Chapter

Member Countries of the International Monetary Fund

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1960
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Afghanistan

Exchange Rate System

There is no agreed par value for the Afghani. The official rates are Afg 20.00 buying, Afg 20.25 selling, per US$1 (the first category rate), and Afg 28.00 buying, Afg 28.35 selling, per US$1 (the second category rate). In addition, there is 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 remainder 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

Settlements with countries with which Afghanistan has bilateral payments agreements1 must be made 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 a few imports at the first category rate and for essential industrial imports and most 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. Imports not permitted at the official rates have to be financed in the free market.

Payments for Invisibles

Government payments for invisibles and payments to foreigners on government contract 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. The currencies to be received for exports of karakul, cotton, and wool are prescribed (see section on Prescription of Currency, above). Portions of the export proceeds of these three commodities have to be surrendered at the official rates; the remainder may be sold in the free market 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. Partial surrender requirements at official rates apply to exports of six other commodities; the remainder, and exchange proceeds from all other exports, may be sold in the free market. (See Table of Exchange Rates, below.)

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; they may sell the remainder in the free market. Exchange from diplomatic establishments is purchased by Da Afghanistan Bank at the first category rate. Exchange receipts from other transactions may be sold in the free market. Travelers entering Afghanistan may bring in Afghan 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 Law to Encourage the Investment of Private Foreign Capital in Afghanistan, of November 18, 1958, the repatriation of registered capital and the remittance, up to 15 per cent per annum, of profits thereon are guaranteed and take place through an authorized bank at the free market rate. Capital that was entered under the Foreign Investment Law (of April 24, 1954) and was registered at the second category rate may be repatriated, and profits thereon remitted, at the effective rate of Afg 32.35 per US$1; but if the capital was registered under that law as having been entered through the free market, transfers may be made only at the free market rate.

Table of Exchange Rates (as at December 31, 1959)(afghanis 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)

Certain budgetary expenditures of the Government. A few imports. Certain students’ expenses abroad.
24.66(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)

Capital registered under the Foreign Investment Law of April 24, 1954.
28.35(Second Category Rate)
28.74(17% at First Category Rate, 68% at Second Category Rate, and 15% at Free Market Rate)
Exports of cotton and wool to other than bilateral agreement countries.30.35(Second Category Rate plus Afg 2 Exchange Tax)
Imports of sugar and petroleum products by the Government Monopolies Department (including freight and insurance).
32.35(Second Category Rate plus Afg 2 Exchange Tax and Afg 2 Surcharge)
36.40(40% at Second Category Rate and 60% at Free Market Rate)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.
Exports of sesame seeds.
37.60(20% at First Category Rate and 80% at Free Market Rate)

Exports of sheepskins and goatskins.
39.80(10% at First Category Rate and 90% at Free Market Rate)
Exports of casings.
39.90(15% at Second Category Rate and 85% at Free Market Rate)
Exports of carpets and flaxseed.
42.00 (approx.) (Fluctuating Free Market Rate)42.00 (approx.) (Fluctuating Free Market Rate)
All other receipts.All other authorized payments.

Changes during 1959

March 22. With effect from September 21, 1958, 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.

Argentina

Exchange Rate System

The par value of Argentine Pesos 18 = US$1 does not apply to any transactions under the present system. All exchange transactions are settled through the free exchange market, in which the rate is determined by the free play of market forces. The free market rate on December 31, 1959 was M$N 83.20 per US$1.

Administration of Control

Exchange may be bought and sold only at institutions (banks, finance companies, 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. The Central Bank of Argentina intervenes in the free market only in the settlement of transactions left over from the former official market, which existed until December 30, 1958.

Prescription of Currency

Under the bilateral agreements concluded by Argentina with various countries,1 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 currencies or externally convertible European currencies.

Imports and Import Payments

Imports are free of import and exchange licensing, and exchange to pay for them is obtained in the free market. Approval by the Central Bank is required for imports of capital equipment by official agencies if payment is extended over a period of more than 180 days.

Surcharges on the c.i.f. value of imports are payable before customs clearance, as follows:

  • List 1 (fuels, principal metals, rubber, industrial machinery and motors of a type not manufactured in Argentina, newsprint, etc.): no surcharge

  • List 2 (numerous raw materials, drugs, iron and steel bars, tinplate, book paper and paper for plates, woodpulp, etc.): 20 per cent

  • List 3 (semiprocessed articles, lumber, chemical products, etc.): 40 per cent

  • List 4 (spare parts, tires, tools, etc.): 100 per cent

  • List 5 (luxuries, musical instruments, etc.): 150 per cent plus a temporary surcharge of 50 per cent2

  • List 6 (certain industrial machines and motors similar to those produced locally): 100 or 150 per cent, depending upon essentiality

  • List 7 (items to be announced):3 200 per cent

All imports not specifically included in these lists are subject to a 150 per cent surcharge, plus a temporary surcharge of 50 per cent,2 except that imports of automobiles are subject to a special surcharge which varies with the weight of the automobile. Exemption from surcharges may be granted to imports under officially approved investment programs, to imports for certain vital industries (oil, coal, steel, power, and railroads), certain imports from Bolivia, Brazil, Chile, Paraguay, Peru, and Uruguay, and certain personal imports by diplomats, immigrants, and others.

Payments for Invisibles

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

Exports and Export Proceeds

Exports are free of direct controls and the surrender of exchange proceeds is not required. The principal export products are subject to retention taxes calculated on the basis of export prices fixed by the Office of the Secretary of the Treasury. The amounts retained are 10 per cent for wool and most meat and 20 per cent for cereals, oilseeds, vegetable oils, quebracho extract, hides, and certain livestock by-products. The full amount of the retention tax must be deposited, prior to shipment of the goods, with an institution authorized to deal in exchange, unless the export is covered by an irrevocable letter of credit payable against shipping documents or is made by a large firm with a capital of over M$N 5 million.

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 1959

January 12. A comprehensive stabilization program was put into effect and exchange operations, suspended since December 30, 1958, were resumed. A single fluctuating rate replaced the earlier multiple rate structure. The system of aforos was abolished and, except for the requirement that export proceeds be surrendered within 30 days of shipment, all existing controls over trade, invisibles, and capital transactions were removed. However, three import lists were announced, goods on two of which would be subject to surcharges of 20 per cent or 40 per cent of their c. & f. value. Imports not included in these lists automatically became subject to a surcharge of 300 per cent. Some imports on List 3 and all unlisted imports were subject also to advance deposits, to be held for 180 days, ranging from 50 to 500 per cent of the c. & f. value of the goods plus surcharge. Exemption from surcharges and/or advance deposits was allowed only for imports under officially approved investment programs, imports destined for the oil, coal, steel, power, and railroad industries, and personal imports under certain specified conditions. All imports of capital equipment with payment extended over a period exceeding 180 days required special authorization from the Central Bank. Certain exports were made subject to retention taxes (“withholding percentages”), as follows: principal meat exports and raw wool, 10 per cent; grain and some livestock by-products, 20 per cent. The amount of the retention tax was calculated on the basis of official export prices fixed by the customs office, and it had to be deposited in full at an authorized bank prior to shipment of the goods. Cereals and oilseeds from stocks produced prior to the exchange reform were additionally subject to a temporary export tax of 15 per cent. Imports of automobiles continued to be governed by the previous regulations, which provided for a surcharge of M$N 500 to M$N 1,000 per kilogram, according to the weight of the automobile.

January 15. Certain imports from Bolivia, Brazil, Chile, Paraguay, and Uruguay were exempted from surcharges and advance deposits for 180 days. (This period was later extended.)

January 20. Exports covered by irrevocable letters of credit payable against shipping documents were exempted from the requirement that the amount of the appropriate retention tax be deposited with a local bank before shipment.

February 5. The privilege, in respect of the retention tax, granted firms with a capital exceeding M$N 5 million was extended (see section on Exports and Export Proceeds, above).

March 18. The temporary tax of 15 per cent on exports of wheat was withdrawn.

April 1. A new trade and payments agreement with Peru came into effect, requiring settlements between Argentina and Peru to be made through bilateral clearing accounts. Certain imports from Peru were exempted from surcharges.

April 24. Exports of corn (maize) from the 1958-59 crop were exempted from the special 15 per cent tax.

May 6. New import lists with revised surcharges were put into effect, as follows: List 1, no surcharge; List 2, 20 per cent; List 3, 40 per cent; List 4, 100 per cent; List 5, 300 per cent; and List 6 (applying to machines and industrial motors), 40, 100, or 300 per cent, depending upon essentiality. Imports of goods on these lists were exempted from the advance deposit requirements, and goods not on the lists became subject to an advance deposit of 500 per cent and a surcharge of 300 per cent, except for automobiles, the surcharge on which varied according to the weight of the automobile (see January 12, above). Imports already contracted at the time of this change could be brought in under either the old or the new regulations, at the option of the importer.

May 13. The retention tax on exports of salted and cured meat and of boned and frozen beef was reduced from 20 to 10 per cent.

June 11. The system of bilateral payments between Argentina and Paraguay was discontinued. In accordance with the free exchange systems effective in both countries, it was agreed that trade transactions could be settled in the currency of either country or in any other convertible currency.

August 28. The compulsory surrender of export proceeds, formerly required within 30 days of shipment for most exports, was abolished.

September 9. Industrial machinery and motors imported permanently, with the exception of those specified in Sections A and B of List 6, were exempted from surcharges.

September 22. The requirement of authorization by the Central Bank for imports of capital goods with payment extended over a period of more than 180 days was abolished for private importers, but not for official agencies.

September 28. The trade and payments agreement with Ecuador ceased to be effective.

October 28. Production lines which form a single unit, although they consist of independent elements, could be imported without surcharge, even if some of the components were subject to surcharge.

November 6. All remaining advance deposit requirements for imports were abolished. Deposits already held would be returned to the importers immediately.

November 6. The 15 per cent temporary tax on exports of cereals and oilseeds was abolished beginning with the 1959-60 crop.

December 31. The 300 per cent surcharge (formerly applying to all imports on List 5, some on List 6, and all unlisted imports) was reduced to 150 per cent. However, a new List 7 was created carrying a 200 per cent surcharge. No items were immediately placed on List 7, but it was stated that a list of merchandise to be included would be published by March 1, 1960. Items on List 5 and unlisted items would be subject temporarily to a 50 per cent surcharge (in addition to the regular surcharge of 150 per cent), which would be refunded for items not eventually included in List 7.

Australia

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 Australia1 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, 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 by crediting sterling to an External Account, in Australian currency through the account of a bank in the country of origin of the goods with a bank in Australia, or in any foreign currency. Proceeds from exports to countries outside the Sterling Area may be accepted in sterling from an External Account, Australian currency from appropriate accounts, or any currency specified by the Commonwealth Bank (i.e., in practice, any foreign currency which is freely convertible).

Nonresident Accounts

All credits to the accounts of residents of countries outside the Sterling Area 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. Transfers are allowed freely, on application, between accounts of nonresidents. Under current policy, the balance of a nonresident account may be withdrawn by direct payment in a convertible currency.

Imports and Import Payments

Unless specifically exempted, imports of all goods require import licenses. The import licensing system is administered by the Department of Trade and the Department of Customs and Excise, the latter being responsible for the actual issue of import licenses and enforcement of the Customs (Import Licensing) Regulations. Import licenses are generally valid for 12 months, and no restrictions are imposed on payments for licensed imports provided the prescription of currency requirements are observed.

Imports are divided into a number of categories. At the end of 1959, approximately 45 per cent of total imports were either exempt from license or licensed freely under various categories. Major exempt items include petroleum products and a range of basic materials. The virtually free Replacement category covers a wide range of raw materials, replacement parts, and some foodstuffs. Machinery and various raw materials are licensed under the Administrative category, applications being subject to a case-by-case examination. Consumer goods are in the main subject to quotas, based largely on imports in a past trading period. At the end of 1959, approximately 95 per cent of total imports could be obtained without restriction as to source of supply.2

Payments for Invisibles

All payments in respect of invisibles come under exchange control, but current invisibles are not subject to discrimination and, except for certain noncontractual transfers, are not restricted, the control operating solely to prevent unauthorized capital transfers. There is a basic exchange allowance of £A 2,000 in any 12 months for any kind of travel in any country; additional amounts may be obtained on application, provided the exchange control is satisfied that the exchange is required for bona fide travel expenses and does not represent an unauthorized capital transfer. Limits are placed on remittances for family maintenance and gifts; however, the treatment of applications for such transfers is liberal and, for family maintenance, amounts beyond the normal limit will be approved on application. Travelers may not take out more than £A 25 in Australian notes.

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.3 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 Australia are allowed only in special 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 borrowing foreign currency or 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)4 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 certain securities expressed in Canadian dollars and registered in Australia, provided the securities are held within the Sterling Area. The export of securities and practically all transactions in foreign securities are subject to specific exchange control approval.

Changes during 1959

January 19. The prescription of currency requirements were simplified. Payments for imports from countries outside the Sterling Area could be made in any currency, and proceeds of exports to countries outside the Sterling Area could be accepted in External Account sterling or in any specified currency. The remaining discrimination against payments for invisibles to dollar area countries (relative to other non-sterling countries) was removed and the banks’ authority to approve allocations for business travel in the non-sterling, nondollar area was extended to include travel in the dollar area. Of the basic allocation for nonbusiness travel, one half could be spent in countries outside the Sterling Area. For business travel, banks could make exchange available at the rate of UK£15 a day, up to a limit of UK£1,500 for each person in any 12 months, of which UK£900 would be available for travel in countries outside the Sterling Area. Applications for larger amounts could be submitted to the exchange control authorities for their determination.

April 1. Discrimination against a further wide range of dollar imports was removed, raising the proportion of total imports exempt from licensing or licensed on a nondiscriminatory basis from about 50 per cent to about 70 per cent.

August 1. Import licensing was raised to a rate consistent with an over-all level of recorded imports of about £A 850 million (f.o.b.) a year (previously £A 800 million). The licensing requirements for a wide range of goods were simplified: about £A 400 million worth of imports would be either exempt from license or licensed virtually freely. For more than 90 per cent of total imports, importers would be free to buy from any country in the world. For the remainder, some provision would be made to widen trade with the dollar area.

November 17. The separate allowances for different categories of travel were merged in a basic allowance of £A 2,000 a person in any period of 12 months for any type of travel to anywhere in. the world. Applications for additional amounts for bona fide travel purposes would be approved, the purpose of the applications being to ensure that transfers of capital would not be made in the guise of travel expenditure. Provision for the payment of fares in Australian currency was extended to cover all fares for public transport and rental-hire cars in any country. Personal gifts could be made up to £A 150 a year. Emigrants could transfer £A 2,000 a person on departure and the balance of their assets upon establishment of permanent residence overseas, irrespective of the currency area concerned.

December 1. The annual rate of import licensing was raised by £A 25 million (f.o.b.). Discrimination in respect of dollar imports of timber and of a number of consumer goods was terminated, and it was announced that discrimination against imports of automobiles of dollar area origin would be discontinued as of October 1. 1960.

Austria

Exchange Rate System

The par value is Austrian Schillings 26.00 = US$1. The official limits for the U.S. dollar are a minimum middle rate of S 25.80, and a maximum middle rate of S 26.20, 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 currencies1 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. A special arrangement for exchange transactions in Egyptian pounds gives rise to other rates.2

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 exchange control and issues the exchange licenses where still required.

Prescription of Currency

Settlements with countries with which Austria has bilateral payments arrangements are made as follows: with Bulgaria, Czechoslovakia, Eastern Germany, Greece, Hungary, Poland, Rumania, Turkey, the U.S.S.R., and Yugoslavia, through clearing accounts expressed in U.S. dollars; with the Egyptian Region of the United Arab Republic, in Egyptian pounds.2 The clearing accounts with Greece and Turkey are settled monthly in accordance with the terms of the European Monetary Agreement. Settlements with all other countries may be made in any convertible currency or externally convertible European currency, or through Free Schilling Accounts (see section on Nonresident Accounts, below).

Nonresident Accounts

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

1. Free Schilling Accounts, which are maintained with Austrian authorized banks, originate from the sale of gold, gold coins, convertible currencies, and externally convertible European currencies by a nonresident to the Austrian National Bank or to an Austrian authorized bank, as well as from transactions authorized by a special or general license of the Austrian National 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.

2. Blocked Accounts arise from a few categories of capital payments that are not allowed to be transferred abroad. The Austrian National Bank is prepared to permit automatically, upon application and documentation, the transfer of balances on such accounts to residents of countries with convertible currencies or externally convertible European currencies, as well as to residents of Greece and Turkey through the relevant bilateral account, but this does not apply to balances which have arisen from the sale of foreign securities and Austrian foreign bonds. Although in general balances on these accounts may not be used in Austria except as permitted under general or individual license, 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.

Imports and Import Payments

Most goods imported from OEEC countries are free of license, import licenses being required only for goods listed in the Foreign Trade Law that are not included in the OEEC liberalization. Some imports from Canada and the United States may be made freely or by special license; other imports from these countries require import licenses, which are, however, granted automatically. Goods imported from and originating in countries that settle with Austria in 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 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 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 granted after account is taken of the terms of existing bilateral agreements and such other considerations as the principle of reciprocity and hardship cases.

Residents traveling as tourists to countries settling their payments with Austria in 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 10,000. Persons leaving Austria as tourists 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 and export claims must be declared and the export proceeds surrendered. However, exemption from the general obligation to surrender export proceeds has been granted to claims and proceeds kept in accounts with Austrian authorized banks; such exchange in convertible currencies or externally convertible European currencies 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 convertible currencies or externally convertible European currencies, as far as such payments are permitted under general or individual licenses. Also exempted from the surrender requirement are 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 agreement of July 6, 1953; such exchange may be sold at free rates through authorized banks to Austrian residents who hold valid exchange licenses for payments to Egypt (but see footnote 2).

Proceeds from Invisibles

In general, exchange receipts from invisibles have to be declared within eight days from the date of collection and surrendered, with the exception of currencies held with Austrian authorized banks and proceeds credited to an account under the agreement with Egypt (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 convertible currencies or externally convertible European currencies or out of free or originally owned blocked schilling balances. For investments financed by other means of payment, and for loans by nonresidents to residents, special licenses are required. These licenses are granted after careful scrutiny of each case, the interest 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 freely.

Under an open license, the Austrian National Bank permits upon application the following transfers related to capital transactions in favor of residents of countries with which payments are settled in convertible currencies or externally convertible European currencies: (1) proceeds from the liquidation of Austrian enterprises in which these nonresidents have participated, as well as of proceeds from the sale of shares in such enterprises; (2) proceeds from the sale of Austrian securities (the proceeds of foreign securities and Austrian foreign bonds are not covered by this provision); (3) proceeds from the sale of Austrian real estate (or shares in such real estate); (4) repayment of loans and credits by Austrian residents to nonresidents insofar as the payments do not represent contractual amortization (the transfer of contractual amortization is permitted by general license); and (5) payments for claims which have passed from Austrian residents to nonresidents by inheritance. These transfers are also approved, upon application, in favor of residents of Greece and Turkey within the framework of the existing payments agreements with those countries. The transfer of capital abroad by residents is subject to approval, which is granted only in exceptional cases. Transfers to OEEC countries, as well as to Canada and the United States, of exchange representing dowries and remigrants’ funds are limited to the equivalent of US$10,000 a year.

An open license has been granted for the export of securities for the purpose of realizing rights and claims thereunder abroad, the export of nonresident-owned securities, and the export of resident-owned foreign securities for sale abroad (the proceeds must be declared and surrendered). Nonresidents may acquire Austrian securities against payment in convertible currencies or externally convertible European currencies or to the debit of Free Schilling Accounts or Blocked Accounts (see section on Nonresident Accounts, above). The proceeds of sales of such securities, if the securities were acquired against convertible currencies or externally convertible European currencies or to the debit of Free Schilling Accounts, and amortization and earnings on such securities may be transferred freely to owners residing in any country.

Changes during 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 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 7. Blocked schilling balances as of December 31, 1958 belonging to residents of countries with which settlements are made in 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 foreign exchange regulations and introduced simplifications and relaxations: Payments for goods originating in and imported from countries with convertible currencies or externally convertible European currencies no longer required individual exchange licenses. Imports (except from countries with which Austria maintains bilateral accounts) could be paid for and export proceeds received in any 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 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.

February 25. The proceeds from the sale of Austrian securities owned by nonresidents could be credited to Free Schilling Accounts or transferred abroad in any convertible currency or externally convertible European currency, provided that the securities in question had been purchased with such a currency or by debiting a Free Schilling Account. Previously, such proceeds could be credited only to Blocked Accounts.

June 12. The foreign exchange allocation for Austrian tourists traveling abroad was raised from S 7,150 to S 10,000 a year. For children aged 12 and under, the allowance was raised to S 5,000 (formerly S 3,575) a year.

July 1. The Austrian National Bank permitted the transfer to Free Schilling Accounts of blocked schilling balances held by Austrian authorized banks as of June 30, 1959 and owned by residents of countries with which payments are settled in convertible currencies or externally convertible European currencies. At the same time, the National Bank authorized the transfer without special license, within the framework of the relevant payments agreements, of balances accumulated in blocked schilling accounts as of June 30, 1959 and owned by residents of Spain, Turkey, and the Egyptian Region of the United Arab Republic.

August 1. Spain was included in the group of countries with which payments are settled in convertible currencies or externally convertible European currencies. Credit balances in Spanish clearing dollars remaining as of July 31, 1959 could be used until January 31, 1960 to buy merchandise in Spain in accordance with the Austrian-Spanish payments agreement of March 21, 1956.

October 31. Most types of capital payments due to nonresidents which previously could only be deposited in a blocked schilling account could now be authorized for remittance abroad. Blocked balances already in existence and belonging to residents of countries that settle their payments with Austria in convertible currencies or externally convertible European currencies automatically became Free Schilling Accounts.

Belgium-Luxembourg

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 most outgoing and a few incoming current payments 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, and externally convertible European currencies (see footnote 3). 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.

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 exchange 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

The prescription of currency requirements operate mainly to ensure that settlements with foreign countries are made, according to their nature, through the appropriate exchange market or, where payments in Belgian or Luxembourg francs are involved, through the appropriate category of nonresident account.

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, collateral for current trade transactions, salaries, pensions, fees, subscriptions, 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 payments, capital investments, the liquidation of investments, dealings in gold, emigrants’ funds, inheritances, 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—Rumania, Turkey, and the U.S.S.R.—and (2) the convertible area—all other countries.

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 Lists C and D or paid for transactions in Lists A, B, and C; such payments if made in Belgian or Luxembourg francs can also be settled through a Financial or a Convertible Account.

Summary of Permissible Methods of Settlement for Foreign Payments1
Transaction ListCountry-GroupForeign CurrencyExchange MarketNonresident Account in Francs
Outward Payments
A, B, and CConvertibleAnyOfficial or freeAny
BilateralBilateral2
DAnyAnyFreeFinancial or Bilateral2
Inward Payments
A and BAnyConvertible3OfficialConvertible or Bilateral2
CAnyConvertible3

Other
Official or free

Free
Convertible, Financial, or Bilateral2
DAnyConvertible3

Other
Official or free

Free
Convertible or Financial

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.

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, and imports of certain other goods (mainly textiles) imported from or originating in Hong Kong or Japan, 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, Eastern 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 other 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

If payments for transactions in invisibles are to be made through the official exchange market or by crediting Belgian or Luxembourg francs to a Convertible Account, supporting documents must be presented to an authorized bank and, in exceptional cases, the approval of the central exchange control authority is required. Payments for other invisibles may be made through the free market or by crediting Belgian or Luxembourg francs to a Financial Account.

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, Eastern 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 other 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, alternatively, they may be 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

Receipts in Canadian dollars, U.S. dollars, or externally convertible European currencies from invisibles connected with certain commercial transactions (Lists A and B—see section on Prescription of Currency, above) must be surrendered (i.e., sold in the official exchange market), or, 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 these same currencies from other transactions (Lists C and D) may be retained or they may be sold in the official or the free market. Receipts in all other currencies may be retained or they may be 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. In that case, capital brought in through the official market 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 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 and not settled by transport and travel companies holding a general authorization were permitted only through the free market.

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

April 1. The proceeds of certain long-term investments and the proceeds of approved foreign investments made through the official market could be repatriated by residents of the convertible area through the official market. Income on nonresident capital could be remitted through the official market in dollars as well as in European Monetary Agreement currencies, as previously.

July 1. Czechoslovakia ceased to be treated as a bilateral country and was included in the convertible area. The National Bank of Belgium ceased buying and selling Czechoslovak korunas at fixed rates of exchange.

July 28. Spain 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 all exchange transactions are carried out in a fluctuating free market. All sales of foreign exchange by the banks and the licensed foreign exchange dealers are subject to an exchange tax of 2 per cent. The exchange rate at the Central Bank of Bolivia, Monetary Department, on December 31, 1959 was Bs 11,875 buying, and Bs 11,885 selling, per US$1; with the 2 per cent tax, the effective selling rate was therefore Bs 12,123 per US$1.

Administration of Control

As fiscal agent of the Government, the Central Bank of Bolivia, through the Ministry of Finance, executes the exchange budget for foreign payments 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 bilateral trade and payments agreements are subject to the provisions of these agreements while they remain in force.1

Imports and Import Payments

Private imports are free of import and exchange licensing, and exchange to pay for such imports may be obtained freely at the free market rate plus the 2 per cent tax. 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. An advance deposit in U.S. dollars of from 20 to 60 per cent of the c.i.f. value is required for imports of automobiles and other vehicles; the deposit is held for one year.

Payments for Invisibles

Payments for invisibles and capital transfers may be made freely at the free market rate plus the 2 per cent 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. Minerals produced by private medium-sized mines are exported by the enterprises concerned. Minerals produced by small mines are exported through the Mining Bank of Bolivia. The Bolivian Government Petroleum Corporation is responsible for exports of petroleum.

All exchange receipts from exports by official agencies are surrendered to the Central Bank at the free market rate, with the exception of the portion retained by the Mining Corporation 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 (regalías) 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 are settled freely at the free market rate plus, for outward transfers, the 2 per cent tax:

Changes during 1959

No significant changes took place during 1959.

Brazil

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 exchange rates fluctuate. Preferential imports, as well as government payments and certain services, are paid for at the official rate plus a fixed surcharge. Some imports of newsprint also benefit from a preferential rate. A few major export commodities are subject to the Cr$18.36 rate plus bonuses. The proceeds of all other exports have to be surrendered at the fluctuating free market rate, the exporter receiving Cr$130 per US$1 (or the equivalent in other currencies) in cruzeiros and the balance in six-month notes of the Bank of Brazil. Practically all transactions in invisibles 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 quotas 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 auctioned exchange 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. The proceeds of exports that have to be negotiated in the official market must be sold by the banks to the Bank of Brazil, which provides the exchange needed for imports. All receipts under bilateral payments agreements, including those negotiated in the free market, must also be sold to the Bank of Brazil.

Prescription of Currency

Prescription of currency is in principle related to the country of origin of imports or 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 Sweden1 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), Chile, Czechoslovakia, Finland, Eastern 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, all trade with Bolivia, and frontier trade with Paraguay are settled in cruzeiros. Imports from Japan are paid in clearing sterling, although exports may be settled in any convertible or externally convertible currency. Settlements with countries with which Brazil has no payments agreements or arrangements are usually made in U.S. dollars or other convertible currencies.

Imports and Import Payments

Only imports of goods in the Special Category (see 2, 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. Preferential imports, most of which require import licenses, are authorized within global quotas established in an exchange budget. Imports and import payments may be classified as follows:

1. Specified commodities for which payment is not made through the auction system: In this group are specified government imports; wheat; petroleum and petroleum derivatives; 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,2 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 auction category (see 2, below). Imports of newsprint by printers whose publications weigh 80 grams or less, which are paid for at the official rate plus a special, periodically adjusted surcharge, are also included in this group.3 Exchange for all these imports is allocated in the exchange budget approved by the Council of the SUMOC.

2. 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”4 are acquired by bidding for certificates denominated in dollars; successful bidders may then obtain any of these currencies for delivery after 120 days have elapsed. Auctions of inconvertible currencies are subject to minimum premiums established on the basis of 85 per cent of the average of bids made for U.S. dollars during the previous week. 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. Imports of parts of motor vehicles to be assembled in Brazil according to plans approved by the Government are generally subject to the weighted average bid in the General Category.

Payments for Invisibles

Payments for expenses incidental to exports are made at the same effective rates and subject to the same conditions as the goods exported. Freight and marine insurance payments incidental to imports are made at the free market rate; exchange is not provided for the insurance of goods in Brazil or when 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 domestic and foreign currency notes freely.

Exports and Export Proceeds

All exports are subject, to export license, with the exception of exports of coffee, 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 an 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.

Exports subject to the official rate are classified in two categories, for each of which a bonus has been established, as follows (in cruzeiros per US$1):

First Category (green coffee beans, roasted coffee, whole or ground, and cocoa beans): Cr$57.64 (effective rate, Cr$76.00)

Second Category (cocoa derivatives, castor beans, and crude mineral oil and derivatives): Cr$81.64 (effective rate Cr$100.00)

Export proceeds negotiable at the official rate or received in clearing account currencies 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. The proceeds of all other exports must be surrendered to an authorized bank at the fluctuating free market rate, but immediate cash payment in cruzeiros is made only for Cr$130 per US$1 (or the equivalent in other currencies). The authorized bank negotiates freely the dollars thus obtained. For the difference between the total proceeds and the amount paid in cash, notes of the Bank of Brazil, with six months’ maturity and interest at 6 per cent per annum, are issued to the exporter. The minimum amount of these notes is Cr$10,000, fractions being paid in cash.

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

The inflow and, with certain exceptions, the outflow of foreign investments take place at the free market rate. However, when investments are made in the petroleum industry or the printing industry or in a sector considered essential to economic development or national defense, repayments of the 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.

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. Imports of production goods financed abroad may be authorized by the Council of the SUMOC. The Council may also authorize registration of loans covering other imports considered of national interest; repayments of principal and transfers of interest in this case are subject to a surcharge not lower than the weighted average of actual bids in the General Category of imports.

The commitment on the part of the Exchange Department to provide exchange for capital transactions depends on the availability of exchange, and the amounts corresponding to the obligations assumed must be taken into account in future exchange budgets.

Table of Exchange Rates (as at December 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.
51.35(Official Rate plus 40% of Cr$81.08 Surcharge)5
76.00(Official Rate plus Cr$57.64 Bonus)Imports of newsprint by printers whose publications weigh 80 grams or less.
First Category exports.
100.00(Official Rate plus Cr$81.64 Bonus)100.00(Official Rate plus Cr$81.08 Surcharge)
Second Category exports.Government payments. Preferential imports, including specified government imports, wheat, imports for the petroleum and printing industries, petroleum and petroleum derivatives, etc. Imports of newsprint by printers whose publications weigh more than 80 grams. Amortization and interest on registered loans, credits, and financing.
198.00(Fluctuating Free Market Rate)203.00(Fluctuating Free Market Rate)
All other exports.6 Most invisibles. All incoming capital.Most invisibles. All capital transactions not effected at preferential rates.
213.92–219.92(Official Rate plus Cr$195–201 Auction Premium)7
General Category imports.
442.92–445.92(Official Rate plus Cr$424–427 Auction Premium)7
Special Category imports.

Changes during 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 (green coffee beans 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 still had to be surrendered at the free market rate. 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 payments 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 4).

January 21. The proceeds of exports of processed meat products packed in hermetically sealed containers and of certain lumber products, formerly in Category III, became surrenderable at the fluctuating free market rate.

February 14. The surcharges on payments for imports of newsprint were increased from 20 to 30 per cent for printers whose publications weigh 80 grams or less, and from 50 to 75 per cent for printers whose publications weigh more than 80 grams, of the surcharge payable for other preferential imports. This move was made in accordance with arrangements instituted on February 15, 1958 to raise surcharges on newsprint imports by half-yearly stages to the level of the surcharge on other preferential imports (see footnote 3).

April 22. The proceeds of exports of sugar and cotton, formerly in Category III, became surrenderable at the free market rate, and exports of cocoa butter were moved from Category II to Category III. Foreign exchange payments for freight and marine insurance relating to all imports and to exports of cotton and sugar were transferred to the free market.

May 15. Payments for imports of foreign books, newspapers, magazines, and similar publications, formerly made at the Cr$100 rate, were transferred to the free market.

June 17. The proceeds of exports of all processed meat products, whether packed in hermetically sealed containers or not (see January 21, above), became surrenderable at the free market rate.

July 1. Export Categories I and II were renamed the First Category, to which a bonus of Cr$57.64 per US$1 would apply, making an effective buying rate of Cr$76.00 per US$1. Export Category III became the Second Category, the effective rate remaining unchanged at Cr$100.00 per US$1. The proceeds of all exports not included in the two new categories still had to be surrendered at the free market rate.

July 1. Payments for imports of parts of motor vehicles to be assembled in Brazil according to plans approved by the Government were made generally subject to the payment of a surcharge based on the weighted average bid in the General Category.

July 15. The proceeds from exports of mutton, raw wool, Brazil nuts, and cotton by-products became surrenderable at the free market rate.

August 14. The surcharge on payments for imports of newsprint by printers whose publications weigh 80 grams or less was raised to 40 per cent of the surcharge payable for other preferential imports. Newsprint imported for publications weighing more than 80 grams became subject to the full preferential surcharge (see footnote 3).

October 20. All trade with Bolivia was to be conducted in cruzeiros negotiable in Bolivia’s free market, and not through a clearing account as previously. Import surcharges and export bonuses and subsidies on trade with Bolivia were eliminated.

December 30. Export proceeds were treated as follows: the bonus of Cr$57.64 per US$1 was applied only to green coffee beans, roasted coffee, whole or ground, and cocoa beans; the bonus of Cr$81.64 per US$1 was applied only to cocoa derivatives, castor beans, and crude mineral oil and derivatives. The proceeds of all other exports were surrenderable at the free market rate, but exporters would receive cash only to the extent of Cr$130 per US$1 (or its equivalent in other currencies); for the balance, they would receive notes of the Bank of Brazil with six months’ maturity and interest of 6 per cent per annum. The minimum amount of these notes would be Cr$10,000, fractions of this amount being payable in cash.

Burma

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 must be made through bilateral accounts denominated in sterling;1 payments to other countries may be made 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.

Requests for foreign exchange for tourist travel by residents are subject to individual license; allocations for this purpose are, however, temporarily suspended. Residents going abroad may take out K 100 in Burmese notes and the equivalent of K 100 in the currency of the country of destination, except that, for travel to India, the limit on foreign currency is the equivalent of K 75. On leaving, nonresident travelers who have stayed in the country for less than six months may take out any foreign currency they still hold and may also reconvert one fourth of the amount of foreign currency which they had exchanged into kyats.

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 from invisibles must be surrendered. Travelers may bring in K 100 in Burmese notes and, subject to declaration, any amount in foreign currency.

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 1959

January 2. 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 containers, machinery and parts thereof previously exported for repairs, exposed photographic films and plates previously exported, and fresh fish caught by Burmese. Open General License No. Ill 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.

January 7. The prescription of currency requirements were simplified, following similar changes in the United Kingdom and other Sterling Area countries.

June 4. All individual licenses would henceforth be issued on a global basis, thus removing all dollar discrimination in connection with individual licenses, including those licenses not yet fully utilized.

June 8. Regulations governing the taking in and out of money by travelers were liberalized. Travelers were permitted to bring in K 100 in Burmese notes and, subject to declaration, any amount in foreign currency. They were permitted to take out K 100 in Burmese notes and the equivalent of K 100 in the currency of the country of destination. On leaving, nonresident travelers who had stayed in the country for less than six months could take out all the foreign currency which they still held and could reconvert one fourth of the amount of foreign currency which they had exchanged into kyats.

December 5. The amount of foreign currency notes that could be taken out of Burma was reduced from the equivalent of K 100 to the equivalent of K 75 for travel to India.

December 21. All imports of goods from Japan payable by letter of credit or sight draft were suspended until further notice. No remittances could be made in payment of goods shipped under sight draft from Japan on or after December 21, 1959.2

Canada

Exchange Rate System

The exchange value of the Canadian Dollar is allowed to fluctuate. The noon market rate on December 31, 1959 was Can$0.95932 per US$1. Canada has no exchange restrictions on foreign payments. On March 25, 1952, Canada notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

There are no obligations imposed on importers, exporters, or others prescribing the method or currency for payments to or from persons resident abroad.

Imports and Import Payments

Payments and transfers abroad may be made freely. The only import licenses required are those for a few agricultural items.

Exports and Export Proceeds

The surrender of the proceeds of exports is not required, and exchange receipts are freely disposable. For supply reasons, a few commodities are under export control to all destinations. For security reasons, a list of restricted commodities is under export control to all destinations except the United States. All exports to the U.S.S.R. and some other destinations are subject to control, but certain nonstrategic goods, when of Canadian origin, may be exported to these destinations under general permit.

Payments for and Proceeds from Invisibles

There are no requirements imposed on exchange receipts from, or exchange payments for, invisibles.

Capital

No exchange control obligations are imposed on capital receipts or payments by either residents or nonresidents.

Changes during 1959

No significant changes took place during 1959.

Ceylon

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 rate for the U.S. dollar as at December 31, 1959 was Cey Rs 4.7500 buying, and Cey Rs 4.7625 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. Import 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 agreements1 must be made 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 40 items) from all countries except those in the dollar area2 and the “Ceylonized” area.3 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.4 Most of the goods covered by open general licenses may be imported freely from the “Ceylonized” area3 under general import licenses, which are issued only to registered Ceylonese traders. Other goods, with some exceptions, may be imported only under general import licenses, which are issued only to registered Ceylonese traders. Still others may be imported under general import licenses or under individual licenses, the latter being issued to registered Ceylonese traders freely and to other importers on the basis of past performance. Policy concerning the issue of these licenses is announced from time to time. 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 countries (see section on Changes during 1959, September 1, below). Other remittances of a personal nature are granted for reasonable requirements for education, 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) are permitted to transfer their assets up to £7,500 for a family unit—i.e., £5,000 for wife and husband and £500 for each dependent up to a maximum of five dependents. Repatriates are permitted to transfer their proved 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 a person (Cey Rs 25 for children) once in 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. Licenses for exports to Albania, Austria, Bulgaria, Mainland China, China (Taiwan), Czechoslovakia, Hungary, Poland, Rumania, and the U.S.S.R. 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 20. 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 for investment abroad are not normally permitted. 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 1959

January 9. 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.

February 12. Imports of textiles of specified description from any source were made subject to individual import license.

February 23. Imports of certain types of electric batteries and accumulators from any source were made subject to individual import license.

March 16. Imports of glass bottles from any source were made subject to individual import license.

April 1. Registered Ceylonese traders were given permission to import goods from Albania, Bulgaria, China (Taiwan), Hungary, Rumania, and Spain by general import license, instead of having to obtain individual import licenses.

June 2. Imports of alcoholic essence from any source were made subject to individual import license.

June 15. Imports of specified types of footwear from any source were made subject to individual import license.

July 2. Imports of bicycle tires and tubes from any source were made subject to individual import license.

August 8. A bilateral trade and payments agreement was concluded with Cuba. The agreement provided that Ceylon would purchase 20,000 tons of sugar from Cuba before the end of 1959, part of the proceeds of which would be remitted and the balance would be placed in a bilateral account available to Cuba for the purchase of Ceylonese products.

September 1. The basic ration of £400 available during the four years commencing September 1, 1955 for travel in countries outside the dollar area and the Indian Group of countries (India, Pakistan, Malaya, Burma, Iraq, Iran, Saudi Arabia, Afghanistan, and Indonesia) was reduced to £300 (£150 for a child under 12 years) and was made available also for travel in the dollar area. The operative period of four years was extended by one year.

October 10. Imports of Maldive fish, masoor, masoor dhal, and lentils from any source were made subject to individual import license. Licenses would be issued to registered Ceylonese traders for Maldive fish from any source other than the Maldive Islands, and for the other commodities from any source whatever. Registered Ceylonese traders were permitted to import garlic from Mainland China on their general import licenses.

October 19. Imports of wire nails from any source were made subject to individual import license.

October 22. Imports of cotton fents from any source were made subject to individual import license.

November 3. Any importer, whether a registered Ceylonese trader or not, was required to obtain a General Import (Foodstuffs) License to import beans, pulses, chillies, fish (dried or salted), or potatoes from any source other than the “Ceylonized” area (see footnote 3) and the dollar area.

November 16. Registered Ceylonese traders were issued licenses for the importation, irrespective of sizes or value, of banians and vests of cotton, and banians, vest singlets, and tee-shirts of artificial silk.

November 21. Restrictions imposed on June 2 (see above) were revoked, and the following were brought under individual import license: essences (with or without alcohol) of arrack, brandy, port, rum, sherry, whisky, wine, and gin.

December 10. Restrictions imposed on October 10 (see above) were modified to provide for the issue of licenses to importers other than registered Ceylonese traders.

December 15. Licenses were issued for imports of broken rice, licenses for imports from the “Ceylonized” area (see footnote 3) being issued to registered Ceylonese traders only.

Chele

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.1

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 U.S. dollars, deutsche mark, pounds sterling, Swiss francs, Argentine agreement dollars, 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; since January 27, 1959, the Central Bank’s rate for the U.S. dollar has remained unchanged at Chil$l,049 buying, and Chil$l,051 selling, per US$1.

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. The commercial banks and various exchange dealers, tourist agencies, and hotels are authorized as dealers in the exchange market.

Prescription of Currency

Settlements with bilateral agreement countries2 must be made according to the method and in the currency established in the regulations that give effect to the terms of the agreements with those countries. The proceeds of exports of copper by the large companies must be received in U.S. dollars or other currencies specifically authorized by the Copper Department. Large iron ore mining enterprises must pay their income taxes in U.S. dollars. All other transactions, including exports of iron ore by small and medium-sized companies, 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, deutsche mark, pounds 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

Imports are not subject to license, but government departments and agencies require permission from the Ministry of Finance for imports other than for national defense purposes. A quota of 200 units applies to the import of automobiles to be used as taxicabs.

Most imports are subject to either an advance deposit or a surcharge. No import is subject to both. The following imports are, however, exempt from advance deposits and surcharges: imports by large companies concerned with mining iron, copper, nitrates, or iodine; imports of crude petroleum and diesel oil destined for the nitrate, subnitrate, and iodine industries; 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; imports with payment deferred more than one year; imports of certain capital goods; and imports of all goods from countries with which Chile has bilateral agreements, except motor vehicles and goods subject to an advance deposit of more than 1,000 per cent.

Surcharges, ranging (in six categories) from 5 to 200 per cent of the c.i.f. value and payable in U.S. dollars, are charged on a number of specified imports, including certain lumber products, special steels, building materials, industrial machines, certain vehicles, wheat flour, edible oils, and electric motors. A “surcharge deposit,” equal to the amount of the surcharge, must be paid to the Central Bank at the time of registration of the import with the Foreign Exchange Commission. The Central Bank transfers these amounts daily to the General Treasury of the Republic. The deposit is applied against payment of the surcharge and customs duties at the time of clearance of the goods.

Advance deposits apply to most imports not subject to surcharge. The deposits are fixed from time to time by the Foreign Exchange Commission as a percentage of the value of the import, deposits for imports on which the insurance premiums are paid in Chilean pesos being calculated on a c.i.f. basis. For goods imported on a consignment basis, no advance deposit is required. Goods imported on a cash basis are classified in seven categories for the purpose of determining the 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, buses, scientific and technical books and magazines, etc.): 100 per cent

  • Category E (industrial machinery, tools, bulk tobacco, etc.): 200 per cent

  • Category F (other magazines and books, agricultural machinery, tires and tubes, etc.): 400 per cent

  • Category H (automobiles, station wagons, pick-up trucks, jeeps, typewriters, calculators, etc., most used merchandise, domestic and industrial sewing machines, motor chassis, certain liquors, etc.): 1,000 per cent

  • Category J (all goods not on the “permitted list”): 3,500 per cent3

Advance deposits not exceeding 100 per cent must be paid in U.S. dollars and are retained for 30 or 90 days, depending upon the essentiality of the goods. Advance deposits exceeding 100 per cent must be paid in U.S. dollar bonds issued by the General Treasury or the Caja de Amortización de la Deuda Pública. Five-year bonds of the General Treasury are accepted as advance deposits at a ratio of $1 of the face value of the bond to each $2 of the advance deposit required; for 8-year bonds, the ratio is $1 to $3.

An advance deposit certificate, duly signed by the importer, serves as a guarantee for the authorized bank to cover the sale of exchange. Payments for imports are subject to the prescription of currency requirements. With the exception of motor vehicles and goods subject to an advance deposit of more than 1,000 per cent, immediate exchange cover is provided for imports of all goods from bilateral agreement countries, but banks may sell exchange only after 15 days from the date of shipment for imports from other countries in the Western Hemisphere, and after 30 days for imports from all other countries, except that they may make forward sales to cover imports in advance deposit Categories A and B.

Payments for Invisibles

The authorized dealers may sell exchange to cover payments for all invisibles.

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 carried out through authorized banks. For other investments, transfers may be made freely through the exchange market.

Changes during 1959

January 20. New rates of Chil$l,004 buying, and Chil$l,006 selling, per US$1 were fixed by the Central Bank for the banking free market.

January 27. Effective from this date, 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. On the same date, new rates of Chil$l,049 buying, and Chil$l,051 selling, per US$1 were fixed by the Central Bank.

April 4. Under Law No. 13305, the President was granted wide powers to decree changes in customs duties and exchange taxes and surcharges, and the following specific changes were made: The 2 per cent tax on sales of foreign exchange was abolished. The exemptions from import taxes, surcharges, and advance deposits formerly granted to certain government agencies were abolished. Imports of crude petroleum and diesel oil destined for the nitrate, subnitrate, and iodine industries were exempted from import taxes, surcharges, and advance deposits.

April 29. The payment of advance deposits in local currency was discontinued. Henceforth, advance deposits would be made in short-term (90-day) U.S. dollar obligations issued by the General Treasury of the Republic or—for imports subject to retention of the advance deposit for 30 days—alternatively in U.S. dollars.

April 30. A new advance deposit of 1,000 per cent was established for all goods formerly subject to advance deposits of 1,500 and 5,000 per cent, except for goods imported against a “certificate of necessity” and certain commercial vehicles. The facility of immediate exchange cover and nominal advance deposits (applicable to imports from certain bilateral agreement countries) was not extended to goods subject to advance deposits of more than 1,000 per cent, or to motor vehicle imports in general.

May 9. The Foreign Exchange Commission announced that, in addition to short-term U.S. dollar obligations issued by the General Treasury (see April 29, above), advance deposits could also be made in certain longer-term U.S. dollar bonds and obligations of the Caja de Amortización de la Deuda Pública. The bonds or obligations have maturities of 8, 5, and 2 years and bear interest (tax free) at 7, 7, and 5 per cent, respectively.

May 9. Rules governing imports on a deferred payments basis (i.e., where payment is extended over a period of more than one year) were revised and clarified. An advance deposit equivalent to that normally applicable to the merchandise concerned, divided by the number of quarters in which payment was to be made, would be required for all such imports.

May 15. A new list of “permitted imports” was issued, including most goods formerly excluded from the permitted list and therefore de facto prohibited. However, the imports thus freed, together with those not specifically mentioned in the new list, were placed in Category J and made subject to an advance deposit of 5,000 per cent.

May 16. It was announced that the exemption from advance deposits granted to certain official and semiofficial institutions would not apply to imports requiring an advance deposit of more than 1,000 per cent, or to imports of motorcars or station wagons.

May 26. Advance deposits on imports of buses were reduced from 200 to 100 per cent.

June 4. Advance deposits were permitted to be calculated on the c.i.f. value of imports on which the insurance premium is paid in Chilean pesos.

June 22. Advance deposits on a number of imports were replaced by surcharges, ranging (in six categories) from 5 to 200 per cent of the c.i.f. value and payable in U.S. dollars. A “surcharge deposit,” equal to the amount of the surcharge, must be paid to the Central Bank at the time of registration of the import with the Foreign Exchange Commission, and the deposit would be applied to the final assessment of the surcharge and customs duties at the time of entry of the goods. Exemptions from the new surcharges would be similar to those previously applying to advance deposits. Among the goods subject to the new surcharges were certain lumber products, special steels, building materials, industrial machines, and some vehicles.

June 30. Reductions in advance deposits on certain imports were announced. Included were bulk tobacco (reduced from 5,000 to 200 per cent) and motor chassis (reduced from 5,000 to 1,000 per cent).

August 10. A further list of imports, which would be subject to surcharges of 10 to 200 per cent of the c.i.f. value in place of advance deposits, was announced (see June 22, above). Included were wheat flour, edible oils, and certain electric motors.

August 18. Advance deposits on certain imports, including some electrical goods and certain types of ships, were reduced. However, imports of used merchandise, irrespective of class, were made subject to an advance deposit of 5,000 per cent calculated on the c.i.f. value of equivalent merchandise in an unused condition. A quota of 200 units was fixed for imports of automobiles to be used as taxicabs in Chile.

August 25. The advance deposit on imports of used caterpillar tractors was reduced to 100 per cent, and that on imports of used fishing vessels, merchant vessels, and dredgers, to 5 per cent.

August 27. Advance deposits in U.S. dollars, formerly permitted only for deposits for which the minimum retention period was 30 days (see April 29, above), were now permitted for all goods in Categories A, B, and C. Advance deposits for imports on deferred terms were abolished; such deposits already made under the ruling of May 9 (see above) would be returned.

September 3. It was announced that, effective January 1, 1960, Chile would establish a new monetary unit, called the escudo, which would gradually replace the peso. The ratio of the escudo to the peso, which would remain as a fractional unit, would be 1 to 1,000.

September 10. Banks were permitted to sell exchange to cover imports from countries in the Western Hemisphere, other than bilateral agreement countries, after 15 days from the date of shipment of the goods. Exchange for imports from other non-bilateral countries remained salable only after 30 days.

September 14. Advance deposits on imports of sherry, port, cognac, and brandy were reduced from 5,000 to 1,000 per cent.

November 25. Bilateral payments arrangements with France ceased to operate and settlements were placed on a convertible currency basis.

December 12. Importers of goods subject to advance deposits exceeding 100 per cent of the c.i.f. value who make their deposits in the form of U.S. dollar bonds issued by the General Treasury could now make such deposits as follows: in 8-year bonds, in the proportion of $1 of the face value of the bond for each $3 of the advance deposit required; in 5-year bonds, in the proportion of $1 of the face value of the bond for each $2 of the advance deposit required. Deposits in the form of General Treasury bonds with 18 months’ or 2 years’ maturity continued to qualify on a dollar for dollar basis.

December 30. Advance deposit categories were reduced from ten to seven, as follows: imports formerly in Category D (150 per cent) were moved to Category C (100 per cent); those in Category G (600 per cent) were moved to Category F (400 per cent); and those in Category I (1,500 per cent) were moved to Category H (1,000 per cent). The advance deposit for imports in Category J was reduced from 5,000 per cent to 3,500 per cent, and made applicable to all goods not specifically mentioned on the “permitted list.” The goods previously specified as requiring an advance deposit of 5,000 per cent were made subject to an advance deposit of 1,000 per cent.

December 31. The advance deposit on imports of agricultural machinery was reduced from 1,000 per cent to 400 per cent, and that on industrial machinery from 1,000 per cent to 200 per cent.

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. 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. All exporters and other recipients of inward remittances must surrender their total exchange proceeds and may then choose either cash settlement at the official buying rate or receipt of an exchange certificate, which is negotiable in a free market. Importers and others making outward remittances (with the exception of government organizations, which obtain foreign exchange at the official selling rate) acquire exchange through the surrender of an exchange certificate. On December 31, 1959, the dollar exchange certificate was quoted at NT$39.70 per US$1.

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 (delegated agency of the Central Bank of China) and its appointed bank, through which all sales and purchases of foreign exchange must be made.

Prescription of Currency

Export receipts must be obtained in U.S. dollars, Hong Kong dollars, sterling, Malayan dollars, deutsche mark, or French francs. Payments may be made in the same currencies. 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). The Bank of Taiwan stands ready to convert exchange certificates denominated in any one currency into certificates expressed in any other currency, and the conversion is made at parity rates.

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. Import licenses are issued only to registered importers, who 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. A list of permissible imports comprises commodities that may be admitted on an ad hoc basis according to special criteria. Imports of certain specified luxuries and of goods competing with locally produced commodities are prohibited.

When the import license is granted, the holder is automatically entitled to obtain the necessary foreign exchange from the Bank of Taiwan through the surrender of an exchange certificate acquired in a free market.

Payments for Invisibles

Payments to nonresidents for family maintenance are restricted by a monthly quota fixed by the authorities. Permission to make payments 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 export declarations, and exports of controlled items require licenses, which are granted to exporters only after their application has been screened and approved by the Foreign Exchange and Trade Control Commission. Exports may be made against receipt of letters of credit or telegraphic transfers, by means of drafts on a documents-against-payment or documents-against-acceptance basis, or on consignment.

The currencies in which export proceeds may be received are prescribed. Export proceeds must be surrendered, at the exporter’s option, either at the official buying rate or against exchange certificates equivalent to the value of the proceeds. These exchange certificates are valid for foreign payments for 180 days and may be sold in a free market.

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, as revised, new foreign investments approved by the authorities are guaranteed (1) transfer of net annual profits, or accrued interest, in any foreign currency, (2) repatriation of capital (including reinvested earnings), 2 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 20 years, where the foreign investment constitutes at least 51 per cent of the total investment.

New capital investments abroad in cash form 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 1959

July 31. A new trade and payments agreement was signed with Japan for the period April 1, 1959–March 31, 1960.

August 10. All export and import transactions by private traders were to be settled with exchange certificates at free market rates.

September 1. The system of allocating exchange in accordance with a quarterly import commodity budget was abolished and replaced by a system of continuous acceptance of applications. Applications for foreign exchange for general imports were restricted to 29 categories of permitted items. Applications for imports by factories were restricted to replacement equipment and raw materials.

December 14. The Foreign Investment Law of July 14, 1954 was amended. The 15 per cent limitation on the remittance of annual profits was removed and other liberalizing changes were made.

Colombia

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 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 December 29, 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.

A fixed “certificate” rate, which on December 29, 1959 was Col$6.10 per US$1, applies to the exchange proceeds of major exports, to exports of certain manufactured goods, and to imports of capital for 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 December 29, 1959, the selling rate in the free market was Col$7.01 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 payments of interest on debts and service on capital registered before June 17, 1957. (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, and Finland 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, Eastern Germany, Hungary, Israel, Spain, the U.S.S.R., and Yugoslavia.

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. An advance deposit of 5 per cent is required for imports of capital goods of considerable value payable in installments, of 20 per cent for essential goods in current consumption, and of 500 per cent for gold and silver coins. For all other imports, an advance deposit of 130 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 90 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. 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.

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 are made at the “certificate” rate. Installments of principal and interest on all official 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 also made at the “certificate” rate and are subject to the 10 per cent remittance tax. 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. 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. 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 coffee, bananas, raw cowhides, and precious metals must be surrendered to the Bank of the Republic for pesos at the fixed “certificate” rate. The proceeds of most other exports are negotiated at the average buying rate in the free market for the preceding week. Exchange proceeds of manufactured goods consisting of imported raw materials are negotiated at the fixed “certificate” rate when the import component exceeds 40 per cent of the f.o.b. value; in other cases, the average buying rate in the free market for the preceding week is applied. 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. Minimum surrender prices are established for exports of coffee (US$69.50 per 70-kilogram bag) and bananas (US$0.50 per bunch for exports to the United States and US$27 per ton for exports to Europe). These minimum surrender prices also serve as the basis for collection of the exchange tax.

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 must be surrendered at the “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 December 31, 1959)(pesos per U.S. dollar)
BuyingSelling
5.185(Fixed “Certificate” Rate less 15% Exchange Tax)
Exports of coffee, bananas, raw cowhides, and precious metals.
5.98(Fixed “Certificate” Rate less 2% Exchange Tax)
Exports of manufactured goods with an import component in excess of 40 per cent of the f.o.b. value.
6.10(Fixed “Certificate” Rate)
Capital for the petroleum and metal-extracting industries.6.40(“Certificate” Rate)
6.82(“Fluctuating” Rate1less 2% Exchange Tax)All imports. Government payments. Students’ remittances. Freight payments.
All other exports, including manufactured goods with an import component not exceeding 40 per cent of the f.o.b. value.
7.00(Fluctuating Free Market Rate)

Invisibles. Other capital.
7.01(Fluctuating Free Market Rate)

Other invisibles. Unregistered capital.
7.10(“Certificate” Rate plus 10% Remittance Tax)2
Interest on debts and service on capital registered before June 17, 1957.

Changes during 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. The refineries would pay out of these proceeds their own exchange costs (except for crude oil imports, for which payment would be made through the official auction market) and the remainder of their export proceeds would be auctioned for their account by the Bank of the Republic.

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.

May 10. The exchange remittance tax of 10 per cent (payable in U.S. dollars purchased in the free market) on import payments at the “certificate” rate was absorbed in the customs duties, the first 10 percentage points of the ad valorem duty, insofar as applicable, being payable in U.S. dollars. The remittance tax of 10 per cent on freight payments was removed.

July 8. A resolution provided that advance import deposits of 100 per cent would be increased to 130 per cent of the f.o.b. value of the merchandise. The period during which these deposits would be held was extended from 60 days to 90 days after the merchandise has passed through customs. Imports of gold and silver coins were made subject to an advance deposit of 500 per cent.

August 19. It was established by decree that the exchange proceeds of manufactured exports with an imported raw material component not exceeding 40 per cent of the f.o.b. value of the product would be negotiated at the average free market buying rate of the previous week, less a tax of 2 per cent. However, if the imported raw material component exceeded 40 per cent of the f.o.b. value, the proceeds would be negotiated at the fixed “certificate” rate less a tax of 2 per cent.

September 11. The official surrender price for proceeds from exports of coffee was lowered from US$75 to US$69.50 per 70-kilogram bag.

September 25. The minimum surrender price for proceeds from exports of bananas was reduced from US$1.05 per bunch to US$0.50 per bunch on exports to the United States, and from US$56 per ton to US$27 per ton for exports to Europe.

October 20. Certain commodities were transferred from the lists of freely permitted imports or of prohibited imports to the lists of commodities subject to prior import license.

November 3. Imports of catgut and of surgical bandages were made subject to a 20 per cent advance deposit, instead of 130 per cent as previously. Advance deposits on imports of tin-plated iron and steel sheets and certain machine dies were increased from 20 per cent to 130 per cent.

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 additional effective rates of Ȼ 6.27 and Ȼ 6.62 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 regulating the rate of exchange in that market.

Prescription of Currency

Nearly all exchange transactions in Costa Rica are 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 50 per cent of total imports.

Exchange licenses must be obtained from the Central Bank to make payments for imports at the official market rate. 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 import certain essential goods in lieu of surrendering exchange from their exports.

Payments for Invisibles

Payments permitted at the official rate are government payments, earnings on registered foreign capital invested after January 20, 1933 (other than earnings on foreign investments governed by special contracts) up to the amounts allocated in the annual foreign exchange budget, and specified expenses of students who are taking specialized courses abroad and are registered with the Central Bank. All 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 guarantee in this respect. Exports of goods 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, leather articles, and books and other printed matter, and of some other products for a limited period, may retain 65 per cent of their exchange proceeds for sale in the free market; and exporters of cotton (a specific quantity only), sleepers, cocoa butter, and surplus potatoes (a specific quantity only) may retain 99 per cent. These arrangements result in effective rates of Ȼ 6.27 and Ȼ 6.62 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 at the free market rate without limitation. 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 goods for export 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, 1959)(colones per U.S. dollar)
BuyingSelling
5.60(Official Rate)5.67(Official Rate)
All exports except those at special rates. Certain invisibles. Registered capital.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.
6.62(1% at Ȼ 5.60 and 99% at Free Market Rate)
Certain other exports by special authorization from the Central Bank.
6.63(Free Market Rate)6.65(Free Market Rate)
All other receipts.All other payments.

Changes during 1959

On the dates given below, exporters of the commodities listed were permitted to benefit from the Law on Free Exchange for Exports for a specific period, but in no case for more than one year. The figures show the percentage of export proceeds of these commodities that could be sold in the free market.

March 6. Cotton, a specific quantity only, 99 per cent.

March 21. Paints, lacquers, and varnishes, 65 per cent.

May 5. Machinery manufactured in Costa Rica or imported for repair and returned to the place of origin, 65 per cent.

June 19. Dried cinchona bark, 65 per cent.

June 21. Sleepers, 99 per cent.

July 16. Sanitary porcelain, lamps, and ceramic ornaments, 65 per cent; cocoa butter, 99 per cent.

August 6. Biscuits and similar products, 65 per cent.

November 11. Surplus potatoes, a specific quantity only, 99 per cent.

November 13. Flowers, fruits, and vegetables, 65 per cent.

Cuba

Exchange Rate System

The par value is Cuban Peso 1.00 = US$1. The official rates are 1.00 peso buying (and selling for certain capital transfers), and 1.02 pesos selling (including a 2 per cent tax on the export of funds, securities, etc.), per US$1. Payments for imports of luxury and semi-luxury goods are subject to exchange surcharges ranging from 30 per cent to 100 per cent of the f.o.b. value. Special requirements are imposed on noncommercial payments, and on all payments to Spain, Mainland China, and North Korea. On December 18, 1953, Cuba notified the Fund that it assumed fully the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

The Cuban Monetary Stabilization Fund, the administration of which is entrusted to a committee consisting of the Minister of Finance, the President of the National Bank of Cuba, and the Director of the Stabilization Fund, operates exchange control directly or through the National Bank and other authorized banks. It is also the authority for granting import licenses.

Prescription of Currency

Personal remittances exceeding US$1,000 may be made only by bank transfer. Other requirements with respect to the method of payment are as follows: (1) Under the terms of a payments agreement with Spain, settlements between Spanish and Cuban residents are made through clearing accounts expressed in Cuban pesos. (2) Payments to residents of Mainland China and North Korea must be made by bank transfer through a bank located in the United States.

Nonresident Accounts

Accounts in the names of nonresidents may not be opened or operated without the prior authorization of the Monetary Stabilization Fund, except for corporations or other business entities actually located and doing business in Cuba. Withdrawals from nonresident accounts are subject to a 2 per cent exchange tax if the funds are sent or used abroad or are made payable in foreign currency.

Imports and Import Payments

Import licenses and the opening of a commercial letter of credit within 30 days of the issue of the import license are required for practically all imports. All payments for imports under documentary collection, open account, or letter of credit must have the prior approval of the Monetary Stabilization Fund.

Payments for imports of certain luxury and semiluxury goods are subject to exchange surcharges, calculated on the f.o.b. value of the import at port of origin, as follows:

  • Category 1 (frozen foods, fresh fruit, fruit juices, prepared meats, etc.): 30 per cent

  • Category 2 (mineral water, beer, wine, perfume, electric typewriters, calculating machines, other office equipment): 40 per cent

  • Category 3 (gasoline and diesel motors, air conditioning units of less than 2 horsepower and various other electrical appliances, television sets with 17-inch screens or smaller, automobiles with a factory value of not more than $750, low-priced photographic equipment, record players with a factory price of not more than $75, tape recorders, etc.): 60 per cent

  • Category 4 (china and porcelain articles, refrigerators and freezers, television sets with screens larger than 17 inches, cameras with a factory value of more than $20, automobiles with a factory value of more than $750 but not more than $2,300, wood, aluminum, and bamboo furniture, etc.): 80 per cent

  • Category 5 (jewelry, precious stones, automobiles with a factory value of more than $2,300, light airplanes, fancy leather goods, etc.): 100 per cent

Exchange to pay for imports is provided by the authorized banks, subject to the submission of supporting evidence. Imports from Spain (with which Cuba has a payments agreement) may be cleared only upon the presentation of an authorization from the Monetary Stabilization Fund. There is an exchange tax of 2 per cent on exchange payments and transfers on account of imports.

Payments for Invisibles

A 2 per cent exchange tax is charged on all payments on account of invisibles. Payments of US$100 or less every 6 months are permitted freely, but there is a limit of US$150 on the amount of exchange that may be purchased without the approval of the Monetary Stabilization Fund (1) by Cuban tourists in a 12-month period, (2) for family remittances in any one month, and (3) for business trips and travel for reasons of health. The authorized banks may sell exchange to cover the expenses of Cuban students abroad up to US$2,000 for an academic year or US$1,000 for a semester, subject to the presentation of satisfactory proof that the student is registered with the scholastic institution named. The provision of exchange for any other purpose, including all payments for such items as royalties, insurance, transport, interest, dividends, profits, commissions, and alimony, requires the prior approval of the Monetary Stabilization Fund. The granting of exchange for personal remittances and capital transfers is considered on the basis of their essentiality, the need for them, and their urgency. Obligations concerning the method of payment apply to certain payments (see section on Prescription of Currency, above). Insurance of imports for account of Cuban residents must be obtained in Cuba.

Tourists or foreigners departing from Cuba may exchange up to 200 pesos against proof of having converted sufficient foreign exchange previously. A limit of US$50 is placed on foreign or domestic currency notes that may be taken out of the country. Foreign travelers are exempt from the 2 per cent tax on personal funds they carry when leaving the country. International travel tickets may be sold to nonresidents only for U.S. dollars.

Exports and Export Proceeds

In general, licenses are not required for exports. The proceeds of all exports must be surrendered to the Monetary Stabilization Fund for Cuban pesos within three days after collection.

Proceeds from Invisibles

Exchange earnings from invisibles must be surrendered to the Monetary Stabilization Fund for Cuban pesos within three days after collection. A limit of 50 pesos is placed on the amount of Cuban currency that a traveler may bring into Cuba.

Capital

There are no exchange control requirements on incoming capital payments by either residents or nonresidents. Outgoing capital payments of more than US$100 in any six-month period require the Monetary Stabilization Fund’s prior approval, the granting of which is subject to indefinite delay.

A 2 per cent exchange tax is charged on the export of capital, on withdrawals of actual U.S. currency from banks in Cuba, even if made from U.S. dollar accounts, and on the export of securities. The tax is refunded when it is proved that the proceeds from the sale of the securities have been returned to Cuba within a specified period of time.

When duly registered with the Monetary Stabilization Fund, capital imported for investment (1) in industrial, agricultural, or other enterprises or undertakings in Cuba, (2) in securities issued by such enterprises, or (3) in securities of the State of Cuba, the Cuban Bank for Agricultural and Industrial Development, or other similar institutions, is exempt from the 2 per cent tax when it is re-exported.

Changes during 1959

January 28. By Decree No. 316, a limit of 50 pesos was placed on the amount of Cuban currency that could be brought into Cuba. By Decree No. 261, the percentage of proceeds received in U.S. dollars that must be surrendered by exporters of sugar was increased from 75 to 100. Under a revised version of Instruction No. 4, all personal remittances exceeding US$1,000 had to be made by bank transfer and the banks were prohibited from issuing negotiable documents for such remittances. The banks were required to refrain from selling exchange for the sole purpose of crediting accounts maintained abroad. The authorized banks were given general permission to sell exchange to cover the expenses of Cuban students abroad to a total of US$2,000 for an academic year or US$1,000 for a semester, subject to the presentation of satisfactory proof that the student is registered with the scholastic institution named.

February 9. Under Instruction No. 6, import licensing was applied to some 195 less essential items; these goods could be imported only by opening a commercial letter of credit within 30 days after the issue of the import license.

March 19. Imports of spare parts and accessories were exempted from import licensing and payment by letter of credit (see February 9, above).

April 23. By Resolution No. 81, the amount of personal remittances which could be made freely was reduced from US$250 to US$100 for each 6-month period. Personal payments for books, magazines, subscriptions, association dues, etc., were limited to $25 for each 3-month period.

June 23. It was announced that the entire U.S. dollar proceeds of exports of leaf tobacco and cigars must be surrendered to the Monetary Stabilization Fund.

August 27. All payments for merchandise imports under documentary collection, open account, or letter of credit must have prior approval from the Monetary Stabilization Fund.

September 3. Under Instruction No. 10, imports of gold and in-transit movements of gold in Cuba were made subject to prior authorization of the Monetary Stabilization Fund.

September 23. By virtue of Article 1, Section 9, of Law 568, banks in Cuba were prohibited from accepting deposits for the credit of, or paying checks against, bank accounts on their books in the names of nonresidents, without the prior approval of the Monetary Stabilization Fund. Corporations or other business entities actually having offices in, and doing business in, Cuba were exempt from this regulation, even though the bank account carried an address outside Cuba.

September 28. Surcharges, calculated on the f.o.b. value at port of origin, were imposed on remittances of exchange for imports of certain luxury and semiluxury goods. The merchandise affected was divided into five categories, with surcharges ranging from 30 per cent to 100 per cent. Goods already in transit, or those covered by letters of credit opened on the basis of licenses issued prior to September 18, 1959, were exempted from payment of these surcharges.

November 3. It was announced that the proceeds of all exports, as well as funds received in payment of services rendered in Cuba, must be surrendered to the Monetary Stabilization Fund for Cuban pesos within three days after collection.

December 11. Under revised Instruction No. 4, practically all imports were made subject to prior license with effect from December 4, 1959. In order to obtain from the National Bank the necessary foreign exchange to pay for the imports, importers must show, in addition to the commercial invoice and bill of lading, a receipt from the customs as proof that import duties have been paid on the merchandise. All payments for such items as royalties, insurance, transport, interest, dividends, profits, commissions, and alimony were made subject to prior approval of the Monetary Stabilization Fund. A limit of US$150 was placed on the amount of exchange that may be purchased without the approval of the Monetary Stablization Fund (1) by Cuban tourists in a 12-month period, (2) for family remittances in any one month, and (3) for business trips or travel for reasons of health. International travel tickets could be sold to nonresidents only for U.S. dollars. Tourists or foreigners departing from Cuba were permitted to exchange up to 200 pesos against proof of having converted sufficient foreign exchange previously.

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 externally convertible European currencies1 vary between limits resulting from the dollar rate for the Danish krone in relation to the dollar rates for the other currencies. Forward premiums and discounts are left to the interplay of market forces. Forward transactions may be concluded freely for a period not exceeding six months; forward transactions with residents must have a commercial basis.

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 countries2 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 countries in the convertible area may be received in the currency of any of them, or in Danish kroner from a Convertible Krone Account. Payments to 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. Payments from bilateral account countries may be received in accordance with the relevant payments agreement or in convertible currency, including Danish kroner.

Nonresident Accounts

Accounts in Danish kroner for nonresidents are of four kinds: Convertible Krone Accounts, Bilateral Krone Accounts, Capital Accounts, and Foreign Accounts.

Convertible and Bilateral Krone Accounts may be opened by authorized banks for foreign banks, insurance companies, and shipping lines. They may also be opened for other nonresidents if it is agreed with the account holder that balances exceeding DKr 75,000 are to be transferred abroad automatically at the end of each quarter. This limitation is not, however, applicable to persons who are or have been of Danish nationality.

Convertible Krone Accounts may be credited with transfers from other Convertible Krone Accounts, with the proceeds from sales of currencies of countries in the convertible area, and with authorized payments to countries in the convertible area. They may be debited for transfers to other Convertible Krone Accounts or to Bilateral Krone Accounts, for purchases of any foreign currency, or for authorized payments to residents of Denmark from countries in the convertible area.

Bilateral Krone Accounts may be credited with transfers from any Convertible Krone Account or from another Bilateral Krone Account of the same country, with the proceeds from sales of the currency of that country or of currencies of countries in the convertible area, and with authorized payments to any foreign country. They may be debited for transfers to other Bilateral Krone Accounts of the same country, for purchases of the currency of that country, and for authorized payments to residents of Denmark from the country of the account holder.

Capital Accounts and Foreign Accounts have the character of restricted accounts and are operated in accordance with detailed regulations. They are related to the country of residence of the account holder.

Capital Accounts are kept for nonresidents by authorized exchange dealers for holding funds which may not be transferred abroad. In particular, they are credited with capital payments, capital income, pensions, and other funds accruing to emigrants within the first three years after emigration. Capital Accounts may be used for the same payments in Denmark as those which are generally allowed from Convertible and Bilateral Krone Accounts, but balances held by persons who are or have been Danish nationals may not be used for commercial payments in excess of DKr 2,000. Capital Accounts may be transferred abroad within the limits set for restricted capital payments, i.e., up to DKr 75,000 a year for each account holder, except that for emigrants the limit is DKr 25,000 in all for the first three years after emigration. Balances belonging to Danish nationals who have emigrated to Finland, Norway, Sweden, or countries in the Sterling Area may be transferred abroad without limitation after the accounts have been blocked for three years. Transfers between Capital Accounts and between Capital and Foreign Accounts may take place freely, except for the following limitations: Transfers to accounts belonging to residents of Finland, Norway, Sweden, or the Sterling Area may be made only from accounts belonging to residents of those countries. Transfers from accounts belonging to residents of a bilateral country may be made only to an account belonging to a resident of the same country. Transfers from Capital Accounts belonging to Danish nationals who have emigrated within the last three years are allowed only to the extent that the allowance of DKr 25,000 (see above) has not been used.

Foreign Accounts, which are kept for nonresidents by savings banks, cooperative banks, and the Public Trustee’s Office, may be credited with payments for imports, subject to permission from the National Bank; with other current commercial payments (freight, commissions, etc.), when the account holder is or has been a Danish national; with donations, etc., but if the amount exceeds DKr 2,000, only from the account holder’s family; and with loans up to DKr 75,000 per borrower in a calendar year from the same lender to members of his family. All other payments accruing to the account holder may be credited freely. Foreign Accounts may be debited freely for current payments in Denmark by the account holder and for the purchase of foreign exchange for travel (except that, if the account holder is or has been a Danish national, commercial payments may not exceed DKr 2,000). They may also be debited for the following capital payments in Denmark: on account of direct investments, subject to the permission of the Ministry of Trade; for purchases of real estate for noncommercial use, if the purchaser is a Danish national; for purchases of or subscriptions to Danish securities quoted daily and payable only in kroner, if the investor is or has been a Danish national or the funds have been obtained from the liquidation of investments in Denmark or are being used to take up subscription rights to shares owned by the person concerned; for loans to the account holder’s family up to DKr 75,000 per borrower in a calendar year from the same lender; and for repayment of loans. Balances on Foreign Accounts of account holders residing in Finland, Norway, Sweden, or a country in the Sterling Area may be transferred abroad without limitation; transfers abroad of capital items on other Foreign Accounts are limited to DKr 75,000 per account holder in a calendar year. The rules for transfers between Foreign Accounts are the same as those for Capital Accounts (see above).

Imports and Import Payments

Most goods included in the import free list (which is applicable to 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 on the import free list. A few goods may be imported 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 make 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 carrying out foreign exchange transactions—by authorized exchange dealers. The methods and currencies for payments to bilateral account countries (see footnote 2) are prescribed.

Payments for Invisibles

The authorized exchange dealers are permitted to make most payments for invisibles freely; only in a few cases is approval from the National Bank required. Transfers of up to DKr 2,000 for any current invisible are permitted freely. Foreign exchange for travel is allocated liberally and may be obtained in convertible currencies or externally convertible European currencies for travel to any country, including the bilateral account countries.

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 of 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 ensure 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 carry on their business, or for necessary purposes abroad, the Bank may exempt them from the general obligation to repatriate 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. or 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 (5 per cent as from January 1, 1960) 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. These import rights are transferable. The price of the titles is stabilized at 80 per cent of their face value, involving an effective premium on dollar exports in 1960 of 4 per cent. From January 1, 1961, the effective premium will be reduced to 2 per cent, and at the end of 1961 the arrangements will be liquidated.

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 repatriate proceeds realized from assets abroad. Transfers abroad may be made by residents to pay interest on, to redeem, or to repurchase the transferor’s own bonds, to lend amounts not exceeding DKr 75,000 to subsidiary companies, etc., or to a member of the resident’s family, and to buy foreign securities which do not represent direct investments in foreign commercial or industrial enterprises provided that the securities are acquired on the basis of a drawing right to shares or the like owned by the resident concerned or the resident furnishes proof that he has repatriated a corresponding amount within the last six months from the sale of foreign securities to a nonresident. Danish emigrants are granted an exchange allowance of up to DKr 25,000 for each person. Permission from the National Bank is required for other transfers abroad of a capital nature by residents.

Direct investments in Denmark by nonresidents (including purchases of real property for commercial use) may be made only with permission from the Ministry of Trade. Purchases by nonresidents of real property for noncommercial use may be made freely only when the purchaser is a Danish national. Nonresidents may purchase or subscribe to securities expressed solely in Danish kroner. Nonresidents may grant loans up to DKr 75,000 per borrower in a calendar year to commercial and industrial enterprises connected with the lender as subsidiary companies, branches, etc., or to members of his family.

The repatriation of direct investments made by nonresidents in Denmark is permitted freely, irrespective of when and how the original investment was made. Interest and principal on authorized loans, credits, and deposits received from persons and firms who were nonresidents at the time of receipt may be paid freely. Inheritances may be transferred freely to any country without limitation. Individual payments on account of gifts to persons who are not relatives of the donor may not exceed DKr 2,000. Up to DKr 75,000 per beneficiary annually may be paid to the donor’s family. Nonresident-owned funds may be transferred abroad up to an annual maximum of DKr 75,000 a person. Funds exceeding this maximum must be credited to a Capital Account of the owner, from which they may be transferred abroad in subsequent years at DKr 75,000 a year. Up to DKr 25,000 of the surrender value of any life insurance policy may be transferred abroad freely. These limitations of amount do not apply, however, if the payee resides in Finland, Norway, Sweden, or a Sterling Area country.

Imports and exports of securities require permission from the National Bank. Bona fide imports of Danish securities payable only in Danish kroner are permitted. Exports of Danish and foreign securities owned by nonresidents are normally permitted also. Nonresidents are permitted to reinvest the proceeds of sales or liquidation of Danish assets in Danish bonds which are payable exclusively in Danish kroner. Proceeds of sales of Danish shares may be reinvested in shares quoted daily and denominated exclusively in Danish kroner.

Danish securities held in Denmark and belonging to nonresidents may be sold freely to residents. Foreign securities held in Denmark and belonging to nonresidents may be sold to residents only with the National Bank’s permission.

Changes during 1959

February 1. The liberalization of dollar imports was raised from 66 per cent (based on 1953 imports) to 70 per cent.

February 4. The annual quota of $500 for tourist travel to the dollar area was abolished and foreign exchange for travel was provided liberally for travel to any country.

March 3. The gradual liquidation of the dollar export incentive system was announced. Starting January 1, 1960, the effective premium on dollar exports would be reduced to 4 per cent and from January 1, 1961, to 2 per cent. By January 1, 1962, the scheme would be abolished.

April 1. The liberalization list for dollar imports was made identical with that for the OEEC area, raising the liberalization vis-à-vis the dollar area to 89 per cent.

June 8. The U.S.S.R. was included in the convertible area.

August 1. Spain and its monetary area were included in the convertible area.

August 21. The exchange control regulations were recodified and liberalized. Nonresident Krone Accounts IV belonging to Danish nationals who had emigrated within the last three years, and those with balances exceeding DKr 75,000 and belonging to residents of countries other than Finland, Norway, Sweden, and the Sterling Area, were replaced by Capital Accounts. All other Krone Accounts IV were redesignated Convertible Krone Accounts or Bilateral Krone Accounts, according to the residence of the account holder.

November 10. Israel was included in the convertible area.

Dominican Republic

Exchange Rate System

The par value is Dominican Peso 1.00 = US$1. U.S. dollar transactions between the Central Bank and other banks take place at parity. Exchange transactions by commercial banks with the public also take place at the par value, subject to small banking commissions (except on the purchase of travelers checks). There are no exchange restrictions on foreign payments. All payments abroad must, however, be made through banks, and there is an exchange licensing system, but it is not exercised in a restrictive manner. On August 1, 1953, the Dominican Republic notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange licenses are issued by the Central Bank of the Dominican Republic, and the commercial banks have the obligation to submit daily applications for exchange to this bank.

Prescription of Currency

There are no obligations imposed on importers, exporters, or other residents prescribing the method or currency for payments to or from persons resident abroad, except that all payments abroad must be made through banks.

Imports and Import Payments

With a few exceptions, import licenses are not required; but all applications for exchange have to be submitted daily by the banks for approval by the Central Bank. This system of exchange licensing is maintained for statistical purposes and is not exercised restrictively. Licenses are issued within 24 hours after applications are filed.

Payments for Invisibles

Payments for invisibles require exchange licenses, which are issued within 24 hours after applications are filed; but no restrictions are imposed on such payments.

Exports and Export Proceeds

Export licenses are required only for sugar, in connection with the operation of export quotas established under the International Sugar Agreement, and for a few other special items. No exchange control requirements are imposed on export proceeds and these may be disposed of freely.

Proceeds from Invisibles

Proceeds from invisibles are not subject to exchange control.

Capital

There are no restrictions on the movement of capital by either residents or nonresidents. Applications for exchange for capital remittances must be submitted daily by the banks for formal approval by the Central Bank.

Changes during 1959

No significant changes took place during 1959.

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 (other than tuna), 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 Chile, Colombia, 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 exceeding a value of US$100 other than those representing official foreign loans and those of certain foreign companies, 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. No advance deposit is required for imports of goods on List 1, 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 payments for imports of goods on List 2, foreign exchange must be purchased in the free market, and for certain of these goods, 50 per cent of this exchange must be deposited with the Central Bank prior to the issuance of the import license. Imports of all goods on List 2 require payment to the Central Bank of an ad valorem tax of 10 per cent of the c.i.f. value. The Central Bank issues the import license as soon as the importer has paid this tax and any advance deposit that is required. The advance deposits, which are not required if the goods are paid for before importation, are refunded at the time the import remittance is made.

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, other 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; (2) $1.20 per stem from exports to countries outside Europe, Latin America, and New Zealand shipped from Esmeraldas and Bahia de Caráquez at any time of the year, and from all ports during August, September, and October; and (3) $1.50 per stem from exports to countries outside Europe, Latin America, and New Zealand shipped from all ports except Esmeraldas and Bahia de Caráquez at any time of the year except August, September, and October. 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. Under these conditions, it is estimated that, of the total proceeds surrendered by exporters of bananas, about 64 per cent is sold at the official rate and the balance is sold in the free market.

From the proceeds of each metric ton of fish (except tuna) 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 tuna fish. 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 20 per cent of total export proceeds), and for the proceeds of exports of shellfish other than shrimp, it is $100 per metric ton (approximately 7 per cent). (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, 1959)(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.
15.571
Exports of bananas.
15.57(60% at Official Rate and 40% at Free Market Rate)
Exports of pharmaceutical products.
16.541
Exports of shrimp.
16.681
Exports of fish, except tuna.
16.791
Exports of shellfish, except shrimp.
16.93(Free Market Rate)216.98(Free Market Rate)2
Most minor and marginal exports. Invisibles. Unregistered capital.List 2 imports. Most invisibles. Unregistered capital.

Changes during 1959

On various dates during the year, changes were made in the lists of commodities on List 1, and of those—with or without an advance deposit of 50 per cent—on List 2.

March 19. The sale in the free market of the exchange proceeds of exports of copper scrap was permitted.

March 23. The sale in the free market of the exchange proceeds of exports of works of sculpture produced in Ecuador was permitted.

May 7. The bilateral payments agreement with Italy was terminated.

July 17. The sale in the free market of the exchange proceeds of exports of sapota rubber was permitted.

August 12. The ad valorem surcharges of 20 per cent (List 1) and 40 per cent (List 2) on imports from Japan were abolished.

August 22. The bilateral payments agreement with Argentina was terminated.

August 28. All advance deposits of 100 per cent on List 2 imports were reduced to 50 per cent, and all imports subject to a 25 per cent advance deposit were freed from this requirement.

September 16. The sale in the free market of the exchange proceeds of exports of tuna fish was permitted.

September 22. Imports of jute cloth were exempted from the requirement of an advance deposit.

October 23. The sale in the free market of the exchange proceeds of exports of hog-bristle brushes was permitted.

October 30. The bilateral payments agreement with France was terminated.

November 27. The sale in the free market of the exchange proceeds of exports of sugar, cement, beer, and fishing-boat hulls was permitted.

December 29. The sale in the free market of the exchange proceeds of 6,000 raw cattlehides was permitted.

El Salvador

Exchange Rate System

The par value is Salvadoran Colones 2.50 = US$1. The official rates are Ȼ 2.49 buying, and Ȼ 2.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at or within these limits. There are no exchange restrictions on foreign payments, except that payments to Spain must, and payments to Nicaragua may, be made through special accounts. On November 6, 1946, El Salvador notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

Settlements for merchandise transactions with Spain must be made through special accounts in accordance with the terms of a payments agreement with that country. El Salvador also has a payments agreement with Nicaragua, but payments for merchandise transactions with that country may be made either through special accounts or by other legal means. Otherwise, no obligations prescribing the method or currency of payment are imposed on residents.

Imports and Import Payments

Import licenses are not required, but a few imports are subject to regulation. Payments and transfers abroad may be made freely, but payments for imports from Spain must be made through special accounts. Because of the payments agreement with Nicaragua, some imports from that country are paid for through special accounts.

Exports and Export Proceeds

The proceeds of exports are not subject to exchange control, except that receipts from exports to Spain must be obtained through special accounts (see section on Prescription of Currency, above).

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

No exchange control requirements are imposed on incoming or outgoing capital transfers by residents or nonresidents.

Changes during 1959

No significant changes took place during 1959.

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.

Administration of Control

All transactions in foreign exchange must be carried out 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 that currency is freely convertible. Proceeds of exports to other countries must be received in the currency of the country of final destination if that currency is acceptable to the Exchange Controller; otherwise, they must be received in a freely convertible currency.

Imports and Import Payments

There are no import licenses, but payments abroad for imports require exchange licenses. For seven categories of goods, no such licenses are being issued for a period of six months as from October 1, 1959. For all other goods, licenses are granted freely in the currency appropriate to the country of origin, or in U.S. dollars or sterling if ordered through a third country. Application for an exchange license must be made prior to the arrival of the goods. For imports of certain nonessentials, the request for an exchange license must be accompanied by a payment to the State Bank of Ethiopia of a deposit in Ethiopian dollars equivalent to 100 per cent of the value of the goods to be imported, which may be used only to make payment for the goods; if the license is canceled, the deposit may be withdrawn. 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. Foreign employees under contract with the Ethiopian Government may remit currently a maximum of 30 per cent of their salaries. Remittances by other foreign employees or personnel for family maintenance are permitted on a graduated scale, rising to 20 per cent of income. Any expenditure abroad on education or for insurance premiums must be met from such remittances. 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$50,000 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 12-month period does not exceed Eth$50,000.

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 5 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 12-month period no more than the equivalent of Eth$50,000 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 1959

September 1. An advance deposit of 100 per cent was imposed in respect of a list of nonessential imports.

September 1. The maximum percentage of salaries that foreign nationals under contractual employment with the Ethiopian Government were permitted to remit abroad was reduced from 35 per cent to 30 per cent, and for other foreign employees it was reduced from a maximum of 25 per cent to 20 per cent. Any expenditure abroad for education or insurance premiums had to be met from such remittances. The maximum amount that an emigrant or a repatriate was permitted to remit abroad and the maximum amount of imported capital and reinvested profits that could be transferred on liquidation were reduced from Eth$70,000 to Eth$50,000 in any 12-month period.

October 1. The issue of exchange licenses for seven categories of import commodities was discontinued for a period of 6 months.

Finland1

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 of 1 per cent on either side of the par value. Market rates for externally convertible European currencies2 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. Authorized banks may conclude exchange transactions between themselves, with their Finnish customers, and with foreign authorized banks in U.S. dollars, Canadian dollars, and externally convertible European currencies. Forward premiums and discounts are left to the interplay of market forces. Forward transactions may be concluded freely for periods not exceeding six months; forward transactions with residents must have a commercial basis.

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 (mainly commercial banks). Import licensing is administered by an office subordinate to the Ministry of Commerce, the Licensing Office, which is presided over by a Licensing Board composed of government officials, including one from the Bank of Finland.

Prescription of Currency

Payments to and from countries with which Finland has bilateral payments agreements must be made in accordance with the terms of those agreements.3 Payments to and from all other countries may be made in any currency or through Convertible Accounts.

Nonresident Accounts

Three categories of nonresident account are operated under the control of the Bank of Finland.

1. Convertible Accounts are held by nonresidents in Finnish markkas, U.S. dollars, Canadian dollars, or any externally convertible European currency. Convertible Accounts may be credited with any of these foreign currencies transferred to a Finnish authorized bank or, if sold to an authorized bank, with the equivalent in Finnish markkas; with all authorized remittances from residents of Finland; and with transfers from other Convertible Accounts. They may be debited for authorized payments in Finland, including the purchase of foreign exchange; for transfers abroad; and for transfers to other Convertible Accounts, Bilateral Accounts, or Blocked Accounts.

2. Bilateral Accounts are related to the country of the account holder and are maintained in accordance with the terms of bilateral payments agreements in Finnish markkas and/or in the foreign currency determined by the agreement. Bilateral Accounts may be credited with the equivalent of U.S. dollars, Canadian dollars, and externally convertible European currencies, as well as with the currency of the payments agreement, or its equivalent in Finnish markkas, and with authorized remittances payable to the country concerned. They may be debited for payments in Finland in accordance with the relevant payments agreement, for transfers to other Bilateral Accounts related to the same country, and for transfers to Blocked Accounts.

3. Blocked Accounts comprise all nonresident accounts not designated as Convertible or Bilateral. All credits to Blocked Accounts are subject to approval; however, the authorized banks are permitted to credit Blocked Accounts with interest accrued thereon and with income from other blocked funds administered by a bank and the proceeds from the sale of such holdings. 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 ticket to return abroad from Finland; for payments for expenses incurred in the administration of blocked property; for investments in bonds expressed in Finnish currency (including index-tied bonds); for acquisition of shares on the basis of subscription rights to stocks belonging to the same holder and held in the custody of a bank; 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 import license from Argentina, Canada, the United States, most Western European countries,4 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 (other than from Canada and the United States), and certain imports from bilateral trade agreement countries are licensed automatically upon application. Certain other imports from the countries benefiting from the free list and imports of certain raw materials and food products from specified sources are licensed liberally.

Some goods are imported under quotas. For certain goods, 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, Argentina, Canada, the United States, and countries in the Sterling Area (except Iceland and Ireland); they may also be used to import some goods from countries in the rest of the dollar area. Licenses for goods on a restrictive, nondiscriminatory list specify the commodity and the amount, but the importer is free to select the country of supply from among the same countries as those covered by the global quotas. A third category 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 3) 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 in principle 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 the payments. Authorized banks may, however, make transfers to foreign accounts and sell foreign exchange for most current purposes without prior approval from the Bank of Finland.

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 40,000 for each visit to the Scandinavian countries and Fmk 80,000 for each visit to other countries. Resident and nonresident travelers may take out Fmk 20,000 in Finnish notes and coins and any reasonable amount in foreign 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 of destination are in the group benefiting from the import free 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

With the exception of wages or salaries earned abroad and not exceeding the equivalent of Fmk 100,000, and of unused travel exchange, foreign exchange proceeds from invisibles must be surrendered to the Bank of Finland or an authorized exchange dealer. The import of Finnish and foreign means of payment and securities by nonresident travelers and returning Finnish residents is unrestricted.

Capital

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

Most outward transfers of nonresident capital are subject to approval by the Bank of Finland, which is generally granted only in certain circumstances. Inheritances of Canadian and U.S. citizens may usually be transferred abroad, subject to certain conditions; inheritances of citizens of other countries are normally transferred only up to certain amounts. 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 1959 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 1958 (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 a citizen of the same country since January 1, 1952, or to the same shareholder since January 1, 1952, or that the share was acquired after January 1, 1952 against foreign currency remitted to Finland or paid through a clearing account and remained thereafter in the possession of a citizen of the same country. Transfers of interest and dividends are made 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. Nonresident foreigners may repatriate their blocked balances if the total amount of such balances does not exceed Fmk 50,000. A nonresident holder of balances deposited with Finnish banks prior to September 1, 1939 may repatriate Fmk 1 million of such balances to his country of residence. Nonresident foreigners may purchase through an authorized bank, against convertible currencies or externally convertible European currencies or by debiting a Convertible Account, bonds quoted on the Helsinki stock exchange or shares included in List A of the stock exchange. When the securities so acquired by a nonresident are deposited in the custody of an authorized bank, the nonresident purchaser is permitted to sell the securities on the stock exchange through an authorized bank and to repatriate the proceeds of the sale in a convertible currency or an externally convertible European currency.

Foreign bondholders residing abroad may repatriate amounts falling due after June 18, 1959 on account of redemption of bonds in Finnish markkas issued before September 1, 1939. Interest and amortization on the 1959 Convertible Bond Loan of the Republic of Finland (issued for the purpose of repatriating blocked assets of all types) are transferable abroad in any currency.

Any other transactions in, and the export of, securities involving nonresident interests require approval.

Residents are required to declare and, if the Bank of Finland so demands, 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.

Finnish residents emigrating to countries outside Europe are granted an exchange allowance of up to Fmk 100,000 a person in addition to the regular travel allowance.

Changes during 1959

January 17. Authorized banks were permitted to carry out exchange arbitrage transactions in Finnish markkas (on A-Accounts and B-Accounts), U.S. dollars, Canadian dollars, and externally convertible European currencies except French francs.

March 24. The allocation of foreign exchange for travel was increased from Fmk 20,000 to Fmk 40,000 a person for each visit to the Scandinavian countries and from Fmk 40,000 to Fmk 80,000 for each visit to all other countries.

May 2. Additional authority was delegated to the authorized banks to make payments to foreign countries and to sell foreign exchange for a number of purposes, subject to certain limitations.

May 26. Nonresident foreigners were permitted to purchase through an authorized bank, against convertible currencies or externally convertible European currencies (except French francs) or by debiting a Convertible Account, bonds quoted on the Helsinki stock exchange or shares included in List A of the stock exchange. When securities so acquired by a nonresident are deposited with an authorized bank, the nonresident purchaser is permitted to sell the securities on the stock exchange through an authorized bank and to repatriate the proceeds of the sale in a convertible currency or an externally convertible European currency (except French francs).

June 1. The authorized banks were permitted to execute payments to foreign countries and to sell exchange for marine insurance premiums for hull insurance on Finnish-registered vessels or for protection and indemnity insurance on such vessels.

June 18. Amounts falling due after June 18, 1959 for the redemption of bonds in Finnish markkas issued before September 1, 1939 were permitted to be transferred to nonresident bondholders.

July 1. The system of nonresident accounts was modified in conformity with the external convertibility of the Finnish markka.

September 1. Owners of blocked assets were permitted to subscribe to a special ten-year Convertible Bond Loan of the Republic of Finland. The interest and amortization on this loan are freely transferable abroad in any currency.

September 9. Nonresidents were permitted to transfer their blocked balances to their country of residence if the total of such balances was less than Fmk 50,000 or if, after subscribing to a special bond issue (see September 1, above), the remaining balance was less than Fmk 50,000.

November 2. The Bank of Finland canceled its requirement that payment for certain goods on the import free list must be made before customs clearance. Importers were thus permitted to make use of customary trade credits. Suppliers’ credits exceeding one year, however, still required approval by the Bank of Finland.

December 8. Any nonresident who had had balances with Finnish banks since September 1, 1939 was permitted to transfer up to Fmk 1 million of such balances to his country of residence.

Note.—The following changes took place on January 1, 1960: The French franc was included in the list of externally convertible European currencies in the Finnish exchange regulations. Canada, France, and the United States were included in the list of countries benefiting from Finland’s import free list and global quotas. New foreign exchange control regulations were issued concerning the import and export of foreign and domestic means of payment and securities.

France1

Exchange Rate System

The par value is New Francs 4.93706 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of NF 4.90 buying, and NF 4.9740 selling, per US$1. Market rates for externally convertible European currencies2 and for the Djibouti franc vary between limits resulting from the official limits for the U.S. dollar in Paris and in the other countries concerned. There are official limits (¾ of 1 per cent on either side of parity) for two bilateral currencies quoted in the Paris exchange market, Czechoslovak korunas and Yugoslav dinars, and market rates for these currencies vary between these limits. No official limits are established for Canadian dollars and Mexican pesos.

Forward transactions take place at rates freely determined by supply and demand. Authorized banks in continental France (including Corsica and the Principality of Monaco) are permitted to deal spot or forward in the Paris exchange market in all the currencies quoted on that market, that is, all those referred to in the paragraph above. They may also deal with their correspondents in foreign markets in these currencies, except the two bilateral currencies. Forward transactions between French authorized banks and their correspondents abroad may not exceed six months.

Rates for certain other currencies are published monthly, for information, by the Bank of France, either on the basis of the quotations in London and New York and the quotations for sterling and the U.S. dollar in France, or on the basis of official quotations fixed by foreign central banks. These rates can be used to determine the equivalent in French francs of payments expressed in such currencies, since settlements between France and countries whose currencies are not negotiated in the Paris exchange market are usually made in French francs through the appropriate nonresident account; settlements with Uruguay are, however, made in U.S. dollars as the currency of account.

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 Saoura, 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 Mauritanian 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, Monaco, Tunisia, and Morocco (except Tangier—but see footnote 3).

Most payments agreements concluded by France provide for settlements between the French Franc Area as a whole and the other country concerned. Payments from France to other parts of the French Franc Area, except Guinea, are free of restrictions. The foreign exchange reserves of the French Franc Area are managed centrally. The exchange rates of the other local currencies of the area are fixed in relation to the French franc, except that the parities for the Moroccan dirham and the Tunisian dinar are fixed in relation to gold.

Administration of Control

The Minister of Finance and Economic Affairs is granted extensive authority in trade and exchange control. Various departments of the Ministry are concerned with the issue and supervision of import and export documents, the issue of licenses for payments related to imports and exports, control of import payments and export proceeds, the preparation of decisions concerning and control over French investments abroad and foreign investments in France, and the preparation of regulations concerning foreign trade and exchange. The Bank of France is concerned with the issue of licenses for transactions of a financial nature, controls relating to assets held abroad, the repatriation of income, transactions in foreign securities, etc. Much of the detail of exchange control is carried out by authorized banks designated by the Minister of Finance and Economic Affairs on the proposals of the Governor of the Bank of France.

Prescription of Currency

General exchange control regulations and, in specific cases, individual decisions prescribe the currency and method for settlements between residents and nonresidents. For prescription of currency purposes, countries outside the French Franc Area are divided into two groups: the bilateral group3 and the area of convertibility (all other countries).

Settlements with countries in the area of convertibility are made in Canadian dollars, U.S. dollars, Mexican pesos, Djibouti francs, or externally convertible European currencies negotiated in the Paris exchange market (see footnote 2), or through Foreign Accounts in Convertible Francs (see section on Nonresident Accounts, below).

Payments to a country in the bilateral group are made by crediting a Foreign Account in Bilateral Francs related to the country concerned; in addition, payments to Czechoslovakia and Yugoslavia may be made by buying Czechoslovak korunas or Yugoslav dinars, respectively, in the Paris exchange market. Payments from a country in the bilateral group may be received to the debit of a Foreign Account in Bilateral Francs related to that country, or by the same methods as those prescribed for receipts from the area of convertibility; 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 Hungary and the Egyptian Region of the United Arab Republic are subject to special regulations.4

Nonresident Accounts

The classification of nonresident accounts in French francs corresponds to the grouping of countries for prescription of currency purposes: Foreign Accounts in Convertible Francs, for residents of countries in the area of convertibility, and Foreign Accounts in Bilateral Francs, for residents of countries in the bilateral group. Foreign Accounts in Convertible Francs are not related to any specific country, while Foreign Accounts in Bilateral Francs are designated according to the country of the account holder. A nonresident account in francs may be opened by an authorized bank for a nonresident foreigner; but to open a nonresident account in francs for a French citizen residing abroad, specific permission is required. Nonresident accounts established under certain bilateral agreements may be opened only with the approval of the Bank of France. Nonresident accounts in francs may not show any debit balance unless specifically permitted. Foreign Accounts maintained for residents of Uruguay are expressed in U.S. dollars as the currency of account.

Foreign Accounts in Convertible Francs may be credited freely (1) with francs obtained from the sale of Canadian dollars, U.S. dollars, Mexican pesos, Djibouti francs, or externally convertible European currencies in the Paris exchange market or to a French authorized bank in an exchange market abroad, and (2) with transfers from other Foreign Accounts in Convertible Francs. They may be debited freely (1) for purchases in the Paris exchange market of any foreign currency negotiated in that market, (2) for purchases of Canadian dollars, U.S. dollars, Mexican pesos, Djibouti francs, or externally convertible European currencies through a French authorized bank in an exchange market abroad, (3) for transfers to the credit of another Foreign Account in Convertible or Bilateral Francs, and (4) for payments in the French Franc Area, irrespective of the country of residence of the nonresident on whose behalf such payment is made.

Foreign Accounts in Bilateral Francs may be credited freely (1) with proceeds from sales in the Paris exchange market of Canadian dollars, U.S. dollars, Mexican pesos, Djibouti francs, externally convertible European currencies, or, in the case of Czechoslovakia and Yugoslavia, their respective currencies, and (2) with transfers from a Foreign Account in Convertible Francs or from a Foreign Account in Bilateral Francs of the same nationality as the account to be credited. Foreign Accounts in Bilateral Francs may be debited freely (1) for purchases in the Paris exchange market of the currency of the country of the account holder, if that currency is negotiated in the market, (2) for transfers to a Foreign Account in Bilateral Francs of the same nationality, and (3) for payments in the French Franc Area, provided that the person on whose behalf such a payment is made resides in the country to which the account to be debited is related and the creditor is a person residing in the French Franc Area, or that the amount withdrawn is used to cover expenses in France of a person residing in the same country as that of the account debited. Other transactions through Foreign Accounts require individual permits.

In addition to the nonresident accounts described above, there are Tourist Accounts, intended 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 French residents staying temporarily abroad.

Imports and Import Payments

Most imports from the OEEC countries and their dependent territories, Finland, Canada, and the United States are free of quantitative restrictions. Many imports from some other countries5 are also free of quantitative restrictions. In addition, certain imports (mostly raw materials) are admitted freely from any country. Other imports are licensed either within quotas determined on an individual commodity basis and applicable to specified countries or areas in accordance with an import plan drawn for a definite period, or in accordance with special import procedures.

All imports must be domiciled with an authorized bank. Liberalized imports and imports liberalized up to certain quota limits may be imported under an import certificate procedure, which requires only that the importer deposit with an authorized bank an invoice or a copy of the commercial contract concluded with the foreign supplier. An importer of liberalized imports may also, if he wishes, request an import license, which is issued automatically. Liberalized goods up to NF 5,000 are exempted from trade control formalities and may be imported c.o.d. through the post or by rail, or by presenting an invoice.

All other imports require an individual import license, the validity of which is normally six months. Licenses are issued automatically for coal and steel products from the other member countries of the European Community for Coal and Steel (Belgium, the Federal Republic of Germany, Luxembourg, and the Netherlands). Import licenses are issued fairly liberally for specified raw materials or other goods needed for the production of goods to be exported (IMEX and EXIM procedures).6 Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses for imports of goods to be used directly by exporters are granted provided such imports are paid for with funds from EFAC accounts. A very small proportion of imports is effected through compensation transactions—mainly agricultural items from Eastern bloc countries.

In principle, payments for imports may be made only after documents have been presented to prove that the goods have been shipped. However, for goods imported under the import certificate procedure or with an import license, importers may, as soon as the import has been domiciled with an authorized bank, arrange with the bank to purchase exchange up to six months before dispatch of the goods. Exchange may be provided on a spot or a forward basis if a documentary credit has been opened, but in other cases only on a forward basis.

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. However, foreign exchange is not granted to exporters and importers for insurance abroad of risks concerning persons, property, or liability in France, which may be insured only in France with French insurance companies or foreign companies authorized to conduct insurance business in France. Income accruing to nonresidents in the form of profits, dividends, and royalties is remittable, subject to supervision. Exchange up to NF 400 monthly per beneficiary is granted for family maintenance abroad. Appropriate foreign exchange is granted for the remittance of banking commissions, patent fees, royalties, and specified categories of taxes. Transfers to nonresidents of current earnings for film rentals and royalties are approved on a liberal basis; however, only 40 per cent of amounts due to U.S. film companies may be transferred to the United States or other countries, the remainder being 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 either up to specified limits or without limitation.

The exchange allowance for French residents for tourist travel abroad is NF 1,500 a calendar year. The exchange allowance for residents going abroad on business, where EFAC account facilities are not available, is NF 750 for each journey; this allowance may be taken in addition to the tourist exchange allowance. Exchange is granted relatively freely, up to certain limits, for other personal payments.

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 NF 250.

Exports and Export Proceeds

A number of exports are subject to individual license. Export proceeds must be collected within 180 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 NF 5,000, 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 requirement: 15 per cent of the proceeds of exports obtained by the holders of exporters’ cards7 and 12 per cent of proceeds obtained by other exporters, from exports to Canada or the United States (regardless of the currency received); 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, in the case of export proceeds received in francs, separate according to the designation of the nonresident franc account debited for the payment. EFAC accounts may be used only by the account holder for the needs of his professional activity. Transfers between EFAC accounts of the same account holder and the use of balances on such accounts are subject to the same rules as those governing the corresponding nonresident accounts. Balances on EFAC accounts may be used freely for payments on account of commissions to nonresident representatives and agents, advertising costs, commercial travel expenses, and expenses incurred in connection with fairs, exhibitions, etc.; premiums for transport insurance, transport expenses, customs duties, and consular fees; and to pay for liberalized imports. The use of balances on EFAC accounts for other purposes (e.g., nonliberalized imports, investments abroad) is subject to approval. EFAC accounts may not be credited on account of exports without payment or through compensation transactions, exports of French films, or exports by ordinary mail. Exporters may, on an individual basis, be permitted 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 unused balances; minimum balances not exceeding NF 1,000 or the equivalent in foreign currencies are not affected by this requirement.

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 and of income exceeding NF 100 from foreign securities.

Sales of goods by authorized producers and merchants to foreign tourists in France are made at discounts ranging from 10 to 25 per cent. These discounts are granted only on purchases made against checks or travelers checks expressed in convertible currencies or externally convertible European currencies or checks issued by foreign correspondents of French banks to the debit of nonresident franc accounts. The commercial establishment that has granted a discount receives, upon surrendering exchange, the official exchange rate plus a certificate which entitles it to reimbursement of taxes from the Government. Sales in acordance with the above conditions also constitute a basis for crediting EFAC accounts at a rate of 8 per cent or, for holders of exporters’ cards, 11 per cent (see section on Exports and Export Proceeds, above). Hotels and car rental agencies which receive payment in foreign exchange may also benefit from these EFAC arrangements.

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 operations and transactions related to nonresident investments may be made freely, provided that the investment is financed by a resident of the area of convertibility in accordance with the prescription of currency regulations applicable to that area, or by a resident of a country in the bilateral group in accordance with the prescription of currency regulations applicable either to the area of convertibility or to the country of residence of the foreign investor: (1) purchases on stock exchanges in France of French securities8 officially quoted on those stock exchanges; (2) subscriptions to an increase in the capital of a French company, provided that its shares are officially quoted on a stock exchange in France; (3) subscriptions, at the time of issuance, to short-term or long-term securities and bonds issued by a French public service organization or by a private enterprise having its head office in France, provided that securities issued by a private enterprise are officially quoted on a stock exchange 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, provided that the seller holds an individual nonresident account in francs; (5) loans in French francs to residents in accordance with certain, prescribed conditions (the exchange of letters between a lender and a borrower must explicitly stipulate that repayment will be made directly by the borrower to the authorized bank whose services were used in financing the operation, in order that the transfer of funds may be made in accordance with the regulations). The liquidation of these investments and the transfer of proceeds accruing from their liquidation may be made freely.

The import of French and foreign securities on behalf of residents or nonresidents is free provided that it is carried out through the intermediary of an authorized bank. The export of French securities held in France is permitted if they are at the free disposal of a resident of foreign nationality. The export of foreign securities on behalf of residents of foreign nationality is permitted only when such securities were held by them prior to September 10, 1939 or were acquired with a permit after that date. Immovable property and French securities in France belonging to nonresidents may be transferred between residents of all countries in the area of convertibility or between residents of the same country in the bilateral group. Foreign securities held in France by nonresidents may be transferred between nonresidents irrespective of their country of residence.

Banknotes

Authorized banks are permitted to buy foreign banknotes freely from any person against payment in French francs and, in accordance with a general or individual license, to sell foreign banknotes to residents going abroad against payment in French francs. They are also permitted to buy foreign banknotes from other authorized banks and from their foreign correspondents against payment in any foreign currency acquired in the Paris exchange market or against any other foreign banknotes, or by crediting any nonresident account. Authorized banks are permitted to sell foreign banknotes to other authorized banks or to their foreign correspondents against payment in any other foreign banknotes or in currencies used for settlements with the area of convertibility. Foreign currencies acquired from the sale of foreign banknotes are to be sold immediately in the Paris exchange market.

Changes during 1959

January 1. The special exchange tax of about 3 per cent on sales of foreign exchange to residents for travel abroad was abolished. Since turnover taxes had been modified, the discounts given on sales of goods to foreign tourists became 10, 20, or 25 per cent.

January 2. Liberalization in respect of imports from OEEC countries and their dependent territories was raised to 90 per cent (1948 basis), and that in respect of imports from Canada and the United States to 50 per cent (1953 basis).

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

January 13. A further 100 items were placed on the import free list applicable to Canada and the United States, raising the liberalization to about 56 per cent (1953 basis). Quotas for imports from member countries of the European Economic Community of items not included in the liberalization list were increased by 20 per cent or, at the least, to an amount representing 3 per cent of national production in France. A new import free list that included certain raw materials (metal ores, sulphur, etc.) was established for imports from countries other than the OEEC countries, Canada, and the United States.

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 for transferring 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 without limitation as to amount.

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

May 7. The import free list applicable to OEEC countries was further extended.

May 15. Authorized banks could deal in foreign banknotes with their foreign correspondents as follows: They could purchase banknotes with any foreign currency quoted on the Paris exchange market or with any foreign banknotes or by crediting any Free Franc or Transferable Franc Account; they could sell banknotes against a convertible currency or an externally convertible European currency—which must then be sold on the exchange market—or against other foreign banknotes, or against French francs to the debit of a Free Franc Account. In dealing with their customers, authorized banks could buy foreign banknotes freely against French francs from residents or nonresidents, and authorized banks could sell these banknotes to residents within the limits fixed for travel exchange allocations.

May 21. The Republic of Viet-Nam was included in the transferable franc area.

June 1. Saudi Arabia was included in the transferable franc area.

June 1. The amount of French banknotes and coins (except gold coins) which travelers are permitted to take out of the country was increased from F 20,000 to F 25,000. The exchange allowance for tourist travel abroad, which had been suspended on May 24, 1958, was restored. A resident going abroad could obtain automatically foreign currency equivalent to F 50,000 each calendar year, in one or more installments, upon presentation of a valid passport issued in his name. The exchange allowance for residents traveling abroad on business was increased from F 15,000 to F 25,000 for each journey; this allowance could be taken in addition to the tourist exchange allowance.

June 5. The regulation requiring a 50 per cent deposit on spot and forward purchases of exchange by importers was withdrawn.

June 10. Financial transfers to Israel and payments for imports from Turkey no longer had to be made through special accounts in the names of the central banks of those countries.

June 13. With a few exceptions, the limit on liberalized imports exempted from trade control formalities was raised from F 200,000 to F 350,000. The limit on exports exempted from all formalities was correspondingly raised from F 200,000 to F 350,000.

July 5. The Saar ceased to be included in the French Franc Area.

July 22. The dollar area and the transferable franc area were merged to form the “area of convertibility,” covering all countries outside the French Franc Area that are not in the bilateral group. The accounts of residents of the area of convertibility were denominated “Foreign Accounts in Convertible Francs.” EFAC accounts fed by transfers from Foreign Accounts in Convertible Francs were denominated “EFAC Accounts in Convertible Francs.”

July 22. Spain was included in the area of convertibility. The amount of French banknotes that could be taken to Spain was made the same as for travel to other countries, i.e., F 25,000.

July 23. The import free list applicable to OEEC countries and that applicable to Canada and the United States were further extended, so that OEEC import liberalization was now about 93 per cent (1948 basis) and dollar import liberalization was 60 per cent (1953 basis).

July 26. The regulations applicable to forward dealings in convertible currencies and externally convertible European currencies were unified. The time limit for forward dealings involving French francs was extended from three months to six months, the same as for forward dealings between foreign currencies.

July 26. Goods on the import free lists could be imported on the basis of an import certificate or the importer could, if he wished, obtain an import license, which would be issued automatically. Importers could, from the moment of domiciling their import with an authorized bank, purchase from the bank of domicile funds in the currency of the contract, provided that the required currency is negotiated in the Paris exchange market. The exchange could be purchased on a spot or forward basis if a documentary credit was opened, but in other cases only on a forward basis. Exchange for goods imported on the basis of an import license could be purchased six months before dispatch of the goods; exchange for goods imported on the basis of an import certificate could be purchased for the period of validity of the import certificate, i.e., three months before dispatch. Payments for exports could be received in a period not exceeding 180 days from the date of the arrival of the goods at their destination, instead of 90 days, as previously.

July 27. Transfers of French securities held with authorized banks were permitted from a nonresident dossier related to a country in the area of convertibility to any other nonresident dossier, and from a nonresident dossier of a country in the bilateral group to another nonresident dossier of the same country.

August 14. Global quotas were established for imports of a number of goods from countries in the area of convertibility.

August 20. Andorra was included in the area of convertibility.

September 26. The import free lists applicable to OEEC countries, to Canada and the United States, and to all other countries were extended. The dollar import liberalization was thus raised from 60 per cent to about 80 per cent (1953 basis).

October 24. A new import free list applicable to a group of specified countries was established; broadly speaking, this group included all countries other than the OEEC countries, Canada, the United States, the Sino-Soviet bloc countries, and nine others (Iraq, Jordan, Lebanon, Muscat and Oman, Saudi Arabia, the United Arab Republic, Yemen, and Yugoslavia).

October 29. The exchange allowance for residents for tourist travel abroad was increased from F 50,000 to F 150,000 a year. The exchange allowance for a resident traveling abroad on business was increased from F 25,000 to F 40,000 for each journey.

October 30. Ecuador was included in the area of convertibility.

November 5. The import free list applicable to OEEC countries and that applicable to Canada and the United States were extended by adding some 200 products, including a number of consumer goods (e.g., many textiles and small electrical appliances), as well as certain equipment for agriculture. Quotas for certain other agricultural equipment imported from these countries were increased by 25 per cent. Import restrictions were abolished or relaxed until January 1, 1960 on a large number of fruits and vegetables, sausage, canned meat, sauerkraut, and beer. Most of these products were also freed temporarily from customs duties. A number of them could be imported free of quantitative restrictions only if imported at certain minimum prices.

November 25. Chile was included in the area of convertibility.

December 4. The OEEC import free list was made applicable to Finland.

Note.—The following changes took place between January 1 and April 10, 1960:

January 1. The “new franc” was established as the legal unit of value, worth 100 “old francs.” The par value of the new franc was established at NF 4.93706 per US$1. It was announced that similar action would be taken later in French Guiana, Réunion, the French Antilles, and St. Pierre and Miquelon.

January 1. Under a decree of December 21, 1959, the Exchange Office was abolished. Some of its functions were taken over by the Bank of France—the issue of licenses for transactions of a financial nature, controls relating to assets held abroad and the repatriation of income, transactions in foreign securities, etc. Various departments of the Ministry of Finance and Economic Affairs took over other functions—the issue and supervision of import and export documents, the issue of licenses for payments related to imports and exports, control of import payments and export proceeds, the preparation of decisions concerning and control over French investments abroad and foreign investments in France, the preparation of regulations concerning foreign trade and exchange, etc.

January 1. The import free list applicable to OEEC countries and that applicable to Canada and the United States were extended. The liberalization of imports from Canada and the United States was thus raised from about 80 per cent to 90 per cent (1953 basis).

January 1. Nonliberalized imports from member countries of the European Economic Community could be licensed under global quotas.

January 1. Finland was included in the area of convertibility.

January 23. The Bank of France ceased to quote official exchange rate limits for externally convertible European currencies, leaving the rates for these currencies to vary between limits resulting from the official limits for the U.S. dollar in Paris and in the other countries concerned.

January 23. The authority delegated to the authorized banks in exchange control matters was considerably extended, including permission to make any individual payment abroad freely up to NF 100.

January 23. The limit below which imports and exports are exempt from trade control formalities was raised from NF 3,500 to NF 5,000. The period of validity of import certificates was extended from three to six months.

January 25. The authority delegated to the authorized banks in exchange control matters was further extended. Among other things, the amount of exchange that could be remitted abroad for family maintenance was increased from NF 250 to NF 400 monthly for each beneficiary, and the exchange allowance for residents going abroad on business was increased from NF 400 to NF 750 for each trip.

February 1. Israel was included in the area of convertibility.

February 20. Poland was included in the area of convertibility.

March 7. All settlements with Guinea were suspended.

April 10. The U.S.S.R. was included in the area of convertibility.

Federal Republic of Germany1

Exchange Rate System

The par value is Deutsche Mark 4.20 = US$1. The official rates of the Deutsche Bundesbank are DM 4.17 buying, and DM 4.23 selling, per US$1. These rates are, however, considered as middle rates which can be exceeded by buying or selling margins. The rate for the U.S. dollar fluctuates in the exchange market between these margins. Market rates for externally convertible European currencies,2 Icelandic krónur, and Spanish pesetas 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 and no prescription of currency requirements. Certain categories of trade transactions and of transactions in invisibles are restricted for other than balance of payments reasons. 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 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 carry out foreign exchange transactions.

Prescription of Currency

Settlements between Germany and foreign countries may be made freely in deutsche mark or in any foreign currency.

Nonresident Accounts

Accounts in deutsche mark may be held by any nonresident. Balances on these accounts may be transferred freely to any other account and used for any payment in Germany or abroad, including the purchase of any foreign currency, and the accounts may be credited freely with any payment.

Imports and Import Payments

No quantitative restrictions are applicable to imports included in three import free 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 (6,123 items) are included in the second list (6,144 items), and all commodities in the second list are included in the first list, which contains 6,344 items out of a total of 6,637 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.

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 three months must be reported to the authorities, for statistical purposes.

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.

Receipts exceeding DM 500 on account of services have to be reported, with the exception of receipts in connection with travel.

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. All capital movements to or from foreign countries exceeding DM 500 or its equivalent must be reported when a maturity of 12 months or more has been fixed at the time of concluding the contract. Securities of all types may be imported or exported freely.

Changes during 1959

The following changes in the regulations governing trade and payments with foreign countries represent for the most part a slight broadening and rewording of liberalization measures that were already in effect.

January 14. Residents were permitted to buy from, and to sell to, residents and nonresidents means of payment in any form or expressed in any currency, including any foreign travel tickets, travel coupons, gasoline coupons, etc. Residents were permitted to hold foreign means of payment at home or on account with banks in Germany or abroad. Residents were also permitted to grant to, or receive from, nonresidents credits in connection with such transactions in accordance with the regulations issued by the Bundesbank. Residents were permitted to cede to other residents means of payment in any form. Transactions covered by the general license had to be reported to the Bundesbank.

January 14. All remaining restrictions on the conclusion and implementation of forward commodity operations in domestic and foreign markets were abolished, but all payments related to forward commodity transactions had to be reported.

January 15. The regulations concerning transshipment of goods included in the import free lists were further liberalized, so that goods on the import free list applicable to countries in the monetary areas of OEEC members and certain other specified countries, if produced in these countries, could also be imported from other countries to which the free lists applied. Previously, these regulations concerning transshipment of goods were applicable only to OEEC countries, their dependent territories, countries in their monetary areas, and certain other countries.

January 18. Any prescription of currency limitations still applicable to transit trade were abolished. In consequence, goods purchased against U.S. dollars could be resold against any currency and not, as previously, only against U.S. dollars, Canadian dollars, or free Swiss francs.

January 21. Residents were permitted to receive from nonresidents loans for periods of not less than five years. In cases of loans or repayments on an installment basis, the average period must also be at least five years. The general license covered also all legal actions and financial operations related to loans. Loan operations covered by the general license had to be reported to the Bundesbank. Residents could conclude any transactions with residents and nonresidents and carry out any operations involving German or foreign securities. However, short-term securities (money market paper), loans from nonresidents for periods of less than five years, and transactions with residents in Eastern Germany were not covered by the general license.

January 28. The conclusion of the following insurance contracts was permitted freely under general license: (1) insurance contracts in any foreign currency between resident insurance companies and residents, covering goods involved in foreign trade (including processing trade), the execution of contracts providing for work abroad, contracts related to building and repairing ships when nonresident interests are involved, exhibition goods, luggage, and repacking in foreign trade, and the property of residents located abroad; (2) reinsurance contracts in foreign currencies between resident insurance enterprises; (3) the conclusion and execution of insurance contracts (including reinsurance) between resident insurance enterprises and nonresidents; and (4) the conclusion and execution of insurance contracts between residents and insurance enterprises abroad. Life insurance contracts between resident insurance enterprises and foreign policyholders, as well as life insurance contracts between resident policyholders and foreign insurance enterprises, were also covered by the general license.

January 29. Imports of unprocessed gold, silver, and platinum, gold in forms other than half processed or gold dust (which were already admitted freely), and gold scrap were permitted freely from all countries benefiting from the import free lists (and not, as previously, only from OEEC countries).

January 29. Residents were permitted to acquire from residents or nonresidents without payment, or against payment in any currency, precious metals (gold, platinum, silver, and alloys) located in Germany; to cede to residents or nonresidents precious metals without payment or against payment in any currency; and to process such metals and to exchange them against other precious metals (but they could not be used in payment of services or goods).

January 29. Any limitations for payment reasons on small imports of books, small imports through the post, and certain other imports were abolished. The limit on the free import of books was raised from DM 500 to DM 1,000.

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 Germany.

February 1. The provision and receipt of collateral security by residents were permitted, the import or export of any commodities involved being subject to the general foreign trade regulations.

February 9. The export regulations were modified. Many commodities, including gold, were exempted from export restrictions and prohibitions.

February 12. Any currency could be quoted officially in Germany, and the administration of foreign exchange markets in Germany was entitled to decide which currencies should be thus quoted.

February 15. It was stipulated that the import license did not cover the payment aspects of imports. Import payments deferred for more than 12 months (previously 6 months) required an individual license. A license was no longer required for the delivery of imported goods to foreign armed forces stationed in Germany.

February 21. Resident banks were permitted to grant credits in foreign currency to residents for periods of not more than 12 months. Residents were permitted to grant credits to nonresidents in any currency.

February 21. Residents were permitted to receive credits from nonresidents in any currency for periods not exceeding 180 days, for their own account or by order of other residents, for the fulfillment of payment obligations toward nonresidents or for the mobilization of claims due from nonresidents arising from trade or service transactions.

May 1. Residents could accept from nonresidents loans and credits in German and foreign currencies, subject to their being reported to the Bundesbank. The general license covered also any contracts and operations related to guarantees, trusts, mortgages, etc. For loans and credits for periods of three or more years and exceeding DM 100,000, the borrower had to submit a copy of the credit contract to the regionally appropriate Land branch of the Bundesbank.

May 1. Nonresidents and residents could conclude with nonresidents any transaction involving foreign or German securities (including German securities expressed in foreign currencies), except transactions with residents of Eastern Germany. Residents could conclude between themselves all transactions involving foreign securities and German securities expressed in foreign currencies. Securities and all documents related to such transactions could be taken into and out of the Federal Republic freely, but not exported to Eastern Germany. Transactions carried out under this general license had to be reported to the Bundesbank.

May 1. Banks were permitted to maintain accounts in German or foreign currency for nonresidents. Any payment could be credited or debited to such accounts. This general license was not applicable to payments by residents in favor of residents of Eastern Germany.

May 16. Any remaining restrictions on the import, export, and use of foreign and German means of payment were abolished.

June 6. It was announced that the official rates at which the Bundesbank stands ready to deal in U.S. dollars were to be considered as middle rates which could, in practice, be exceeded by small margins.

July 1. The import free lists were further extended.

July 29. The OEEC import free list was made applicable to the Spanish Monetary Area.

August 3. Any remaining restrictions on the accounts of nonresidents were abolished.

August 4. The special arrangement with Turkey for the settlement of arrears was terminated. Settlements with Turkey could now be made freely.

August 20. Transactions involving nonresidents were permitted freely in respect of lots, buildings on them, and related rights, as well as equipment and objects located on such property, and hunting and fishing contracts.

October 22. The import free lists were modified and slightly extended.

November 14. Goods (except foodstuffs) valued at up to DM 100 could be imported freely from any country through the post. Except for samples, however, such imports could not be for industrial uses.

December 11. It was announced that, effective January 1, 1960, the import free lists would be further extended.

Ghana

Exchange Rate System

The par value is Ghana Pound 1 = US$2.80. Exchange rates are uniform and are based on the fixed rate for sterling, with which the Ghana pound is at par. The Bank of Ghana does not quote rates other than for the pound sterling; it deals in sterling at rates within ½ of 1 per cent on either side of parity, the statutory limits being ¾ of 1 per cent on either side of parity. For other currencies, the commercial banks in Ghana base their rates on the current London market rates plus the ½ per cent exchange charge levied on sterling transactions and a brokerage fee of ⅛ per cent. The authorized banks may exchange sterling or Ghana currency for any foreign currency and arbitrage any currency against another, spot or forward.

Exchange Control Territory

Ghana is one of the territories of the Sterling Area.

Administration of Control

Exchange control is administered by the Exchange Control Branch of the Ministry of Finance. Authority for approving payments for imports and providing travelers with standard allocations of foreign exchange is delegated to the Bank of Ghana and the authorized banks. Import policy is formulated by the Minister of Trade, subject to the approval of the Cabinet of Ministers, and the import and export system is administered by the Controller of Imports and Exports, whose office constitutes a department of the Ministry of Trade. The responsibility for issuing licenses also rests with the Controller, to whom applications to import or export must be submitted before import orders are placed or exports are shipped.

Prescription of Currency

Settlements between residents of Ghana and residents of other Sterling Area countries may be made in sterling or another Sterling Area currency. Authorized payments, including payments for imports, by residents of Ghana to residents of countries outside the Sterling Area may be made in sterling or Ghana pounds to the credit of an External Account or in any foreign currency. The approved method of settlement for exports to countries outside the Sterling Area and for incoming payments arising from merchanting transactions is in sterling or Ghana pounds from an External Account or in any specified currency.1 However, settlements related to transactions covered by a trade and payments agreement with Israel are made through agreement accounts in sterling maintained by the Bank of Israel for the Bank of Ghana, and those related to transactions concluded under a trade and payments agreement with the United Arab Republic (Egyptian Region) are made through an agreement account in Egyptian pounds maintained by the National Bank of Egypt for the Bank of Ghana.

Nonresident Accounts

Accounts in Ghana pounds held by residents of countries outside the Sterling Area with authorized banks in Ghana are designated External Accounts. These accounts 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 currencies. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of foreign currency.

In addition to External Accounts, there are Blocked Ghana Accounts, the purpose of which is to receive funds that are not placed at the free disposal of nonresidents, e.g., capital proceeds. There are also other nonresident accounts to which special restrictions apply, e.g., “Undesignated Nonresident Accounts.”

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 established 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 and from most other non-dollar countries, a few commodities from dollar area countries, and wheat flour from the United States and Canada are, at present, covered by open general license or quota license.2

When the importer has obtained a license, or if the transaction is covered by an open general license, exchange is provided automatically by authorized banks after the importer has filled in an application for foreign exchange or for Ghana pounds to be paid to a nonresident account and has submitted to the bank the necessary documentary evidence. After arrival of the goods, the importer must supply the exchange control with evidence of importation.

Payments for Invisibles

Payments for invisibles to residents of other Sterling Area countries may be made freely unless they relate to transactions outside the Sterling Area. Payments to persons resident outside the Sterling Area require specific approval of the exchange control, except for the basic travel allowance. In general, all normal commercial payments, depreciation allowances, and investment income transfers are permitted on application. Foreign employees in Ghana who are not nationals of Sterling Area countries are allowed to remit up to one half of their income to their home countries during their period of residence in Ghana. Authorized banks may approve applications from residents in Ghana to purchase up to US$100 a year to pay for correspondence courses from specified institutions in the United States.

For travel in all countries outside the Sterling Area, residents are granted an exchange allowance for the year ending October 31, 1960 of £G 100 for each person 12 years of age or over and £G 70 for each person under that age. Residents traveling to Denmark, Norway, or Sweden are granted an exchange allocation of £G 250 in addition to any allowance to which they may be entitled in respect of travel to other countries outside the Sterling Area. Residents who had not used their basic travel allowances in the two years prior to November 1, 1959 are permitted to obtain the unused portion of the allowances which would have been obtainable in those years, in addition to the allowances to which they are entitled in the year ending October 31, 1960. Exchange allocations are also granted for cars and motorcycles taken abroad. In addition, residents may buy tickets in Ghana to the country of destination.

Travelers may take out of Ghana no more than £10 in sterling notes or in legal tender of other Sterling Area countries.

Exports and Export Proceeds

All exports are subject to either open general license or specific license. A 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. The larger proportion of exports is effected under monopolies granted to the Ghana Cocoa Marketing Board (for cocoa beans) or the Ghana Agricultural Development Corporation (for palm kernels, coffee, bananas, shea nuts, and copra).

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 a specified currency (see footnote 1), the exchange must be sold to an authorized bank.

Proceeds from Invisibles

There are no specific requirements governing receipts from invisibles, but if specified currencies (see footnote 1) are received they must be sold to an authorized bank. Not more than £10 in sterling notes may be imported by travelers. All other currency notes may be imported freely, but they must be declared and, if a specified currency, sold to an authorized bank.

Capital

There are no restrictions on the movement of capital between Ghana and other Sterling Area countries. The investment in Ghana of funds from countries outside the Sterling Area must have prior approval of the Cabinet of Ministers in order to qualify for repatriation.3 The subscription by a resident of such a country to the memorandum of association of a company registered under the Companies’ Ordinance of Ghana must also be approved. Transfers of capital to countries outside the Sterling Area require approval of the exchange control authorities, which is normally granted for the repatriation of approved investments; in other cases, applications are considered on their merits.

Transactions in securities are controlled to ensure that capital is not transferred outside the Sterling Area.

Nationals of countries outside the Sterling Area who are resident in Ghana are allowed to repatriate up to £G 5,000 of their personal assets when they return home finally, the remainder being diverted to blocked accounts which are treated in accordance with Sterling Area practice.

Changes during 1959

January 13. A bilateral trade and payments agreement was concluded with the United Arab Republic (Egyptian Region).

February 10. The basic travel allowance for the year ending October 31, 1959 was established.4

June 8. Following the unification of nonresident accounts in the United Kingdom, Ghana pound accounts of nonresidents designated as American, Canadian, and Transferable Accounts were merged and designated External Accounts. The use of these accounts was prescribed according to the U.K. system.

June 8. Subject to certain currency limits, authorized dealers were permitted to exchange sterling or Ghana pounds for any foreign currency and to arbitrage any currency against another, spot or forward.

July 8. All restrictions on the import and export of French West African currency notes were removed.

July 11. Imports of six commodities or commodity groups from dollar area countries were permitted freely.

Greece

Exchange Rate System

There is no established par value for the Greek Drachma. The official rates are Dr 29.85 buying, and Dr 30.15 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 on the basis of the origin or destination of the goods and services involved or in the currency and manner provided for by trade and payments agreements. Under the terms of most of the agreements, settlements are made through controlled accounts, with the U.S. dollar as the currency of account, or in the currency of the partner country.1

Nonresident Accounts

Nonresidents are permitted to hold, for current transactions, Foreign Sight Deposit Accounts in drachmas or in specified convertible currencies.2 These accounts may be credited with the proceeds of sales of the specified convertible currencies, with authorized payments by residents of Greece for imports or services payable in the specified convertible currencies, and with transfers from other Foreign Sight Deposit Accounts. They may be debited for payments to residents for current transactions, for transfers to other Foreign Sight Deposit Accounts, and for purchases of foreign currencies.

All drachma assets of nonresidents, other than those in Foreign Sight Deposit Accounts, must be declared and are held in blocked accounts. Subject to the approval of the exchange control authorities, however, balances on blocked accounts may be used 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. Blocked balances may also be deposited with a commercial bank as sight deposits, where they earn current interest.

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 countries (see footnote 1) when payment is made through the relevant clearing account; or from OEEC countries 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; for imports from any other country when the method of settlement differs from those mentioned under (1), above; and for certain specified imports originating in OEEC countries, Canada, or the United States. 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 a time draft. Imports of specified luxury items, however, may be settled only by opening a documentary credit.

Imports of items on List A (certain luxury items, textiles, and automobiles and parts) require special licenses. Imports of other specified items (iron and iron sheet, timber, coal, paper pulp, electrical equipment and instruments, sewing machines, newsprint, and tires and tubes) originating in OEEC countries, Canada, or the United States are subject to special licenses issued on the basis of annual import quotas established for each item; these quotas also cover imports of the same items from other countries with which Greece has no payments agreements. Imports of certain types of machinery and machinery spare parts (List B) require prior licenses from the Ministry of Industry. Imports of petroleum products similar to those produced by the Greek Oil Refinery require prior licenses from the Ministry of Trade. Special regulations govern imports of a few other items, such as monopoly items, medicines, wheat, flour, and rice.

For goods imported on the basis of cash against shipping documents (except certain commodities, mainly foodstuffs), an 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 imports of textiles, the advance deposit is 280 per cent); in addition, he must 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. 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. For shipments payable by letter of credit, no advance deposit or bank guarantee is, in principle, required; however, a cash guarantee equivalent to 10 per cent of the c.i.f. value is required for a few specified imports from OEEC countries, Canada, the United States, or other countries with which Greece has no payments agreements, if they are settled by opening a documentary credit; and for imports of certain commodities (mainly consumer goods) paid for by opening a documentary credit, an importer must also deposit, as security for import duties and other charges, an amount in cash equal to 40 per cent of the c.i.f. value of the goods. For commodities ultimately paid for with International Cooperation Administration 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 and the advance deposit is refunded.

If the importer fails to fulfill the conditions prescribed for the import or payment of the goods, deposits and guarantees are partly or entirely forfeited, and a fine of up to 25 per cent of the c.i.f. value of the goods is payable. Greek importers who place orders without previously obtaining an import permit 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 $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 1,000 in Greek banknotes.

Exports and Export Proceeds

All exports are subject to individual license, but most exports are free of quantitative limitation. Export proceeds must 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. Travelers may bring in a maximum of Dr 1,000 in Greek banknotes.

Capital

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 may not be repatriated 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 repatriation of capital and the transfer of interest.

Transfers of capital abroad by residents require approval.

Changes during 1959

February 15. The descriptions of items on List B (machinery and spare parts whose import requires a license from the Ministry of Industry) were amplified and 19 items were added to the list.

April 1. Imports of 9 items (iron and iron sheet, frozen meat, timber, coal, paper pulp, electrical equipment and instruments, sewing machines, newsprint, and tires and tubes) originating in OEEC countries, Canada, or the United States were made subject to special licenses from the Bank of Greece. Licenses would be issued within import quotas established for each item. These quotas would also be applied to the licensing of imports of the same items from other countries with which Greece has no payments agreements. Several items (cotton and cotton articles, artificial fibers, wool, automobiles, etc.) were added to List A, making their import subject to special license.

May 9. Items on List A were divided into three categories: Category I, comprising certain luxury items which may be imported only against documentary credits and are subject to prior deposits of 40 per cent as security for import duties and taxes; Category II, comprising trucks and automobile chassis, the import of which is subject to an advance deposit of 50 per cent, plus a prior deposit of 20 per cent as security for import duties and taxes; and Category III, comprising textiles, buses, and passenger cars, the import of which is subject to an advance deposit of 100 per cent, plus a prior deposit of 40 per cent as security for import duties and taxes.

May 25. The Bank of Greece and the commercial banks were authorized to open Foreign Sight Deposit Accounts for nonresidents in drachmas or in specified convertible currencies (see footnote 2). These accounts could be credited with the proceeds of sales of the specified convertible currencies, with payments for imports or services payable in the specified convertible currencies, and with transfers from other nonresident accounts; they could be used for payments to residents, for transfers to other nonresident accounts, and to purchase foreign currencies.

May 25. The exchange rates of the Bank of Greece were changed to Dr 29.85 buying, and Dr 30.15 selling, per US$1, and the rates for other currencies were changed accordingly.

July 10. All textile imports were made subject to an advance deposit of 280 per cent of the c.i.f. value. If the import is payable by sight draft, the deposit must be made at the time of ordering the goods; if payable through the opening of a bank credit, the importer must deposit with his bank the difference between the amount of the bill he has already paid and 280 per cent of the c.i.f. value. After clearance of the goods through customs, the excess of the deposit over the cost of the goods must be refunded to the importer.

July 15. Sugar was placed on List A, making its import subject to special license.

July 16. A Category IV was added to List A (see May 9, above), comprising certain goods whose import is subject to special license but not to any advance deposit.

August 10. Coffee was placed on List A, making its import subject to special license.

September 10. Electrical machines and appliances of certain types used for stockbreeding were placed on List B, making their import subject to license from the Ministry of Industry.

October 13. For goods on the list of commodities whose import from OEEC countries, the United States, and Canada is subject to quota, the Minister of Trade was authorized to approve imports in excess of the quota. Frozen meat was removed from this list.

November 16. The amount of Greek banknotes that travelers may export from or import into Greece was increased from Dr 450 to Dr 1,000.

December 13. Rice was placed on List A, making its import subject to special license.

Guatemala

Exchange Rate System

The par value is Guatemalan Quetzal 1.00 = US$1. The official rates are Q 1.0000 buying, and Q 1.0075 selling, per US$1. Guatemala has no exchange restrictions on foreign payments. Purchases and sales of exchange must, however, be made through banks. On January 27, 1947, Guatemala notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from persons resident abroad are imposed, except that all purchases and sales of exchange must be made through banks.

Imports and Import Payments

Payments and transfers abroad may be made freely through banks. The import of some 100 commodity items is prohibited. A surcharge of 100 per cent of the customs duty is applied to products originating in or imported from countries on a special list prepared by the Government on the basis of an analytical study of foreign trade for the preceding year. As at December 31, 1959, this surcharge applied to imports from 27 countries.1

Exports and Export Proceeds

The proceeds of exports are not subject to exchange control requirements, but the sale of foreign exchange must take place through a bank. Export licenses are required for a few items.

Payments for and Proceeds from Invisibles

Payments for transactions in invisibles are not restricted, except that sales and purchases of foreign exchange must be made through banks. Minor exchange transactions by tourists and other travelers are exempt from this requirement.

Capital

Incoming or outgoing capital payments by residents or nonresidents are not subject to exchange control.

Changes during 1959

January 15. A new customs tariff came into effect, providing for an increase in duties on imports of goods that are produced in Guatemala and a decrease for machinery, other capital goods, and raw materials. The system of import licensing introduced on September 30, 1958 was discontinued. Certain quota restrictions were removed.

April 30. Custom duty surcharges of 100 per cent were imposed on imports from 27 countries (see footnote 1).

September 21. The import of soft wheat and of flour manufactured from soft wheat was prohibited.

September 28. The import of lead was prohibited until such time as a scarcity should develop in the domestic market.

November 24. The import of a number of agricultural and food items, including meat and meat products, certain dairy products, processed foods, vegetables, and cotton, was temporarily prohibited, and a further increase of 20 per cent in customs duties on imports of goods that are produced in Guatemala became effective.

December 18. The import of cottonseed and of cottonseed cake and meal was temporarily prohibited.

Haiti

Exchange Rate System

The par value is Haitian Gourdes 5.00 = US$1. This is a uniform rate, applicable to all transactions. Exchange transactions by commercial banks with the public are subject to small banking commissions. Under a law of February 22, 1948, remittances abroad of amounts derived from insurance premiums are subject to a 3 per cent tax. Otherwise, Haiti has no exchange restrictions on foreign payments. On December 22, 1953, Haiti notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from persons resident abroad are imposed.

Imports and Import Payments

There are no quantitative restrictions on imports, but a few imports are controlled for other than balance of payments reasons. Payments abroad may be made freely.

Exports and Export Proceeds

The proceeds of exports are not subject to exchange control. Gold coins, bullion, etc., may be exported only by the National Bank of the Republic of Haiti. A few exports are subject to license.

Payments for and Proceeds from Invisibles

Payments for invisibles are not restricted, except for a 3 per cent tax on remittances abroad of amounts derived from insurance premiums. No exchange control requirements are applied to proceeds from invisibles. A regulation, which is seldom applied, prohibits the export and import of U.S. banknotes in denominations of over $20.

Capital

Incoming and outgoing capital payments by residents or nonresidents are not subject to exchange control. Under a decree of June 27, 1957, revising a law of August 14, 1952, private banks operating in Haiti are required to keep in the form of domestic assets up to 80 per cent of deposits collected from residents of Haiti.

Changes during 1959

No significant changes took place during 1959.

Honduras

Exchange Rate System

The par value is Honduran Lempiras 2.00 = US$1. The official rates are L 2.00 buying, and L 2.02 selling, per US$1. Honduras has no exchange restrictions on foreign payments. Exchange may be purchased from local banks without restriction; however, for statistical purposes, buyers are required to file an application stating how the exchange will be used. Earners of foreign exchange wishing to negotiate the exchange in Honduras may do so only with the Central Bank of Honduras or through the banking system for account of the Central Bank. On August 19, 1950, Honduras notified the Fund that it had assumed the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, beginning July 1, 1950.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from persons resident abroad are imposed.

Imports and Import Payments

Import licenses are required for a few items. Payments and transfers abroad may be made freely; however, for statistical purposes, buyers of exchange are required to file an application stating how the exchange will be used.

Exports and Export Proceeds

The proceeds of exports are not subject to exchange control, and the foreign exchange may be retained or used for international transactions. Those wishing to negotiate their exchange in Honduras may do so only with the Central Bank or through the banking system for account of the Central Bank. All exports, re-exports, and transshipments to countries of the Soviet bloc are prohibited.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

Capital payments are not subject to exchange control.

Changes during 1959

No significant changes took place during 1959.

Hong Kong

Exchange Rate System

The par value is Hong Kong Dollars 5.71429 = US$1. There is a multiple exchange rate system comprising the official rates, the free market rates, and four mixed rates, but all of these, so far as the rates for the U.S. dollar are concerned, were within 1 per cent of the par value as at December 31, 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, to portions of the U.S. dollar proceeds of exports of seven commodities of local origin, 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 41 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 area1 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,1 in Hong Kong dollars; and to all other countries, in sterling from an External Account or in any specified currency.2 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.2

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 £250 for each person for the 12 months beginning November 1, 1959. Applications for exchange in excess of this allowance to cover genuine travel expenses may be made to the exchange control. 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.3 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 made 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 made 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 December 31, 1959)(sterling per Hong Kong dollar or Hong Kong dollars per U.S. dollar)
BuyingSelling
Is. 3 132 d.Is. 2 1516d.
All transactions in Hong Kong dollars against sterling. (Rates for other nondollar currencies are based on the sterling rate.)AU transactions in Hong Kong dollars against sterling.

or
HK$5.702 (approx.)HK$5.738 (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. All non-dollar imports. Authorized invisibles and capital.
HK$5.708(50% at HK$5.702 and 50% at Free Market Rate)
Cotton yarn exports.4
HK$5.712(25% at HK$5.702 and 75% at Free Market Rate)
Lead, silver, and tin exports.4
HK$5.712(20% at HK$5.702 and 80% at Free Market Rate)
Copper and feather exports.4
HK$5.713(15% at HK85.702 and 85% at Free Market Rate)
Wood oil exports.4
HK$5.715(Fluctuating Free Market Rate)HK$5.719(Fluctuating Free Market Rate)
All other exports. Invisibles and capital.All other imports payable in U.S. dollars. Other invisibles and capital.

Changes during 1959

January 23. 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.

November 17. The basic annual travel allowance for residents of Hong Kong was raised from £100 for each person to £250 for the 12 months beginning November 1, 1959. Applications for foreign exchange facilities in excess of this amount to cover genuine travel expenses could be submitted to the exchange control.

Iceland1

Exchange Rate System

The par value is Icelandic Krónur 38.00 = US$1. The official rates are IKr 38.00 buying, and IKr 38.10 selling, per US$1, and are applicable to all transactions. Rates for other currencies are based on the dollar rate for the Icelandic króna in relation to the dollar rates for the other currencies.

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 Central Bank, and under its authority the two largest commercial banks, have the exclusive right to deal in foreign exchange. Import licenses, where required, are issued by the Import Office.

Prescription of Currency

Settlements with certain countries in respect of specified transactions must be made in the currency and by the method laid down in the payments agreement with the country concerned. Iceland has bilateral payments agreements with Brazil, Czechoslovakia, Eastern Germany, Hungary, Israel, Poland, Rumania, 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 that exchange is available to pay for the import is required from an Icelandic bank before the commodity can be imported. There are two lists of commodities for which import licenses are not required: one list applies to imports from all countries and the other to imports from the clearing countries. For all other imports, both import and exchange licenses, which are issued in combined form, are required. The granting of these licenses is based on the essentiality of the goods and the availability of the exchange to pay for them.

Payments for Invisibles

All outgoing payments for invisibles require licenses, which are granted on the basis of essentiality and the availability of the required exchange. For travel abroad, there is a basic exchange allowance of £40 a year. Residents traveling abroad may take with them foreign banknotes and coins up to the amount they are allowed to take into other countries under the regulations of the countries concerned. The export of Icelandic banknotes and coins is 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. A tax of 5 per cent on the f.o.b. value of exported commodities produced after February 16, 1960 is collected by the customs.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered. Shipowners and insurance companies are permitted to use a portion of their exchange earnings for operating purposes. The import of Icelandic banknotes and coins is prohibited.

Capital

All foreign investments are subject to individual approval. Incoming foreign capital in the form of exchange must be surrendered. Transfers of capital abroad require approval, which is granted only in exceptional cases. 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.

Changes during 1959

June 12. Exports of salted herring from the summer season catch were granted an exchange premium of 75 per cent, making a new effective exchange rate of IKr 28.46 per US$1. The 80 per cent exchange premium was made applicable to exports of salted herring from the fall season catch. The 70 per cent exchange premium was made applicable to all other herring products.

August 1. The bilateral payments agreement with Spain was terminated, and Spain ceased to be treated as a clearing country.

August 1. The 70 per cent exchange premium was made applicable to exports of whale products and to certain exports other than fish and agricultural products.

Note.—The following changes took place early in 1960:

January 31. With the expiration of the bilateral payments agreement, Finland ceased to be treated as a clearing country.

February 20. The exchange system was revised and simplified, as part of an economic stabilization program. The par value was changed from IKr 16.2857 per US$1 to IKr 38.00 per US$1. The multiple exchange rate system was abolished, and all transactions would henceforth take place at uniform rates without surcharges or subsidies. A tax of 5 per cent was levied on the f.o.b. value of exported commodities produced after February 16, 1960. The Export Fund was liquidated. A basic exchange allowance of £40 a year was established for residents traveling abroad.

India

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, at rates based on the fixed rates for sterling and the London market rates for sterling against the other currency concerned. Further, authorized dealers are permitted to cover their requirements of foreign currencies in the London market, and to cover their permitted transactions in certain currencies1 against sterling, rupees, or any one of these currencies, either spot or forward for periods not exceeding six months, with authorized banks in any country outside the Bilateral Account group.2

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

For prescription of currency purposes, countries are divided into three groups: Sterling Area countries, Bilateral Account countries,2 and the Convertible Account group (all other countries).

Payments to and from Sterling Area countries may be made in sterling or any Sterling Area currency (except Indian rupees) through the account of a resident of a Sterling Area country (except India), or in Indian rupees through the account of a bank in any Sterling Area country (except India). Payments to and from Bilateral Account countries must be settled in Indian rupees through the appropriate clearing account. Payments to countries in the Convertible Account group may be made in rupees or sterling to the credit of the account of a resident of any country in this group or in any listed currency.3 Receipts from the Convertible Account group may be obtained in any listed currency,3 in rupees from the account of a bank in any country in this group, or in sterling from an External Account in the United Kingdom.

Nonresident Accounts

The accounts of residents of Bhutan, Nepal, and Tibet are treated as resident accounts. All other accounts related to countries outside India are treated as nonresident accounts. The treatment of these accounts distinguishes between those of banks and others.

The accounts of banks are classified in three groups corresponding to the division of countries for prescription of currency purposes, i.e., Sterling Area Accounts, Bilateral Accounts, and Convertible Accounts. These accounts may be credited with payments for imports, interest and dividends, and other authorized payments, authorized transfers from the nonresident accounts of private firms or persons in the same country as the account holder, proceeds of sales of the currency of the country or monetary area of the account holder, and proceeds of sales of sterling from the appropriate nonresident sterling account in the United Kingdom. They may be debited for payments for exports, and for other payments not exceeding Rs 20,000, to residents of India. These accounts may also be debited for remittances exceeding Rs 20,000 made by Indian nationals resident in the Sterling Area for credit to their accounts in India or for payment to Indian nationals resident in India. Transfers may be made from Convertible Accounts to other Convertible Accounts or to Sterling Area Accounts, and between Sterling Area Accounts. All other entries on Sterling Area Accounts, Bilateral Accounts, and Convertible Accounts and all transactions through the accounts of banks in the Portuguese territories in India 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 a 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 nonresident 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

Practically all imports require 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. Licenses may be used to import from any country (except the Union of South Africa), even though the license may be called a “soft currency” license. 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 for 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. License holders may make payments by opening letters of credit or by remitting against sight drafts. Advance remittances 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 in Indian notes and coins, and another PRs 100 in Pakistan notes and coins, on any one day. Persons leaving for Afghanistan may take out Afghan currency without limit, and Rs 50 in Indian notes and coins on any one day. 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 that 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 the license is valid only for the dollar area or for Pakistan. Controlled exports not under open general license are 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); exchange received in certain currencies (see footnote 1), sterling, Hong Kong dollars, Iraqi dinars, or Malayan dollars must be surrendered.

Proceeds from Invisibles

Exchange received on account of invisibles in certain currencies (see footnote 1), sterling, Hong Kong dollars, Iraqi dinars, or Malayan dollars must be surrendered.

General permission, subject to customs declaration, has been granted by the Reserve Bank for any person to bring in Rs 75 in Indian currency and banknotes from any country, except that one-rupee notes may not be brought in from Afghanistan or Pakistan. Coins may be brought in without limit, except from Pakistan and the Portuguese territories in India, where the limit for Indian coins is Rs 5 per person. Special permission from the Reserve Bank is required to send Indian currency and banknotes to India. Foreign 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 money-changer 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 in certain currencies (see footnote 1), sterling, Hong Kong dollars, Iraqi dinars, or Malayan dollars must be surrendered. Foreign investments once admitted are eligible for the same treatment as Indian enterprises receive. 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 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 Rs 75,000 per family for emigration to the dollar area and 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 Indian or foreign securities. 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 1959

January 1. Eastern Germany, Poland, and the U.S.S.R. were added to the list of Bilateral Account countries in the prescription of currency regulations.

March 31. Import policy for the period April-September 1959 was announced. Although no substantial change was made in the total exchange allocation for imports, quotas were increased for certain urgently needed items and reduced for others regarded as relatively inessential.

June 22. The authorized banks were no longer permitted to credit nonresident rupee accounts with the proceeds of Indian rupee notes received from their overseas banks and correspondents. An exception was, however, made until July 31, 1959 for Indian rupee notes collected by banks in Saudi Arabia from Haj pilgrims from India. Indian rupee notes could no longer be sent to India without special permission from the Reserve Bank.

June 26. The rupee accounts of banks in Iraq were treated as Convertible Accounts, and the regulations concerning payments to and from Iraq were amended to take account of Iraq’s withdrawal from the Sterling Area.

August 1. The terms of settlement for trade with the United Arab Republic (Egyptian Region) were revised. Permission to receive payment for certain Indian exports to Egypt in Egyptian pounds (“export accounts”) was revoked. A limited trade and payments agreement with the Egyptian Region was signed, providing that payments for imports of Egyptian cotton would be made to a special rupee account in the name of the National Bank of Egypt; this account would be available only for payments for exports of specified commodities to Egypt or for repayment of the commercial credit granted by the State Trading Corporation of India.

September 19. It was announced that, as a result of the terms of recently concluded trade agreements (or protocols to existing trade agreements), all transactions with Bulgaria, Czechoslovakia, Hungary, Rumania, and Yugoslavia were to be concluded in Indian rupees, and these countries were added to the Bilateral Account group in the Indian exchange control regulations.

September 30. Import policy for the period October 1959-March 1960 was announced. The total amount of imports to be licensed was almost unchanged from the previous six-month period, but various increases and decreases were made in the import quotas for different commodities.

September 30. An exchange of letters with Burma provided for the purchase by India of an additional quantity of Burmese rice, to be paid for in inconvertible Indian rupees which would be available to pay for Burmese purchases of Indian goods.

November 18. It was announced that, effective December 10, 1959, a traveler could bring in only Rs 75 in Indian currency and banknotes (other than the special Gulf and Haj notes). Limits previously had applied only to travelers coming from Afghanistan, Burma, Pakistan, and the Portuguese territories in India.

December 4. A protocol to an existing agreement with Pakistan provided for additional trade between the two countries up to Rs 20 million each way. Payments would be made through an account established in inconvertible Indian rupees.

December 12. Authorized dealers were permitted to approve applications for remittances for correspondence courses in any country up to Rs 200 a year for each applicant. Previously, such applications, if for correspondence courses in Canada or the United States, had to be referred to the Reserve Bank.

December 18. It was announced that “soft currency” import licenses could now be used to import from any country. Previously, only 50 per cent of the face value of these licenses could be used for imports from Canada and the United States.

Indonesia

Exchange Rate System

No par value for the Indonesian Rupiah has been established with the Fund. The basic official rate is Rp 45.00 per US$1, on which are based the Bank Indonesia’s rates of Rp 44.83125 buying, and Rp 45.28125 selling, per US$1. The Bank’s selling rate applies to payments for imports in the first category (highly essential goods) and to payments for all invisibles and authorized capital. Imports in the other five categories are subject to surcharges of 25, 50, 100, 150, or 200 per cent, which, applied to the Bank’s selling rate, yield effective rates ranging from Rp 56.6015 to Rp 135.84375 per US$1. All incoming receipts are subject to an exchange tax of 20 per cent, which, applied to the Bank’s buying rate, yields an effective rate of Rp 35.865 per US$1. (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 any other currency mutually agreed; settlements with South American countries are made largely in sterling or U.S. dollars. Imports originating in the dollar area may also be paid for in U.S. dollars. By arrangement with the government concerned, Indonesia obtains partial reimbursement in U.S. dollars from Singapore and Malaya for Indonesian goods re-exported by those countries to the dollar area. Payments to Mainland China and Czechoslovakia, 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 Department 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 finance imports, including the payment of additional import levies.

Most imports are subject to exchange surcharges (called PUIM); for this purpose, imports are divided into six groups, as follows:

GroupSurcharge (PUIM)
I.Highly essential
II.Essential25%
III.Less essential50%
IV.Semiessential100%
V.Semiessential150%
VI.Luxury200%

All imports require licenses, which are issued in accordance with a quarterly exchange budget. 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 Bank’s selling rate and are subject to either general or special license from the Foreign Exchange Institute. General licenses are issued to the authorized banks to make 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, except for some government imports with a special permit from the Committee for Insurance of Government’s Imported Goods.

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 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.

Export proceeds are subject to an exchange tax of 20 per cent. Under a special scheme, exporters from certain coastal regions of Sumatra may retain abroad 30 per cent of their proceeds from exports of goods to Singapore and Malaya for importing specified commodities.

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. All receipts from invisibles are subject to an 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 Bank’s buying rate. 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 (in all denominations) and sterling 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, as described in the following paragraphs.

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, although they are 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 must be deposited in rupiah accounts as reserve profits and the remaining 60 per cent may then be used as follows: In Category 1, it may all be transferred abroad at the Bank’s selling rate; in Category 2, 40 per cent may be transferred abroad at the Bank’s selling rate and the remaining 20 per cent retained for private use in Indonesia; in Category 3, 20 per cent may be transferred abroad at the Bank’s selling rate and the remaining 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 from liquidation of investments in Group I are placed in 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 Bank’s selling rate.

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 after the business has been in operation for a specified period of time to be decided by the Council for Foreign Capital 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 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, 1959)(rupiah per U.S. dollar)
BuyingSelling
35.865(Bank’s Buying Rate less 20% Exchange Tax)
All exports, invisibles, and capital.
44.83125(Bank’s Buying Rate)145.28125(Bank’s Selling Rate)1
Group I imports (all highly essential goods, including rice and raw cotton). Invisibles. Authorized capital.
56.6015(Bank’s Selling Rate plus 25% Surcharge)
Group II (essential) imports.
67.9218(Bank’s Selling Rate plus 50% Surcharge)
Group III (less essential) imports.
90.5625(Bank’s Selling Rate plus 100% Surcharge)
Group IV (semiessential) imports.
113.2031(Bank’s Selling Rate plus 150% Surcharge)
Group V (semiessential) imports.
135.84375(Bank’s Selling Rate plus 200% Surcharge)
Group VI (luxury) imports.

Changes during 1959

August 25. The exchange certificate system was abolished. In its place, a new system was introduced with a basic official rate of Rp 45.00 per US$1 instead of the former rate of Rp 11.40 per US$1. An exchange tax of 20 per cent calculated on the new basic rate was applied to all export proceeds and other incoming transfers. Imports were divided into six categories, as before, and were subject to import surcharges, which for certain categories were increased. The Bank Indonesia’s selling rate applied to imports in Category I (highly essential goods), which were exempted from the surcharge. Imports in the other five categories were subject to surcharges of 25, 50, 100, 150, or 200 per cent. In addition to payments for imports in Category I, the Bank’s selling rate also applied to outgoing payments for invisibles and authorized capital transactions. Advance deposits were abolished.

September 28. Settlements with the United Arab Republic (Egyptian Region) were placed on a convertible currency basis.

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 110 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 take place 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 25 billion for imports that are not prohibited has been established for the Iranian year 1338 (March 21, 1959-March 20, 1960), but if the quota should prove to be inadequate, it may be raised by the Ministry of Commerce, in consultation with the Bank Melli, 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. Imports from Eastern Germany are under government monopoly and imports of certain goods from Japan are subject to special restrictions.

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 110 of 1 per cent under the law on encouragement of exports. Persons holding “own exchange” are permitted to use 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.

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 110 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, once in a year, £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, as recorded in their passports; they may, however, purchase up to $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 the 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 proceeds, up to the amount of the export value as appraised by the customs authorities, must be offered for sale to an authorized bank within eight months after the export takes place. Within the regulations (see section on Prescription of Currency, above), authorized banks accept export proceeds in Belgian francs, deutsche mark, French francs, Indian rupees, Italian lire, 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, but the repatriation of Iranian banknotes through the mail is not permitted. 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 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 1959

May 23. The import program for the Iranian year 1338 (March 21, 1959-March 20, 1960) was published. All goods except those on the list of prohibited imports could be imported up to a total of Rls 25 billion on a global basis. Small changes were made in the list of prohibited imports.

Iraq

Exchange Rate System

The par value is Iraqi Dinar 1 = US$2.80. Most transactions in the official market are effected in sterling or in Iraqi dinars through nonresident accounts in Iraq. The Central Bank of Iraq quotes official rates for U.S. dollars, Swiss francs, deutsche mark, Netherlands guilders, Belgian francs, and Austrian schillings, and operates at these rates with authorized dealers. There is a small free market (mainly in banknotes) for limited transactions in Iranian rials and Saudi Arabian riyals.

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 take place through licensed dealers unless specially 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

Settlements must be made in convertible currencies or, under bilateral payments agreements, in dinars through an appropriate dinar account of a nonresident.1

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; allocations and licenses are valid for imports from all sources except Israel.

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 as being nonessential or 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. All other imports are unrestricted.

Authorized exchange dealers may make exchange available upon presentation of the exchange control copy of the approved 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 tourist travel, there is a yearly basic allowance for each person of ID 300. Travelers may take out ID 15 in Iraqi currency notes and 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, of which ID 40 may be in Iraqi notes and coins. The granting of exchange to meet the costs of business travel is subject to administrative approval. Most travel fares are payable in Iraqi dinars to travel agents in Iraq.

Exports and Export Proceeds

All exports require licenses. Specified exports (e.g., certain kinds of livestock, certain foodstuffs in short supply, cereals and fruits, and raw materials in short supply) can be prohibited, but some of these (e.g., wheat and certain fruits) may be exported if specially authorized by the High Supply Committee. At present, export licenses are being issued freely for all commodities. 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 undertake to repatriate through a bank foreign exchange in prescribed currencies to the agreed value of the exports. However, foreign exchange proceeds from exports of dates to Pakistan may be used to obtain imports from that country in accordance with special arrangements.

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 foreigners may re-export any unused amount. Pilgrims returning from Saudi Arabia may bring in ID 40, and other travelers 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 1959

January 3. A bilateral trade and payments agreement was signed with Mainland China.

February. The import licensing program for 1959 was announced (Notice No. 8 of the Directorate-General of Commerce). The differentiation between dollar and non-dollar areas as sources of supply was removed. All imports were classified in three categories, without regard to source: Commodities in the first category were restricted to limited allocations against which import licenses would be issued at selected times during the year. Commodities in the second category were prohibited as being nonessential or to protect domestic industry. All other import commodities were placed in the third category, for which allocations were unlimited and for which applications for import licenses could be made at any time.

February 15. 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.

February 25. Edible vegetable oils, leather shoes, cigarettes, and cigars were added to the category of prohibited imports.

June 23. Iraq withdrew from the Sterling Area. The prescription of currency requirements were revised accordingly.

August 29. The proceeds of exports of dates to India, Jordan, Kuwait, Lebanon, Saudi Arabia, the United Arab Republic (Syrian Region), and the Persian Gulf Protectorates were made subject to the surrender requirements.

August 29. Travelers could take out ID 15 in Iraqi currency notes and the equivalent of ID 25 in foreign currency. Pilgrims returning from Saudi Arabia could bring in ID 40 in Iraqi notes.

September. Several import items were transferred from the limited allocations category to the unlimited allocations category.

October. Shoes and tobacco products were transferred from the category of prohibited imports to the unlimited allocations category.

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 leading 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 in Irish pounds or sterling, regardless of the account holders’ countries of residence, except 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 already been obtained. 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, all goods, whether or not they require an import license, 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. However, the Irish authorities have stated that this permission is granted automatically.1

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 £500.

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 film rentals. There is a basic allowance of exchange for tourist travel of £250 for each adult for 12 months, but applications for larger amounts are approved provided no unauthorized export of capital is involved. Not more than £50 in Sterling Area notes or £250 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 a limit of £5,000 per family; 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 1959

February 19. The foreign exchange allowance for emigrants to the dollar area was increased from £1,000 plus £250 for each accompanying dependent to £5,000 for a family unit.

March 9. Any foreign exchange allowance for travel outside the Sterling Area could be made available (within the permitted limit of £100) in any non-sterling currency notes, instead of, as previously, in currency notes of the countries to be visited.

March 23. The exchange control regulations were consolidated and amended to give effect to the following changes: (1) The General Exemption covering imports from the dollar area was extended (a) by adding the following goods to the list of imports that may be purchased without limitation as to value: canned fish, fresh fruit, dried fruit, sugar, coffee, unmanufactured tobacco, coal, machinery, textile piece goods, synthetic rubber, pulp, paper and cardboard, chemicals, dyes and colors, and medical and pharmaceutical products; and (b) by raising the limit for any commodity not included in the list from £250 worth in any 3 months to £5,000 worth in any 12 months. (2) Importers of goods from outside the Sterling Area, regardless of the value, were relieved of the obligation to furnish evidence of the importation of the goods. (3) The procedure relating to payments for exports of goods was simplified and the prescribed manner of payment for goods exported to any country outside the Sterling Area was altered to Irish pounds or sterling from an External Account or any specified currency. (4) The list of specified currencies was reduced to the following currencies: 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.

March 23. Banks were permitted to deal in foreign currencies with persons resident outside the Sterling Area against payment in other foreign currencies.

April 2. The limit on the amount in Sterling Area currency notes that may be exported by travelers to destinations outside the United Kingdom was increased from £10 to £20.

August 24. The completion of exchange control forms was dispensed with for payments up to £500 (instead of £250, as previously) for goods and the transport and insurance of goods.

August 24. Iraq was excluded from the Scheduled Territories and the accounts of residents of Iraq were designated External Accounts.

November 1. The basic exchange allowance for tourist travel was increased from £100 to £250 for each travel year, and it was announced that any application for a larger amount would be approved by the Department of Finance if it was satisfied that no unauthorized export of capital was involved. The cost of hotel accommodation or similar services arranged outside the Sterling Area through a travel agent in the Sterling Area ceased to be reckoned as part of the basic or other exchange allowance granted for travel purposes.

November 4. The limits on currency notes that travelers to destinations outside the United Kingdom may export were raised from £20 to £50 for Sterling Area notes and from £100 to £250 for foreign currency notes. The amount of any foreign exchange allowance for travel purposes that may be obtained in foreign currency notes was increased from £100 to £250.

Israel

Exchange Rate System

The par value is Israel Pounds 1.80 = US$1.1 This rate applies to most transactions, but for some transactions special premiums give rise to other rates. Premiums ranging from I£0.36 to I£1.20 per US$1 are applied to that part of the exchange proceeds of exports of industrial and agricultural 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 premium of I£0.36 per US$1 is paid to nonresident tourists and to foreign personnel in diplomatic and consular missions in Israel. (See Table of Exchange Rates, 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 force2 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—which may be used only with special approval, 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£2,500 to relatives who are Israel residents if the account has been held for at least one year. Transfers of Blocked Accounts from one nonresident to another are permitted at freely established rates. Blocked Accounts are opened for the holding of funds derived from former investments or funds transferred to Israel at the official rate of exchange; other nontransferable funds are credited to Registered Accounts.

Imports and Import Payments

All imports require licenses. Exchange to pay for licensed imports is granted automatically at the official rate. An advance deposit of 10 per cent of the c.i.f. value of the import (20 per cent for “cash-against-documents” financing) is required before the license is issued. 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 of Israel currency 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 all profits, interest, and repayments on loans is allowed. If in any one year the profits are less than 10 per cent of the investment, an additional allocation of foreign exchange may be 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£180. 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 these securities for at least 15 days, they may sell them abroad and receive out of the proceeds an amount not exceeding US$120 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 surrendered at the official rate of I£1.80 per US$1 or deposited with authorized commercial banks in PAZAK accounts (foreign exchange accounts—see section on Proceeds from Invisibles, below). Exporters are also permitted to keep their export proceeds in PAMAZ accounts (another type of foreign exchange account) and to use them for the purchase abroad of the import components of their exports. However, since the end of 1959, new PAMAZ accounts may not be opened and existing accounts may not be credited.

All exports receive premiums, which vary according to certain factors and are calculated on the net value added, i.e., the value of the export after deducting the direct and indirect foreign exchange costs. For exports of citrus products, the premium is LE0.36 per US$1 of the value added, regardless of the currency obtained. For other exports, the premiums are (1) I£0.85 for proceeds in U.S. dollars, Canadian dollars, sterling, Swiss francs, Belgian francs, deutsche mark, Italian lire, Netherlands guilders, Swedish kronor, Latin American currencies, and Bulgarian, Finnish, French, Greek, Icelandic, Norwegian, Polish, Portuguese, Turkish, and Yugoslav clearing currencies; (2) for proceeds in Hungarian and Rumanian clearing currencies (a) no premium if the value added is less than 20 per cent of the export value, (b) I£0.60 if the value added amounts to 20 to 40 per cent of the export value, and (c) I£0.80 if the value added amounts to 40 per cent or more of the export value. An additional export premium of I£0.35 per US$1, also calculated on the net value added, is given for exports of industrial goods to West Africa.3

Proceeds from Invisibles

Exchange proceeds from invisibles, in general, must be surrendered or kept as time deposits (PAZAK accounts). Convertible currencies—but not clearing currencies—received from abroad may be deposited in these accounts, which are available for exchange into Israel currency at the rate prevailing at the time the exchange is made. 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, 1958, 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, one third of the foreign exchange so received may be retained in a PAMAZ Transfer account (a third type of foreign exchange account) and up to two thirds 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 to pay for imports up to 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 of the notes.

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 LE0.70 per US$1, up to $10,000 for a 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.4

Tourists visiting Israel are expected to bring with them the amounts of foreign currency that they will need during their stay. On changing their foreign currency into Israel pounds, they are given a 20 per cent premium. The same facility is extended to foreign personnel in diplomatic and consular missions up to a maximum of US$1,500 a month. 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 August 16, 1959, which permits a nonresident who has made an approved investment in foreign currency to transfer all his profits abroad in the same currency. Repayment and amortization of capital may also be transferred on the following terms: If the investment has been kept for five years or less, the capital may be withdrawn in five equal annual installments. If the investment has been kept for more than five years, it may be withdrawn during the period which remains until the end of ten years from the date the investment was made. An investment kept for ten years or more may be withdrawn immediately. Foreign investments effected in Israel without taking advantage of the 1959 law do not benefit from these transfer privileges. Interest and dividends on bonds or shares that are registered on the stock exchange and that have been purchased by nonresidents with funds exchanged at the official rate may be transferred abroad in foreign currency at the official rate; this applies also to amounts received through sales of such bonds and shares.

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, 1959)(Israel pounds per U.S. dollar)
BuyingSelling
1.80(Official Rate)1.80(Official Rate)
All exports.5 Most invisibles, including appeals and charitable donations. Capital.Authorized imports. Authorized invisibles. Capital.
2.16(Official Rate plus 20% Premium)
Tourist exchange. Exchange sold by personnel of foreign missions up to certain limits.

Changes during 1959

March 13. Foreign tourists exchanging their currency into Israel pounds were given a 20 per cent premium.

May 26. One third, instead of one fifth, of foreign exchange received could be retained in foreign exchange accounts.

June 21. The amount which holders of Blocked Accounts could withdraw annually to support relatives in Israel was increased from I£1,000 to I£2,500.

July 15. Interest and dividends on bonds or shares that are registered on the stock exchange and that have been purchased by nonresidents with funds exchanged at the official rate could be transferred abroad in foreign currency at the official rate; this applied also to amounts received through sales of such bonds and shares.

July 28. The amount of foreign currency that persons going abroad could purchase was increased from US$100 to US$120 (see section on Payments for Invisibles, above).

August 16. A Law for the Encouragement of Capital Investments came into effect. It set forth new facilities for the repatriation of foreign investments and profits and income thereon (see section on Capital, above).

August 18. The subsidy of I£0.40 per US$1 on imports of informational media under the Informational Media Guaranty program was abolished.

August 25. The 20 per cent premium given to foreign tourists was extended to personnel in foreign diplomatic and consular missions.

November 3. The bilateral payments arrangement with Denmark was discontinued.

December 31. After this date, new PAMAZ accounts (see section on Exports and Export Proceeds, above) could not be opened and existing PAMAZ accounts could not be credited.

Italy

Exchange Rate System

The par value is Italian Lire 625 = US$1.1 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. Market rates for most externally convertible European currencies2 vary between limits resulting from the dollar rate for the lira in relation to the dollar rates for the other 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. There is a separate exchange market for banknotes, which is related to certain capital transactions (see section on Banknotes, below).

Exchange Control Territory

Exchange control is not exercised over payments from the Italian Republic to the Republic of San Marino or the Vatican City. 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 Greece and Portugal, the two countries with which Italy has clearing agreements, must be made by crediting the clearing account concerned; receipts from these countries may be obtained through the relevant clearing account, in lire to the debit of a Foreign Account (see section on Nonresident Accounts, below), or in U.S. dollars, Canadian dollars, or externally convertible European currencies except Portuguese escudos.2 These currencies and Italian lire debited or credited to any Foreign Account may be used for settlements with all other countries, except that certain payments must be settled in lire through Capital Accounts (see section on Nonresident Accounts, below) and all settlements with Somaliland must be made in lire through a special centralized account.

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, and Capital Accounts, for financial transactions (mainly investments and income thereon, banknote transactions, and the travel expenses of nonresidents in Italy). 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, for transfers to any other Foreign Account or Capital Account, and for payments to residents of Italy for current transactions.

2. Capital Accounts may be held by residents of any foreign 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 payment of taxes, and for 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.

There are special centralized accounts for transactions with Somaliland, Greece, and the Portuguese Monetary Area.

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 only for a few items listed in a Tabella “B Import.” Licenses are also required for commodities 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 from these countries being subject to license. For all imports over Lit 250,000 in value, an import document completed by an authorized bank is required. Trade with Uruguay is settled on a compensation basis.

For all authorized imports, the authorized banks provide exchange or permit payment in Italian lire to a nonresident account in accordance with the regulations (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, tourism, health, and education, patents and trademarks, and remittances of income on foreign-owned capital. Applications for amounts beyond these limits are approved on a liberal basis. 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 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 equivalent to Lit 300,000 for each trip for tourism, business, education, or health (Lit 500,000 will be provided for trips for business, education, or health lasting more than 15 days). Any person traveling abroad may take with him Lit 50,000 in Italian banknotes and, if he refrains from obtaining an allocation of foreign exchange, he 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). Trade with Uruguay is settled on a compensation basis.

Exchange receipts must be offered for sale to an authorized bank within seven days of receipt. Proceeds in U.S. dollars, Canadian dollars, and externally convertible European currencies except Portuguese escudos may be retained by the recipients in foreign exchange accounts for a limited period, during which such balances may be used for permitted transactions or sold to other residents through authorized banks; the banks are allowed to sell these currencies 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). Firms importing on a temporary basis may hold in special foreign exchange accounts with authorized Italian banks the proceeds of exports related to their own lines of business, up to certain limits.

Proceeds from Invisibles

Receipts from invisibles are subject to the same 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 any amount in Italian or foreign banknotes.

Capital

In accordance with the provisions of Law No. 43 of February 7, 1956, the repatriation of capital invested in the establishment or expansion of productive enterprises and the transfer of income thereon are not restricted. 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).

Italian companies may freely take up participations in foreign companies and purchase foreign shares, provided such investments are in their lines of business and are intended to facilitate the expansion of the firms’ activities abroad. Other 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 or by crediting lire to a Capital Account.

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, or against funds on a Capital Account.

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. A bank abroad may remit Italian banknotes to authorized banks in Italy for the credit of its Capital Account. 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 1959

January 24. Balances held for residents of Somaliland were designated as special temporary accounts available for all payments in Italy or for transfer to Somaliland.

April 4. A special centralized account in Italian lire was established, through which most settlements between Italy and Somaliland would take place.

May 8. Settlements with Ecuador could be made in dollars or externally convertible European currencies and Ecuador was removed from the list of bilateral countries in the Italian exchange control regulations. The list of license-free goods applicable to imports from the dollar area and some other countries was made applicable to imports from Ecuador.

May 8. Imports from Uruguay would be licensed only against exports to Uruguay of equivalent value on the basis of so-called “global” compensation. The list of license-free goods applicable to imports from the dollar area and some other countries ceased to be applicable to imports from Uruguay.

May 8. The “global” compensation arrangements with Chile requiring that imports from and exports to that country be balanced were terminated.

June 1. Accounts in Bilateral Lire were abolished.

June 9. A ministerial decree of May 22, 1959 came into effect, revising the dollar import licensing list to show the commodities for which import licenses are required. At the same time, a decrease in the number of items subject to license raised the dollar import liberalization from 71 per cent to 85 per cent.

July 13. The payments agreement of January 24, 1952 between Italy and Turkey expired. Settlements with Turkey would now be made in dollars or externally convertible European currencies instead of through a clearing account in U.S. dollars, as previously. The liberalization applicable to imports from OEEC countries was made applicable to imports from Turkey.

August 4. The obligation on certain exporters to surrender their exchange proceeds within seven days was waived. Authorized applicants were permitted to maintain “Authorized Accounts in Foreign Exchange for Temporary Imports” with Italian authorized banks up to the maximum established for each account holder by the Ministry of Foreign Trade. Balances on these accounts may be used only for authorized payments or for conversion in Italy into other currencies in accordance with the general regulations.

August 6. It was announced that the liberalization applicable to imports from the dollar area and some other countries would apply to imports from Chile.

August 8. Settlements with Paraguay could be made in dollars or externally convertible European currencies and Paraguay was removed from the list of bilateral countries in the Italian exchange control regulations. The liberalization applicable to imports from the dollar area and some other countries became applicable to imports from Paraguay.

August 24. A ministerial decree of July 28, 1959, facilitating Italian investment abroad, came into effect. Italian companies may freely take up participations in foreign companies and purchase foreign shares, provided that such investments are in the same lines of business as those of the investing firms and are intended to facilitate the expansion of the firms’ activities abroad.

October 28. Banks were permitted to arrange for the opening of credits for up to 180 days for imports not subject to individual import license, provided the import takes place within 180 days of the utilization of the credit. Credits for longer periods or where the import is not being made within the prescribed period required prior authorization. Credits for imports subject to individual import license would have the period of validity prescribed in the license.

December 7. It was announced that, effective January 1, 1960, the liberalization of imports from the dollar area would be extended to many industrialized products that had so far been restricted. After this measure came into effect, dollar imports still subject to license would represent some 10 per cent of private imports in 1953 and consist mainly of agricultural commodities.

December 21. The trade and payments agreement with Brazil was terminated and the prescription of currency regulations were amended to place settlements with Brazil on the same terms as settlements with other countries not having bilateral payments arrangements with Italy.

Japan1

Exchange Rate System

The par value is Japanese Yen 360 = US$1. The official rates of authorized banks for telegraphic transfers in U.S. dollars are maintained between official limits of ¥ 358.20 buying, and ¥ 361.80 selling, per US$1. Authorized banks may carry out freely spot and forward exchange transactions in the designated currencies.2

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 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 countries3 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.2 (2) Payments to and from all other countries may be made in any of the designated currencies.2 Deviations from these prescription of currency requirements are subject to individual licenses from the control authorities.

Nonresident Accounts

1. Nonresident Yen Deposit Accounts. These accounts may be held by any nonresident. 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 for conversion into foreign currency require individual licenses.

2. Nonresident Foreign Currency Deposit Accounts. To facilitate the application of exchange control, nonresidents are authorized to keep deposit accounts with banks in the designated currencies (see footnote 2).

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 announcements by the trade control authorities.

There are three different licensing procedures for imports requiring payment abroad: (1) Under the foreign exchange fund allocation system (covering a major 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 an authorized 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. In addition, allocations for specified items are readily granted through the special foreign exchange allocation system (see section on Exports and Export Proceeds, below). (2) Under the automatic allocation system, allocations of foreign exchange for certain machinery are granted automatically and without restriction, unless the Government believes the import to be excessive or that it might have an adverse effect on the national economy. (3) Under the automatic approval system, imports are, in effect, free from quantitative restriction, since licenses to import the commodities specified under this system 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. All items subject to the automatic approval system except pig iron, scrap steel, beef tallow, lard, soybeans, and cattle hides may be imported from any country. When the proposed payment for an import is not in accordance with the prescribed methods of settlement, prior approval of the Ministry of International Trade and Industry must be obtained. This Ministry also issues import licenses for special transactions, such as imports without exchange.

In general, except for goods imported under the foreign exchange fund allocation system, 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 (the highest being 1 per cent). 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

Payments for invisibles are in general subject to individual license. However, slightly over one half of such payments are, in practice, permitted freely. Payments related to foreign trade, e.g., freight (but not all import freight), insurance, and other incidental costs, are approved automatically. Payments designated by the Ministry of Finance or the Ministry of International Trade and Industry as having no significant effect on the balance of payments and involving no danger of capital flight, such as living expenses of relatives, donations, expenses for travel abroad to a specified area or for a specific purpose, are permitted without license up to certain amounts. Where a license for all the transactions arising from a contract has been granted in advance, individual payments under the contract are authorized automatically by an authorized bank.

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 must be surrendered within 10 days from the date of acquisition. However, trading concerns resident in Japan may be permitted to hold foreign currency deposit accounts with authorized banks, in which they may keep their proceeds in U.S. dollars and sterling from exports and invisibles for a maximum of 20 days. During this period, the trading concerns may use these holdings to make payments for their imports or current invisibles or they may sell them to the banks for yen. In addition, 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 they have surrendered, to pay for imports of specified goods and for certain other purposes (advertisements for trade promotion, 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. But 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. However, in order to facilitate payments for current invisibles, specified residents (shipping companies, etc.) are authorized to keep foreign currency deposit accounts with banks in the designated currencies (see footnote 2). 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 the Foreign Investment Law (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. These acquisitions must be made 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. Investment trust certificates, dividends, interest, receipts from technological assistance contracts, and proceeds from sales of stocks are deemed to be the same as the yen proceeds from the sale of foreign exchange and 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.

There is also a “prior designation” procedure, under the Foreign Exchange and Foreign Trade Control Law. Foreign investors who obtained such designation from the competent minister at the time of acquiring an equity investment or of concluding a technological assistance contract may remit earnings and principal in accordance with this law, following almost the same procedures as under the Foreign Investment Law.

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, although in practice, for most transactions, an exchange license is not required for foreign investment 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 generally subject to approval.

Changes during 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 classifying foreign countries in only two groups—open account countries and all others—and allowing all settlements with the latter to be made in any designated currency.

January 31. Of the 230 items on the automatic approval list, 217 were freed from regional discrimination and could be imported from any source. The remaining 13 items could not be imported from the dollar area.

April 1. Austrian schillings, Danish kroner, Italian lire, Norwegian kroner, and Portuguese escudos were added to the list of designated currencies.

April 1. The number of goods eligible for usance facilities if payment was to be made in a designated currency was increased to 60 items, thus removing the discrimination in the use of such facilities.

April 7. Twenty-four import items were added to the automatic approval list, and 3 of the 13 items still subject to regional discrimination were freed from such discrimination.

April 25. Balances on certain categories of nonresident yen accounts could be remitted abroad upon application.

June 8. The advance deposit requirements for imports were relaxed. Goods subject to the foreign exchange fund allocation system were exempted, and the deposit for imports under the automatic approval system was reduced from 5 per cent to 1 per cent.

July 21. A “prior designation” procedure under the Foreign Exchange and Foreign Trade Control Law was established. Foreign investors who obtained such designation from the competent minister at the time of acquiring an equity investment or of concluding a technological assistance contract would be permitted to remit earnings and principal in accordance with this law, following almost the same procedures as under the Foreign Investment Law.

July 31. The bilateral payments agreement with Turkey was terminated and transactions with that country could be settled in any of the designated currencies.

September 12. The spot exchange rates for telegraphic transfers in U.S. dollars were made freely quotable within ½ per cent on either side of parity. The forward exchange rates for U.S. dollars were made freely quotable, and the Minister of Finance discontinued transactions in forward U.S. dollars.

November 13. Under a new procedure, the “automatic allocation system,” foreign exchange for imports of 48 types of machinery (e.g., industrial and office machines, medical instruments) would be allocated automatically unless such imports might adversely affect domestic producers or the balance of payments.

December 18. The restriction on the remittance of earnings in Japan by foreign motion-picture companies was relaxed.

Note:—The following changes took place early in 1960:

January 1. Several measures to liberalize imports became effective: 4 of the 10 items which, under the automatic approval system, were subject to regional discrimination could now be imported from the dollar area; 80 items were shifted from the foreign exchange fund allocation system to the automatic approval system; 36 consumer goods items were shifted to the automatic allocation system; for certain commodities importable only under bilateral trade arrangements, global quotas would be set; certain imports not generally approved, such as binoculars and fountain pens, would be permitted within certain quota limits; import quotas for certain items, such as automobiles and watches, would be increased; restrictions on the import of automobiles by foreigners resident in Japan without the use of foreign exchange would be eased.

February 8. The following measures to liberalize transactions in invisibles became effective: The allocation of foreign exchange for travel abroad was increased and that for travel of other specified kinds was freed from license. Miscellaneous remittances, such as living expenses of relatives up to a certain amount, royalties, copyright fees, etc., were freed from license. Remittances of dividends on stocks that had been acquired by nonresidents before the war were freed from license. Contracts for rendering technological assistance to nonresidents were freed from license, provided reasonable remuneration is to be received for the services and no advances by residents of necessary expenses are involved.

February 15. Payments abroad for such expenses incidental to trade transactions as freight and agents’ commissions (with few exceptions) and insurance premiums were permitted automatically through authorized banks.

February 22. All goods (except luxuries specified in the negative list) were made eligible for usance facilities, provided payment was made in any of the designated currencies.

April 1. Trading concerns resident in Japan could hold foreign currency deposit accounts in U.S. dollars or sterling with authorized foreign exchange banks. They may credit their proceeds in these currencies from exports and invisibles to these accounts and hold them for a maximum of 20 days. During this period, such balances may be used for settlements of their imports or current invisibles or be sold to the banks for yen.

April 2. The bilateral payments agreement with Greece was terminated.

Jordan

Exchange Rate System

The par value is Jordan Dinar 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: one, where official rates are applied, is primarily for transactions in non-Arab League currencies; the other, where rates fluctuate in accordance with supply and demand, is for transactions in Arab League currencies only.1 A tax of ½ of 1 per cent is levied on sales of exchange for invisibles, except expenses for 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

Payments for which exchange at official rates is provided must in general be made in a currency prescribed in 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, as follows: 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 its trade is financed in sterling.

Nonresident Accounts

Subject to the prior approval of the Controller of Currency, authorized banks may open nonresident accounts designated in accordance with Sterling Area practice. 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 items2 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. Payments are made in Arab League currencies at the free market rate for imports of goods originating in Arab League countries (except flour, wheat, barley, maize, and sheep, 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).3

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 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 traveling to these countries 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 countries 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, 1959)(U.S. dollars per dinar)
BuyingSelling
2.82(Official Rate)
Exports of phosphates, etc., to non-Arab League countries. Some invisibles.
2.81(Free Market Rate)42.795(Free Market Rate)4
All other exchange receiptsImports authorized in Arab League currencies.
2.785(Official Rate)
Government payments. Imports authorized at the official rate in non-Arab League currencies.
2.776(Free Market Rate4 with ½% Tax)
Invisibles authorized in Arab League currencies.
2.765(Official Rate with ½% Tax)
Invisibles authorized at the official rate in non-Arab League currencies.

Changes during 1959

January 7. The import system was revised, to reduce substantially the scope of the free market. The practice of providing foreign exchange for imports at either official or free market rates, according to the degree of essentiality of the imports, was discontinued, and imports were regrouped according to origin and point of last shipment. The free market rate was applied to all goods (with important exceptions) originating in or reshipped from Arab League countries, while the official rate was applied to imports of all goods originating in and shipped from all other countries.

January 12. Imports of flour, wheat, barley, maize, and sheep were permitted at the official rate regardless of the country of origin.

April 22. Imports of flour and wheat were prohibited, with the exception of imports by the UNRWA.

Korea1

Exchange Rate System

There is no agreed par value for the Korean Hwan. The official rate is hw 650 per US$1; this rate applies to government imports, sales of hwan to United Nations Forces in Korea, invisibles, and foreign exchange obtained from exports and invisibles and sold at the owners’ option to the Bank of Korea. A flat tax of hw 150 per US$1 applicable to sales of U.S. aid funds at the official rate to certain importers (“non-project end-users”) for specified imports creates an effective selling rate of hw 800 per US$1.

Foreign exchange to pay for specified imports that are not paid for with foreign exchange earned from exports and certain invisibles is supplied by the Government by auctioning exchange for those commodities. Exchange sold at auctions is also subject to a flat tax of hw 150 per US$1. There are two separate auctions: at one, U.S. aid funds are sold to the importers who are called “non-project non-end-users”; at the other, government exchange is sold to all “other importers.” The two fluctuating selling rates arising from these auctions during December 1959 averaged hw 953 and hw 1,030, respectively, per US$1. The difference between the total bid price for each import dollar purchased at the auctions and the official rate plus the flat tax is collected by the Government as a variable exchange tax. In addition, exchange sold at the auctions to “other importers” is subject to a fee of hw 2 per US$1.

Other effective rates approximating those derived from the auction procedure arise from sales to importers of foreign exchange retained in Foreign Currency Accounts. (See Table of Exchange Rates, below.)

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. The Ministry of Finance reviews demands for and supplies of foreign exchange, instructs the Bank of Korea to sell foreign exchange for imports, and controls receipts and payments related to invisibles. Certain imports and exports must be approved by appropriate ministries. The Bank of Korea has been given authority to control imports under the automatic approval procedure and exports.

Prescription of Currency

Proceeds from exports must be obtained in U.S. dollars, Hong Kong dollars, sterling, Japanese yen, deutsche mark, or another currency authorized by the Bank of Korea. The methods of payment for imports and other purposes are prescribed through licensing or through conditions attached to the auctions. Except for exports of rice to, and imports of foods from, Japan, settlements with Japan must be made through the bilateral clearing account.2

Foreign Currency Accounts

Foreign exchange receipts, if not sold voluntarily to the Bank of Korea, may be retained with the Bank of Korea in one of two types of foreign currency account, according to the origin of the funds, as follows:

Import Accounts may be credited with the foreign exchange obtained from exports of goods and services; from sales of goods to the Republic of Korea Army, if payment is received from U.S. aid funds; from the Government of Korea, to pay for private imports; from sales of gold and silver to the Bank of Korea; from sales of goods and services to United Nations Forces by persons or firms in Korea; from sales of goods in tourists’ shops; and from transfers from other Import Accounts or from General Accounts (see below). The foreign exchange held in Import Accounts may be used to pay for imports, incidental costs related to imports and exports, and other approved purposes; sold to the Bank of Korea; or transferred (but only once) to other Import Accounts.

General Accounts may be credited with foreign exchange remitted from abroad; with foreign exchange received by foreigners in Korea as remuneration for services rendered by them in Korea; with foreign currency registered by travelers at the customs upon their entry into Korea; with foreign currency obtained from sales of hwan by airlines and shipping, insurance, or other designated organizations; and with foreign currency authorized by the Government for deposit in these accounts. The foreign exchange held in General Accounts may be used for authorized transfers abroad; paid to foreign employees for their services; transferred to Import Accounts with the approval of the Government; transferred to Import Accounts of registered traders to pay for goods imported under the automatic approval procedure, provided that the General Account being debited belongs to a registered missionary; used for other authorized purposes; or sold to the Bank of Korea.

Imports and Import Payments

Only registered traders are allowed to import; the requirement for maintaining status as a registered trader is a certain minimum of annual exports (at present, $20,000) or imports (at present, $100,000). Imports are divided into those which are approved automatically and those which require an individual license. Broadly speaking, the former procedure applies to essential, and the latter to less essential, goods. In addition, certain goods may be imported only under retention quota arrangements (see section on Exports and Export Proceeds, below). All imports from communist countries and specified imports from all other countries are prohibited.

All imports must in principle be financed by letter of credit. Only exchange from Import Accounts (see section on Foreign Currency Accounts, above) may be used to pay for imports, except that imports from Japan must be financed with clearing dollars secured from exports to Japan.

Payments for Invisibles

All remittances abroad, except by diplomats, require approval. 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 $500 at any one time. Persons holding General Accounts (see section on Foreign Currency Accounts, above) 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. The remittance of profits is subject to permission of the Government.

The export of Korean currency notes and foreign currency is prohibited, but departing foreigners may exchange hwan for dollars up to $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.

Exports and Export Proceeds

Exports of certain specified goods—such as tobacco, raw cotton, raw hides, precious metals, certain ores, minerals, and chemicals, bituminous coal, cement, pulp, and lumber—and all exports to communist countries are prohibited. Certain goods may be exported only under the authorization of the ministry concerned.

The foreign exchange proceeds of exports must be deposited in an Import Account at the Bank of Korea (see section on Foreign Currency Accounts, above) or sold to the Bank of Korea.

According to the commodity, 20 or 30 per cent of proceeds accruing from exports of 9 commodities to countries other than Japan may be retained by exporters and used freely to pay for imports of 15 specified commodities. When any commodity is exported for the first time by a registered trader, 100 per cent of the export proceeds may be retained by him. Import rights under retention quota arrangements may be transferred, but only once.

All exports to new markets and exports of 5 items to established markets may be permitted for bartering against specified imports.

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, or from sales to tourists of specified goods in tourists’ shops, must be either sold to the Bank of Korea or deposited with the Bank in an Import Account. Foreign exchange derived from certain inward remittances to registered missionaries or from other invisibles must be either sold to the Bank of Korea or deposited in a General Account. 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. Travelers may bring with them any amount of foreign exchange, which must be declared upon entry.

Capital

All capital remittances require approval.

Table of Exchange Rates (as at February 23, 1960)(hwan per U.S. dollar)
BuyingSelling
650(Official Rate)650(Official Rate)
Voluntary sales of exchange to the Bank of Korea. U.S. offshore procurement. Sales of hwan to UN Forces. Other invisibles.Government imports. Aid-financed imports for specified projects.
800(Official Rate plus hw 150 Flat Tax)
Specified aid-financed imports (raw cotton and wheat) by certain importers (non-project end-users).
1,2333(Official Rate plus hw 150 Flat Tax and hw 438 Variable Tax)
Other aid-financed imports by certain importers (non-project non-end-users).
1,1054(Official Rate plus hw 150 Flat Tax, hw 803 Variable Tax, and hw 2 Fee)
Imports financed with exchange supplied by the Government.
1,330(Transfer Rate)1,340(Transfer Rate)
Exchange credited to Import Accounts and sold to importers.Imports paid with exchange purchased from holders of Import Accounts.
Note: Other rates apply to transactions involving trade with Japan and to transactions in foreign exchange received by registered missionaries.

Changes during 1959

May 7. The requirements for the registration of foreign traders were made more stringent. The minimum amount required initially for registration was increased from $3,000 to $5,000 for exports and from $10,000 to $20,000 for imports, while the minimum for exporters of handicrafts was prescribed as $1,500. The minimum annual value of transactions required to maintain registration was increased from $10,000 to $20,000 for exporters and from $50,000 to $100,000 for importers.

June 15. Trade with Japan was temporarily suspended.

June 19. It was announced that permission would be given to deposit in Import Accounts earnings from services rendered to United Nations Forces.

July 1. A retention quota system was established for six export commodities (raw silk, bristles, tuna, handicraft articles, dried oysters, and agar-agar) by permitting part of the proceeds from such exports to be used for imports of specified commodities, such as electric phonographs, linoleum, and men’s hats. The number of commodities exportable without a license was increased.

Note.—The following changes took place early in 1960:

January 1. Three additional export commodities were added to the list benefiting from the retention quota arrangements. The percentages of retained exchange were raised to 20 per cent and 30 per cent (from 10 per cent and 20 per cent, respectively) according to the category of goods exported. It was established that the export for the first time of any commodity entitled the exporter to retain 100 per cent of the export proceeds.

February 23. The official exchange rate was changed from hw 500 to hw 650 per US$1.

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, 1959 were LL 3.1725 buying, and LL 3.18 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 countries1 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 from any source 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 1959

March 2. Imports of acetic anhydride were made subject to prior license.

April 2. Imports of women’s ready-made dresses and certain types of rubber products used in the manufacture of shoe heels were made subject to prior license.

August 28. Imports of certain grains and grain products were made subject to prior license.

Libya

Exchange Rate System

The par value is Libyan Pound 1 — US$2.80. Exchange rates are based on the fixed rate for sterling, with which the Libyan pound is at par, and London market rates for sterling against other currencies. The rates for the U.S. dollar as at December 31, 1959 were US$2.80⅛ buying, and US$2.791316 selling, per £L 1.

Administration of Control

Exchange control is administered by the National Bank of Libya, which has delegated some of its powers to the banks. Policy relating to import and export licensing is formulated by a consultative Import and Export Council, under the chairmanship of the Ministry of National Economy and comprising officials of that Ministry and of the Ministry of Finance, the chief financial officials of the Provinces of Tripolitania, Cyrenaica, and the Fezzan, and officials of the National Bank.

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). Exchange control is, however, exercised over payments from Libya to other members of the Sterling Area. 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; for goods originating in countries within the Sterling Area, payment is made by crediting Libyan pounds or sterling to a Scheduled Territories Account (see section on Nonresident Accounts, below).

Libya has a trade and payments agreement with the Egyptian Region of the United Arab Republic, under which bilateral clearing accounts are maintained in Egyptian and Libyan pounds, settlements being due annually in sterling or other currency acceptable to the creditor.

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 of residents of countries outside the Sterling Area are designated External Accounts, while those of residents of the Sterling Area are designated Scheduled Territories Accounts. (The only exceptions are blocked accounts or accounts to which special procedures apply.)

Transfers may be made freely between Scheduled Territories Accounts, between External Accounts, and from External Accounts to Scheduled Territories Accounts. Funds held on Scheduled Territories Accounts may be converted into sterling or any other Sterling Area currency. Funds held on External Accounts may be converted into any foreign currency, including sterling.

Imports and Import Payments

Most imports, with the exception of certain specified commodities, do not require an individual import license. Commodities subject to individual import license include processed foodstuffs, commodities which are manufactured locally, and several revenue-producing items. Imports of a few goods from all countries, and all imports from Israel, are prohibited. Exchange permits required for authorized imports are readily granted by the authorized banks, provided there is a firm contract and any necessary import license has been obtained.

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 may take with them Libyan currency notes not exceeding a total of £L 50, foreign currency notes not exceeding £L 10 in value, and, in any period of 12 months, foreign currency notes not exceeding a total value of £L 100 and travelers checks or letters of credit which, when added to the amount taken in foreign currency notes, do not exceed 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 in special circumstances. Temporary visitors may take out any travelers checks, letters of credit, or foreign currency notes declared on entry.

Exports and Export Proceeds

Export licenses are required for all commodities. Export proceeds must be surrendered, either to the National Bank or to another bank in Libya. Exports of gold and silver, and of bonds, coupons, or other documents of negotiable value, are subject to special permit. Exports to Israel are prohibited.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers checks or foreign currency notes must be offered for sale at the official rate to an authorized bank or 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, and other currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable instruments in unlimited amounts.

Foreign currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable instruments 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 within the authorized amount.

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 1959

January 8. All accounts (other than blocked accounts and certain special accounts) of residents of countries outside the Sterling Area were designated External Accounts, balances on which were made freely transferable to other External Accounts and convertible into any foreign currency.

April 1. Most imports were made free of individual license.

August 12. An initial par value of US$2.80 per Libyan pound was agreed with the International Monetary Fund.

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$l = 2s. 4d. Rates for U.S. and Canadian dollars, applicable both to merchandise transactions and to transactions in invisibles, are fixed by the Exchange Banks Association of the Federation of Malaya; 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 current 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 residents of other countries in the Sterling Area are treated as resident accounts. The accounts of residents of 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 are permitted freely under an open general license or under specific licenses, depending on the nature and origin of the goods. Exceptions to this general rule are imports that are controlled for health or security reasons, and in respect of which certain conditions must be satisfied before licenses are issued; imports of poultry from Thailand, which are controlled under a quota system; and imports of certain cotton textiles from Mainland China, which are prohibited as an anti-dumping measure. Foreign exchange appropriate to the country of origin of the merchandise is made available freely for all permitted imports.

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. There are no restrictions on the amount of foreign exchange made available for travel abroad. 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 to nonresidents of dividends, interest, and agreed profits on all bona fide investments are subject to exchange control approval, which normally is given freely. Unless special permission is obtained, not more than M$500 in Malayan notes and the equivalent of £250 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$500. Otherwise, permission is required for the import of Malayan notes and of 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.

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 for 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 1959

January 1. Import restrictions on 23 items were removed. Among the items liberalized were trucks, milk preparations, mining machinery, paper products and newsprint, agricultural machinery, type-writers, and steel and steel products.

April 24. The amount of Malayan notes that travelers could take out with them was increased from M$100 to M$200.

August 1. Restrictions were removed on all imports from the dollar area. Licenses would still be required, however, for imports of vehicles, radios, and watches, although these items would be licensed freely.

November 1. All restrictions on the provision of exchange for foreign travel were removed.

December 3. The amount of Malayan notes that travelers could take out with them was further increased from M$200 to M$500 and the total amount of notes in other currencies was increased from £100 to £250.

Mexico

Exchange Rate System

The par value is Mexican Pesos 12.50 = US$1. The official rates are Mex$12.49 buying, and Mex$12.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at market rates fluctuating within these limits. The closing market rate on December 31, 1959 was Mex$12.49 per US$1. Mexico has no exchange restrictions on foreign payments, but payments to two countries with which Mexico has payments agreements may be made through special accounts. The granting of some import licenses is subject to quantitative restriction. On November 12, 1946, Mexico notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from persons resident abroad are imposed on importers, exporters, or others. Payments for transactions with Czechoslovakia and Spain may be recorded by the Bank of Mexico through special accounts. (Mexico has a payments agreement with Czechoslovakia; the agreement with Spain is between the Bank of Mexico and the Spanish Foreign Exchange Institute.)

Imports and Import Payments

Payments and transfers abroad are made freely. Payments for imports from Czechoslovakia and Spain may be recorded through special accounts. For a considerable number of items, a prior import license must be obtained from the Ministry of Industry and Trade before firm orders are placed; the issuance of such licenses is subject to quantitative restriction. Imports of certain goods (assembled and unassembled automobiles and trucks, iron and steel pipes, firearms, watches, synthetic fibers, some types of jewelry, radios and television sets, equipment, machinery, and whisky, wines, and other liquors) are licensed only if the importer guarantees the export of an equivalent amount of certain listed commodities, mainly cotton. Imports by official Mexican agencies are subject to the prior approval of the Committee of Public Sector Imports.

Payments for Invisibles

Payments for invisibles are not restricted. Such transactions with certain countries may be recorded through special accounts (see section on Prescription of Currency, above). The contracting of insurance with foreign companies for persons in Mexico, or on property of Mexican ownership, or where the risks are for the account of persons in Mexico or may occur in Mexico, is permitted only with branches established in Mexico in accordance with Mexican law.

Exports and Export Proceeds

No exchange control requirements apply to the proceeds of exports. Certain exports require export licenses.

Proceeds from Invisibles

No exchange control requirements apply to proceeds from invisibles.

Capital

No exchange control requirements apply to incoming or outgoing capital payments by residents or nonresidents.

Changes during 1959

On various dates during the year, additions to and removals from the list of items subject to restrictive import licensing were made.

January 29. All Mexican Federal Ministries, Departments, decentralized agencies, and enterprises with State participation were required to obtain all possible goods, equipment, materials, and merchandise in general from local production. Purchase of foreign goods, either through direct importation or locally, henceforth must be made only with permission of the newly established Committee of Public Sector Imports.

Morocco

Exchange Rate System

The par value is Moroccan Dirhams 5.06049 = US$1. The rate of the dirham in relation to the French new franc is fixed at Dh 1.025 per NF 1.00. Rates for other currencies are based on the fixed rate for the new franc and the rates in the Paris exchange market for the new franc against the other currencies. The rate for the U.S. dollar as at December 31, 1959 was Dh 5.05290 buying, and Dh 5.06808 selling, per US$1.

The authorized banks are not permitted to offset their purchases and sales of foreign exchange. For their regular settlements, however, they may maintain balances with foreign banks up to certain limits, but are obliged to sell exchange beyond these limits to the Bank of Morocco, which sells to them the exchange they require for permitted payments. Forward exchange transactions are at present suspended.

Exchange Control Territory

Morocco is one of the territories of the French Franc Area. However, restrictions are placed on movements of funds between Morocco and other parts of the French Franc Area, although imports from those territories and the related payments may be made freely.

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

Settlements with other parts of the French Franc Area are made in any currency of that area or in Moroccan currency through a French Franc Area Account (see section on Nonresident Accounts, below). Settlements with countries outside the French Franc Area are made in U.S. dollars, Canadian dollars, Mexican pesos, or externally convertible European currencies (except French francs), or in Moroccan currency through appropriate nonresident accounts. However, settlements with Bulgaria, Mainland China, Czechoslovakia, Guinea, Poland, Spain, the U.S.S.R., and the United Arab Republic (Egyptian Region) are made through special accounts under the terms of the bilateral payments agreements between Morocco and those countries.

Nonresident Accounts

Residents of other countries in the French Franc Area may open nonresident French Franc Area Accounts in Moroccan currency. Such accounts may be credited freely with the proceeds of sales to the Bank of Morocco of Canadian dollars, U.S. dollars, and Mexican pesos, or of banknotes issued in the French Franc Area; with transfers from any other French Franc Area Account; and with transfers from France to the debit of Foreign Accounts in Convertible Francs. French Franc Area Accounts may be debited freely for payments in Morocco and for purchases from the Bank of Morocco of the currency of any territory of the French Franc Area.

Residents of countries outside the French Franc Area are permitted to maintain with authorized banks Free Franc Accounts and Transferable Franc Accounts. Both types of account may be credited freely with transfers from similar accounts kept with authorized banks in Morocco, and with the proceeds of sales to the Bank of Morocco of certain currencies;1 they may be debited freely for any payment in Morocco or to purchase from the Bank of Morocco any foreign currency negotiated by it, except currencies of the French Franc Area.

The authorized banks also maintain Bilateral Franc Accounts for transactions with the countries with which Morocco has bilateral payments agreements (see section on Prescription of Currency, above).

Imports and Import Payments

Imports from other parts of the French Franc Area may in general be made freely. Imports from other countries require licenses, which are issued within the limits of established quotas.

All imports must be domiciled with an authorized bank. The bank is permitted to make payment upon dispatch of the goods; but when a documentary credit has been established, the bank may sell exchange to an importer three months before dispatch of the goods.

Payments for Invisibles

Payments for invisibles are subject to license. However, payments for commercial transactions related to licensed imports are permitted freely, as are also certain other current payments, including workers’ earnings. A worker may remit 50 per cent of his net wages if his family does not reside in Morocco, or 20 per cent if he is not married or his family resides in Morocco. Exchange is granted for tourist travel up to the equivalent of Dh 500 a year, plus Dh 250 in Spanish pesetas for travel in the Spanish Monetary Area; for business travel up to Dh 50 or Dh 80 a day, according to the country of destination; for study abroad up to Dh 400 a month, when the student does not board at the school; and for family maintenance up to Dh 250 a month. Persons leaving Morocco permanently and persons residing abroad who inherit property in Morocco are entitled to transfer up to Dh 35,000. Travelers may take with them Dh 300 in Moroccan banknotes.

Exports and Export Proceeds

Export licenses are required for only a few products, but every exporter must sign an undertaking to repatriate and surrender to an authorized bank in Morocco the foreign exchange proceeds of his exports. However, exporters may retain 8 per cent of their proceeds in EFAC (Exportations-Frais Accessoires) accounts, which may be used freely to pay commissions to nonresident representatives and agents, advertising costs, premiums for transport insurance, transport expenses, export duties, and consular fees, and to pay for imports of raw materials, equipment, and other goods for use only by the enterprise holding the EFAC account. Balances on EFAC accounts may also be used for commercial travel expenses, subject to a maximum of Dh 500 for each country of destination. The use of balances on EFAC accounts for other purposes is subject to approval. Every six months, 50 per cent of outstanding balances on EFAC accounts have to be surrendered to the Bank of Morocco.

Proceeds from Invisibles

Residents of Moroccan nationality 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 currency must sell foreign exchange 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.

Residents of Moroccan nationality, as well as legal entities established in Morocco, are obliged to declare all foreign-held assets exceeding Dh 250 to an authorized bank and to repatriate and surrender specified foreign-held assets. The disposal of foreign-held assets in any other way requires permission. The transfer of capital abroad by residents is subject to approval.

Changes during 1959

January 12. Payments for imports from other parts of the French Franc Area, as well as most other payments to those territories, were made subject to an exchange tax of 10 per cent.

January 14. The arrangement was discontinued by which citizens of countries that retained their trading rights in Morocco under the Act of Algeciras, 1906, were permitted to import without allocation of exchange most goods originating in countries other than Germany, Hungary, or Japan. The countries whose citizens had benefited from these facilities were Austria, Belgium, France, Italy, the Netherlands, Portugal, Spain, Sweden, the U.S.S.R., the United Kingdom, and the United States.

February 21. Payments for imports of certain petroleum products from other parts of the French Franc Area were exempted from the 10 per cent exchange tax.

March 21. The list of imports from other parts of the French Franc Area that were exempted from the 10 per cent exchange tax was extended.

July 1. The conditions governing exchange transactions by authorized banks were redefined. With the exception of certain percentages of export proceeds which could be retained in EFAC accounts, exporters were required to surrender all foreign exchange proceeds, including those in French francs. Foreign exchange assets held in countries outside the French Franc Area by residents of Morocco were required to be repatriated and sold to the Bank of Morocco.

July 1. French Franc Area Accounts were established for residents of other parts of the French Franc Area, and the methods of settlement with those territories were prescribed. The list of imports from other parts of the French Franc Area that were exempted from the 10 per cent exchange tax was further extended. Authorized banks were permitted to make payments for imports from other parts of the French Franc Area only for goods imported after this date. Noncommercial transfers to other parts of the French Franc Area were suspended. However, persons traveling to those territories were permitted to take with them 100,000 francs in Moroccan banknotes, and holders of postal checking accounts were permitted to transfer to those territories 50,000 francs a month from each account.

July 13. A bilateral trade and payments agreement with the United Arab Republic (Egyptian Region) provided for settlements to be made through centralized clearing accounts.

October 14. It was announced that residents of foreign nationality were not subject to the provisions of the regulation of July 1, 1959 regarding repatriation of foreign assets, and therefore were not obliged to repatriate income and claims from nontrade transactions with other countries.

October 16. An initial par value for the Moroccan currency of Dh 5.06049 per US$1 was agreed with the International Monetary Fund.

October 17. A decree was promulgated making the dirham the new monetary unit as from October 19. Transfers between Morocco and France were to be made at the rate of Dh 10.25 per F 1,000. The exchange tax of 10 per cent on transfers from Morocco to other parts of the French Franc Area was abolished, and transfers of funds to those territories were made subject to the permission of the Moroccan Exchange Office, which, however, would generally accord such transfers the same treatment as transfers to other countries receive. All imports from other parts of the French Franc Area had to be domiciled with an authorized bank, which would make payment for such imports only after dispatch of the commodities concerned.

October 17. Residents of Moroccan nationality, as well as legal entities established in Morocco, were obliged to declare to authorized banks their foreign-held assets exceeding Dh 250; certain categories of these assets were made subject to repatriation and surrender.

October 17. The special exchange control status of Tangier was abolished. However, for six months, foreign exchange and foreign trade transactions could be carried out freely in Tangier, with the exception of imports subject to quotas and certain others which require licenses.

October 19. By a decree of October 17, 1959, the dirham, divided into 100 Moroccan francs, became the new monetary unit.

October 19. The percentage of export proceeds that could be retained in EFAC accounts was reduced to a uniform rate of 8 per cent. The use of EFAC account facilities was restricted to the actual account holders.

Netherlands

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 the “convertible” currencies.1 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 currencies against guilders in Convertible Guilder Accounts or against the convertible currencies. Forward transactions with residents must be based on permitted merchandise or service transactions.

Foreign exchange related to transactions in securities (see section on Capital, below) is 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, 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-six 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.

For prescription of currency purposes, foreign countries are divided into two groups: bilateral countries,2 and all other countries, known as the “convertible guilder area.” Payments to the convertible guilder area 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 the convertible currencies (see footnote 1), or in guilders to the debit of a Convertible Guilder Account (see section on Nonresident Accounts, below). Transactions with bilateral countries are settled in guilders by crediting or debiting the Bilateral Guilder Account of a banking institution in the country concerned. Receipts from bilateral countries may also be obtained in the convertible currencies, or in guilders to the debit of a Convertible 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, with permitted payments by residents of the Netherlands to residents of the convertible area, with proceeds from the sale of gold or convertible currencies, and with Netherlands notes and coins remitted or deposited by nonresidents. 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. 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.

3. 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 4 and 6, 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. They may be used for certain capital transactions provided the account holder does not reside in a bilateral country. Balances on T Accounts related to the convertible 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.

4. 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.

5. K Accounts. These accounts may be held by all nonresidents, regardless of nationality, except those who reside in Indonesia. Balances on K Accounts may be used only for payments directly resulting from transactions in securities. K Accounts may be credited with proceeds from the sale of foreign currencies other than Indonesian rupiah, with transfers from Convertible Guilder Accounts or from T Accounts related to the convertible guilder area, with transfers from other K Accounts (except nonexportable K Accounts),3 and with the proceeds of sales of securities (except nonexportable securities).3 K Accounts may be debited for purchases of securities. With the exception of nonexportable K Accounts, they may also be debited for transfers to any other K Account and for purchases of foreign currencies other than Indonesian rupiah. Convertible currencies acquired in this manner must be obtained by debiting a resident’s “reinvestment” account (in which are held the foreign exchange proceeds in convertible currencies of sales by residents of foreign securities).

6. 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 T Accounts.

7. 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 nearly all goods imported from all countries other than Yugoslavia, Spain and its monetary area, Egypt, Japan, Hong Kong, and the Sino-Soviet area, no import licenses or declarations are required to clear the goods through customs, and payments may be made under the terms of a Foreign Exchange Notice (which is also applicable to nonliberalized commodities). 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 those liberalized commodities still subject to license. 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 abroad for invisibles are permitted freely under general license. Exchange for travel is provided up to the countervalue in the appropriate currency of f. 2,000 a person for each trip for travel to any country.4 Payments for interest, dividends, and contractual amortization due to nonresidents are permitted freely by crediting the appropriate Convertible Guilder, Bilateral Guilder, or T Account.

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.4 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.5

Exports and Export Proceeds

Export licenses or declarations are not required for a large number of goods exported to any country other than Yugoslavia, Spain and its monetary area, and the Sino-Soviet area.

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 in f. 200 in Netherlands banknotes and coins plus any Netherlands currency acquired abroad from the conversion of their travel exchange.6

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 most types of capital transaction.

All authorized capital transactions, other than transactions in securities, take place at the official exchange market rates. All payments in respect of transactions in securities are channeled through a free market, where payments and receipts must be either in guilders through K Accounts or in convertible currencies through “reinvestment” accounts (see below). In addition, nonresidents may debit their Convertible Guilder Accounts, T Accounts related to countries in the convertible guilder area, or E Accounts, to pay residents for transactions in securities.

Residents may buy foreign securities from, or sell them to, other residents. Residents may sell foreign securities abroad against any foreign currency except Indonesian rupiah. The exchange so acquired must be deposited with an authorized bank or securities broker in the Netherlands and may be sold or retained. If convertible currencies are acquired, a “reinvestment” account may be credited. “Reinvestment” accounts may be used to buy officially quoted foreign securities either in the Netherlands or abroad. However, transactions between residents of the Benelux countries in Netherlands, Belgian, Luxembourg, and Congolese securities are not restricted to officially listed securities.

New capital investments in the Netherlands by nonresidents are in general permitted only if made in convertible currencies. Capital proceeds held by nonresidents in K Accounts may be reinvested in the Netherlands or transferred by purchasing “reinvestment” currencies, provided the K Account is not classified as nonexportable (see section on Nonresident Accounts, above).

Nonresidents who are allowed to hold K Accounts may have their Netherlands securities and Indonesian securities, and foreign securities denominated exclusively in guilders, exported to them (but this does not apply fully to certain Sino-Soviet countries). On exportation, the securities are provided with “red documents.”

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.7 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 T Accounts and their income credited to these accounts (see section on Nonresident Accounts, above).

Changes during 1959

January 6. Residents of the Netherlands could make payments to residents of the transferable area in convertible currencies, or in Netherlands guilders to the credit of a Convertible Guilder or a Transferable Guilder Account. Residents could receive payments from dollar countries in any convertible currency, as well as to the debit of Convertible Guilder or Transferable Guilder Accounts.

February. Many commodities (some 120 tariff items) already on the OEEC import free list were added to the dollar import free list (import licenses for imports of most of these goods from the dollar area were already being issued freely). This move constituted the virtual abolition of discrimination in import liberalization between the dollar area and the OEEC area.

February 24. It was announced that all import restrictions maintained for balance of payments reasons had been eliminated.

March 4. Poland was included in the transferable area.

April 1. Hungary was included in the transferable area.

July 1. Czechoslovakia was included in the transferable area.

July 15. Substantially all commodities from most sources, including the dollar countries, could be imported without an import license.

July 15. Netherlands New Guinea was included in the convertible guilder area.

July 15. The system of Transferable Guilder Accounts was discontinued. All countries other than the remaining bilateral countries (Bulgaria, Eastern Germany, Indonesia, the Netherlands Antilles, and the U.S.S.R.) constituted the convertible guilder area. The prescription of currency requirements were correspondingly simplified. Residents could make payments freely to any destination in respect of nearly all current invisibles, and they could enter freely into contracts leading to such payments.

July 21. Spain and its monetary area were included in the convertible guilder area.

July 23. Residents could make gifts to nonresidents of up to f. 2,000 a year per beneficiary, to the credit of N Accounts-Indonesia, E Accounts, or T Accounts. Nonresidents could make gifts to residents in any amount, to the debit of an E Account or of a T Account related to the convertible guilder area or the Netherlands Antilles.

July 27. All authorized capital transactions, other than transactions in securities, would henceforth be channeled through the official exchange market. All payments in respect of transactions in securities, irrespective of currency area, were channeled through a free market, and the regulations regarding such transactions were liberalized. “Security dollar” accounts were abolished and replaced by “reinvestment” accounts in any convertible currency. The use of K Accounts was limited to transactions in securities. Balances on K Accounts (except nonexportable K Accounts) could be transferred to any other K Account, regardless of country designation. K Accounts could be credited with convertible guilders, with the countervalue at free exchange rates of foreign remittances, and with balances from T Accounts related to countries in the convertible guilder area. K Accounts related to the Netherlands Antilles, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hungary, Poland, Rumania, and the U.S.S.R. were designated either “exportable” or “nonexportable.”8 Dividends up to 20 per cent (previously 15 per cent) on stocks not officially quoted could be credited to T Accounts without special license.

August 27. Egyptian A Accounts and Egyptian C Accounts were replaced by Convertible Guilder Accounts.

October 1. The Netherlands Antilles were included in the convertible guilder area.

November 1. Turkey was included in the convertible guilder area.

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 most transactions; there is, however, 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, except that payments to El Salvador must be made through special accounts established under a bilateral payments agreement with that country. Nicaragua has no payments or clearing agreements with other countries.

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. The advance deposit is refunded to the importer when the goods reach Nicaragua and the importer makes payment to the foreign supplier. Merchandise imports for certain investment purposes are exempt from advance deposits.

Payments for Invisibles

Payments for invisibles at the official selling rate are subject to prior authorization, which is granted only for the following: 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. Payments for other invisibles are 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 official rate (see Table of Exchange Rates, below).

Proceeds from Invisibles

Proceeds from most invisibles must be surrendered at the official 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; 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. 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 capital invested prior to March 11, 1955 and 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, 1959)(córdobas per U.S. dollar)
BuyingSelling
7.00(Official Rate)7.0525(Official Rate)
All exports.1 Most invisibles. Registered capital.All imports. Government payments. Students’ expenses. Insurance premiums. Registered capital. Salaries and fees for specialized services.
7.10(Fluctuating Free Market Rate)7.35(Fluctuating Free Market Rate)
Foreign banknotes and coins.Other invisibles and capital.

Changes during 1959

March 13. The C$6.60 buying rate, formerly applied to exports of cottonseed and a few other commodities, became applicable only to the proceeds of exports of cottonseed from the 1958-59 crop. All other exports became subject to the official rate.

April 20. A total of 21 industrial and miscellaneous imports, formerly on Lists II and III, were transferred to List I. Among the commodities transferred were rubber thread, scientific instruments, motor tires of certain sizes, and some materials for industrial use.

November 13. An amendment to Article 16 of the Law for the Regulation of International Exchange authorized the Executive Power to impose any suspension, limitation, or restriction on imports when, in its opinion, the balance of payments or the economy of Nicaragua so requires. These powers were not used in 1959.

Norway

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 externally convertible European currencies1 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 generally issued by the Ministry of Commerce. For most agricultural goods, import licenses are issued by the Ministry of Agriculture. For fish and fish products, export licenses are issued by the Ministry of Fisheries. All payments to and from nonresidents must be made through one of the Norwegian authorized banks or through the Bank of Norway. Authorized banks may effect payments freely for imports not requiring an import license and for most invisibles. Payments in the restricted sector require, in general, approval from the Ministry of Agriculture (for most agricultural goods), the Ministry of Commerce (for other goods), or the Bank of Norway (for invisibles).

Prescription of Currency

For prescription of currency purposes, foreign countries are divided into two groups: the bilateral area2 and the convertible area 1 (all other countries). Settlements with countries in the bilateral area must be made in the way prescribed in the relevant payments agreement. Settlements with countries in the convertible area may be made in any convertible currency or externally convertible European currency,1 including Norwegian kroner on 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, with transfers from other Convertible Krone Accounts, and with the proceeds of sales of dollars and externally convertible European currencies in Norway. They may be debited for authorized payments to residents of Norway from the convertible area, for transfers to other Convertible Krone Accounts, and for purchases of dollars and externally convertible European 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 approval, 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 the 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, 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. Licenses for these same goods are for the most part granted freely for imports from Argentina, Brazil, Bulgaria, and Eastern Germany. Imports of commodities included in the list of nonliberalized goods, except government imports, require import licenses; however, these licenses are for the most part granted liberally, and most of the commodities in the list are included in a global quota list, which permits such imports up to certain limits from all countries in the global quota area (all OEEC countries and their monetary areas, the dollar area, Chile, Finland, Paraguay, Peru, Uruguay, and Yugoslavia).

If no license is required, or when an import license has been 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 countries in the convertible area for most invisibles, including income from capital and contractual amortization, may be obtained freely. There are restrictions on payments to all countries in connection with the chartering of road transport, and on payments to the dollar area on account of film rentals (20 per cent of the rentals have to be retained in Norway for local expenses). Payments for invisibles to countries in the bilateral area must be made in the manner prescribed in the relevant payments agreement, a liberal practice being followed with regard to payments to these countries for most invisibles.

Norwegian tourists to all countries 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. There are also exchange allowances for students in countries in the convertible area. 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 other countries from which payments are usually received in convertible currencies or externally convertible European currencies, against a declaration or a license, which is granted automatically. Exports subject to regulation are listed and require export licenses. Payment must be received within six months of shipment, in conformity with the regulations (see section on Prescription of Currency, above). All exchange from exports must be surrendered.

Proceeds from Invisibles

Receipts from invisibles must be surrendered. Each person entering Norway may import NKr 1,000 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, and portfolio investment abroad is approved only exceptionally. In handling such applications, the exchange control authorities follow a liberal practice.

Changes during 1959

January 1. A new list, comprising only those import commodities which remain regulated, replaced the former import free 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 liberalization percentage for dollar imports from 86.6 to 90.9 (on the basis of private imports in 1953). Import and exchange declarations would no longer be required, and non-restricted 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 convertible currency or externally convertible European currency to residents of Norway to make authorized payments, and to sell any of these currencies, 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.

June 19. The following payments were liberalized vis-à-vis the dollar area: participation by subsidiary companies and branches in the overhead expenses of parent companies situated abroad and vice versa; patents, designs, trademarks, and inventions; and transactions and transfers in connection with direct insurance (other than social security and social insurance).

July 1. The list of commodities subject to quantitative import restrictions was reduced, thus increasing the liberalization percentages from 81.4 to 81.7 for OEEC countries and from 90.9 to 91.7 for the dollar area.

July 21. The payments agreement with Spain was terminated. Spain was covered by the import arrangements applicable to OEEC countries and was included in the global quota area.

August 4. The amount of Norwegian banknotes and coins which a person entering Norway is permitted to import freely was raised from NKr 350 to NKr 1,000.

December 1. A new payments agreement with Yugoslavia came into effect, placing settlements between Norway and Yugoslavia on a convertible currency basis.

Pakistan

Exchange Rate System

The par value is Pakistan Rupees 4.76190 = US$1. 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 arise from the negotiation of bonus vouchers which certain exporters may 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 21 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

The prescribed methods for settling both trade and nontrade transactions are similar to those of most other Sterling Area territories.

Exchange receipts have to be obtained through a bank. Receipts from countries in the Sterling Area must be received in sterling from the account of a resident of the Sterling Area (other than a resident of Pakistan) or in Pakistan rupees from the account of a bank in the Sterling Area. 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.

Payments abroad must be made through an authorized bank. Payments by residents of Pakistan to countries in 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.

Exchange transactions with Afghanistan are settled in Pakistan rupees or afghanis, and those covered by the trade agreement with the U.S.S.R. are settled in Pakistan rupees.

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 departments of the Central Government, goods in transit, personal baggage, certain imports over the land route from Afghanistan and Iran, 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.

Where a valid import license is held, the required exchange is released by an authorized bank when it receives the related import documents. The license holder may make payment by opening a letter of credit or by remitting against a sight draft. Advance remittances before shipping documents are received are not normally permitted, but in special cases—e.g., imports of machinery and other capital goods, where deposits have to be made with overseas manufacturers—the State Bank may authorize advance payment for a part of the value of the goods.

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. Remittances of a personal nature are either 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 taken out 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 Iran, Iraq, and 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. Exporters may use part of their entitlement under the Export Bonus Scheme for business travel or for opening and maintaining branch offices outside Pakistan.

Nonresident travelers may take out foreign currency not exceeding the amounts they brought in and PRs 20 in Pakistan currency notes. Residents may take out PRs 20 in Pakistan currency notes at any one time and, if leaving for Afghanistan, any amount of Afghan currency. The export of other currencies requires individual permission.

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 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 rice) are issued bonus vouchers in rupees for 20 per cent of their exchange receipts; for exporters of all other manufactures, the percentage is 40. These vouchers are freely transferable and entitle the holder to import specified commodities.

Proceeds from Invisibles

With the exception of Afghan currency, which may be retained, incoming foreign exchange from invisibles 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 net foreign exchange earned by them; these vouchers are transferable and may be sold to importers (see section on Exports and Export Proceeds, above). Each traveler entering Pakistan may bring with him PRs 2,0001 in Pakistan currency notes, £20 in sterling notes, and Rs 5 in coins that are legal tender in India. 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 order to encourage industrial development in Pakistan, the Government follows a liberal policy toward foreign entrepreneurs, who can start any industry in the private sector without any conditions being laid down regarding the participation of local capital.

Repatriation facilities are as follows: (1) Foreign capital invested in approved industries established after September 1, 1954 may be repatriated at any time thereafter to the extent of the original investment, and current profits may be transferred without restriction, to the country of origin of the capital. (2) Profits that are reinvested in approved industrial projects with the approval of the Government may be treated as investment for the purpose of subsequent repatriation. (3) Appreciation of any capital investment under (1) and (2) may also be treated as investment for the purpose of subsequent repatriation. These repatriation facilities will be subject to the exchange control regulations in force at the time, and they will not apply to the purchase of shares on the stock exchange unless the purchase is an integral part of an approved investment project, or to capital invested in Pakistan before September 1, 1954.

Guarantees provide for just and fair compensation in the currency of the country of origin of the capital in the event of nationalization of any project. (The subject of issuing a Foreign Investment Law in Pakistan is under active consideration.)

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 the transfer is 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 1959

January 15. A new Export Bonus Scheme was introduced which provided that certain exporters would receive bonus entitlement vouchers with a value in Pakistan rupees equivalent to specified percentages of the proceeds of their exports. The bonus vouchers would be freely transferable and would entitle the holder to obtain import licenses for any of a long list of items specified for this purpose. All other export promotion schemes were withdrawn.

May 25. The amount in sterling notes which each traveler is permitted to bring into Pakistan was increased from £10 to £20.

August 31. The requirement lapsed which had provided that payments should be made in special French francs for imports shipped from France up to this date, under single country or global import licenses issued in accordance with the 1957-58 trade agreement with France.

December 29. Permission to travelers to take out Bank of England notes up to £10 or foreign currency notes up to the value of PRs 50 was withdrawn, and the limit on Pakistan currency notes which could be taken out by travelers was reduced from PRs 50 to PRs 20.

Panama

Exchange Rate System

The par value is Panamanian Balboa 1.00 = US$1. U.S. currency notes circulate freely in Panama, and local currency is represented only by the silver balboa and subsidiary coins. Exchange transactions by commercial banks are based on New York market quotations. Panama has no exchange restrictions on foreign payments. On November 26, 1946, Panama notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

There are no 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

Payments abroad may be made freely. Import licensing is in effect for a few items and a few imports are subject to quantitative restriction.

Exports and Export Proceeds

The proceeds of exports are not subject to exchange control. Export permits are required for a few items and a few exports are prohibited.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

No exchange control requirements are imposed on incoming or outgoing capital payments by residents or nonresidents.

Changes during 1959

No significant changes took place during 1959.

Paraguay

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, 1959 was about ₲ 122 per US$1. Other rates apply to agreement currencies. Two surcharges of 5 per cent each of the c.i.f. value are payable on most imports,1 and taxes of 7½ per cent and 2½ per cent of the value of the goods are payable on 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 Spain and Uruguay, under which exchange payments and receipts must be effected through clearing accounts in terms of U.S. dollars. Otherwise, there are no prescription of currency requirements.

Imports and Import Payments

No licensing restrictions are imposed on imports. However, imports are subject to advance deposits, which vary according to the category and essentiality of the merchandise, as follows: Category I, 0 to 20 per cent; Category II, 50 per cent; Category III, 110 to 200 per cent; Categories IV and V, 300 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, or Uruguay. Advance deposits are also not required from importers whose imports are not financed by bank credit and who hold proceeds of certain agricultural 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.

Two surcharges of 5 per cent each of the c.i.f. value (but see footnote 1) are payable on imports from countries other than Argentina, Bolivia, Brazil, and Uruguay, even if no foreign exchange payment takes place, but imports by certain international agencies are exempt from these surcharges. The surcharges are collected by the authorized bank either at the time the import remittance is made or at the time of delivery of the documents for customs clearance, whichever is the earlier.

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 per cent 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 1959

During the year, minor changes were made in the classification of various imports and consequently of the amount of the advance deposit applicable to such imports.

January 1. The tax on exports of 15 per cent of the value 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. Subsidies formerly granted to certain imports from Argentina and Uruguay were canceled.

February 10. A temporary tax of 2½ per cent of the f.o.b. value of exports was imposed, in addition to the 7½ per cent tax.

February 16. A surcharge of 5 per cent of the c.i.f. value of imports was established. The surcharge would be collected by the authorized bank either at the time the import remittance is made or at the time of delivery of the documents for customs clearance, whichever is the earlier. Imports from Argentina, Bolivia, Brazil, and Uruguay were exempted from the surcharge.

March 23. Imports by various international agencies were exempted from payment of the 5 per cent surcharge.

June 10. A new trade agreement with Argentina, replacing the trade and payments agreement of October 1956, placed payments between the two countries on a convertible currency basis.

July 8. A new trade and payments agreement with Italy, replacing that of April 1952, placed payments between the two countries on a convertible currency basis.

August 1. An additional surcharge of 5 per cent of the c.i.f. value was established for all imports except liquid fuels and those imports exempted from the surcharge established on February 16, 1959 (see above).

September 12. The following reductions in advance deposits applicable to specified imports became effective: Category I, 0 to 20 per cent (formerly 10 to 25 per cent); Category II, 50 per cent (formerly 60 per cent); Category V, 300 per cent (formerly 400 per cent). Advance deposits for imports in Categories III and IV remained unchanged.

September 12. Imports of liquid fuels were no longer exempted from the additional 5 per cent surcharge imposed on August 1, 1959 (see above).

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 and a draft market rate. Exchange for most trade transactions is negotiated at the certificate rate. Export proceeds in U.S. dollars and sterling must be converted into exchange certificates, which are valid for five days and are issued in those currencies for 100 per cent of export proceeds. 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. (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 conducts stabilization operations, from time to time, in the certificate market. Exchange certificate transactions are carried out 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. Settlements with Argentina are made through a clearing account expressed in U.S. dollars. Transactions through the draft market may be made in any currency.

Imports and Import Payments

Imports are permitted freely, with the exception of imports from Eastern Europe and Mainland China, and are paid with certificates or drafts. The use of certificates for import payments takes place through commercial banks, which 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 selling the certificate in the market and buying the currency required.

Payments for Invisibles

Exchange licenses are required in order to use certificates to pay 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 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, 1959)(soles per U.S. dollar)
BuyingSelling
27,70(Fluctuating Exchange Certificate Market Rate)27.701(Fluctuating Exchange Certificate Market Rate)
Export proceeds in sterling and U.S. dollars. Certain capital.Most imports. Certain invisibles and capital.
27.63(Fluctuating Draft Market Rate)27.78(Fluctuating Draft Market Rate)
All other export proceeds. Invisibles. Most capital.Occasional imports. Other invisibles and capital.

Changes during 1959

April 1. A bilateral payments agreement with Argentina became effective; settlements were to be made through a clearing account expressed in U.S. dollars.

October 1. The quota restrictions imposed on imports of automobiles were removed.

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 ½ of 1 per cent on all payments for imports, and a fee of 1 per cent on all exchange licenses or letters of authority covering foreign travel. Under legislative authority which permits the Central Bank of the Philippines to levy a “margin” fee of up to 40 per cent on exchange sales, the Central Bank is presently collecting 25 per cent on sales of exchange for all but about 16 per cent of imports and some invisibles, making an effective rate (including the service charge) of ₱ 2.529 per US$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 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, sterling, deutsche mark, Swiss francs, or Canadian 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; proceeds of the sale of this gold are freely transferable.

Imports and Import Payments

Import licenses, as such, are not issued, but—except for imports under barter arrangements as provided for under Republic Act 2261—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 Bank. All payments for imports must be made by letter 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, semiessential, and nonessential consumer goods and of nonessential producer goods. No cash deposit is required to open letters of credit for imports of decontrolled items and of essential and semi-essential producer goods. A cash deposit of 50 per cent is required for imports of 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 not 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 ½ of 1 per cent is levied on all import payments, and a “margin” fee of 25 per cent on most 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 included 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 be imported, under a barter arrangement, without an exchange allocation from the Central Bank, imports of goods without an exchange allocation 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 and the payment of a “margin” fee of 25 per cent, unless a certificate of exemption is obtained. Licenses are usually granted to pay for most invisibles; but for travel, education, maintenance, profits and dividends, income, royalties, salaries, etc., they are granted on a limited basis. Travelers may take out with them a maximum of F 20 in Philippine currency, of which coins may not exceed ₱ 5. A fee of 1 per cent is payable on exchange licenses or letters of authority covering foreign travel.

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. Exports of certain products of marginal and submarginal industries are permitted under a barter arrangement which permits the exporter to import specified classes of goods outside of the regular licensing procedure.

With the exception of barter exports, the proceeds of all exports must be obtained in U.S. dollars, sterling, deutsche mark, Swiss francs, or Canadian dollars and surrendered to an authorized agent, and no commodity may be exported from the Philippines unless covered by a draft drawn in one of these currencies 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 net earnings after September 30, 1958 are allowed in amounts ranging from 12.5 per cent to 50 per cent of the foreign participation in the net profits or ranging from 10 per cent to 30 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 1959

January 15. The service charge on payments for imports was reduced from 1.20 per cent to ½ of 1 per cent.

April 28. The Central Bank instructed all authorized banks to collect a fee of approximately 1 per cent on all exchange licenses or letters of authority covering foreign travel.

May 11. The Monetary Board established new rules governing Philippine exchange reserves and exchange proceeds from exports. Exporters were permitted to accept—in addition to U.S. dollars—sterling, deutsche mark, Swiss francs, and Canadian dollars.

June 20. New legislation “to promote economic development by giving incentives to marginal and submarginal industries” came into effect. It provided that the proceeds of exports of certain goods could be used for imports of specified categories of goods without these imports being subject to the regular import licensing procedure.

July 17. Authorized banks were instructed to collect a “margin” fee of 25 per cent on sales of foreign exchange for most purposes. About 16 per cent of imports and some payments for invisibles were exempted from the payment of this tax.

August 25. New instructions were issued governing remittances of profits and dividends. The effect of this measure was to reduce by 50 per cent the amount which may be remitted from profits and dividends declared out of profits earned after September 30, 1958.

October 12. It was announced that, effective January 1, 1960, the remittable portion of salaries earned by foreign technicians or by alien staff members of firms doing business in the Philippines would be reduced by 50 per cent, but that no remittable portion would be reduced below $250 a month. This reduction would not apply to contracts with individual technicians approved by the Monetary Board.

Note.—It was announced on April 25, 1960 that, as part of a four-year program for the gradual lifting of exchange restrictions, certain changes were being made in the exchange system. The proceeds of sales of gold, receipts from tourism, and 25 per cent of exchange receipts from other invisibles and from exports must be sold at the free market rate; the remainder has to be sold at the official rate. Exchange to pay for less essential imports by authorized importers and for most invisibles will be provided at the free market rate. The Central Bank announced a free market rate of ₱ 3.20 per US$1 for April 25 and 26, 1960. In consequence, when allowance is made for the “margin” fee of 25 per cent that is payable on most remittances through the official market and on all remittances through the free market, the effective rates were basically ₱ 2.30 and ₱ 3.20 buying, and ₱ 2.00, ₱ 2.50, and ₱ 4.00 selling, per US$1. These changes have not been taken into account in the foregoing survey.

Saudi Arabia1

Exchange Rate System

The par value is Saudi Arabian Riyals 4.50 = US$1.2 The Saudi Arabian Monetary Agency sells exchange to banks at the par value rate, and this serves as the basis for exchange quotations in the market. Saudi Arabia has no restrictions on foreign payments.

Prescription of Currency

There are no 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 are not required and exchange for payments abroad may be obtained freely. All imports from Israel are prohibited.

Exports and Export Proceeds

Export licenses are not required, and no control is exercised over export proceeds. All exports to Israel are prohibited.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

No exchange control requirements are imposed on incoming or outgoing capital payments by residents or nonresidents.

Changes during 1959

January 10. The Monetary Agency reduced its selling rate for U.S. dollars in the free market from SRls 5/7 to SRls 5/4 per US$1.

March 5. The Monetary Agency reduced its selling rate for U.S. dollars in the free market to SRls 5/0½ per US$1.

May 14. The prohibition on the import of motor vehicles was terminated.

July 22. The Monetary Agency reduced its selling rate for U.S. dollars in the free market to SRls 4.75 per US$1.

Note.—On January 8, 1960, an initial par value of SRls 4.50 per US$1, agreed with the International Monetary Fund, was established. The Saudi Arabian Monetary Agency would sell foreign currency to banks at the Government’s selling rate of SRls 4.50 per US$1. The distinction between the free and official exchange markets was eliminated and all restrictions on imports and payments were abolished.

Spain

Exchange Rate System

The par value is Spanish Pesetas 60.00 = US$1. The official limits are Pts 59.55 buying, and Pts 60.45 selling, per US$1, at which rates the Spanish Foreign Exchange Institute must intervene. Currencies are dealt in daily on the exchange market at rates between these limits. The currencies quoted on the market are U.S. dollars, Canadian dollars, Austrian schillings, Belgian francs, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, pounds sterling, Swedish kronor, and Swiss francs. On the basis of the rates quoted on the exchange market during the previous week, the Spanish Foreign Exchange Institute publishes the rates at which it settles the transactions it carries out direct. It also publishes the rates applicable to currencies not quoted on the exchange market (Portuguese escudos, Egyptian pounds, and clearing dollars) and the rates applicable to banknotes.

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 as a rule 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 the United Arab Republic (Egyptian Region) are made through agreement accounts expressed in Egyptian pounds, and settlements with Argentina, 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 either an import license or an “import declaration” issued by the General Department of Foreign Trade. “Import declarations” are issued freely for goods included in an import free list which applies to most countries1 with which Spain has no bilateral payments agreements. All other imports are subject to license. There are global quotas for specified imports from countries to which the free list applies. An advance deposit of 25 per cent is required for imports other than those subject to state trading; the deposit is returned upon clearance of the goods through customs.2

Payments for Invisibles

All transfers abroad and payments by residents in favor of nonresidents on account of invisibles are subject to individual license. There is a basic annual exchange allowance for travel of Pts 3,000 a person. Income from investments recognized as having economic and social priority is allowed to be remitted without limitation. Income from other investments may be remitted, as a rule, up to a limit of 6 per cent of the invested capital. 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. All export proceeds must be surrendered through authorized banks to the Spanish Foreign Exchange Institute. The proceeds of most major exports are subject to export taxes.

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 incoming capital representing foreign investment in Spanish enterprises requires approval. Capital may be imported in the form of foreign exchange, capital goods, patents, know-how, and some other forms. Registration with the Spanish Foreign Exchange Institute is necessary if the investment is to receive the established treatment for the remittance abroad of income (see section on Payments for Invisibles, above) and principal. For investments recognized as having economic and social priority, repatriation of the principal may be effected, as a rule, over a period of two years, starting two years from the time the investment is made. Other investments may be repatriated over a period of four years, starting two years from the time the investment is made.

Changes during 1959

April 10. The rate applicable to transactions through the “dollar-peseta scheme” was changed from Pts 52.00 to Pts 56.00 per US$1.

July 17. An initial par value of Pts 60.00 per US$1 was agreed with the International Monetary Fund.

July 20. The agreed par value became the effective exchange rate for all transactions, and all multiple exchange rate practices were abolished. Spain became a member of the OEEC. Subsequently, at various dates, Spain’s bilateral payments relations with most OEEC countries were placed on a convertible currency basis.

July 21. In connection with the implementation of a stabilization program, provisions were made for liberalization of imports, the establishment of an advance deposit on imports, the establishment of export taxes, and the introduction of a regime of amnesty for the repatriation of assets held abroad by residents.

July 27. An advance deposit on imports other than those under state trading was established.

July 27. A new law on foreign investment became effective. The law covers investments by foreigners or nonresident Spaniards in Spanish enterprises, except those whose activity is directly connected with the national defense or public information and, as a rule, those rendering public services. Income from investments recognized as having “economic and social priority” may be transferred freely abroad, while the transfer of income from other investments is, as a rule, limited to 6 per cent of the capital invested. Repatriation of the principal in the former case may be effected, as a rule, over a period of two years starting two years after the investment is made. The periods of time for repatriation of the latter investments are four and two years, respectively.

July 29. A list of liberalized imports was published and was made applicable to OEEC countries and their territories, the United States, Canada, and most other countries with which Spain has no bilateral payments agreements.

July 30. All retention quota arrangements under “Special Operations” were abolished.

August 5. A list of global import quotas totaling about $75 million was published and was made applicable to the same countries to which the import free list applies.

September 30. Regulations on certain aspects of the treatment of foreign investments were published.

October 23. A new trade and payments agreement with Cuba was signed.

October 23. A basic foreign exchange allocation for tourist travel, equivalent to Pts 3,000 a person annually, was established.

October 25. New rules on the functioning of the foreign exchange market were published. Authorized banks were permitted to buy and sell in this market foreign exchange in specified currencies at freely negotiated rates, within limits set by the Spanish Foreign Exchange Institute. For other currencies, the buying and selling rates would be set weekly by the Institute. The limits for the U.S. dollar were set at Pts 59.55 buying, and Pts 60.45 selling, per US$1.

November 23. An additional list of global import quotas, totaling about $65 million and applicable to the same countries as the first list, was published (see August 5, above).

December 24. Supplementary provisions to the law on foreign investment (see July 27, above) were approved. The new regulations prescribed, among other things, the form in which foreign capital could be brought in and the conditions under which shares in Spanish companies could be purchased.

Sudan

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 countries1 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 all countries other than bilateral countries 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.1

Imports and Import Payments

A wide range of goods, including such essential items as tea, grey cloth and other textiles, and raw materials for domestic industries, may be imported under an open general license, which is designed to permit imports of these goods freely from any source. However, before entering into firm contracts with foreign suppliers, importers must register such imports with the Ministry of Commerce, stating the quality, quantity, and value of the goods, and there are a few limitations, e.g., a reduction in the amount endorsed for registration in order to avoid unnecessary overstocking, or rejection of endorsement when the price of the import is considered unduly high. Goods not covered by the open general license require individual import licenses. Imports from Israel are prohibited. Exchange appropriate to the country of origin of the goods is granted for all permitted imports.

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. The proceeds of exports must be repatriated and surrendered through an authorized bank within six months after export. 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. Emigrants may transfer up to £2,000 to their new country.

Changes during 1959

March 19. The open general license was extended to include 15 additional items, consisting mostly of toilet articles and spare parts for domestic appliances.

April 5. 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 that area 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.

July 1. The open general license was extended to imports of all commodities except 114 items specified in a list. Importers of goods under the open general license were required to register with the Ministry of Commerce, stating the quality, quantity, and value of the intended import, before entering into firm contracts with foreign suppliers.

July 15. The negative list of 114 items issued on July 1 was replaced by a positive list of 298 items which could be imported under open general license from any source. The new list included certain essential goods, including tea, grey cloth and other textiles, and raw materials for domestic industries.

November 8. A trade and payments agreement was signed with the United Arab Republic (Egyptian Region).

Sweden

Exchange Rate System

The par value is Swedish Kronor 5.17321 = US$1. The Sveriges Riksbank’s official limits for the U.S. dollar are SKr 5.135 buying, and SKr 5.2125 selling, per US$1, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for externally convertible European currencies1 fluctuate between limits resulting from the dollar rate for the Swedish krona in relation to the dollar rates for the other currencies. 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 Foreign Trade Licenses or, in the case of food-stuffs, the National 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 bilateral countries 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, and exchanged into any foreign currency. They may be credited with transfers from other Convertible Accounts, with authorized payments to the convertible area by residents of Sweden, and with 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, and debited for authorized payments to residents of Sweden from residents of the country of the account holder. They may be credited with transfers from other Bilateral Accounts of the same country or from any Convertible Account, with authorized payments by residents of Sweden, and with 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.

Restricted Accounts are held mainly by Swedish emigrants. They may be used freely to cover the holder’s and his family’s living expenses in Sweden and for investment in Swedish bonds quoted on the 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

Practically all goods from OEEC countries and their associated areas, Finland, Indonesia, and Yugoslavia, as well as printed matter and some other commodities from all countries, may be imported freely. Most commodities originating and purchased in dollar area countries are also free of import restriction. With few exceptions, 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 practically all 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, and the Sterling Area countries. The equivalent of SKr 5,000 yearly for each person is granted for tourist travel to other countries,3 and any reasonable amount is granted for business and official travel.

Each person leaving Sweden may take with him freely 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.3 Nonresidents may, when leaving Sweden, export freely foreign banknotes and other means of payment brought into the country by them.

Exports and Export Proceeds

Most exports to practically all countries in the convertible area and to Brazil (but see footnote 2) are exempt from license if payment is to be received within six months after the dispatch of the commodity and is to be made in conformity with the general 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 bring in SKr 1,000 in Swedish banknotes and coins in denominations no higher than SKr 100,4 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 freely. Inheritances due to nonresidents may also be transferred. The repatriation of qther nonresident-owned capital is subject to approval, which is, however, usually granted. Emigrants may transfer abroad up to the equivalent of SKr 75,000 for each person, on special application. 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.

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.

Residents of Sweden who own foreign securities—other than those representing a direct investment—are permitted to use within six months the proceeds of the sale of these securities to invest in other foreign securities denominated in a currency of the convertible area or in Swedish kronor. Residents are also permitted to buy from and sell to other residents such foreign securities held in Sweden.

Changes during 1959

February 1. Goods on the OEEC import free list originating in OEEC countries could be imported without a license, even when the country of purchase was in the dollar area. Previously, the exemption from license had been conditional on the country of origin and the country of purchase being an OEEC country. The dollar import free list was extended by the addition of a number of products not previously covered; among these were liquid fuels and nonprecious metals. Colombia was included in the group of countries benefiting from the dollar import free list.

February 11. Edible fruits, except fresh apples and pears, were added to the dollar import free list. Fresh apples and pears could be imported until June 30, 1959 without quantitative restriction from OEEC countries, the dollar area, and other countries in the convertible area.

April 17. A number of agricultural products were added to the OEEC and dollar import free lists.

April 28. Transfers from Sweden on account of dividends and other earnings on investments, as well as payments for contractual amortization, were permitted freely, and the requirement of an affidavit was abolished. A simplified affidavit was introduced for use by nonresidents who wish to sell Swedish securities in the Swedish market.

June 2. In place of the specific exchange allowances, any reasonable amount of foreign exchange would now be granted for business and official travel to all countries.

June 10. Transfers of emigrants’ capital to the dollar area up to the equivalent of SKr 75,000 for each person were authorized, subject to special application, making the allowance the same as for emigration to other countries.

July 1. The regulations concerning transactions in foreign securities by residents were liberalized.

August 31. Spain was included in the convertible area for prescription of currency purposes.

September 15. Spain was included in the list of OEEC countries for import purposes.

November 1. Coal, coke, and certain textiles were included in the dollar import free list.

November 6. New official exchange rate limits of SKr 5.135 buying, and SKr 5.2125 selling, per US$1 were established by the Sveriges Riksbank.

December 30. It was announced that the regulations concerning exports would be liberalized as from January 1, 1960. Paper pulp, newsprint, timber, and some other commodities were included in the export free list, and the group of countries to which the list applies was extended to include, with few exceptions, all countries in the convertible area.

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 31, 1959, the free rate for the U.S. dollar was B 21.02 buying, and B 21.19 selling, 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 70 listed commodities and for most of these items licenses are not generally granted. All imports of goods originating in Mainland China are prohibited.

Payments for imports must be made by letter 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.1 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 subject to certain maximum limits.

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, including premiums on life insurance policies, 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 1959

January 17. A prohibition was placed on imports of goods originating in Mainland China.

March 27. Hessian was added to the list of goods subject to import license.

June 4. Imports of grey cotton bags were made subject to import license.

July 13. Crude oil was added to the list of goods subject to import license.

September 15. The following 12 items were made subject to import license: fresh fruits; meat, fresh or frozen; beverages containing carbon dioxide, except natural mineral water; melon seeds (not for sowing); betel nuts; attap and other similar leaves used for rolling cigarettes, cut into strips or otherwise; slippers and sandals, made chiefly of straw or with wooden soles; coconut oil, groundnut oil, and palm oil; fans made of paper or wood, woven or otherwise; toothpicks; chopsticks; and fireworks.

October 12. Premiums on life insurance policies were considered as capital transfers. However, the remittance of premiums on life insurance policies contracted before October 12, 1959 would be permitted.

November 15. Under an amendment to the Thai Revenue Code, a 15 per cent tax became payable by juristic companies or partnerships on remittances of foreign exchange in respect of profits or the crediting of an account of a person abroad with profits. However, companies that declare dividends in Thailand and pay income tax on such dividends are exempt from this tax.

Tunisia

Exchange Rate System

No par value for the Tunisian Dinar has been established with the Fund. The official value of the dinar is 2.115880 grams of fine gold, corresponding to 0.420 dinar = 1 U.S. dollar and 1 dinar = 1,175.49 French francs (=11.7549 new francs). Exchange rates for currencies other than the French franc are based on the rates in the official exchange market in Paris, to which the authorized banks have access.

Exchange Control Territory

Tunisia is one of the territories 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

Exchange control is administered by the Central Bank of Tunisia and the authorized banks. Import and export licenses are issued by the Office of the Secretary of State for Finance and Commerce, which also allocates import quotas.

Prescription of Currency

Settlements with other parts of the French Franc Area are made in the currencies of that area. Under the terms of bilateral payments agreements concluded by Tunisia, settlements with Czechoslovakia, Spain, and Yugoslavia are made in agreement dollars, with the United Arab Republic (Egyptian Region) in Egyptian pounds, with the U.S.S.R. in Tunisian dinars, and with China (Mainland) in Swiss agreement francs. Settlements with other countries outside the French Franc Area are made in accordance with the French exchange control regulations and the agreements concluded by France for the French Franc Area.

Imports and Import Payments

With a few exceptions, imports originating in France and other countries of the French Franc Area do not require import licenses unless the goods originate elsewhere. Imports from countries outside the French Franc Area are subject to individual license, except that liberalized goods valued at less than D 300, certain spare parts valued at less than D 50, and imports financed through EFAC accounts are free of license. Licenses are valid for three months and are issued automatically for products on a liberalization list applicable to imports from the OEEC countries, the Sterling Area, the United States, and Canada.

Imports of commodities not on the liberalization list are licensed either on the basis of quotas for imports from individual countries with which Tunisia has bilateral trade agreements, or on the basis of three specific import programs—one for imports from the dollar area, a second for imports from countries in the Sterling Area (excluding the United Kingdom and its dependent territories), and a third for imports from the OEEC countries (including the United Kingdom). Under the program for OEEC countries, global quotas are set for imports from those countries of certain commodities, such as butter, canned milk, cheese, cotton cloth, chemicals, and agricultural machinery. Import quotas are distributed among applicants by the Office of the Secretary of State for Finance and Commerce in proportion to their actual imports from the countries concerned. New licenses for specific imports are granted only to the extent that licenses previously obtained have actually been used. The Tunisian authorities may use any foreign exchange held in EFAC accounts that has not been utilized by Tunisian exporters, to authorize imports above or outside the import programs.

All imports must be recorded with an authorized bank. Compensation transactions may be approved in exceptional cases. Payments for imports from France and other countries of the French Franc Area are subject to prior authorization from the Central Bank of Tunisia. When applying for an authorization to acquire French francs, importers must declare that they do not have in France or in other countries of the French Franc Area financial resources which could be used to pay for their imports. The method of payment for imports from countries outside the French Franc Area is similar to that of France, if it is not regulated by the terms of Tunisia’s own bilateral payments agreements (see section on Prescription of Currency, above).

Payments for Invisibles

All payments abroad for invisibles require exchange control approval. Travelers leaving Tunisia may take with them D 20 in Tunisian banknotes and the equivalent of D 30 in banknotes of the country of destination, which may be obtained from an authorized bank. If, on the same trip, they travel to a country in the French Franc Area and to a country outside that area, they may take with them, in addition, the equivalent of D 50 in banknotes of the country of destination or transit in the French Franc Area. Nonresident travelers may also 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. All other exports of foreign banknotes are subject to license.

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. Proceeds of exports to France and the rest of the French Franc Area must be collected and surrendered in Tunisia within 3 months from shipment, and proceeds of exports to other countries, within 30 days from the date payment is due. This regulation applies whether the proceeds are in French francs or other currencies. 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 to pay certain commercial expenses and for imports of raw materials or producer goods used by him in his line of business. The percentages that may be retained in EFAC accounts are 15 per cent of the proceeds of exports paid in U.S. dollars, Canadian dollars, Mexican pesos, or dinars from a free dinar account, and 10 per cent of the proceeds of exports paid in externally convertible European currencies. Convertible currencies and externally convertible European currencies in EFAC accounts may be exchanged for any other currency.

Proceeds from Invisibles

Residents must surrender to an authorized bank any foreign exchange, other than currencies of the French Franc Area, 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 of June 4, 1957, 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 repatriation of the original capital are guaranteed. For other investments, transfers 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 less than two years from the date of investment.

Changes during 1959

January 14. All payments to other parts of the French Franc Area were made subject to the prior approval of the Central Bank of Tunisia. The proceeds of exports to other parts of the French Franc Area had to be surrendered in Tunisia within three months.

January 14. The maximum amount of Tunisian banknotes which travelers could take out was fixed at D 20.

April 14. Imports of liberalized commodities valued at less than D 200, and imports financed through EFAC accounts, were exempted from license.

May 12. It was announced that, in order to ensure fuller utilization of licenses issued, the Office of the Secretary of State for Finance and Commerce would allocate import quotas among applicants in proportion to their actual imports from the countries concerned. New licenses would be granted only to the extent that licenses previously obtained had been used.

July 17. Imports valued at less than D 300 of liberalized products (other than spare parts) and of books in Arabic or a foreign language were exempted from license.

August 20. It was announced that Tunisia was no longer a party to the French customs union, and a new tariff was partially applied.

September 5. A financial agreement and a commercial and tariff convention to regulate economic relations between Tunisia and France were signed.

October 1. The new Tunisian customs tariff came into full force.

October 20. A list of commodities liberalized for import from OEEC countries, the Sterling Area, and the dollar area was issued. Imports of spare parts requiring approval of the Tunisian Technical Services and valued at less than D 50 were exempted from license.

November 5. Law No. 59-145, governing transactions between Tunisia and other parts of the French Franc Area, was promulgated.

December 31. To give effect to the law of November 5, 1959, the Central Bank issued a detailed circular (to come into force on January 4, 1960) codifying the regulations governing settlements between Tunisia and other parts of the French Franc Area.

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. However, a surcharge or a premium, as the case may be, of LT 6.20 per US$1 is applied to all exchange transactions except the proceeds of exports of tobacco and opium, making the effective rates LT 9.00 buying, and LT 9.0252 selling, per US$1. Exchange proceeds from exports of tobacco and opium receive a premium of LT 2.80 per US$1, which yields an effective rate of LT 5.60 per US$1.

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 Reconstruction and Settlements, 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 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 with the dollar area, in currencies convertible into U.S. dollars with other countries, or in accordance with the terms of the relevant payments agreement. Turkey is a participant in the European Monetary Agreement and has clearing account arrangements with Austria, Belgium-Luxembourg, Denmark, France, Greece, Norway, Spain, and Switzerland; the accounts with Austria, Greece, and Norway are settled monthly under the European Monetary Agreement. In addition, Turkey has bilateral trade and/or payments agreements with 12 countries.1

Imports and Import Payments

All imports are subject to licenses, which are issued only to registered importers and government departments. The present import procedure classifies imports basically into three lists: (1) a liberalized list of commodities that may be imported freely; (2) an “automatic” free list of items that may be imported freely subject to certain conditions or ceilings; and (3) a list of global quotas established for specified commodities and divided into subquotas for the European Monetary Agreement and dollar countries and the bilateral agreement countries. These subquotas are further divided into quotas for importers and quotas for industrialists, the latter designed to enable industrialists to meet their requirements by importing directly. Licenses for commodities subject to global quotas are issued freely within those quotas, but any one importer may not obtain a license for goods valued at more than 15 per cent of the quota (this restriction does not apply to imports from bilateral agreement countries).

In addition to the three lists of imports described above, licenses are granted for certain products that may be imported on credit and for certain products that may be imported by using the importer’s own foreign exchange held abroad.

An advance deposit of 10 per cent of the value of the import is required for all imports except those on the liberalized and the “automatic” free lists and imports under the industrialists’ quotas. The deposit must be made at the time of applying for the import license and is refunded at the time the import is paid for.

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. Travelers are permitted to export LT 200 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 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 currencies and externally convertible European 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 tobacco and opium receive a premium of LT 2.80 per US$1; the proceeds of 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. Travelers are permitted to import LT 200 in Turkish banknotes and coins.

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 nonresident interests are involved.

Changes during 1959

February 17. An import program of $151 million was announced for the first quarter of 1959. Imports from bilateral agreement countries were included in the global quotas. The advance deposit was lowered from 20 per cent to 15 per cent.

May 10. The effective exchange rate applicable to the proceeds of exports of chromium was changed from LT 4.90 per US$1 to LT 9.00 per US$1.

June 6. The Minister of Reconstruction and Settlements was included in the Interministerial Coordination Committee.

July 29. The bilateral payments agreement with Spain was terminated.

July 31. The bilateral payments agreement with Japan was terminated.

August 3. An import program of $240 million to cover the period until the end of 1959 was announced. The lists of commodities that could be imported were expanded and liberalization was substantially extended. The advance deposit was lowered from 15 per cent to 10 per cent, and was not required for imports on the liberalized list or the “automatic” free list, or for those included in the industrialists’ quotas.

August 15. The system of premiums on export proceeds was modified. Tobacco (which had received a premium of LT 2.10 per US$1) and opium were granted a premium of LT 2.80 per US$1, making an effective rate of LT 5.60 per US$1. All other exports were given a premium of LT 6.20 per US$1, making an effective rate of LT 9.00 per US$1.

October 21. The amount of Turkish currency that travelers are permitted to bring in or take out was increased to LT 200.

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. The rates for the U.S. dollar as at December 31, 1959 were US$2.8050 buying, and US$2.7875 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

All approved payments to and receipts from nonresidents must be effected in accordance with the methods prescribed by the South African Treasury: i.e., for settlements with residents of the Sterling Area, in any Sterling Area currency; for settlements with residents of other countries, in sterling or South African pounds to or from an External Account or in any specified currency, or—for outgoing payments only—in any other non-Sterling Area currency.

Nonresident Accounts

Nonresident accounts are the accounts of residents of countries outside the Union of South Africa, South West Africa, Basutoland, Swaziland, and Bechuanaland. They are divided into two categories—Nonresident Sterling Area Accounts, which are held by residents of other Sterling Area countries, and External Accounts, which are held by residents of countries 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 of goods subject to import license must be registered with the Director of Imports and Exports. (Approximately 25 per cent of imports are free of license, including all goods grown, produced, or manufactured in the Federation of Rhodesia and Nyasaland.) Import licenses are valid for imports from any country.

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 certain others, such as commercial vehicles and trucks, licenses are issued on the basis of replacement for retail sales. Licenses for other items, mainly consumer goods, are subject to annual quotas allocated to individual importers, usually based on the type and volume of business done. In the distribution of quotas there are two groups for which the quotas are decided separately: Group A comprises some 50 commodities, mainly consumer goods; the quota issue for these goods in 1959 was 90 per cent of the 1957 quota issue, but additional issues were made where justified by turnover. Group B comprises “general merchandise” not covered in any of the other lists. Import quotas for “general merchandise” are expressed as percentages of basic quotas which, in most cases, are based on the type and volume of business done. The allocation for 1959 was 50 per cent of the basic quotas. However, basic quotas are also established for new and established business undertakings after one year’s trading, and adjustments are made to increase them where such quotas were low in relation to the turnover of the firms. For 1960, the consumer goods falling under Group A are accorded the same treatment as raw materials (see above), and new firms intending to trade receive an initial import quota on commencing business. Specific licenses are required for imports of built-up motorcars, whether new or used, costing more than £SA 800 f.o.b. when new, juke boxes, pin tables, novelty tables, and amusement machines, and certain books and periodicals (comics, science fiction, detective magazines, etc.), and their import is virtually prohibited.

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, South West Africa, Basutoland, Swaziland, and Bechuanaland) 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 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.1

Exports and Export Proceeds

All goods subject to export control are assigned a code letter. 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 overexportation; 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. There are no limitations on the import of foreign or domestic banknotes.

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 shares2 quoted on the London and South African stock exchanges. All other transfers of capital by residents of South Africa 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 1959

January 1. Allocations for imports subject to annual quotas came into effect: for consumer goods included in Group A, the allocations were equal to 50 per cent of such imports for 1958; for goods in Group B (“general merchandise”), allocations were equal to 25 per cent of the assessment basis.

June 1. Allocations for Group A imports were increased to a total of 75 per cent of the 1958 quotas. Allocations for Group B imports were increased from 25 per cent to 40 per cent of the assessment basis.

July 16. Revised regulations were circulated to the authorized banks giving them additional authority and relaxing certain restrictions. The most important changes were as follows: (1) The advance payment permitted for imports of specially manufactured machinery and equipment was increased from 30 per cent to 40 per cent. (2) The authorized banks were permitted to make foreign currency payments on a cash-with-order basis to cover the cost of permissible imports by private individuals up to £SA 100. (3) The open authority permitting private individuals to pay for imports of medical preparations and herbal remedies was increased to £SA 100 a year for each person. (4) The authorized banks were permitted to provide foreign exchange to pay for imports of postage stamps for philatelic purposes up to £SA 50 a year for each person. (5) The emigrants’ settling-in allowance was increased from £SA 5,000 to £SA 10,000 for a family unit. (6) Authorized dealers were permitted to transfer to beneficiaries permanently resident outside South Africa the full proceeds of legacies or distributions from estates due and payable to such persons on and after January 1, 1959 under wills or intestacies of persons who at the time of their death were regarded as residents of South Africa. (7) The authorized banks were permitted to allow the transfer abroad of directors’ fees up to £SA 1,000 a year for any one director. (8) The allowance for shipboard expenses by travelers was increased from £SA 2 a day to £SA 4 a day for each adult. (9) Exchange for business visits to any country outside South Africa was permitted up to £SA 15 a day, for up to 60 days, for each person. (Previously, this limit had applied to business visits to the dollar area, only £SA 12/10/- a day being allowed for business visits to other countries.) (10) The authorized banks were permitted to grant special exchange allotments to persons of executive and managerial rank going overseas solely for business purposes. (11) The exchange allowance for students going overseas and accompanied by their wives was increased from £SA 150 to £SA 200 a month. (12) The authorized banks could permit residents to remit abroad amounts not exceeding £SA 100 in respect of any one family unit to cover expenses directly connected with the cost of conveying such persons to South Africa. (13) The authorized banks were permitted to provide forward exchange cover for transactions in invisibles.

July 24. A further increase was made in allocations for Group A imports, bringing the total allocation of exchange for imports in this group to the same as that in 1958.

August 7. A further quota issue of 10 per cent was made for imports of Group B goods, bringing the total allocation of exchange in this category to the same as that in 1958.

United Arab Republic: Egyptian Region1

Exchange Rate System

The par value is Egyptian Pound 1 = US$2.87156. Commercial banks’ rates as at January 5, 1960 were US$2.8660 buying, and US$2.8375 selling, per LE 1. These rates (or their equivalents in other currencies) apply to a few exports, a few invisibles, including Suez Canal dues, and all transactions in bilateral agreement currencies. A variable premium, which was 20.48 per cent on January 5, 1960, applies to convertible currencies2 received from exports of cotton and silk in various forms. Most other export proceeds in convertible currencies receive a premium of 17.5 per cent. Proceeds in convertible currencies from invisibles (with certain exceptions) receive a premium of 27.5 per cent. A “premium” of 20 per cent is payable by the remittor on payments in convertible currencies for all imports and most invisibles. The premiums are calculated on the Egyptian pound at the par value rate (see Table of Exchange Rates, below). A tax of 10 per cent is charged in most cases on exchange allocated for travel and for remittances 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 instructions of the Director of Exchange Operations, by the Central Exchange Control attached to the National Bank of Egypt. An Export Board controls exports. An Import Control Office is responsible for issuing import licenses.

Prescription of Currency

Payments to countries with which the Egyptian Region has bilateral payments agreements are made according to the terms of those agreements.3 Payments to non-agreement countries whose currencies are convertible may be made either in convertible currencies, or in Egyptian pounds to the credit of an ordinary nonresident account related to the country concerned (see section on Nonresident Accounts, below). Payments to non-agreement countries whose currencies are not convertible may be made either in the currency of the country concerned, or in Egyptian pounds to the credit of an ordinary nonresident account related to the country concerned.

Proceeds from exports to countries with which the Egyptian Region has bilateral payments agreements3 may be received in convertible currencies, or in accordance with the terms of the relevant agreement. Receipts from non-agreement countries whose currencies are convertible must be obtained either in convertible currencies, or in Egyptian pounds from an ordinary nonresident account related to the country concerned. Receipts from non-agreement countries whose currencies are not convertible must be obtained either in convertible currencies or “acceptable” currencies,4 or in Egyptian pounds from an ordinary nonresident account.

Suez Canal dues must be paid in Egyptian pounds to the debit of a Shipping Account No. 1. Balances on this type of account may be created by selling any of the following currencies to the National Bank or to an authorized bank in Egypt: Belgian francs, Canadian dollars, Danish kroner, deutsche mark, Italian lire, Netherlands guilders, Norwegian kroner, pounds sterling, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars. Ships of Indian domicile may pay Canal dues in any of these currencies or in Indian rupees.

Nonresident Accounts

The main categories of nonresident account are as follows: Ordinary (or so-called “free”) nonresident accounts are designated according to the country or monetary area in which the account holder is normally resident. Special nonresident accounts (e.g., “Collector Accounts”) are established and operated in accordance with bilateral payments arrangements. Blocked accounts are credited with any payment to a nonresident not remittable under the exchange control regulations. 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 nonresident account. Export Accounts, which resulted from the functioning of the Export Account system, are held by certain Egyptian authorized banks or by residents of countries with which the Egyptian Region does not have bilateral payments agreements specifying settlements in Egyptian pounds (see footnote 3). With effect from September 1, 1959, new credits to these accounts are no longer permitted, and the accounts are in process of liquidation. All transfers abroad to the debit of nonresident accounts require the prior approval of the Central Exchange Control.

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. 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 the surcharge.

An import budget is prepared by the Central Exchange Control on a six months’ basis, and is communicated to the Import Control Office, which allocates and distributes import licenses. In the allocations for imports, a distinction is made between convertible currencies and bilateral agreement currencies; for the latter, the amount available is indicated separately for each agreement currency. Importers are, in general, required to furnish documentation regarding their imports in previous years, as a basis for future allocations. As a rule, licenses are issued freely for imports of essential goods and raw materials and on a somewhat restrictive basis for semiessential goods. There is a fairly extensive list of prohibited imports, mainly luxury goods and goods manufactured domestically, and all imports from Israel are prohibited.

Payments for imports in convertible currencies are subject to a “premium” of 20 per cent. Payments to countries with which the Egyptian Region has bilateral payments agreements are made at the commercial banks’ rate, either in Egyptian pounds or in the other currency specified in the agreement (see section on Prescription of Currency, above).

Payments for Invisibles

Banks are authorized to effect payments for certain invisibles; payments for other invisibles require the prior approval of the Central Exchange Control. Payments in convertible currencies (see footnote 2) for invisibles are subject to a “premium” of 20 per cent, with certain exceptions, such as insurance payments, government pensions, and cost of tickets for travel abroad. 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 residing permanently abroad is subject to a 10 per cent tax; however, remittances of diplomats, students, certain officials, and some 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.

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.

The proceeds of exports to countries with which the Egyptian Region has bilateral payments agreements requiring settlements in currencies other than the Egyptian pound (see footnote 3) are surrendered at the commercial banks’ rate, as are also the proceeds of all exports of petroleum, petroleum products, cement, rice, potatoes, groundnuts, flowers, and vegetables,5 and all export proceeds received in inconvertible currencies. Export proceeds in convertible currencies receive, according to the commodity exported, a variable premium (20.48 per cent on January 5, 1960), which is announced weekly, for the proceeds of exports of raw cotton, cotton textiles, silk yarn, and silk textiles, or a fixed premium of 17.5 per cent for the proceeds of other exports.

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 commercial banks’ rate all proceeds in foreign currencies, within one month from the date of their collection abroad. Proceeds in convertible currencies, however, receive a premium of 27.5 per cent, except for bank charges and commissions, amounts received to cover expenses of ships and planes in Egypt, amounts received for the credit of Shipping Accounts, the surplus of Egyptian shipping and airline companies abroad, insurance and reinsurance operations, and amounts due from provident funds. Suez Canal dues must be received in Egyptian pounds from Shipping Accounts No. 1, which may be fed only with sales of specified currencies at the commercial banks’ rate (see section on Prescription of Currency, above).

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 (see section on Nonresident Accounts, above). Proceeds from sales of securities held under “nonresident dossier” are credited to blocked accounts. Transfers of securities between residents 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.

Table of Exchange Rates (as at January 5, 1960)(U.S. dollars per Egyptian pound)
BuyingSelling
2.866(Commercial Banks’ Rate)2.8375(Commercial Banks’ Rate)
Receipts from a few specified exports and invisibles. Suez Canal dues. All receipts in bilateral agreement currencies and inconvertible currencies.Payments for a few invisibles. All payments in bilateral agreement currencies.6
2.439($2.866 plus 17.5% Premium on Par Value Rate)
Receipts in convertible currencies from exports, except cotton and silk and items not entitled to a premium.
2.379($2366 plus 20.48% Premium on Par Value Rate)2.364($2.8375 less 20% “Premium” on Par Value Rate)
Receipts in convertible currencies from exports of cotton and silk.Payments in convertible currencies for all imports and other invisibles.6
2.248($2.866 plus 27.5% Premium on Par Value Rate)
Receipts in convertible currencies from invisibles.

Changes during 1959

January 12. A bilateral trade and payments agreement with North Korea came into effect, providing for payments to be made through clearing accounts in Egyptian pounds.

February 14. A bilateral trade and payments agreement with North Viet-Nam came into effect, providing for payments to be made through clearing accounts in Egyptian pounds.

February 21. It was announced that, in accordance with a payments agreement recently concluded with France, payments between the Egyptian Region and the French Franc Area, except Morocco and Tunisia, would be made in French francs through nonresident Egyptian accounts maintained by authorized banks in the Egyptian Region with authorized banks in France.

April 15. A new bilateral payments agreement with Hungary came into effect, providing for payments through an account denominated in pounds sterling and maintained with the National Bank of Egypt.

September 1. The Export Account system was abolished and was replaced by a new exchange system in which premiums on the Egyptian pound are applied to receipts and payments in convertible currencies. Proceeds in convertible currencies from exports of raw cotton and a few other items would receive a variable premium, while most other export proceeds in convertible currencies would receive a premium of 17.5 per cent. Most receipts in convertible currencies from invisibles would receive a premium of 27.5 per cent. Payments in convertible currencies for all imports and most invisibles would be subject to a “premium” of 27.5 per cent. The import licensing system was also revised. Barter transactions were abolished and “investment account imports”—imports for which no financial transfer was involved—were virtually eliminated.

September 28. New payments arrangements with Indonesia came into effect, providing for payments in sterling or other convertible currencies.

October 22. A new bilateral, payments agreement with Czechoslovakia came into effect, providing for payments through clearing accounts denominated in Egyptian pounds and maintained with the respective central banks.

November 1. It was announced that, in accordance with a trade and payments agreement concluded with Ethiopia on October 20, payments between the Egyptian Region and Ethiopia would be made in convertible currencies. In practice, however, payments would be made in pounds sterling through centralized accounts.

November 9. In accordance with a trade and payments agreement recently concluded with the Sudan, payments between the Egyptian Region and the Sudan would be made through centralized accounts maintained in Egyptian pounds.

December 22. It was announced that, in accordance with a payments agreement recently concluded with Morocco, payments between the Egyptian Region and Morocco would be made through clearing accounts maintained in U.S. dollars as the unit of account.

Note.—On January 5, 1960, the “premium” applicable to payments in convertible currencies for all imports and most invisibles was reduced from 27.5 per cent to 20 per cent. By this date, the premium payable on the proceeds in convertible currencies from exports of raw cotton, etc., had been reduced by several stages to 20.48 per cent.

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, 1959, 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 countries except those with which the Syrian Region has bilateral payments agreements1 be obtained in the currency of the country to which the goods are exported (if it is an “acceptable” currency)2 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 granted freely, but there is a tax of 2 per cent on the issue of import licenses, except for government imports and imports of basic foods, most raw materials and equipment, and petroleum and petroleum products. There is a list of prohibited items and a list of goods for which import licensing has been suspended, and all imports from Israel are prohibited. Exchange for most licensed imports may be obtained at the controlled free market rate. Trade and payments relations with the Egyptian Region are covered by special arrangements; most goods may move freely between the two Regions.

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 major exports to countries other than those with which there are bilateral payments agreements (see footnote 1) have to be obtained in “acceptable” currencies (see footnote 2), 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 1959

March 4. It was stipulated that, with a few exceptions, import licenses would not be renewed unless the goods were shipped prior to the expiration date of the license, and in no case would such license be renewed more than once.

June 15. The validity period of import licenses was fixed at two months, but licenses for specified imports would be valid for a longer period.

July 16. A 2 per cent tax was levied on the issue of new import licenses and a tax of 0.2 per cent on the renewal of import licenses; however, government imports and imports of basic food products, most raw materials and equipment, and petroleum and petroleum products were exempted from these taxes. A uniform fee of LS 10 was levied on export licenses.

August 8. The validity period of import licenses was fixed at four months, regardless of the origin of the goods.

August 19. The regulations issued on August 27, 1958, that certain goods could be imported only from specified countries or areas, were revoked.

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. Market rates for other convertible or externally convertible currencies are free to move within a range of rates resulting from the official dollar limits of the United Kingdom in relation to the dollar limits of the other countries concerned. 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, 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 commercial 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 by residents of any territory of the Sterling Area, 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 most goods are permitted freely, under an Open General License, from all sources other than Japan and the “Eastern Area.”4 Twenty-six items imported from various other countries are subject to restriction; of these, 12 are specifically restricted when imported from the dollar area. Restricted imports from Japan comprise those goods listed in Schedule I, Parts I and II, of the Open General License; the greater proportion are consumer goods. Restricted imports from the “Eastern Area” consist of goods not listed in Schedule II of the Open General License.

Permission to import either under the Open General License or by some other form of license carries with it an entitlement to obtain foreign exchange to pay for the import. Exchange control forms are not required for payments to residents of the Sterling Area, or for payments for imports not exceeding £500 to other countries.

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. 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 to the United States in respect of films are covered by a special agreement.5 Applications for licenses for noncontractual payments are considered on their merits and some are subject to monetary limitations.

An allowance of up to £250 in foreign exchange is made available automatically to travelers, who may obtain additional funds upon authorization by the Bank of England. Not more than £50 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 mnd 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, and all exports to Mainland China, 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 profits thereon.

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.6 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 £250 or, if the traveler is a visitor, the amount he brought into the United Kingdom in foreign notes.

Changes during 1959

January 15. Authorized banks were given permission to export sterling notes to nonresidents against payment in sterling from an External Account or in 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 as is 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. 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 would also be permitted to 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, and amended in May 1957, were removed. The Egyptian No. 1 and No. 2 Accounts were formally designated External Accounts.

March 4. The requirement would no longer apply that sterling bearer securities for which facilities are available for registration in the United Kingdom of both principal and interest or dividends should be so registered immediately after import.

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 were then quoted by the Bank of England, together with the Canadian dollar (see footnote 3). 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 freely exchangeable for sterling.

March 20. Two steps were taken to allow more freedom to the London foreign exchange and bullion markets. Permission was given for transactions on account of invisibles to be covered in the forward exchange market with a limit of six months. In the gold market, dealers would no longer be required to obtain Bank of England permission for forward transactions.

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, who may take out any amount) was increased from £10 to £20.

May 28. It was announced that, effective June 8, liberalization would be extended to a wide range of imports from the dollar area, as follows: (1) Restrictions would be removed on imports of many consumer goods, including foodstuffs, from the dollar area. (2) Restrictions would be removed entirely on commodities in 8 categories, at present restricted, from both Western Europe and the dollar area. (3) Global quotas, at present limited to imports from Western Europe and certain non-dollar countries, would be extended to the dollar area in respect of goods in 14 categories (for most commodities, effective January 1, 1960) and most of these quotas would be enlarged. (4) Annual quotas were increased for imports from the dollar area of motor vehicles and canned and dried fruits.

June 8. The Open General License (No. 1) of June 19, 1958 and the Open General License (No. 2) of July 22, 1958 were replaced by a new Open General License, to give effect to the liberalization of dollar imports announced on May 28.

June 23. Iraq withdrew from the Sterling Area and all sterling accounts of persons, firms, companies, and banks resident in Iraq were designated External Accounts.

July 1. The limit below which payments for imports to countries outside the Sterling Area may be made without an exchange control form was raised from £250 to £500.

November 1. Authorized dealers were permitted to make available to resident travelers foreign exchange up to £250 a year. (Previously, the basic allowance had been £100 a year, except for travel to Denmark, Norway, and Sweden, for which “any reasonable amount” had been provided.) It was also announced that if an additional amount was required, it would be authorized by the Bank of England on application.

November 5. Travelers were permitted to take out of the United Kingdom foreign currency notes up to the equivalent of £250, instead of £100 as previously. Visitors would continue to receive permission to take out the amounts they brought into the United Kingdom in foreign currency notes. There was also an increase, from £20 to £50, in 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, who may take out any amount).

November 9. Controls were removed on a wide range of imports from all sources, including the dollar area. The effect of this was to eliminate restrictions on imports from all sources other than Japan and the “Eastern Area” (see footnote 4), with the exception of 26 items, of which 12 were goods specifically controlled only when imported from the dollar area.

Note.—From January 1, 1960, the Bank of England ceased to quote official rates for currencies other than the U.S. dollar. However, the list of specified currencies (see footnote 3) remained unchanged.

United States

Exchange Rate System

The par value of the United States Dollar is 15521 grains of gold 910 fine, which is equivalent to US$35 per fine ounce, at which price (with allowance for handling charges and expenses) the Treasury buys gold from and sells gold to governments, central banks, and other official institutions of other countries. There are no restrictions on foreign payments, except on transactions involving the authorities or nationals of Mainland China or North Korea. The United States notified the Fund on December 10, 1946 that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Controls

The Treasury Department deals with license applications for transactions involving the authorities or nationals of Mainland China or North Korea. Licenses in the form of “Certificates of Intention” for imports of lead and zinc are issued by the Bureau of Customs of the Treasury Department. Licenses required for agricultural and dairy products placed under import quota are issued by the Department of Agriculture. For items subject to export control (see section on Exports and Export Proceeds, below), the Department of Commerce is, in general, the responsible authority.

Imports and Import Payments

Payments and transfers abroad may be made freely, with the exception of payments to or for the account of the authorities or nationals of Mainland China or North Korea, which are permitted only under license. Imports of merchandise known or believed to be of Chinese Communist or North Korean origin are subject to license. Import quotas are allocated on a country-of-origin basis for lead and zinc and for certain dairy and agricultural products, including sugar from most producing countries. Special import quotas apply to cordage and to sugar from the Philippines under the Philippine Trade Act of 1946 as revised. Global quotas are imposed on imports of crude petroleum and petroleum products, except those imported overland (i.e., by pipeline, motor carrier, or rail).

Exports and Export Proceeds

Exports to countries in the European Soviet bloc, with the exception of designated nonstrategic goods, and all exports to Mainland China, North Korea, and North Viet-Nam are subject to license. In general, exports of strategic materials to other countries also require licenses. The proceeds of exports are not subject to exchange control.

Payments for and Proceeds from Invisibles

These are not restricted, except where they involve Mainland China or North Korea.

Capital

Incoming or outgoing capital payments by residents or nonresidents are not subject to exchange control, except to the extent that the provisions referred to above regarding Mainland China or North Korea are involved.

Changes during 1959

March 11. Quota restrictions were imposed on imports of crude petroleum and petroleum products.

June 1. Crude petroleum and petroleum products imported overland (i.e., by pipeline, motor carrier, or rail) were exempted from quota restrictions.

August 4. Quota restrictions on imports of rye and rye products, which had expired on June 30, 1959, were reimposed.

Uruguay1

Exchange Rate System

No par value for the Uruguayan Peso has been established with the Fund. The value of the peso is established by law as 0.136719 gram of gold, 900/1,000 fine, which is equivalent to Ur$6.4999 per US$1. No transactions take place at this rate. Exchange transactions take place in a free market with a fluctuating rate. However, most exports are subject to taxes (detraciones) and certain permitted imports are subject to advance deposits. The rate in the free market on January 29, 1960 was Ur$11.03 buying, and Ur$11.06 selling, per US$1.

Administration of Control

The exchange control system is operated by the Bank of the Republic. Exchange transactions related to imports, exports, and some invisibles are carried out through the authorized banks. Applications for the registration of imports are considered by the Bank of the Republic.

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, Bolivia, Brazil, Bulgaria, Czechoslovakia, Finland, France, Eastern 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.2 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 four categories: for goods in one category, no advance deposit is required; for goods in the other three categories, an advance deposit of 50, 100, or 150 per cent is required, the percentage depending on the category concerned. The import of commodities not specifically included in any one of these four categories is prohibited. Imports for which advance deposits are required are subject to prior registration. The deposits must be made with the Bank of the Republic at the time registration is requested; they are refunded 180 days later. Acceptance of the registration entitles the importer to complete the import transaction. Although the Government is empowered to impose surcharges of up to 300 per cent on imports, no such taxes had been imposed as at January 29, 1960.

Payments for Invisibles

Payments for invisibles may be made freely through the fluctuating free market. There are no limitations on the export of foreign or domestic banknotes.

Exports and Export Proceeds

The conclusion of an exchange contract is a prerequisite for most exports. The proceeds of practically all exports are subject to taxes (detraciones) withheld by the Bank of the Republic. For some commodities, the tax is stipulated in pesos by unit of export commodity; but it may not be more than 50 per cent or less than 5 per cent of the peso proceeds of the export, except that for exports of greasy wool the stipulated minimum is 25 per cent. These percentages may be adjusted at 60-day intervals. The exchange proceeds of exports subject to detraciones must be surrendered to the Bank of the Republic, through banks authorized to deal in foreign exchange, not later than 10 working days after shipment has been authorized.

Proceeds from Invisibles

All proceeds from invisibles may be held, utilized, or sold in the fluctuating free 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 market.

Changes during 1959

January 13. New regulations were issued concerning the temporary import of goods to be used by local industries to manufacture goods for export. Such raw materials could now be imported with exchange obtained in the free financial market. Interested firms had to register with the Ministry of Industry and Labor and deposit 5 per cent of the value of each import transaction with the Bank of the Republic. Deposits could be made in the form of national, municipal, or government mortgage bonds at face value. Exchange proceeds from exports of products manufactured with these specific import materials had to be surrendered to the Bank of the Republic at a rate specified by it and in a proportion corresponding to the amount of domestically produced materials incorporated in the finished product. The Bank reserved to itself the right to purchase the remaining exchange at the free financial market rate.

March 19. The emergency import regime introduced on November 28, 1957 was extended for the fifth time, until June 30, 1959.

April 14. Law No. 8729 of May 29, 1931, which had been in abeyance for some years, was reinstated. Under the terms of this law, the Bank of the Republic is charged with the control of foreign exchange operations and of transfers of foreign capital; commercial banks, exchange brokers, and other firms authorized to deal in exchange are required to hold at the disposal of the Bank of the Republic detailed records of all exchange operations. Any transactions not related to normal and legal economic and financial activities, and operations considered to be of a speculative nature or those tending to affect the value of the currency, are prohibited.

April 22. The exchange surcharges applying to imports in Categories II and III were doubled. Whisky and cigarettes were transferred from Category II to Category III, thus increasing the surcharge on these items.

April 23. Circular No. 64/29, issued in connection with Law No. 8729 (see April 14, above), prohibited forward exchange transactions not related to import or export transactions.

April 25. The exchange control regulations were modified to permit the import of larger quantities of essential goods through the free financial market. Quantitative restrictions would still be imposed by the Bank of the Republic, and decisions on the goods to be imported would still be made by the Export and Import Control Board. Since exchange rates could be modified only by law, and not by decree, the existing rates remained unaltered; but the decree listed the goods which could be imported at these rates, as follows: certain newspaper requirements, at Ur$1.519 per US$1; certain agricultural machinery, spare parts exclusively for use in the sugar industry, raw materials for the manufacture of fertilizers, sugar beet seed, seed potatoes, fodder seeds, coke and coal, diesel oil, fuel oil, gas oil, crude petroleum, petrol, certain timber, raw cotton, rayon fibers, jute and hessian, raw tobacco, raw sugar, raw coffee beans, yerba maté, iron in various forms, aluminum ingots, copper and bronze bars, raw rubber, certain cellulose and paper pulp, certain tanning materials, rayon or cotton cord for tires, certain drugs, chemicals, and surgical equipment, at Ur$4.11 per US$1 (the free commercial market rate).

June. Circular No. 44 of the Export and Import Control Board requested industrialists to present a statement of their consumption of commodities in import Categories II and III during the past two years, to provide a basis for the issue of further emergency quotas. France, Greece, and the U.S.S.R. were removed from the list of Group A countries.

June. Circular No. 49 of the Export and Import Control Board provided for the import of US$1.7 million worth of medicinal items, of which approximately US$1.3 million was earmarked for import through the free commercial market and the remainder through the free financial market. Imports through the free commercial market were in turn subdivided into US$662,000 for Group A countries and US$605,000 for Group B countries; imports through the free financial market would be permitted from any country.

June 30. The regulations concerning export proceeds were changed to provide that proceeds of all exports except certain major commodities—such as wool, meat, wheat, hides, and textiles—could now be sold at the free financial market rate, rather than at the free commercial market rate as previously. Export proceeds had to be sold within seven days of shipment, either to the Bank of the Republic or to the commercial banks, and such exchange could be used by the banks only to provide local importers with the necessary exchange to import Category I (most essential) goods. Exporters who did not negotiate their proceeds within seven days would be compelled to sell them to the Bank of the Republic at the rate of Ur$4.11 per US$1.

July 9. The emergency import regime of November 28, 1957 was allowed to expire, and the National Government Council instructed the Bank of the Republic to inform the Export and Import Control Board of the exchange available for imports during the second half of 1959 of goods in Category I and raw materials and essential manufactured goods in Categories II and III.

July 28. It was announced that 42 per cent of exchange proceeds obtained from certain meat exports could be negotiated in the free financial market and the remainder in the free commercial market. The products listed were frozen, chilled, continental B & F, and preserved beef, canned meats, meat extracts, hides, and by-products of the canning industry.

July 28. The Export and Import Control Board granted import permits for the second half of 1959 for US$306,529 worth of raw materials to be imported from Group A countries, and US$340,000 worth of cotton fibers and US$536,724 worth of raw materials to be imported from Group B countries.

August 18. It was announced that 42 per cent of the exchange proceeds from exports of linseed oil could be sold at the free financial market rate and the remainder at the free commercial market rate.

September. It was announced that 66 per cent of the exchange proceeds from exports of processed rice could be sold at the free financial market rate, that the entire proceeds from exports of salted hides could be sold at the free commercial market rate, and that the entire proceeds from exports of worsted fabrics, woolen fabrics, and certain cowhides could be sold at the free financial market rate.

September 29. Imports of farm equipment and various other essential items were authorized at the free financial market rate; included were spare parts for tractors, barbed wire, galvanized iron wire, galvanized steel or imitation wire, spare parts for agricultural machinery, industrial wire, refrigeration gases, and vegetable seeds. Importers would have to prove that they had the necessary funds to finance their purchases and the goods had to be imported within 150 days from the date of application for the permit.

November. A decree of the Executive Branch authorized the Bank of the Republic to put at the disposal of the Export and Import Control Board a quota of US$3 million at the free financial market rate for imports of goods in Categories II and III. The surcharge for imports in Category II was increased to Ur$8 per US$1, and that for imports in Category III, to Ur$10 per US$1.

December 17. A new Exchange and Monetary Reform Law was promulgated. The official exchange rates were abolished, and the peso would be allowed to find its own level through the free interplay of supply and demand. The parity of the peso was changed from 0.585018 gram to 0.136719 gram of fine gold. All imports were freed, but the authorities were empowered to levy a surcharge of up to 300 per cent on the c.i.f. value of imports of nonessential goods, or to prohibit their import for a six-month period, and to require advance deposits for imports. The Government was also authorized to levy export retention taxes ranging from 25 to 50 per cent for greasy wool and from 5 to 50 per cent for other wool products, peanuts, linseed, sunflower seed, and their oils, oilseed meals, wheat and by-products, frozen, chilled, and canned beef, and hides. Foreign exchange earned from most exports could be negotiated only through the Bank of the Republic or authorized agents. The proceeds of all retention taxes and import surcharges were to be used for lowering the domestic price of certain basic consumption goods and essential services, for the protection and assistance of certain basic industries, for undertaking certain public works and highway construction, and to compensate for revenue loses resulting from reductions in port fees and from certain tax exemptions.

December 22. Under the Exchange and Monetary Reform Law, imports were permitted, free of surcharges and advance deposits, of a long list of raw materials and essential semimanufactured goods. Included in the list were timber, iron, steel, nonferrous metals, tin-plate, wire, rubber, jute and hessian, cotton, rayon, coke, coal, diesel oil, fuel oil, gas oil, kerosene, naptha, crude oil, heavy chemicals, materials for the manufacture of fertilizers and pesticides, antibiotics, basic medical products, books, magazines, farm machinery, tractors, seeds, bananas, coffee, sugar, salt, newsprint, paper, ink, and tanning materials.

December 30. A decree was issued giving a revised list of the commodities that could be imported free of surcharges and advance deposits, and also listing the goods that could be imported free of surcharge but subject to an advance deposit of 50, 100, or 150 per cent.

Note.—On January 13, 1960, a retention tax of 5 per cent ad valorem was imposed on all exports of beef for the next 60 days.

Venezuela

Exchange Rate System

The par value is Venezuelan Bolívares 3.35 = US$1. An official selling rate of Bs 3.35 per US$1 applies to all sales of exchange except those for government payments. The corresponding buying rate fluctuates around Bs 3.33 per US$1 and applies to all purchases of exchange except those from the petroleum companies and, under certain conditions, from exporters of cacao and coffee. A multiple exchange rate system operates, comprising preferential rates for the proceeds of coffee and cacao exports and special buying rates applied to purchases of exchange from the petroleum companies. (See Table of Exchange Rates, below.) There is no system of payment licenses, and only a few import restrictions are maintained, principally for protective purposes.

Administration of Control

Most of the few import and export licenses required are issued by the Office of Foreign Commerce of the Ministry of Development; the Ministry of Agriculture licenses some imports. Under the terms of a contract with the Government, the Central Bank of Venezuela has the responsibility for ensuring that the special exchange rates are applied to the appropriate transactions.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

Some items are subject to import license and import quotas are applied to a few commodities for protective purposes. Licenses for some products are issued on the condition that the importer has purchased domestic products equal to a prescribed percentage of the amount imported. The importation of certain goods is reserved to the Government. No restrictions are imposed on payments for imports.

Exports and Export Proceeds

There are no limitations on exports, but the export of strategic materials to certain countries is prohibited and export licenses for a few products essential to the domestic economy must be obtained from the Ministry of Development. The export of gold requires an export license issued by the Ministry of Finance. The petroleum companies must surrender export proceeds to the extent of their local currency requirements at a rate of Bs 3.09 per US$1; a rate of Bs 3.046259 per US$1 is applied to exchange surrendered by them in excess of the Central Bank’s sales of exchange to domestic buyers during any one year. The proceeds of exports other than petroleum are sold at the Bs 3.33 rate; but if the world prices for cacao and coffee are below certain levels, a proportion of the proceeds of exports of cacao, unwashed coffee, and certain processed products containing cacao may be sold at a rate of Bs 4.25, and a proportion of the proceeds of exports of washed coffee and certain processed products containing coffee may be sold at a rate of Bs 4.80 per US$1.

Payments for and Proceeds from Invisibles

Payments for invisibles may be made freely at the Bs 3.35 rate. Exchange receipts from invisibles are freely disposable or may be sold at the Bs 3.33 rate.

Capital

Payments for transfers of capital are made at the Bs 3.35 rate. Exchange receipts from capital are freely disposable or may be sold at the Bs 3.33 rate.

Table of Exchange Rates (as at December 31, 1959)(bolívares per U.S. dollar)
BuyingSelling
3.046259
Local currency requirements of petroleum companies in excess of the Central Bank’s foreign exchange sales during the given year.
3.09
Local currency requirements of petroleum companies up to the limits of the Central Bank’s foreign exchange sales during the given year.
3.335
Government payments for obligations contracted after March 18, 1958.
3.333.35
Exports of coffee and cacao in a proportion depending on world prices. All other exports except petroleum. Invisibles. Capital.All other payments
4.25
Exports of cacao, unwashed coffee, and certain processed cocoa products in a proportion depending on world prices.
4.80
Exports of washed coffee and certain processed coffee products in a proportion depending on world prices.
Note: The rates shown above for exports of coffee and cacao need not be effective rates, since the exchange rates at which the proceeds of these exports are purchased are varied in accordance with the world prices for these commodities.

Changes during 1959

January 31. Under the terms of an agreement between the National Government and the Central Bank, the selling rate of Bs 3.09 per US$1 would apply only to foreign exchange purchased by the National Government for payments on obligations contracted before March 18, 1958. For later obligations, the Central Bank would provide the exchange at the rate of Bs 3.335 per US$1.

February 11. By virtue of a decree, the preferential rate treatment for coffee and cacao was changed. The rate of Bs 4.80 per US$1 would apply to the export proceeds of washed coffee whenever the export price reached a given support level expressed in U.S. dollars. Should the export price fall below this level, the Bs 4.80 rate would apply to the surrendered exchange, and in addition the Central Bank would pay a subsidy sufficient to bring the total proceeds up to an amount equal to the support level. Should the export price exceed the support level, the Central Bank would then purchase a certain portion of the exchange at the Bs 4.80 rate, and the remainder at the Bs 3.33 rate, the proportion purchased at the Bs 4.80 rate gradually diminishing as the export price rose. Should the export price rise beyond a specified level, the preferential rate would no longer apply to the export proceeds, which must then be sold at the Bs 3.33 rate. Should the export price rise beyond a second specified level, part of the bolivar proceeds must be delivered to the Central Bank to be placed in a special account for the financing of payments to exporters whenever the export price falls below the support level. The same kind of arrangement was made applicable to unwashed coffee and various types of cacao, except that the preferential buying rate in this case was Bs 4.25 per US$1 instead of Bs 4.80.

July 4. Certain imports, including dried, salted, and smoked ham, evaporated milk, wheat flour, fruit juices, certain dry pulses, certain vegetables, tobacco, cigars and cigarettes, copper wire, insulated copper cables, etc., were made subject to prior license.

July 18. It was announced by the Office of Foreign Commerce of the Ministry of Development that licenses for certain imports would be granted to importers on a quota basis, taking into account, among other things, import figures for the periods January-December 1958 and January-June 1959. Subsequent instructions would advise importers as to the relevant statistics to be supplied. The quotas would be distributed by a committee appointed for this purpose.

September 24. The preferential rate treatment (see February 11, above) for coffee and cacao was extended to processed coffee and cacao products, including roasted and soluble coffee, cacao liqueur, cocoa butter, and cocoa. By the establishment of factors for determining the coffee or cacao component in the processed products, the exporters receive the same preferential rates as for unprocessed coffee and cacao.

November 20. The import of a number of consumer goods was made subject to prior license, some of the principal items being alcoholic beverages, assembled and unassembled automobiles, radios, television sets, phonographs and records, most articles of furniture, jewelry, cameras and film, perfume, and some plastic articles. This control was stated to be temporary pending the imposition of certain internal excise taxes and higher tariff duties on these imports.

December 11. Higher import duties on most of the items made subject to license on July 4 and November 20 (see above) became effective, and the import licensing requirements were withdrawn for those items.

Viet-Nam

Exchange Rate System

There is no agreed par value for the Vietnamese Piastre. The official rate is VN$35.00 per US$1; U.S. aid imports, essential imports financed with Viet-Nam’s own resources, and certain transactions in invisibles take place at this rate. 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 December 31, 1959, it was VN$73.50 per US$1. An effective rate of about VN$48.25 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$85 per US$1 applies to other imports financed with Viet-Nam’s own resources and arises from the addition of a “stabilization” tax of VN$50 per US$1 to the official rate. Rates for other currencies in each of the exchange markets are computed in accordance with official parities.

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 surplus agricultural commodities to France and made available to Viet-Nam as part of U.S. aid), as well as imports financed with Viet-Nam’s own resources and entering at the official rate, are administered by the Directorate-General of Trade and the National Bank. Imports subject to the “stabilization” tax must be approved by the Directorate-General of Trade. 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 non-communist country. In respect of other imports and of exports, settlements are made in convertible currencies. However, most imports from the French Franc Area must be settled in resident francs until Viet-Nam’s present balance in that currency is exhausted, and certain imports from the French Franc Area must be settled in “triangular” francs (see section on Administration of Control, above).

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 US$10,000. Imports are classified in 13 categories; no importer may be concerned with more than 3 categories. Licenses may not 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. Some imports financed with Vietnamese resources (mostly of a luxury nature) are subject to a “stabilization” tax of VN$50 per US$1, or an equivalent amount when payable in other currencies.

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 Vietnamese banknotes. Foreign banknotes and credit instruments not used by foreign travelers may be re-exported 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 Vietnamese 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, but foreign investors must register their capital with the Vietnamese authorities and agree on the terms of the investment in order to be able to repatriate their capital and to transfer profits. The rate, whether official or free, at which the foreign investments enter is regulated on a case-to-case basis. If a foreign enterprise requires imported materials entering at the official rate, the capital concerned must be transferred at that rate. Repatriation of capital takes place at the rate of entry, but profits are always transferred through the free market. 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 designated branches of economic activity and only with the approval of the National Exchange Office. The transfer of profits derived from agreed foreign investments is guaranteed in accordance with the regulations in force at the time, and repatriation is allowed to begin after five years in annual installments of 20 per cent of the initial investment.

Table of Exchange Rates (as at December 31, 1959)(piastres per U.S. dollar)
BuyingSelling
35.00(Official Rate)35.00(Official Rate)
Government receipts and certain other invisibles.Imports financed by U.S. aid. Essential imports financed with Vietnamese resources. Government expenses and certain other invisibles.
48.25(65% at Official Rate and 35% at Controlled Free Market Rate)
Exports.
73.50(Controlled Free Market Rate)73.50(Controlled Free Market Rate)
Tourist exchange. Sales of exchange by foreign embassies. Operating funds for foreign investments.Profits, some savings, travel exchange, and some other invisibles.
85.00(Official Rate plus VN$50 “Stabilization” Tax)
Other imports.

Changes during 1959

January 1. By Decree No. 1/TC, the official parity of the Vietnamese piastre in terms of the French franc was changed from F 12 to F 14.103135 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. Pending negotiations with the French authorities, Viet-Nam suspended the purchase of resident francs.

January 5. Sales of 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).

May 15. The “stabilization” tax was reduced generally from VN$60 to VN$50 per US$1, but for transactions with France this tax was increased from VN$0.06 to VN$0.10 per F 1.

May 21. As a result of negotiations with France, Viet-Nam ceased to be considered by France as a part of the French Franc Area. Payments between the French Franc Area and Viet-Nam would be made in transferable francs, but Viet-Nam would first exhaust its balances held in resident French francs. Viet-Nam started to quote French francs at official cross rates.

Yugoslavia1

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, 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 1.20. 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, 1959, the settlement rates for the U.S. dollar and sterling were Din 632 per US$1 and Din 1,752 per £1.

There are also “regular meetings” held once a month at the foreign exchange settlement places, at which the National Bank sells exchange at fluctuating rates. Since importers obtain the foreign exchange they require at the fixed settlement rates through the National Bank, the Yugoslav Investment Bank, or the Yugoslav Foreign Trade Bank, sales of exchange at “regular meetings” are minimal and represent only some 0.1 per cent of total sales of exchange.

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, 1959, there were 9 import coefficients (not counting the coefficient 1.00), ranging from 1.00 to 2.50, and 11 export coefficients (not counting the coefficient 1.00), ranging from 0.80 to 2.00. Where the coefficient is less than 1.00, 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 1.00, 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 1.00, 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 are bound 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. Exchange for imports of investment goods is sold by the Yugoslav Investment Bank; 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,2 Austria, Brazil, Bulgaria, Chile, Czechoslovakia, Finland, Eastern Germany, Greece, Hungary, Israel, Mongolia, 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, India, 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, and Switzerland. Payments agreements on a multilateral basis with Belgium-Luxembourg, Denmark, the Federal Republic of Germany, Italy, the Netherlands, Norway, and Sweden provide for settlements in the currencies of any 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, Swiss francs, or any other convertible currency.

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

All economic organizations wishing to enter into foreign trade and to import must be registered on the Foreign Trade Register, and the amount of their imports is determined by the allocation of foreign exchange for a particular year as set forth in the over-all economic plan. In general, the authorized foreign trade economic organizations may import without special import licenses. However, advance approval must be obtained for imports of equipment and for imports of parts of machinery, apparatus, installations, and means of transport to be used in the metal-processing and electro-metallurgical industries and shipyards. Import licenses are required for passenger cars with an engine capacity exceeding 2,000 cubic centimeters. 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 1.20 (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, transfers of inheritances, and judicially established support payments 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 9,000 for each person, and for remittances for family maintenance is allocated by the National Bank at the official rate plus 100 per cent. Not more than Din 1,500 in Yugoslav banknotes, in notes of Din 100 or less, may be taken out by travelers.

Exports and Export Proceeds

Most goods may be exported freely, but certain commodities in short supply require export licenses. 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 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 1,500 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. A Decision of the Yugoslav Federal Executive Council of October 14, 1955 requires the Yugoslav authorities to continue to permit the remittance of inheritances to citizens of the United States, provided that the remittance is requested within three years from the date of distribution of the estate.

Table of Exchange Rates (as at December 31, 1959)(dinars per U.S. dollar)
BuyingSelling
300(Official Rate)300(Official Rate)
Repayment of government debts, transfers of inheritances, and judicially established support payments.
400(Official Rate plus 33⅓% Premium)400(Official Rate plus 33⅓%)
Retransfer of unspent dinar amounts representing exchange cashed for nonresidents.
Receipts from tourism and diplomatic and other foreign missions.
600(Official Rate plus 100% Premium)600(Official Rate plus 100%)
Exchange for travel; other private noncommercial payments; invisibles of government and social organs and institutions.
Receipts from emigrants’ remittances, inheritances, family maintenance, gifts, and other noncommercial items.
6323(Settlement Rate)6323(Settlement Rate)
Exports and related invisibles.Imports and related invisibles.
Note: There is also a market (applicable only to some 0.1 per cent of total sales of foreign exchange), in which the National Bank sells exchange for a few imports and invisibles; the rate for the U.S. dollar in this market at the end of 1959 was Din 9,725 per US$1. Imports paid for with foreign exchange obtained in this market are subject to an additional payment of the settlement rate times the relevant coefficient.

Changes during 1959

March 4. Some 70 commodities whose export had previously been prohibited could now be exported, provided an export license was obtained.

May 25. A supplementary protocol was signed, amending certain provisions of an agreement with India dated March 1, 1956 and providing that payments between India and Yugoslavia would be made through special accounts in inconvertible rupees.

September 17. A new customs law, approved June 17, 1959, came into effect. Article 36 of the law provided that details of the new customs tariff would be issued later.

November 18. Yugoslav residents were permitted to open accounts in foreign exchange saved or earned during their stay abroad.

November 18. Settlements with Norway were placed on a multilateral currency basis.

December 23. The number of coefficients (not counting the coefficient 1.00) was reduced from 11 to 9 for imports and from 13 to 11 for exports. The range of the import coefficients was reduced from 1.00-3.00 to 1.00-2.50, and the range of export coefficients from 0.60-2.00 to 0.80-2.00.

December 30. The number of commodities subject to export license was reduced to 50.

Note.—The following changes took place early in 1960:

January 13. Advance approval was no longer required for imports of consumer goods.

February 17. The foreign exchange allocation for private travel abroad was increased from Din 6,000 to Din 9,000 for each person. Larger amounts may be authorized in special cases. The amount of dinar notes that may be taken in or out of Yugoslavia was reduced from Din 3,000 to Din 1,500 a person in notes of Din 100 or less.

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