit Blocked Accounts with interest accrued thereon and with income from other blocked funds and the proceeds from the sale of such funds. Blocked Accounts may be debited freely for the account holder’s own travel and living expenses in Finland or those of members of his family—or, if the holder is a firm, members of its staff—up to Fmk 100,000 monthly for each person for a stay in Finland not exceeding three months ; for the purchase of a return ticket from Finland to abroad; for payments for expenses incurred in the administration of blocked property; for investments in bonds expressed in Finnish currency (including index-tied bonds) ; and for transfers to the Blocked Account of a bank located in the same country as that of the account holder.

Imports and Import Payments

Most goods are on a free list, permitting them to be imported without an import license from certain countries (see footnote 3) and their overseas territories. Specified imports from these countries, imports from other countries in the Sterling Area of goods on the free list, certain imports from the dollar area, and certain imports from bilateral trade agreement countries are licensed automatically upon application. Certain other imports from the free list countries and imports of certain raw materials and food products from specified sources are licensed liberally.

Some goods are imported under quotas. For goods in Category A, global quotas are established, each covering a group of commodities, and licenses are granted to importers in proportion to their imports in a previous licensing period. These licenses may be used to import any goods in each group from any of the European countries with externally convertible currencies (except France) and from countries in the Sterling Area (except Iceland and Ireland) ; they may also be used to import some goods from countries in the dollar area. Category B comprises goods on a restrictive, nondiscriminatory list. Licenses for these goods specify the commodity and the amount, but the importer is free to select the country of supply from among the same countries as those applicable to Category A. Category C comprises goods on a restrictive, discriminatory list. Licenses for these goods specify the commodity, the amount, and the source of supply.

Imports from countries with which Finland has bilateral payments arrangements (see footnote 2) are made in accordance with the provisions of the relevant agreement. All other imports, including barter transactions, are subject to individual license.

Exchange appropriate to the exporting country is granted without delay for all permitted imports on presentation of an application form, the import license if required, and the original commercial invoice, provided the goods are already in the country or there is sufficient evidence to guarantee their importation.

Payments for Invisibles

Payments not connected with imports are for the most part subject to the approval of the Bank of Finland, and all contracts involving payments to nonresidents must be submitted to the Bank for approval. If the Bank of Finland has approved a contract providing for transfers abroad, exchange is granted automatically for such payments.

Transfers on account of income on capital owned by nonresidents are generally permitted for interest due from bonds denominated in Finnish markkas and for dividends on shares in Finnish companies, provided the shares have been uninterruptedly in the possession of a citizen of the same foreign country since January 1, 1952 or the shares were acquired later against payment to Finland in foreign currency or through a clearing account and have since then been in such continuous possession.

A Finnish resident going abroad may, for each journey, purchase from commercial banks foreign exchange equivalent to Fmk 20,000 for each visit to the Scandinavian countries and Fmk 40,000 for each visit to other countries.4 Resident and nonresident travelers may take out Fmk 20,000 in Finnish notes and coins.

Exports and Export Proceeds

All exports are subject to license, and all foreign exchange acquired through exports must be surrendered to the Bank of Finland or an authorized exchange dealer. Export licenses are issued automatically, provided that the country of purchase and destination are on the free import list and provided that the exports are not subject to the system of price equalization, effected through compensation transactions, made without payment, or paid for through Blocked Accounts. Through the licensing of exports and the control of the currency of payment, the authorities are able to ensure that exports conform to Finnish trade agreements and that exchange surrender requirements are fulfilled.

The authorized exchange dealers, insurance companies, and shipping firms are allowed to maintain their own working balances in foreign exchange, under the supervision of the Bank of Finland. Certain export firms are also permitted to keep a part of their export proceeds in foreign exchange accounts with Finnish banks, and in exceptional cases with foreign banks. The accounts may be used by the exporter to pay for incidental expenses related to exports and for authorized imports of raw materials, equipment, and machinery. The Bank of Finland may at any time claim the accounts against payment at the official rate.

Proceeds from Invisibles

All foreign exchange proceeds from invisibles must be surrendered to the Bank of Finland or an authorized exchange dealer. Nonresident travelers and Finnish residents may bring in a maximum of Fmk 20,000 in Finnish notes and coins.

Capital

All nonresident-owned investments and property in Finland and proceeds from their sale are, as a rule, considered as blocked assets. Such proceeds and other blocked assets may, subject to approval, be credited to Blocked Accounts (see section on Nonresident Accounts, above).

Each outward transfer on account of nonresident capital is subject to approval by the Bank of Finland. As a rule, such transfers are not permitted. However, inheritances of Canadian and U.S. citizens may usually be transferred abroad, subject to certain conditions. The interest on bonds and loans in foreign currency owned by nonresidents may be transferred abroad in accordance with the loan agreement approved by the Bank of Finland. Interest on bonds in Finnish markkas accrued in 1958 may be transferred abroad to the owner, provided the owner is a foreign citizen permanently residing abroad or a legal foreign entity. The dividend distributed to shareholders by a Finnish joint-stock company from the profits for 1957 (less dividend tax) may be transferred abroad to a shareholder who is a foreign citizen permanently residing abroad or a legal foreign entity and provided that the share has belonged continuously to the same shareholder since January 1, 1952 or that the share was acquired after January 1, 1952 against foreign currency paid to Finland or through a clearing account and remained thereafter in the possession of the same owner. Transfers of interest and dividends are effected either in the currency of the country of the owner or as provided by the payments agreement concluded between Finland and the country of the beneficiary.

Residents are required to declare and surrender their foreign securities, investments, and proceeds accruing from property owned abroad. The obligation to surrender is, however, not applicable to assets owned by foreigners prior to June 22, 1941; to assets owned by foreigners at the time of taking up residence in Finland since that date; to bequests and legacies; or to the yield on all such assets received by foreigners after June 22, 1941. Outward transfers of capital by residents are subject to individual approval, which is seldom granted.

The import and export of, and any other transactions in, securities involving nonresident interests require approval.

Changes during 1958

February 3. The tax levied on export proceeds as a result of the devaluation of the markka in September 1957 was reduced by 15-20 per cent, to a range of from 1.6 per cent to 18.2 per cent or, for exports of merchandise manufactured in certain localities in the northern part of the country, one half of these rates. Exports of cotton thread and cables were exempted from this tax.

March 7. The regulation on transfers of interest and dividends accruing to nonresidents was liberalized.

March 14. Payments arrangements with Portugal were placed on a multilateral basis.

April 12. The multilateral trade and payments arrangements concluded by Finland with Austria, the Belgian-Luxembourg Economic Union, Denmark, the Federal Republic of Germany, Italy, the Netherlands, Norway, Portugal, Sweden, Switzerland, and the United Kingdom, were modified and extended to December 31, 1958. The list of goods that could be imported from these countries without license represented, on the basis of 1954 imports, about 81 per cent of total Finnish imports. For other imports, Finland unilaterally fixed global quotas. Finland’s export proceeds from these countries continued to be transferable among the participating countries. These countries extended OEEC liberalization to imports from Finland and applied nondiscriminatory treatment to other imports from Finland.

April 14. The list of goods automatically licensed for import from the dollar area was expanded.

April 15. Certain exports were made subject to the automatic licensing procedure.

April 28. The export tax rates were reduced to a range of from 1.1 per cent to 14.0 per cent or, for exports of merchandise manufactured in certain localities in northern Finland, one half of these rates.

May 14. Finland joined the multilateral trade and payments arrangements between Argentina and certain countries in Western Europe (the “Paris Club”).

May 17. The maximum amount of Finnish markkas in the form of notes and coins that residents and nonresidents are free to take out of Finland and residents are free to bring into Finland was raised from Fmk 10,000 to Fmk 20,000.

June 9. The export tax rates were further reduced, to a range of from 0.5 per cent to 11.2 per cent or, for exports of merchandise manufactured in certain localities in northern Finland, one half of these rates.

July 1. Nonresident accounts in Finnish markkas arising from current transactions were classified in three broad categories: A-Accounts (convertible), B-Accounts (transferable), and C-Accounts (bilateral).

August 4. The export tax rates were further reduced, to a range of from 0.5 per cent to 8.4 per cent or, for exports of merchandise manufactured in certain localities in northern Finland, one half of these rates.

September 15. The export tax (see August 4, above) expired.

December 29. Funds in B-Accounts of nonresidents could be transferred freely to A-Accounts, or exchanged for fully convertible currencies as well as externally convertible European currencies other than French francs.

France1

Exchange Rate System

The par value is French Francs 493.706 = US$1. Official market limits of F 490.00 buying, and F 497.40 selling, per US$1, are maintained for the U.S. dollar, and the rate for the U.S. dollar fluctuates in the foreign exchange market between these limits. Market rates for the externally convertible European currencies (see section on Prescription of Currency, below), Czechoslovak korunas, and Yugoslav dinars also vary between established limits. In addition, Canadian dollars, Mexican pesos, and Djibouti francs are negotiated in the Paris foreign exchange market.

Authorized banks are permitted to effect spot exchange arbitrage between Canadian dollars, U.S. dollars, or Mexican pesos, and externally convertible European currencies, in the Paris foreign exchange market or any foreign exchange market abroad, and to purchase and sell these currencies abroad against French francs to the credit or debit of a nonresident Free Franc or Transferable Franc Account.

Authorized banks are permitted to conclude forward purchases and sales of Canadian dollars, U.S. dollars, or Mexican pesos in the Paris foreign exchange market, forward purchases of these currencies in foreign exchange markets abroad, and forward purchases and sales of externally convertible European currencies in the Paris foreign exchange market and in foreign exchange markets in countries in the transferable franc area. Forward exchange operations take place at rates freely determined by demand and supply and are limited to six months (three months if the French franc is involved).

Rates for other currencies are published monthly by the Bank of France either on the basis of the quotations in London and New York and the quotations for the U.S. dollar in France, or on the basis of the official quotations of the respective foreign central banks. These rates are published mainly in order to determine the equivalent in French francs of payments expressed in such currencies, since as a general rule settlements between France and countries whose currencies are not mentioned above are made in French francs through appropriate nonresident accounts.

Exchange Control Territory

The French Franc Area comprises (1) the territory of the French Republic and the Community, i.e., Continental France, Corsica, the Departments of Algeria, Oasis, and Sahara, the Overseas Departments (Guadeloupe, Martinique, Guiana, and Réunion), the Overseas Territories (Comoro Islands, St. Pierre and Miquelon, New Caledonia and dependencies, and French Polynesia), and the member States of the Community (the Central African Republic, the Republic of Chad, the Republic of the Congo, the Republic of Dahomey, the Gabon Republic, the Republic of the Ivory Coast, the Malagasy Republic, the Mauri-tanian Islamic Republic, the Republic of the Niger, the Republic of Senegal, the Sudanese Republic, and the Voltaic Republic) ; (2) the Condominium of the New Hebrides; (3) the Republic of Togo and the State of Cameroon; and (4) Guinea, Morocco (except Tangier), Monaco, the Saar, and Tunisia.

Most payments agreements relate to settlements between the French Franc Area as a whole and the other country concerned. Restrictions between the various territories of the French Franc Area either are not applied or are applied only to minor parts of the Area, although such territories are formally independent exchange control units, each with its own local exchange control. The foreign exchange reserves of the French Franc Area are managed centrally. The exchange rates of the local currencies of the territories are fixed in relation to the French franc, except for the Tunisian dinar, whose parity is fixed in relation to gold.

Administration of Control

The Minister of Finance is granted extensive authority in the field of exchange control. The Exchange Office (Office des Changes) carries out French exchange control policy and issues import licenses in accordance with directions formulated by various government bodies. The Exchange Office is administered by an Administration Committee—whose president is the Governor of the Bank of France—and by a Director designated by the Minister of Finance, and is subject to the control of a financial controller appointed by the Minister of Finance. Much of the detail of exchange control is carried out by authorized banks designated by the Minister of Finance on the proposals of the Governor of the Bank of France.

Prescription of Currency

General exchange control regulations and, in specific cases, individual decisions of the Exchange Office prescribe the currency and method for settlements between residents and nonresidents. For prescription of currency purposes, countries are divided into three groups: (1) the dollar area,2 (2) the transferable franc area (all countries outside the French Franc Area not classified in the dollar area or the bilateral group), and (3) the bilateral group.3 The first two groups are treated identically.

Settlements with countries in the dollar area or the transferable franc area may be made in Canadian dollars, U.S. dollars, Mexican pesos, or any externally convertible European currency4 purchased or sold in the Paris exchange market, or in French francs through a Free Franc or a Transferable Franc Account (see section on Nonresident Accounts, below).

Payments to a country in the bilateral group may be made in the currency of the country concerned, if that currency is dealt in on the Paris exchange market, or by crediting a Bilateral Franc Account related to the country concerned. Payments from a country in the bilateral group may be received in Canadian dollars, U.S. dollars, Mexican pesos, or any externally convertible European currency, or by debiting a Free Franc, a Transferable Franc, or a Bilateral Franc Account related to the country concerned; in addition, payments from Czechoslovakia or Yugoslavia may be received by selling Czechoslovak korunas or Yugoslav dinars, respectively, in the Paris exchange market.

Settlements with Ecuador, Israel, Turkey, and the United Arab Republic (Egyptian Region) are subject to special regulations.

Nonresident Accounts

Following the grouping of countries for prescription of currency purposes, there are three categories of nonresident account: Free Franc Accounts, which are held mainly by residents of the dollar area; Transferable Franc Accounts, which are held by residents of the transferable franc area, and Bilateral Franc Accounts, which are held by residents of countries in the bilateral group.

Free Franc Accounts and Transferable Franc Accounts may be credited freely with (1) proceeds from the sale in the Paris foreign exchange market of Canadian dollars, U.S. dollars, Mexican pesos, or externally convertible European currencies, (2) proceeds in francs from the sale (except of banknotes) of these currencies to a French authorized bank in a foreign exchange market abroad, and (3) transfers to the debit of other Free Franc or Transferable Franc Accounts. These two categories of nonresident account may be debited freely for (1) purchases in the Paris foreign exchange market of any foreign currency negotiated in that market (with the exception of banknotes), (2) purchases of Canadian dollars, U.S. dollars, Mexican pesos, or externally convertible European currencies through a French authorized bank in any foreign exchange market abroad, (3) transfers to the credit of a Free Franc, Transferable Franc, or Bilateral Franc Account, and (4) payments in the French Franc Area, irrespective of the country of residence of the nonresident on whose behalf such payment is made.

Bilateral Franc Accounts may be credited freely with (1) proceeds from sales in the Paris foreign exchange market of Canadian dollars, U.S. dollars, Mexican pesos, externally convertible European currencies, and, in the case of Czechoslovakia and Yugoslavia, their respective currencies, and (2) transfers from a Free Franc Account, a Transferable Franc Account, or a Bilateral Franc Account of the same nationality as the account to be credited. These accounts may be debited freely for (1) purchases in the Paris foreign exchange market of the currency of the country of the owner of the account if such currency is negotiated in that market, (2) transfers to a Bilateral Franc Account of the same nationality, and (3) payments in the French Franc Area.

In addition to the above-mentioned accounts, there are Tourist Accounts, designed mainly for the deposit of French banknotes held by nonresidents, and Internal Accounts of Nonresidents, mainly for persons staying temporarily in the French Franc Area or whose residence is not determined.

Imports and Import Payments

Most imports from OEEC countries and their dependent territories and many imports from the United States and Canada are liberalized. Other imports are licensed either within quotas determined on an individual commodity basis and applicable to specific countries or areas in accordance with an import plan drawn for a definite period, or in accordance with special import procedures.

Import licenses are issued automatically for goods included in the free import lists, and for coal and steel products from the other member countries of the European Community for Coal and Steel. Import licenses are issued fairly liberally for imports from countries within the quotas in the trade arrangements concluded with those countries, and for specified raw materials or other goods needed for the production of goods to be exported (IMEX and EXIM procedures). Under the so-called EFAC arrangements (see section on Exports and Export Proceeds, below), licenses for imports of raw materials, capital goods, and other goods to be used directly for exports are granted provided that such imports are paid for with foreign exchange retained by exporters. A small proportion of imports is effected through compensation transactions. Import licenses are normally valid for six months.

The import license, which is issued by the Exchange Office, constitutes the authority for the authorized bank handling the transaction to effect payment. The purchase of exchange by importers is subject to a 50 per cent deposit, which is returned at the time payment is actually made to the foreign supplier.

Payments for Invisibles

Control over payments in respect of many categories of invisibles is supervisory, to ensure that other aspects of the control are not being circumvented. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved. Income accruing to nonresidents in the form of profits, dividends, and royalties is remittable, subject to supervision. Exchange up to F 25,000 monthly for each beneficiary is granted for family maintenance abroad. Appropriate foreign exchange is granted for banking commissions, patents and royalties, and specified categories of taxes. Transfers to nonresidents of current earnings from film rentals and royalties are approved on a liberal basis ; however, amounts due to U.S. film companies may be partly transferred to the United States and partly credited to special accounts, called comptes cinéma and governed by special regulations. Transfers on account of membership fees, subscriptions, donations, and movements of emigrants’ funds are permitted up to specified limits. Foreign exchange is not granted to exporters and importers for insurance abroad of risks concerning persons, property, or liability in France, which may only be insured in France with French insurance companies or foreign companies authorized to conduct insurance business in France.

There are special facilities for business travel, particularly for exporters who have been allowed to retain a percentage of their export proceeds (see section on Exports and Export Proceeds, below). Exchange for tourists is granted on an ad hoc basis under individual license. Foreign exchange is granted relatively freely up to certain limits for travel abroad for education and health. When it is necessary to travel for important family reasons (accident, sickness, death of a family member), French residents may receive a special allocation of exchange equivalent to F 15,000.

Travelers, as well as residents and nonresidents living near French frontiers, may take with them out of France banknotes or coins (except gold coins) in metropolitan francs, CFA francs, or CFP francs, up to the value of F 20,000; however, tourists going to Spain may take with them F 60,000 in French banknotes.

Exports and Export Proceeds

Some exports are subject to individual license. Export proceeds must be collected within 90 days from the arrival of the goods at their destination and in the manner set forth in the regulations (see section on Prescription of Currency, above). The procedure is simplified for exports not exceeding F 200,000, with a few exceptions. Foreign exchange proceeds must be surrendered within a month from the date of their receipt.

The following percentages of export proceeds are, however, exempt from the surrender requirements: 15 per cent of proceeds obtained by the holders of exporters’ cards,5 and 12 per cent of proceeds obtained by other exporters, from exports to Canada or the United States; 11 per cent of proceeds obtained by holders of exporters’ cards, and 8 per cent of proceeds obtained by other exporters, from exports to countries other than Canada or the United States; and 6 per cent of the proceeds of goods exported on consignment for sale at best. These retained percentages of export proceeds are kept in special EFAC (Exportations-Frais Accessoires) accounts, which are separate for each foreign currency or, for export proceeds received in francs, separate according to the designation of the nonresident franc account debited for the payment. Transfers between EFAC accounts and purchases of foreign currencies against balances on such accounts are subject to the same rules as those governing the corresponding nonresident accounts. The retained proceeds must be used by the original exporter or supplier of the goods either for meeting incidental expenses or to pay for certain imports, which are limited to raw materials, capital goods, and merchandise used directly by the importing firm. The Exchange Office may, on an individual basis, permit exporters to retain a percentage of export proceeds higher than those indicated above; such permits are granted particularly for exports that require considerable publicity expenses abroad. At the end of quarterly periods, authorized banks with which EFAC accounts are held have to surrender 10 per cent of unutilized balances, except for certain minimum balances.

Proceeds from Invisibles

Residents are obliged to collect, and to surrender within a month from the date of receipt, amounts due from nonresidents in respect of services. When foreign securities are kept abroad in an account in the name of the owner, he is not obliged to surrender the income if the accumulated income does not exceed F 10,000 for the year.

Sales of goods by authorized producers and merchants to foreign tourists temporarily in France are made at discounts ranging from 10 per cent to 25 per cent, provided that the purchases are taken personally by the tourist when leaving France. The discounts are granted only on purchases made against checks or travelers checks expressed in foreign currencies or checks issued by foreign correspondents of French banks to the debit of nonresident franc accounts. Sales in accordance with these conditions, as well as sales by residents to American military services in the French Franc Area against U.S. dollars and receipts in foreign currencies obtained from nonresidents by hotels and casinos, constitute a basis for crediting EFAC accounts at a uniform rate of 8 per cent or, for holders of exporters’ cards, 11 per cent (see section on Exports and Export Proceeds, above).

Travelers, as well as residents and nonresidents living near French frontiers, may bring in any amount of banknotes or coins (except gold coins) in metropolitan francs, CFA francs, or CFP francs.

Capital

Most outward transfers of capital require approval. Capital assets abroad belonging to or acquired by residents, whether of French or foreign nationality, are not subject to repatriation or surrender. Residents of foreign nationality may dispose freely of their assets abroad. Residents of French nationality are permitted to reinvest such assets either in quoted securities in accordance with a general authorization or in other investments under individual license. Subscriptions to new issues may be made only by using the proceeds of sales of securities already owned by residents of French nationality. The proceeds of sales of foreign securities expressed in foreign currencies and owned by residents of French nationality may be retained in special accounts (so-called devises-titres) ; currencies in these accounts may be sold at any exchange rate but only to other French residents, who in turn may use them only for the purchase of securities abroad.

The following investments by nonresidents may be made freely after January 21, 1959, provided that such investments are financed in accordance with the prescription of currency regulations: (1) purchase of officially quoted French securities6 on a stock exchange in France; (2) subscription to an increase in the capital of a French company whose shares are officially quoted on a stock exchange in France; (3) subscription to short-term or long-term securities and bonds (officially quoted on a stock exchange in France) issued by a French public service organization or by a private enterprise having its head office in France; (4) acquisition on a spot basis through the intermediary of a notary public of immovable property or rights to such property located in France; and (5) loans in French francs to residents (the rate of interest may not be higher than 6 per cent or more than 1½ points higher than the interest rate charged by the Bank of France on loans secured by collateral, the amount of the loan may not exceed F 100 million, and its period may not be longer than five years). The liquidation of these investments and the transfer of proceeds accruing from their liquidation may be made freely. Practically all other investments by nonresidents are subject to individual license.

Property, and rights to it, which prior to September 10, 1939 belonged to, or after September 10, 1939 were inherited by, a nonresident are treated in the same way as investments made after January 21, 1959.

The import of French and foreign securities for the account of residents or nonresidents is free if effected through the intermediary of an authorized bank. French securities held in France by residents of the dollar area or the transferable franc area may be exported. Foreign securities may be exported by an authorized bank and put at the disposal of owners of foreign nationality residing in France only when such securities were owned by them prior to September 10, 1939 or acquired after that date in accordance with a license from the Exchange Office.

Banknotes

Authorized banks are allowed (1) to purchase foreign banknotes without limitation, (2) to deal in foreign banknotes with other authorized banks and to sell the notes at freely determined rates to French residents going abroad, up to the limits of foreign exchange granted to French tourists and the maximum amounts that the foreign exchange control authorities of other countries permit travelers to import, and (3) to send foreign banknotes abroad for sale, provided the proceeds of such sales are repatriated and surrendered, either through the sale in the Paris exchange market of foreign currencies other than Czechoslovak korunas or Yugoslav dinars, or by debiting a nonresident Free Franc or Transferable Franc Account.

Changes during 1958

January 7. Settlements with Iran were placed on a transferable basis.

February 12. The requirements for obtaining an exporters’ card (the sale abroad of goods valued at at least F 50 million, constituting 20 per cent of total export sales) were liberalized: exporters who had not yet sold abroad a minimum of 20 per cent of their total sales could now receive exporters’ cards on the condition that the 20 per cent minimum would be reached in the future.

March 17. The percentage of export proceeds which exporters could retain in EFAC accounts was increased for holders of exporters’ cards.

March 22. The transferability of balances on Capital Accounts was extended. The market for foreign banknotes was extended to all foreign banknotes. Prescription of currency regulations were modified and simplified. Nonresident accounts for current payments were reclassified in accordance with the grouping of countries for prescription of currency purposes; however, no essential changes were made in the prescription of currency requirements or the system of nonresident accounts.

April 29. Discounts (varying from 11.5 to 27.5 per cent) on purchases by foreign tourists and discounts on services rendered to foreign tourists by hotels and rental services, if paid for in specified foreign currencies, were reintroduced.

May 21. The automatic allocation of foreign exchange to French tourists for travel abroad of F 35,000 for each person was suspended.

May 23. The EFAC facilities granted to exports to the United States was extended to the sale of goods to American military services in the French Franc Area.

June 21. The system of surcharges and premiums of 20 per cent on the official exchange rates was incorporated in the exchange system and the “reference” rate for the U.S. dollar was fixed at F 420 per US$1. The formal distinction between the “free” market for the convertible currencies and the “official” market for eleven EPU currencies, the Czechoslovak koruna, and the Yugoslav dinar was eliminated.

June 25. French residents were permitted temporarily to declare for surrender their foreign currencies and assets illegally held abroad without paying the special levy on such surrendered funds. This special treatment applied to all cases of violation of exchange control regulations concerning the surrender of foreign currencies and assets which had occurred prior to June 26, 1958.

August 26. Settlements with the Egyptian Region of the United Arab Republic were in principle placed on a transferable basis.

December 2. Exporters’ cards were to be granted in the future on the basis of results reached in a period of reference, e.g., for 1959, on the basis of results obtained in 1958. Conditions for granting exporters’ cards were modified as follows: While industrial producers will still be granted cards if their exports equal at least 20 per cent of their production (excluding taxes), export merchants may now also be granted such cards if their exports equal 50 per cent of their total turnover. The ratio of exports to total production or turnover is 20 per cent for both producers and merchants exporting agricultural products. Exporters’ cards may also be granted to exporters who have not reached the minimum percentage in the reference period, provided they assume the obligation to reach that percentage as evidenced in a submitted export plan.

December 18. It was announced that, effective January 2, 1959, quantitative restrictions would be abolished in respect of about 40 per cent (1948 basis) of imports from OEEC countries and their overseas territories and of about 13 per cent (1953 basis) of imports from Canada and the United States. The quotas for certain imports which were not affected by the new liberalization measure would be increased by 20 per cent. In addition, imports of goods not previously on the free import lists would be liberalized as follows: quotas for imports from countries in the European Economic Community would be increased by 20 per cent or at least to an amount representing 3 per cent of national production; quotas for imports from other OEEC countries would be increased by 10 per cent with the possibility of increasing them by another 10 per cent through bilateral negotiation.

December 27. Reimbursement of the 10 per cent tax by the Government on account of a discount of the same amount granted by hotels and rental agencies in France (see April 29, above) was discontinued.

December 29. By a decision published on December 28, a par value for the French franc of F 493.706 per US$1, agreed with the International Monetary Fund on December 27, became effective, and became the new basis for calculating the buying and selling rates of foreign currencies applied by the Exchange Stabilization Fund.

December 29. The regulations applicable to transactions through nonresident accounts in “free francs” and in “transferable francs,” as well as the prescription of currency regulations applicable to the dollar area and the transferable franc area, were made identical. The exchange arbitrage facilities permitted to authorized banks were extended to include arbitrage between Canadian dollars, U.S. dollars, and Mexican pesos on the one hand, and externally convertible European currencies on the other; previously, these two groups of currencies had been negotiated separately. Exchange operations and arbitrage effected by the authorized banks on account of foreign travelers in France were modified in accordance with the redefined prescription of currency regulations applicable to countries in the dollar area and in the transferable franc area.

December 29. The regulations applicable to transfers and operations involving Capital Accounts held by residents of countries in the dollar area and the transferable franc area were made identical, as were also the regulations governing French securities held by residents of countries in these two areas. The methods of financing “new” investments were adjusted to the changes in the prescription of currency regulations.

December 31. The tax on foreign exchange for travel was abolished.

Note.—The following changes took place early in 1959:

January 1. As turnover taxes had been modified, the discounts given on sales of goods to foreign tourists became 10, 20, or 25 per cent.

January 2. Quantitative restrictions were abolished in respect of a further 50 per cent (1948 basis) of imports from OEEC countries and their overseas territories and of a further 37 per cent (1953 basis) of imports from Canada and the United States (see December 18, above).

January 2. The percentages of exchange proceeds that could be retained in EFAC accounts by exporters and other specified residents were reduced; the percentages were made dependent solely on the country of destination of exports and not, as formerly, on the currency of receipt.

January 21. Foreign investments in France were made subject to a uniform system providing for the possibility of transfer abroad of the proceeds of the liquidation of these investments. Capital Accounts were abolished and the balances were transferred to one of the other categories of nonresident account according to the country of residence of the account holder. Special arrangements for the liquidation of certain foreign investments in France therefore became unnecessary. The export of French securities, including bearer shares, belonging to persons resident in foreign countries not classified in the bilateral group was permitted. The method of permitting the transfer of income and amortization on French securities belonging to nonresidents was simplified. The transfer of capital of a personal character (foreigners returning to the country of their nationality, inheritances, and dowries) was permitted.

February 18. Lebanon and the United Arab Republic (Syrian Region) were included in the transferable franc area.

Federal Republic of Germany1

Exchange Rate System

The par value is Deutsche Mark 4.20 = US$1. The official limits are DM 4.17 buying, and DM 4.23 selling, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for the externally convertible European currencies,2 Greek drachmas, and Icelandic krónur vary between the limits resulting from the dollar rate for the deutsche mark in relation to the dollar rates for the other currencies. There are no restrictions on foreign exchange dealings by residents or nonresidents.

There are no restrictions on payments. Certain categories of trade transactions and of transactions in invisibles are restricted for other than balance of payments reasons. There are no prescription of currency requirements except for certain payments to Turkey (see section on Prescription of Currency, below). Residents are not required to repatriate or surrender their foreign exchange holdings and these may be held in Germany or abroad.

Administration of Control

The administration of controls in Germany in respect of imports and exports of goods and services is operated by the Federal Ministry of Economics, the Federal Office for Trade and Industry (Bundesamt für die gewerbliche Wirtschaft), the Foreign Trade Agency for Food and Agriculture (Aussenhandelsstelle für Ernährung und Landwirtschaft), and the Land Ministries of Economics. For capital transactions, the Deutsche Bundesbank is primarily the authority in charge of exchange control. All banks in Germany are permitted to effect foreign exchange transactions.

Prescription of Currency

Payments between Germany and foreign countries may be made freely in deutsche mark or in any foreign currency, except that, for a transitional period, payments to Turkey for certain transactions entered into before August 4, 1958 must be made through a centralized clearing account maintained in U.S. dollars as the unit of account.

Nonresident Accounts

Nonresident DM Accounts (the only category of DM account for nonresidents) may be held by any nonresident. Balances on these accounts may be transferred freely to any other Nonresident DM Account and used for any payment in Germany, including the purchase of any foreign currency, and they may be credited freely with any payment.

Imports and Import Payments

No quantitative restrictions are applicable to imports included in three free import lists. Goods in the first list produced in OEEC member countries or their dependent territories, goods in the second list produced in specified countries,3 and goods in the third list produced in certain other countries4 may be imported freely from any of the countries specified in connection with the three lists. Practically all imports of industrial goods and raw materials and most imports of foodstuffs are included in the first list and most of such imports are included in the second and third lists. All commodities in the third list (nearly 5,900 items) are included in the second list (over 6,000 items), and all commodities in the second list are included in the first list, which contains about 6,300 items out of a total of some 6,700 importable items.

Goods free from quantitative restriction are not subject to license either for import or for payment and no prior control is exercised over such goods, but an ex post control is carried out by the federal authorities; however, an import declaration stamped by the Deutsche Bundesbank is required, which serves as documentation for customs control and for statistical purposes.

For imports still subject to quantitative limitation, an individual import license is required. Payments, however, are free, even where imports are still restricted. Commodity futures may be dealt in freely. Transit trade transactions may also be carried out freely, the only requirement being that of an ex post declaration, for statistical purposes.

Payments for Invisibles

All payments for invisibles may be made freely without an individual license. The following transactions—but not the related transfers—between residents and nonresidents are subject to restriction: (1) the chartering of foreign ships outside the regular shipping lines; (2) the use of foreign boats in certain inland waterways traffic; (3) the production of motion pictures in association with nonresidents ; (4) certain contracts with nonresidents pertaining to motion-picture films;5 (5) transactions covering the processing of goods abroad where exports of the goods to be processed or imports of the processed goods are restricted ; and (6) transactions with foreign countries for hull and marine liability insurance and aviation insurance, except passenger accident insurance.

German and foreign notes and coins may be exported freely.

Special arrangements are applicable to settlements of specified German external debts, in accordance with the London Debt Agreement, signed February 27, 1953 and effective September 16, 1953 (see Fifth Annual Report on Exchange Restrictions, pages 153-54).

Exports and Export Proceeds

Exporters may freely conclude export contracts with foreign importers and carry through the export of commodities. For all goods up to a value of DM 1,000 and for certain specified commodities regardless of value, only an export notification, serving statistical purposes, is required. All other exports require export declarations, and certain commodities—mostly strategic goods—are subject to individual license. The customs authorities exercise control over export declarations and also check to see whether a license is required.

Foreign exchange proceeds from exports do not have to be declared or surrendered and may be used for all payments. However, amounts over DM 5,000 that have been overdue for more than 3 months must be reported to the authorities for statistical purposes. Residents are permitted to finance their exports for periods of, generally, up to 180 days.

Proceeds from Invisibles

Services performed for nonresidents do not require licenses. Special licenses are required for transactions related to specified sea services; the sale of, or the granting of licenses for, inventions, patents, registered designs, trademarks, etc.; and for technical assistance through the delivery of constructional drawings, materials, and instructions for manufacture, insofar as such assistance is for the production of goods whose export requires a license. Services related to import or export transactions subject to individual license also require licenses.

Payments exceeding DM 500 on account of services have to be reported, with the exception of payments made in connection with travel and payments through resident accounts in foreign currencies held with foreign banks.

German and foreign notes and coins may be imported freely.

Capital

There are no restrictions on imports or exports of capital by residents or nonresidents and such transactions may be carried out freely without an individual license. Securities of all types may be imported or exported freely. All capital movements to or from foreign countries exceeding DM 500 or its equivalent must be reported.

Changes during 1958

January 1. The free import lists were extended, and regulations concerning imports of goods included in these lists through third countries covered by the lists were liberalized.

January 16. All residents were permitted to maintain foreign currency accounts in banks (and postal checking agencies) abroad.

March 22. Afghanistan was included in the area of freely convertible currencies.

June 19. The export of foreign banknotes and coins by resident travelers was liberalized.

June 26. The obligation to report the movements of capital funds was applied to all capital payments to or from foreign countries exceeding the amount of DM 500 or its equivalent.

July 1. Balances on Liberalized Capital Accounts were permitted to be transferred to Freely or Partly Convertible DM Accounts, transferred abroad in any currency, or treated as balances in freely or partly convertible currencies. In consequence, Liberalized Capital Accounts ceased to exist. Regulations concerning nonresident investments in Germany, legacies in Germany due to nonresidents, etc., were liberalized and, in connection with the abolition of Liberalized Capital Accounts, modified.

July 1. Regulations concerning services rendered to, or by, nonresidents were codified.

July 5. The limitation according to which German residents could grant loans to foreign enterprises only if more than 50 per cent of the enterprise was owned by German residents (subsidiary enterprises) was abolished by permitting loans to be granted to any enterprise that belongs to the resident lender or in which he has a share.

July 19. Exchange regulations concerning private insurance transactions were liberalized and, in connection with the abolition of Liberalized Capital Accounts, modified.

August 13. All restrictions on dealings between residents and nonresidents in German bonds expressed in foreign currency were removed.

August 14. Subject to certain limitations, banks were authorized to deal in banknotes and coins expressed in any currency.

September 2. The conclusion of import contracts for coal was made subject to individual license. Imports of coal purchased in the member countries of the European Community for Coal and Steel were not, however, affected by the regulation.

September 6. Residents holding accounts in foreign currencies with foreign banks abroad were permitted to sell their balances not only against deutsche mark but also against another foreign currency purchased from the bank carrying the account. Payments and transfers to feed these accounts were not to be considered as outgoing payments.

September 12. Gold coins were permitted to be imported freely without limitation on the quantity or value.

September 12. Payments for cotton produced in a country in the area of freely convertible currencies but imported through an OEEC country could be made freely in a freely convertible currency.

September 12. The free import lists were slightly modified and extended.

November 1. The regulation of May 1, 1957 which provided (with certain exceptions) that imports up to a value of DM 100 for each separate parcel from any country could be made without a license was amended to define a “separate parcel” as any amount of a commodity that is sent on the same day by the same sender through the post to the same recipient.

November 4. The free import lists were extended.

November 7. Accounts Related to Payments Agreements as a special group within the category of Partly Convertible DM Accounts were abolished and all existing Accounts Related to Payments Agreements were converted into Partly Convertible DM Accounts.

December 29. Freely Convertible DM Accounts and Partly Convertible DM Accounts of nonresidents were unified as Nonresident DM Accounts, freely convertible into any foreign currency. Payments between Germany and other countries could be made in deutsche mark or in any foreign currency, i.e., all payments provisions (prescription of currency) were abolished. German and foreign notes and coins, bills of exchange, checks, and any other means of payment could be imported or exported freely.

Note.—The following changes took place in the first months of 1959:

January 1. The free import lists were extended.

January 14. Dealings in commodity futures were exempted from all restrictions. Spot and forward exchange transactions between residents and nonresidents were completely freed of restriction.

January 15. Restrictions on the direction of trade were abolished; liberalized commodities could now be imported freely from all countries from which imports are liberalized.

January 18. Restrictions for payments reasons on transit transactions were abolished, including the limitation that goods purchased with freely convertible currencies could be sold only against payment in such currencies.

January 21. Residents were permitted to accept freely credits abroad in deutsche mark, provided that the period of the credit was not shorter than five years.

January 21. All transactions in domestic and foreign securities (with the exception of German money market paper) between residents and nonresidents were freed from remaining exchange restrictions.

January 22. The general license for imports of goods by the book trade was extended to parcels valued at not more than DM 1,000; the previous limit had been DM 500.

January 28. The regulations concerning payments resulting from services were abolished. In addition, the limit on free transfers abroad was abolished as a consequence of the establishment of convertibility for the deutsche mark.

January 28. The conclusion and carrying out of insurance contracts between the Federal Republic and foreign countries and within the Federal Republic was permitted in any currency. Only a few categories of special insurance contracts still required an individual license.

January 29. The free import lists were further extended.

January 29. The remaining exchange restrictions on the import and export of unminted precious metals and gold and silver coins for the purpose of trading in them within the country were abolished.

January 31. German civil servants abroad, as well as German nationals employed abroad in international organizations, were considered as residents in respect of their assets in Germany. They were granted the privilege of maintaining interest-bearing bank accounts in the Federal Republic.

January 31. The acceptance and the establishment of guarantees, mortgages, deposits, etc., in relations between residents and nonresidents were exempted from all restrictions.

February 9. The list of commodities which require a license or a declaration for export was considerably reduced.

February 15. The regulations concerning the import procedure were adjusted to take account of the abolition of the prescription of currency requirements. The use of import credits for up to 12 months was permitted.

May 1. The remaining restrictions on the import of capital were removed.

Ghana

Exchange Rate System

The par value is Ghana Pound 1 = US$2.80. The currency of the West African Currency Board is being withdrawn from circulation and will lose its status as legal tender on July 1, 1959, from which date only the Ghana pound will be legal tender. Exchange rates are based on the fixed rate for sterling, with which the Ghana pound is at par, and London market rates for sterling against other currencies. The rates for the U.S. dollar as at December 31, 1958 were US$2.82 buying, and US$2.78 selling, per £G 1.

Administration of Control

Exchange control is operated by the Ministry of Finance, but its administration will be taken over by the Bank of Ghana in 1959 (the exchange control regulations are in the process of being revised). Authority for approving payments for imports and tourist travel is delegated to the Bank of Ghana and commercial banks authorized for this purpose. Import and export licenses, where necessary, are issued by the Controller of Imports and Exports in the Ministry of Trade and Industries.

Prescription of Currency

Ghana is one of the territories of the Sterling Area and payments to other parts of the Sterling Area may be made without formality. Payments for goods and services originating outside the Sterling Area may be made either by paying Ghana pounds, West African pounds, or sterling to a resident of the United Kingdom or through a bank to the credit of an External Account in the United Kingdom, or in any foreign currency. Payments for imports of goods and services from Israel are made through special bilateral accounts maintained in sterling. The proceeds of exports to countries outside the Sterling Area must be received in Ghana pounds, West African pounds, sterling from an External Account in the United Kingdom, or one of the specified currencies.

Imports and Import Payments

All imports are subject to one of the following types of import license: open general license, which permits importers, without individual licensing, to import the goods covered by the license in any quantity from any country or (in most cases) from specified groups of countries or areas ; quota license, which permits importers, with the individual approval of the Controller of Imports and Exports, to import the goods covered by the license from specified countries; and specific license, which permits a specific import transaction not authorized under open general license or quota license. Imports of almost all commodities from the Sterling Area, of a wide range of commodities from other non-dollar countries, and of wheat flour from the United States and Canada are, at present, covered by open general license. The authorized banks provide exchange for all permitted imports. The importer is, however, required to present evidence of importation to the exchange control authorities in due course.

Payments for Invisibles

Payments to other territories of the Sterling Area are not subject to exchange control unless they are for transactions outside the Sterling Area. Payments to countries outside the Sterling Area require approval of the exchange control, although for some transactions, mainly tourist travel, permission is granted by the local banks in their capacity as authorized dealers. Foreign employees in Ghana who are not nationals of Sterling Area countries may remit up to half their salaries to their home countries during their residence in Ghana. The basic allowance of exchange of £G 100 for each adult for 12 months is granted to residents of Ghana who are nationals of the Sterling Area for tourist travel in countries outside the Sterling Area. An additional £G 250 for each adult is granted for travel in Denmark, Norway, and Sweden. The equivalent of £G 10 in sterling notes and £G 5 in French West African notes may be taken out by travelers.

Exports and Export Proceeds

All exports are subject to either open general license or specific license. A wide range of exports is covered by an open general license which permits exporters to export, without an individual license, one group of specified goods to the United Kingdom and another group of specified goods to any country. Exports of goods not covered by open general license require specific licenses from the Controller of Imports and Exports prior to shipment. Exporters of goods to countries outside the Sterling Area are required to obtain payment in the manner prescribed in the regulations within six months of shipment. When payment is received in specified currencies, the exchange must be sold to an authorized dealer, i.e., a local bank.

Proceeds from Invisibles

There are no specific requirements governing exchange receipts from invisibles, but if specified currencies are received they must be sold to an authorized dealer. Not more than the equivalent of £G 10 in sterling notes and £G 5 in French West African notes may be imported either by travelers or through the post. Other currency notes may be imported without limit but must be declared and, if a specified currency, surrendered to an authorized dealer.

Capital

There are no restrictions on capital payments to or from other countries in the Sterling Area. All transfers of capital to territories outside the Sterling Area require exchange control approval; applications are considered on their merits. Transactions in securities are controlled to ensure that capital is not transferred outside the Sterling Area. Investments in Ghana of funds from outside the Sterling Area require exchange control approval. Applications for the repatriation of approved investments are normally granted. Nationals of countries outside the Sterling Area who are resident in Ghana are allowed to repatriate £G 5,000 of their personal assets when they retire, the remainder being treated as “blocked” funds in accordance with Sterling Area practice.

Changes during 1958

July 4. Under a trade and payments agreement concluded with Israel, Ghana would purchase from Israel machinery and equipment for development projects, chemical products, and other items; payment would be made partly with funds obtained from the sale of goods to Israel and partly through a credit fund of up to £G 7.5 million made available by Israel.

July 14. The Ghana pound was issued and became legal tender in Ghana.

November 5. A par value of US$2.80 per £G 1 was agreed with the International Monetary Fund.

Greece

Exchange Rate System

There is no established par value for the Greek Drachma. The official rates are Dr 29.90 buying, and Dr 30.10 selling, per US$1. The rate of the drachma in relation to other currencies is determined by the Bank of Greece on the basis of the parity relationship of each currency to the U.S. dollar.

Administration of Control

Controls are administered on the policy level by the Ministry of Coordination, the Ministry of Trade, and a Currency Committee. Controls are implemented and applied by the Bank of Greece and authorized commercial banks.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles are made in the currency and manner provided for by trade and payments agreements, or on the basis of the origin or destination of the goods and services involved. Under the terms of most of the agreements,1 settlements are made through controlled accounts, with the U.S. dollar as the currency of account, or in the currency of the partner country.

Imports and Import Payments

One of two general import procedures is applicable to private imports, depending on the method of payment: (1) No license is necessary, but the approval of an authorized bank is required, to import goods (except as mentioned under (2), below) from bilateral agreement countries1 when payment is effected through the relevant clearing accounts ; or from countries participating in the OEEC when payment is made in an externally convertible European currency; or from Canada or the United States when payment is made in free dollars provided by the Greek exchange authorities. (2) An import approval issued by the main office of the Bank of Greece is required for imports from countries specified in Procurement Authorizations covering imports sponsored by the U.S. International Cooperation Administration (ICA) ; and for imports from any other country when the method of settlement differs from those mentioned under (1), above. Payment under either import procedure may be made by opening a documentary credit, by cash against shipping documents, or, for some specified goods, by the acceptance of time drafts.

Imports of specified luxury items and of a few other goods from any country are subject to special license and payment may be made only by the opening of a documentary credit for a period not exceeding six months. Imports from Japan of four specified commodities are subject to the same procedure.

For goods imported on the basis of cash against shipping documents, a Greek importer must deposit with his bank an amount in cash equal to 50 per cent or 100 per cent of the invoiced value, according to the commodity to be imported; for certain commodities (mainly foodstuffs), no guarantee or advance deposit is required. Importers have to deposit 20 per cent or 40 per cent of the c.i.f. value of the import as security for import duties and other charges. Deposits and guarantees are partly or entirely forfeited if imports or payments for them are not effected as prescribed. For shipments against time drafts, a personal guarantee equivalent to 25 per cent of the c.i.f. value of the goods to be imported is required. No advance deposit or bank guarantee is required on shipments payable by letter of credit. For commodities ultimately paid for with ICA funds, importers must deposit, within ten days from the date of obtaining the import license, cash or a bank guarantee covering 10 per cent of the value of the goods, in addition to any other downpayment required. After making arrangements for payment and upon delivery of the shipping documents, the importer’s bank issues a permit for the clearance of the goods.

If the importer fails to fulfill the conditions prescribed for the import or payment of the goods, a fine of up to 25 per cent of the c.i.f. value of the goods is payable. Greek importers who do not place orders with the exchange control prior to the shipment of goods may also be subject to a fine of up to 25 per cent of the c.i.f. value of the goods.

Special regulations govern imports by state agencies, legal entities, and public companies.

Payments for Invisibles

Payments for invisibles require individual licenses, but these are granted freely for expenses incidental to authorized trade transactions and for certain other transactions. Transfers abroad on account of specified categories of insurance (e.g., shipping, aviation, merchandise transport, fire, accident, and life) are authorized by the Bank of Greece up to specified percentages of the amounts owed.

Greek residents going abroad for family reasons, tourist travel, or business are entitled to US$150 for each trip. Exporters and manufacturers are allowed $20 a day for a maximum of 45 days when they go to the United States, Canada, or the Far East; for all other countries the amount is $15 a day for a maximum of 30 days. Requests for larger amounts or from other businessmen, commercial representatives, etc., are submitted to the Foreign Exchange Subcommittee. Persons traveling abroad may take with them a maximum of Dr 450 in Greek banknotes.

Exports and Export Proceeds

All exports are subject to individual license, but most exports are free of quantitative limitation. Export proceeds have to be surrendered.

Proceeds from Invisibles

Exchange receipts representing payments for services must be surrendered. Foreign exchange proceeds from shipping are exempt from the surrender requirement, but shipowners have to pay for supplies, repairs, etc., and any taxes and fees, and must cover their disbursements and expenses in Greece in local currency obtained through the sale of foreign exchange to the Bank of Greece at the official rate. Individuals may bring in a maximum of Dr 450 in Greek banknotes.

Capital

All drachma assets of nonresidents have to be declared and are held in blocked accounts. Subject to the approval of the exchange control authorities, however, balances on such accounts may be utilized for such purposes as personal expenses in Greece up to specified amounts, the purchase of securities officially listed on the Greek stock exchange, and the purchase of real estate in Greece ; the resale of such real estate is permitted if the proceeds are credited to a blocked account opened in the name of the nonresident seller. Blocked balances may be deposited with a commercial bank as sight deposits and earn current interest.

Under Legislative Decree No. 2687 of October 31, 1953, approved foreign investments in Greece that are expected to promote national production or otherwise contribute to the economic advancement of the country may be granted preferential treatment, but such investments are not repayable earlier than one year from the date of importation or from the time the enterprise began to operate productively. When any enterprise organized with foreign capital is granted terms more favorable than those accorded to a similar enterprise previously established with foreign capital, equally favorable terms will be extended to the previously established enterprise, at the request of the beneficiary. Special guarantees are provided in case of requisition.

Approved foreign capital may be repatriated at an annual rate not exceeding 10 per cent. Dividends on equity capital not exceeding 12 per cent a year and payments of interest on loan capital not exceeding 10 per cent a year may be transferred; however, annual earnings below these limits may be supplemented by earnings in excess of such limits from other years.

Deviations from the general regulations may be approved for foreign capital imported to develop exports of agricultural and mining products or invested in enterprises of special importance to the economy. Specified foreign short-term investments may also be granted preferential treatment in respect of the repayment of capital and the transfer of interest.

Transfers of capital abroad by residents require approval.

Changes during 1958

July 28. The basic allowance of foreign exchange for all travel abroad was reduced from US$200 to US$150 for each trip.

August 4. Imports subject to a 15 per cent cash deposit were shifted to List F-50, requiring a cash deposit of 50 per cent on application for import approval. Imports subject to an advance deposit of 50 per cent or 100 per cent were made subject also to prior deposits of 20 per cent or 40 per cent, respectively, as security for import duties and taxes. Tools, motion-picture films, auto parts, truck, bus, and tractor tires, and lumber were shifted from List P, permitting imports against time settlement, to List F, the sight draft list (no cash deposit is required for List F items). All other List P items were shifted to a new List P-3 (90-day draft), or to a new List P-6 (180-day settlement) containing about 35 items, mostly raw materials, machinery, and lubricating oils. About 55 items were added to List F-100 (100 per cent cash deposit), including leather, steel bars and sheets, razor blades, canned foods, candy, radios and parts, electric washing machines, cameras, watches, musical instruments, paints, varnishes, motorcycles, and plastic products.

October 25. Imports of petroleum products similar to those produced by the Greek oil refinery required a prior import license from the Minister of Trade.

Hong Kong1

Exchange Rate System

The par value is Hong Kong Dollars 5.71429 = US$1, but there is a multiple exchange rate system comprising the official rates, the free market rates, and four mixed rates, all of which, so far as the rates for the U.S. dollar are concerned, were within 1 per cent of the par value as at January 23, 1959 (see Table of Exchange Rates, below). The official rates are those of the authorized banks, based on the sterling-Hong Kong dollar rate (agreed informally by the three note-issuing banks with the Hong Kong Exchange Fund) and the sterling-foreign currency rates in the London foreign exchange market. The official rates apply to all transactions in Hong Kong dollars against sterling, to the U.S. dollar proceeds of exports not of local origin (except that, in the case of seven local commodities, a percentage of the proceeds must be surrendered at the official rate), and to most authorized non-dollar transactions. The free market rates apply to most other transactions.

Exchange Control Territory

The Colony of Hong Kong is a part of the Sterling Area—the Scheduled Territories of the United Kingdom’s exchange control system.

Administration of Control

The exchange control system in Hong Kong is operated by 34 banks authorized to conduct exchange transactions within the framework of the local regulations and subject to specific or general approval of the local control. These authorized banks are not permitted to conclude exchange transactions at other than the official rates.

Prescription of Currency

All payments and receipts except those effected through the free market must be by the method and in the currency prescribed in the exchange regulations, as described in the following paragraphs.

Payments for imports from the Sterling Area may be made in sterling or in any other Sterling Area currency. Approved payments for imports from all other countries may be made by crediting sterling to an External Account or in any foreign currency through the official market. In addition, approved payments for imports from Cambodia, Indonesia, Laos, Thailand, and the Republic of Viet-Nam may be made by crediting Hong Kong dollars to a nonresident account. Imports from Mainland China, China (Taiwan), and Macao may be paid for freely in Hong Kong dollars. Most imports from the dollar area for local consumption or for re-export to Hong Kong’s traditional trading area2 may be paid for in U.S. dollars from the free market.

The proceeds of exports to the Sterling Area may be obtained in any Sterling Area currency; to Hong Kong’s traditional trading area,2 in Hong Kong dollars; and to all other countries, in sterling from an External Account or in any specified currency.3 However, most exports to the dollar area are not subject to prescription of currency requirements and are settled in U.S. dollars through the free market. For merchanting transactions by Hong Kong firms in goods bought from and sold to countries outside the Sterling Area, outgoing payments may be made in sterling to the credit of an External Account or in any foreign currency, provided the incoming payment is received in sterling from an External Account or in one of the specified currencies.3

Nonresident Accounts

Credits to the accounts of banks situated outside the Sterling Area, Mainland China, China (Taiwan), the Republic of Korea, and Macao require licenses; payments from these accounts, including payments for exports invoiced in Hong Kong dollars to the countries of the account holders, may be made to residents of Hong Kong. Credits to the accounts of persons and firms resident on the North American continent or in the Philippines require licenses, but credits to the accounts of persons and firms in other countries do not require licenses. Payments between Hong Kong and other Sterling Area territories require licenses; however, authorized exchange banks may make or receive such payments without license if the transaction is in respect of (1) bona fide trade between Hong Kong and other Sterling Area territories, (2) dividends and interest payments, or (3) small bank charges. In addition, authorized exchange banks may make payment to Hong Kong residents for family remittances from residents of British North Borneo, Brunei, Cambodia, Indonesia, Laos, Malaya, Sarawak, Singapore, Thailand, and the Republic of Viet-Nam, without the requirement of an individual license, but subject to a weekly report being made by the banks.

Imports and Import Payments

Except for certain strategic materials and for some other items from specified countries, imports are free of import license. Exchange licenses are required, even if the importer provides his own exchange, for imports from any country except other parts of the Sterling Area, the dollar area (if paid through the free market), Mainland China, China (Taiwan), and Macao. The exchange licenses are granted freely, provided payment is made in accordance with the regulations (see section on Prescription of Currency, above). Foreign exchange, except U.S. dollars, to pay for authorized imports may be obtained at the rate corresponding to the official rate. U.S. dollar exchange at this rate normally is authorized only for a few imports regarded as strictly essential ; for other authorized imports payable in U.S. dollars, foreign exchange may be obtained in the free market.

Payments for Invisibles

Exchange licenses are required to obtain exchange at the official rate. These are granted to local residents for most transactions in invisibles on criteria similar to those applied in the United Kingdom; e.g., exchange at the official rate for travel, personal remittances, and similar purposes is limited. The basic allowance of exchange at the official rate for residents (for exchange control purposes) of Hong Kong traveling abroad is £100 for each person for the 12 months beginning November 1, 1958. These facilities are cumulative for a period of 3 years, except for travel to the dollar area. If exchange at the official rate is not authorized, exchange licenses may be issued upon evidence of the prior sale to an authorized exchange bank of the equivalent in U.S. dollars (which may be purchased in the free market). In any event, payments may be made freely through the free market by holders of Hong Kong dollars. Transfers to other parts of the Sterling Area require licenses, except that authorized exchange banks may make remittances for dividends and interest without licenses.

Exports and Export Proceeds

Exports of certain strategic articles and of a few commodities in short supply to any destination require licenses.4 For exports to all countries other than the Sterling Area, Mainland China, China (Taiwan), the Republic of Korea, and Macao, a declaration by the exporter showing how the export proceeds will be collected must be approved by the Department of Commerce and Industry.

The U.S. dollar f.o.b. proceeds of most exports originating in Mainland China, China (Taiwan), Hong Kong, the Republic of Korea, or Macao are freely disposable. However, portions of the U.S. dollar f.o.b. proceeds of certain exports originating in these countries must be surrendered, viz., 50 per cent for cotton yarn, 25 per cent for lead, silver (subject to prior permission), and tin, 20 per cent for copper and feathers, and 15 per cent for wood oil; the remaining percentages may be sold in the free market. The U.S. dollar proceeds of exports originating in other countries must be entirely surrendered. The proceeds of exports to countries other than those in Hong Kong’s traditional trading area and the Sterling Area must be obtained in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

The receipt of transfers from other parts of the Sterling Area, unless in respect of dividends or interest, requires permission. When freight and insurance on exports that have originated in Mainland China, China (Taiwan), Hong Kong, the Republic of Korea, or Macao, and that have been financed in U.S. dollars, are paid in Hong Kong by the exporter in sterling or in Hong Kong dollars, the exporter must surrender the U.S. dollar proceeds of that freight and insurance at the official rate. The surrender of other exchange receipts from invisibles is not insisted upon.

Capital

Outgoing transfers of capital in currencies other than U.S. dollars may be effected at the official rate ; but they require licenses, which are granted only for approved purposes or, at the discretion of the local control, provided the equivalent in U.S. dollars has been sold to an authorized exchange bank. Transfers of capital may be effected freely through the free market by holders of Hong Kong dollars, but all transfers to and receipts from other parts of the Sterling Area require licenses, which are granted for all bona fide transactions between Hong Kong and other parts of the Sterling Area.

Table of Exchange Rates (as at January 23, 1959)(sterling per Hong Kong dollar or Hong Kong dollars per U.S. dollar)
BuyingSelling
ls. 22932 d.ls. 21316 d.
All transactions in sterling against Hong Kong dollars. (Rates for other non-dollar currencies are based on the sterling rate.)All transactions in Hong Kong dollars against sterling.

or
HK$5.744 (approx.)HK$5.780 (approx.)
Exports not originating in Mainland China, China (Taiwan), Hong Kong, Republic of Korea, or Macao, and received in U.S. dollars.A few essential imports payable in U.S. dollars. Authorized invisibles and capital. All non-dollar imports.
HK$5.747(50% at HK$5.744 and 50% at Free Market Rate)
Cotton yarn exports.5
HK$5.7485(25% at HK$5.744 and 75% at Free Market Rate)
Lead, silver, and tin exports.5
HK$5.7488(20% at HK$5.744 and 80% at Free Market Rate)
Copper and feather exports.5
HK$5.7491(15% at HK$5.744 and 85% at Free Market Rate)
Wood oil exports.5
HK$5.75(Fluctuating Free Market Rate)HK$5.76(Fluctuating Free Market Rate)
All other exports. Invisibles and capital.All other imports payable in U.S. dollars. Other invisibles and capital.

Changes during 1958

No significant changes took place in 1958.

Note.—On January 23, 1959, a preliminary notice was issued concerning changes in the Hong Kong exchange control regulations made necessary by the changes of December 29, 1958 in the exchange control regulations of the United Kingdom.

Iceland

Exchange Rate System

The par value is Icelandic Krónur 16.2857 = US$1. The official rates are IKr 16.26 buying, and IKr 16.32 selling, per US$1. Most transactions, however, are conducted at effective rates resulting from the application of various exchange taxes or premiums to the official rates. Payments for most imports and invisibles are subject to taxes of 30 or 55 per cent, resulting in effective rates of IKr 21.22 and IKr 25.30 per US$1, respectively. There is also a fee of 45 per cent payable on exchange licenses for travel. Receipts from most exports and invisibles receive premiums of 55, 70, or 80 per cent, resulting in effective rates of IKr 25.20, IKr 27.64, and IKr 29.27 per US$1, respectively. However, the official rates, without tax or premium, are applied to exchange receipts and payments related to military installations in Iceland, under Law No. 110 of 1951. (See Table of Exchange Rates, below.)

Exchange Control Territory

Iceland is a part of the Sterling Area—the Scheduled Territories of the United Kingdom’s exchange control system.

Administration of Control

The granting of import licenses, where required (i.e., for goods not on the free lists), is in the hands of the Import Office, which together with the Central Bank is responsible for the over-all administration of exchange control. The Central Bank and, under its authority, the two largest commercial banks have the exclusive right to buy and sell foreign exchange. The Central Bank and the two commercial banks determine from time to time the extent to which exchange is available to pay for imports, within the framework of over-all exchange allocations laid down periodically by a Working Party composed of representatives of the Ministry of Commerce, the banks, and the Import Office.

Prescription of Currency

Payments to and receipts from certain countries in respect of specified transactions must be effected in the currency and by the method laid down in the payments agreement with the country concerned. Iceland has bilateral payments agreements with Brazil, Czechoslo-vakia, Finland, East Germany, Hungary, Israel, Poland, Rumania, Spain, and the U.S.S.R.; these countries are referred to as the clearing countries. For authorized payments to other countries, the general principle is to permit payments in U.S. dollars to countries in the dollar area and payments in sterling to most other countries.

Imports and Import Payments

Regardless of other requirements, prior certification is required from an Icelandic bank that exchange is available to pay for an import before the import can be effected. There are two lists of commodities that do not require import licenses—one for imports from all countries and the other for imports from the clearing countries (see section on Prescription of Currency, above). All other imports require import and exchange licenses, which are issued in combined form ; these licenses are granted on the basis of the essentiality of the goods and the availability of exchange to pay for them.

There is a tax of 30 per cent on sales of exchange for imports of certain basic consumer goods (about 8 per cent of imports), and a tax of 55 per cent on sales of exchange for most other imports.

Special import fees are payable on many less essential imports. For this purpose, these imports are classified in three categories:

  • Category 1 (preserved, fresh, and dried fruits, refrigerators, washing machines, radios, watches, etc.): import fee of 62 per cent

  • Category 2 (glucose, pencils, toothpaste, soap, perfume, various textiles, sanitary and photographic appliances, etc.): import fee of 40 per cent

  • Category 3 (implements and household utensils, etc.): import fee of 22 per cent

In addition, when import licenses for passenger automobiles are issued, a fee amounting to 35 per cent of the amount licensed must be paid, and a further, temporary, license fee—amounting to 125 per cent of the f.o.b. value of passenger cars and delivery vans (under three tons)—must also be paid.

The major portion of the proceeds of the exchange taxes, import fees, and import license fees is paid to an Export Fund (a minor portion is paid to the Treasury). The Export Fund provides assistance to producers of commodities for export, as well as subsidies on domestically produced consumer goods.

Payments for Invisibles

All outgoing payments for invisibles require licenses, which are granted on the basis of essentiality and the availability of the required foreign exchange. A tax of 55 per cent is payable on foreign exchange payments, except for transfers for students and medical care, which are subject to a 30 per cent tax. In addition, a fee of 45 per cent is payable on licenses for travel exchange.

Residents traveling abroad may take with them foreign banknotes and coins up to the amount they are allowed to import into other countries under the regulations of the countries concerned. Exports of Icelandic banknotes and coins are prohibited. Nonresidents may re-export foreign banknotes and coins that were declared on entry.

Exports and Export Proceeds

All exports require licenses. Exchange receipts must be surrendered at the official rate. Some time after the exchange has been surrendered, exchange premiums are paid from the Export Fund, as follows: 55 per cent on exports of herring from the summer season catch and of whale products; 70 per cent on exports of herring from the fall season catch; and 80 per cent on exports of fish (except herring) products, agricultural products, and certain other commodities.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered. Most invisibles receive an exchange premium of 55 per cent. Shipowners and insurance companies are permitted to use a portion of their exchange earnings for operating purposes. Imports of Icelandic banknotes and coins are prohibited.

Capital

All foreign investments are subject to individual approval. Incoming foreign capital in the form of exchange must be surrendered and receives an exchange premium of 55 per cent. Transfers of capital abroad require approval, which is granted only in exceptional cases, and are subject to an exchange tax of 55 per cent. Securities held in Iceland by nonresidents are subject to registration and all transactions or operations in respect of them are subject to license. The import and export of securities are also subject to the approval of the exchange control authorities.

Table of Exchange Rates (as at December 31,1958)(krónur per U.S. dollar)
BuyingSelling
16.26(Official Rate)16.32(Official Rate)
Receipts under Law No. 110 of 1951.Sales of foreign exchange under Law No. 110 of 1951.
21.22(Official Rate plus 80% Tax)
Imports of basic consumer goods. Students’ and medical expenses.
25.20(Official Rate plus 55% Exchange Premium)25.30(Official Rate plus 55% Tax)

All other imports. All other invisibles except travel. Capital.
Exports of herring from summer season catch; exports of whale products. Most invisibles. Capital.
27.64(Official Rate plus 70% Exchange Premium)
Exports of herring from fall season catch.
29.27(Official Rate plus 80% Exchange Premium)
Exports of fish (except herring) products and agricultural products; certain other exports.
32.64(Official Rate plus 55% Tax and 45% License Fee)
Business and tourist travel.

Changes during 1958

May 29. Major changes were made in Iceland’s exchange system. Three exchange premiums on export proceeds, of 55, 70, or 80 per cent, were introduced, replacing the assistance previously granted to exports through different forms of subsidization. Discrimination as to country of destination was terminated. The 55 per cent premium was also made applicable to the proceeds from most invisibles and to capital. New exchange taxes of 30 or 55 per cent were levied on payments for all imports, replacing the previous exchange tax of 16 per cent. Import fees of 22, 40, or 62 per cent, depending on the category of commodity, replaced the previous fees and were made applicable to less essential imports from all countries. Payments for most invisibles were made subject to the 55 per cent tax, and in addition a fee of 45 per cent was levied on exchange licenses for travel.

India1

Exchange Rate System

The par value is Indian Rupees 4.76190 = US$1. Exchange transactions take place at uniform rates. All transactions in foreign exchange must be conducted through authorized dealers, whose dealings with the general public must be effected as follows: in sterling, at rates fixed by the Exchange Banks Association; in other currencies, including U.S. dollars and Canadian dollars, at rates at or between the official buying and selling rates of the Bank of England for spot transactions and at freely determined market rates for forward transactions. Further, authorized dealers are permitted to cover their requirements of specified currencies in the London market and to cover their permitted transactions in the specified currencies against sterling, rupees, or any one of the specified currencies, either spot or forward for periods not exceeding six months, with authorized banks in any country outside the Sterling Area except Afghanistan, East Germany, Poland, the U.S.S.R., and the United Arab Republic (Egyptian Region).

Administration of Control

Like other Sterling Area countries, India has an exchange control system similar to that in operation in the United Kingdom but adapted to suit local requirements. The administrative work and decisions on exchange control matters are handled by the Reserve Bank of India, in accordance with the general policy laid down by the Indian Government in consultation with the Reserve Bank. Much of the routine work on exchange control is delegated to certain commercial banks, which act as authorized dealers permitted to buy and sell foreign exchange for specified purposes under regulations laid down by the Reserve Bank.

Prescription of Currency

Payments to and from residents of the Sterling Area may be made in any Sterling Area currency; payments to Bilateral Account countries2 may be made in rupees to the account of a resident of the country concerned; payments to all other countries (the “Convertible Account Area”) may be made in rupees or sterling to the credit of an account of a resident in that area or in any specified currency. Receipts from the Convertible Account Area must be obtained in rupees from the Convertible Account of a bank in any country in that area, in sterling from an External Account, or in any specified currency. Payments for most exports to the Egyptian Region of the United Arab Republic may be received only in Indian rupees from the account of an Egyptian bank; for some goods, however, they may be received only in Egyptian pounds through the “export account” of the State Bank of India with the National Bank of Egypt.

Nonresident Accounts

Nonresident accounts consist of rupee accounts belonging to banks, or to private individuals or firms, resident outside India. Payments to the accounts of nonresident banks for imports, interest, and dividends may be made by authorized dealers without prior approval; other payments by residents to such accounts must be approved by the Reserve Bank. The nonresident accounts of foreign banks may be drawn on to pay for Indian exports and for other payments, if the amount of an individual transaction does not exceed Rs 20,000. Rupee balances of banks in other Sterling Area territories may be transferred freely from one account to another.

The rupee accounts of banks in countries outside the Sterling Area, except Bilateral Account countries (see footnote 2), are designated Convertible Accounts. These accounts are freely transferable to other Convertible Accounts and may also be exchanged into sterling or any specified currency. All other credits and debits to these accounts require the prior approval of the Reserve Bank.

Nonresident accounts of private individuals or firms may be credited, without prior approval, for payment of dividends and interest on securities and proceeds of small checks up to certain limits. They may be debited for such items as payments for insurance premiums, income taxes, and remittances to relatives, subject to the limit of Rs 1,000 for each transaction. All other credits and debits require the prior approval of the Reserve Bank. Transfers normally are not permitted from the accounts of individuals or firms to nonresident accounts of banks belonging to the same country or monetary area, unless the items originally credited to such accounts were “currently remittable” in nature.

There are also blocked accounts, to which are credited capital proceeds that are due to nonresidents and may not be remitted abroad. Balances on blocked accounts may be placed on fixed deposit or invested in approved Indian rupee securities. The income derived from such investments may be remitted to the owner’s country with the approval of the Reserve Bank.

Imports and Import Payments

Goods may be imported into India under individual licenses. Individual licensing may be by quotas allocated to established importers in accordance with their imports in a base period and to actual users on the basis of their current requirements or it may be ad hoc. There are, currency-wise, so-called “soft” licenses for imports from soft currency countries and general licenses for imports from all countries. Fifty per cent (and for some commodities, more than 50 per cent) of any “soft” license is automatically available for imports from hard currency countries. Applications to use all of a “soft” license for imports from hard currency countries are normally granted when the price conditions are more favorable in the latter. No distinction is made between one country and another within either currency area, except that imports from the Union of South Africa are prohibited and certain imports from Pakistan are admitted more liberally than are imports from other countries. At the beginning of each half-yearly licensing period, an announcement on import control policy is made in the form of a Red Book, which gives in detail the policy for established importers and actual users. There are also special procedures applicable to capital goods, heavy electrical plant, and goods imported to fulfill government contracts and irrigation projects. In licensing imports of a capital nature, their essentiality, their potential for earning or saving foreign exchange, and the availability of medium-term or long-term credits for them are taken into account.

Where a valid import license is held, the required exchange is released by an authorized bank on presentation of the exchange control copy of the license. The license holder may effect payments by opening letters of credit or by making remittances against sight drafts. Advance remittances in payment of imports before shipping documents are received are not normally permitted; but in special cases, e.g., imports of machinery and capital goods, where deposits have to be made with overseas manufacturers, the Reserve Bank grants special authorization for advance payment for a part of the value of the import.

Payments for Invisibles

In general, payments abroad for invisibles require approval. However, except for travel, insurance, and a few other items, foreign exchange is granted freely for such payments, especially for expenses incidental to trade transactions and transfers of recurring contractual obligations.

Premiums on insurance policies issued in foreign currency to residents may be paid in rupees or in the currency in which the policy is issued; but Indian residents are prohibited from taking out life insurance policies in foreign currencies.

There are no restrictions on the remittance of profits, dividends, and interest to beneficiaries permanently resident in any country outside India, provided all current tax and other liabilities in India have been cleared.

Foreign employees are permitted to make reasonable remittances to their own countries to pay insurance premiums or other expenses and for the support of their families. For Sterling Area nationals, other than nationals of Pakistan, authorized dealers may allow such remittances by the principal member of a family, up to a maximum of £150 a month, in the currency of any Sterling Area country. Nationals of Pakistan are allowed to remit up to Rs 50 a month for the support of their dependents in Pakistan. Each application from nationals of countries outside the Sterling Area is considered on its own merits, and facilities are provided for the remittance of savings that the applicant may reasonably be expected to make.

To obtain foreign exchange for travel or education abroad, individual application must be made.

Persons leaving India, except those going to Pakistan, Afghanistan, or the Portuguese territories in India, may take out Indian and foreign currency notes and coins not exceeding a total value of Rs 75 in any one month. Persons going to Pakistan may take out not more than Rs 50 on any one day in Indian notes and coins and another PRs 100 in Pakistan notes and coins. Persons leaving for Afghanistan may take out Afghan currency without limit and Rs 50 on any one day in Indian notes and coins. Persons leaving for the Portuguese territories in India may take out Indian notes and coins not exceeding Rs 50 on each visit.

Exports and Export Proceeds

Except for a few items that are not available in sufficient quantities to meet even domestic consumption needs or are of strategic importance, most exports are free of controls and restrictions. Exports are encouraged, and concrete measures are taken to make available to exporters their requirements of imported raw materials.

The export of the few commodities which are restricted is controlled by the Chief Controller of Imports and Exports of the Ministry of Commerce and Industry and may be effected only under an open general license or a special license. Goods on open general license are not subject to quantitative restriction and may be exported to any destination unless that license is valid only for the dollar area or for Pakistan. Controlled exports not under open general license may be licensed either freely or under global quotas.

The export of goods is permitted only if the exporter makes a declaration on the prescribed form to the Collector of Customs that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within the period specified by the Reserve Bank. The currencies in which the export proceeds may be received are prescribed (see section on Prescription of Currency, above).

Proceeds from Invisibles

Exchange received on account of invisibles in specified currencies, sterling, Hong Kong dollars, or Malayan dollars must be surrendered.

General permission has been granted by the Reserve Bank for any person to bring or send into India without limit Indian currency and banknotes from any foreign country, except Afghanistan, Burma, Pakistan, and the Portuguese territories in India, where special limitations apply. Foreign currency notes may be brought into India without limit, provided a declaration of the total amount brought in is made to the customs authorities upon arrival. Persons holding duly certified declaration forms may sell the relevant currency notes to any moneychanger or authorized dealer in foreign exchange.

Capital

The inward movement of capital is practically free, except when it forms part of an investment requiring the prior approval of the Indian Government; in such cases, applications have to be made to the Reserve Bank, which refers them to the Government. Exchange receipts from approved foreign capital investment and from capital in the specified currencies, sterling, Hong Kong dollars, and Malayan dollars must be surrendered. Foreign investments once admitted are eligible for the same treatment given to Indian enterprises. Repatriation of capital owned by persons residing in Sterling Area countries other than Pakistan, and of capital invested in India by residents of Denmark, Norway, or Sweden, is authorized freely. Capital invested in approved projects after January 1, 1950 by residents of other countries, including capital appreciation on the original investment, may be repatriated at any time. The proceeds from liquidated foreign investments not eligible for repatriation are blocked (see section on Nonresident Accounts, above).

Indian nationals (including persons domiciled in India) who emigrate to a Sterling Area country may transfer up to Rs 200,000 per family at the time of their departure. Any remaining assets are held in India, but remittance of income on such assets is allowed in full. Indian nationals (including persons domiciled in India) who emigrate to a country outside the Sterling Area may transfer up to Rs 75,000 per family for emigration to the dollar area and up to Rs 125,000 per family for emigration to any other country; any remaining assets are blocked. Sterling Area nationals temporarily resident but not domiciled in India are permitted to repatriate their assets, including capital investments, to any Sterling Area country at the time of their repatriation. Sterling Area nationals who emigrate from India to countries outside the Sterling Area are permitted remittance facilities on the same scale as in the United Kingdom. Other nationals who are resident but not domiciled in India are permitted at the time of their retirement to transfer to their own country the proceeds from the sale of their investments, subject to an over-all limit of Rs 125,000 per holder, provided the shares and securities concerned are quoted on recognized stock exchanges in India; in addition, they may transfer all their current remittable assets in India. Any amount in excess of that authorized for free transfer is blocked.

There are no restrictions on the import into India of domestic or foreign securities. Domestic dealings in rupee securities are not subject to restriction. The export of securities and their transfer to nonresidents require approval. Persons resident in India who become owners of foreign securities are permitted to hold them, provided they have been acquired in a manner not involving a breach of the Indian exchange control regulations. The sale, transfer, or other disposal of foreign securities requires approval.

Changes during 1958

January 15. An exchange of letters with Hungary extended the trade agreement between the two countries for two years. Under the new arrangements payments for commercial and other transactions between the two countries would be settled in Indian rupees, the balance being convertible into sterling.

March 5. The limit of £10 on the import of Bank of England notes by travelers to India was removed.

March 12. An exchange of letters between the Government of India and the Ministry of Foreign Trade of Poland established a special payments arrangement for trade in certain goods between India and Poland. The National Bank of Poland would open a special trade development account to which would be credited the rupee proceeds of India’s imports of essential machinery from Poland. The balance on the account would be used only to pay for exports from India of specified commodities. This arrangement, valid until the end of 1959, was additional to the trade agreement concluded on April 3, 1956, under which settlements are made in rupees or sterling.

March 26. It was announced that, in accordance with the terms of a bilateral trade agreement that had been concluded with the Egyptian Region of the United Arab Republic, settlements for certain exports and imports would be made in Egyptian pounds. All other settlements for trade between the two countries would continue to be made in rupees in accordance with the agreement of March 8, 1957. Under the new arrangements, the State Bank of India would open an “export account” in Egyptian pounds with the National Bank of Egypt and would accept on a collection basis documents relating to the export of Indian tea and jute goods to the Egyptian Region with an authority from the exporters to sell the Egyptian pounds received to Indian importers of Egyptian cotton.

March 31. It was announced that the existing pattern of import control policy would be continued for the period April-September 1958; total import licensing would remain unchanged from the preceding six months, but some adjustment would be made to meet the demand of certain industries for raw materials. Imports of certain goods would be liberalized while imports of other goods would be reduced.

April 1. A new Open General License No. LII came into effect, replacing O.G.L. No. LI. It permitted the import from Pakistan of poultry, fish not otherwise specified, and salted wet fish.

April 29. It was established that travelers to and from India and the Portuguese territories in India could not take with them more than Rs 50 on each visit. Previously, Rs 100 could be taken out of India into those territories and there was no limit on the amount of Indian notes and coins that could be brought in from those territories.

April 30. It was announced that during the current licensing period import licenses for steel would be issued only for certain categories: hoops, box strapping, and industrial scrap. Licenses would be issued to established importers on the basis of their imports of these items in earlier years. For other categories, licenses would be issued on an ad hoc basis and only to actual users.

April 30. The quota for the import of unexposed cinematograph films was increased from 40 per cent general and 40 per cent soft to 60 per cent general and 60 per cent soft. Additional licenses would also be granted to established importers of leader films and electric carbon.

May 1. The relaxation of most restrictions on the granting of foreign exchange for studying abroad was announced.

May 16. The limit on Indian notes and coins that a traveler from the Portuguese territories in India might bring into India at any one time was raised from Rs 50 to Rs 100.

May 20. It was announced that exchange up to Rs 150 per applicant would now be granted for foreign correspondence courses and examination fees in respect of examinations held in India. The general authority for payments of this nature had been suspended since June 3, 1957.

May 25. It was announced that licenses for the import of machine tools would be granted to established importers during the current half year on the basis of a quota of 40 per cent general and 40 per cent soft, instead of on an ad hoc basis. Moreover, soft currency licenses granted to established importers during this period would be valid for imports from the dollar area to the extent of their full face value, but not more than 85 per cent of this would be valid for complete machine tools, the remainder being reserved for spare parts.

June 23. The permission of the Reserve Bank was no longer required for inward remittances in Sterling Area currencies exceeding £1,500 on account of Indian nationals resident in the Sterling Area for credit to their accounts in India or for payment to Indian nationals resident in India. This applied also to similar remittances received in rupees, so that prior approval was no longer required for transfers from nonresident accounts of banks to the nonresident rupee accounts of Indian nationals resident in the country or monetary area of the remitting bank. In addition, prior approval was no longer required for credits to the nonresident accounts of Indian nationals representing proceeds of remittances received from outside the Sterling Area.

July 5. It was announced that for the next 12 months licenses for imports of cars would be given only to the 3 licensed manufacturers, each to import one type of car (completely knocked down). Of the exchange earned from exports of cars, 90 per cent would be made available to the manufacturers for additional imports of raw materials, components, etc.

July 31. More than 200 items were removed from export control, and the lists of export goods subject to quota regulation and of prohibited exports were shortened.

September 2. Any currency of the Sterling Area (including sterling), instead of only Indian and Pakistan rupees, could be used for settlements between India and Pakistan. Exports to Pakistan could be financed in any Sterling Area currency. The Reserve Bank discontinued buying and selling Pakistan rupees; authorized dealers were to determine the rates on the basis of market conditions. All spot transactions between banks and their customers and between authorized dealers should be effected at rates no more than 1 per cent on either side of the par value. The Indian rupee accounts of banks in Pakistan were made freely exchangeable into sterling or any other Sterling Area currency.

September 25. Persons resident in India having or acquiring foreign exchange in any of the leading world currencies, including sterling, Hong Kong dollars, and Malayan dollars, were required to offer them for sale to an authorized dealer against payment in rupees. Exemption from this requirement was given to authorized dealers within the scope of their authority, other persons authorized by the Reserve Bank to hold foreign exchange, and persons in or resident in India but not domiciled therein, and to sterling held in accounts in existence prior to July 8, 1947. Previously, surrender requirements applied only to holdings of U.S. dollars and Philippine pesos.

September 30. An interim announcement concerning import policy for the period October 1958-March 1959 was made in respect of actual users and of consumer items in short supply. Pending a later announcement of import policy for this period, applications from actual users for certain items would be considered in the same way as in the previous licensing period. Quotas for established importers for certain items in short supply were announced. These items were milk foods for infants, malted foods, X-ray films, tin block and tin scrap, wattle bark and bark for tanning, mercury, and raw hides and skins; their quotas were slightly greater than the quotas for the previous six months.

October 17. The amount of Indian and foreign currency notes that could be exported by a traveler was reduced from Rs 270 to Rs 75.

October 31. Details of the import licensing policy for the period October 1958-March 1959 were announced. The amount of foreign exchange to be allocated for imports was estimated at Rs 1.80 billion, compared with Rs 1.76 billion for the preceding six months. Quotas were increased for imports of such items as spare parts for earth-moving machinery and certain consumer goods. On the other hand, quotas for established importers were reduced or suspended for nearly 100 items.

November 3. An arrangement supplementary to the bilateral trade agreement with East Germany was signed. Effective January 1, 1959, trade payments would be settled through a bilateral clearing account in Indian rupees.

November 15. The bilateral payments agreement with Poland was revised. Effective January 1, 1959, payments would be made through a bilateral clearing account in Indian rupees.

November 16. A new trade and payments agreement was signed with the U.S.S.R., to be effective January 1, 1959 and valid for five years. Payments would be made through a bilateral clearing account in Indian rupees.

December 29. American Accounts and Transferable Accounts of nonresidents in Indian rupees were merged as Convertible Accounts. Rupees on these accounts could be freely transferred to other Convertible Accounts or exchanged into sterling or any specified currency. The prescription of currency regulations were correspondingly simplified.

Note.—With effect from January 1, 1959, East Germany, Poland, and the U.S.S.R. were treated as Bilateral Account countries in the prescription of currency regulations.

Indonesia

Exchange Rate System

No par value for the Indonesian Rupiah has been established with the Fund. The basic rate is Rp 11.40 per US$1, the official rates being Rp 11.355 buying, and Rp 11.475 selling, per US$1; however, these rates have only a nominal application. Almost the whole exchange rate structure revolves around the export certificate rate, which has been pegged (since April 19, 1958) at Rp 37.848 per US$1. In return for foreign exchange surrendered, except receipts from tourism and certain other invisibles (see below), the authorized banks issue an export certificate, called a BE, which is expressed in rupiah and is equivalent to 100 per cent of the foreign exchange surrendered. BE certificates are valid for 42 days; during the first 28 days they may be sold freely, through the authorized exchange banks, in the exchange market. All permitted exchange payments for imports, as well as for most invisibles and for transfers of capital, and all payments by the Government have to be financed by BE certificates bought in the market, through the intermediary of a bank, at the fixed rate. Multiple exchange rates arise from the application of an exchange tax of 20 per cent on export proceeds and receipts from invisibles and surcharges on imports (called TPI). Imports are divided into six groups, with surcharges of nil, 20, 50, 100, 140, and 175 per cent. Certificates are not issued for receipts from tourism and a few other invisibles. Instead, the exchange is bought by banks, on behalf of the Foreign Exchange Fund, at a fixed rate set from time to time at the export certificate rate less the 20 per cent exchange tax. (See Table of Exchange Rates, below.)

Administration of Control

Exchange control is administered by the Foreign Exchange Institute (which is under the direction of the Bank Indonesia), on whose behalf combined import and exchange licenses are issued by the Bureau for Import-Exchange licenses. Export licenses are issued by the Bureau for Exports. Control is actually carried out by the Foreign Exchange Institute, the Bank Indonesia, the commercial banks authorized for this purpose, and the customs.

Prescription of Currency

Payments and receipts must be effected through the authorized exchange banks and in the currency stipulated in the license. Settlements with OEEC countries may be made in the currency of the country concerned, in sterling, or in other currencies mutually agreed; settlements with South American countries are made largely in certain European currencies. Only imports originating in the dollar area may be paid for in U.S. dollars. By arrangement with the government concerned, Indonesia obtains partial reimbursement in U.S. dollars from the Netherlands, and also from Singapore and Malaya, for Indonesian goods re-exported by those countries to the dollar area. Payments to Mainland China, Czechoslovakia, Poland, and the United Arab Republic (Egyptian Region), with which Indonesia has payments agreements, are settled through special clearing accounts.

Nonresident Accounts

There are two classes of nonresident account, as described in the following paragraphs.

1. Accounts of foreign banks: Balances that have been created by transferring foreign currency to Indonesia are freely convertible into the same currency and may be transferred freely to accounts of nonresident banks of the same monetary area.

2. All other nonresident accounts: The opening of these accounts and all entries require permission from the Foreign Exchange Institute. These accounts are designated as Capital Accounts or Income Accounts, and transfers from the former to the latter are not allowed. For nonresident accounts of private persons, the authorized exchange banks have been given permission to make routine personal payments in Indonesia and yearly transfers up to a maximum of Rp 30,000 in the currency of the nonresident to the debit of his Income Account. The granting of licenses for remittances to the debit of Capital Accounts, i.e., capital remittances and remittances of inheritances, has been suspended since January 1, 1954. However, in cases of destitution, transfers to the debit of Capital Accounts may be permitted up to limited amounts at the discretion of the Foreign Exchange Institute.

Imports and Import Payments

Business establishments wishing to import must obtain the official recognition of the Ministry of Trade. Most importers are required to lodge a deposit with the Foreign Exchange Fund: for Indonesian nationals, the deposit is Rp 500,000, and for nonnationals (other than those classified as industrial or horticultural and importing goods solely for their own use), the deposit is Rp 5,000,000. After the importer has been registered, the deposit may be used to pay the required advance deposit, as well as the exchange surcharge and the cost of BE certificates.

All imports have to be paid for with BE certificates. Most imports are, in addition, subject to exchange surcharges (TPI) ; for this purpose, imports are divided into six groups, as follows:

GroupSurcharge (TPI)
I.Highly essential
II.Essential20%
III.Less essential50%
IV.Semiessential100%
V.Semiessential140%
VI.Luxury175%

All imports are subject to license. Application for an import license to the Bureau for Import-Exchange Licenses or its branches has to be made through an authorized foreign exchange bank and be accompanied by a receipt showing that 100 per cent1 of the c. & f. value of the import at the basic official rate has been deposited with the bank. If the application is approved, a preliminary license is issued to the importer through the bank which has submitted the application. Upon receipt of the preliminary license, the importer must buy within 30 days, through his bank, BE certificates equivalent to the nominal value of the license and must pay at the same time the applicable TPI surcharge, which is calculated on the effective rupiah purchase price of the BE certificates. Of the 100 per cent1 advance deposit, 10 per cent is forfeited if the preliminary import license is not used, i.e., the BE certificates are not bought and the TPI not paid, within the 30-day period. Upon proof that the necessary BE certificates have been presented and the required TPI paid, the Bureau for Import-Exchange Licenses issues to the importer the final import-exchange license.

Import licenses are issued only for the c. & f. value of the import; insurance has to be covered in Indonesia. Payments for imports may be made by a correspondent bank abroad only after the bank has received the documents evidencing the shipment to Indonesia of the merchandise as described in the related letter of credit or the import license.

Payments for Invisibles

Payments for invisibles are made at the BE certificate rate and are subject to either general or special license from the Foreign Exchange Institute. General licenses are issued to the authorized banks to effect payments for specified invisibles on certain conditions without further authorization from the Foreign Exchange Institute. Payments in excess of the limits established in the general licenses and payments not covered by those licenses (e.g., advertising fees, film rentals, royalties, registration fees for patents and trademarks, subscriptions to newspapers and periodicals, memberships in associations, charitable remittances, legacies, and contractual amortization expenses) require special licenses from the Foreign Exchange Institute. Foreign exchange is not made available to pay insurance premiums on imports.

Under a special license, foreign nationals employed in Indonesia are allowed to remit 20 per cent of their gross taxable income for such purposes as family allowances and children’s education, and as remittances of savings. In addition to this 20 per cent limit, there are annual over-all ceilings of Rp 36,000 per remittor for those in independent professions and Rp 48,000 for employed persons. A general license permits nonresidents to remit from their Income Accounts up to Rp 30,000 annually (see section on Nonresident Accounts, above).

The export of Indonesian and foreign banknotes and coins is prohibited, but residents going abroad are provided with small amounts of foreign banknotes to meet their traveling expenses.

Exports and Export Proceeds

All exports require licenses. Exporters (with the exception of those oil companies to which special arrangements apply) are required to surrender to an authorized bank in Indonesia all foreign exchange to which they become entitled. All exports, irrespective of the country of destination, must as a rule be financed by irrevocable bank credits, and the drafts drawn on such credits must be sight drafts. Exports may not be invoiced in rupiah, but must be invoiced in a currency acceptable to the Bureau for Exports. There are no general limitations as to the destination of exports, but the Bureau for Exports will refuse to issue an export license if, for example, the shipment should not conform to existing trade agreements. Exports of high-grade rubber, estate coffee, and tea to Singapore and Malayan ports are prohibited.

An exporter, in return for the foreign exchange surrendered, is notified by the authorized bank that an export certificate (BE), expressed in rupiah and equivalent to 100 per cent of the foreign exchange surrendered at the official basic rate, has been issued in his name and is held by the bank for him. These BE certificates are valid for 42 days, during which time they may be sold freely—through the authorized exchange banks—in the exchange market, provided they have a remaining validity of at least 14 days at the time of sale. An exchange tax of 20 per cent is deducted by the banks from the proceeds of BE certificates. BE certificates not sold during their period of validity must be surrendered to the Bank Indonesia at the basic rate, but are not subject to the exchange tax.

Proceeds from Invisibles

Residents are required to surrender to an authorized bank in Indonesia all foreign exchange to which they become entitled. Foreign nationals resident in Indonesia may retain, in the currency of the country of their nationality, any income that does not arise from foreign trade. Receipts from invisibles, including the inward remittances of foreign oil companies, are treated in a manner similar to that for receipts from exports, i.e., they receive BE certificates and are subject to a 20 per cent tax on the sales proceeds. However, BE certificates are not issued for receipts from tourism; instead, tourist exchange is bought by the banks at a special rate set from time to time by the Foreign Exchange Fund at the level of the BE certificate rate less the exchange tax of 20 per cent.

The import of Indonesian banknotes and coins is prohibited. Foreign banknotes may be imported on condition that they are surrendered to an authorized exchange bank at the rate fixed by the Foreign Exchange Fund. However, visitors planning to stay in Indonesia no longer than 90 days may, after a record has been made, retain their foreign currency and take it with them on departure or sell it to an authorized bank at the rate applicable to tourist exchange. They may exchange only the following currencies and only with an authorized bank: U.S. banknotes (in denominations not exceeding $50) and U.S. travelers checks, sterling banknotes and travelers checks (payable outside the Sterling Area), Malayan banknotes (in denominations not exceeding $M 10), Australian banknotes (in denominations not exceeding £A 25), and banknotes of the Federal Republic of Germany in denominations of DM 5, DM 10, DM 20, DM 50, and DM 100.

Capital

There are no limitations on the remittance to Indonesia by nonresidents of capital which, if it were in the form of foreign exchange, would have to be surrendered in accordance with the regulations.

For the purpose of determining the treatment to be given them, companies operating in Indonesia with foreign capital are classified in three groups.

Group I, also known as “old, active companies,” includes investments in Indonesia before January 1, 1954 in companies registered abroad, as well as investments in companies which, though registered in Indonesia, are owned by one or a few foreigners residing abroad. This group is divided into three categories:

Category 1Category 2Category 3
a. Estatesa. Transport and communicationsa. Insurance and administration
b. Mining
c. Industryb. Energyb. Hotel and domestic trade
c. Other industries
d. Printingc. Small industries
e. Banksd. Cultural
f. Development
g. Foreign trade
h. Domestic trade

Forty per cent of net profits (after payment of the corporation tax) on investments in this group may be deposited in rupiah accounts as reserve profits and the balance of 60 per cent may then be used as follows: In Category 1, it may all be transferred abroad at the BE certificate rate ; in Category 2, 40 per cent may be transferred abroad at the BE certificate rate and the balance of 20 per cent retained for private use in Indonesia; in Category 3, 20 per cent may be transferred abroad at the BE certificate rate and the balance of 40 per cent retained for private use in Indonesia. The reserved profits may be used for certain purposes, such as reinvestment in the companies concerned or in certain Indonesian enterprises, subject to approval by the Bank Indonesia. Amortization allowances and proceeds resulting from liquidation of investments in Group I are placed in blocked Capital Accounts, transfers from which have been suspended since January 1, 1954.

Group II, also known as “new investments,” comprises foreign capital invested in Indonesia since January 1, 1954. These investments are subject to conditions agreed between the Indonesian authorities and the interested parties. In general, companies in this group benefit from more favorable treatment than that accorded companies in Group I. Most companies in Group II are exempt from the reserve profits requirements applied to Group I and, as a minimum, they are entitled to the same treatment as that accorded to companies in Group I. Transfers of profits and authorized repatriation of capital by “new investments” are made at the BE certificate rate without surcharge.

Group III, also known as “passive companies,” includes foreign investments in Indonesia that do not fall into the two groups described above. In principle, no direct transfers of profits or dividends are allowed for this group. However, in special cases, e.g., when the shares of the company—registered in Indonesia—were originally quoted on the Djakarta Stock Exchange or abroad, a direct transfer for dividend coupons received from abroad may be allowed, but not above 30 per cent of the company’s paid-up capital. If no direct transfer of dividends is granted, the proceeds of dividend coupons may be credited to nonresident Income Accounts of the foreign owners, balances on which are transferable up to an annual maximum amount (see section on Nonresident Accounts, above).

For foreign capital invested under the provisions of the Foreign Investment Law of September 16, 1958, profits may be transferred entirely and capital repatriation may be allowed in the currency of the original investment.

Residents are required to surrender exchange from capital, and approval is not normally granted to them for capital payments abroad.

Residents may trade in the Djakarta market in registered foreign securities including registered bonds and shares, obligations, bank mortgages, profit-sharing certificates, and similar securities, coupons, and dividend warrants. Residents may also trade in unregistered securities, provided a nonresident does not benefit thereby, directly or indirectly. Nonresidents are permitted to trade in specified domestic securities, provided the proceeds of any sale are credited to a nonresident Capital Account (see section on Nonresident Accounts, above). The import of foreign securities into Indonesia is subject to license, the issue of which is subject to a special import levy (TPI-E) of 33⅓ per cent of the current domestic market value of the security. The proceeds of this levy are payable to the Foreign Exchange Fund. Imported securities representing the reinvestment of securities exported from Indonesia are exempt from this levy.

Table of Exchange Rates (as at December 31, 1958)(rupiah per U.S. dollar)
BuyingSelling
11.355(Official Rate)11.475(Official Rate)
29.642
Tourist exchange.
30.278(BE Certificate Rate less 20% Exchange Tax)
All exports. Most invisibles.
37.8483(BE Certificate Rate)37.8483(BE Certificate Rate)
Capital.Category I imports (all highly essential goods, including rice and raw cotton). Invisibles. Authorized capital.
45.418(BE Certificate Rate plus 20% TPI Surcharge)
Category II (essential) imports.
56.772(BE Certificate Rate plus 50% TPI Surcharge)
Category III (less essential) imports.
75.696(BE Certificate Rate plus 100% TPI Surcharge)
Category IV (semiessential) imports.
90.835(BE Certificate Rate plus 140% TPI Surcharge)
Category V (semiessential) imports.
104.082(BE Certificate Rate plus 175% TPI Surcharge)
Category VI (luxury) imports.

Changes during 1958

January 1. All exports, irrespective of the country of destination, were required to be financed by irrevocable bank credits, but exemptions might be given by the Foreign Exchange Institute.

February 3. The advance deposit required for an import application was raised from 20 per cent to 100 per cent of the c. & f. value of the import calculated at the official rate, and the amount forfeited if the preliminary import license was not used within the prescribed period of 30 days remained 10 per cent of the c. & f. value of the import.

February 10. The maximum daily increase in the BE certificate rate was limited to 2 points.

March 18. Sterling banknotes of any denomination could be exchanged by visitors. (This facility had previously been limited to denominations not exceeding £1.)

March 27. The maximum daily increase in the BE certificate rate was limited to 1 point.

April 19. The BE certificate rate was pegged at Rp 37.848 per US$1, the effective rate for BE certificates on April 18, 1958.

May 30. New regulations were issued governing barter trade conducted under the supervision of Indonesian Consulates between certain border regions of Indonesia and Singapore/Penang.

October 27. The Foreign Investment Law, approved by Parliament on September 16, went into effect.

December 31. It was announced that, effective January 2, 1959, applicants for import-exchange licenses would have to make an advance deposit of 133⅓ per cent of the c. & f. price at the official rate.

Iran

Exchange Rate System

The par value is Iranian Rials 75.75 = US$1. All transactions take place at the rates fixed by the Bank Melli Iran: Rls 75.00 buying, and Rls 76.50 selling, per US$1. There are charges on the invoiced amount of all imported goods of ½ of 1 per cent for sanitary services and of 1/10 of 1 per cent under the law on encouragement of exports.

Administration of Control

Exchange control authority is vested in the Bank Melli Iran. Import licenses are issued by the customs authorities and exchange licenses by the Bank Melli. All foreign exchange transactions must be effected through authorized banks. The Ministry of Commerce determines the classification of imported and exported commodities.

Prescription of Currency

Payments and receipts must be settled in the currency of the country concerned, provided the currency is one in which the Bank Melli deals. Alternatively, payment may be made in a currency acceptable to both countries.

Transactions with countries with which Iran has payments or clearing agreements must be conducted in the currencies specified in the agreements: U.S. dollar accounts are used for transactions under the agreements with Hungary and Turkey; the Swiss franc is specified in the agreement with Czechoslovakia, sterling in the agreement with Poland, and the rial in the agreement with the U.S.S.R.

Nonresident Accounts

Nonresidents are permitted to maintain accounts freely, in rials as well as in foreign currencies, with the authorized banks. Rial accounts may be used only for payments in Iran. Foreign currency accounts may be used for transfers abroad or for sales to authorized banks.

Imports and Import Payments

Except for personal belongings, goods imported must be new and unused.

Exchange for imports is allocated freely, except for goods included in a list of prohibited imports. A global quota of Rls 20 billion for imports that are not prohibited has been established for the Iranian year 1337 (March 21, 1958-March 20, 1959), but if the quota should prove to be inadequate, it may be raised by the Ministry of Commerce, taking into account the availability of foreign exchange. Specified commodities, such as sugar, silkworm eggs, tobacco, cigarette paper, and railway equipment, are imported under state monopoly. Special permits to import these commodities may be issued to private traders or institutions.

Import licenses, which are required to clear goods through customs, are issued automatically by the customs authorities on receipt of documents showing that payment has been or will be made through an authorized bank. The customs authorities check whether the import is permitted (i.e., not prohibited). Imports of precious metals, e.g., silver, gold, and platinum, are permitted if no exchange is transferred for that purpose; in such cases, an import license is not required.

Under a general license, authorized banks may make payments against shipping documents for imports that are not prohibited. Charges are levied on the invoiced amount of all imported goods of ½ of 1 per cent for sanitary services and 1/10 of 1 per cent under the law on encouragement of exports. Persons holding “own exchange” are permitted to utilize that exchange for imports, provided they pay Rls 1.50 per US$1 of the import value to an authorized bank; importers of newspapers, periodicals, and precious metals are exempt from this charge.

Agreements concluded by private merchants or commercial firms in Iran with private concerns abroad for the exchange of permitted products may be approved by the Ministry of Commerce upon submission of a detailed list of the goods to be exported and imported. Imports under private barter arrangements from countries whose currencies are not purchased by the Bank Melli are authorized, provided the importer pays Rls 1.50 per US$1 of the import value, plus the taxes of 1/10 of 1 per cent and ½ of 1 per cent of the import value, to an authorized bank; except for exports to payments agreement countries, such counter-imports need not be obtained from the country to which the export was directed.

Payments for Invisibles

Payments for noncommercial purposes require licenses issued by the Bank Melli, except that students have to present licenses issued by the Ministry of Education.

Each person presenting a visaed passport to an authorized bank will be sold £400 for travel in Europe and $1,000 for travel in the United States. For children under ten years of age, half these sums will be sold. Persons going abroad for medical treatment will, in addition, be granted exchange licenses for medical expenses upon presentation of the relevant bills duly certified by the local Iranian Consulate.

Travelers may take with them Rls 3,000 in Iranian banknotes. Nonresident travelers may not export foreign currency in excess of the amounts they imported less the amounts they have sold to authorized banks. They may, however, purchase up to US$100 or the equivalent in other currencies for traveling expenses, upon presentation of their visaed passports.

Exchange is granted to merchants for insurance of Iranian imports, but for imports covered by documentary credits, the insurance must be taken out in Iran and the exchange granted must be used for this purpose. For imports made against sight drafts, however, the c.i.f. value of goods may be transferred to the exporter abroad. Exchange is not granted to merchants for insurance of Iranian exports sold f.o.b.

Exports and Export Proceeds

Exports of some commodities, mainly wheat, barley, and rice, are prohibited except under license.

Export receipts, up to the amount of the export value as appraised by the customs authorities, must be offered for sale to an authorized bank within six months after the export takes place. Under private clearing arrangements approved by the Ministry of Commerce, however, export proceeds need not be surrendered, but the exporters should import authorized goods equivalent to the value of the goods exported.

Within the regulations (see section on Prescription of Currency, above), authorized banks accept export proceeds in Belgian francs, deutsche mark, French francs, Indian rupees, Netherlands guilders, Pakistan rupees, sterling, Swedish kronor, Swiss francs, and U.S. dollars. Export proceeds in other currencies may be used by the exporter to purchase imports payable in the same currency.

Proceeds from Invisibles

Exchange receipts derived from invisibles must be surrendered. Persons receiving foreign exchange abroad, other than export proceeds, may use this exchange to import goods that are not prohibited.

Travelers to Iran are permitted to bring with them unlimited amounts in foreign currencies and Iranian banknotes. Travelers of Iranian nationality must either sell their exchange to authorized banks or deposit the funds in a temporary foreign exchange account, from which transfers abroad or to nonresident accounts will require a license from the Bank Melli. Other travelers, during their stay in Iran, may sell their exchange only to an authorized bank at the bank’s buying rate.

Capital

Transfers of capital abroad require the approval of the Bank Melli, which is given only in exceptional circumstances.

In accordance with a decree of December 16, 1953, modified slightly in 1955 by the Foreign Investment Protection Act, foreign capital invested in approved development or productive activities in industry, mining, or agriculture may be repatriated, together with net profits (up to a limit to be determined by implementing regulations), in the form of foreign exchange and/or goods; transfers of exchange must be effected in the original currency and at the commercial selling rate prevailing at the date of transfer. Capital imported in the form of foreign exchange must be in a currency acceptable to the Bank Melli ; the conversion into rials is made at the commercial buying rate prevailing at the date of application for entry, and repatriation of the capital and transfers of profits will take place at the commercial selling rate on the day the transfer takes place. The Bank Melli has the option to buy the exchange or to accept it as a deposit while making available the rial equivalent at a rate mutually agreed upon in a separate agreement; in this case, the rate applicable to repatriation is that at which the exchange was originally purchased. The decree guarantees legal protection for foreign capital and provides for a committee to make recommendations on proposed investments to the Council of Ministers.

Changes during 1958

January 25. Payments arrangements with France were put on a transferable basis.

February 10. Payments arrangements with Italy were put on a transferable basis.

April 5. The import program for the Iranian year 1337 (March 21, 1958-March 20, 1959) was published. Imports were classified in two categories, free and prohibited. All goods except those on the prohibited list could be imported up to a total of Rls 20 billion on a global basis. There were no changes in the list of prohibited imports.

June 1. By virtue of the Exchange Transactions Act, all matters pertaining to exchange rates and regulations were entrusted to the Bank Melli Iran, and the Exchange Control Committee was abolished.

June 1. All travelers leaving Iran were permitted to take with them Rls 3,000 in Iranian banknotes. Until further notice, travelers entering Iran could bring with them, subject to customs declaration, unlimited amounts of Iranian currency. Iranian travelers returning to Iran must either sell their exchange to the Bank Melli or deposit it in a temporary foreign exchange account.

June 1. Exporters who had not surrendered export proceeds due in the period up to April 18, 1958 were allowed to settle their obligations either by surrendering the exchange or by paying Rls 5 per US$1 before October 18, 1958.

Iraq1

Exchange Rate System

The par value is Iraqi Dinar 1 = US$2.80. Most transactions in the official market are effected in sterling (Iraq is one of the countries of the Sterling Area). Licensed dealers are authorized to deal in certain currencies on the basis of London rates; for the U.S. dollar, the Central Bank of Iraq quotes an official rate at which it will sell exchange to licensed dealers to cover the excess of their dollar requirements over their purchases from customers or other banks.

Administration of Control

Exchange Control Law No. 18 of 1950 entrusts the Board of Administration of the Central Bank of Iraq with all powers and responsibilities in connection with exchange control. In practice, however, the Board has delegated most of its administrative authority to the Directorate of Foreign Exchange of the Central Bank. All foreign exchange transactions must be effected through licensed dealers unless especially authorized by the Central Bank. Import and export licenses, where required, for items other than banknotes, coins, gold, and securities, are issued by the Directorate-General of Commerce in the Ministry of Economics.

Prescription of Currency

The method and currency of payment for transactions with most countries outside the Sterling Area are, in general, comparable to those applied in other countries of the Sterling Area. Insofar as Iraqi exports are concerned, receipts must be obtained in acceptable foreign currency, in sterling through an External Account, or in dinars through an appropriate dinar account of a nonresident.

Nonresident Accounts

Nonresident accounts are designated according to the residence of the account holder.

Imports and Import Payments

All imports require licenses, which are granted in accordance with an annual program based on the anticipated needs of the economy.

The import control policy aims at allowing adequate imports of all goods essential for domestic consumption and development. Imports of certain nonessentials are restricted. A few imports are prohibited for protective reasons—these include a variety of agricultural products and goods produced by certain newly established Iraqi industries—and all imports from Israel are prohibited.

Authorized exchange dealers may make exchange available upon presentation of the exchange control copy of the import license. Payments to Cyprus require special authorization.

Payments for Invisibles

All payments for invisibles require permission. Exchange is usually granted for travel, educational and medical expenses abroad, freight on exports carried on a c.& f. or a c.i.f. basis, insurance premiums, and royalties on certain motion-picture films. Exchange is not, however, granted to merchants for the insurance abroad of their imports or exports. For the transfer of interest and profits, exchange is provided if the amounts applied for are considered reasonable. Licensed dealers are permitted to transfer up to ID 50 a month for family maintenance on behalf of foreign nationals resident in Iraq, provided the remittances do not exceed half of the resident’s monthly income; for amounts exceeding this limit, it is necessary to refer to the exchange control authorities.

For residents traveling abroad, there is a basic allowance for each person of ID 100 a month for not more than three months in any one year. Travelers may take out ID 15 in Iraqi currency notes or the equivalent of ID 25 in foreign currency. Pilgrims to Saudi Arabia are permitted to take out the equivalent of ID 150 in foreign exchange, including up to ID 40 in the form of notes and coins. The granting of exchange to meet the costs of business travel is subject to administrative approval.

Exports and Export Proceeds

Exports of essential goods in short supply require licenses. Specified exports (e.g., certain kinds of livestock, certain foodstuffs in short supply, cereals and fruits, and raw materials in short supply) are prohibited, but some of these (e.g., wheat and certain fruits) may be exported if specially authorized by the High Supply Committee. All exports to Israel are prohibited. Generally, goods imported into Iraq may be re-exported, subject to license; however, such specified goods as cars and agricultural machinery may not be re-exported.

Exporters must declare their exports to ensure that foreign exchange proceeds are received and surrendered. However, foreign exchange proceeds from exports of dates to India, Pakistan, the United Arab Republic (Syrian Region), Lebanon, Jordan, Saudi Arabia, Kuwait, and the Persian Gulf Protectorates are exempt from the surrender requirement.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers may bring in foreign currency, including notes, in unlimited amounts, provided declarations are made to the Iraqi customs, and any unused amount may be re-exported. Travelers other than pilgrims returning from Saudi Arabia may bring in only ID 15 in Iraqi notes.

Capital

In general, all transfers of capital abroad require exchange control approval. The transfer of capital abroad by residents is not allowed, except for the 30 per cent of their deposits that authorized banks may be permitted to invest abroad. Nonresidents may import capital freely, but they must deposit it with a licensed dealer; such deposits may be converted into local currency at the official rate and repatriation to the country of origin is permitted. Foreign investment in Iraq is permitted freely, and exchange is provided for the repatriation of reasonable profits upon submission of an audited earnings statement and proof that local taxes have been paid. Interest payments may be made freely, subject to administrative checking.

Changes during 1958

February 17. The export subsidy of ID 1 per metric ton on exports of barley was terminated. This subsidy, which was instituted on July 29, 1957, had applied only to shipments in lots of 100 tons or more, shipped to ports other than Persian Gulf ports.

February 22. Cement Excise Tax Law No. 7 of February 4, 1958 came into effect. It provided for a tax equivalent to US$1.40 per metric ton on locally produced cement. The tax on all cement that is exported is refunded.

February 28. Allocations totaling ID 18.1 million were made for imports from the dollar area for 1958. Although this was the same as the amount allocated in 1957, changes were made in specific groups, with higher allocations for brake and axle oils, batteries, medical and surgical instruments, milk powder, baby foods, and miscellaneous items.

March 1. The Banks Control Law of 1950, which authorized Iraqi banks to invest abroad 50 per cent of their deposits, subject to Central Bank approval, was modified to reduce that percentage to 30.

July 20. All imports, regardless of origin, were made subject to import license. Some goods already imported were made subject to a new tariff before they could be cleared through the customs.

September 15. A list of products licensed for import until the end of 1958 was issued. It included textiles, sugar, tea, medicines, baby foods, fresh fruits and vegetables, seeds, construction equipment, electrical equipment, motors and machinery, measuring apparatus, typewriters, automobiles, motorcycles and bicycles, rubber tires, batteries and accumulators, special oils and lubricants, and garage equipment.

October 1. A trade and payments agreement containing provisions for technical cooperation was signed with Yugoslavia.

Note.—On February 15, 1959, the authorized banks were notified of changes in the prescription of currency requirements, following similar changes in the exchange control regulations of the United Kingdom.

Ireland

Exchange Rate System

The par value is Irish Pound 1 = US$2.80. Exchange rates are based on the parity of the Irish pound with sterling and the London market rates for sterling against other currencies, maintained between official limits.

Administration of Control

Exchange control is operated by the Department of Finance, whose permission is required before orders may be placed for goods originating outside the Sterling Area, unless the goods are covered by the General Exemptions. Much of the authority for approving normal payments is delegated to commercial banks authorized for this purpose. Import licenses, where necessary, are issued by the Department of Industry and Commerce if the goods are of an industrial nature, or by the Department of Agriculture if the goods are agricultural in character. Import licensing is not used for exchange control purposes. Import and export controls are administered by the Revenue Commissioners.

Prescription of Currency

The Irish Republic is one of the territories of the Sterling Area and payments to and from other parts of the Sterling Area may be made without formality. Authorized payments to countries outside the Sterling Area may be made in Irish pounds or sterling through an External Account or in any non-sterling currency. The proceeds of exports to countries outside the Sterling Area may be accepted in Irish pounds or sterling through an External Account or in any specified currency.

Nonresident Accounts

Accounts of persons resident in other countries of the Sterling Area are treated as resident accounts. Accounts of persons resident in countries outside the Sterling Area are treated as nonresident accounts and, with the exception of Blocked Accounts (see below) are designated External Accounts. External Accounts may be credited with payments authorized for transfer to countries outside the Sterling Area, with transfers from other External Accounts in Irish pounds or in sterling, and with the proceeds in Irish pounds of any non-sterling currency sold by a nonresident to an authorized bank. Balances on these accounts may be transferred freely to other External Accounts in Irish pounds or in sterling, used for payments to residents, or converted into any non-sterling currency.

Blocked Accounts are credited with capital funds due to persons resident outside the Sterling Area and not eligible for transfer. These funds arise from such sources as the sale of Irish securities, proceeds from sales of real estate exceeding £1,000, and the Irish estates of persons who at the time of death were resident outside the Sterling Area. Funds in these accounts may be invested through the stock exchange in Irish or sterling securities which cannot be redeemed within five years from the date of investment. They may also be used for the expenses of the account holder and his family during visits to Ireland and for the upkeep of the account holder’s property in Ireland. Balances on Blocked Accounts may be transferred freely to other Blocked Accounts regardless of the account holders’ countries of residence, with the exception that transfers may not be made to the account of a resident of Denmark, the Faroe Islands, Greenland, Norway, or Sweden from the account of a person resident outside those countries.

Imports and Import Payments

The import of goods into Ireland is subject to two types of administrative control: (1) regulations applied by the Department of Industry and Commerce under the Control of Imports Acts 1934 and 1937, and by the Department of Agriculture under the Agricultural Produce (Regulation of Imports) Act 1938 and the Acts relating to dairy produce and cereals, and (2) regulations applied by the Department of Finance under the Exchange Control Acts 1954 and 1958. Only the former are used to limit the quantity of goods imported ; they cover only a limited range of commodities for protective purposes. The regulations of the second type also have limited application; they cover only those goods whose origin is outside the Sterling Area, even though an import license has been obtained already. These measures are not, in present practice, used restrictively.

Under the first type of control, imports of certain commodities are subject to quota restrictions which, with minor exceptions, are on a global basis; individual import licenses are required for these goods. All other imports are free from this import licensing. However, those goods which require a license, as well as those which do not, are subject to the second type of control, under which the permission of the Department of Finance must be obtained before orders may be placed for goods originating outside the Sterling Area and not covered by the General Exemptions.1 However, the Irish authorities have stated that this permission is at present granted automatically.

For permitted imports, appropriate exchange or permission to credit Irish pounds or sterling to an External Account is granted automatically. The submission of an exchange control form is required for amounts exceeding £250.

Payments for Invisibles

Payments to other territories of the Sterling Area are not subject to exchange control unless they are for transactions outside the Sterling Area. Payments to persons resident outside the Sterling Area require approval, but there is a general authority covering the costs of transport, handling, and insurance of Irish imports and exports. Other payments for invisibles are authorized freely, except that there are limitations on payments for tourism and film rentals. There is a basic allowance of exchange for tourist travel of £100 for each adult for 12 months. Not more than £10 in Sterling Area notes or £100 in other currency notes may be taken out of the country to a destination outside the United Kingdom.

Exports and Export Proceeds

A system of export licensing is applied to a limited range of goods. Exporters of goods to countries outside the Sterling Area are required to obtain payment for the goods in the manner prescribed in the regulations within six months of shipment, if the value of the goods exceeds £100. When payment is received in specified currencies, the exchange must be sold to an authorized bank. Exchange control forms are required for exports exceeding £500 to countries outside the Sterling Area.

Proceeds from Invisibles

There are no specific requirements governing exchange receipts from invisibles, but if specified currencies are received they must be sold to an authorized bank. There are no limitations on the import of Irish or foreign banknotes.

Capital

Exchange control approval is required for all transfers of capital to countries outside the Sterling Area. Applications by emigrants are approved within certain fixed allowances; those from other persons are considered on their merits. Incoming capital received in specified currencies must be sold to an authorized bank, except that certain capital receipts in foreign currency may be reinvested in securities payable in that currency, provided the reinvestment is carried out within six months through a bank, a stockbroker, or a solicitor. Transactions in securities are controlled to ensure that capital is not transferred outside the Sterling Area.

Changes during 1958

February 10. Austrian schillings were listed as a specified currency.

February 10. The General Exemptions covering imports of goods were extended to cover precious metals, precious stones, etc., to any value when originating in the Transferable Account Area and to a limit of £250 in any period of three months when originating in the dollar area.

February 10. Exchange control forms were no longer required for exports not exceeding £500 to countries outside the Sterling Area.

February 28. All restrictions on the import of banknotes were removed.

April 9. Special import levies imposed in March 1956 and July 1956 on a wide range of less essential consumer goods to correct a serious deficit in the balance of payments were removed or reduced for certain articles.

May 14. An initial par value for the Irish pound was agreed with the International Monetary Fund.

December 30. American, Canadian, and Transferable Accounts were designated External Accounts. Balances on External Accounts could be transferred freely to other External Accounts or converted into any non-sterling currency. The prescription of currency requirements were simplified by allowing authorized payments to any country outside the Sterling Area to be made in Irish pounds or sterling through an External Account or in any non-sterling currency, and permitting the proceeds of exports to countries outside the Sterling Area to be accepted in Irish pounds or sterling through an External Account or in any specified currency.

Israel

Exchange Rate System

The par value is Israel Pounds 1.800 = US$1. This rate applies to most transactions, but for other transactions special premiums and discounts give rise to other rates. Premiums ranging from I£0.600 to I£1.200, per US$1, are applied to that part of the exchange proceeds of exports of industrial products which is regarded as value added by domestic industry, when the proceeds are received in certain currencies or the goods are exported to West Africa. A subsidy of I£0.400 per US$1 is given on exchange payments for imports of informational media. (See Table of Exchange Rates, below.)

Dealings through Blocked Accounts take place at freely negotiated rates; such accounts are available for certain purposes (see section on Nonresident Accounts, below).

Administration of Control

Exchange control is exercised by the Department of Foreign Exchange of the Treasury (Ministry of Finance), under the responsibility of the Controller of Foreign Exchange in cooperation with other government agencies, and is carried out through the authorized banks. The official exchange rates are published by the Bank of Israel.

Prescription of Currency

Payments and receipts must be effected in the currency and manner prescribed by the exchange control authorities. Settlements with countries with which payments agreements are in force1 are usually made in U.S. dollars as an accounting unit, sterling, or the currency of the partner country.

Nonresident Accounts

Nonresidents’ funds are held either as foreign currency accounts or as local currency accounts. A nonresident abroad may use his foreign currency account freely; if in Israel, he may convert it into local currency. Local currency accounts of nonresidents are of two types: (1) Registered Accounts for foreign aviation, shipping, insurance, and film companies and for others, and (2) Blocked Accounts, which may be used for investment in Israel securities, for the purchase of real estate, for the payment of property taxes payable by the account holder, for tourist expenses in Israel of up to I£100 a day for the account holder and the same amount for each member of his family if the account has been held for at least one year, and for remittances of up to I£1,000 to relatives who are Israel residents if the account has been held for at least one year. Transfers of Blocked Accounts from one resident to another are permitted at freely established rates provided the amount in question is not less than I£6,000 or represents the balance of the account. Blocked Accounts are at present opened only for the holding of funds derived from former investments; other nontransferable funds are credited to Registered Accounts, which may be used only with special approval.

Imports and Import Payments

All imports require licenses. Exchange is automatically granted at the official rate. A subsidy of I£0.400 per US$1 on imports of books and newspapers under the Informational Media Guaranty program is paid at the time the importer purchases the exchange to pay for the import. An advance deposit of 10 per cent of the c.i.f. value of the import is required before the license is issued. A 20 per cent deposit is required for “cash against documents” financing. Upon approval of the import license and the opening of a letter of credit, the required foreign currency must be purchased against Israel currency, according to the terms of the import license. The following are the most frequent terms: (1) For “cash on completion” documentary credits, 30 per cent of the value of the import must be deposited in Israel currency; the amount deposited in a WAPA (import license deposit) account is considered as part of this payment. (2) For “cash” documentary credits, the entire amount required for the purchase of foreign currency must be deposited with the Bank of Israel. Here, too, the amount deposited in the WAPA account is considered as part of the payment.

Payments for Invisibles

Payments abroad for invisibles require licenses. All authorized payments are made at the official rate. The annual transfer of profits, interest, and repayments on loans, to a maximum of 10 per cent of invested capital approved under Clause 21 of the Law for the Encouragement of Capital Investments (1950), is allowed. The export of Israel banknotes is prohibited. Foreign tourists leaving Israel are permitted to repurchase through authorized dealers part of the same foreign currency they previously exchanged into Israel pounds, but not more than the equivalent of I£72. Israel residents intending to travel abroad may buy from the holder of a PAMAZ Transfer account (see section on Proceeds from Invisibles, below) foreign securities at free market prices. After holding their securities for at least 30 days, they may sell them abroad and receive out of the proceeds an amount not exceeding US$100 or its equivalent, for travel purposes.

Exports and Export Proceeds

Locally produced goods that fulfill certain requirements may be exported without a license; other exports require licenses. Export proceeds in foreign currencies must be collected at the official rate of I£1.800 per US$1 and may be surrendered at that rate or deposited with authorized commercial banks in PAZAK accounts (foreign exchange accounts—see section on Proceeds from Invisibles, below). Alternatively, certain industries are permitted to keep all or part of their export proceeds in PAMAZ accounts (another type of foreign exchange account) and to use them for the purchase abroad of raw materials related to production for export.

Exports of industrial products, except cement, receive premiums varying according to the currency obtained. These premiums are calculated on the net value added, i.e., the value of the export after deducting the direct and indirect foreign exchange costs. They are as follows (the premiums are expressed in Israel pounds per US$1 of value added): (1) for proceeds in U.S. dollars, Canadian dollars, sterling, Swiss francs, Belgian francs, deutsche mark, Latin American currencies (except Argentine and Brazilian clearing currencies), Italian lire, Netherlands guilders, Swedish kronor, and Danish, French, Finnish, Greek, Icelandic, Norwegian, Portuguese, Turkish, and Yugoslav clearing currencies, I£0.850; (2) for proceeds in Argentine, Brazilian, Bulgarian, Polish, Rumanian, and Uruguayan clearing currencies, (a) no premium if the value added is less than 20 per cent of the export value, (b) I£0.600 if the value added amounts to 20 to 40 per cent of the export value, and (c) I£0.800 if the value added amounts to 40 per cent or more of the export value. An additional export premium of I£0.350 per US$1, also calculated on the net value added, is given for exports of the same commodities (i.e., industrial goods) to West Africa.2 Export premiums are not paid if an exporter chooses to retain exchange in a PAZAK account or in a PAMAZ account instead of surrendering it.

Proceeds from Invisibles

Exchange proceeds from invisibles, in general, must be surrendered or kept as time deposits (PAZAK accounts). If not surrendered at the official rate, all foreign exchange received from abroad—except that received under bilateral payments agreements or obtained by semipublic institutions—may be deposited in these accounts. PAZAK accounts may be opened in most currencies except those of the bilateral clearing accounts. The use of PAZAK accounts requires the approval of the exchange control authorities. Residents of Israel who receive U.S. or Canadian dollars, sterling, Swiss francs, deutsche mark, Belgian francs, Netherlands guilders, or Swedish kronor from inheritances and legacies, social security payments, pensions, rentals, and personal compensation, or, in the case of persons who became residents of Israel before June 1, 1957, from the liquidation of property abroad for the purchase of which no foreign exchange had been allocated, and who sell the exchange or any part thereof to the Ministry of Finance at the official rate, are entitled to receive a bonus in the form of interest-bearing debentures with a face value of 20 per cent of the Israel pounds received by them. Alternatively, 20 per cent of the foreign exchange so received may be retained in a PAMAZ Transfer account (a third type of foreign exchange account) and up to 80 per cent may be deposited in a PAZAK account. Holders of PAMAZ Transfer accounts may use them for certain purposes, including the purchase of foreign securities, for themselves or their immediate families without prior approval. Foreign securities purchased to the debit of a PAMAZ Transfer account may be sold to other Israel residents at free market quotations. Furthermore, residents may purchase treasury promissory notes in foreign currency against dollars, sterling, or Swiss francs accruing to them from legacies, gifts, life insurance policies, liquidation of assets abroad, or restitution payments. The notes bear interest at 5 per cent, payable semiannually, and are redeemable in 15 years, though holders may demand repayment by giving 90 days’ notice. Importers holding import licenses with allocation of foreign currency may, without giving the 90 days’ prior notice, use the notes registered in their names for payments of the value of the foreign currency allocated to them. Payments will be effected at the rate of exchange prevailing on the date of redemption or repayment.

For a period of two years after entering Israel, immigrants and temporary residents are exempt from surrendering their foreign currencies to the Treasury or depositing them in PAZAK accounts, and they may keep these currencies with authorized banks in Israel or with foreign banks abroad. All debits to such accounts, however, require prior authorization from the exchange control authorities. Some categories of new immigrants who transfer foreign exchange to Israel may be granted a bonus of I£0.700 per US$1, over and above the conversion rate of LE1.800 per US$1, up to $10,000 per family. Half of this bonus is in the form of a grant by the Jewish Agency and the other half is in the form of a loan to the immigrant repayable to the Jewish Agency within four or five years.

Tourists visiting Israel are expected to bring with them the amounts of foreign currency that they will need during their stay. They are entitled to subsidies in various forms, such as a sales tax exemption amounting to 20 per cent of any purchase in an authorized store and a discount of 22 per cent on hotel bills. The import of Israel banknotes is prohibited. Tourists and others visiting Israel who are holders of Blocked Accounts (see section on Nonresident Accounts, above) are permitted to draw upon such accounts to the extent of I£100 a day for themselves and the same amount for each member of their families, provided they have held the account for one year or more.

Capital

Foreign exchange representing incoming capital has to be surrendered at the official rate. Capital brought into Israel for the purpose of investment can, subject to approval, be granted preferential treatment in accordance with the Law for the Encouragement of Capital Investments of March 29, 1950, which permits the repatriation of capital and transfers of earnings up to 10 per cent annually of the invested capital. Repayment and amortization of capital may also be transferred, provided the total value of profits, interest, and repayment does not exceed 10 per cent of the total investment in any one year. However, the rate of repatriation is limited to 7 per cent annually if the investment is in a building project. In June 1955, an amendment to this law made the privileges more automatic and reduced taxation on new enterprises. Foreign investments effected in Israel without taking advantage of the 1950 law do not benefit from these transfer privileges.

Payments due to nonresidents and not permitted to be transferred abroad may be credited to Registered or Blocked Accounts (see section on Nonresident Accounts, above).

Proceeds accruing from the repatriation or liquidation of foreign assets held by residents are treated in the same way as proceeds from invisibles.

Transfers abroad of a capital nature by residents are not permitted.

Exports of, and transactions in, securities involving nonresident interests are subject to approval. However, foreign capital in Blocked Accounts may be invested freely in securities quoted on the Tel Aviv Stock Exchange.

Table of Exchange Rates (as at December 31, 1958)(Israel pounds per U.S. dollar)
BuyingSelling
1.400(Official Rate with I£0.400 Exchange Subsidy)
Imports of informational media under the Informational Media Guaranty program.
1.800(Official Rate)1.800(Official Rate)
Most exports.3 Invisibles, including appeals and charitable donations. Capital.Other authorized imports. Authorized invisibles. Capital.

Changes during 1958

January 1. The premium given on the net value added to industrial exports for receipts in Italian clearing dollars, Netherlands guilders, Swedish kronor, and French clearing francs was increased to that given for receipts of dollars, sterling, etc. A premium of I£0.850 per US$1 was granted on 40 per cent of the cost of air freight for Israel exports carried by EL-AL (Israel Airlines).

January 1. The subsidy on imports of drugs and medicines was abolished, the only remaining import subsidy being that on books, etc., under the Informational Media Guaranty program.

March 17. A bilateral payments agreement was signed with Uruguay.

April 1. The special rate of I£1.500 per US$1 for exchange receipts from charitable organizations was abolished.

May 1. The bilateral payments arrangement with Italy was terminated.

June 9. A bilateral payments arrangement with Portugal came into effect. It provided for settlements in clearing dollars.

June 23. The premium on the net value added to industrial exports to Greece was raised to I£0.850 per US$1, and the same premium was introduced with regard to Portuguese clearing currency. Premiums on the net value added to exports to Bulgaria, at the rates of LE0.600 and I£0.800 per US$1, were introduced.

July 4. A bilateral trade and payments agreement was signed with Ghana.

July 15. The premium on the net value added to industrial exports for receipts in Norwegian, Danish, and Finnish clearing currencies was increased to I£0.850 per US$1.

August 15. Premiums of I£0.600 and I£0.800 per US$1 were introduced on the net value added to exports to Uruguay, and of I£0.850 per US$1 on the net value added to exports to Yugoslavia.

August 15. The 13 per cent discount on export proceeds received in Yugoslav clearing currency was abolished.

November 11. Permission was granted to export without an export license locally produced goods that fulfill certain requirements.

November 20. Exports to Iceland were given the export premium of I£0.850 per US$1 of added value, after a deduction of a discount of 10 per cent of the export proceeds. This measure was retroactive to October 7.

December 1. The 30 per cent discount on the proceeds of exports to Turkey was abolished, and exports to that country were made eligible for the premium of I£0.850 per US$1 of added value.

December 7. The distinction between “A” and “B” Blocked Accounts was abolished, and the margins within which balances in those accounts were allowed to be used for certain local payments were increased.

December 7. Israel residents received a tourist allowance of US$100 through the sale of foreign securities acquired from holders of PAMAZ Transfer accounts, in addition to an allowance of US$10 at the official exchange rate.

December 30. The 10 per cent discount on the proceeds of exports received in Hungarian and Polish clearing dollars was abolished.

Italy

Exchange Rate System

No par value for the Italian Lira has been established with the Fund. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of Lit 620.50 buying, and Lit 629.50 selling, per US$1. Exchange rates for certain externally convertible European currencies1 are within approximately 1½ per cent on either side of the par value for those currencies. Forward premiums and discounts are left to the interplay of market forces. Authorized banks are allowed to engage in spot and forward exchange transactions in any currencies.

Exchange Control Territory

Exchange control is not exercised over payments from the Italian Republic to the Republic of San Marino. There are special arrangements for payments between Italy and the territory of Somaliland under Italian administration.

Administration of Control

The exchange control system is operated by the Italian Exchange Office (Ufficio Italiano dei Cambi) on the basis of instructions issued by the Ministry of Foreign Trade. All sales and purchases of exchange pass through banks authorized for this purpose.

Prescription of Currency

Payments to countries with which Italy has clearing agreements2 must be made by crediting the clearing account concerned; receipts from these countries may be obtained through the relevant clearing account, by debiting lire to a Foreign Account (see section on Nonresident Accounts, below), or in U.S. dollars, Canadian dollars, or externally convertible European currencies except Portuguese escudos.1 These currencies and Italian lire debited or credited to any Foreign Account may be used for settlements with all other countries, except that Danish kroner, Norwegian kroner, Swedish kronor, Swiss francs, U.S. dollars, and Canadian dollars may not be used to pay for imports from Brazil, and Danish kroner, Norwegian kroner, and Swedish kronor may not be accepted in payment of exports to Brazil.

Payments for transactions relating to securities, investments, dividends, interest, remittances of banknotes, etc., must be settled in lire through Capital Accounts (see section on Nonresident Accounts, below).

Nonresident Accounts

The main types of account in Italian lire which nonresidents are allowed to maintain with authorized banks in Italy are Foreign Accounts, primarily for current transactions, Capital Accounts, for financial transactions (mainly investments and income thereon, banknote transactions, and the travel expenses of nonresidents in Italy), and Accounts in Bilateral Lire, for transactions with Greece, Portugal, and Turkey. The use of these accounts is described below.

1. Foreign Accounts may be held by residents of any foreign country. They may be credited with transfers from other Foreign Accounts, with authorized current payments by residents of Italy, and with the proceeds of sales of U.S. dollars, Canadian dollars, and externally convertible European currencies except Portuguese escudos, and they may be debited for purchases of any of these currencies, or for transfers to any other Foreign Account, Capital Account, or Account in Bilateral Lire, and for payments to residents of Italy for current transactions.

2. Capital Accounts may be held by residents of any country. They may be credited with transfers from Foreign Accounts and from other Capital Accounts, with proceeds from sales by nonresidents of foreign banknotes in the Italian market and with Italian banknotes sent to Italy by banks abroad, with proceeds from the sale of foreign-owned personal property and real estate in Italy, and with payments arising from the regulation of foreign-owned capital in Italy under Legislative Decree No. 211 of March 2, 1948 and Law No. 43 of February 7, 1956. Capital Accounts may be debited for transfers to any other Capital Account, for the purchase of investments, for living and traveling expenses in Italy, for emigrants’ remittances from abroad, for payment of taxes, and certain other expenses. They are not exchangeable in Italy into foreign currency, except in banknote form, and transfers from them to Foreign Accounts are not permitted.

3. Accounts in Bilateral Lire are held by foreign authorized banks, tourist agencies, shipping lines, airlines, and insurance companies, with headquarters in Greece, Portugal, or Turkey. These accounts may be credited with authorized payments by residents of Italy due to the country of the account holder, with sales of foreign currency, and with transfers from Foreign Accounts. They may be credited or debited for transfers to or from another Account in Bilateral Lire related to the same country, and debited for payments to the Italian Exchange Office for transfer to the country of the account holder. There are special foreign accounts for the capital transactions of residents of Ecuador and Paraguay.

Imports and Import Payments

Import licenses for goods from OEEC countries and their associated territories, Afghanistan, Ethiopia, Saudi Arabia, the Sudan, Thailand, the United Arab Republic (Egyptian Region), and Yemen are required for only a few items listed in a Tabella “B Import.” Licenses are also required for commodities not listed in a Tabella “A Import” when imported from the dollar area and a few other countries.3 Separate lists (Tabella “C Import” and Liste Particolari) indicate the goods that may be imported without import license from various other countries. All other imports are subject to license. For all imports over Lit 250,000 in value, an import document completed by an authorized bank is required. Trade with Chile is settled on a compensation basis. Imports from Paraguay may be linked to exports to that country.

For all authorized imports, the exchange control authorities grant exchange or approve payment in Italian lire to a nonresident account in accordance with the established methods of payment (see section on Prescription of Currency, above). International postal money orders may be used to pay for imports not exceeding Lit 50,000 in value.

Payments for Invisibles

In principle, payments abroad for invisibles require licenses issued by the exchange control authorities; but in practice, the authorized banks may grant foreign exchange freely for expenses incidental to trade transactions. They are also permitted to approve payments abroad up to specified limits for other types of expenditure, such as travel for business and tourism, health and education, patents and trademarks, and remittances of income on foreign-owned capital. Exchange is granted freely for remittances of earnings on investments in Italy in productive enterprises (see section on Capital, below). Residents may use international postal money orders for financial payments in the currency and within the limits established for each country. As a rule, when the cost of insurance premiums is being met by Italian exporters or importers, payment to domestic or foreign insurance companies operating in Italy is in lire; premiums may be paid in foreign exchange or in lire credited to a Foreign Account or an Account in Bilateral Lire only for goods arriving in Italy or being sent out of Italy the insurance on which has been stipulated by contractual agreement with an insurance company chosen by the seller or buyer abroad.

Residents traveling to dollar and OEEC countries may obtain from the banks exchange up to the value of Lit 300,000 annually for each person (Lit 500,000 will be provided for trips lasting more than 15 days). Persons traveling abroad may take with them Lit 50,000 in Italian banknotes, and if they refrain from obtaining the foreign exchange allocation, they may take an additional Lit 300,000 in Italian banknotes.

Exports and Export Proceeds

A few commodities listed in a special table (Tabella Esport) require export licenses. All exports exceeding Lit 250,000 in value require an export document completed by an authorized bank. Payment must be received in accordance with the regulations (see section on Prescription of Currency, above). Licenses for exports to Paraguay may require that such exports be linked to an equivalent value of imports from that country.

Exchange receipts must be surrenderd to an authorized bank within seven days of receipt. Current proceeds in U.S. dollars, Canadian dollars, and externally convertible European currencies except Portuguese escudos (see footnote 1) may be retained by the recipients in foreign exchange accounts for a certain period, during which such balances may be utilized for permitted transactions or may be sold to other residents or to authorized banks; the banks are allowed to sell such balances to residents for authorized transactions and to negotiate them freely with the Exchange Office or among themselves. After expiration of the retention period, unused balances must be sold to the Exchange Office at the lowest official exchange rate quoted during the retention period (these official rates are determined daily on the basis of the average closing rates in Milan and Rome).

Proceeds from Invisibles

Receipts from invisibles are subject to the same surrender requirements as receipts from exports, except that shipping and insurance companies and travel and forwarding agencies may keep operating accounts in U.S. dollars, Canadian dollars, and any externally convertible European currency except Portuguese escudos. Persons may bring in Italian banknotes in any amount.

Capital

In accordance with the provisions of Law No. 43 of February 7, 1956, all restrictions on the repatriation of capital invested in the establishment or expansion of productive enterprises and on the transfer of income therefrom were abolished. For other investments, the original capital may be repatriated after a minimum period of two years and the transfer of income is limited to 8 per cent. Any amounts which arise from investments that are not freely transferable abroad may be credited to Capital Accounts (see section on Nonresident Accounts, above).

Investments abroad by residents are subject to approval, which is granted only when such investments are considered economically advantageous. Residents may be authorized to make investments abroad with foreign banknotes purchased in Italy.

The export of securities is not permitted, except those which are owned by nonresidents and have been purchased against U.S. dollars, Canadian dollars, or externally convertible European currencies except Portuguese escudos.

Banknotes

Residents are authorized to receive foreign banknotes from nonresidents as gifts, or in payment for goods sold and services rendered to tourists during their stay in Italy. Banknotes so acquired must be sold to an authorized bank within seven days. Banks abroad may remit Italian banknotes to authorized banks in Italy for the credit of a Capital Account appropriate to the remitting country. Authorized banks may deal among themselves or with the Italian Exchange Office in foreign banknotes, sell foreign banknotes to residents traveling abroad or investing overseas, or export foreign banknotes for credit or for exchange into U.S. dollars, Canadian dollars, or externally convertible European currencies except Portuguese escudos.

Changes during 1958

January 1. A list of goods was published for which import licenses would be granted freely during 1958 or, for a few of the items, during the first quarter or the first semester.

January 1. Settlements with Finland and Hungary would be made in multilateral currencies, and Finland and Hungary were removed from the group of bilateral countries in the Italian exchange control regulations.

January 11. Settlements with the U.S.S.R. would be made in multilateral currencies, and the U.S.S.R. was removed from the group of bilateral countries in the Italian exchange control regulations.

January 29. The amount of Italian banknotes which persons could take out of Italy was raised from Lit 30,000 to Lit 50,000 per trip.

February 1. Foreign Ordinary Accounts of free currency countries and those of EPU countries were combined in one group—Capital Accounts—applicable to residents of all countries except those outside EPU with which Italy has bilateral payments agreements.

February 10. Settlements with Iran would be made in multilateral currencies, and Iran was removed from the group of bilateral countries in the Italian exchange control regulations.

March 1. Settlements with Rumania would be made in multilateral currencies, and Rumania was removed from the group of bilateral countries in the Italian exchange control regulations.

April 1. Settlements with Bulgaria and Poland would be made in multilateral currencies, and Bulgaria and Poland were removed from the group of bilateral countries in the Italian exchange control regulations.

May 1. Settlements with Czechoslovakia and Israel would be made in multilateral currencies, and Czechoslovakia and Israel were removed from the group of bilateral countries in the Italian exchange control regulations.

May 20. Settlements with Spain would be made in multilateral currencies, and Spain was removed from the group of bilateral countries in the Italian exchange control regulations.

May 22. Residents of countries with which Italy had bilateral payments agreements (Albania, Ecuador, and Paraguay) were allowed to hold Capital Accounts (see February 1, above). The classification of Foreign Ordinary Accounts (Other Countries) was discontinued and such accounts were redesignated Capital Accounts.

June 1. Settlements with Albania would be made in multilateral currencies, and Albania was removed from the group of bilateral countries in the Italian exchange control regulations.

September 16. Accounts in Bilateral Lire in the names of residents of Ecuador and Paraguay were changed into special foreign accounts (Transitori Diversi) available, as previously, for certain payments in Italy.

December 29. Foreign Accounts in Free Lire and Foreign Accounts in Multilateral Lire were combined in a single category, Foreign Accounts; these accounts would be freely transferable to other Foreign Accounts and convertible into dollars or any externally convertible European currency except Portuguese escudos. The prescription of currency requirements were correspondingly simplified. Fixed official limits for dealings in U.S. dollars were set at Lit 620.50 buying, and Lit 629.50 selling, per US$1.

Japan1

Exchange Rate System

The par value is Japanese Yen 360 = US$1. The official rates of authorized banks for telegraphic transfers are ¥ 359.20 buying, and ¥ 360.80 selling, per US$1. Exchange rates are uniform.

Administration of Control

A Ministerial Council, whose main function is to establish the foreign exchange budget and approve its revision, is the highest control authority on the policy level. The Ministry of International Trade and Industry carries out exchange and trade control policy in respect of merchandise transactions and of nonmerchandise transactions incidental thereto. The Ministry of Finance, through its Foreign Exchange Bureau, carries out policy in respect of prescription of currency and method of settlement, the operation of the foreign exchange fund, payments for nonmerchandise transactions, and capital transactions and transfers. The Ministry of Finance also has the function of determining exchange rates. The Bank of Japan, as the Government’s agent, executes the above functions in part. Authorized banks carry out the controls on the technical, administrative level.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles are made in accordance with the following prescription of currency requirements: (1) Payments to and from open account countries2 are made through the accounts established under the bilateral agreements with these countries. Alternatively, incoming payments may be accepted in any of the designated currencies.3 (2) Payments to and from all other countries may be made in any of the designated currencies.3 Deviations from these prescription of currency requirements are subject to individual licenses from the control authorities.

Nonresident Accounts

1. Nonresident Yen Deposit Accounts. Nonresidents may be authorized individually to keep Nonresident Yen Deposit Accounts. Debits to these accounts for the personal needs of the account holder or for certain payments in yen without compensation to a resident or to a nonresident are authorized freely. Debits to these accounts for conversion into foreign currency require individual licenses.

2. Nonresident Foreign Currency Deposit Accounts. To facilitate the application of exchange control, nonresidents may be authorized to keep deposit accounts with banks in U.S. dollars, sterling, and other designated currencies.4

3. Foreign Investors’ Deposit Accounts. Certain proceeds of foreigners’ liquidated investments may be placed in Foreign Investors’ Deposit Accounts. These accounts may be used for remittances abroad or for making other investments under certain conditions.

Imports and Import Payments

Practically all imports are subject to individual import license. Most of the authorized imports are planned in the exchange budget and communicated through Import Announcements.

There are two different licensing procedures for imports requiring payment abroad: (1) Under the foreign exchange fund allocation system (covering the greater part of imports of foodstuffs, raw materials, and other essentials), the importer must first obtain from the trade control authorities an allocation of foreign exchange. If the allocation is granted, the importer receives an exchange allocation certificate which entitles him to receive an import license from a foreign exchange bank automatically upon application. Exchange allocation certificates for most commodities under this system are issued on a global basis, without regard to the country of origin or the currency of settlement. (2) Under the automatic approval system, imports are, in effect, free from quantitative restriction, since licenses for specified commodities are issued freely by the authorized banks on application, up to the total amount appropriated for the system in the exchange budget, and additional amounts are provided after the original appropriation is exhausted. Nearly 98 per cent of the items subject to the automatic approval system may be imported from any country.

Under both licensing procedures, licenses for imports are issued by authorized banks ; but when the proposed payment is not in accordance with the prescribed methods of settlement, the import requires prior approval of the Ministry of International Trade and Industry. In specified cases, such as imports without exchange, import licenses are issued by the Ministry of International Trade and Industry.

As a general rule, applicants for import licenses must furnish a deposit in the form of currency, securities, or other collateral; the amount of this deposit is calculated by multiplying the value of the intended import by a coefficient that differs (the highest being 5 per cent) for various categories of goods. The deposit is returned after the goods have been imported or if the import transaction is canceled for a reason acceptable to the control authorities.

Payments for Invisibles

Contracts for specified services are subject to individual license, e.g., services between residents which give rise to foreign claimable assets, and services between residents and nonresidents when payment is to be effected by a nonstandard method or over a period longer than three months. Payments for invisibles are subject to individual license; however, payments considered as part of a contract for service that has been authorized may be made freely. Payments on account of costs incidental to authorized imports and exports and specified categories of transfers—e.g., those in connection with insurance and shipping—are permitted freely. Residents may take out of Japan ¥ 2,000 in Japanese currency to be spent only on Japanese ships or on Japanese aircraft. Applications to take up to ¥ 20,000 are accepted, subject to the approval of the customs director.

Exports and Export Proceeds

All exports must be registered with an authorized bank (“bank certification”) in order to enforce the requirements concerning prescription of currency and surrender of proceeds. The following exports are subject to individual license: goods in short supply in the domestic market, strategic materials, imported goods, goods on the list of prohibited exports, gold or gold alloy in bullion form, and goods exported by transshipment or under consignment, processing, or compensation contracts.

Export proceeds have to be surrendered within ten days from the date of acquisition. Under the Special Foreign Exchange Allocation System, exporters are entitled to receive, through simplified procedures, allocations of foreign exchange of up to 3 per cent of the export proceeds surrendered, for specified purposes (advertisement for trade promotion, imports of samples, etc.), but there is no actual retention of foreign exchange by exporters.

Proceeds from Invisibles

Receipts by the standard methods of settlement may be accepted without a license. However, contracts for specified services are subject to individual license, e.g., services between residents which give rise to foreign claimable assets, and services performed for nonresidents when payment is to be received by a nonstandard method. Receipts from invisibles must, as a rule, be surrendered. Residents may bring into Japan in Japanese currency any unspent balance of the amount which they took out legally ; otherwise, the import of Japanese currency by residents or nonresidents is prohibited.

Capital

In accordance with Law No. 163 of May 10, 1950, foreign investments in Japan are generally subject to approval. All acquisitions of stocks, debentures, investment trust certificates, and claims in the form of loans by foreign investors are subject to individual license if a guarantee for remittance of income or principal is desired. (In specified cases of acquisitions of stocks, such a license is always required.) These acquisitions must be effected against the yen proceeds from the sale of foreign exchange or its equivalent. Stocks in the form of stock dividends on earned surplus or revaluation of assets may be acquired freely, but application for remittance rights must be made within three months from the date of acquisition. Proceeds from sales of stocks, and investment trust certificates, dividends, interest, and receipts from technological assistance contracts, may be reinvested, but not proceeds from sales of debentures before maturity. In the event of expropriation or compulsory sale of a foreign investment, the amount paid on account of expropriation may be repatriated freely.

Transfers abroad of earnings on foreign investments are permitted. Up to 20 per cent of the proceeds of liquidated stocks may be remitted in any one year following a two-year deferment after the investment; for stocks purchased with proceeds from the sale of other stocks, the two-year period runs from the date of the last purchase. In the event of capital loss, only the actual proceeds may be remitted. For debentures and claims in the form of loans, the entire principal may be remitted at maturity only. After the redemption of investment trust certificates, the principal may be remitted in amounts of up to 20 per cent of the redeemed amount in any one year.

Purchase rights on stocks may be sold if the issuing company gives its consent, or the value of the rights can be realized by selling the stocks with rights and purchasing the same stocks without rights or purchasing other stocks. (This constitutes a preferential treatment of foreign investors, since under the Japanese commercial code stock purchase rights may not be sold.) All other capital transactions and transfers having an exchange control aspect are subject to individual license; in practice, however, an exchange license is not required for foreign investments in Japan if remittance of income or principal is not desired.

Transfers of capital abroad and foreign investments by residents are subject to approval, which may be given if such investments are recognized as necessary for balance of payments reasons.

Imports and exports of securities are subject to approval.

Changes during 1958

April 26. A trade and payments agreement with Poland became effective under which settlements were to be made in transferable sterling or U.S. dollars.

May 1. The percentages of import guarantee deposits were scaled downward. The requirement that import guarantee funds must be deposited with the Bank of Japan was discontinued.

May 10. The payments agreement with Belgium-Luxembourg specifying payments in U.S. dollars was terminated and a new payments agreement, signed on April 30, became effective; under this agreement, settlements were to be made in Belgian francs or sterling.

July 9. Foreign exchange banks could purchase transferable sterling for U.S. dollars in overseas markets if special approval was obtained.

September 1. To simplify export procedures, some 200 items were dropped from the list of goods subject to specific export license.

October 16. A new trade and payments agreement was signed with Brazil. In consequence, settlements through the open account were terminated and would be made in transferable sterling or any other transferable or convertible currency that might be agreed. The sterling proceeds of Brazilian exports to Japan were to be auctioned by Brazil for the purchase of Japanese goods only.

October 17. Foreign exchange banks were authorized to engage in outright buying and selling of transferable sterling against U.S. dollars in overseas markets without prior approval of the authorities.

November 8. A new trade and payments agreement was signed with the Egyptian Region of the United Arab Republic. In consequence, settlements through the open account were terminated and would be made in transferable sterling or in any other transferable or convertible currency that might be agreed.

December 26. Prescription of currency requirements were simplified so that countries were divided into three groups: hard currency countries, open account countries, and all others.

Note.—The following changes were made in January 1959:

January 5. All restrictions on spot and forward transactions by foreign exchange banks in the designated currencies were removed.

January 31. The prescription of currency requirements were simplified further by dividing countries into only two groups—open account countries and all others. All settlements with the latter group could be made in any designated currency.

Jordan

Exchange Rate System

The par value of the Jordan Dinar is JD 1 = US$2.80. The official rates for the U.S. dollar are based on the buying and selling rates in the London market. There are two exchange markets in Jordan, one primarily for transactions in non-Arab League currencies, where official rates are applied, and the other only for transactions in Arab League currencies, where rates fluctuate in accordance with supply and demand.2 A tax of ½ of 1 per cent is levied on sales of exchange for transactions in invisibles, except education, whether payment is made at the official or the free rate. Fees of 4 per cent for goods paid for at the official rate and ½ of 1 per cent for goods paid for at the free market rate are payable on import licenses.

Administration of Control

Exchange control is administered by the Exchange Control Department of the Ministry of Finance under the direction of the Controller of Currency. Import policy is formulated by an Import Committee, which is composed of the Controller of Imports, the Undersecretaries for National Economy and Customs, the Economic Adviser to the Ministry of National Economy, the Controller of Currency, and the Director of Income Tax. The regulations of the Import Committee are carried out by the Controller of the Import Department of the Ministry of National Economy.

Prescription of Currency

Transactions for which exchange at official rates is provided must in general be paid for in a currency prescribed on the individual import license, according to the country of origin. Payments to persons resident outside the Sterling Area may be made by crediting an External Account. Proceeds from exports and invisibles must be surrendered, where required, in the following manner: from Arab League countries, in any Arab League currency or in sterling from an External Account; from other countries outside the Sterling Area, in sterling or Jordan dinars from an External Account or in any specified currency. Jordan is a member of the Sterling Area and most of her trade is financed in sterling.

Nonresident Accounts

Authorized banks may open nonresident accounts designated in accordance with Sterling Area practice, subject to the prior approval of the Controller of Currency. These accounts must be fed by appropriate funds. The approval of the Controller of Currency is necessary for redesignation of residence, and for transfers from resident to nonresident accounts. Transfers between nonresident accounts and transfers from nonresident to resident accounts are permitted freely.

Imports and Import Payments

Imports of certain items3 and all imports from Israel are prohibited. Imports of industrial machinery require the approval of the Ministry of National Economy. All other imports except those covered by an agreement between Jordan and the exporting country require import licenses.

Payments are made at the official rate for imports of all goods originating in and shipped from non-Arab League countries, and in Arab League currencies at the free market rate for imports of goods originating in Arab League countries (except flour, wheat, barley, maize, lentils, beans, rice, dates, sheep, and goats, which are paid for at the official rate), or originating in a non-Arab League country and reshipped from an Arab League country (except petroleum products, tombac, and mineral oils, which are paid for at the official rate).

A fee of ½ of 1 per cent is payable on licenses for goods imported without exchange or paid for in Arab League currencies at the free market rate, and a fee of 4 per cent is payable on licenses for imports paid for at the official rate.

Licenses for Arab League commodities are valid for 4 months and those for non-Arab League commodities for 6 months. For the latter, the importer must open a letter of credit within 45 days of the date of issue of the license and must complete the process of importation within the period of validity of the license. If the importer chooses to pay against documents, the requirement that he open a letter of credit is dispensed with, provided the goods are shipped within 3 months of the date of issue of the license.

Payments for Invisibles

All payments for invisibles are subject to exchange control approval. Payments to countries outside the Arab League are approved at the official rate in the currency of the country to which payment is due or in sterling. Payments to Arab League countries are approved at the free market rate in the currency of the country concerned, except that remittances for education in Arab League countries are granted in sterling. A tax of ½ of 1 per cent is levied on payments for all invisibles except expenses for education. Payments for the following types of invisibles are generally permitted: income of nonresidents, savings up to JD 5,000 of foreign nationals who intend to return to their own countries, remittances to refugee dependents, living expenses of Jordan nationals abroad, travel expenses of Jordan residents abroad, expenditures for education, expenses of medical treatment, business expenses abroad, and insurance payments in accordance with special regulations. The policy in authorizing these payments is, in general, not discriminatory. In respect of certain items, however, limits have been established: Thus, for tourist travel to Europe the allowance is JD 150 a month for a period of one month in any one year; larger allowances are approved for travel to the United States. No allowance is given for travel to Lebanon and the Syrian Region of the United Arab Republic, but residents of Jordan and nationals of Lebanon or the Syrian Region of the United Arab Republic traveling to these territories may take out up to JD 100 in Jordan banknotes. Otherwise, persons leaving Jordan may not take out more than JD 5 in Jordan banknotes. Persons leaving Jordan for any destination may take out the equivalent of JD 10 in foreign banknotes and any amount of such notes previously brought into the country by them. Up to JD 5 a person monthly may be sent by postal or money order to other Arab League countries.

Exports and Export Proceeds

In general, export proceeds exceeding JD 20 must be surrendered in the prescribed manner (see section on Prescription of Currency, above). Proceeds from exports of vegetables, fruits, and other perishable commodities are exempt from the surrender requirements on the understanding that the proceeds will be used to pay for imports from Arab League countries. Exports to Israel are prohibited.

Proceeds from Invisibles

Receipts from invisibles must be surrendered to the banks in the appropriate manner (see section on Prescription of Currency, above). Residents of Jordan and nationals of Lebanon or the Syrian Region of the United Arab Republic entering Jordan from these territories may bring in a maximum of JD 100 in Jordan banknotes; otherwise, the limit is JD 5. All persons may bring in any amount in foreign currencies.

Capital

Capital may be imported freely, but exports of capital require approval. Current income arising from nonresident investments in Jordan may be transferred abroad. Under the Law for the Encouragement of Foreign Capital Investment, effective May 1, 1955, profits from approved foreign investments may be remitted regularly, without any limitation, in the currency of the original investment. After one year, the repatriation of capital is permitted in four annual installments in the same foreign currency as the original investment. The Government may approve more liberal provisions upon application. Transfers abroad of a capital nature by residents are subject to approval.

Table of Exchange Rates (as at December 31, 1958)(U.S. dollars per dinar)
BuyingSelling
2.82(Official Rate)2.784(Official Rate)
Exports of phosphates, etc., to non-Arab League countries. Some invisibles.Government payments. Imports authorized at the official rate in non-Arab League currencies.
2.765($2.78 with ½% Tax)
Invisibles authorized at the official rate in non-Arab League currencies.
2.645(Free Market Rate)52.6214(Free Market Rate)5
All other exchange receipts.Imports authorized in Arab League currencies.
2.608(Free Market Rate5with ½% Tax)
Invisibles authorized in Arab League currencies.

Changes during 1958

January 20. Imports of oilcloth and plastic sheets were transferred from the “Secondary” category to the “Primary” category.

March 3. All exports of bran were forbidden.

March 20. The import of flour, wheat, barley, and maize was permitted at the official rate (“Primary” imports), regardless of the country of origin.

September 1. All government imports, as well as those of the Jordan Arab Army, the police, and the municipalities, were transferred from the “Secondary” category to the “Primary” category.

September 29. Shirts and pajamas were removed from the list of prohibited imports.

December 29. In line with measures taken by the United Kingdom, the prescription of currency regulations were simplified: authorized payments to persons resident outside the Sterling Area could now be made by crediting an External Account, and receipts due from such persons could be received in sterling from an External Account.

Note.—On January 7, 1959, the practice of providing exchange at free market rates for imports of nonessential goods was discontinued. In addition, all permitted imports from non-Arab League countries would be granted exchange at the official rate.

Korea

Exchange Rate System

There is no agreed par value for the Korean Hwan. The official rate is 500 hwan per US$1 and this rate applies to all foreign exchange receipts from exports and invisibles surrendered to the Bank of Korea. Foreign exchange for imports, including foreign aid funds, is allocated by auction. The difference between the successful bid price and the official rate must be paid as an exchange tax.1 In addition, there is a tax of 150 hwan per US$1 on all sales of foreign exchange for imports. Specified end-users are liable for a tax of 150 hwan per US$1 only, insofar as this is compatible with foreign aid agreements. No taxes, however, are levied on the foreign exchange sold to the Government or diplomats for imports or on the use of foreign exchange earned through either exports or U.S. off-shore military procurement. Transfers of private foreign exchange accounts may result in other effective rates.

Administration of Control

Exchange control is administered by the Ministry of Finance and by the Bank of Korea (the central bank), which is the only authorized exchange bank in Korea and through which all exchange transactions must pass. Exchange control regulations are issued by the Monetary Board of the Bank and the Ministry of Finance. Certain imports and exports must be approved by appropriate ministries.

Prescription of Currency

The proceeds of exports must be obtained in U.S. dollars, Hong Kong dollars, sterling, Japanese yen, deutsche mark, or in a currency authorized by the Monetary Board of the Bank of Korea.

Imports and Import Payments

Commodities listed by the Ministry of Commerce and Industry may be imported without license; the only procedure necessary is the opening of a letter of credit. Certain commodities on the import lists are subject to the approval of the appropriate ministry; those not on the import lists require the authorization of the Ministry of Commerce and Industry. Imports from communist countries are prohibited. Imports of rice, barley, and wheat flour are limited by quota.

Imports are classified in two categories—ordinary imports and special imports. Ordinary imports may be paid for with foreign exchange purchased from the Government, with export earnings, or with certain inward remittances to registered missionaries. Exchange sold for imports, including foreign aid funds, is allocated by auction, and an exchange tax is also payable on most sales of exchange (see section on Exchange Rate System, above). Special imports may be paid for only with foreign exchange earned from exports or with dollar receipts from United Nations Forces. Dollars secured from exports to the “open account area” (Japan) may be used only for imports from that area.

Payments for Invisibles

All remittances abroad, except by diplomats, require the approval of the Government. Subject to the approval of the Bank of Korea, foreigners residing in Korea may make payments abroad for invisibles (including tax payments and gifts to relatives), up to US$500, by drawing checks on their accounts abroad. Persons holding General Accounts (see section on Proceeds from Invisibles, below) may apply to the Ministry of Finance for permission to use the exchange in these accounts for business travel, if they have received a recommendation from the Bank of Korea. General Accounts may be remitted abroad if prior approval of the Government is obtained (persons with diplomatic status do not need to obtain approval), paid to foreign employees for their services, sold to the Bank of Korea, transferred to Import Accounts with the prior approval of the Ministry of Finance, or used for such other purposes as may be authorized by the Government. The remittance of profits is not permitted. The export of Korean currency notes and foreign currency is prohibited, but departing foreigners may exchange hwan for dollars up to US$100 if they surrendered more than this amount to the Bank of Korea, and they may take out any foreign exchange registered on their entry into Korea. The export of foreign currency beyond this allowance is prohibited by military order, unless it was surrendered on entry into Korea.

Exports and Export Proceeds

Exports of certain specified goods—such as tobacco, raw cotton, raw hides, precious metals and their ores, certain minerals and chemicals, pulp, and lumber—and exports to communist countries are prohibited. Certain other goods may be exported only under the authorization of the ministry concerned.

The foreign exchange proceeds of exports must be deposited in a foreign exchange Import Account in the Bank of Korea or sold to the Bank of Korea. Import Accounts are credited with foreign exchange accruing from (1) exports of goods and services, (2) sales of goods to the Republic of Korea Army, if payment is received from U.S. aid funds, (3) purchases, to pay for imports, of foreign currency holdings from the Government of Korea, (4) sales of goods and services to the United Nations Forces by persons or firms in Korea (when United Nations Forces make contracts with local suppliers for goods and services, the local supplier must obtain the approval of the Ministry of Finance, and the supplier may then be paid in dollars, which must be sold to the Bank of Korea or deposited in an Import Account), (5) sales of gold and silver to the Bank of Korea, as authorized by the Monetary Board, and (6) other foreign exchange transferred from approved accounts. Exchange in Import Accounts may be sold to the Bank of Korea, transferred to other Import Accounts, or used to pay for imports, for incidental costs of imports and exports (freight, insurance, etc.), and for other approved purposes.

Proceeds from Invisibles

The proceeds derived from such invisibles as services to foreign countries, or to United Nations Forces or U.S. Government agencies in Korea, must be either sold to the Bank of Korea or deposited with the Bank in an Import Account. Certain inward remittances to registered missionaries may be credited to General Accounts or sold to registered importers, who may hold the foreign exchange thus obtained in Import Accounts. Foreign exchange derived from other invisibles must be either sold to the Bank of Korea or deposited in a General Account, but such deposits may be disposed of only in accordance with existing regulations (see section on Payments for Invisibles, above). Foreign exchange reported upon entering the country or sent from overseas is credited to a General Account. The import of Korean currency notes is prohibited.

Capital

All capital remittances require approval.

Changes during 1958

August 28. Foreign exchange taxes replaced the system of tying sales of National Bonds to sales of exchange. The auctioning of foreign exchange was continued, but the difference between the successful bid price and the official rate had now to be paid to the Government as an exchange tax, and an additional tax of 150 hwan was applied to each dollar sold; these taxes were applied to all sales of foreign exchange except that sold to specified end-users, the Government, or diplomats. Specified end-users would not bid for exchange but would pay only the tax of 150 hwan per US$1. No taxes were levied on the foreign exchange earned through either exports or U.S. off-shore military procurement.

Lebanon

Exchange Rate System

The par value is Lebanese Pounds 2.19148 = US$1. However, all transactions take place at free market rates, which for the U.S. dollar as at December 31, 1958 were LL 3.16⅛ buying, and LL 3.16⅜ selling, per US$1.

Prescription of Currency

In general, no requirements are imposed on exchange payments abroad or receipts in Lebanon. In some cases, transactions with certain countries,1 with which Lebanon has concluded payments agreements specifying the method or channel of payment, may be made through specific accounts.

Imports and Import Payments

Imports of a few goods and all imports from Israel are prohibited. Imports of certain commodities that are for the most part produced locally are subject to license. All other commodities may be imported freely without license. Exchange to pay for imports may be obtained freely through the free market.

Payments for Invisibles

Exchange to pay for invisibles may be obtained freely through the free market or payment may be made freely in local currency to any account.

Exports and Export Proceeds

Exports of a few goods (scraps of iron, cast iron, copper, lead, and tin) and all exports to Israel are prohibited. A few items, such as livestock, wheat and wheat products, barley, jute goods, Egyptian cotton, newsprint, cement, petroleum and petroleum products, industrial and agricultural machines and equipment, and certain metals, and all products intended for export to North Korea, are subject to export license. No surrender requirements are imposed on exchange receipts from exports, which may be retained, used, or sold freely in the free market.

Proceeds from Invisibles

There are no surrender requirements imposed on exchange receipts from invisibles, which may be retained, used, or sold freely in the free market.

Capital

There are no limitations on capital payments or receipts, and exchange in respect of capital movements may be obtained or sold freely through the free market.

Changes during 1958

January 8. Imports of gas meters were made subject to prior licensing and to certain certification requirements.

January 15. Temporary admission was granted to imports of iron sheets, flat bars, and iron bars of certain specification for the construction of ships’ hulls.

January 15. Imports of olive oil, which had been prohibited, were now allowed, subject to prior license.

February 12. Imports of apple juice and dried figs were made subject to prior license.

March 1. The trade and payments agreement with Czechoslovakia, signed on January 11, 1957, was ratified.

June 11. The quota for imports of flour of all kinds for the year 1958 was fixed at 45 per cent of the average of total flour imports during the three years 1955-57.

July 30. Imports of soles and heels for shoes were made subject to prior license.

Libya1

Exchange Rate System

No par value for the Libyan Pound has been established with the Fund. The Libyan pound is officially at par with the pound sterling, and exchange rates for other currencies are based on the London quotations.

Administration of Control

Exchange control is administered by the National Bank of Libya, which has delegated some of its powers to the authorized banks. Matters of policy are formulated by a consultative Import and Export Council composed of four officials from the Ministry of National Economy, four officials from the Ministry of Finance, and the chief financial officials of the Provinces of Tripolitania, Cyrenaica, and the Fezzan, under the Chairmanship of the Minister of National Economy.

Prescription of Currency

The United Kingdom of Libya, as a member of the Sterling Area, conforms to the prescription of currency arrangements and the sterling payments system of the United Kingdom (see section on Prescription of Currency in the survey on the United Kingdom). Imports of goods originating in countries outside the Sterling Area may be paid for by crediting Libyan pounds or sterling to an External Account, or in any foreign currency. Libya has a trade and payments agreement with the Egyptian Region of the United Arab Republic, under which settlements with that territory are made in Egyptian pounds or Libyan pounds. Under an agreement with Greece, settlements with that country are made in sterling.

Nonresident Accounts

Subject to any conditions that may be laid down by the National Bank of Libya, nonresidents may open accounts with any authorized bank in Libya, in either Libyan or foreign currency. The accounts in Libyan pounds or sterling of residents of countries outside the Sterling Area (other than blocked accounts or accounts to which special procedures apply) are designated External Accounts. Such accounts are freely transferable to other External Accounts and are convertible into any foreign currency (including sterling).

Imports and Import Payments

Imports from all countries require individual licenses. Imports from Israel are prohibited. Exchange appropriate to the exporting country is granted for all authorized imports.

Payments for Invisibles

All payments for invisibles require licenses. These are granted freely for expenses incidental to trade transactions, but remittances in respect of other invisibles are considered on their merits.

Persons leaving the country to travel abroad may take with them, without permit, Libyan currency notes not exceeding a total of L£50 and foreign currency notes not exceeding a total value of L£10; however, in any 12-month period, a traveler may not take out foreign currency notes exceeding a total value of L£100 or travelers checks, letters of credit, and foreign currency notes exceeding an aggregate value of L£100. Children under 12 years of age are limited to one half of these amounts. Amounts in excess of the above may be granted under special circumstances. Temporary visitors may take out any travelers checks, letters of credit, or foreign currency notes that they declared on entry.

Exports and Export Proceeds

All exports require licenses, to ensure that the proceeds will be received in conformity with the prescription of currency requirements. Export proceeds must be surrendered, either to the National Bank or to another bank in Libya. Exports of gold, silver bullion, and bonds, coupons, or other documents of negotiable value are subject to permit. Exports to Israel are prohibited.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers checks or foreign currency notes can be offered for sale at the official rate to any exchange office licensed by the National Bank of Libya.

Travelers entering Libya may bring with them Libyan currency notes not exceeding a total of L£50, sterling currency notes not exceeding a total value of L£10, and other currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable documents in unlimited amounts.

Foreign currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable documents may also be sent by mail into Libya, without restriction, from a foreign bank to any bank authorized to operate in Libya. Libyan notes may be repatriated through banking channels, provided that details are given to establish that the notes were obtained from bona fide travelers from Libya.

Capital

Under the provisions of the Foreign Capital Investment Law of January 30, 1958, foreign capital invested in projects deemed to contribute to the economic development of the country, as well as profits accruing thereon, and salaries of foreign staff employed on such projects may be transferred freely to the country of origin.

Changes during 1958

January 18. The National Bank of Libya took over the administration of exchange control.

April 26. The Foreign Capital Investment Law of January 30, 1958 came into effect. The law ensures free transfer of capital and profits, as well as of the salaries of foreign staff employed in development projects.

September 17. Libya became a member of the International Monetary Fund.

Note.—On January 8, 1959, following similar changes in the United Kingdom’s regulations, the prescription of currency requirements were simplified and the accounts of residents of countries outside the Sterling Area (other than blocked accounts) were designated External Accounts, freely exchangeable into any foreign currency.

Malaya

Exchange Rate System

No par value for the Malayan Dollar has been established with the Fund. The Malayan dollar has a fixed relationship to the pound sterling based on $M 1 = 2s. 4d. Rates for U.S. and Canadian dollars, applicable to both merchandise transactions and transactions in invisibles, are fixed by the Malayan Exchange Banks Association; these rates are based on the London–New York cross rate within the limits of US$2.82 and US$2.78, per £1.

Administration of Control

Exchange control is administered by the Exchange Control Branch of the Treasury, under the direction of a Controller of Foreign Exchange. However, much of the authority for approving normal payments is delegated to commercial banks authorized for this purpose. Import controls are administered by the Comptroller of Customs.

Prescription of Currency

The Federation of Malaya is one of the territories of the Sterling Area and follows the prescription of currency arrangements and the sterling payments system of the United Kingdom. All payments to and from Sterling Area countries must be made in sterling or another Sterling Area currency. Payments to countries outside the Sterling Area may be made either in Malayan dollars or another currency of the Sterling Area through a nonresident account, or in any foreign currency. Receipts from exports to countries outside the Sterling Area must be obtained either in Malayan dollars or another currency of the Sterling Area through a nonresident account, or in any specified currency that is freely offered and freely transferable to Malaya.

Nonresident Accounts

The accounts of persons resident in other countries of the Sterling Area are treated as resident accounts. The accounts of persons resident in countries outside the Sterling Area are treated as nonresident accounts and, unless specially restricted, are designated External Accounts. External Accounts may be credited with the proceeds of any foreign currency sold to a bank in Malaya, with transfers of Malayan dollars or sterling from other External Accounts, and with funds eligible for transfer to countries outside the Sterling Area. Balances on External Accounts may be transferred to any other account, whether resident or nonresident, and may be converted into any foreign currency.

Imports and Import Payments

Imports from countries outside the dollar area are licensed freely, with the exception of a few items for which, for reasons of security or health, certain conditions must be satisfied before licenses are issued. All goods of dollar area origin are subject to specific import license. Direct imports from the dollar area are limited to goods which are not readily available at competitive prices from other sources and which are necessary for the economic development and the maintenance of the standard of living of the country. Foreign exchange appropriate to the country of origin of the merchandise is made freely available for all permitted imports, but nonessential goods of dollar area origin can be imported via Hong Kong and paid for in sterling or Malayan dollars.

Payments for Invisibles

Payments for invisibles to residents of the Sterling Area may be made freely. Payments related to commercial transactions and personal payments to other countries are in general authorized. Special arrangements permit family remittances to Mainland China to be made through licensed remittance shops up to $M 45 from a family in any one month.

Remittances of dividends, interest, and agreed profits on all bona fide investments are subject to exchange control approval, which normally is given freely.

A basic travel allowance of £100 for each person over the age of 12 years and £70 for each child of 12 years of age and under is available for the period November 1, 1958 to October 31, 1959, for travel in all countries outside the Sterling Area. However, there is a cumulative basic travel allowance of up to £400 for each person over the age of 12 years and £280 for each child of 12 years of age and under, the amount of the accumulation (since November 1, 1955) depending on the unbroken length of the applicant’s residence in Malaya. For travel to Denmark (including Greenland), the Faroe Islands, Norway, and Sweden, travelers may obtain any reasonable amount of foreign exchange.

Unless special permission is obtained, not more than $M 100 in Malayan notes and the equivalent of £100 in foreign banknotes may be taken out of Malaya by travelers.

Exports and Export Proceeds

All exports to countries outside the Sterling Area (except certain exports to Indonesia) require the approval of the exchange control authorities, to ensure that the proceeds are obtained in accordance with the prescription of currency regulations and that the foreign exchange proceeds are sold to an authorized bank. Exchange control approval is not usually required for exports to Indonesia of goods other than gold, platinum, precious stones, rubber, tin, and cigarettes.

Proceeds from Invisibles

The requirements governing exchange receipts from invisibles are in general the same as those for proceeds of exports. Travelers coming direct from Singapore, North Borneo, Sarawak, or Brunei may bring in any amount in Malayan notes, and other travelers may bring in $M 100. Otherwise, permission is required for the import of Malayan notes and currency notes of India, Indonesia, and Thailand. No limitations are imposed on the import of currency notes of other countries.

Capital

There are no restrictions on the movement of capital, profits, and dividends within the Sterling Area, so far as Malaya is concerned.

Control over the entry of capital (as distinct from cash balances) from residents of countries outside the Sterling Area is applied as follows: (1) Investments in new industrial and development projects that have been submitted to and approved by the exchange control authorities are not restricted. (2) Investments in existing Federation securities are normally permitted, provided the securities are purchased through a recognized stock exchange and the investment funds are remitted through banking channels.

The repatriation to countries outside the Sterling Area of initial capital and appreciation is permitted only in the case of projects that have been approved by the exchange control authorities after January 1, 1950. The proceeds realized from investments in recognized marketable securities are not remittable and must be deposited in a blocked account, except that remittances from Malaya to the Scandinavian countries by Scandinavian nationals in respect of their own assets are permitted freely on application.

Changes during 1958

March 7. The Federation of Malaya became a member of the International Monetary Fund.

July 2. The restriction of £10 per person on the import and export of sterling notes was removed. Resident travelers were authorized to take out $M 100 in Malayan notes and foreign, including sterling, banknotes not exceeding £100 in value.

December 12. It was announced that, effective January 1, 1959, import restrictions on 23 items from the dollar area would be removed.

December 29. All nonresident accounts not specially restricted were designated External Accounts, convertible into any foreign currency or transferable to any resident or nonresident account. The prescription of currency regulations were simplified accordingly.

Morocco1

Exchange Rate System

No par value for the Moroccan Franc has been established with the Fund. The official rates are 420 Moroccan francs per 1 U.S. dollar and 1,000 Moroccan francs per 1,175 French francs. Other exchange rates are based on the rates in the official exchange market in Paris, to which the authorized banks have access. There is an exchange tax of 10 per cent on all payments to other parts of the French Franc Area.

Exchange Control Territory

Morocco is part of the French Franc Area, and no limitations are placed on the movement of funds between Morocco and France; between Morocco and other parts of the Area, transfers are allowed on the same conditions as are applied to transactions between France and those territories. The Tangier Zone is treated separately, in view of the freedom of exchange in that territory (see section on Tangier Zone, below).

Administration of Control

Exchange control is administered by the Moroccan Exchange Office, an agency under the Ministry of Finance. Details of the exchange control are carried out by the authorized banks. Import and export licenses are issued by the Undersecretary of State for Commerce.

Prescription of Currency

The methods of payment and receipt for settlements with countries outside the French Franc Area are in conformity with the French exchange control regulations and the agreements concluded for the French Franc Area (see section on Prescription of Currency in the survey on France). However, settlements with Spain are made in agreement dollars and settlements with Mainland China and the U.S.S.R. are made in Moroccan francs, under the terms of bilateral payments agreements between Morocco and those countries.

Imports and Import Payments

No exchange allocations are necessary for imports from other parts of the French Franc Area, in view of the interchangeability of the Moroccan franc and the French franc, but a 10 per cent exchange tax is payable on payments for such imports, 8 per cent being payable in advance at the time of import. Import controls are imposed on French products only in connection with certain import quotas designed to protect local industries. Licenses are required for all imports from countries outside the French Franc Area. These licenses are issued within the limits of quotas authorized by trade agreements concluded by Morocco with certain countries or fixed unilaterally by the Moroccan authorities. Goods imported with funds held in EFAC accounts (see section on Exports and Export Proceeds, below) or under compensation or barter arrangements, certain listed commodities, and goods shipped from but not originating in the Tangier Zone also require import licenses.

As a result of a decision of the International Court of Justice on August 22, 1952, the Moroccan authorities permit the import, subject to license but without the allocation of official exchange, of most goods originating in any country except Germany, Hungary, and Japan. However, such imports must be made by a citizen of a country that retains its rights under the Act of Algeciras, 1906,2 and the Moroccan regulations do not permit the franc proceeds from the sale of such goods to be transferred outside Morocco.

Payments for Invisibles

Payments to other parts of the French Franc Area may be made freely, but are subject to an exchange tax of 10 per cent. All other payments for invisibles require exchange control approval. The export of Moroccan banknotes to countries outside the French Franc Area is limited to F 20,000 for each traveler going abroad and F 50,000 for each traveler to Tangier.

Exports and Export Proceeds

Export licenses are required for only a few products, but every exporter must sign an undertaking to repatriate to the French Franc Area the foreign exchange proceeds of his exports to countries outside the French Franc Area. This exchange must be sold in the exchange market of the French Franc Area through an authorized bank. Exporters may, however, retain a certain percentage of this exchange—25 per cent from exports to the dollar area and 10-15 per cent from exports to most other countries—in an EFAC (Exportations-Frais Accessoires) account, which may be used to pay expenses related to exports or to finance imports (however, import licenses are required for such imports). Foreign exchange in EFAC accounts may be sold to others wishing to import, and in practice it is negotiated at a premium.

Proceeds from Invisibles

With the exception of currencies of the French Franc Area, which may be retained, residents must surrender to an authorized bank any foreign exchange received by them. Domestic and foreign banknotes may be brought in freely.

Capital

Foreign investments in Morocco are subject to advance approval of the Moroccan Exchange Office. A foreign investor who wishes to purchase Moroccan francs must sell his foreign currency at the official rate through an authorized bank. As a general rule, foreign investments may not be repatriated, but in certain cases the Exchange Office may provide a guarantee that the invested capital can be transferred to the country of origin.

Tangier Zone

There are no exchange controls or import or export licensing in the Tangier Zone and all trade and payments may be made without restriction, in accordance with Tangier’s special economic status in the Kingdom of Morocco as recognized by a Royal Charter of August 26, 1957, promulgated on August 30, 1957. Settlements between the Tangier Zone and the countries of the French Franc Area are made through nonresident Bilateral Accounts.

Changes during 1958

February 2. In the South Zone (formerly French territory), the decree dated August 16, 1957, exempting from the 20 per cent surcharge payments for imports of certain commodities, was abolished by a decree of January 31, 1958. Under the new decree, a 10 per cent refund was to be paid to importers, out of a special compensation fund, on the prices of imports in certain categories. The new list of products benefiting from this measure covered substantially the same categories of goods that were formerly exempted from the 20 per cent surcharge. This refund was due regardless of the origin of the goods imported and the currency of payment and therefore it benefited imports from countries of the French Franc Area as well as those from other areas.

February 17. The Spanish currency in circulation in the North Zone (formerly Spanish territory) was exchanged for Moroccan francs at the rate of 10 francs for 1 peseta, and the economy of the North Zone was integrated with that of the rest of the country; the exchange control regulations in operation in the South Zone were therefore extended to the former North Zone. The payments agreement with Spain of July 7, 1957 came into effect and settlements with Spain would now be made through an account in agreement dollars. Tangier retained its special status.

April 25. Morocco became a member of the International Monetary Fund.

August 1. Quotas were published for various textiles that could be imported without allocation of official exchange.

December 9. The refund of 10 per cent on certain imports (see February 2, above) was discontinued.

December 29. A new exchange rate was established between the Moroccan franc and the French franc at 1,000 Moroccan francs per 1,175 French francs; the dollar rate remained unchanged at 420 Moroccan francs per 1 U.S. dollar. The Moroccan franc was declared convertible into any foreign currency for residents of countries outside the French Franc Area other than those with which Morocco has bilateral payments arrangements.

Note.—On January 12, 1959, an exchange tax of 10 per cent was imposed on all payments to other parts of the French Franc Area. In the case of imports, 8 per cent would be collected in advance at the time of import.

Netherlands1

Exchange Rate System

The par value is Netherlands Guilders 3.80 = US$1. The official limits are f. 3.77 buying, and f. 3.83 selling, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for externally convertible European currencies vary between limits resulting from the dollar rate for the Netherlands guilder in relation to the dollar rates for the other currencies.

There are spot and forward exchange markets for “convertible” currencies,2 Czechoslovak korunas, and Turkish agreement dollars. Authorized banks are allowed to conclude both spot and forward transactions in these currencies against guilders, in the Amsterdam and Rotterdam exchange markets and with banks abroad. The authorized banks are also permitted to conclude, multilaterally with banks abroad, spot transactions and forward transactions for up to six months’ delivery in the “convertible” currencies2 against guilders in Convertible or Transferable Guilder Accounts or against the “convertible” currencies. Forward transactions with residents must be based on permitted merchandise or service transactions.

Special arrangements apply to Belgian and Luxembourg francs in Financial Accounts (see section on Capital, below), which are traded in a spot market at free rates that are, in practice, very close to the official market rates.

Exchange Control Territory

All transactions with the Netherlands Antilles, New Guinea, and Surinam are subject to exchange control. However, vis-à-vis third countries with which payments agreements are in force, the Netherlands and the overseas territories constitute the Netherlands Monetary Area.

Administration of Control

Exchange control is administered by the Netherlands Bank on behalf of the Ministers of Foreign Affairs, Affairs Overseas, Finance, Economic Affairs, and Agriculture. Import and export licensing are handled by the Central Import-Export Agency (CDIU) and its delegated offices, under directives from the Directorate-General for Foreign Economic Relations. Invisibles and capital transactions are licensed by the Netherlands Bank, as are all transit trade transactions. Sixty-seven authorized banks are permitted to handle foreign exchange transactions within the scope of general and special licenses granted by the licensing authorities.

Prescription of Currency

Payments to nonresidents, if eligible for transfer abroad, must always be made through an authorized bank either in guilders to the credit of a nonresident guilder account held with an authorized bank in the Netherlands or to the debit of the authorized bank’s currency holdings abroad.

Settlements with nonresidents must be made in accordance with Foreign Exchange Notice 1/58, unless approval has been given to settle in another way. For prescription of currency purposes, foreign countries are divided into two groups, as described below.

1. Dollar countries3and transferable area4countries. Payments to these countries may be made in any foreign currency or in guilders to the credit of any nonresident account. Receipts from these countries must be obtained in “convertible” currencies (see footnote 2) or in guilders debited to a Convertible or Transferable Guilder Account (see section on Nonresident Accounts, below).

2. Bilateral countries.5 Transactions with nonresidents residing or domiciled in Bulgaria, East Germany, Hungary, Indonesia, Netherlands New Guinea, Poland, Spain and its monetary area, or the U.S.S.R. are settled in guilders by crediting or debiting the Bilateral Guilder Account of a banking institution in the country concerned; transactions with the Netherlands Antilles and Czechoslovakia may also be settled in this way or in the partner country’s currency; transactions with Turkey are settled through an account maintained in U.S. dollars by the Central Bank of the Republic of Turkey with the Netherlands Bank. Receipts from bilateral countries may also be obtained in “convertible” currencies, or in guilders debited to a Convertible or Transferable Guilder Account.

Nonresident Accounts

The main categories of nonresident account are described below.

1. Convertible Guilder Accounts. These accounts may be held by all nonresidents. They may be credited with transfers from other Convertible Guilder Accounts and from Transferable Guilder Accounts, with permitted payments by residents on account of imports and services supplied by residents of the dollar area or the transferable area, and with proceeds from the sale of gold or “convertible” currencies. They may be debited for payments to Netherlands residents for exports and services rendered to any country and for other permitted transactions, including purchases of foreign currencies. Balances on these accounts may be transferred to any other nonresident account.

2. Transferable Guilder Accounts. These accounts are held by banking institutions established in the transferable area. They may be credited with proceeds from the sale of gold and “convertible” currencies, and with other permitted payments to residents of the dollar area or the transferable area. They may be debited for payments to residents for exports and services supplied to any country and for other permitted transactions, including purchases of foreign currencies. Balances on these accounts are transferable to other Transferable Guilder Accounts, Convertible Guilder Accounts, and Bilateral Guilder Accounts.

3. Bilateral Guilder Accounts. These accounts are held exclusively by banking institutions established in the bilateral countries. Balances may be transferred only to other Bilateral Guilder Accounts of the same country or monetary area.

4. T Accounts. These accounts may be held by all nonresidents, regardless of nationality, except those who reside in Indonesia and those who hold E Accounts (see 5 and 7, below). They may be credited with earnings and the proceeds of the contractual redemption of securities if authorized for credit to T Accounts, and with transfers from Convertible Guilder Accounts. Balances on these accounts may be used for current transactions and general licenses have been granted for current payments from them to residents. Their use for capital transactions is prohibited unless the account holder resides or is domiciled in the Netherlands overseas territories or in dollar countries. Balances on T Accounts related to the dollar area or the transferable area may be transferred to any nonresident account on the books of an authorized bank or exchanged into any currency through an authorized bank. Balances on a T Account related to a bilateral country may be transferred to the country concerned.

5. N Accounts-Indonesia. These accounts apply only to nonresidents residing or domiciled in Indonesia, regardless of nationality. There are special regulations applicable to the crediting and debiting of these accounts.

6. K Accounts. These accounts may be held by all nonresidents, regardless of nationality, except those who reside in Indonesia. K Accounts may be credited with proceeds from the sale of “convertible” currencies (see footnote 2), with transfers from Convertible Guilder Accounts, and with the proceeds of sales of securities, real property, and other amounts of a capital nature, as well as with income from capital. They are used primarily for investments, but may be debited for some current payments, including travel expenses in the Netherlands up to a daily maximum of f. 150 per person. Balances on K Accounts may be transferred to other K Accounts of the same country or monetary area. In addition, balances on K Accounts held by residents of dollar countries may be transferred to any other K Account, including exportable K Accounts (see below), and those held by residents of transferable area countries or bilateral countries—provided they are not classified as nonexportable (see below)—may be transferred to K Accounts, including exportable K Accounts, held by residents of any other transferable area country or bilateral country. Reinvestment currencies, including “security dollars,” are made available for the repatriation by the account holders of balances on K Accounts, with the exception of nonexportable K Accounts. K Accounts are classified in two groups, as follows:

  • (a) K Accounts related to dollar countries and to transferable area countries (with the exception of Belgium-Luxembourg, Mainland China, Rumania, and Surinam);

  • (b) K Accounts related to other countries; these are subclassified as

    • (i) exportable—the proceeds from the sale or liquidation of securities imported after May 5, 1945, or of securities paid for in “convertible” currencies, or of securities acquired out of securities in either of the foregoing categories, as well as K Accounts related to Belgium and Luxembourg not acquired by conversion of francs in Financial Accounts—or

    • (ii) nonexportable—all other capital proceeds not eligible for credit to an exportable K Account.

Netherlands and Indonesian securities, as well as foreign securities denominated exclusively in guilders, which are purchased to the debit of K Accounts related to the countries mentioned under (a) and of K Accounts described under (b) (i) may be exported.

7. E Accounts. These are transitional accounts held by emigrants from the Netherlands after their departure. On establishing residence abroad, emigrants may, on application, have their balances on E Accounts transferred to K Accounts, and T Accounts may be opened in their name.

8. Z Accounts (residual group). These accounts are those to which sums of doubtful origin have been credited. The debiting or crediting of Z Accounts is permitted only if expressly allowed by a Foreign Exchange Notice or a general or special license.

Imports and Import Payments

For liberalized goods imported from OEEC countries (except Turkey) or their associated areas, or from the Netherlands Antilles, New Guinea, or Surinam, no import licenses or declarations are required to clear the goods through customs, and payments may be made by virtue of an open general license (which is also applicable to non-liberalized commodities). The OEEC liberalization list also applies to Argentina, Brazil, Chile, Finland, Indonesia, Israel, the United Arab Republic (Egyptian Region), Uruguay, and Yugoslavia, and licenses are issued automatically for liberalized goods imported from these countries. For imports from Indonesia and Turkey, an import declaration must be completed by the importer if no import license is required. For practically all imports valued at not more than f. 200, import and payment may be effected without documents. All other imports require combined import and exchange licenses, but these are issued automatically for imports of liberalized commodities from the dollar countries.

In principle, whenever an import and exchange license is obtained, or if no license is required, payment may be effected without delay, provided that the method of payment is in conformity with the general rules (see section on Prescription of Currency, above).

Payments for Invisibles

Payments for invisibles to residents of non-dollar countries are permitted freely, except for a few items which are permitted under general license. Payments to residents of dollar countries for some categories of invisibles are permitted by general license up to any amount. For most other categories of invisibles, payments to residents of dollar countries may be made without license up to f. 1,000 but documents giving evidence of the debt have to be submitted; for debts exceeding f. 1,000, an individual license is required, which is granted for all bona fide transactions.

Tourist exchange, apart from the cost of fares, is provided up to the countervalue in the appropriate currency of f. 2,000 a person for each trip for travel to any country. This facility is also available for nonresidents domiciled in any of the Netherlands overseas territories but staying in the Netherlands temporarily.

Residents traveling abroad may take with them, in addition to the travel allowance, a maximum of f. 200 in Netherlands banknotes and coins, which may be spent abroad. Nonresidents may, when leaving the Netherlands, export the equivalent of f. 4,000 in negotiable instruments and foreign banknotes and coins and f. 1,000 in Netherlands banknotes and coins or, in both cases, as much more as was declared at the time of entry.

Exports and Export Proceeds

Export licenses or declarations are not required for a large number of goods exported to OEEC countries (except Turkey) and their associated areas. However, for exports to the dollar countries, Indonesia, or Turkey that do not require export licenses, a declaration completed by the exporter is required. For goods valued at not more than f. 200, the export may be effected and payment received without documents, but the method of payment must be in conformity with the regulations (see section on Prescription of Currency, above).

The surrender of export proceeds is not obligatory; but if they are surrendered, it must be at the official rate. The collection of export proceeds is obligatory; they must be received in accordance with the prescription of currency requirements and may then be held in appropriate “foreign currency accounts” with authorized banks. The use of such funds is subject to the usual licensing requirements.

Proceeds from Invisibles

Exchange receipts from invisibles need not be surrendered and may instead be credited to “foreign currency accounts.” For settlement in guilders of incoming exchange exceeding f. 200 derived from current invisibles, the recipient must submit to an authorized bank a form “B,” indicating the nature of the underlying transaction as well as the amount and currency received. The authorized banks must also verify that receipts are in accordance with the prescription of currency requirements.

Nonresidents may bring into the Netherlands unlimited amounts in Netherlands banknotes, foreign banknotes, and negotiable instruments. These may be sold only to an authorized bank or an authorized exchange office or they may be used to pay tourist expenses in the Netherlands. Residents may bring into the Netherlands f. 200 in Netherlands banknotes and coins plus the amount in Netherlands currency acquired abroad from the conversion abroad of their travel exchange.

Capital

Inward and outward capital transfers and the shifting of foreign-owned capital within the Netherlands from one asset to another are subject to control, but general licenses have been granted for many types of capital transaction. Payments for interest, dividends, and contractual amortization due to nonresidents are permitted freely by crediting the appropriate T or K Account, Convertible Guilder Account, Transferable Guilder Account, or Bilateral Guilder Account.

Residents may buy foreign securities from, or sell them to, other residents. With the exception of Belgian-Luxembourg securities, which may be sold only in Belgium-Luxembourg, residents may sell foreign securities abroad, either for U.S. dollars or for the currency in which payment of the principal and interest or dividends may be demanded. The exchange so acquired must be deposited with an authorized bank or securities broker in the Netherlands and may be sold or credited to an account denominated in the same foreign currency. The accounts of this type in which dollar proceeds are held are called “security dollar” accounts; all the others are called “reinvestment” accounts. These accounts may be credited also with capital repayments and similar items and used to buy foreign securities in the currencies concerned. Residents may buy foreign securities abroad with balances held abroad which cannot be transferred to the Netherlands owing to the foreign exchange regulations of the countries in which the balances are outstanding; real estate may also be bought to the debit of such balances. In addition, residents may purchase foreign securities in OEEC countries through authorized brokers; but these securities must be quoted officially and the principal and interest or dividends must be payable in a “convertible” currency; reinvestment currencies, including “security dollars,” are made available for such purchases.

All capital transactions between the Netherlands and Belgium and Luxembourg are conducted through a free market in which practically all capital payments may be made either under a general license or by individual licenses which are granted automatically. These payments are made in the Netherlands in guilders through K Accounts, and in Belgium-Luxembourg in Belgian or Luxembourg francs through Financial Accounts kept in the names of Netherlands authorized banks and securities brokers. Residents of Belgium-Luxembourg and residents of the Netherlands may trade K Account guilders against Financial Account francs. Securities expressed in Netherlands guilders or in one of the currencies of the Belgian Monetary Area, as well as Indonesian securities, may be purchased and sold, except that Netherlands residents may not buy Indonesian bonds in Belgium-Luxembourg. Moreover, residents of Belgium-Luxembourg may purchase foreign securities from Netherlands residents to the debit of a K Account or to the credit of a Financial Account, with the exception of securities denominated in U.S. dollars or Canadian dollars and of U.S. or Canadian securities of no par value.

New capital investments in the Netherlands by nonresidents are in general permitted only if made in “convertible” currencies, but there are special facilities for such investments by residents of Belgium-Luxembourg. Capital proceeds held by nonresidents in K Accounts may be reinvested in the Netherlands or transferred by purchasing reinvestment currencies, including “security dollars,” provided the K Account is not classified as nonexportable.

Nonresidents who may hold K Accounts may have their Netherlands securities and Indonesian securities, and foreign securities denominated exclusively in guilders, exported to them on the understanding that, (1) if the owner is domiciled in Belgium, Luxembourg, the Belgian Congo, or a Belgian mandated territory, and the securities have been acquired under the agreement for capital transactions within the Benelux countries, export only to these countries and territories is permitted, and (2) if the owner is domiciled in Mainland China, Rumania, Surinam, or a bilateral country, export is permitted only if the securities were imported after May 5, 1945 or were purchased with “convertible” currency or to the debit of a Convertible Guilder Account, or have been acquired by switching such securities. On exportation, the securities are provided with “red documents,” unless they have been acquired under the agreement for capital transactions within the Benelux countries.

Emigrants are permitted to export on departure foreign exchange to the countervalue of f. 4,000 for an individual emigrant or for the head of a family, plus f. 2,000 for each member of the family, in addition to personal effects, and f. 25,000 for the establishment of a domicile and/or the independent exercise of a profession or trade. On departure from the Netherlands, their guilder funds are held in E Accounts. On establishing residence abroad, emigrants may apply to have their E Accounts converted into K Accounts and to have their income credited to T Accounts (see section on Nonresident Accounts, above). Thus, as balances on K Accounts may be transferred—provided the account is not classified as nonexportable—by purchasing reinvestment currencies, including “security dollars,” emigrants may have all their capital transferred to their new country of residence.

Changes during 1958

February 5. Authorized banks would be granted general licenses, on application, to finance international merchandise transactions in transferable guilders and multilateral arbitrage currencies for periods up to four months.

March 6. Authorized banks were permitted to conclude both spot transactions and forward transactions for a maximum of six months, in Egyptian “export pounds” with banks in countries of the transferable area.

March 7. Authorized banks would be granted general licenses, on application, to finance international merchandise transactions in convertible currencies (Canadian dollars, U.S. dollars, or free Swiss francs) for periods up to four months.

March 18. A general license was granted for transactions in the futures markets for hides, established in Amsterdam.

March 21. The maximum permissible period for bills of exchange drawn against letters of credit opened by authorized banks in favor of residents to pay for merchandise was extended from three months to four months.

April 10. General licenses were granted for transactions in the futures market for potatoes, established in Amsterdam.

May 20. The general license permitting residents to acquire Western European multilateral arbitrage currencies from other residents, including authorized banks, which had been withdrawn on August 14, 1957, was restored, with the provision, however, that the purchase would be allowed only if the buyer required the foreign exchange for payment on account of bona fide commercial transactions.

July 1. New regulations were introduced concerning the system of nonresident accounts used for settling current payments. For this purpose, foreign countries were divided into three categories: dollar countries, bilateral countries, and transferable area countries. Separate nonresident accounts were established for each category, namely, Convertible Guilder Accounts, Bilateral Guilder Accounts, and Transferable Guilder Accounts. The scope of the transferable area was extended to cover all countries not included with the dollar countries or the bilateral countries.

July 1. Surinam was included in the transferable area.

July 1. Yugoslavia was included in the transferable area.

July 9. Free deutsche mark were added to the list of convertible currencies, which had previously included only U.S. dollars, Canadian dollars, and free Swiss francs.

July 10. Nonresident travelers were permitted to bring in Netherlands notes and coins in unlimited amounts. Previously, there had been a limit of f. 1,000 on such movements.

November 3. The travel allowance for residents was increased from the equivalent of f. 1,000 for each trip to f. 2,000 for each trip. The average daily maximum that could be spent abroad was increased from f. 75 to f. 125 a day. The amount which might be paid out to nonresidents staying temporarily in the Netherlands, to the debit of Transferable Guilder Accounts, Bilateral Guilder Accounts, T, K, and E Accounts, or in exchange for foreign negotiable instruments not expressed in Canadian dollars, U.S. dollars, free deutsche mark, or free Swiss francs, was increased from f. 100 to f. 150 a day.

November 4. Transferability facilities for K Accounts held by residents of non-dollar countries were extended. Under the new regulations, balances on K Accounts, except nonexportable K Accounts, held by residents of transferable area countries and bilateral countries were given intercountry transferability within the transferable area and the bilateral countries.

December 29. The currencies previously in the Western European multilateral arbitrage arrangement and Portuguese escudos were designated “convertible” (previously, only Canadian dollars, U.S. dollars, free deutsche mark, and free Swiss francs had been so designated). Balances on Transferable Guilder Accounts could be transferred freely to Convertible Guilder Accounts, and authorized banks were permitted to arbitrage in the “convertible” currencies spot or forward for periods not over six months, against guilders in Transferable Guilder or Convertible Guilder Accounts or against the “convertible” currencies.

Note.—Effective January 6, 1959, residents were permitted to make payments to residents of the transferable area in “convertible” currencies or in Netherlands guilders credited to a Convertible Guilder or a Transferable Guilder Account. Residents were also permitted to receive payments from dollar countries in any “convertible” currency, as well as to the debit of Convertible Guilder or Transferable Guilder Accounts.

Nicaragua

Exchange Rate System

The par value is Nicaraguan Córdobas 7.00 = US$1. The official rates are C$7.00 buying, and C$7.0525 selling, per US$1. These rates apply to exchange receipts from exports of coffee and cotton and from certain minor exports, most invisibles, and registered capital, and to all authorized payments. A buying rate of C$6.60 per US$1 applies to the exchange proceeds of exports of cottonseed and a few other commodities. There is a fluctuating free market for foreign notes and coins, which is used for travel exchange and certain other transactions. (See Table of Exchange Rates, below.)

Administration of Control

The control system is administered by the Issue Department of the National Bank of Nicaragua, which issues import and export permits and allocates commodities to the import categories. All sales of exchange pass through the Issue Department and the Banking Department of the National Bank or through private banks acting as agents of the National Bank.

Prescription of Currency

There is no prescription of currency; incoming and outgoing payments normally are made in U.S. dollars.

Imports and Import Payments

No quantitative restrictions or prohibitions are imposed on imports. All imports are subject to license, but licenses are issued automatically. For the purpose of advance deposit requirements, three import categories have been established on the basis of essentiality. No advance deposit is required for items in List I. For items in List II, the importer must deposit in domestic currency 100 per cent of the c.i.f. value before making an application to import, and the license is issued within 48 hours. For items in List III (all goods not included in List I or II), the importer must make an advance deposit of 100 per cent 30 days before receipt of the import license.

Payments for Invisibles

Payments for invisibles at the official selling rate are subject to prior authorization, which is granted only for the following classes of payment: government payments, students’ expenditures for tuition and living expenses, insurance and reinsurance premiums, remittances on account of registered foreign investments and of registered foreign loans, and salaries and fees for specialized services. Payment for other invisibles is usually made through the free market. Domestic currency notes may be exported freely.

Exports and Export Proceeds

Exports are subject to a licensing procedure similar to that for imports. The licensing procedure serves to confirm that the prices at which the goods are exported are not lower than the minimum prices in foreign currency in world markets on the date of export and to ensure that all exchange receipts are surrendered at the appropriate rate (see Table of Exchange Rates, below).

Proceeds from Invisibles

Proceeds from most invisibles must be surrendered at the C$7.00 rate. Domestic currency notes may be imported freely.

Capital

Under the Law on Foreign Investments of February 26, 1955 (effective March 11, 1955), foreign investments approved by the National Bank and registered are granted favorable treatment. Foreign investments may be made in any form, and if made in foreign exchange, the exchange must be surrendered. The law provides that exchange transactions in respect of foreign investments are to be carried out at the exchange rate applicable to the essential import category on the day of the transaction. Merchandise imports for investment purposes are exempt from the requirement of an advance deposit. Foreign investments are granted the following privileges: free repatriation of the registered capital; free transfer of earnings, profits, or interest on the capital; and free re-exportation of goods imported for investment. Profits not transferred abroad during the year following the year in which they were earned, and not registered as foreign capital, are treated as domestic capital.

Remittances on account of foreign investments that were effected prior to March 11, 1955 and were registered under the Law for the Regulation of International Exchange of November 9, 1950 are subject to individual approval by the Board of Directors of the Issue Department of the National Bank, with the limitation that remittances of profits or amortization may not exceed 10 per cent of the capital annually. Remittances on account of investments subject to special contracts signed with the Government are bound by the terms of the contract.

Banknotes

Foreign currency notes may be negotiated in the free market.

Table of Exchange Rates (as at December 31, 1958)(córdobas per U.S. dollar)
BuyingSelling
6.601 (Export Rate)

Exports of cottonseed and a few other commodities.
7.00 (Official Rate)

Exports of coffee and cotton and certain minor exports. Most invisibles. Registered capital.
7.0525 (Official Rate)

All imports. Government payments. Students’ expenses. Insurance premiums. Registered capital.
7.50 (Fluctuating Free Market Rate) Foreign banknotes and coins.7.50 (Fluctuating Free Market Rate) Other invisibles and capital.

Changes during 1958

January 3. Advance deposit requirements were abolished for imports of truck trailers, natural and synthetic rubber, materials to repair tires and tubes, and containers and wrappers for industrial use.

January 3. Industrial machinery was transferred to import List A.

May 6. Changes were made in the advance deposits required for imports: List A was abolished and Lists I, II, and III were revised. The advance deposit for imports in List II was increased from 50 per cent to 100 per cent, with the license to be issued within 48 hours. The advance deposit of 100 per cent and the 30-day waiting period for the import license continued to apply to List III.

July 16. Coal-tar paints and natural indigo and textile fiber yarn and thread were transferred from List II to List I, and unground barley was transferred from List III to List II, of imports.

October 16. Platform scales for weighing railroad cars and other vehicles were transferred from List II to List I of imports.

October 24. The official rate was applied to proceeds of exports of coffee.

Norway1

Exchange Rate System

The par value is Norwegian Kroner 7.14286 = US$1. The official limits for the U.S. dollar are NKr 7.09 buying, and NKr 7.20 selling, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for the externally convertible European currencies2 vary between limits resulting from the dollar rate for the Norwegian krone in relation to the dollar rates for the other currencies. The forward premiums and discounts are left to the interplay of market forces.

Administration of Control

Import and export licenses are issued by the Ministry of Commerce. All payments to and from nonresidents must be made through one of the Norwegian authorized banks or through the Bank of Norway. In general, all payments require approval from the Ministry of Agriculture (for agricultural goods), the Ministry of Commerce (for other goods), or the Bank of Norway (for invisibles). However, the authorized banks may effect payments freely to nonresidents for imports not subject to regulation and for most invisibles.

Prescription of Currency

For prescription of currency purposes, foreign countries are divided into two groups: the bilateral area3 and the convertible area (all other countries). Settlements with countries in the bilateral area must be made through the relevant agreement account. Settlements with countries in the convertible area may be made in any fully convertible currency or externally convertible European currency,2 including Norwegian kroner through Convertible Krone Accounts (see section on Nonresident Accounts, below). However, payments to Greece and Turkey must be made through the clearing accounts of those countries with the Bank of Norway.

Nonresident Accounts

The main type of nonresident account for current transactions is the Convertible Krone Account. Such accounts may be held for residents of countries in the convertible area (see section on Prescription of Currency, above). They may be credited with authorized payments by residents of Norway to the convertible area, transfers from other Convertible Krone Accounts, and the proceeds of sales of fully and externally convertible currencies in Norway. They may be debited for payments to residents of Norway from the convertible area, transfers to other Convertible Krone Accounts, and purchases of fully and externally convertible currencies in Norway.

Nonresident-owned capital, which normally may not be transferred abroad, is deposited in blocked accounts. These accounts may be used by the holder for such expenses in Norway as personal taxes, insurance premiums, and traveling expenses, as well as for direct investment, upon application, and for investment in bonds that are issued in Norwegian kroner only. Bonds acquired in this way may either be deposited with a Norwegian authorized bank or be sent to the owner abroad. Capital amounts that according to general rules or specific permission may be transferred abroad may be credited to a Convertible Krone Account.

Imports and Import Payments

All commodities not included in a small published list of nonliberalized goods may be imported freely from the dollar area, OEEC countries and their associated areas, and Czechoslovakia, Finland, Hungary, Israel, Poland, Rumania, the Spanish Monetary Area, and Yugoslavia. These goods, and certain categories of fruits and vegetables, are not subject to license and may be imported upon presentation of the original invoice. Imports of commodities included in the list of nonliberalized goods, except government imports, require import licenses. However, these licenses are granted freely for goods for which global quotas are published that permit such imports up to the limits of the quotas from OEEC countries, from dollar area countries (with the exception of passenger cars, other than taxis, and delivery vans), and from Chile, Finland, Paraguay, Peru, Uruguay, and Yugoslavia.

If no license is required, or when an import license is obtained, payment may be effected without delay, provided that the method of payment is in conformity with the general rules (see section on Prescription of Currency, above).

Payments for Invisibles

Exchange for payments to nonresidents for most invisibles, including income from capital and contractual amortization, is granted freely. Small remittances of up to NKr 100 by one person at any one time are permitted freely. Norwegian tourists to all European countries, the United States, and Canada are granted the equivalent of NKr 2,000 a year for each adult and NKr 500 a year for each child under 16 years of age. For business travel, the allowance is US$35 a day in the United States and Canada or the equivalent of NKr 150 in other countries. Each person leaving Norway may export NKr 350 in Norwegian banknotes and coins in denominations not exceeding NKr 100. Nonresidents leaving Norway may export any foreign banknotes that they can prove they brought into the country.

Exports and Export Proceeds

Most goods may be exported freely to OEEC countries, the United States, Canada, and a number of other countries, against a declaration or a free list license, which is granted automatically. Exports subject to regulation are listed and require an export license. Payment must be received in conformity with the regulations (see section on Prescription of Currency, above). All exchange resulting from exports must be surrendered.

Proceeds from Invisibles

Receipts from invisibles must be surrendered. Each person entering Norway may import NKr 350 in Norwegian banknotes in denominations not exceeding NKr 100 and any amount in foreign banknotes.

Capital

Inward transfers of capital and investments in Norway by nonresidents are subject to approval by the Bank of Norway. Outward transfers of capital are subject to individual license, the granting of which depends on such circumstances as the merits of the case, the transfer possibilities under a relevant payments agreement, the possibility of compensation with Norwegian assets abroad, etc. Outward transfers in respect of investments made in Norway after World War II are granted freely. Payments for contractual amortization are also permitted freely.

In accordance with an agreement concluded by Norway with Denmark, Sweden, and the United Kingdom in 1950, capital transfers to these countries normally are permitted. Transfers to the United States and Canada may take place within certain limits; above these limits, transfer depends upon the merits of the case, but inherited capital assets owned by residents of the United States or Canada may be transferred freely. The transfer of inheritances and dowries to OEEC countries is permitted freely up to the equivalent of US$10,000 a year. Emigrants are granted the equivalent of US$500 a person in addition to the tourist allocation. Repatriation of moderate amounts of other nonresident-owned capital is permitted in cases of hardship. Most transactions in securities involving nonresident interests are subject to approval.

In general, resident-owned capital assets abroad, other than securities and real estate, have to be surrendered. Applications for capital transfers to make direct investments abroad are considered on their individual merits. In handling such applications, the exchange control authorities follow a liberal practice.

Changes during 1958

January 1. The import free list was further extended by the addition of 72 items to the OEEC list and 130 items to the dollar list, raising the import liberalization percentages to 81.4 (1948 basis) and 86.6 (1953 basis), respectively.

January 1. Finland was included in the list of countries from which imports in a list of global quotas may be imported up to the limits of the quotas.

January 1. The exchange allocation for Norwegian tourists to all European countries, the United States, and Canada was raised from NKr 1,500 a year for adults and NKr 350 a year for persons under 16 years of age to NKr 2,000 and NKr 500, respectively.

March 1. Export licensing requirements were suspended for a wide range of commodities. The percentage of free exports (1954 basis) was raised from 47 to 84 per cent (excluding ships). Argentina and Finland were included in the list of countries to which exports are free of license.

March 12. The amount in Norwegian banknotes and coins which a person leaving Norway is permitted to export freely was raised from NKr 99 to NKr 350. Similarly, the amount in Norwegian banknotes and coins which a person entering Norway is permitted to import freely was raised from NKr 300 to NKr 350.

April 22. Export liberalization was extended to 18 additional items.

April 26. The liberalization of payments for repairs of ships and other means of transport, travel for private reasons, dowries, and salaries and wages was extended to the dollar area.

November 6. The permission to transfer up to NKr 100 by one person at any one time as small remittances (but not to pay for goods) or gifts to OEEC countries was extended to apply to all countries. (This facility may also be used to pay for invisibles of all kinds.)

December 29. External convertibility for the Norwegian krone was announced, effective for all countries except those with which Norway has bilateral payments arrangements. Current receipts of Norwegian kroner obtained by foreign exporters would be freely exchangeable into fully or externally convertible currencies, including U.S. dollars.

December 31. It was announced that payments for liberalized imports could be made in any currency, except that imports from bilateral agreement countries could be paid for only through the relevant clearing account.

Note.—Listed below are changes that were made early in 1959.

January 1. A new list, comprising only those import commodities which remain regulated, replaced the former free import list. All commodities not included in this list could be imported freely from the countries formerly covered by the free list, with no distinction between imports from the dollar area and imports from other countries. This measure increased the dollar import liberalization percentage from 86.6 to 90.9 (on the basis of private imports in 1953). Import and exchange declarations would no longer be required, and nonrestricted goods could be imported from the countries formerly covered by the free list upon presentation of the original invoice.

January 2. The authorized banks were permitted to sell any fully or externally convertible currency to residents of Norway to make authorized payments, and to sell any fully or externally convertible currency, including Norwegian kroner, for another such currency. Convertible Krone Accounts could be held not only by banks, as previously, but by all nonresident firms and individuals except those resident in the countries with which Norway has bilateral payments agreements.

February 15. The export free list was replaced by a list of those commodities the export of which is still regulated.

Pakistan1

Exchange Rate System

The par value is Pakistan Rupees 4.76190 = US$1. Exchange transactions are effected at uniform rates. All transactions in foreign exchange must be conducted through authorized dealers, whose transactions with the general public must be effected at rates authorized by the State Bank of Pakistan on the basis of par values established with the International Monetary Fund. Authorized dealers in Pakistan are permitted to cover in the London market their requirements of specified currencies. They may also cover their permitted transactions in specified currencies against sterling or Pakistan rupees either spot, or forward for a limited period, with their agents in the countries concerned. Other effective rates may arise from the negotiation of bonus vouchers which certain exporters sell at freely determined rates to importers who need them in order to obtain import licenses for various commodities.

Administration of Control

All transactions in foreign exchange must be conducted through authorized dealers. The State Bank of Pakistan has delegated to 19 commercial banks authority to deal in all foreign currencies, to supervise surrender requirements, and to sell exchange for specified purposes within limits prescribed by the State Bank.

Prescription of Currency

Regulations prescribe the currencies to be used for settling both trade and nontrade transactions with different countries and monetary areas. The prescribed methods of payment are similar to those of the United Kingdom and most other Sterling Area territories.

Exchange receipts have to be obtained through a bank. Receipts from Sterling Area countries must be received in Pakistan rupees or sterling from the account of a resident in the Sterling Area other than a resident of Pakistan. Receipts from countries outside the Sterling Area must be obtained in sterling from an External Account in the United Kingdom, in Pakistan rupees from the account of a bank outside the Sterling Area, or in any specified currency. Exchange transactions with Afghanistan and those covered by the trade agreement with the U.S.S.R. are settled in Pakistan rupees.

Payments abroad must be made through an authorized bank. Payments by residents of Pakistan to countries within the Sterling Area are made by transferring sterling or any other Sterling Area currency, including Pakistan rupees, to an appropriate account; payments to countries outside the Sterling Area are made by transferring sterling or Pakistan rupees to a nonresident account or, in some cases, in the recipient’s currency. In the case of imports, payment is made to the country of origin of the goods.

Certain transactions covered by the trade agreements with France and Czechoslovakia are settled in French francs and Czechoslovak korunas, respectively.

Nonresident Accounts

Different rules apply to nonresident rupee accounts of individuals, firms, or companies, on the one hand, and to nonresident rupee accounts of banks, on the other. Authorized dealers may open rupee accounts for banks abroad without reference to the State Bank, but approval is required for opening other nonresident accounts. Transfers from nonresident banks’ rupee accounts in Pakistan to the corresponding sterling accounts in the United Kingdom are allowed, but other nonresident account holders must obtain permission from the exchange control for transfers from their credit balances. Accounts of residents of India held prior to the imposition of exchange control on transactions with India are governed by separate regulations.

Imports and Import Payments

All imports are subject to license, except goods imported by the Central Government for defense purposes, goods for which orders are placed directly by the departments of the Central Government, goods in transit, personal baggage, and certain other items permitted under a Ministry of Commerce Notification (No. 335/260/24, June 12, 1951). An import license may be used in any country of the world, except for items for which single country licenses are issued under the terms of trade agreements with particular countries. Import licenses are issued only on a c. & f. basis, and are generally issued for commodities specified in the half-yearly import policy announcements. In addition, import licenses are issued for specified items under the Export Bonus Scheme.

Subject, in most cases, to the prior approval of the State Bank, foreign exchange is made available under the regulations (see section on Prescription of Currency, above) upon presentation of an import license from the applicant. The application must be made through an authorized bank in the exchange control area in which the applicant resides.

Payments for Invisibles

Payments for invisibles are controlled by the State Bank and require licenses. However, under authority delegated to them, authorized dealers may sell exchange or make remittances in accordance with detailed regulations. Although remittances for business and commercial purposes normally are permitted, remittances of a personal nature either are subject to annual quotas or are permitted on their individual merits. Separate regulations govern payments to India for such purposes as family maintenance. Remittances by Pakistan nationals to their families abroad require special authority. Foreign exchange is granted for expenses incidental to trade transactions, but not to importers for transport insurance, which may only be effected with insurance companies in Pakistan. Exchange is granted for transfers abroad of dividends and other earnings due to nonresidents. Payments for international travel fares are permitted if certain conditions are met. There is no basic allocation of exchange for tourist travel, but there is an annual allowance for pilgrimages to Saudi Arabia. Exchange for business travel, medical treatment, and students’ expenses in other countries and for sponsored cultural trips may be granted on an individual basis.

Nonresident travelers may take out foreign currency not exceeding the amounts they brought in. Residents of Pakistan leaving for Afghanistan may take with them Afghan currency without limit; for travel to other countries, foreign currency notes up to the equivalent of PRs 50 for each person at any one time or sterling notes not exceeding £10 may be taken out.

Exports and Export Proceeds

The export of all commodities is allowed freely. Only 16 listed items require export licenses, and these are issued freely by the Ministry of Commerce.

The State Bank exercises control over exchange receipts and requires a declaration by the exporter to ensure surrender of the foreign exchange earned. The exporter declares that, when payment in accordance with the prescribed method (see section on Prescription of Currency, above) is received, he will surrender the specified foreign currency within a certain period of time. After making sure that the exporter’s declaration meets all conditions, the authorized dealer certifies the export shipment.

Under the Export Bonus Scheme, exporters of jute and cotton manufactures and of primary products (other than raw jute, raw cotton, hides, skins, wool, tea, and certain varieties of rice) are issued bonus vouchers in Pakistan rupees equivalent to 20 per cent of their exchange receipts; for exporters of all other manufactures, the percentage is 40. These vouchers are freely transferable and may be used to import any item on a list of 219 commodities specified for this purpose.

Proceeds from Invisibles

Incoming foreign exchange from invisibles, with the exception of certain currencies that may be retained,2 must be surrendered at the official rate within one month. Exporters of certain services (aircraft repairs, salvage operations, ship repairs, and shipping) are entitled to receive bonus vouchers equivalent to 20 per cent of the foreign exchange surrendered by them; these vouchers are transferable and may be sold to importers (see section on Exports and Export Proceeds, above). Each traveler entering Pakistan is permitted to bring with him Pakistan currency notes up to PRs 2,000, sterling notes up to £10, and coins that are legal tender in India up to Rs 5. There is no limitation on the import of other currency notes, subject to declaration to the customs.

Capital

Investments in Pakistan by nonresidents are subject to approval. In accordance with the foreign investment policy, foreign investors are permitted, after approval, to invest capital to the extent of 60 per cent of the total of local and foreign investment, in 27 approved industries; in special cases, foreign participation may be higher. The extent of foreign investment permitted in public utility concerns (other than the 27 approved industries) is considered on the merits of each case. The transfer of capital abroad and the repatriation of investments are not normally permitted, except where this has been arranged by prior agreement with the Government or is in accordance with the foreign investment policy. Applications for the repatriation of old foreign investments are considered on their merits. Capital invested after September 1, 1954 in industrial projects approved by the Government of Pakistan and approved separately for coverage by the repatriation guarantee may be repatriated at any time thereafter—subject to the exchange control regulations in force—to the country in which the investment originated and to the extent of the original investment; any profits derived from investment which are reinvested in approved industrial projects with the approval of the Government of Pakistan may be treated as investment for the purpose of repatriation; appreciation of any such capital investment may also be treated as investment for repatriation purposes. For an investment by means of goods or services, the amount of capital is the rupee value of such goods or services as recorded in the books of the company or firm concerned at the time of investment. These repatriation facilities do not apply to purchases of shares on the stock exchange (unless the shares are an integral part of an approved investment project) or to capital invested in Pakistan before September 1, 1954. Under the foreign investment policy, if any undertaking is nationalized, just and equitable compensation will be paid to the dispossessed owners and will be freely remittable to the country of residence of the foreign owners.

Transfers of capital abroad by residents are in general not permitted. However, detailed rules govern the transfer of capital by persons emigrating or retiring from Pakistan, depending upon the nationality of the person concerned and the country or monetary area to which transfers are to be made. Foreign nationals resident in Pakistan are permitted to transfer capital assets up to UK£5,000. Residents are permitted to sell foreign securities upon approval by the State Bank, provided the foreign exchange proceeds resulting from such sales are surrendered, but there is no provision for purchases of foreign securities by residents. In this connection, foreigners residing in Pakistan are considered nonresidents.

Exports of, and transactions in, securities involving nonresident interests are subject to approval. Proceeds accruing from the liquidation of nonresident capital assets may be credited to blocked accounts. Balances on blocked accounts may be invested in approved securities payable in Pakistan rupees.

Changes during 1958

January 1. The schedule of fees levied on import licenses and clearance permits was changed slightly.

January 28. It was announced that, in accordance with a forthcoming new trade agreement with France (see February 17, below), shipments of cotton to France made on or after October 1, 1957 were payable in French francs only, to be credited to “special French franc” accounts which authorized dealers could open at commercial banks in France. Single country licenses would be issued for imports from France against payment in “special French francs” only. Also payable in “special French francs” would be shipments from France from January 1, 1958 to September 30, 1958 under global import licenses, except equipment supplied on a deferred payments basis, armaments, coal, nonferrous metals, pig iron, and specified iron and steel products. The State Bank of Pakistan announced spot and forward rates for “special French francs” at which it stood ready to deal with authorized dealers.

February 17. The new trade agreement with France was signed (see January 28, above).

April 19. The limit on the import of Pakistan currency notes by travelers was raised from PRs 500 to PRs 2,000 for each person.

May 9. The basic travel quota for Iran and Iraq was withdrawn.

June 12. The amounts of all family maintenance permits for over PRs 25 a month issued to Pakistani nationals for transfers to India were reduced. It was also announced that, with effect from January 1, 1959, the permits would be further reduced every six months by 12½ per cent of the amount remittable on December 31, 1958. The amount of the basic travel quota for India could be taken up only once every two years, instead of annually. This reduction was applied retroactively from January 1, 1958.

June 23. The basic travel quota for Burma was reduced in the same way as that for India (see June 12, above).

July 2. Without specific approval of the State Bank, authorized dealers were no longer allowed to issue to foreign nationals resident in Pakistan sterling notes up to £10 for travel abroad.

July 7. In accordance with an agreement with Czechoslovakia, signed on June 17, 1958, all exports of cotton to that country up to August 31, 1958 became payable in Czechoslovak korunas only. These korunas could be used only for the importation of a cement plant from Czechoslovakia by the Pakistan Industrial Development Corporation. Authorized dealers were instructed to sell accrued korunas to the State Bank of Pakistan immediately upon the negotiation of the cotton export documents. The State Bank of Pakistan would maintain an account in korunas at the State Bank of Czechoslovakia and announced spot and forward rates at which it stood ready to deal in korunas with authorized dealers.

August 20. An export promotion scheme for processed coarse and medium varieties of cotton was announced. Exporters would be entitled to receive import licenses, equivalent to 25 per cent and 10 percent, respectively, of the f.o.b. value of cotton cloth and yarn exported, for the import of textile machinery and spares, textile mill stores, and certain other goods used in the manufacturing process.

August 20. Government Notification No. 1 (8)-EF/58 regarding declaration of foreign currencies was issued. Possession of foreign currencies (other than the currency of Afghanistan and other specified exceptions) either inside or outside Pakistan would constitute an offense under Section 9 of the Foreign Exchange Regulation Act, and these holdings had to be declared for surrender. The main exceptions were (1) exchange held abroad by foreign nationals or foreign business houses, except to the extent that it represented earnings abroad in respect of business conducted in Pakistan or services rendered while in Pakistan, and (2) exchange held in the United Kingdom, up to £100, or in the United States, up to $280, provided that the total amount held in these two countries did not exceed the equivalent of £100.

August 28. The basic travel quotas for India, Ceylon, and Burma were withdrawn.

August 30. The following instructions were announced concerning single country licenses issued for imports from France and valid for shipment beyond September 30, 1958: Authorized dealers were now permitted to open letters of credit providing for shipment beyond September 30, 1958 but not beyond the validity of the licenses. In these cases, payment would be made only in “special French francs” for shipments made up to November 15, 1958, and in sterling or Pakistan rupees for those made after that date. The original instructions (see January 28, above) had been that authorized dealers could not open letters of credit in “special French francs” providing for shipments beyond six months, and in no case beyond September 15, 1958.

September 2. The State Bank of Pakistan ceased to deal in Indian rupees with the authorized dealers, leaving the rate to be decided by market conditions. Sterling could now be used for settlements between Pakistan and India, instead of only Pakistan and Indian rupees, as previously.

September 10. It was announced that the latest instructions regarding import letters of credit in “special French francs” (see August 30, above) would apply also to imports from France under global licenses.

October 1. Foreign exchange for medical treatment abroad would no longer be granted unless the necessity for such treatment was certified by a Government Medical Board.

November 3. Under Martial Law Regulation No. 45, an amnesty was granted to persons surrendering their holdings of foreign exchange before December 1, 1958 (extended later to January 15, 1959).

November 17. The requirement of a 15 per cent marginal deposit against all import letters of credit was abolished. The State Bank of Pakistan canceled its instructions of June 29, 1957 limiting the authorized dealers in their extension of credit against imported goods.

November 18. It was stated that the requirement to declare holdings of foreign currencies (see August 20 and November 3, above) was applicable also to foreign shares, securities, and properties, if acquired by persons out of their own foreign exchange holdings; however, properties in India were exempt from declaration.

November 27. The requirement that payments must be made in French francs for imports from France under single country or global licenses (see August 30 and September 10, above) was extended to goods shipped from France up to December 15, 1958.

December 15. The requirement that payments must be made in French francs for imports from France under single country or global licenses was extended to goods shipped from France up to January 31, 1959.

December 30. The prescription of currency regulations for export proceeds were simplified. Receipts from countries outside the Sterling Area could now be received in sterling from an External Account, in Pakistan rupees from the account of a bank outside the Sterling Area, or in any specified currency.

December 31. Payments for practically all imports were made subject to the prior approval of the State Bank. Unused and partially used import licenses were suspended, in order to ascertain outstanding foreign exchange liabilities. (Most of these licenses have since been revalidated.)

Note.—Effective January 15, 1959, a new Export Bonus Scheme was introduced under which exporters receive bonus entitlement vouchers of a value in Pakistan rupees equivalent to specified percentages of the proceeds of certain exports. The bonus vouchers are freely transferable and entitle the holder to obtain import licenses for any of 219 items specified for this purpose. All other export promotion schemes were withdrawn.

Paraguay1

Exchange Rate System

The par value of Paraguayan Guaraníes 60 = US$1 is not applied to any transactions under the present exchange system. The value of the guaraní is determined in a free market, where the rate for the U.S. dollar on December 31, 1958 was about

110 per US$1. Other rates apply to agreement currencies. There is a surcharge of 5 per cent payable on the c.i.f. value of imports and taxes of 7½ per cent and 2½ per cent on the value of exports.

Administration of Control

The Central Bank of Paraguay is in charge of the operation of the exchange system.

Prescription of Currency

Paraguay has bilateral payments agreements with Argentina, Italy, Spain, and Uruguay, under which exchange payments and receipts must be effected through clearing accounts in terms of U.S. dollars.

Imports and Import Payments

No licensing restrictions are maintained on imports. However, imports are subject to advance deposits, which vary according to the category and essentiality of the merchandise, as follows: Category I, 10 to 25 per cent; Category II, 60 per cent; Category III, 110 to 200 per cent; Category IV, 300 per cent; and Category V, 400 per cent. These deposits are retained for a minimum of 120 days or, if the deposit is made after the date of shipment, for a minimum of 180 days. Advance deposits are not required for imports of wheat, wheat flour, newsprint and printer’s ink for periodicals, government imports, imports in special circumstances, e.g., by diplomats, or imports from Argentina, Bolivia, Brazil, and Uruguay. Advance deposits are also not required from importers whose imports are not financed by bank credit and who hold proceeds of certain exports in U.S. dollars or transferable currencies. However, at least 40 per cent of such export proceeds must be used for imports of equipment for silos and sugar refineries or for heavy machinery for basic industries, a further 30 per cent must be used for imports of medium-sized machinery, and the remaining 30 per cent may be used for other imports, except certain luxuries. A surcharge of 5 per cent on the c.i.f. value of imports is payable on imports from countries other than Argentina, Bolivia, Brazil, and Uruguay, even if no foreign exchange payment takes place. Payments for imports from countries with which Paraguay has bilateral payments agreements must be made through the relevant clearing account (see section on Prescription of Currency, above).

Exports and Export Proceeds

The surrender of the proceeds of exports is not required, and exchange receipts are freely disposable. For the time being, all exports are subject to taxes in guaraníes of 7½ and 2½ per cent of the value of the goods exported.

Payments for and Proceeds from Invisibles

There are no requirements imposed on exchange payments for, or exchange receipts from, invisibles.

Capital

No exchange control obligations are imposed on capital receipts or payments by either residents or nonresidents.

Changes during 1958

During the year, numerous changes were made in the category classification of various imports and consequently of the amount of the advance deposit applicable to such imports.

March 19. A subsidy of 20 per cent was established for imports of certain products from Argentina and Uruguay, and the special exchange rate for such transactions was abolished.

March 21. The advance deposits were increased for certain imports, including jeeps and motorcycles (from 100 per cent to 200 per cent) and buses (from 50 per cent to 100 per cent).

March 31. The advance deposits required for Categories I, II, and III were increased from 5 to 10 per cent, from 50 to 60 per cent, and from 100 to 110 per cent, respectively.

March 31. A temporary tax of 10 per cent was levied on the f.o.b. value of exports of timber, yerba maté, and coco oil to Argentina, Bolivia, Brazil, and Uruguay.

April 18. Cheese was added to the lists of imports from Argentina and Uruguay which are granted a 20 per cent subsidy.

April 26. The bilateral payments agreement with Yugoslavia was terminated.

May 12. Imports of chassis for passenger transport were included in Category II.

May 12. It was announced that the exemption from advance deposits of imports from Argentina, Bolivia, Brazil, and Uruguay related to “frontier” imports payable under international agreements and to imports payable in agreement dollars.

July 3. It was announced that advance deposits made after this date would be retained for a minimum of 120 days or, for deposits made after the date of shipment, for a minimum of 180 days.

July 3. The advance deposit required for some imports in Category I was increased from 10 per cent to 25 per cent. Imports of fuels made from petroleum became subject to a 10 per cent advance deposit.

October 13. Exporters of certain agricultural products who wish to take advantage of the privilege granted to them of importing goods without making an advance deposit were required to apply within 90 days of the shipment of the goods.

Note.—The following changes took place early in 1959:

January 1. The tax of 15 per cent on the value of exports was reduced to 7½ per cent and the additional levy of 10 per cent on exports of timber, yerba maté, and coco oil to Argentina, Bolivia, Brazil, and Uruguay lapsed.

January 15. Resolution No. 1 of Act No. 9 canceled the subsidies granted certain imports from Argentina and Uruguay.

February 10. Decree-Law No. 185 established a temporary tax of 2½ per cent on the f.o.b. value of exports in order to finance the public works plan.

February 16. Resolution No. 1 of Act No. 25 established a surcharge of 5 per cent on the c.i.f. value of imports, payable at the time of the sale of exchange to cover the value of the import, where payment is being made within 90 days. For other imports, including those not involving remittance of foreign exchange, the surcharge would be collected by the authorized bank at the exchange rate prevailing on the day of delivery of documents for customs clearance. Imports from Argentina, Bolivia, Brazil, and Uruguay were exempt from the surcharge.

Peru

Exchange Rate System

The initial par value of Peruvian Soles 6.50 = US$1, established on December 18, 1946, is not applied to any transactions under the present exchange system. No new par value has been proposed.

There are two free fluctuating exchange rates: an exchange certificate market rate applying to most trade transactions and a draft market rate for other trade and most nontrade transactions. Foreign exchange from exports must be converted into exchange certificates, which are valid for five days and are issued for 100 per cent of export proceeds in U.S. dollars and sterling. These exchange certificates are negotiable in the certificate market and may be used to pay for imports and for certain nontrade transactions. All exchange transactions that do not qualify for the certificate market are permitted freely in the draft market. The exchange rates fluctuate and broken cross rates exist in both markets. (See Table of Exchange Rates, below.)

Administration of Control

Export permits and exchange licenses permitting the use of certificates for nontrade transactions are issued by the Ministry of Finance and Commerce. The exchange certificates (see section on Exchange Rate System, above) are issued by the Central Reserve Bank of Peru, which has conducted stabilization operations, from time to time, in the certificate market. Exchange certificate transactions are conducted through commercial banks; draft market transactions are conducted freely through banks and various other dealers, or directly between sellers and buyers.

Prescription of Currency

The issuance of exchange certificates only in certain currencies—at present, U.S. dollars and sterling—results in prescription of the currencies for all transactions effected through the certificate market. Transactions through the draft market may be made in any currency.

Imports and Import Payments

Imports are permitted freely, with the exception of automobiles, which are permitted on a quota basis, and of imports from Eastern Europe and Mainland China. Control over other imports exists only insofar as commercial banks must ensure that certificate exchange is used to pay for actual imports and not for unauthorized purposes.

Payments for imports are not subject to license or other controls. However, in the certificate market, through which payments for most imports are made, certificates are denominated only in U.S. dollars and sterling; payments in other currencies may be made through the draft market or by converting the certificate into the currency required. Importers opening documentary letters of credit through commercial banks must make advance deposits (except for imports of wheat, meat, milk, and fats) in foreign currency of 25 per cent of the import value for imports for production and 50 per cent for all other imports. Banks may finance up to 50 per cent of the local currency equivalent of such advance deposits for raw materials, but credit may not be extended for nonessential imports.

Payments for Invisibles

Exchange licenses are required in order to use certificates for payments for invisibles. The types of transactions in invisibles that are eligible for, and usually allowed in, the certificate market include freight and transit expenses, interest payments and dividends, rents on property, royalties, agents’ commissions, repayments of commercial debts, and insurance and reinsurance payments. Remuneration of foreign technicians and payments for pensions also are usually allowed through the certificate market. Exchange for all other types of invisibles, and for all invisibles in currencies other than the two (U.S. dollars and sterling) in which certificates are denominated, is obtained in the draft market.

Exports and Export Proceeds

All exports are subject to license to assure the necessary supply of export proceeds to the certificate market. Export licenses may be denied for goods in short supply domestically. The export of strategic materials to Mainland China and North Korea is prohibited.

In general, exports are authorized only against payment in the two currencies in which certificates are issued (U.S. dollars and sterling). However, certificates in other currencies may be issued if it is considered necessary. Export proceeds in either of the two currencies in which certificates are issued must be surrendered within 5 days of the date of shipment for exports covered by irrevocable letters of credit and within 30 days for other exports. The proceeds of exports authorized in currencies for which no certificates are issued may be sold in the draft market.

Proceeds from Invisibles

All receipts from invisibles are free of control and may be sold in the draft market.

Capital

All inward and outward capital transfers by residents and nonresidents may be effected without control in the draft market. Capital remittances representing contractual amortization and depreciation of foreign capital and depletion of mineral investment may be effected, within certain limits, through the certificate market, subject to exchange license.

Table of Exchange Rates (as at December 31, 1958)(soles per U.S. dollar)
BuyingSelling
24.49 (FluctuatingExchangeCertificateMarketRate)24.491 (Fluctuating Exchange Certificate Market Rate)
Export proceeds in sterling and U.S. dollars. Certain capital.Most imports. Certain invisibles and capital.
24.63 (Fluctuating Draft Market Rate)24.73 (Fluctuating Drajt Market Rate)
All other export proceeds. Invisibles and most capital.Occasional imports. Most invisibles and capital.

Changes during 1958

January 22. The Central Reserve Bank announced that it would no longer intervene in the purchase and sale of foreign exchange certificates, which would have the effect of freeing the exchange certificate market rate.

February 4. The period of validity of exchange certificates was reduced from 10 days to 5 days.

February 10. Private persons would no longer be permitted, upon prior authorization from the Ministry of Finance, to import automobiles outside the quota limit of 9,000 units for 1958.

May 5. A law was promulgated authorizing specific import duties on general merchandise to be increased by 50 per cent and on luxury items by 100 per cent. Authority was also given to double the duty on luxury goods subject to the 100 per cent surcharge and to prohibit imports of nonessential goods. Basic commodities, such as foodstuffs and pharmaceutical supplies, and also imports covered by bilateral treaties with neighboring countries, were exempted from the increases in duty.

June 13. Banks were asked to restrict credit for luxury imports.

July 20. Import duties on luxury goods were raised to 200 per cent. Quotas for imports of automobiles and trucks were established at 4,500 units for the year beginning October 1, 1958, compared with a quota of 9,000 units for the previous year.

Philippines

Exchange Rate System

The par value is Philippine Pesos 2 = US$1. The official rates are ₱ 2.00375 buying, and ₱ 2.015 selling, per US$1. These rates represent the official minimum buying and maximum selling rates of commercial banks for demand drafts and telegraphic transfers of US$500 and over. There is a service charge of 1.20 per cent on all payments for imports.1 An arrangement for converting blocked pesos into U.S. dollars through the purchase and sale of gold results in other effective exchange rates.

Administration of Control

Exchange controls are operated by the Central Bank of the Philippines, whose Monetary Board determines, on a quarterly basis, the amount of exchange to be allocated for various purposes, including payments for imports. In the licensing of exchange for imports, the Monetary Board of the Central Bank is assisted by a committee of commercial banks in Manila appointed for this purpose. All sales and purchases of exchange must pass through authorized agent banks (the commercial banks and, for transactions connected with travel, various other concerns, including the American Express Company). Post offices are also authorized to sell U.S. dollar money orders payable in the United States and its territories and possessions for certain, specified purposes, subject to certain conditions and restrictions. The authorized agent banks are permitted, without prior approval of the Central Bank, to issue exchange licenses and sell exchange for specified transactions and in specified amounts. Applications for exchange licenses outside the scope of authority of the authorized agent banks are referred to the Central Bank.

Prescription of Currency

There are no prescription of currency requirements for outgoing payments, but all exchange proceeds from exports must be obtained in U.S. dollars.

Nonresident Accounts

Nonresident accounts are composed primarily of nonresident peso funds that were in the Philippines prior to the imposition of exchange controls, savings of former residents, unremitted portions of income or other earnings of nonresidents, and other items of a similar nature. These funds are not ordinarily convertible into foreign exchange and must be deposited in special, blocked, fiduciary accounts; however, they may be used for certain specified purposes without the approval of the Central Bank. Prior approval of the Central Bank must be obtained to use them for other specified purposes, e.g., for local expenditures, for local production of motion pictures, for bond purchases, for some investments, and for purchases in the free market of domestically mined gold bullion, which must be sold to the Central Bank at US$35 per ounce; the proceeds from the sale of this gold are freely transferable.

Imports and Import Payments

Import licenses, as such, are not issued, but the Bureau of Customs will not permit the entry of goods without the presentation of a release certificate issued by an authorized agent bank in a form prescribed by the Monetary Board of the Central Bank and validated by an authorized representative of the Central Bank. All payments for imports must be effected through letters of credit, except payments by importers who have been permitted by the Monetary Board since 1950 to remit such payments by demand draft, mail, or telegraphic transfer. All applications for the opening of such letters of credit are therefore considered as applications for licenses to purchase foreign exchange to pay for imports. A cash deposit of 100 per cent is required for the opening of letters of credit for imports of essential and semiessential consumer goods and nonessential producer goods and for imports through barter of nonessential consumer items. A cash deposit of 50 per cent is required for imports of essential raw materials for essential industries. A deposit equal to the downpayment plus 25 per cent is required for imports of capital goods under arrangements deferring payments for no less than three years. Importers are classified, according to status, as government, old producer, new producer, old importer, new importer qualified under Republic Act No. 650, new importer under the delegated authority of the Bankers’ Committee, or new importer by authority of the Monetary Board and who, up to and including the six months immediately preceding the current period for which foreign exchange is being allocated, has opened letters of credit and/or made remittances by demand draft, mail, or telegraphic transfer to pay for imports. A service charge of 1.20 per cent is payable on all import payments.

The Monetary Board certifies to each authorized agent bank the total amount of foreign exchange available to it for a certain period, generally three months. This certification includes a classification by importers, based on the specific categories of imports covered by their respective lines of business. In addition, the Monetary Board sets aside a contingency reserve of foreign exchange for sales to customers not considered in the regular budget; this reserve is used primarily for the requirements of old producers to expand production and of new producers to import machinery and raw materials, and for adjustments of quotas. With the exception of certain goods which may, upon approval of the Department of Commerce and Industry, be imported without an exchange allocation from the Central Bank, imports of goods without an exchange allocation (referred to as “no-dollar” imports) are, as a general rule, prohibited. There are no prescription of currency requirements and U.S. dollars are provided for import payments to all countries.

Payments for Invisibles

All payments and remittances abroad for invisibles require exchange licenses. Such licenses are usually granted to pay for most invisibles; they are granted on a limited basis for travel, education, maintenance, profits and dividends, income, royalties, salaries, etc. Travelers may take out with them a maximum of ₱ 20 in Philippine currency, of which coins may not exceed ₱ 5.

Exports and Export Proceeds

In general, exports are not restricted, but they are controlled to ensure that the foreign exchange proceeds are surrendered to an authorized agent of the Central Bank. Exports of certain strategic materials are prohibited. Barter exports are allowed under certain conditions and subject to the approval of the Department of Commerce and Industry.

With the exception of barter exports, the proceeds of all exports must be obtained in U.S. dollars and surrendered to an authorized agent and no commodity may be exported from the Philippines unless covered by a draft drawn in U.S. dollars and unless collection of the proceeds will be undertaken by an authorized agent.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered. Travelers may bring in a maximum of ₱ 20 in Philippine currency, of which coins may not exceed ₱ 10 for third-class passengers.

Capital

All exchange receipts from capital must be surrendered. The transfer abroad of nonresident-owned capital invested prior to December 9, 1949 is not ordinarily allowed. Transfers to nonresident investors of profits and dividends out of current net earnings are allowed in amounts ranging from 25 per cent to 100 per cent of the foreign participation in the net profits or ranging from 20 per cent to 60 per cent of the foreign capital invested, whichever is the lower; the amount permitted to be transferred is related to the contribution made by the firm to the national income, to improving the balance of payments, and to the basic needs of the economy. Capital invested by nonresidents after December 9, 1949 with the prior approval of the Central Bank is eligible for transfer abroad, but all transfers of capital require approval of the Central Bank.

The import and export of, and transactions in, securities involving nonresident interests are subject to license. For certain transactions, licenses may be issued by authorized securities dealers on behalf of the Central Bank.

Foreign assets held by residents and acquired prior to December 9, 1949 are subject to declaration and their use or disposal is subject to approval. Earnings and other acquisitions of foreign exchange abroad by residents since that date must be remitted to the Philippines and surrendered. Transfers of capital abroad by residents are in principle not permitted.

Changes during 1958

January 15. Up to 50 per cent of the advance deposit required for opening letters of credit could be made in government bonds.

January 20. The temporary ban on barter transactions was lifted, except for exports of saw logs and other major export items.

January 23. Certificates validated by authorized representatives of the Central Bank were required in order to obtain release of imports.

January 27. Living allowances of students abroad were reduced by 20 per cent. Similarly, allowable remittances out of 1957 profits were reduced by 25 per cent.

February 1. Monthly allowances for living expenses abroad of dependents of Philippine residents were reduced by 20 per cent.

February 18. The requirement of a deposit for opening new letters of credit was lifted for producers who manufacture essential and semiessential goods.

February 21. The requirement of a deposit for opening letters of credit was removed for imports of decontrolled goods.

July 18. The opening of letters of credit covering barter permits was temporarily suspended.

August 1. Banks were permitted to open import letters of credit for barter transactions approved prior to July 1, 1958.

September 1. The following regulations became effective for barter transactions: Barter may be conducted not only by bona fide producers but also by cooperatives or associations of producers. Deals involving two or more foreign countries are prohibited. Foreign goods bought through a barter transaction must be imported into the Philippines in the name of the producer-exporter. At least 70 per cent of barter imports must be machinery, equipment, and essential commodities, 20 per cent may be semiessential goods, and 10 per cent may be nonessential goods. The barter of major export products is limited to not more than 15 per cent of total exports of such products during the preceding calendar year, of minor export products to 30 per cent of total exports during the preceding calendar year, and of “low-grade” items to amounts equivalent to actual cash exports.

October 3. The remittance abroad of profits and dividends earned after September 30, 1958 was temporarily suspended.

October 10. A service charge of 1.20 per cent was levied on all letters of credit opened or remittances made for imports chargeable to the foreign exchange budget for the fourth quarter of 1958.

October 15. The service charge of 1.20 per cent (see October 10, above) was made applicable to all imports.

October 21. The maximum amount of Philippine pesos that may be brought into or taken out of the Philippines by a traveler was reduced from ₱ 100 to ₱ 20.

October 22. It was announced that all blocked funds must be deposited in special, blocked, fiduciary accounts with commercial banks before December 15, 1958. Blocked pesos could now be used for investment in dollar-saving or dollar-earning industries under certain conditions, as well as to purchase shares of certain mining companies, to purchase gold at free market rates, to finance locally produced motion pictures, to purchase government bonds, and for local expenditures.

October 23. The deposit required for opening letters of credit for imports of semiessential consumer goods and nonessential producer goods was reduced from 200 per cent to 100 per cent.

October 27. The deadline for depositing nonresident accumulated blocked pesos in special, blocked, fiduciary accounts was extended to December 21, 1958. Certain funds were permitted to be deposited in, and specified payments to be made from, these accounts without the approval of the Central Bank.

December 10. A cash deposit of 100 per cent was required for the opening of letters of credit for imports of nonessential consumer items through barter.

December 11. The deadline for depositing blocked funds of nonresidents in special, blocked, fiduciary accounts without losing remittance rights was extended to January 16, 1959.

Saudi Arabia

Exchange Rate System

No par value for the Saudi Riyal has been established with the Fund. The Saudi Arabian Monetary Agency fixes the value of the riyal in relation to foreign currencies. The official government selling rate through the Monetary Agency is Saudi Riyals 3, qurush 16½, per US$1. The commercial banks’ selling rate is SR 3/17 per US$1. Payments for imports of specified commodities, transfers by foreign employees of the Government, and government transfers for which provision has been made in the fiscal budget are made at the official rate. All other payments are made through the free market. Exchange control regulations are applied only to the official allocations for trade and private remittances. Foreign exchange acquired from other than official sources, including the proceeds of exports, may be used freely in any way and may be sold in the free market, in which the Saudi Arabian Monetary Agency also sells exchange. The free market quotation at the end of February 1959 was around SR 5 per US$1.1 Saudi Arabia has an agreement with the Egyptian Region of the United Arab Republic stipulating a fixed rate of exchange of SR 10 = LE 1.

Administration of Control

Import licenses for all goods payable at the official rate are issued by three Import Offices, in Jedda, Riyadh, and Dammam. The Import Offices are under the supervision of the Controller-General of Imports, who receives instructions from the Minister of Finance and National Economy. Exchange licenses for payments for invisibles at the official rate are issued by the Exchange Control Department of the Monetary Agency. In granting licenses for exchange at the official rate, the Import Offices and the Monetary Agency are limited to allocations made quarterly by the Ministry of Finance and National Economy. Exchange at the official rate is provided to the banks by the Saudi Arabian Monetary Agency in accordance with directives of the Minister of Finance and National Economy.

Prescription of Currency

Imports from Lebanon must be settled in Lebanese pounds. Exports to France, other than of oil, are payable in French francs. Oil sold to the Egyptian Region of the United Arab Republic by the Government is payable in Egyptian pounds. There are no other obligations imposed on importers, exporters, or other residents prescribing the method or currency for payments to or from persons resident abroad.

Imports and Import Payments

Import licenses from one of the three Import Offices are required for all imports at the official rate and are granted only for imports of certain, listed, essential items up to the limits of quarterly global allocations of foreign exchange. Licensing for imports under the Regulations for the Investment of Foreign Capital is automatic. The remittance of official exchange to pay for imports or the opening of import letters of credit is permitted only after an import license has been obtained. Import licenses for other items are not required and the importer must obtain his exchange in the free market. Imports of gold are subject to prior license by the Monetary Agency. Imports of motor vehicles and all imports from Israel are prohibited.

Payments for Invisibles

Foreign employees under contract with the Saudi Arabian Government may remit abroad at the official rate of exchange 50 per cent of their net incomes if their families are in Saudi Arabia or 70 per cent if their families are living abroad. Government transfers for which provision has been made in the fiscal budget are also made at the official rate. All other payments for invisibles take place through the free market and are not subject to license. Travelers leaving Saudi Arabia are permitted to carry a maximum of SR 500 in notes.

Exports and Export Proceeds

No license is required for exports. The surrender of the proceeds of exports is not required and exchange receipts are freely disposable. The re-export of imported goods is prohibited, as are also exports to Israel. Exports of gold are subject to prior license by the Monetary Agency. Exports of Saudi Arabian silver or gold coins are prohibited.

Proceeds from Invisibles

There are no limitations on receipts from invisibles. Travelers may not bring in more than SR 500 in notes. Other imports of Saudi Arabian currency are prohibited, except for small amounts of silver coins in border traffic. Imports of Egyptian pounds are also prohibited, except that travelers may bring in up to LE 20 in LE 1 notes.

Capital

No exchange control obligations are imposed on capital receipts, but outgoing payments require permits. Under the provisions of the law of May 23, 1957, entitled “Regulations for the Investment of Foreign Capital,” profits from foreign investment in Saudi Arabia may be remitted abroad at the rate of 20 per cent per annum on the capital invested. The capital itself may be withdrawn, after three years, at the maximum rate of 30 per cent of its value per annum, or in its entirety after eight years, together with accumulated profits. In the event of technical difficulties acknowledged by the ministries concerned, the capital may be withdrawn at any time. A committee (formed by the Minister of Commerce as chairman, a member of the Ministry of Commerce, a member of the Ministry of Finance and National Economy, and a member of the Exchange Control Department of the Monetary Agency) receives, examines, and grants all applications for foreign investment and for transfer of profits under this law.

Changes during 1958

January 23. A royal decree obliged all exchange brokers to buy and sell exchange at official rates only.

January 27. The Saudi Arabian Monetary Agency resumed allocations of official exchange to the commercial banks (these allocations had been interrupted since November 18, 1957).

February 7. Exchange brokers were again permitted to buy and sell foreign exchange at free market rates.

February 28. The payments agreement with France was terminated (under this agreement, the Saudi Arabian Monetary Agency had maintained a French franc account with the Bank of France, which was used mainly for pilgrimage expenses and for Saudi Arabian imports from the French Franc Area). Certain provisions of the agreement continued to apply, however.

June 4. Two royal decrees revising the import and exchange control system, as described in the following paragraphs, became effective.

Royal Decree No. 39, of May 25, 1958, abolished the Import Committees and established Import Offices in Jedda, Riyadh, and Dammam, under the supervision of a Controller-General of Imports nominated by the Minister of Finance and National Economy and appointed by the President of the Council of Ministers; the Controller-General of Imports would receive his instructions from the Minister of Finance and National Economy. The three Import Offices were charged with the licensing, at the official rate, of imports of 31 specified commodities (or groups of commodities) in accordance with quarterly allocations of foreign exchange; the allocations would be determined by the Minister of Finance and National Economy after consultation with the Governor of the Saudi Arabian Monetary Agency and would be released by the Monetary Agency. Importers were now given the right to choose the banks through which they wished to open letters of credit. Imports of motor vehicles of all kinds were prohibited for a period of six months. Imports and exports of gold would be subject to regulations issued by the Minister of Finance and National Economy and approved by the Council of Ministers. All other goods could be imported freely, without license, but without being entitled to official exchange from the Monetary Agency.

Royal Decree No. 40, also of May 25, 1958, contained the following provisions: The Monetary Agency would release exchange at the official rate only for (1) imports licensed in accordance with Decree No. 39, (2) the salaries of foreign employees and officials of the Government, to the extent that these could be transferred abroad in accordance with existing regulations, and (3) government transfers for which provision was made in the fiscal budget. Payments for all other goods, services, and transfers were to be made through the free market and would not require licenses. All import licenses outstanding, except those against which irrevocable letters of credit had been opened, were canceled. Also revoked were all outstanding licenses for private transfers other than those under (2) and (3), above. The Monetary Agency was authorized, for the purpose of stabilizing the riyal, to buy and sell gold and foreign currencies in the free market at any time, subject to the directives of the Minister of Finance and National Economy. The latter’s Exchange Control Department was abolished, and its functions were transferred to the Monetary Agency. For each quarter, the Minister of Finance and National Economy would, after consultation with the Governor of the Monetary Agency and the Controller-General of Imports, determine the amounts of foreign exchange to be allocated for the importation of goods and the personal transfers of foreign employees of the Government. The Minister of Finance and National Economy was authorized, subject to approval of the Council of Ministers, to order the surrender of specified foreign currency earnings at the official rate.

September 18. The Monetary Agency reduced its selling rate for U.S. dollars in the free market to SR 5/9 per US$1.

November 18. The Monetary Agency reduced its selling rate for U.S. dollars in the free market from SR 5/9 to SR 5/7 per US$1.

November 18. The ban on the import of passenger motor vehicles was extended for a further six months. The import of buses, trucks, and dump-trucks was no longer prohibited, provided they were paid for with exchange from the free market.

Spain

Exchange Rate System

No par value for the Spanish Peseta has been established with the Fund. The official rates are Pts 42.00 buying, and Pts 42.27 selling,1 per US$1, and most commercial transactions are settled at these rates. Other effective rates arise from the application of premiums and taxes on the proceeds of certain exports and of taxes on sales of exchange for certain imports (see Table of Exchange Rates, below). In addition, there is a preferential rate of Pts 52.00 per US$1 which applies to certain noncommercial dollar remittances from the United States to beneficiaries in the Spanish Monetary Area.

Authorized banks are permitted to operate in the exchange market, acting as intermediaries between buyers (who must have permits from the Spanish Foreign Exchange Institute) and sellers. Rates for currencies of clearing agreements (see section on Prescription of Currency, below) are quoted by the Spanish Foreign Exchange Institute.

Exchange Control Territory

The Peninsular Territories of the Spanish State, the Canary Islands, the Balearic Islands, Ceuta, Melilla, and the Spanish towns and provinces in Africa constitute a single exchange control territory, the Spanish Monetary Area.

Administration of Control

On a policy level, controls are administered by the Ministry of Finance, the Ministry of Commerce, and the Spanish Foreign Exchange Institute, and on a technical administrative level, by the Spanish Foreign Exchange Institute, the General Department of Foreign Trade in the Ministry of Commerce, and authorized banks.

Prescription of Currency

Prescription of currency requirements are applied to all categories of exchange payments through individual licenses. Settlements on account of merchandise transactions and invisibles are made in the currency determined on the basis of the country of origin or destination or in the manner prescribed by the provisions of the relevant bilateral trade and payments agreement. Thus, settlements with Belgium-Luxembourg, Denmark, France, the Netherlands, Norway, Portugal, Sweden, Switzerland, and the United Arab Republic (Egyptian Region) are made through agreement accounts expressed in the currencies of those countries; settlements with Iceland are made through agreement accounts in sterling; and settlements with Argentina, Austria, Bolivia, Brazil, Bulgaria, Chile, China (Taiwan), Colombia, Cuba, Czechoslovakia, Ecuador, El Salvador, Finland, Greece, Hungary, Mexico, Morocco, Paraguay, Poland, Rumania, Tunisia, Turkey, Uruguay, and Yugoslavia are made through agreement accounts in U.S. dollars.

Imports and Import Payments

All imports require import licenses, which are issued by the General Department of Foreign Trade and are then sent to the Spanish Foreign Exchange Institute, which authorizes the payment when it is satisfied that foreign exchange will be available. Foreign exchange is provided for authorized imports through official allocations at the official rate. A temporary tax (fondo de retorno), ranging from 25 per cent to 200 per cent according to commodity, is levied on certain imports (representing nearly 40 per cent of Spain’s total imports), partly as a revenue device and partly in order to equalize domestic and foreign prices pending the introduction of a new customs tariff. Subject to the approval of the Spanish Foreign Exchange Institute and the Ministry of Commerce, nonresidents may import essential materials and use the proceeds accruing from their sale for specified expenses and investments in Spain. Specified industries grouped on a national or regional basis are permitted to import materials needed for production of their export goods out of their own retained exchange (see section on Exports and Export Proceeds, below).

Payments for Invisibles

All transfers abroad and payments by residents in favor of nonresidents on account of invisibles are subject to individual license, and practically all of them are made at the official rate. Persons traveling abroad may take with them a maximum of Pts 2,000 in notes of the Bank of Spain.

Exports and Export Proceeds

All exports are subject to individual licenses issued by the General Department of Foreign Trade. This requirement is mainly in order to enforce currency prescription and surrender regulations and to determine the premium or tax (fondo de retorno) applicable to the export proceeds (see Table of Exchange Rates, below). Proceeds accruing from exports must be surrendered through authorized banks to the Spanish Foreign Exchange Institute or sold through them in the exchange market. However, in accordance with the arrangements called “Special Operations,” specified industries grouped on a national or regional basis are permitted to retain a percentage of their export proceeds to pay for imported raw materials or other goods needed by them for their production of export goods (there are altogether 13 such arrangements, 8 of which are regional). The percentages of export proceeds that may be retained are as follows: 10 per cent from exports of pyrites; 20 per cent from exports of preserved fish and vegetables, various manufactures, cotton cloth, cloth made of viscose rayon, books, periodicals, and other publications; 50 per cent from exports of silk fabrics; 55 per cent from exports of knitwear made of reclaimed materials; and 70 per cent from exports of cloth made of reclaimed materials. The proceeds of exports of certain goods to Italy are granted special premiums ranging from 7 to 100 per cent on the official rate. Minimum prices (60-70 per cent of actual prices) are established for exports of citrus fruits and vegetables sold on a commission basis; proceeds above these prices must be sold at the Pts 52.00 rate.

Proceeds from Invisibles

All exchange proceeds from invisibles must be sold in the exchange market or to the Spanish Foreign Exchange Institute through authorized banks. Persons may bring in a maximum of Pts 10,000 in notes of the Bank of Spain.

Capital

All outward capital transfers are subject to individual approval. All incoming capital representing foreign investment in Spanish enterprises requires the approval of the Spanish Foreign Exchange Institute. Special facilities are accorded to investments effected in Spain by nonresidents through the importation of essential goods (see section on Imports and Import Payments, above).

Table of Exchange Rates (as at January 12, 1959)2(pesetas per U.S. dollar)
BuyingSelling
10.95 (Official Basic Rate)11.22 (Official Basic Rate plus Commission)
31.00 (Official Rate less Pts 11 Tax)

Exports of mercury.
36.00 (Official Rate less Pts 6 Tax)

Exports of iron ore, fresh fish, raw hides, herbs, and raw cork.
42.00 (Official Rate)

Exports not subject to other rates.

Most invisibles. Capital.
42.27 (OfficialRateplusCommission)

All payments not subject to other rates.
45.00 (Official Rate plus Pts 8 Premium)
Exports of orange, apricot, and peach pulp; manufactured cork; barytes; honey, ordinary and sweet wines, La Rioja wines, sherries, and brandy in casks; tunny; tinned fruit; and vegetables and tomatoes in tins of more than five kilograms.
48.00 (Official Rate plus Pts 6 Premium)
Exports of green olives in barrels and olive oil in drums.
50.00 (Official Rate plus Pts 8 Premium)
Exports of ordinary and sweet wines, sherries, La Rioja wines, and brandy in bottles; tunny from the Canary Islands; tinned fruit; vegetables and tomatoes in tins of less than five kilograms; canned green olives and olive oil; saffron and red pepper; books; cider, fruit juices, citrus concentrates, and citrus products in general; tinned meats; metal goods; chemical products; wood products; pottery and glass; textile and leather goods; playing cards; cigarette paper; tinned fish; woolen material; carob bean gum; crinvegetal; and treated cotton materials.
52.00 (Official Bate plus Pts 10 Premium)52.77 (Official Rate plus 25% Tax plus Commission)
Certain noncommercial dollar remittances from the United States.3Imports of drinks and raw materials for drinks, rubber, skins, gut, soybeans, materials for tanning, textiles, handicrafts, rags, all varieties of paper except printed paper and cardboard, all types of vegetable fibers except cotton, animal fibers, minerals (except coal and petroleum products), metals and metal goods, machinery (except that designated for production of electricity, nitrogenous fertilizers, or coal mining); apparatus and instruments of all kinds and their spare parts and replacements; all chemical products except fertilizers; raw cork, lecithin, synthetic cork, and cork goods; unused or printed films; gold watches.
52.77-54.87 (Official Rate plus 25-80% Tax plus Commission)
Imports of marine engines (the tax is applied according to the power).
54.87 (Official Rate plus 30% Tax plus Commission)
Imports of metal watches.
59.07 (Official Rate plus 40% Tax plus Commission)
Imports of trucks and engines for industrial vehicles.
63.27 (Official Rate plus 50% Tax plus Commission)
Imports of whisky.
126.27 (Official Rate plus 200% Tax plus Commission)
Imports of cars.

Changes during 1958

January 14. A trade and payments agreement providing for settlements through an agreement account in U.S. dollars was concluded with Yugoslavia.

January 18. A trade and payments agreement providing for settlements through an agreement account in U.S. dollars was concluded with Czechoslovakia.

January 28. A trade and payments agreement providing for settlements through an agreement account in U.S. dollars was concluded with Rumania.

February 3. The tax of Pts 6 per US$1 on exports of olive oil in small tins was abolished.

February 7. A premium of Pts 3 per US$1 was given to exports of wines, liqueurs, and other alcoholic beverages in bottles.

February 7. A trade and payments agreement providing for settlements through an agreement account in U.S. dollars was concluded with Hungary.

March 13. The tax payable on exports of raw cork was reduced from Pts 11 to Pts 6 per US$1.

April 18. An exchange rate of Pts 52 per US$1 was established for certain noncommercial dollar remittances from the United States.

May 20. A revised payments agreement with Italy provided that settlements would be in Italian lire on a multilateral basis or in other agreed currencies.

August 15. The premium given on exports under certain “Special Operations” (chiefly metal goods and wooden products, glass, and tinned fish) was increased from Pts 3 to Pts 8, making an effective rate of Pts 50 per US$1; this rate was also applied to exports of woolen textiles.

September 15. Spain became a member of the International Monetary Fund.

September 24. A temporary tax (fondo de retorno) was imposed on certain imports. All other taxes and premiums continued to apply, but under the fondo de retorno arrangements.

December 8. A trade and payments agreement providing for settlements through an agreement account in U.S. dollars was concluded with Bulgaria.

Sudan1

Exchange Rate System

The par value is Sudanese Pound 1 = US$2.87156. Official rates for transactions in sterling are fixed by the Currency Board: LSd 0.974 buying, and LSd 0.976 selling, per £1, for transactions between the banks and with the Government, and LSd 0.9725 buying, and LSd 0.9775 selling, per £1, for transactions with the general public. The authorized banks quote their own rates for other currencies, based on market quotations in London.

Administration of Control

Exchange control is administered by the Ministry of Finance and Economics, much of the detail being carried out by authorized banks. Licensing of imports and exports is the responsibility of the Ministry of Commerce, Industry, and Supply, but all licenses must be validated by the exchange control authorities.

Prescription of Currency

Transactions with bilateral countries2 are normally settled in Sudanese pounds through the relevant Bilateral Account; however, except for transactions with the Egyptian Region of the United Arab Republic, some noncommercial invisibles have to be settled outside these accounts. Payments to all other countries and monetary areas (the “convertible area”) may be made in Sudanese pounds to the credit of any nonresident account or in any foreign currency; receipts from the “convertible area” may be accepted in Sudanese pounds from any Convertible Account or in U.S. dollars, External Account sterling, or any other fully or externally convertible currency.

Nonresident Accounts

The accounts in Sudanese pounds of residents of countries comprising the former American Account Area, the former Transferable Area, and the Sterling Area are designated Convertible Accounts and are exchangeable into any foreign currency. Bilateral Accounts are used for most transactions with countries with which the Sudan has bilateral payments agreements (see footnote 2).

Imports and Import Payments

Most imports require individual import licenses, although a few commodities originating in non-dollar countries are imported freely on open general license. All imports of dollar goods require individual licenses, which are not issued for commodities that may be imported on the same terms from soft currency countries. Imports from Israel are prohibited. Exchange appropriate to the country of origin of the goods is granted for all permitted imports (see section on Prescription of Currency, above).

Payments for Invisibles

Most payments for invisibles require licenses. Remittances within reasonable limits are permitted for family maintenance, education and medical expenses, and assistance to close relatives. Foreign nationals are also permitted to remit reasonable amounts of current savings to their own countries. Shipping charges, insurance premiums, profits, interest, and dividends earned by nonresidents may be remitted freely upon presentation of the required documents. Travel expenses for tourism and other purposes are authorized up to the equivalent of LSd 100 for each adult, and LSd 25 for each child, annually. Travelers may not take out of the Sudan more than LSd 10 in Sudanese currency.

Exports and Export Proceeds

Exports from the Sudan are subject to license, to surrender of the proceeds, and to certain regulations governing the credit terms that can be extended to foreign buyers. Export licensing is quite liberal. Export proceeds must be repatriated and surrendered through an authorized bank within six months after export (see section on Prescription of Currency, above). Exports on credit are limited by the six-month surrender requirement, as well as by specific regulations governing consignment sales. Exports to Israel are prohibited.

Proceeds from Invisibles

Receipts from abroad in respect of invisibles must be surrendered to authorized banks and are subject to the general prescription of currency requirements. Travelers entering the Sudan may bring in LSd 10 in Sudanese currency and any amount in notes and coins of other countries permitted by their regulations to be taken out of those countries.

Capital

Under a law for the encouragement of foreign investment, incoming foreign capital may be registered and thus may receive, among other advantages, a guarantee for repatriation of the original capital and profits thereon. Non-Sudanese emigrants may transfer up to £2,000 (sterling) to the dollar area or £7,000 to non-dollar countries; Sudanese nationals are permitted to transfer £2,000 on emigration to non-dollar countries and, depending on the number in the family, up to £2,000 to the dollar area. Except with the explicit approval of the exchange control authorities, remittances may be made only to the country of origin of the applicant.

Changes during 1958

April 27. The open general license for imports from soft currency countries was canceled and a new one, narrower in scope, was issued. The freedom to import from the Egyptian Region of the United Arab Republic was rescinded. The new open general license listed 24 items that could be imported freely—21 from the Sterling Area and the Transferable Account Area, including the Egyptian Region; semn, cattle, calves, and sheep from French Equatorial Africa; and Ethiopian coffee when imported through certain, specified towns.

July 23. An initial par value for the Sudanese pound of LSd 1 = US$2.87156 was established with the International Monetary Fund.

September 12. The maximum period for credit granted by domestic banks for imports of goods was shortened to four months from the date of the arrival of goods in Port Sudan; previously, the period had been four months from the date of clearance of the goods in Port Sudan. As from January 1, 1959, the period for imports of consumers’ goods was to be further shortened to three months from the date of arrival in Port Sudan. The cash margin to be paid by importers on the opening of letters of credit was increased from 33% per cent to 40 per cent.

October 20. The bilateral payments agreement with Saudi Arabia expired.

December 17. Exchange allowances for tourist and leave travel were reduced from the equivalent of LSd 200 for each adult and LSd 100 for each child, annually, to LSd 100 and LSd 25, respectively.

Note.—On April 5, 1959, the American Account Area, the Transferable Account Area, and the Sterling Area were unified in the Sudanese exchange control regulations as the “convertible area” and nonresident accounts related to those areas were designated Convertible Accounts. The prescription of currency regulations were modified to permit payments to the “convertible area” to be made in Sudanese pounds to the credit of any nonresident account or in any foreign currency; receipts from that area were to be obtained in Sudanese pounds to the debit of a Convertible Account or in U.S. dollars, External Account sterling, or any other fully or externally convertible currency.

Sweden

Exchange Rate System

The par value is Swedish Kronor 5.17321 = US$1. The Sveriges Riksbank’s official exchange rate limits for the U.S. dollar are SKr 5.1715 buying, and SKr 5.1750 selling, per US$1. The rates for telegraphic transfers in U.S. dollars between Swedish banks and the public are SKr 5.17 buying, and SKr 5.18 selling, per US$1. Spot market rates for the externally convertible European currencies1 fluctuate between limits resulting from the official U.S. dollar rate in relation to the official exchange rate limits for the U.S. dollar in the respective countries. Forward market rates for these currencies are left to the interplay of market forces.

Administration of Control

Import and export licenses, when required, are issued by the National Board for Trade Licenses or, in the case of foodstuffs, the State Agricultural Marketing Board. All payments to and from nonresidents must in principle be made through one of the 14 Swedish authorized banks, which have been given wide powers by the Sveriges Riksbank to approve payments.

Prescription of Currency

For prescription of currency purposes, countries are divided into two groups: the bilateral countries2 and the convertible area (all other countries). Payments to residents of bilateral countries must be made in the currency of, or by crediting kronor to a Bilateral Account related to, the country concerned. Receipts from a bilateral country may be accepted in any currency of the convertible area or in kronor through a Bilateral Account of the country concerned or any Convertible Account. Payments to residents of the convertible area may be made in any foreign currency or by crediting kronor to any Regular Account (see section on Nonresident Accounts, below). Receipts from countries in the convertible area may be accepted in any currency of that area or in kronor to the debit of any Convertible Account.

Nonresident Accounts

There are two main types of nonresident account held in Swedish kronor with authorized banks in Sweden: Regular (i.e., current) Accounts and Restricted Accounts.

Regular Accounts include Bilateral Accounts, held by residents of countries with which Sweden has bilateral payments arrangements (see footnote 2), and Convertible Accounts, held by residents of all other countries. Convertible Accounts may also be held by residents of bilateral countries, e.g., in cases where the amounts credited to such accounts emanate from other Convertible Accounts or from the sale of currencies of the convertible area. Convertible Accounts may be debited for transfers to any other Regular Account and for authorized payments to residents of Sweden, or exchanged into any foreign currency. They may be credited with transfers from other Convertible Accounts, authorized payments by residents of Sweden, or sales of currencies of the convertible area. Bilateral Accounts may be debited for transfers to other Bilateral Accounts of the same country, exchanged into the currency of that country, or debited for authorized payments to residents of Sweden. They may be credited with transfers from other Bilateral Accounts of the same country or from any Convertible Account, authorized payments by residents of Sweden, or sales of currencies of the convertible area. Replenishment of Regular Accounts with the proceeds of sales of currencies or by transfers from other Regular Accounts may not result in the creation of abnormal balances on the accounts.

Nonresident-owned capital that cannot be transferred abroad usually is allowed to be deposited in Restricted Accounts. A Restricted Account may be used to cover the holder’s and his family’s living expenses in Sweden and for investment in Swedish bonds quoted on a Swedish stock exchange. Bonds purchased in this way and proceeds therefrom must be deposited in a “restricted securities” account with an authorized bank or stockbroker.

Imports and Import Payments

Most goods from OEEC countries and their associated areas, Finland, and Yugoslavia, as well as printed matter from all countries, may be imported freely. Most commodities originating and purchased in dollar area countries are also free of import restriction. Some imports from other countries require import licenses.

When the import license has been obtained, or if no license is required, payment may be effected without delay. Normal advance payments are, as a rule, also permitted. In principle, payments for imports must be made in any manner prescribed for payments to the country of origin (see section on Prescription of Currency, above).

Payments for Invisibles

Payments to nonresidents for most current invisibles are allowed freely through the authorized banks. Any reasonable amount of exchange is granted for travel for any purpose to Denmark, Finland, Iceland, Norway,3 and the Sterling Area countries. The equivalent of SKr 5,000 yearly for each person is granted for tourist travel to other countries; and for business and official travel to other countries, exchange may be granted up to SKr 150 a day for each person, but normally no more than SKr 3,000 a trip and SKr 6,000 a year.

Each person leaving Sweden may freely take with him Swedish and foreign banknotes to a total value of SKr 1,000 (Swedish banknotes in denominations no higher than SKr 100). Persons traveling to Denmark, Finland, Iceland, and Norway may, further, up to a total of SKr 5,000, take with them without special documentation means of payment (Swedish banknotes excluded) that have been bought in Sweden from authorized banks and travel agents. Nonresidents may, when leaving Sweden, freely export foreign banknotes and other means of payment brought into the country by them.

Exports and Export Proceeds

Most exports to North, Central, and South American countries, OEEC countries, and Finland are exempt from licensing requirements. However, payment must be received within six months after the dispatch of the commodity and must be in conformity with the regulations (see section on Prescription of Currency, above). In principle, payment must be received in the manner prescribed for the country of final destination.

Export proceeds from Denmark, Finland, and Norway exceeding SKr 10,000, and export proceeds from all other countries exceeding SKr 5,000, must be reported to the Sveriges Riksbank. Proceeds from exports of goods (as well as from invisibles) do not have to be surrendered: they may be kept in a currency account with a Swedish authorized bank and used by the holder to make authorized payments abroad, or they may be sold against Swedish kronor at the official rate.

Proceeds from Invisibles

Receipts from invisibles from Denmark, Finland, and Norway exceeding SKr 10,000, and receipts from all other countries exceeding SKr 5,000, must be individually reported to the Sveriges Riksbank, but they need not be surrendered.

Each person entering Sweden may import SKr 1,000 in Swedish banknotes and coins in denominations no higher than SKr 100, and other means of payment without limitation.

Capital

Investments in Sweden by nonresidents and repatriation of capital owned by nonresidents are subject to approval. Such approval is normally granted where direct investments are concerned. Transfers from Sweden on account of dividends and other earnings on investments, as well as payments for contractual amortization, are permitted against presentation of an affidavit or if the underlying transaction has been specifically approved. Inheritances due to nonresidents may be transferred, and the repatriation of moderate amounts of other nonresident-owned capital is also permitted. Emigrants may transfer funds to countries in the dollar area up to the equivalent of SKr 50,000 for each person on special application; for transfers to countries outside the dollar area, the maximum is SKr 75,000. In accordance with an agreement concluded by Sweden with Denmark, Norway, and the United Kingdom in 1950, certain capital transfers and transactions between Sweden and these countries are generally permitted.

Nonresident-owned capital assets that are not permitted to be transferred abroad may be used in Sweden for certain purposes or are held in Restricted Accounts (see section on Nonresident Accounts, above).

Requests by residents to transfer capital abroad for direct investment are considered on their merits and are in most cases approved. Transfers of capital abroad for portfolio investment are permitted only exceptionally.

Securities may be imported into Sweden through the intermediary of an authorized bank; however, their disposal is subject to approval. The export of, and transactions in, securities involving nonresident interests are also subject to approval.

Changes during 1958

January 1. Nonresident accounts held by residents of all non-dollar countries, except 12 specified countries to which bilateral payments arrangements applied, were designated Transferable Accounts. All residents of Transferable Account countries became eligible to hold Transferable Accounts. The regulations on prescription of currency were consolidated so as to stipulate uniform methods of payment between Sweden and the dollar area, Sweden and the Transferable Account countries, and Sweden and the Bilateral Account countries. Regular Accounts held by residents of the dollar area were redesignated Convertible Accounts. Yugoslavia was included in the Transferable Account area.

May 23. Regulations concerning the export of Swedish and foreign banknotes and other means of payment by persons leaving Sweden were liberalized.

December 29. Transferable Accounts were designated Convertible Accounts. The Bilateral Accounts of Greece, Portugal, and Turkey were also designated Convertible Accounts. Any currency could be used to pay for imports from countries included in the convertible area and any currency of that area could be accepted for payments from that area. The surrender requirement, which had applied only to dollar currencies, and the “transit dollar” system (see Ninth Annual Report on Exchange Restrictions, page 275) were abolished. The allowance of foreign exchange for tourist travel to the dollar area was raised to SKr 5,000 a year.

Thailand

Exchange Rate System

No par value for the Thai Baht has been established with the Fund. There are fluctuating free market rates at which all authorized transactions take place. All incoming exchange must be sold to an authorized agent at these rates. All outgoing payments are subject to approval (given automatically for bona fide commercial transactions) and take place also at the fluctuating free market rates. As at December 30, 1958, the free rate for the U.S. dollar was approximately B 21.02 per US$1.

Administration of Control

Exchange control is administered by the Bank of Thailand on behalf of the Ministry of Finance; the Bank delegates responsibility for most transactions to authorized agents, i.e., authorized banks and authorized companies. A few imports and exports are subject to licensing by the Ministry of Economic Affairs.

Prescription of Currency

There are no special requirements concerning the currency to be used for settlements with foreign countries; however, payments are made largely in sterling and related currencies or in U.S. dollars.

Nonresident Accounts

Transfers of baht to and from the accounts of nonresidents (including transfers between nonresident accounts) require approval, which is granted automatically for certain current payments.

Imports and Import Payments

Most commodities may be imported freely, but import licenses are required for some 55 listed commodities and for most of these items licenses are not generally granted.1 Payments for imports must be made by means of letters of credit, unless approval otherwise is given, and are made at the free market rate. Importers must obtain, in addition to the usual documents, a “certificate of payment” from an authorized agent before imported goods exceeding B 3,000 in value can be cleared through the Bangkok customs or goods exceeding B 5,000 in value can be cleared through other customs stations.

Payments for Invisibles

Authorized payments for invisibles are made at the free market rate. In general, exchange is provided freely for transactions in invisibles when the applications are supported by the documentary evidence specified in the regulations. For foreign travel and family remittances, however, the amounts of exchange that the authorized agent may sell are limited.

No person may take out local currency exceeding B 500 or foreign currency exceeding the equivalent of UK£50 or US$140 without prior approval of the exchange control authorities. A family traveling under the same passport may not take out more than twice these amounts without a permit. Persons in transit may take out any foreign exchange not exceeding the amounts they imported on entry.

Exports and Export Proceeds

Eight categories of exports are subject to a licensing procedure,2 while all others may be exported freely. The exporter is required to obtain a “certificate of exportation” from an authorized agent in order to clear the shipment through customs, as follows: for shipments of rice, rice flour, tin, or rubber exceeding B 1,000 in value through any customs station; for shipments of charcoal or wood exceeding B 10,000 in value through certain provincial customs stations; and for goods exceeding B 3,000 in value through the Bangkok customs or B 5,000 in value through other customs stations. This certificate assures repatriation of the export proceeds. Export proceeds must be sold to authorized agents at the free market rate within seven days of receipt but not later than three months after the date of export.

Proceeds from Invisibles

All receipts from invisibles must be sold to an authorized agent at the free market rate. No person may bring into Thailand local currency exceeding B 500 without a permit, and a family traveling under the same passport may not bring in more than B 1,000 without a permit.

Capital

All outward transfers of capital by residents or nonresidents are subject to approval. Foreign exchange from inward capital movements must be sold to an authorized agent. Foreign investments in Thailand can be accorded preferential treatment under the Industrial Promotion Act of October 4, 1954; this treatment can include a guarantee of the transfer abroad of current net earnings. The repatriation of capital is considered on the merits of each case.

Changes during 1958

May 16. The list of imports subject to license was revised by the addition of 8 items and the removal of 20 others. The newly added items were electric-lamp shades, vermicelli, plywood and fiberboard of certain thickness, lunch boxes, resin, paper used for making umbrellas, and glass jars of certain sizes. Among the imports freed from licensing were melon seeds, betel nuts, dried palm leaves and other leaves for making cigarettes, coconut oil, groundnut oil, palm oil, all kinds of animal meats, all kinds of fruits, joss sticks, all kinds of fans, toothpicks, chopsticks, fireworks, paper bags, crepe paper, all kinds of paper weighing 120 grams per square meter, slippers without rubber soles, ornaments made of silver and gold, cement, gypsum, and oil for mixing paints.

September 4. The export licensing list was revised and considerably shortened (25 out of a total of 43 items were eliminated). Export licenses were no longer required for poultry, timber and timber products, cotton textiles, coconut oil, and a number of other commodities.

September 17. Imports of paper clips and pins were prohibited.

October 8. Imports of printed papers in packets and motion-picture films from Mainland China were prohibited.

Tunisia1

Exchange Rate System

No par value for the Tunisian Dinar has been established with the Fund. The official rates are 0.420 dinar = 1 U.S. dollar and 1 dinar = 1,175.49 French francs.

Exchange Control Territory

Tunisia is part of the French Franc Area, but all payments to other parts of that area require prior approval from the Central Bank of Tunisia.

Administration of Control

All French regulations on foreign trade and payments are applicable in Tunisia. Exchange control is administered by the Central Bank of Tunisia. Details of the exchange control are carried out by authorized banks. Import and export licenses are issued by the External Finance Service.

Prescription of Currency

The methods of payment and receipt for settlements with countries outside the French Franc Area are in conformity with the French exchange control regulations and the agreements concluded for the French Franc Area. Settlements with Spain and Yugoslavia, however, are made in agreement dollars under the terms of payments agreements between Tunisia and those countries.

Imports and Import Payments

With few exceptions, commodities originating in and consigned from the French Franc Area may be imported freely. Certain commodities originating in and consigned from OEEC countries and their associated areas may also be imported freely. All other imports require import licenses, which are valid for three months. Imports must be recorded with an authorized bank. Authorized imports may be made within the limits of the exchange placed at the disposal of the importer. Some commodities may be imported only with the freely available proportion of export proceeds retained in EFAC accounts (see section on Exports and Export Proceeds, below).

Payments for Invisibles

All payments for invisibles require exchange control approval. Travelers may not take out more than 20 dinars in Tunisian banknotes unless authorized by the Central Bank of Tunisia. The export of foreign banknotes is subject to license. Nonresident travelers may obtain foreign currencies against payment in French francs, but foreign banknotes are provided only up to the amount permitted to be imported under the regulations of the country to be visited.

Exports and Export Proceeds

Some items require export licenses, but others may be exported if the exporter gives an undertaking to collect and surrender the exchange proceeds. Exports must be recorded with an authorized bank and the exchange proceeds surrendered within three months from the date of export. Certain percentages of export proceeds may, however, be retained in special EFAC (Exportations-Frais Accessoires) accounts and used by the original exporter or supplier of the goods either to pay certain commercial expenses or to pay for imports of certain commodities. The percentages that may be retained in EFAC accounts are 15 per cent for exports giving rise to the sale of a convertible currency (of this 15 per cent, 3 per cent may be used for any payment abroad, including payments for imports of any goods), 10 per cent for exports giving rise to the sale of other currencies, and 6 per cent for exports consigned on a sell-at-best basis. U.S. dollars and other currencies of the dollar area in EFAC accounts may be exchanged for any other currency and the currencies of most OEEC countries may be exchanged for the currency of any other OEEC country.

Proceeds from Invisibles

Residents must surrender to an authorized bank any foreign exchange received by them. Domestic and foreign banknotes may be brought in freely.

Capital

Foreign investments in Tunisia require prior authorization, which may be given by the Central Bank of Tunisia with the agreement of the Tunisian Government. Securities may be imported freely through the authorized banks.

Under a decree concerning foreign investments, a special fund has been established in the Tunisian Treasury to which foreign exchange acquired from private foreign investments in productive enterprises is credited. Future transfers abroad of current earnings from such investments and the repatriation of the original capital are guaranteed. For other investments, the transfer abroad of dividends, interest, and profits may not exceed 8 per cent annually of the capital invested or the amount of foreign exchange imported originally and may not take place in less than two years from the date of the investment.

Changes during 1958

April 14. Tunisia became a member of the International Monetary Fund.

June 23. The 20 per cent surcharge and premium levied on payments to and receipts from countries not in the French Franc Area were abolished, and effective this date, spot or forward purchases and sales of foreign exchange for such settlements could be made on the basis of the official market quotations for the individual currencies. The rate for the U.S. dollar became 420 Tunisian francs per 1 U.S. dollar. A list was issued of commodities which would benefit from a return of 16.66 per cent of their f.o.b. value on importation. Exports of these same commodities would be subject to a 16.66 per cent surcharge. Included in the list were tractors; machinery and equipment for the manufacture of bread, pastry, candy, sugar, and beer, and the processing of meat, fish, and vegetables; agricultural machinery; drilling and excavating equipment; explosion or internal combustion engines; synthetic fibers and textiles; and cotton, wool, linen, and silk textiles.

November 1. A new monetary unit, the Tunisian dinar, was introduced as the currency of Tunisia, replacing the Tunisian franc at a ratio of 1 dinar to 1,000 francs. The administration of exchange control was transferred from the Delegation of the Exchange Control Office in Tunis to the Central Bank of Tunisia.

December 30. The Tunisian Government announced that the exchange rate of the dinar would be maintained at 0.420 dinar per 1 U.S. dollar.

Note.—Effective January 14, 1959, all payments to other parts of the French Franc Area were made subject to the prior approval of the Central Bank of Tunisia. Travelers could take out of the country not more than 20 dinars in Tunisian banknotes.

Turkey

Exchange Rate System

The par value is Turkish Liras 2.80 = US$1. The official rates are LT 2.80 buying, and LT 2.8252 selling, per US$1. All exchange transactions, however, are conducted at effective rates obtained by adding to the official rates an exchange surcharge or one of three exchange premiums.1 All sales of exchange are subject to a surcharge of LT 6.20 per US$1, yielding an effective selling rate of LT 9.0252 per US$1. Exchange proceeds from exports receive an exchange premium of LT 2.10, LT 2.80, or LT 6.20, per US$1, yielding effective buying rates of LT 4.90, LT 5.60, and LT 9.00, per US$1, and all proceeds from invisibles and capital transactions are surrendered at the effective rate of LT 9.00 per US$1. (See Table of Exchange Rates, below.)

Administration of Control

Exchange control is administered by the Ministry of Finance. An Interministerial Coordination Committee, composed of the Minister of Coordination, the Minister of Foreign Affairs, the Minister of Finance, the Minister of Commerce, and the Minister of Industry, determines export policy and makes decisions with respect to the allocation of exchange for imports for current needs and imports for investment purposes, in both the public and the private sectors. Attached to the Interministerial Coordination Committee is a Technical Committee, composed of senior officials of the ministries and general directorates concerned; the preparatory work of the Technical Committee is done by two subcommittees for, respectively, current needs and investment requirements. The Central Bank of the Republic of Turkey issues import certificates required for imports by both the public and the private sectors, up to the limit of global quotas established by the Interministerial Coordination Committee.

Prescription of Currency

Settlements on account of merchandise and invisibles must be made in U.S. dollars, in free Swiss francs, or in any other currency or manner acceptable to the Central Bank, or in accordance with the terms of the relevant payments agreement. Turkey is a participant in the European Monetary Agreement and has payments arrangements with all OEEC countries except Iceland, Ireland, and Portugal. In addition, Turkey has bilateral trade and/or payments agreements with 15 countries.2

Imports and Import Payments

All imports are subject to licenses, which are issued only to registered importers and government departments. Global exchange quotas are established periodically for specified commodities (mostly raw materials, fuels, semimanufactured goods, and essential capital goods). Licenses are issued freely within these quotas, but an importer may not obtain a license for goods valued at more than 15 per cent of a quota. Where the total value of applications exceeds the quota, the Central Bank allocates the available quota among all applicants. As a rule, the quotas cover imports from all countries except bilateral agreement countries, although a part of the quotas may be made available for imports from the latter.3 Licenses may, however, be issued for imports from bilateral agreement countries of commodities for which no quota has been established.

A certain percentage (at present, 20 per cent) of the value of the import must be deposited with the Central Bank at the time application is made for a license and a deposit equivalent to the remainder of the value of the import must be made with the Central Bank within a week after the license has been issued. The import license entitles the holder to purchase the corresponding foreign exchange to pay for the import.

Payments for Invisibles

In principle, payments to nonresidents on account of invisibles are restricted and subject to individual license. However, payments incidental to merchandise transactions are permitted automatically, and licenses are usually granted for payments on account of (1) interest, commissions, and similar payments connected with bank operations, (2) export commissions, registration fees, patent fees, etc., (3) advertisements and other expenses connected with trade, and (4) payments by insurance companies. Exchange for business travel is granted within limits varying according to the amount of income or corporate tax paid by the applicant firm. Exchange for all invisibles is sold at the effective rate of LT 9.0252 per US$1. Travelers are permitted to export LT 99 in Turkish banknotes and coins. Nonresident travelers may take out the unspent portion of the foreign exchange recorded in their passports on entry.

Exports and Export Proceeds

Certain goods may be exported freely. Specified valuable export goods require individual licenses, mainly in order to prevent triangular trade in such goods that would result in payment of soft currency to Turkey for goods finally sold for hard currency, and all exports against currencies other than convertible and transferable currencies are also subject to license. Exporters are required to sell to a bank in Turkey the foreign exchange proceeds of goods exported, within three months from the date of export and within ten days from the date on which the foreign exchange is placed at their disposal. The proceeds of exports of goods in Category A (tobacco, chromium ore, and copper)4 receive a premium of LT 2.10 per US$1; the proceeds of exports of Category B goods (raisins, hazelnuts, and figs) receive a premium of LT 2.80 per US$1; and the proceeds of exports of Category C goods (wheat and other cereals, cotton, other agricultural products, and all other exports) receive a premium of LT 6.20 per US$1.

Proceeds from Invisibles

Foreign exchange accruing to residents for services rendered by them to nonresidents must be surrendered within three months from the date on which the service was rendered and within ten days from the date of acquisition of the exchange. An effective exchange rate of LT 9.00 per US$1 is applicable to all proceeds from invisibles. Travelers are permitted to import LT 100 in Turkish banknotes and metallic currency.

Capital

Capital transfers abroad by residents and capital transactions between residents and nonresidents are subject to the approval of the exchange control authorities.

Foreign investments in Turkey require approval. Foreign companies and contractors established abroad who wish to do business in Turkey must import in the form of foreign exchange the capital and operating funds required by the business. In principle, assets and balances owned by, and earnings accruing to, nonresidents cannot be converted into foreign currency, and if they exceed LT 5,000 a year they are blocked. Subject to individual permit, blocked assets and balances may be utilized within Turkey, except as capital for business.

Foreign capital invested in Turkey under the terms of the Law to Encourage Foreign Investments is accorded preferential treatment, provided the enterprise in which the investment will be made will tend to promote the economic development of the country, will operate in a field of activity open to Turkish private enterprise, and will not entail monopoly or special privilege. The investment may be made in the form of (1) capital brought into Turkey in the form of foreign exchange, (2) installations, machinery, tools, and instruments, or their spare parts, and such special construction materials as may be needed, (3) nonphysical assets, such as concessions, trademarks, and patents, and (4) profits converted into capital through reinvestment. Under this law, as amended, annual profits, interest, and dividends on approved investments and all or part of the invested capital or foreign loan may be remitted abroad in the original currency of the capital. Registered shares or stock certificates issued under this law are freely transferable between persons of all nationalities both in Turkey and abroad.

The capital and interest on long-term loans and credits extended by nonresidents to enterprises in Turkey (including those of an agricultural character) may be accorded the same transfer benefits as those described above for foreign investment. The Ministry of Finance can guarantee such loans to a total of LT 1 billion, subject to the approval of the Council of Ministers.

Foreign capital imported under the Petroleum Law is also accorded certain preferential treatment. Holders of petroleum rights who are authorized to operate in Turkey in accordance with permits, licenses, leases, or certificates issued by the Petroleum Administration may repatriate their capital in foreign exchange or in kind at any time at the exchange rate at which the capital was imported. Foreign holders of petroleum rights are entitled to retain abroad the foreign exchange proceeds of their petroleum exports.

Transactions in securities, including their export and import, require approval where a nonresident interest is involved.

The effective exchange rates of LT 9.00 buying, and LT 9.0252 selling, per US$1, are applied to all incoming and outgoing capital transactions.

Table of Exchange Rates (as at December 31, 1958)(liras per US. dollar)
BuyingSelling
2.80 (Official Rate)2.8252 (Official Rate)
Exports of opium.
4.90 (Official Rate plus LT 2.10 Premium)
Exports of Category A goods.
5.60 (Official Rate plus LT 2.80 Premium)
Exports of Category B goods.
9.00 (Official Rate plus LT 6.20 Premium)9.0252 (Official Rate plus LT 6.20 Exchange Surcharge)
Exports of Category C goods. All invisibles and capital.All imports, invisibles, and capital.

Changes during 1958

April 19. Imports under barter could not be retained by the manufacturer-importer and would be distributed by the Government among interested residents.

May 22. The special exchange rate of LT 5.75 per US$1 was made applicable to sales of exchange for medical care abroad. At the same time, the allocations to merchants of foreign exchange for business travel, classified in various categories, were reduced.

August 4. Major changes were introduced in the exchange rate system as part of a stabilization program. Exports were classified in three categories—A, B, and C—and export proceeds were granted exchange premiums of LT 2.10, LT 2.80, and LT 6.20, per US$1, respectively, yielding effective rates of LT 4.90, LT 5.60, and LT 9.00, per US$1, respectively. The effective rate of LT 9.00 per US$1 was made applicable also to incoming invisibles and capital. A surcharge of LT 6.20 per US$1, yielding an effective rate of LT 9.0252 per US$1, was made applicable to all sales of exchange. The preferential treatment granted under the Law to Encourage Foreign Investments and the Petroleum Law remained in effect, and new rules were established for transfers to Turkey of funds for investment and for capital remittances abroad.

August 25. General rules were laid down for imports and exports. Barter transactions were prohibited. A list of exports subject to license was published and all exports against payment in currencies other than transferable and convertible currencies were made subject to license.

September 23. An import plan totaling US$150 million was announced for the fourth quarter of 1958. At the same time, detailed rules and procedures for import licensing were set forth, including the establishment of global exchange quotas for listed products (mostly raw materials, fuel, semimanufactured goods, and essential capital goods), the requirement of a 20 per cent advance deposit, and rules for the utilization of import licenses.

December 27. The 40 per cent tax on all imports except petroleum products was abolished.

Union of South Africa

Exchange Rate System

The par value is South African Pound 1 = US$2.80. Exchange rates are uniform and are based on the fixed rates for sterling-S.A. pounds (£SA 99/17/6 buying, and £SA 100/7/6 selling, per £100) and the London market rates for sterling against other currencies, maintained between official limits. The rates for the U.S. dollar as at December 31, 1958 were US$2.8075 buying, and US$2.7900 selling, per £SA 1.

Exchange Control Territory

There are no exchange or trade restrictions between the Union of South Africa, South West Africa, Basutoland, Swaziland, and the Bechuanaland Protectorate. These territories may be regarded as forming with the Union of South Africa a single exchange control territory. The Union of South Africa is one of the territories of the Sterling Area.

Administration of Control

Import and export licenses are issued by the Director of Imports and Exports acting on behalf of the Secretary for Commerce and Industries. Exchange licensing is the responsibility of the Treasury, which has delegated this authority to the South African Reserve Bank, which in turn has delegated to the commercial banks some of its licensing power. Appropriate exchange for licensed imports is made available by the authorized dealers upon presentation of suitable documentary evidence.

Prescription of Currency

Settlements with residents of the Sterling Area may be made in any Sterling Area currency. All approved payments to and receipts from nonresidents must be effected in accordance with the methods prescribed by the South African Treasury, i.e., in sterling or South African pounds to or from an External Account or in any specified currency.

Nonresident Accounts

Nonresident accounts are the accounts of persons resident outside the Union of South Africa, Basutoland, Swaziland, and Bechuanaland. They are divided into two categories—Nonresident Sterling Area Accounts, which are held by persons resident in other Sterling Area countries, and External Accounts, which are held by persons resident outside the Sterling Area. Credits to both categories of account require approval. Withdrawals may be used to pay for exports to the monetary area of the account holder, for local payments, and for payments to other nonresident accounts of the same category. Balances on Nonresident Sterling Area Accounts may be transferred freely to any country in the Sterling Area; balances on External Accounts may be remitted freely to the country of the account holder or to any other country outside the Union or converted into any foreign currency.

Imports and Import Payments

All importers must be registered with the Director of Imports and Exports. Some items may be imported without an import license but others require licenses. For certain goods, such as raw materials and maintenance spares and consumable stores for industry, licenses are issued to cover the country’s full requirements; for others, such as commercial vehicles and trucks, licenses are issued on the basis of replacement needs on account of retail sales. Licenses for other items, mainly consumer goods, are subject to quotas granted to individual importers. Such licenses may be either for specified commodities or for general merchandise. Import licenses are valid for imports from any country. All goods from the Federation of Rhodesia and Nyasaland may be imported freely.

Upon presentation of satisfactory evidence that the transaction has been or will be properly effected, an importer is granted exchange to pay for all goods legally imported; payment must be made in the prescribed manner (see section on Prescription of Currency, above).

Payments for Invisibles

All payments to nonresidents (persons, etc., resident outside the Union of South Africa) require exchange licenses, which are granted freely for most invisibles. Exchange to pay for travel, membership fees, family maintenance, etc., is granted liberally. For tourist travel, there is an exchange allocation of £10 a day for each adult, with a maximum of £500; this maximum is increased to £1,000 if the person had not used the travel exchange allowance during the previous calendar year. For business travel, the allocation is £15 a day for each person for travel to the dollar area and £12/10/– a day for each person for travel to other countries, for a maximum period of 60 days. Persons leaving South Africa may take £20 in South African Reserve Bank notes and the equivalent of £10 in other notes without an export permit; in exceptional circumstances, the export of larger amounts in notes is permitted under approved permits.

Exports and Export Proceeds

All goods subject to export control have a series of code letters. The items with code letters A, C, CI, J, N, or V are goods in relatively short supply or whose domestic prices are substantially lower than those obtainable overseas, so that there is a possibility of local shortages being created by over-exportation. These goods are consequently subject to export permit irrespective of destination, with the exception of exports to Basutoland, Swaziland, and the Bechuanaland Protectorate. Goods with the code letters CIE are controlled for strategic reasons only and permits are required for their export to destinations other than the United Kingdom, any Commonwealth country, any British Colony, Possession, Protectorate, or Mandated Territory, or the United States.

Proceeds from exports must be received in accordance with the prescribed method (see section on Prescription of Currency, above), and all foreign exchange, including Sterling Area currencies, must be surrendered unless exemption is obtained. Compliance with these requirements is supervised under the export control procedures.

Proceeds from Invisibles

Proceeds from invisibles must be received in accordance with the prescribed method (see section on Prescription of Currency, above) and the foreign exchange must be surrendered, unless exemption is obtained.

Capital

Proceeds of capital must be received in accordance with the prescribed method and the foreign exchange must be surrendered. There are no restrictions on the transfer of capital by members of South African stock exchanges to cover commitments in respect of purchases in London of South African shares1 quoted on the London and South African stock exchanges. All other transfers of capital by South African residents to any country abroad require the approval of the Reserve Bank. This is granted, within certain limits, to emigrants; otherwise, residents are not normally allowed to export capital. Capital transferred directly to the Union may be retransferred to the country of origin (together with the income earned thereon) and in the currency in which the original transfer was received.

Changes during 1958

May 2. Revised import licensing lists were published. Some goods were completely exempted from import licensing, some were made subject to quotas to be announced periodically, and others were to be licensed on a replacement basis.

May 8. Applications for Sterling Area currencies for any purpose, including travel in Sterling Area countries, were made subject to the same restrictions as applications for other currencies. Unless special permission was obtained, residents of South Africa could no longer retain, after May 8, 1958, balances in other Sterling Area countries; these balances had to be declared and surrendered to an authorized bank in South Africa. Investments held by Union residents outside South Africa could be retained but could not be disposed of—except for the transfer of the proceeds to the Union—without exchange control approval.

June 12. Balances held by residents of South Africa in the Federation of Rhodesia and Nyasaland on June 12, 1958 could be retained in the Federation, but all subsequent accruals had to be surrendered to an authorized bank in South Africa (see May 8, above).

November 21. New lists were published, regrouping commodities for import control purposes for 1959.

December 19. The import of monetary accounting machines was restricted, with a view to the change-over to a decimal system.

December 29. American, Canadian, and Transferable Accounts in South African pounds were unified and were designated External Accounts. The effect of this was to make South African currency held in External Accounts freely transferable to other External Accounts and convertible into any foreign currency.

United Arab Republic: Egyptian Region

Exchange Rate System

The par value is Egyptian Pound 1 = US$2.87156. Commercial banks’ rates as at December 31, 1958 were $2.8660 buying, and $2.8375 selling, per LE 1. Under the “export account” arrangements, however, exchange rates for most transactions with countries with which there are no payments agreements specifying settlement in Egyptian pounds involve a premium of 17.6 per cent on the above rates, i.e., they are equivalent to $2.44 buying, and $2.41 selling, per LE 1. A tax of 10 per cent is charged in most cases on exchange allocated for travel and on revenue remitted to Egyptian nationals residing permanently abroad.

Administration of Control

Exchange control in the Egyptian Region is supervised by a Supreme Committee for Foreign Exchange, which is set up by the Minister of Economy. The exchange control laws, ministerial arrêts, decree-laws, and instructions of the Minister of Economy and of the Supreme Committee are carried out by a Director of Exchange Operations appointed by the Minister of Economy. The technical work of exchange control is performed, under the supervision and the instructions of the Director of Exchange Operations, by the Central Exchange Control attached to the National Bank of Egypt. An Export Board controls exports.

Prescription of Currency

The prescription of the method and currency for making settlements on account of merchandise transactions (and specified invisibles) depends on the country or monetary area and the type of transaction involved.

Payments for imports from countries with which the Egyptian Region has no payments agreements or has agreements specifying payment in a currency other than the Egyptian pound1 may be made in Egyptian pounds to the credit of “export accounts” or in transferable currencies through “export accounts.” Payments for imports from countries with which the Egyptian Region has payments agreements specifying payments in Egyptian pounds2 are made through special “collector accounts,” unless the exchange control authorities specifically authorize payment through the “export account” arrangements. Other forms of payment for particular transactions and for particular countries are also prescribed in some instances.

Proceeds from exports to countries with which the Egyptian Region has payments agreements must be received either in Egyptian pounds through a “collector account” or in an agreement currency, depending on the terms of the payments agreement. Proceeds from exports to other countries must be received either in Egyptian pounds to the debit of an “export account” or in transferable currencies through “export accounts.”

Foreign currencies received from abroad in settlement of exports or for other purposes may be retained by authorized banks to meet their weekly requirements. Balances of foreign currencies retained by banks have to be sold at the end of each week to the National Bank of Egypt.

Nonresident Accounts

The main categories of nonresident account are described below. All transfers abroad to the debit of nonresident accounts require the prior approval of the Central Exchange Control.

1. Ordinary (or so-called “Free”) Nonresident Accounts. These accounts are named according to the country or monetary area in which the account holder is normally resident, but in the case of the United States, Canada, Switzerland, and Belgium, this applies only to nationals of these countries residing in their own country.

2. “Export Accounts.” These accounts may be held only by certain Egyptian authorized banks (in which case they may also be in foreign currency) or by residents of countries with which the Egyptian Region does not have payments agreements specifying settlements in Egyptian pounds. Such accounts are freely transferable among residents of these countries.

3. Special Nonresident Accounts (e.g., “collector accounts”). These accounts are established and operated in accordance with bilateral payments arrangements.

4. Blocked Accounts. These accounts are credited with any payment to a nonresident not remittable under the exchange control regulations and not creditable to Provisionally Blocked Accounts (see 5, below). They may be debited (a) with amounts up to LE 1,000 a year for living expenses of the account holder in the Egyptian Region; (b) for investments in Egyptian Government loans and in inscribed or registered shares in nominative form of companies established in the Egyptian Region (not redeemable in less than ten years) ; and (c) for subscriptions to increases in capital of Egyptian companies in which the account holder is already a shareholder. Income derived from such investments may be credited to an appropriate Ordinary (“Free”) Nonresident Account.

5. Provisionally Blocked Accounts. These accounts are opened for residents of Canada and the United States when funds due to them in respect of capital or revenue are temporarily not transferable because of a shortage of the corresponding currencies. Balances on these accounts may be used for the same purposes as those indicated above under Blocked Accounts, 4(b) and 4(c), and also for living expenses of the account holder in the Egyptian Region and allowances to his relatives in the Egyptian Region, for transfers in the form of monthly allowances in cases of justified need, and for transfers to other Provisionally Blocked Accounts related to the same monetary area.

Imports and Import Payments

Practically all imports require individual licenses, the issuance of which is dependent on the currency and method of settlement and the category of goods. Certain, specified, nonessential and luxury goods and all imports from Israel are prohibited. A surcharge of 9 per cent of the value of the import license is payable in advance; this surcharge is refunded to the importer if he is unable to import the goods for reasons beyond his control. Certain goods, such as industrial equipment and raw materials, supply articles, and petroleum products, are exempt from this surcharge. Global quotas are established for specified six-month or three-month periods for the issue of import licenses to private individuals who require official exchange to pay for imports.3 As a rule, licenses are issued fairly freely for imports of essential goods and raw materials and on a more restrictive basis for semiessential goods. Import licenses may be obtained for individual commodities or for groups of commodities. Up to 65 per cent of the value of capital arriving in the Egyptian Region may be authorized in the form of imports of goods essential to the national economy, provided that the remaining 35 per cent is imported in the form of free currencies. These arrangements, however, are suspended at present and instead licenses are issued for certain permitted imports without release of currency, and also for otherwise prohibited imports provided that 50 per cent of the value of the latter imports is imported in the form of free currencies.

Imports under the “export account” arrangements are financed by paying local currency to the credit of an “export account” at the prevailing premium (at present 17.6 per cent). Imports from countries whose currencies are transferable may be paid for also in transferable currencies at the prevailing “export account” premium. If the “export account” is in the name of an authorized bank, it is the responsibility of the bank to arrange payment abroad in foreign exchange. Alternatively, the “export account” may be held by the nonresident to whom the payment is due. Payments for imports from payments agreement countries must be made in accordance with the provisions of the relevant agreement. (See also section on Prescription of Currency, above.)

Payments for Invisibles

Banks are authorized to effect payments for certain invisibles without prior exchange control approval; payments for other invisibles require prior approval of the Central Exchange Control. Exchange is normally made available for expenses associated with approved trade transactions and other current payments. Expenses for permitted travel, family maintenance, film royalties, and subscriptions and fees of professional organizations usually are approved within specified quotas. There is a basic exchange allowance for travel of LE 75 a year for each adult, with additional amounts for elderly persons. For travel to the Syrian Region, an allowance of LE 50 a month is authorized, only LE 2 of which may be in cash. Exchange for travel and for remittances to Egyptian nationals abroad is subject to a 10 per cent tax; however, remittances of diplomats, students, certain officials, and others are exempt from this tax. Egyptian residents leaving the Egyptian Region may take with them no more than LE 20 in Egyptian and/or foreign banknotes. Egyptian and foreign banknotes brought in and declared by transit travelers or tourists may be taken out by the travelers concerned.

Exports and Export Proceeds

Apart from exports to Israel, which are prohibited, exports are allowed without restriction, unless the commodity is required for the national economy, in which case the export may be prohibited or allowed only under quota. Exports under barter are subject to barter licenses.

Export proceeds must be repatriated within three months from the date of shipment of the goods. Proceeds from exports to payments agreement countries must be obtained in accordance with the provisions of the relevant agreement. Exchange receipts from most exports to countries with which the Egyptian Region does not have bilateral agreements specifying settlement in Egyptian pounds must be received either in Egyptian pounds to the debit of an “export account” or in foreign currencies. Proceeds repatriated in transferable currencies benefit from the prevailing “export account” premium. If the proceeds are received through an “export account” held by a nonresident, payment is made to the resident in local currency by debiting the equivalent to the nonresident’s “export account.” Egyptian banknotes in denominations of less than LE 50 sent from abroad may be accepted in payment for some exports (books, Egyptian periodicals, and motion-picture films) and in partial payment (25 per cent of the value) for most others.

Proceeds from Invisibles

All persons and legal entities in the Egyptian Region are obliged to offer to authorized banks at the official exchange rate all proceeds in foreign currencies within one month from the date of their collection abroad. Proceeds in transferable currencies from certain invisibles, however, benefit from the prevailing “export account” premium. Suez Canal tolls must be received in Egyptian pounds from Shipping Accounts No. 1, which may be fed only with sales of certain currencies, according to the foreign country concerned. Nonresidents arriving in the Egyptian Region from abroad are permitted to bring in unlimited amounts in Egyptian banknotes in denominations of less than LE 50, as are also Egyptian nationals working abroad under an employment contract of at least two years, provided their stay abroad without return to the Egyptian Region is not less than one year; the limit for residents is LE 20.

Capital

Transfers abroad by residents for the purpose of acquiring capital assets or securities outside the Egyptian Region require individual licenses, which normally are not granted except for transfers to some neighboring countries. The import and export of securities and similar items require licenses.

Nonresidents may freely purchase securities on Egyptian stock exchanges against payment in acceptable foreign currencies or in Egyptian pounds by debiting an appropriate nonresident account. Certain categories of securities may be bought to the debit of Blocked Accounts or Provisionally Blocked Accounts (see section on Nonresident Accounts, above). Proceeds from sales of securities held under “nonresident dossier” are credited to Blocked Accounts. Transfers of securities between nonresidents of the same monetary area are permitted. Transfers abroad are permitted in respect of (1) securities drawn or matured in accordance with the original terms of issue, (2) income from securities quoted on an Egyptian stock exchange and held for account of customers resident abroad, if the payment is made to the country of residence of the owner of the securities, and (3) matured mortgages.

An amount not exceeding LE 5,000 a family—irrespective of whether the sum is made up of capital or income—may be released from a family’s assets in the Egyptian Region to residents of foreign nationality who acquire nonresident status. Any amount above this limit is credited to a Blocked Account, except that capital transfers to Switzerland may exceed LE 5,000. Any payment of a capital nature not remittable under the exchange control regulations must be credited to a Blocked Account.

The Foreign Investment Law of April 2, 1953 and Law No. 475 of 1954 define the treatment of new foreign investments that contribute to the development of the Egyptian economy in the fields of industry, agriculture, metallurgy, mechanization, transport, and tourism. Decrees providing for the Egyptianization of certain types of foreign investment (mainly banks and insurance companies) were put into effect early in 1957.

Changes during 1958

February 10. The system of “export accounts” was introduced.

March 10. The “export account” premium was fixed by the National Bank at 25 per cent buying, 27 per cent selling.

July 21. New payments arrangements were made with the Portuguese Monetary Area, providing for trade and associated transactions to be paid in Egyptian pounds through “export accounts.” Other payments were to be made in transferable Portuguese escudos.

August 1. Egyptian banknotes could be brought into the Egyptian Region by nonresidents in unlimited amounts. They could also be sent by banks abroad to be used in payment for some exports and in partial payment (25 per cent of the value) for most others.

August 2. A bilateral payments agreement with Yugoslavia specifying settlements through a special bilateral account denominated in Egyptian pounds was put into effect.

September 1. The surcharge payable on most imports was increased from 7 per cent to 9 per cent.

September 1. Arrangements regulating trade relations between the Egyptian and Syrian Regions of the United Arab Republic were published. Goods of U.A.R. origin, with some exceptions, would be exchanged freely between the two Regions and would be exempt from customs duties and licensing.

September 1. The export account premium of 25 per cent buying, 27 per cent selling, was changed to 17.6 per cent buying and selling.

October 13. A payments agreement between the Egyptian and Syrian Regions of the United Arab Republic was put into effect, providing that current settlements would be made through a bilateral account denominated in Egyptian pounds.

October 21. Egyptian banknotes in denominations of LE 50 and over could not be accepted in payment of exports or be brought into the country by nonresidents (see August 1, above).

November 24. A bilateral payments arrangement with Iraq specifying settlements through a special bilateral account denominated in Iraqi dinars was put into effect.

November 27. A bilateral payments arrangement with Mongolia specifying settlements through a special bilateral account denominated in Egyptian pounds was put into effect.

November 28. New regulations governing current payments to Japan were put into effect, providing that most payments would be made in specified convertible currencies.

United Arab Republic: Syrian Region

Exchange Rate System

The par value is Syrian Pounds 2.19148 = US$1. The official rates are LS 2.19 buying, and LS 2.21 selling, per US$1; however, no transactions take place at these rates. Most exchange transactions take place at the controlled free market rate, but there is also an uncontrolled free market rate, mainly for capital transactions and some invisibles. As at December 31, 1958, the rates in the controlled free market were LS 3.565 buying, and LS 3.585 selling, per US$1.

Administration of Control

General policy is determined by the Government through the Minister of Economy, usually on the suggestions of the Exchange Office. The Exchange Office, which works under the general directives of the Council on Money and Credit, is the final authority on all matters pertaining to exchange policy and control. According to an agreement between the Central Bank of Syria and the Administrative Board of the Exchange Office, all transactions of the Exchange Office are executed through the Central Bank, which provides the Exchange Office with the required staff and office supplies. Import licenses are issued by the Ministry of Economy. Authorized commercial banks are responsible for recording the exchange proceeds of most exports.

Prescription of Currency

The Exchange Office is empowered to prescribe the currencies to be obtained for exports of certain goods. The usual requirement is that proceeds of major exports to all but a few neighboring countries be obtained in the currency of the country to which the goods are exported (if it is an acceptable currency) or a stronger currency, at the exporter’s choice. Prescription of currency requirements are not applied to outgoing payments.

Imports and Import Payments

All imports, except specified products from neighboring countries, require licenses. Licenses are generally issued freely. There is, however, a list of prohibited items and a list of goods for which import licensing has been suspended, and all imports from Israel are prohibited. Certain commodities may be imported only from the Arab League States,1 countries with which the Syrian Region has compensation arrangements or agreements to maintain a balanced trade,2 or countries with which the Syrian Region had a favorable trade balance in 1957.3 Trade and payments relations with the Egyptian Region are covered by special arrangements. Exchange for licensed imports may be obtained at the controlled free market rate.

Payments for Invisibles

Exchange for some invisibles, mainly those associated with trade, may be obtained at the controlled free market rate. All other invisibles must be paid for through the uncontrolled free market.

Exports and Export Proceeds

Exports of a few goods and all exports to Israel are prohibited. Most other exports are free of license. The proceeds of certain exports, including major exports to countries other than Bahrein, Jordan, Kuwait, and Saudi Arabia, have to be obtained in acceptable currencies (see section on Prescription of Currency, above), according to destination, and recorded with and repatriated through authorized banks in Syria. There is, however, no obligation on the part of exporters or others to sell their export proceeds, which may be held or sold freely to any authorized bank. The authorized banks are permitted to use exchange derived from export proceeds only to finance import transactions.

Proceeds from Invisibles

There are no requirements imposed on proceeds from invisibles and such exchange may be held, sold in the uncontrolled free market, or otherwise disposed of.

Capital

Imports and exports of capital are free of all restriction and may be dealt with in the uncontrolled free market without limitation.

Changes during 1958

April 9. By virtue of Decree No. 247, the Ministry of Economy made the opening of an irrevocable letter of credit a necessary prerequisite for the granting of import licenses.

April 18. By virtue of Decree No. 253 of April 16, a number of products were added to the list of imports which must be entered through the port of Latakia. These included tea, rice, copra, sesame seeds, palm-kernel oil, glucose, marble, fertilizer, tires, wrapping paper, used clothing, steel or iron container drums, combustion motors, agricultural machinery, automobiles, etc.

May 3. By virtue of Decree No. 306, automobile chassis were added to the list of imports which must be entered through the port of Latakia.

June 4. The Ministry of Economy approved a decision of the Council on Money and Credit to raise, from 30 per cent to 40 per cent, the advance deposit required for opening letters of credit for certain goods.

August 27. A list of prohibited imports was issued, containing, among others, wooden and steel furniture and furniture components, wooden and steel doors and windows, wooden clothespins, bamboo or rattan furniture, and unlabeled, empty matchboxes. Another list was issued at the same time, containing products which could be imported only from Arab League countries, countries with which there are compensation arrangements or agreements to maintain a balanced trade with Syria, or countries with which Syria had a favorable trade balance in 1957 (see section on Imports and Import Payments, above). Some of the products included in this list were natural and artificial silk textiles, cotton and cotton cloth, tablecloths, caps, bonnets, and berets, statues, statuettes, and stone works, articles of clay and porcelain, articles of blown glass, tableware (either precious metal or plated), ornamental lamps and lampstands, dress jewelry and dress decorations, candles, wax, paraffin, and stearin.

September 2. Arrangements regulating trade relations between the Egyptian and Syrian Regions of the United Arab Republic were published. Goods of U.A.R. origin, with some exceptions, would be exchanged freely between the two Regions and would be exempt from customs duties and licensing.

September 23. Importers were no longer required to obtain irrevocable letters of credit for their imports, but if they did, the requirement of an advance deposit still applied.

October 2. A payments agreement between the Egyptian and Syrian Regions of the United Arab Republic was put into effect, providing that current settlements be made through a bilateral account denominated in Egyptian pounds.

October 11. Settlements with Iraq were to be regulated by a payments agreement which established a clearing account in Iraqi dinars for settlements between the two territories.

December 2. Import licensing was suspended temporarily for certain items, such as furniture of all kinds, as well as doors and windows, manufactured from iron or steel.

United Kingdom1

Exchange Rate System

The par value is United Kingdom Pound 1 = US$2.80. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of US$2.82 buying, and US$2.78 selling, per £1. Official limits for certain other currencies are also quoted, based on the dollar limits in London and in the centers concerned. The official limits for Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, metropolitan French francs, Italian lire, Netherlands guilders, and Norwegian kroner are no more than 1½ per cent on either side of parity; those for Swedish kronor are no more than ¾ per cent; those for Portuguese escudos are about 1⅞ per cent; and those for Swiss francs are just under 2½ per cent. Authorized banks are allowed to engage in spot and forward exchange transactions in any currencies. Forward premiums and discounts are left to the interplay of market forces.

Exchange Control Territory

Exchange control is not imposed on transactions with other parts of the Sterling Area (“Scheduled Territories” in the nomenclature of the U.K. exchange control) ; in addition to the United Kingdom, the Sterling Area comprises Australia, Burma, Ceylon, Ghana, Iceland, India, Iraq, the Irish Republic, the Hashemite Kingdom of Jordan, Libya, the Federation of Malaya, New Zealand, Pakistan, the Federation of Rhodesia and Nyasaland, and the Union of South Africa, together with all British Colonies, Protectorates, Protected States, and Trust Territories. Exceptionally, sterling payments to Hong Kong are screened to ensure that residents in other parts of the Sterling Area do not have access to Hong Kong’s free market. Control is also exercised over the acquisition of foreign currency securities from the rest of the Sterling Area and over the sale of dollar securities to residents in other parts of the Sterling Area.

Administration of Control

Exchange control in the United Kingdom is administered by the Bank of England on behalf of the U.K. Treasury. However, much of the authority for approving normal payments is delegated to the commereiai banks, practically all of which are authorized for this purpose. Import and export licensing is handled by the Board of Trade.2

Prescription of Currency

Payments from countries in the Sterling Area may be received in any Sterling Area currency; payments from countries outside the Sterling Area must be received in sterling from an External Account or in any specified currency ;3 alternatively, any other foreign currency that is freely exchangeable for sterling may be accepted. Payments to countries in the Sterling Area may be made in any Sterling Area currency; payments to countries outside the Sterling Area may be made by crediting sterling to an External Account or in any foreign currency. The availability of funds in sterling accounts is outlined in the section on Nonresident Accounts, below.

Nonresident Accounts

The sterling accounts of persons, etc., resident in other parts of the Sterling Area (see section on Exchange Control Territory, above) are treated as those of residents of the United Kingdom. Thus, for transfers within the Sterling Area no U.K. exchange control permission is required; but for payments to other countries the U.K. authorized banks are required to ensure that the payment has the approval of the exchange control authority of the territory concerned.

External Accounts. With the exception of Blocked Accounts (see below), the sterling accounts of nonresidents, i.e., those resident outside the Sterling Area, are designated External Accounts. Balances on External Accounts are available for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of any foreign currency or gold. They may be credited with authorized payments by residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currency or gold.

Blocked Accounts. These accounts are applicable to residents of all countries outside the Sterling Area except Denmark, Norway, and Sweden (residents of these three countries may transfer all their sterling assets to their respective countries). The purpose of Blocked Accounts is to receive funds that are not placed at the free disposal of nonresidents, e.g., capital proceeds. Such funds may be used to purchase on a recognized stock exchange in the United Kingdom securities that are payable in a Sterling Area currency, cannot be redeemed under any contractual provision within five years from the date of acquisition, and are not optionally payable in dollars; the income from such securities, and the proceeds at maturity of any that are redeemable, may be remitted to the country of the holder. Transfers between Blocked Accounts are permitted freely, and Blocked Account sterling is negotiable, mainly against U.S. dollars, in free markets abroad.

Imports and Import Payments

Imports of a wide range of goods are permitted under open general license. Open General License No. 1 contains two schedules: The first schedule permits the import of goods originating in or consigned from the dollar area or the Soviet bloc4 if the goods are listed in that schedule; an individual import license is required for goods not listed in the schedule which originate in or come from either of those areas. The second schedule lists those goods which require an individual license when imported from and consigned from countries outside the dollar area and the Soviet bloc; however, this licensing requirement applies to only 18 items on the list if the goods originate in and are consigned from the Sterling Area. Part II of the second schedule contains an additional list of goods which are restricted when they originate in or are consigned from Japan. Open General License No. 2 permits the import, without the need for an individual import license, of industrial chemicals and allied products and a wide range of industrial, office, and agricultural machinery originating in or consigned from the dollar area. All imports not covered by open general license require an individual import license, except for the usual categories exempt from licensing, e.g., samples and returned goods. Import quotas are published for a number of restricted goods and for others, license applications are considered on an ad hoc basis.

Permission to import either by open general license or by some other form of license carries with it entitlement to obtain exchange to pay for the import. Exchange control forms are not required for payments to residents of the Sterling Area or for payments not exceeding £250 to other countries for imports or other commercial purposes.

Payments for Invisibles

Payments for invisibles to residents of the Sterling Area may be made freely. Payments to countries outside the Sterling Area require exchange licenses, but these are granted freely, subject to the presentation of supporting evidence and provided the payment conforms to the prescription of currency regulations. The completion of an exchange control form is not required for the discharge of commercial debts or the payment of professional fees not exceeding £250. Remittances in respect of films are covered by a special agreement. Applications for licenses for noncontractual payments are considered on their merits and some are subject to monetary limitations.

There is a basic allowance of exchange for travel, available for use in all countries, of £100 for each person of 12 years of age or over and of £70 for each child under 12 years of age, for the period November 1, 1958-October 31, 1959. For travel to Denmark, Norway, and Sweden, bona fide travelers may obtain “any reasonable amount” of appropriate exchange. The basic travel allowance is exclusive of the payment of fares for public transport, provided payment is made in sterling in the United Kingdom. Residents of the United Kingdom may send cash gifts up to £10 each per calendar year to persons and organizations resident outside the Sterling Area. Not more than £20 in British banknotes may be taken out of the United Kingdom, except by persons traveling directly to the Irish Republic or the Channel Islands. Authorized banks may export sterling notes to nonresidents against payment in sterling from an External Account or any foreign currency.

Exports and Export Proceeds

Exports to countries outside the Sterling Area are permitted without specific exchange control approval, provided the proceeds are received in conformity with the prescription of currency regulations. The exchange control procedure is waived for exports (other than private gifts in kind) not exceeding £500 f.o.b. Exchange receipts in specified currencies (see footnote 3) must be offered to an authorized bank. Apart from the exchange control requirements, certain exports, mostly of a strategic character, require export licenses.

Proceeds from invisibles

Exchange receipts from invisibles in specified currencies (see footnote 3) must be surrendered. Permission is given for foreign exchange to be retained in controlled accounts if it is required for operating purposes. There is no limit on the amount of British or foreign banknotes that may be brought into the United Kingdom.

Capital

Transfers of resident capital to countries outside the Sterling Area require approval, which normally is granted for commercial investment that promises to employ Sterling Area skills or techniques or to assist Sterling Area exports or the production of raw materials. Permission may be obtained to invest foreign currency capital receipts in marketable securities expressed in foreign currency, but any such receipts in a specified currency (see footnote 3) which have not been invested within six months must be sold to an authorized bank.

Foreign exchange or permission to credit sterling to an External Account is granted freely for repayments abroad due to a nonresident in respect of matured capital obligations; otherwise, the proceeds of nonresident-owned capital may be credited only to Blocked Accounts (see section on Nonresident Accounts, above). However, residents of Denmark, Norway, and Sweden may transfer their capital freely to their respective countries. Persons resident outside the Sterling Area who make direct investments in the United Kingdom must provide one of the specified currencies or sterling from an External Account. Capital directly invested by a nonresident after January 1, 1950 in projects approved by the exchange control authorities may be repatriated at any time, together with capital profits.

Nonresidents may buy sterling securities on a recognized stock exchange in the United Kingdom against payment from an External Account or, if the securities cannot be redeemed under any contractual provision within five years from the date of purchase and are not optionally payable in dollars, with sterling from a Blocked Account.5 Nonresidents may sell sterling securities in the United Kingdom, provided the proceeds are credited to a Blocked Account or reinvested in a Sterling Area security having at least five years to maturity (special rules apply to residents of Denmark, Norway, and Sweden). Interest, dividends, etc., from such securities and the proceeds at maturity of any that are redeemable may be remitted to the country of residence of the owner or credited to any External Account.

Nonresidents may purchase officially quoted non-sterling securities with sterling from an External Account. Such securities may not be resold on a stock exchange in the United Kingdom but may be exported.

Residents may sell outside the Sterling Area a security expressed in foreign currency and reinvest the proceeds in other marketable securities expressed in foreign currency; however, if the security sold is a U.S. or Canadian dollar security, the securities purchased must be U.S. or Canadian dollar marketable securities. Any sale proceeds in a specified currency which have not been reinvested within six months must be sold to an authorized bank. Residents of the United Kingdom are required to obtain permission from the Treasury to acquire foreign currency securities from residents of other parts of the Sterling Area.

Banknotes

The authorized banks may buy and sell foreign notes and coins at market rates of exchange. They may buy foreign notes and coins from residents without limit. In transactions with nonresidents abroad, they may buy and sell foreign notes and coins against External Account sterling, against sterling notes to be exported or that have been imported, or against any other foreign currency in notes or any other form. The authorized banks may also purchase foreign notes and coins from nonresidents visiting the United Kingdom, against payment in sterling in cash or to the credit of an External Account. They may also sell foreign notes and coins for travel outside the Sterling Area, but without special permission a traveler may not take out of the United Kingdom foreign notes in excess of the equivalent of £100 or, if the traveler is a visitor, the amount he brought into the United Kingdom in foreign notes if that amount exceeded £100.

Changes during 1958

February 28. All limitations on the import of British banknotes were removed.

March 3. Deutsche mark were included in the multilateral payments arrangements with Argentina for both spot and forward transactions.

March 3. The limit of three months for forward transactions involving authorized banks in France or French francs in the Western European multilateral foreign exchange arbitrage arrangement was applied only to forward transactions involving French francs.

March 13. Forward transactions for up to six months (three months for French francs) were included in the multilateral payments arrangements with Argentina.

April 11. Austrian schillings were included in the multilateral payments arrangements with Brazil for spot transactions.

July 7. The Open General License of June 3, 1955 was replaced by a new Open General License and by a corresponding Notice to Importers (No. 860), the effect being to codify and simplify the previous import regulations.

August 1. Relaxations were announced in the conditions applying to direct investments in the United Kingdom by nonresidents. Although application still had to be made to the exchange control authorities for permission for a nonresident to invest capital in a new U.K. company, it was announced that such applications would now normally be approved, provided the investment is made by means of a cash transfer in an appropriate form of sterling or foreign currency.

August 18. Open General License No. 2, removing restrictions from a wide range of chemicals and allied products imported from the dollar area, was published. With certain exceptions, such as dyestuffs and intermediates, individual import licenses were no longer required for most chemicals used as industrial material.

September 1. Amendments were made in the control of certain exports to the Soviet bloc and Mainland China. Control was imposed for the first time on some exports to these areas and removed completely from a wide range of other exports that no longer have strategic significance.

September 1. It was announced that permission would no longer be given for cash gifts or charitable donations received in foreign currency to be used to make investments outside the Sterling Area.

September 17. In a statement to the Commonwealth Trade and Economic Conference at Montreal, the President of the Board of Trade stated that restrictions on dollar imports of industrial, agricultural, and office machinery would be abolished almost entirely and with immediate effect. He also stated that imports of canned salmon (except from the Soviet bloc) and newsprint would be completely freed from restriction and that Colonial Governments would be invited to relax restrictions on a wider range of dollar goods.

September 24. Open General License No. 2 was extended to permit the import of many types of plant and machinery from the dollar area, and an amendment to the Open General License of July 7, 1958 freed imports of canned salmon (except from the Soviet bloc) and newsprint.

October 7. Authorized depositories were permitted for the first time since 1939 to deal for themselves or for their customers (including nonresidents) in options in securities, and could arrange contangoes for nonresidents in respect of securities dealt in on a U.K. stock exchange, subject to settlement being made in accordance with the general rules governing the settlement of security transactions involving nonresident interests. (Option dealings enable security transactions to be fixed for settlement at an agreed future date, when actual delivery may or may not take place, at the holder’s option. Contango facilities, available to residents since 1949, enable settlements for securities to be postponed from one stock exchange settlement date to another; on U.K. stock exchanges the settlement dates are usually two weeks apart.)

October 22. It was announced that as from November 10 anyone would be allowed to send cash gifts up to £10 in each calendar year to persons and organizations resident abroad. The full allowance for 1958 could be utilized between November 10 and December 31, 1958.

October 24. It was announced that for the period November 1, 1958-October 31, 1959 the basic allowance of exchange for travel for use in all countries outside the Sterling Area would remain unchanged at £100 for each person of 12 years of age or over and £70 for each child under 12 years of age.

December 29. Sterling in nonresident accounts (other than Blocked Accounts and Egyptian Accounts) was made freely convertible at exchange market rates. The official exchange rate limits for the leading Western European currencies against sterling were widened, but the limits for transactions in U.S. dollars remained at the % per cent margin. The authorized banks were permitted, so long as their net exchange position in various currencies is within specified limits, to exchange sterling for any foreign currency and to arbitrage any currency against another, spot or forward.

December 29. The classification of sterling nonresident accounts according to the country of residence of the account holder was abolished, except for residents of the Egyptian Region of the United Arab Republic. American, Canadian, Transferable, and Registered Accounts were redesignated External Accounts. Sterling in an External Account could be transferred freely to any other External Account, and nonresidents were free to exchange sterling in their External Accounts for any foreign currency or use it to purchase gold in the U.K. bullion market. Authorized payments by residents of the Sterling Area to nonresidents could be made by crediting sterling to any External Account or in any foreign currency. Payments from nonresidents could be received in sterling from an External Account or in any specified currency (see footnote 3). The regulations regarding Blocked Accounts remained unchanged.

Note.—The following changes took place early in 1959:

January 15. Authorized banks were given permission to export sterling notes to nonresidents against payment in sterling from an External Account or any foreign currency.

February 17. Restrictions were removed on the transfer to beneficiaries resident in the dollar area of legacies, etc., due to them under wills or intestacies of persons who were at the time of their death regarded as resident in the United Kingdom. Previously, amounts over £500 had to be placed in Blocked Accounts or invested in sterling securities.

February 17. The settling-in allowance for emigrants leaving the United Kingdom to take up permanent residence in the dollar area was increased, from £1,000 for each emigrant plus £250 for each dependent up to a maximum of £2,000, to a maximum of £5,000 for a family unit, the same amount available to emigrants to other countries.

February 19. Usance credits to finance trade between third countries, prohibited since September 20, 1957, were again permitted.

February 23. The authorized banks were permitted to engage in arbitrage transactions in foreign banknotes.

February 25. It was announced that nationals of countries outside the Sterling Area who return to their country of nationality and receive, under the exchange control regulations, a settling-in allowance could also obtain, on application, the further transfer, commencing one year after departure from the United Kingdom, of any remaining declared assets to the extent of £3,600 a year for a family unit.

March 2. The exchange restrictions imposed on Egyptian Accounts in July 1956 (as amended in May 1957) were removed and all sterling accounts held by residents of the Egyptian Monetary Area with banks in the United Kingdom previously designated Egyptian Accounts were designated External Accounts.

March 4. The requirement that sterling bearer securities for which facilities are available for registration in the United Kingdom for both principal and interest or dividends shall be so registered, immediately after import, no longer applied.

March 12. The list of specified currencies, i.e., those which must be offered for sale to an authorized dealer by residents of the United Kingdom, was reduced to those currencies for which official rates are quoted by the Bank of England, together with the Canadian dollar. The prescribed methods of payment for exports from the United Kingdom to countries outside the Sterling Area were widened to include the receipt of any currency that is freely exchangeable for sterling.

March 26. The amount of British banknotes that may be taken out of the United Kingdom, except by persons traveling directly to the Irish Republic or the Channel Islands, was increased from £10 to £20.

Uruguay

Exchange Rate System

No par value for the Uruguayan Peso has been established with the Fund. There is a basic rate of Ur$1.519 per US$1, which applies to government payments and to imports of newsprint. Another selling rate of Ur$2.10 per US$1 applies to imports of certain goods in Category I; however, the free commercial market rate of Ur$4.11 per US$1 applies to most Category I imports. All other imports must be paid for at the free commercial market rate, subject to surcharges of Ur$1.50 or Ur$2.00, per US$1, or at the fluctuating free financial market rate, subject to surcharges of Ur$2.50 or Ur$3.00, per US$1. In addition, most imports and related invisibles are subject to an exchange tax of 6 per cent. (The system of exchange certificates, established by decree in August 1956, is not in practice applied.) The proceeds of certain exports sold at the free commercial market rate receive premiums, and a tax of 1 per cent is levied on all export proceeds. Invisibles not related to imports and all capital transactions are settled freely in the financial market. (See Table of Exchange Rates, below.)

Administration of Control

The exchange control system is operated by the Bank of the Republic. Exchange transactions related to imports, exports, and some invisibles pass through the authorized banks. Import licenses are issued by the Export and Import Control Board.

Prescription of Currency

Settlements with countries with which Uruguay has bilateral payments agreements or interbank compensation agreements are made through accounts kept in specified currencies, as follows: with Switzerland, in Swiss accounting francs; with Argentina, Brazil, Bulgaria, Czechoslovakia, Finland, France, East Germany, Greece, Hungary, Israel, Italy, Paraguay, Poland, Rumania, Spain, and Yugoslavia, in accounting dollars; and with the U.S.S.R., in External Account sterling. Settlements with other countries are made either in an externally convertible European currency or in U.S. dollars, as indicated in the license.

Imports and Import Payments

Imports are classified in three categories: Category I, most essential goods; Category II, less essential goods; and Category III, luxury goods and goods produced domestically. All imports are subject to licenses, which are issued on a restrictive basis. Under the existing “emergency” regime—which is effective, as renewed, for quarterly periods—global quotas are established for Category I imports to be authorized during the period. The exchange allocation for imports in Categories II and III, and for imports of capital goods, machines, and spare parts under long-term credit, is made infrequently and in limited amounts (see section on Changes during 1958, November 5 and December 30, below). The quota for imports in Category I is composed of two main parts: (1) exchange to be granted for imports from countries in Group A,1 principally countries with which Uruguay has bilateral payments agreements, and (2) exchange to be granted for imports from all other countries. Each import license is issued for a specified country. In general, licenses for imports not originating in Group A countries are granted only when there is authentic proof that the goods cannot be obtained from a country in Group A. There is a system of priorities by commodities, as follows: (1) imports for export and construction industries and for industries that produce essential goods; (2) imports for industries that process articles classified as of prime necessity but not included in the first group; (3) imports for the remaining industries. Each application for an import license is examined on its own merits, taking into account available supplies, etc.

Payments for a few imports of specified goods in Category I are made at the Ur$1.519 and Ur$2.10 rates. Payments for all other imports are made at the rate in the free commercial market or the free financial market. Exchange for authorized imports from Group A countries is granted immediately ; exchange for imports from all other countries is made available 180 days after shipment of the goods. Payments for most imports are subject to an exchange tax of 6 per cent. Payments for some imports in Category I and for all imports in Categories II and III are subject to exchange surcharges. (The advance deposits established by decree in August 1956 have been eliminated for the duration of the emergency regime for imports.)

Payments for Invisibles

Expenditures in foreign exchange incidental to imports are authorized with the payments for the corresponding imports and are subject to a 6 per cent exchange tax if the merchandise for which the expenditure is made is subject to this tax. All other payments for invisibles may be made freely through the fluctuating free financial market. There are no limitations on the export of foreign or domestic banknotes.

Exports and Export Proceeds

All exports require licenses. Exports of essential goods in short supply may be prohibited. The exchange proceeds of exports must be surrendered to the Bank of the Republic not later than seven days after shipment has been authorized. Export commodities are classified in four groups (A through D), to each of which different exchange rates apply (see Table of Exchange Rates, below). Selected exports receive premiums, which are granted on a case-by-case basis and are calculated as a percentage of the free commercial market rate (Ur$4.1025 per US$1).2 A tax of 1 per cent is levied on all export proceeds.

Proceeds from invisibles

All proceeds from invisibles may be held, utilized, or sold in the fluctuating free financial market. There are no limitations on the import of foreign or domestic banknotes.

Capital

Inward and outward capital transfers by either residents or nonresidents are free. The corresponding exchange transactions may take place freely in the fluctuating free financial market.

Table of Exchange Rates (as at December 31, 1958)3(pesos per U.S. dollar)
BuyingSelling
1.519 Government payments. Importa of newsprint.
2.81075(50% at Ur$1.519 Rate and 50% at Free Commercial Market Rate)

Exports in Group D, including dried colt hides, unprocessed hog bristles, and unprocessed cattle hair.
2.10 Specified Category I imports.
3.456625(25% at Ur$1.519 Rate and 75% at Free Commercial Market Rate)

Exports in Group C, including greasy wool, fish meal, sheepskins, woolly sheepskins, and limestone.
3.714975(15% at Ur$1.519 Rate and 85% at Free Commercial Market Rate)

Exports in Group B, including washed wool, shark-liver oil, oats, and barley.
4.1025(Free Commercial Market Rate)

Exports in Group A, including wool tops, cotton textiles, paper and cardboard, canned fish, residual products from the spinning and weaving of combed and carded wool, offset ink, and ostrich feathers.
4.11(Free Commercial Market Rate)

Other Category I imports.
4.7999(Free Commercial Market Rate plus 17% Premium)

Exports of malt barley.
4.84095(Free Commercial Market Rate plus 18% Premium)

Exports of rice.
4.9861785(Free Commercial Market Rate plus 21.54% Premium)

Exports of laminated glass basins.
5.210175(Free Commercial Market Rate plus 27% Premium)

Exports of combed and carded wool yarn.
5.2512(Free Commercial Market Rate plus 28% Premium)

Exports of frozen and chilled meat.

5.784525(Free Commercial Market Rate plus 41% Premium)

Exports of apples.
5.614(Free Commercial Market Rate plus Ur$lJ¡0 Surcharge)

Category II imports within special quotas.
5.866575(Free Commercial Market Rate plus 43% Premium)

Exports of butter and casein.
5.98965(Free Commercial Market Rate plus 46% Premium)

Exports of frozen lamb.

6.3999(Free Commercial Market Rate plus 56% Premium)

Exports of combed and carded wool textiles.
6.114(Free Commercial Market Rate plus Ur$2.00 Surcharge)

Category III imports within special quotas.
6.522975(Free Commercial Market Rate plus 59% Premium)

Exports of canned meat.
7.12399(Free Commercial Market Rale plus 73.65% Premium)

Exports of sunflower-seed oil.
7.2614(Free Commercial Market Rate plus 77% Premium)

Exports of frozen capons.
10.10(Fluctuating Free Financial Market Rate)

All invisibles. Capital.
10.20(Fluctuating Free Financial Market Rate)

Invisibles not related to trade. Capital.
12.70(Fluctuating Free Financial Market Rate plus Ur$2.50 Surcharge)

Category II imports within special quotas.
13.20(Fluctuating Free Financial Market Rate plus Ur$3.00 Surcharge)

Category III imports within special quotas.

Changes during 1958

In addition to the changes described below, various minor export commodities were granted premiums during the year.

February 6. A new effective export rate of Ur$2.81075 per US$1 was established for wool tops and by-products, involving the negotiation of 50 per cent of export proceeds at the free commercial market rate (Ur$4.1025 per US$1) and 50 per cent at the official rate of Ur$1.519 per US$1; the measure was to take effect retroactively as of November 11, 1957.

February 13. The emergency import regime introduced on November 28, 1957 was extended to June 30, 1958. This regime aimed chiefly at the establishment of (1) exchange quotas for Group A countries (see footnote 1) and exchange quotas for all other countries, (2) a system of priorities for imports on the basis of their estimated importance to the country’s economy, and (3) specific rules for the granting of licenses to individual importers.

April 8. The number of export groups was reduced to six. These groups would be subject to the following effective exchange rates (in pesos per US$1): Group A, Ur$4.1025; Group B, Ur$3.4566; Group C, Ur$2.8107; Group D, Ur$2.4232; Group E, Ur$2.1649; Group F, Ur$1.519.

May 2. Finland was added to Group A of the countries from which imports are permitted under the current regulations.

May 13. A large number of export commodities, both raw materials and manufactured products, were classified into new groups. As a result of the new classification, new depreciated rates were established for the proceeds of exports of frozen beef, salted cowhides, and several minor items.

June 3. It was announced that premiums would be granted to selected exports on a case-by-case basis, to be paid out of exchange surcharges on certain imports. Premiums were announced for the following commodities: combed and carded wool textiles, combed and carded wool yarn, apples, butter, and casein.

June 17. The emergency import regime (see February 13, above) was extended until September 30,1958.

September 11. The number of export groups was reduced from six to four and the following effective exchange rates were established for each group (in pesos per US$1): Group A (including wool tops, cotton textiles, paper), Ur$4.1025; Group B (including washed wool, shark-liver oil, oats, barley), Ur$3.714975; Group C (including greasy wool, fish meal, sheepskins), Ur$3.456625; Group D (including dried cow hides, dried colt hides, unprocessed hog bristles, unprocessed cattle hair), Ur$2.81075. A temporary premium of 10 centesimos per US$1 was established for all exports, effective until January 31 or April 30, 1959, depending upon whether or not the export merchandise was to be processed.

September 11. The list of import commodities subject to the Ur$2.10 f.o.b. rate was revised and certain commodities previously on this list were shifted to the Ur$4.11 rate. It was also announced that additional import surcharges would be established for imports in Categories II and III.

September 25. The emergency import regime (see June 17, above) was extended until December 31, 1958.

October 28. Imports of seeds of various types were made subject to the Ur$2.10 rate; previously, seed potatoes had been imported at the Ur$1.519 rate.

November 5. Exports of frozen lamb and haggots were granted the free commercial market rate (Ur$4.1025 per US$1) plus a premium of 34 per cent.

November 5. An import quota of US$5 million, to be distributed at the free financial market rate, was announced for certain capital goods, machines, and spare parts; the foreign sellers of these goods would have to grant long-term credit facilities.

December 16. The emergency import regime (see September 25, above) was extended until March 31, 1959.

December 23. Premiums were announced for certain exports, as follows: frozen and chilled meat other than lamb, 28 per cent; canned meat, 59 per cent; frozen lamb, 46 per cent; and frozen capons, 77 per cent.

December 30. An import quota of US$7 million, to be distributed at the free financial market rate, was announced for goods in Categories II and III; imports under this quota would be subject to surcharges of Ur$2.50 per US$1 for goods in Category II and Ur$3.00 per US$1 for goods in Category III. Special quotas could be opened by the Bank of the Republic for imports in Category I, in which case a surcharge of Ur$1.00 per US$1 would be applied.

Viet-Nam1

Exchange Rate System

There is no agreed par value for the Viet-Namese Piastre. The official rate is VN$35.00 per US$1 ; most import transactions and certain transactions in invisibles take place at this rate. In the official market, French francs are bought at F 14.21, and sold at F 14.00, per VN$1. There is also an officially recognized free market, through which certain other invisibles may be settled. The rate in this market is controlled; as at January 5, 1959, it was VN$73.50 per US$1. An effective rate of about VN$48.47 per US$1 arises from the negotiation of 65 per cent of the proceeds from exports at the official rate and 35 per cent at the controlled free market rate. Exports may receive an export subsidy in piastres. An effective rate of VN$95 per US$1 applies to luxury imports financed with Viet-Nam’s own resources and arises from the addition of a “stabilization” tax of VN$60 per US$1 to the official rate. The rates quoted for French francs in the free market and with regard to imports subject to the “stabilization” tax do not correspond to the official cross rate.

Administration of Control

Exchange control is administered by the National Exchange Office (a department of the National Bank of Viet-Nam) in accordance with the general policies of the Ministry of Finance. All remittances must have the prior approval of the National Exchange Office. Import and exchange controls on goods financed by U.S. aid, including imports financed with “triangular” francs (i.e., French francs accrued to the U.S. Government from the sale of agricultural surplus commodities to France and made available to Viet-Nam as part of U.S. aid), are administered by the Directorate-General of Trade and the National Bank. Other imports must be approved by the Directorate-General of Trade as well as by the National Exchange Office. Export licenses are issued by the Directorate-General of Trade and require also the approval of the National Exchange Office.

Prescription of Currency

Payments and receipts through both the official market and the controlled free market must be effected through the authorized exchange banks and in the currency stipulated in the license. U.S. aid dollars may, with few exceptions, be used for imports from any noncommunist country. In respect of other imports and of exports, settlements with the dollar area are made in U.S. dollars, with Switzerland in U.S. dollars or free Swiss francs, with the French Franc Area in French francs, and with other countries in External Account sterling or the currency of the other country.

Nonresident Accounts

Nonresidents may maintain accounts with banks, subject to the approval of the National Exchange Office. All transactions through these accounts require prior approval.

Imports and Import Payments

Imports are subject to prior license. Applications to import are sent through an authorized bank to the Directorate-General of Trade. In principle, the minimum amount for an import license application is VN$10,000. Imports are classified in 13 categories; no importer may be concerned with more than 3 categories. Licenses cannot be transferred from one importer to another. Goods must be imported in accordance with the time limit, quantity, and quality specified in the import license. Importers must have storage facilities for the goods they import. Luxury imports financed with Viet-Namese resources are subject to a “stabilization” tax of VN$60 per US$1.

Payments for Invisibles

All outgoing payments require the prior approval of the National Exchange Office. For certain payments—such as government expenses, incidental charges on imports, certain insurance premiums and indemnities, students’ expenses, and savings of foreign technicians—exchange is granted at the official rate by the National Exchange Office. With the approval of the National Exchange Office and within prescribed limits, payments for such items as transfers of profits of foreign enterprises, personal savings of resident foreigners other than foreign technicians, medical expenses, family allocations, and foreign travel may be made through the controlled free market. Travelers are permitted to take with them VN$400 in Viet-Namese banknotes. Foreign banknotes and credit instruments not used by foreign travelers may be reexported on the strength of a declaration to the customs supported by evidence that any utilized foreign exchange has been sold to an authorized bank at the appropriate rate.

Exports and Export Proceeds

All exports are subject to license and must be registered with an authorized bank, which is responsible for the repatriation of the foreign exchange. The exchange proceeds of exports must be surrendered 65 per cent at the official rate and 35 per cent at the controlled free market rate. Exports may receive subsidies in piastres. The export of manufactured or semimanufactured products originally imported into Viet-Nam is prohibited.

Proceeds from Invisibles

Foreign exchange receipts from most transactions in invisibles may be sold at the controlled free market rate. Tourists, philanthropic organizations, and foreign governments may sell their foreign exchange in the controlled free market to cover their expenses in Viet-Nam.

There is no limit on the amount of foreign exchange that may be brought into the country, but it must be declared to the customs upon entry. A traveler may not bring in more than VN$400 in Viet-Namese banknotes. Foreigners traveling in Viet-Nam must record all purchases and sales of foreign exchange on entry-exit forms.

Capital

Capital may be imported without formalities through the controlled free market but does not become eligible for favored treatment until its investment has been notified to the Viet-Namese authorities. Capital held in nontransferable piastres by nonresident foreigners may be sold to other nonresident foreigners for foreign exchange at a negotiated rate without prior approval, provided the purchaser places the newly acquired piastres in a capital account with an authorized bank. Piastres held in such accounts are blocked and may be used only for investment in certain branches of economic activity and only with the approval of the National Exchange Office. The transfer of profits derived from new foreign investments is guaranteed, and repatriation is allowed after five years in annual installments of 20 per cent of the initial investment.

Table of Exchange Rates (as at December 31, 1958)3(piastres per U.S. dollar)
BuyingSelling
35.00(Official Rate)

Government receipts. Certain invisibles.
35.00(Official Rate)

Imports financed by U.S. aid. Essential imports financed with Viet-Namese resources. Government expenses. Certain invisibles.
48.47(65% at Official Rate and 35% at Controlled Free Market Rate)

Exports.
73.50(Controlled Free Market Rate)

Tourist exchange. Sales of exchange by foreign embassies. Operating funds for foreign investments.
73.50(Controlled Free Market Rate)

Profits, some savings, travel exchange, and some other invisibles.
95.00(Official Rate plus VN$60 “Stabilization” Tax)

Other imports.

Changes during 1958

January 18. The official rate of the French franc was changed from F 10 to F 12 per VN$1.

June 2. The stabilization tax was reduced from VN$75 to VN$60 per US$1 for U.S. dollar transactions and from VN$182 to VN$168 per £1 for sterling transactions.

July 1. Part of the triangular French franc balances held by Viet-Nam became conditionally transferable.

September 30. The bilateral payments agreement with Cambodia was terminated.

October 10. The Provisional Current Accounts for transactions with Laos were terminated. (These accounts had been created when the bilateral payments agreement with Laos was denounced on October 10, 1957.)

December 27. Dealings in French francs in the free market were temporarily suspended.

Note.—The following changes took place in January 1959:

January 1. By Decree No. 1/TC, the official parity of the Viet-Namese piastre in terms of the French franc was changed from F 12 to F 14.10 3135 per VN$1, and the official market rates for the French franc were established at F 14.21 buying, and F 14.00 selling, per VN$1.

January 5. Dealings in French francs in the free market were resumed but at a rate of VN$ 14.00 per F 100 (approximately equivalent to VN$69.68 per US$1).

Yugoslavia

Exchange Rate System

The par value is Yugoslav Dinars 300 = US$1. This rate, however, has little application except as a basis for calculating some of the effective rates. Thus, the official rate plus 33⅓ per cent yields an effective rate of Din 400 per US$1 for receipts from tourism (and the retransfer of unspent amounts) and from diplomatic and other foreign missions, and the official rate plus 100 per cent yields an effective rate of Din 600 per US$1 for emigrants’ remittances, inheritances, exchange for private travel, and other noncommercial receipts and payments.

“Settlement” rates are fixed for most currencies, and these form the basic rates for receipts from exports and payments for imports, including the related invisibles. Various coefficients are applied to the settlement rates, according to the commodity concerned. Imports for essential investment projects financed by the Yugoslav Investment Bank (i.e., the approved investment expenditures of economic organizations) are paid for at the settlement rates, with the application of a coefficient of 1.2. The National Bank sells exchange for imports of raw materials and spare parts needed by most industries and for imports of specified commodities and of consumer goods at “special meetings” held at the foreign exchange settlement places. The rates for this exchange involve broken cross rates for a few clearing currencies. As at December 31, 1958, the settlement rates for the U.S. dollar and sterling were Din 632 per US$1 and Din 1,752 per £1.

The National Bank also sells exchange for the needs of economic organizations in a free market (referred to as “regular meetings” of the foreign exchange settlement places) at fluctuating rates. Sales in this market are made only by the National Bank and represent less than 1 per cent of total sales of exchange. All economic organizations have a right to buy foreign exchange in this market but, since foreign exchange for investment needs and for practically all other imports and invisibles is allocated by the Yugoslav Investment Bank, the Yugoslav Foreign Trade Bank, or the National Bank at fixed rates more favorable than the free market rates, demand in the free market is usually limited to a few marginal payments. As at December 23, 1958, the rate for the U.S. dollar in this market was Din 8,217 per US$1.

Import and export coefficients (multipliers) are fixed for different import and export commodities and applied to the relevant settlement rates. In this way, differences between domestic and foreign prices for imports and exports are adjusted, using the coefficients effective on the day preceding the date of the conclusion of the transaction. As at December 31, 1958, there were 12 import coefficients, ranging from 1.0 to 3.0, and 14 export coefficients, ranging from 0.6 to 2.0. Where the coefficient is less than 1.0, the exporter pays to the bank the difference between the amount receivable at the settlement rate and the same amount multiplied by the coefficient. Where the coefficient is more than 1.0, the exporter receives from the bank, or the importer pays to the bank, the difference between the amount receivable or payable at the settlement rate multiplied by the coefficient and the amount receivable or payable at the settlement rate. Where the coefficient is 1.0, no additional amounts are payable or receivable. Variations from the official rate are settled in dinars through an account called the Fund for Price Differences in Foreign Trade, except that for imports of capital equipment the difference is paid to the General Investment Fund. Importers are bound within a period of 30 days after importing the goods, and exporters within a period of 30 days after receipt of the exchange, to settle the price difference with the bank concerned.

Administration of Control

The Federal Executive Council prescribes the general provisions governing foreign trade and exchange transactions. The Committee for Foreign Trade, by virtue of these general provisions, establishes rules and regulations and makes decisions governing exchange transactions of a commercial nature. The Federal Secretariat for Finance prescribes the provisions governing exchange transactions of a noncommercial nature. The Committee for Foreign Trade determines the coefficients and the amounts of foreign exchange to be surrendered to the National Bank, regulates exports and imports of goods, and prescribes conditions governing exports and imports of specified categories of goods. The National Bank is the operative organ of the exchange control, and in addition prescribes the methods for payments to and receipts from foreign countries. In principle, all foreign exchange transactions have to be effected through the National Bank, the Yugoslav Foreign Trade Bank, or the Yugoslav Investment Bank. The National Bank sells exchange direct to government organs and institutions and private persons, as well as at the “special meetings” and “regular meetings” of the foreign exchange settlement places. Foreign exchange for imports of investment goods is sold by the Yugoslav Investment Bank, and foreign exchange for imports not covered by the investment program is sold by the National Bank or the Yugoslav Foreign Trade Bank.

Prescription of Currency

Payments are made according to the method or channel of payment provided for in the payments agreement with the country concerned. Yugoslavia has payments agreements requiring settlements through bilateral clearing accounts (1) in U.S. dollars with Albania, Argentina, Austria, Brazil, Bulgaria, Chile, Czechoslovakia, Finland, East Germany, Greece, Hungary, Israel, Mongolia, Norway, Poland, Rumania, Spain, Tunisia, Turkey, the U.S.S.R., and Uruguay; (2) in sterling with Burma and Mainland China; and (3) in their respective currencies with France, Iraq, the Sudan, Switzerland, and the United Arab Republic (Egyptian Region). A certain degree of multilateralization with other currencies is provided in the agreements with Austria, France, Greece, Norway, and Switzerland. Payments agreements on a multilateral basis with Belgium-Luxembourg, Denmark, the Federal Republic of Germany, Italy, the Netherlands, and Sweden provide for settlements in the currencies of those countries. A trade agreement with Morocco provides for settlements through the Franco-Yugoslav clearing account. If no agreement exists, settlement is usually made in U.S. or Canadian dollars, sterling, or Swiss francs.

Nonresident Accounts

The opening of nonresident accounts is subject to the approval of the National Bank. In granting such approval, the National Bank stipulates the conditions under which the accounts may be operated. In general, the dinar account of a nonresident individual may be used by the account holder only to cover expenses of his stay in Yugoslavia; the use of such balances for commercial operations is not permitted. Nonresident accounts may be opened also with foreign exchange imported into Yugoslavia, and these foreign exchange balances may be used within Yugoslavia for payments in dinars for commercial or private purposes; their transfer abroad is subject to individual license from the National Bank.

Imports and Import Payments

Some economic organizations are registered on the Foreign Trade Register as authorized to engage specifically in import business, and the amount of their imports is determined by their annual exchange allocation as set forth in the economic plan. For such imports, an import license is not, as a general rule, required. However, individual import licenses are required for imports of machine spare parts, equipment, apparatus, machinery, and transport equipment purchased by manufacturing enterprises for assembly in Yugoslavia, and of all finished equipment goods. Individual import licenses are also required for consumer goods and for motor vehicles of all kinds. Applications for these licenses must be accompanied by a pro forma invoice and a statement from the Chamber of Industry certifying that the product or material cannot be manufactured in Yugoslavia. In considering applications for licenses, the authorities consider the possibilities of manufacturing the product in Yugoslavia, the possibilities of cooperation between Yugoslav industry and the foreign manufacturer, the quality and suitability of the material to be imported, the purchase price, and the date of delivery. Institutions, social organizations, and economic organizations not on the Foreign Trade Register may also effect individual imports for their own needs if they obtain special authorization on an ad hoc basis. The issuance of an import license is not connected with the delivery of foreign exchange by the National Bank and the importer must arrange to obtain the necessary foreign exchange either at a session of the exchange market or by any other means provided for by the regulations.

Payments for practically all imports are made with exchange acquired at the settlement rates from the National Bank, the Yugoslav Foreign Trade Bank, or, for imports for investment projects, the Yugoslav Investment Bank. Import coefficients are applied to most goods at the time of import. Imports of capital equipment and investment materials financed by the Yugoslav Investment Bank or the Yugoslav Foreign Trade Bank are paid for by the importing enterprise at the settlement rate multiplied by a coefficient of 1.2 (see section on Exchange Rate System, above).

Compensation arrangements with foreign countries are permitted only as an exception and subject to approval by the Committee for Foreign Trade and the Federal State Secretariat for Internal Trade. Approval is given only if the export or import of the products concerned cannot be made through normal commercial channels and provided, further, that the compensation arrangement permits the importer or exporter to buy or sell goods on especially favorable conditions, or contributes to the creation of stable economic ties between Yugoslavia and a foreign country, or facilitates the import of goods not manufactured in Yugoslavia and of benefit to the national economy, or makes it possible to trade with countries with which Yugoslavia does not have trade agreements. Within 15 days of the notification of the approval, an application to register the compensation arrangement must be submitted to the National Bank. The agency carrying out the arrangement must then make a deposit in dinars equivalent to 5 per cent of the value of the proposed export. The deposit is forfeited if the arrangement is not carried through in accordance with the conditions stipulated.

Payments for invisibles

Payments for invisibles related to merchandise transactions are treated in a manner similar to that accorded to payments for merchandise. Exchange for government debt service is allocated by the National Bank at the official rate and for other invisibles of government and social organs and institutions at the official rate plus 100 per cent. Exchange for travel, up to the equivalent of Din 6,000 for each person (i.e., US$20), and for remittances for family maintenance is allocated by the National Bank at the official rate plus 100 per cent. Not more than Din 3,000 in Yugoslav banknotes, in notes of Din 100 or less, may be taken out by travelers.

Exports and Export Proceeds

Exports of a number of goods are prohibited; export quotas are established for some goods; all other goods may be exported freely. Coefficients are applied to the settlement rates when calculating the local currency equivalents of export proceeds (see section on Exchange Rate System, above). Ninety-nine per cent of export proceeds must be surrendered to the National Bank. The balance retained may be used by exporters for expenses abroad incidental to their own transactions, and for other payments of their own abroad if these payments would serve the advancement of their activities; if not used, this exchange may only be sold to the National Bank at the settlement rates. In addition, business associations, groups of enterprises, and individual enterprises may be allowed to use 5 per cent to 20 per cent of the proceeds of their exports in excess of their planned exports for a specific year, to import raw materials and equipment; the actual percentage depends on the type of commodity exported and on the need for imports that would contribute to the promotion of exports.

Proceeds from Invisibles

Exchange proceeds from practically all invisibles must be surrendered to the National Bank at the effective rate of exchange applicable to the particular transaction. However, service organizations generally may retain 1 per cent of their exchange earnings. Enterprises engaged in organizing international fairs, those engaged in development projects abroad, and those receiving exchange from foreign advertising in Yugoslavia benefit from retention quotas of 20 per cent, 100 per cent, and 50 per cent, respectively.

Receipts from tourism and from diplomatic and other foreign missions must be surrendered at the official rate but receive a premium of 33⅓ per cent; receipts from emigrants’ remittances, inheritances, family maintenance payments, gifts, and other noncommercial items receive the official rate plus a 100 per cent premium. Not more than Din 3,000 in Yugoslav banknotes, in notes of Din 100 or less, may be brought in by travelers.

Capital

All transfers of a capital nature by residents or nonresidents are subject to individual license. Authorization is seldom granted for foreign participation in foreign enterprises in Yugoslavia. However, foreign loans to Yugoslav enterprises are allowed on a more liberal basis. Unless specifically permitted to retain foreign exchange, residents are obliged to repatriate and surrender foreign exchange held abroad. Capital transfers abroad by residents are usually not approved.

Table of Exchange Rates (as at December 31,1958)(dinars per U.S. dollar)
BuyingSelling
300(Official Rate)300(Official Rate)

Repayment of government debts and transfers of inheritances.
400(Official Rate plus 33⅓% Premium)

Receipts from tourism and diplomatic and other foreign missions.
400(Official Rate plus 33⅓%)

Retransfer of unspent dinar amounts representing exchange cashed for nonresidents.
600(Official Rate plus 100% Premium)

Receipts from emigrants’ remittances, inheritances, family maintenance, gifts, and other noncommercial items.
600(Official Rate plus 100%)

Exchange for travel; other private noncommercial payments; invisibles of government and social organs and institutions.
6321(Settlement Rate)

Exports and related invisibles.
6321(Settlement Rate)

Imports and related invisibles.
Note: There is also a free market (applicable only to some 0.3 per cent of total sales of foreign exchange), in which the National Bank sells exchange for a few imports and invisibles; the free market rate for the U.S. dollar at the end of 1958 was Din 8,217 per US$1. Imports paid for with foreign exchange obtained at the free market rate are subject to an additional payment of the settlement rate times the relevant coefficient.

Changes during 1958

January 1. The exchange rate for sales of foreign exchange by the banks to government organs and institutions for noncommercial payments (travel, contributions, etc.) was increased by 100 per cent. This made the exchange rate for noncommercial payments the same for all buyers by abolishing the privileged rate for government bodies.

January 10. With the exception of the clearing currencies of seven Eastern European countries, Egypt, Israel, and Turkey, the disparity between the settlement rates for various currencies was reduced to 1 per cent.

January 14. A bilateral trade and payments agreement was signed with the Spanish authorities providing that payments between Spain and Yugoslavia would be settled through a clearing account expressed in U.S. dollars and any balance outstanding at the termination of the agreement would be settled in a transferable currency.

February 19. A bilateral trade and payments agreement with Mongolia came into effect. Under this agreement, payments were to be made through a clearing account expressed in U.S. dollars.

March 1. Certain changes made in the arrangements by which certain groups of enterprises could retain at their free disposal a percentage of their foreign exchange earnings reduced the scope of such arrangements.

April 2. An agreement was signed with the Benelux countries providing that, as of July 1, 1958, the existing bilateral agreements would cease to operate and would be replaced by settlements in the transferable currencies of the Benelux countries. The agreement also provided for the payment of the existing bilateral debts of Yugoslavia to these countries.

April 10. Business associations, groups of enterprises, and individual enterprises were allowed to use 5 per cent to 20 per cent of their export proceeds in excess of their export plan for a specific year to import raw materials and equipment. The actual percentage would depend on the type of commodity exported and on the need for imports that would contribute to the promotion of exports.

May 29. An ordinance of the Committee for Foreign Trade came into effect concerning the procedure governing compensation arrangements with foreign countries. Under this ordinance, compensation arrangements would be permitted only as an exception and after approval by the Committee for Foreign Trade and the Federal State Secretariat for Internal Trade. Approval would be given only if the transaction could not be effected in full or in part through normal commercial channels, or if it offered the exporter or importer especially satisfactory conditions, contributed to the creation of stable economic ties between Yugoslavia and a foreign country, facilitated imports of goods not manufactured in Yugoslavia, or made it possible to trade with countries that do not have commercial agreements with Yugoslavia. Compensation arrangements had to be registered by the National Bank and a 5 per cent guarantee had to be provided; the guarantee would be forfeited if the approved arrangement was not carried through.

June 25. An order was published requiring prior permission to be obtained for contracts covering the import of machine spare parts, equipment, apparatus, machinery, and transport equipment for assembly in Yugoslavia. Imports of finished equipment were made subject to prior approval of the Secretariat of the Federal Executive Council for Industry and imports of consumer goods were made subject to prior approval of the Federal State Secretariat for Internal Trade. In addition, imports of motor vehicles of all kinds were made subject to prior approval of the Secretariat of the Federal Executive Council for Transportation and Communication; previously this requirement had applied only to passenger cars.

July 23. The number of import coefficients was reduced from 19 to 12 and the number of export coefficients from 16 to 14 (including the coefficient of 1.0) ; the range of the import coefficients was changed from 0.6–3.0 to 1.0–3.0 and the range of the export coefficients from 0.5–2.0 to 0.6–2.0.

August 2. An agreement on the settlement of various Yugoslav prewar public debts and of the indemnity for the nationalization of French property in Yugoslavia was signed with France. Payments were to be made by deducting 7 per cent from Yugoslav export earnings from France. In order to facilitate this, France agreed to increase imports of various products from Yugoslavia and to increase, for the next three years, the bilateral swing credit from $3 million to $6 million.

September 2. The terms of settlement under the payments agreement with Paraguay were changed from a dollar clearing basis to a transferable sterling basis.

October 2. A bilateral trade and payments agreement with Iraq came into effect. It provided for payments through a clearing account in Iraqi dinars, with the balance to be settled every six months in sterling.

These countries are Mainland China, Czechoslovakia, Poland, and U.S.S.R.

Thia survey presents the position as at January 12, 1959, when operations began in the single, free, exchange market.

Bolivia, Brazil (excluding fruit), Bulgaria, Chile, Czechoslovakia, Ecuador, East Germany, Hungary, Israel, Paraguay, Poland, Rumania, Spain, U.S.S.R., Uruguay, and Yugoslavia.

In view of certain changes made on January 19, 1959 (see note at the end of this survey), this survey presents the position as at that date.

Effective April 1, 1959, licensing discrimination against a further wide range of dollar goods was removed.

In view of the changes introduced early in 1959 (see note at the end of this survey), this survey presents the position as at February 17, 1959.

Belgian (Luxembourg) francs, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

In view of certain changes that took place early in 1959 (see note at the end of this survey), this survey presents the position as at April 1, 1959.

Austrian schillings, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

Settlements with the Egyptian Region of the United Arab Republic may also be made in Egyptian pounds through the free market. For transactions with Czechoslovakia, there is the possibility of settlement in Czechoslovak korunas.

Bilateral Account of the country concerned.

Convertible as used here includes U.S. dollars, Canadian dollars, and the externally convertible European currencies (see footnote 2).

Bilateral agreements requiring settlements through centralized accounts continue in effect with Argentina, Chile, and Uruguay.

In view of certain changes that took place in January 1959 (see note at the end of this survey), this survey presents the position as at January 31, 1959.

These surcharges are adjusted periodically (see footnote 5). When the effective rate reaches the level of the “cost of exchange,” i.e., the weighted average of the bonuses paid to exporters plus the official exchange rate, there will be no additional surcharge.

The currencies of Austria, Belgium-Luxembourg, France, Federal Republic of Germany, Italy, Netherlands, and United Kingdom—the group of countries sometimes referred to as the “Hague Club.”

The full list is as follows: sugar; cotton, raw or ginned; peanuts, with or without shells; babassu-nut kernels; animal hair and bristles; meat, meat preparations, and meat by-products in general; Brazil nuts, with or without shells; carnauba wax; ouricuri wax; hog bristles; hides and skins, raw, of domestic animals; sleepers; finely cut or processed yerba maté; pig iron; French beans; soybeans; leaf tobacco; jute fiber, raw or processed; greasy or washed wool; cotton linters and residual products thereof; wood other than pine (in logs, sawn or planed); menthol; iron ore; manganese ore; cottonseed oil; oil of peppermint; linseed oil (including seeds); castor oil; oiticica oil; tung oil (including seeds); crude mineral oil and derivatives thereof; unmanufactured sawn pinewood (including laths and squares); residual wood chips and sawdust; residual products of the processing of cotton; textile scraps and waste; sisal (fiber and wadding); oilcake (excluding cocoa cake).

The surcharges on payments for imports of newsprint are adjusted semiannually (see section on Changes during 1958, February 15, below) until the effective rates reach the level of the “cost of exchange,” i.e., the weighted average of the bonuses paid to exporters plus the official exchange rate. On February 14, 1959, these surcharges (which since August 14, 1958 had been 20 per cent and 50 per cent, respectively, of the surcharge on preferential imports) were increased to 30 per cent for imports of newsprint by printers whose publications weigh 80 grams or.less and 75 per cent for other printers, making effective rates of Cr$43.24 and Cr$79.73, respectively, per US$1.

The premiums refer to auctions for U.S. dollars (120 days’ delivery) in Rio de Janeiro on January 27, 1959.

In view of certain changes made in January 1959 (see note at the end of this survey), this survey presents the position as at January 7, 1959.

Burma has bilateral payments agreements with Czechoslovakia, U.S.S.R., and Yugoslavia.

In view of certain changes made on January 9, 1959 (see note at the end of this survey), this survey presents the position as at that date.

Ceylon has bilateral payments agreements with Bulgaria, Mainland China, Czechoslovakia, Poland, Rumania, U.S.S.R., and United Arab Republic (Egyptian Region).

Bolivia, Canada, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Philippines, United States and dependent territories, and Venezuela.

Albania, Austria, Bulgaria, Mainland China, China (Taiwan), Czechoslovakia, East Germany, Federal Republic of Germany, Hungary, Japan, Poland, Rumania, Spain, U.S.S.R., and Yugoslavia.

Belgium, Denmark, France, Greece, Iceland, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, and Turkey.

Austria, Mainland China, China (Taiwan), Czechoslovakia, East Germany, Federal Republic of Germany, Japan, Poland, U.S.S.R., and Yugoslavia.

This prohibition was revoked on January 16, 1959.

In view of the change that took place on January 27, 1959 (see note at the end of this survey), this survey presents the position as at that date.

Chile has bilateral agreements with Argentina, Bolivia, Brazil, Ecuador, France, Portugal, Spain, and Yugoslavia.

In view of certain changes that took place in January 1959 (see note at the end of this survey), this survey represents the position as at January 31, 1959.

The tax is calculated at the free market rate.

Payments for imports may also be made through the free market, in which case they are exempt from the 10 per cent remittance tax.

The average buying rate in the free market during the preceding week (in this case, Col$8.05 per US$1).

Brazil, Bulgaria, Czechoslovakia, East Germany, Hungary, Israel, Rumania, Spain, U.S.S.R., and, for merchandise payments only, Colombia.

Austrian schillings, Belgian (Luxembourg) francs, deutsche mark, Finnish markkas, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

On March 3, 1959, a program was announced for the liquidation of these arrangements by the end of 1961.

This limit was removed on February 4, 1959.

This rate is an approximate effective rate calculated on the basis of the surrender requirements. It varies with the price obtained for the export and with the free market rate (see section on Exports and Export Proceeds, above).

Average free market rate in Quito and Guayaquil.

Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

Finland has bilateral payments arrangements with Brazil, Bulgaria, Mainland China, Colombia, Czechoslovakia, France, East Germany, Greece, Hungary, Iceland, Israel, Paraguay, Poland, Rumania, Spain, Turkey, U.S.S.R., Uruguay, and Yugoslavia.

Argentina, Austria, Belgium, Denmark, Federal Republic of Germany, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, United Kingdom, and some other parts of the Sterling Area.

Effective March 23, 1959, these allocations were increased to Fmk 40,000 and Fmk 80,000, respectively.

In view of the changes introduced early in 1959 (see note at the end of this survey), this survey presents the position as at February 18,1959.

The countries in the dollar area are listed as Bolivia, Canada, Colombia, Costa Rica, Cuba, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Liberia, Mexico, Nicaragua, Panama, Peru, Philippines, United States and possessions, and Venezuela. The French Somali Coast is under the same regime as the dollar area countries and the Djibouti franc is treated similarly to the Canadian dollar, the U.S. dollar, and the Mexican peso.

Albania, Andorra, Bulgaria, Chile, Czechoslovakia, Ecuador, Finland, East Germany, Hungary, Israel, Poland, Rumania, Saudi Arabia, Spain, Tangier, U.S.S.R., Uruguay, and Yugoslavia.

Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

Exporters’ cards are granted to producers of industrial exports whose exports are equal to at least 20 per cent of their production and to export merchants whose exports are equal to at least 50 per cent of their total turnover. For exports of agricultural products, there is a uniform rate of 20 per cent applicable to both categories of exporter.

Securities expressed in foreign currencies and issued by French companies or organizations are considered as “foreign securities.”

The trade and exchange control regulations established by the authorities of the Federal Republic of Germany are, for the most part, applied also in the British, French, and U.S. Sectors of Berlin. The term “Germany” is used in this survey as an abbreviation for the Federal Republic of Germany.

In view of certain modifications that were made in the German system in the first months of 1959 (see note at the end of this survey), this survey presents the position as at May 1, 1959.

Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

Australia, Bahrein, Burma, Cambodia, Ceylon, Ghana, Guinea, India, Indonesia, Iraq, Jordan, Katar, Kuwait, Laos, Libya, Malaya, Morocco, New Zealand, Pakistan, Rhodesia and Nyasaland, Trucial Oman, Tunisia, Union of South Africa, and Viet-Nam; and Andorra, Argentina, Bhutan, Brazil, China (Taiwan), Ethiopia, Finland, Iran, Israel, Japan, Republic of Korea, Lebanon, Muscat and Oman, Nepal, Paraguay, Saudi Arabia, Spain, Sudan, Thailand, United Arab Republic (Egyptian and Syrian Regions), Uruguay, Vatican City, Yemen, and Yugoslavia.

Afghanistan, Bolivia, Canada, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Liberia, Mexico, Nicaragua, Panama, Peru, Philippines, United States and possessions, and Venezuela.

Restrictions are applied only to the acquisition from nonresidents of rights to films that are to be shown in the original German-speaking version or in a German-synchronized version, the acquisition of rights to films of any kind originating in Eastern bloc countries, and the acceptance of film services from Eastern bloc countries.

Besides payments agreements with OEEC countries, Greece maintains bilateral payments agreements with Bulgaria, Chile, Czechoslovakia, Finland, East Germany, Hungary, Israel, Japan, Poland, Rumania, Spain, U.S.S.R., United Arab Republic (Egyptian Region), Uruguay, and Yugoslavia.

In view of certain changes that were notified on January 23, 1959 (see note at the end of this survey), this survey presents the position as at that date.

This is regarded as comprising Cambodia, Mainland China, China (Taiwan), Indonesia, Republic of Korea, Laos, Macao, Philippines, Thailand, and Republic of Viet-Nam.

Specified currencies are Canadian dollars, U.S. dollars, and the externally convertible European currencies.

Export licensing in Hong Kong, as in some other areas, is not related to exchange control.

Originating in Mainland China, China (Taiwan), Hong Kong, Republic of Korea, or Macao, and received in U.S. dollars.

In view of an amendment to the regulations effective January 1, 1959 (see note at the end of this survey), this survey presents the position as at that date.

Afghanistan, East Germany, Poland, U.S.S.R., and United Arab Republic (Egyptian Region).

Effective January 2, 1959, this percentage was raised to 133⅓, and on April 16, 1959, to 230.

Effective March 2, 1959, this rate was changed to Rp 29.91.

On the basis of the pegged BE rate of Rp 3.32 per Rp 1 of nominal value and the basic exchange rate of Rp 11.40 per US$1.

In view of the change made on February 15, 1959 (see note at the end of this survey), this survey presents the position as at February 15, 1959.

The General Exemptions permit the purchase of all goods originating outside the dollar area and the following goods originating in the dollar area: (a) cereals, cereal products, animal feeding stuffs, animal oils, animal fats, vegetable oils, vegetable fats, oilseeds, oil nuts, seeds for sowing, raw cotton, yarns, fibers, leather, hides, skins, and timber; and (b) any other goods, subject to a limit of £250 in any period of three months.

Israel has bilateral payments agreements with Argentina, Brazil, Bulgaria, Denmark, Finland, France, Ghana, Greece, Hungary, Iceland, Norway, Poland, Portugal, Rumania, Turkey, Uruguay, and Yugoslavia.

Specifically, Angola, Belgian Congo, French East and West Africa, Ghana, Liberia, Nigeria, and Sierra Leone.

Exports of certain industrial products receive premiums ranging from I£0.600 to I£1.200 per US$1, according to the currency received and the destination of the goods. However, these premiums are given only to the extent of the “net value added” (see section on Exports and Export Proceeds, above).

These currencies are Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, French francs, Netherlands guilders, Norwegian kroner, pounds sterling, Swedish kronor, and Swiss francs.

Ecuador, Greece, Paraguay, Portugal, and Turkey.

Bolivia, Canada, China (Taiwan), Colombia, Costa Rica, Cuba, Dominican Republic, El Salvador, French Somaliland, Guatemala, Haiti, Honduras, Republic of Korea, Lebanon, Liberia, Mexico, Nicaragua, Panama, Peru, Philippines, United Arab Republic (Syrian Region), United States and possessions, Uruguay, and Venezuela.

In view of certain changes made in January 1959 (see note at the end of this survey), this survey presents the position as at January 31, 1959.

China (Taiwan), Greece, Republic of Korea, and Turkey.

Belgian francs, Canadian dollars, deutsche mark, French francs, Netherlands guilders, pounds sterling, Swedish kronor, Swiss francs, and U.S. dollars. Effective April 1, 1959, Austrian schillings, Danish kroner, Italian lire, Norwegian kroner, and Portuguese escudos were added to this list.

Specified residents, such as shipping companies, airlines, tourist services, insurance companies, and certain Japanese trading firms, also are authorized to keep Foreign Currency Deposit Accounts in these currencies.

1

In view of certain changes that took place on January 7, 1959 (see note at the end of this survey), this survey presents the position as at that date.

The Arab League States are Iraq, Jordan, Lebanon, Libya, Morocco, Saudi Arabia, Sudan, Tunisia, United Arab Republic, and Yemen. However, the currencies most used in the free market are those of Lebanon and the Syrian Region of the United Arab Republic.

Cement, except white cement, carbonic acid, arak, nonalcoholic drinks, and cigarettes.

This selling rate does not include the fees payable on all import licenses (see section on Imports and Import Payments, above).

This rate represents the rate for the Jordan dinar in Beirut converted on the basis of the free rate for the U.S. dollar in Beirut.

The auction price as at December 31, 1958 was 618 hwan per US$1.

These countries are Czechoslovakia, East Germany, Poland, Rumania, U.S.S.R., and United Arab Republic (Egyptian Region).

In view of certain changes announced on January 8, 1959 (see note at the end of this survey), this survey presents the position as at that date.

In view of the exchange tax introduced on January 12, 1959 (see note at the end of this survey), this survey presents the position as at that date.

These countries are Austria, Belgium, France, Italy, Netherlands, Portugal, Spain, Sweden, U.S.S.R., United Kingdom, and United States.

In view of a modification in the payments system on January 6, 1959 (see note at the end of this survey), this survey represents the position as at that date.

“Convertible” currencies in the Netherlands regulations are Canadian dollars, U.S. dollars, and the externally convertible European currencies (Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, French francs, Italian lire, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs).

The dollar countries are Bolivia, Canada, Colombia, Cost Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Liberia, Mexico, Nicaragua, Panama, Peru, Philippines, United States and possessions, and Venezuela.

The countries in the transferable area are all those not included with the dollar countries or the bilateral countries.

The bilateral countries are Bulgaria, Czechoslovakia, East Germany, Hungary, Indonesia, Netherlands Antilles, Netherlands New Guinea, Poland, Spain and its monetary area, Turkey, and U.S.S.R. (However, Poland and Hungary were included in the transferable area on March 4, 1959 and April 1, 1959, respectively.)

Effective March 13, 1959, the rate of C$6.60 applied only to the proceeds of exports of cottonseed from the 1958-59 crop, and the proceeds of all other exports were negotiated at the official rate.

In view of certain changes that took place early in 1959 (see note at the end of this survey), this survey presents the position as at February 15, 1959.

Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, Finnish markkas, French francs, Italian lire, Netherlands guilders, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

Brazil, Bulgaria, Czechoslovakia, East Germany, Hungary, Israel, Poland, Rumania, Spain, U.S.S.R., and Yugoslavia.

In view of the change that took place in January 1959 (see note at the end of this survey), this survey presents the position as at January 31, 1959.

The currencies of Aden, Afghanistan, Belgian Congo, Burma, Ceylon, East Africa, French Africa, India, Portuguese territories in India, Madagascar, Malaya, Mauritius, Nepal, Persian Gulf Sheikdoms, South Africa, and Tibet.

In view of certain changes that took place early in 1959 (see note at the end of this survey), this survey presents the position as at February 16,1959.

The banks are required to quote a single rate for buying and selling certificates, but they may charge a commission of ¼ of 1 per cent on certificate sales.

Effective January 15, 1959, this charge was reduced to ½ of 1 per cent.

On January 10, 1959, the Monetary Agency had reduced its selling rate for U.S. dollars in the free market from SR 5/7 to SR 5/4 per US$1. On March 5, 1959, the rate was further reduced, to SR 5/0½ per US$1.

The buying rate plus Pts 0.27 (banking commission of the Spanish Foreign Exchange Institute).

This table does not take account of the premiums on the proceeds of certain exports to Italy, which give rise to effective rates ranging from Pts 44.94 to Pts 126.00 per US$1

Effective April 10, 1959, the rate for these remittances was changed to Pts 56.00 per US$1.

In view of certain changes introduced on April 5, 1959 (see note at the end of this survey), this survey presents the position as at that date.

The Sudan has bilateral payments agreements with Czechoslovakia, East Germany, Hungary, Poland, United Arab Republic (Egyptian Region), and Yugoslavia.

Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, Finnish markkas, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, and Swiss francs.

Brazil, Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, Rumania, Spain, and U.S.S.R.

For travel to Denmark, Finland, Iceland, and Norway, only amounts exceeding SKr 5,000 need be documented.

As from January 17, 1959, all imports from Mainland China are prohibited.

Gold, platinum and precious stones, certain fertilizers, live cattle and other animals, rice and rice products, tin metal and manufactures, minerals and rubber, and radioactive materials.

In view of certain changes that took place on January 14, 1959 (see note at the end of this survey), this survey represents the position as at that date.

Exports of opium are temporarily subject to the LT 2.80 rate, and do not benefit from any premium.

Brazil (a payments agreement between the central banks), Bulgaria, Czechoslovakia, Finland, East Germany (an agreement between the chambers of commerce), Hungary, Iran, Israel, Japan, Poland, Rumania, Spain, U.S.S.R., United Arab Republic (Egyptian Region), and Yugoslavia.

As from February 17, 1959, when the second quarterly quotas were announced, imports from bilateral agreement countries are included in global quotas.

Exports of opium, which is also classified in Category A, are temporarily subject to the official rate without premium.

For this purpose, shares of companies registered in the Federation of Rhodesia and Nyasaland that are listed on the London Stock Exchange are considered as “South African.”

The Egyptian Region has bilateral payments agreements specifying settlements in a currency other than the Egyptian pound with Belgium-Luxembourg, Ceylon, Mainland China, France, Federal Republic of Germany, India (for payments for invisibles and imports other than tea and jute and for proceeds of exports other than cotton), Indonesia, Iraq, Italy, Japan, Libya, Netherlands, Portugal (for payments for invisibles), Switzerland, and Turkey.

The Egyptian Region has bilateral payments agreements specifying settlements in Egyptian pounds with Austria, Bulgaria, Czechoslovakia, East Germany, Greece, Hungary, India (for payments for imports of tea and jute and for proceeds of exports of cotton), Lebanon, Mongolia, Poland, Portugal (for trade transactions), Rumania, Saudi Arabia, Spain, Sudan, Tunisia, U.S.S.R., Syrian Region of United Arab Republic, and Yugoslavia.

As of January 1, 1959, import licenses for seasonal goods, e.g., seeds, are issued on an annual basis.

The Arab League States are Iraq, Jordan, Lebanon, Libya, Morocco, Saudi Arabia, Sudan, Tunisia, United Arab Republic, and Yemen.

Bulgaria, Mainland China, Czechoslovakia, East Germany, Hungary, Poland, Rumania, U.S.S.R., and Yugoslavia.

Denmark, France, Greece, and Italy.

In view of certain changes made early in 1959 (see note at the end of this survey), this survey presents the position as at March 26, 1959.

Export licensing in the United Kingdom, as in some other countries, is not related to exchange control.

The specified currencies are listed as follows: Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars.

This group is referred to in the U.K. import licensing regulations as the “Eastern Area,” comprising Albania, Bulgaria, Czechoslovakia, Germany (Soviet Zone), Hungary, North Korea, Poland, Rumania, U.S.S.R., and North Viet-Nam.

Exceptionally, 2½ per cent Consols and 3½ per cent War Loan may also be acquired with sterling from a Blocked Account.

The countries in Group A are Brazil, Bulgaria, Czechoslovakia, Finland, France, East Germany, Greece, Hungary, Israel, Italy, Paraguay, Poland, Rumania, Spain, Switzerland, U.S.S.R., and Yugoslavia.

In addition, a temporary premium of 10 centesimos per US$1 has been established for all exports.

This table does not take account of the exchange taxes of 1 per cent on all export proceeds and 6 per cent on most payments abroad related to imports, or of the temporary premium of 10 centesimos per US$1 on export proceeds.

This rate is applicable only to a few licenses remaining from 1956.

In view of the reopening of the free market on January 5, 1959 (see note at the end of this survey), this survey presents the position as at that date.

This is the settlement rate for the U.S. dollar; settlement rates are also fixed for other currencies and for a few clearing currencies they represent broken cross rates. Actual effective rates are created by the application of coefficients. However, no coefficient is applied to imports of basic foods, such as wheat, lard, oils, sugar, and rice, but if the domestic price is higher than the foreign price the importer is, in principle, required to pay an additional amount equivalent to the difference between the foreign price calculated at the official rate and the domestic price.

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