Chapter

Country Surveys

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1964
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Afghanistan

Exchange Rate System

The par value is Afghanis 45.00 = US$1. The Bank of Afghanistan (the central bank) charges a commission of 0.67 per cent of parity for buying or selling. The official buying rate applies to the proceeds of exports of karakul, wool, and cotton, to foreign exchange receipts of the Government for the financing of the salaries in afghanis of foreign experts, and to receipts from foreign embassies, legations, and other foreign official agencies for financing their requirements in afghanis. Exchange taxes of 15.56, 24.44, and 28.89 per cent are payable on the proceeds of exports of karakul, wool, and cotton, respectively. The official selling rate applies to foreign exchange payments by the Government and certain government agencies for imports and other purposes. All other transactions take place at free market rates through either the banks or the bazaar. On December 31, 1963, the free market rate of the Bank of Afghanistan was Af 50 buying, Af 50.65 selling, per US$1, and the free market buying rate in the bazaar was Af 51 per US$1.

Administration of Control

Foreign exchange is controlled by the Bank of Afghanistan (the central bank). The control is facilitated by the existence of relatively large companies specializing in the export of such commodities as karakul, cotton, wool, and carpets. However, these companies do not exercise a monopoly over such commodities.

Prescription of Currency

Settlements with countries with which Afghanistan has bilateral trade and payments agreements must be made in the foreign currencies specified in the agreements.1 The proceeds from exports of karakul, wool, and cotton to other countries must be obtained in convertible currencies. There are no other prescription of currency requirements.

Imports and Import Payments

Imports of a few items (e.g., some drugs, liquor, arms and ammunition) are prohibited except with special permission. In general, there are no quantitative restrictions on imports. In some of the bilateral agreements, however, quotas are specified for commodities to be traded. On the whole, trade with these countries is carried out on a compensation basis, and usually both imports and exports are arranged by the same trader. Imports against exports of cotton and wool are carried out by the Government or government agencies. Control is exercised to ensure that trade conforms with the commitments undertaken in the agreements.

Exchange is provided at the official rate for imports of approved industrial requirements and some minor items and for all imports by the Government and certain government agencies, such as the Monopolies Administration, which imports the entire requirements of sugar and petroleum. Other imports take place at free market rates.

Payments for Invisibles

Government payments for invisibles and payments to foreigners on government contract in Afghanistan are made at the official rate. All other payments are settled at free market rates. Travelers leaving Afghanistan may take out not more than Af 500 in Afghan banknotes.

Exports and Export Proceeds

Control is exercised over exports to bilateral agreement countries (see section on Imports and Import Payments, above). Exchange receipts from exports of karakul, wool, and cotton must be surrendered at the official rate and are subject to taxes of 15.56, 24.44, and 28.89 per cent, respectively. The proceeds of all other exports may be sold at free market rates or be used by the exporter to pay for imports.

Proceeds from Invisibles

Foreign exchange receipts of the Government for the financing of the salaries in afghanis of foreign experts, and receipts from foreign embassies, legations, and other foreign official agencies, must be surrendered at the official rate. All other receipts from invisibles are sold at free market rates. Travelers entering Afghanistan may bring in Afghan banknotes not exceeding Af 500.

Capital

All foreign investment in Afghanistan requires prior approval, which is granted readily if the investment is deemed conducive to the prosperity and economic and technical advancement of the country. The Law Encouraging the Investment of Private Foreign Capital in Afghanistan (November 18, 1958) provides that, beginning five years after the date of the investment, registered capital may be repatriated at a free rate in annual installments not exceeding one fifth of the amount invested. It also provides that ten years after the date of the investment the entire registered capital may be repatriated at a free rate at any time. The repatriation of up to 15 per cent a year of profits on registered capital (under the 1958 law or an earlier one) is guaranteed and may take place through an authorized bank at its free rate.

Changes during 1963

March 22. A comprehensive exchange reform was undertaken, eliminating most of the previous multiple rate practices. An initial par value for the afghani of Af 45.00 per US$1 was established with the International Monetary Fund.

Algeria1

Exchange Rate System

No par value for the currency of Algeria has been established with the Fund. The official unit of currency is the Algerian Franc, which is at par with the French franc, giving the relationship Algerian franc 4.93706 = US$1. There are fixed buying and selling rates for the French franc as well as for currencies of other countries in the French Franc Area. Buying and selling rates for currencies of countries outside the French Franc Area are fixed by the Central Bank of Algeria on the basis of the average rates quoted on the Paris exchange market for the other currency concerned.

Administration of Control

The Ministry of National Economy has general jurisdiction over exchange control. The Central Bank of Algeria assists in the formulation of the exchange legislation and regulations. It is responsible for the execution of this legislation. In addition, a number of commercial banks have been given authority to carry out much of the detail of exchange control matters. Import and export licenses are issued by the Ministry of Commerce. The Office National de Commercialisation has a monopoly over the import of certain commodities.

Prescription of Currency

Algeria is a member of the French Franc Area, and settlements with other countries (except Mali) in the French Franc Area are made in any currency of that Area. Settlements with countries outside the French Franc Area are usually made in French francs through banks in France. Settlements with countries, except Mali, with which Algeria has concluded bilateral payments agreements2 are made through accounts denominated in U.S. dollars under the terms of the agreements; for Mali, the account is in Algerian francs.

Nonresident Accounts

For residents of countries outside the French Franc Area, the regulations pertaining to nonresident accounts are similar to those applied in France. For residents of other French Franc Area countries, there are three types of accounts: Individual Suspense Accounts, Franc Area Accounts, and Final Departure Accounts. Except as described below, all operations through these accounts are subject to authorization.

Individual Suspense Accounts may be opened without authorization and may be credited with payments from any country.

Franc Area Accounts may be opened only with prior authorization from the Central Bank of Algeria. They may be credited freely with proceeds from the surrender of convertible currency; with proceeds from the surrender of freely disposable funds (other than notes and coins) in the currencies of other countries of the French Franc Area; with interest on the balances of French Franc Area Accounts; and with payments for imports from countries in the French Franc Area. They may be debited freely for any payment in Algeria to a resident of any country in the French Franc Area (including Algeria); for any transfer to the credit of an account of a person residing in a country in the French Franc Area other than Algeria; and for any amount due to the bank with which that account is kept, for interest, commissions, or repayment of capital claims. Transfers between these accounts are free.

Final Departure Accounts may be opened without authorization in the name of any person residing in Algeria, but not of Algerian nationality, who intends to leave Algeria for another country in the French Franc Area. These accounts may be credited freely with an amount equivalent to the holdings at October 20,1963 in the account of the person concerned; with proceeds of sales of real estate of the account holder, provided that the sales are made through the intermediary of a notary public; with proceeds accruing from the sale of stocks and other securities and from any income, amortization, and redemption in respect of securities, provided that the transactions are made through the intermediary of a bank; and with any other payments, up to F 1,000. These accounts may be debited freely for all payments in Algeria on behalf of the account holder.

The Central Bank of Algeria maintains special accounts for central banks of the countries with which Algeria has concluded bilateral payments agreements (see footnote 2).

Imports and Import Payments

All imports from bilateral payments agreement countries (see footnote 2) require an individual license. A number of specified imports, listed under 140 tariff headings, or their parts, from all other countries are prohibited or are subject to either quantitative restriction or a special import procedure; the items include such commodities as butter, cattle, cement, cereals, clothing, coffee, fish, matches, meat, milk, phosphates, sheep, soap, sugar, tea, tobacco, vegetables, and wine. All other imports from countries with which Algeria does not maintain bilateral payments agreements may be made freely.

Liberalized imports not exceeding F 10,000 in value require only the submission of an invoice to the customs. Most liberalized imports whose value exceeds this figure are admitted on the basis of a declaration completed by the importer, but some require an administrative visa, which is stamped on an import attestation. Imports exceeding F 10,000 in value, and all imports for which payment has to be made before the goods reach Algeria, must be registered (domiciled) with an authorized bank, to which the necessary import documents must be presented and through which all payments related to the transaction must be made.

For goods imported under the import declaration procedure or with an import license, importers may, as soon as the import has been registered with an authorized bank, purchase the required foreign exchange from the bank. Unless earlier payment is to be made in accordance with the provisions of the import license or of a commercial contract approved by the authorities, payment to the foreign exporter may be made only after the shipping documents have been presented to the bank.

Payments for Invisibles

Payments for invisibles require the approval of the Central Bank. However, when supporting documents are presented, approval may be granted by authorized banks either freely or up to specified limits for such payments as (1) approved trade transactions and maritime contracts, (2) income accruing to nonresidents in the form of profits, dividends, etc., from approved investments, (3) banking commissions, patent fees, and specified categories of taxes, (4) fees to lawyers, medical doctors, etc. For other invisibles, the granting of exchange must be authorized by the Central Bank.

Residents of other French Franc Area countries working in Algeria under the program for technical cooperation may transfer abroad a certain percentage of their net salaries: 50 per cent for single or married persons having their families in Algeria; 70 per cent for persons having their families abroad; and 100 per cent for employees who spend their vacations abroad (the transfer being limited to the duration of their absence from Algeria). For other workers from French Franc Area countries who have contracts with employers and hold the necessary employment documents, the amounts that may be transferred are 30 per cent, 50 per cent, and 100 per cent, respectively, for the groups enumerated above. The payments must be transferred once a month on the basis of the remuneration for the previous month.

For residents traveling to other countries, including the French Franc Area, the foreign exchange allocation is equivalent to F 1,500 a person a year and is issued on presentation of a valid passport and travel documents. Furthermore, residents traveling to a country within the French Franc Area are entitled to an allocation, in the currency of the country of destination, equivalent to F 500 a person for each journey, on presentation of travel documents certified by the authorized intermediary. Children under 15 are entitled to F 250. Foreign exchange for business travel is subject to authorization by the Central Bank of Algeria. Funds in EFAC accounts (see section on Exports and Export Proceeds, below) may be used for business travel.

Pilgrims traveling to Saudi Arabia can obtain a check in Saudi Arabian riyals drawn on the First National City Bank in Jidda, up to the equivalent of F 1,200 a person for 1963.

Exports and Export Proceeds

Exports of specified used machinery and of equipment used in industrial production, exploitation of mines, etc., are prohibited. All exports to countries with which Algeria has bilateral payments agreements and some exports to all other countries require licenses.

With certain exceptions, exports must be registered with an authorized bank. Prior registration is not required for exports that are made on a firm sale basis, which do not exceed F 5,000 in value, and which are payable in not more than 90 days. After customs clearance, such exports must be registered, if they were not registered earlier. If the payment period is more than 90 days, the exports may be registered only after authorization is given by the Central Bank. Sales on consignment are expressly subject to authorization by the Central Bank, and registration must always take place prior to customs clearance.

The proceeds of exports, including those to the French Franc Area, may be the object of a 90-day credit and must thereafter be collected within 30 days. Foreign exchange proceeds may be used to make authorized payments abroad within three months from the date of their receipt. Certain percentages of export proceeds may be kept in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts which may be used by the account holder for all authorized payments; however, amounts credited with proceeds accruing from exports to the French Franc Area may be used only for settlements with countries in that Area. All other export proceeds must be surrendered.

Proceeds from Invisibles

Amounts exceeding F 500 that are due from nonresidents in payment for services must be collected and, if not used to make authorized payments abroad, must be surrendered within one month from the date of receipt.

There are no restrictions on the import of foreign banknotes, coins (except gold coins), checks, and letters of credit, but foreigners must declare such holdings when they enter Algeria.

Capital

Decree-Law 63-277 of July 26, 1963 establishes a code for foreign investments in Algeria that were made after July 1, 1962. Such investments can be undertaken to establish new, or to extend existing, enterprises, provided that such enterprises (1) are recognized by the authorities as having economic priority in accordance with programs prepared by the Government, (2) constitute a program of investment of at least F 5 million, to be carried out in three years, and (3) give rise to the permanent employment of a specified minimum number of Algerian nationals. Such approved enterprises benefit from certain advantages in respect of fiscal charges and other taxes. Moreover, subject to the fulfillment of certain other conditions (such as the effect that the investment would have on related economic activities and the volume of production intended for export), additional privileges relating to certain taxes are accorded to the approved enterprises. The transfer abroad of part of the profits from, as well as part of the proceeds from the liquidation of, such investments is authorized by the Central Bank in accordance with the guarantees provided for in the decree. Similar transfers (including those to countries in the French Franc Area) related to other investments are also subject to authorization by the Central Bank.

Changes during 1963

January 1. A number of imports, e.g., tea, used clothing, household soap, oilseeds, and oils and fats of animal and vegetable origin, were made subject to licensing by the Ministry of Commerce. The import of animal and vegetables oils and of oilseeds became the monopoly of the Office National de Commercialisation.

January 10. The import of coffee was made subject to licensing.

February 20. A temporary import surcharge of 3 per cent became effective. It was to be levied on imports from all countries, with the exception of certain specified products, e.g., staple foodstuffs, minerals, antibiotics, books and periodicals, and machine and automotive spare parts.

February 22. A bilateral payments agreement was signed with Bulgaria.

March 5. Imports of coffee became the monopoly of the Office National de Commercialisation.

March 27. The maximum exchange allocation of Saudi Arabian riyals for pilgrims traveling to Saudi Arabia was fixed at an amount equivalent to F 1,200 a person for 1963.

April 2. Imports of unmanufactured tobacco, pharmaceutical products, certain types of wood, and cotton were exempted from import surcharges.

April 3. The foreign exchange allocation for tourist travel abroad was set at the equivalent of F 1,500 a person. Authorization by the Central Bank was required to obtain foreign exchange for business travel abroad.

April 24. A bilateral payments agreement was signed with the United Arab Republic.

May 14. It was announced that the foreign exchange regulations as they existed on June 30, 1962 were to remain in force. In addition, certain instructions and notifications of the Ministry of Finance and Economic Affairs of France issued after that date were to remain valid.

June 4. An extensive list of products was published whose import from all countries was to be either (1) prohibited, (2) made subject to quantitative restriction, or (3) carried out under special import procedures. Quotas for restricted imports were to be published in the official journal. The restrictions or prohibitions were to take effect from June 10 for some items, from July 1 for some others, and from a date to be announced in the future for about seven remaining commodities. All other imports could be imported freely.

July 1. Imports of tea, fruits, and vegetables became the monopoly of the Office National de Commercialisation.

July 22. A bilateral payments agreement was signed with Mali.

July 28. A bilateral payments agreement was signed with Yugoslavia.

August 2. Decree-Law 63-277 of July 26, 1963 was published; it established a code for foreign investments in Algeria after July 1,1962. Foreign investments could be undertaken to establish new, or to extend existing, enterprises, provided that such enterprises (1) were recognized by the authorities as having economic priority in accordance with programs prepared by the Government, (2) constituted a program of investment of at least F 5 million, to be carried out in three years, and (3) gave rise to the permanent employment of a specified minimum number of Algerian nationals. Such approved categories would benefit from certain advantages in respect of fiscal charges and other taxes. Moreover, subject to the fulfillment of certain other conditions (such as the effect that the investment would have on related economic activities and the volume of production intended for export), additional privileges relating to certain taxes were to be accorded to the approved enterprises. Transfers abroad of part of the profits from, as well as part of the proceeds from the liquidation of, such investments would be freely permitted.

September 12. The export of specified used machinery and of equipment used in industrial production, exploitation of mines, etc., was prohibited.

September 17. It was announced that the import of all banknotes and coins (except gold coins) was free.

October 21. All capital transfers, including those to countries in the French Franc Area, were made subject to prior authorization by the Central Bank.

October 23. A law was passed regulating the import and export of banknotes by persons traveling to and from Algeria, as well as setting up specific limits for current payments for invisibles to countries in the French Franc Area.

October 29. A new tariff list was announced. Under the new regulations, there were four classes of imports for tariff purposes: imports from France, imports from EEC countries, imports from countries that have accorded Algeria most-favored-nation treatment, and imports from other countries.

November 19. Details were announced of the nonresident accounts which may be opened in Algeria by a resident of another country in the French Franc Area.

November 23. A decree was issued regulating the transfer abroad of salaries earned in Algeria by nationals of a country in the French Franc Area.

Argentina

Exchange Rate System

On January 9, 1957, a par value for the Argentine Peso was established by Argentina with the Fund. However, exchange transactions no longer take place at rates based on that par value. Purchases and sales of gold and foreign currencies, including foreign banknotes, take place without restriction in a free exchange market, in which the rate on December 30, 1963 was M$N 132.50 per US$1.

Administration of Control

Exchange transactions must be carried out through institutions (banks, finance companies, and exchange dealers) authorized expressly for this purpose. The Central Bank of Argentina may intervene in the exchange market to avoid excessive variations arising from temporary factors.

Prescription of Currency

Under a bilateral payments agreement with Uruguay, merchandise transactions and certain transactions in invisibles are settled in agreement dollars. 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; exchange to pay for them may be purchased in the free market. For goods imported by official agencies, approval by the Central Bank and the Ministry of Economy is required if payment is extended over a period of more than 180 days. Imports are subject to a special tax of 5 per cent, except those from LAFTA countries and certain other imports. There are consular fees of 1½ per cent, payable in U.S. dollars on most import invoices.

For import purposes, commodities are grouped in lists according to their essentiality and domestic production. Surcharges are established for these lists, independently of the customs duties payable in accordance with the Schedule of Valuations. Except for goods in List 1 (fuels, some metals, rubber, newsprint, etc.), surcharges on the c. & f. value of the invoice—unless it differs markedly from the normal import value, in which case the latter value will be taken into account—are payable before initiation of customs clearance, as follows:1

  • 20 per cent on numerous raw materials, drugs, iron and steel bars, tinplate, woodpulp, etc. (List 2)

  • 46 per cent on semiprocessed articles, timber, chemical products, etc. (List 3); on industrial machinery the local production of which is very limited or for which this surcharge represents sufficient protection (List 6C); and on industrial machinery and motors not included in Lists 6A and 6B (List 6)2

  • 92 per cent on semiprocessed products or raw materials produced locally (List 8)

  • 115 per cent on spare parts, tires, tools, etc. (List 4) and on industrial machinery the local production of which does not fully meet domestic demand or for which this surcharge represents sufficient protection (List 6A)

  • 172 per cent on processed articles manufactured locally and imports of which are not essential (List 5); on industrial machinery manufactured locally (List 6B); and on all goods, other than machinery, not included in any list

  • 230 per cent oh nonessential and luxury items, e.g., whisky, bicycle chains, transistor radios, starters, and fluorescent tubes, textiles and readymade clothing of cotton, wool, artificial silk, etc. (List 7)

There are, in addition, special regulations governing certain imports, as follows: (1) Imports of automobiles are subject to special surcharges according to weight and value. (2) Imports of parts used in the domestic manufacture of automobiles are subject to a fixed surcharge up to certain percentages of the c. & f. value of the automobile; these percentages are being decreased annually according to a previously approved production plan. (3) Imports of tractors of less than 85 horsepower are not permitted except by authorization of the Tractor Industry Council. (4) Certain imports from the other members of the LAFTA (Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, and Uruguay) enjoy special tax exemptions outside the general system, by virtue of the mutual agreements reached with these countries. (5) Machinery and materials for vital industries (petroleum, coal, steel, power, railroads, etc.), machinery for the establishment of industries in developing areas, capital goods related to foreign investment, and personal effects brought in by foreign diplomats and, in small quantities, by immigrants and travelers are exempt from payment of surcharges.

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. Some products are subject to retention taxes calculated on the basis of the f.o.b. sales value or on the index values fixed by the National Grain Board or the National Meat Board. The retention tax is 10 per cent for exports of pickled hides, certain oilseeds (linseed, sunflower seed, cottonseed, peanuts, rapeseed, and tung nuts), and linseed oil; and 20 per cent for horses, unprocessed hides, and some forestry products. The tax must be paid before shipment of the merchandise or within the following 30 days when there is a bank guarantee of payment.

Surcharges, customs and additional duties, and other charges paid on imports of raw materials or other products incorporated in exported articles are returned to exporters. Moreover, when the duties are paid within the country, a refund is made of 12 per cent of the value of exports of manufactured products not traditionally exported.

The Central Bank has established a system of financial support for products not traditionally exported, based on the purchase of bills in foreign currency with periods of up to five years for capital goods, up to two and a half years for durable and semidurable goods, and up to one year for other goods.

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 1963

January 1. New consular fees of 1½ per cent on all imports became effective.

January 1. The list of imports originating in LAFTA countries was published, showing charges in force during 1963.

February 9. The suspension of import surcharges on many goods originating in Bolivia was extended until June 30, 1963.

February 11. It was resolved to refund to exporters 12 per cent of the value of manufactured products not traditionally exported, on account of duties paid within the country.

February 28. Decree No. 1553 introduced additional surcharges on all imports cleared through customs before July 1, 1964, with the following exceptions: imports from LAFTA countries; imports included in Lists 1 and 2; goods already in transit; and goods covered by irrevocable letters of credit already in force. The additional surcharges were as follows: Lists 3, 6, and 6C—6 per cent; Lists 4 and 6A—15 per cent; Lists 5 and 6B—22 per cent; List 7—30 per cent; and List 8—12 per cent.

March 15. A new tax of US$5 per metric ton for exports of wheat was imposed until September 30, 1963.

April 2-5. Exchange market operations were suspended.

April 9. Imports of books, piagazines, journals, newspapers, and printed matter were exempted from the 5 per cent tax.

May 31. Imports, including capital investment goods, which had been exempted from payment of surcharges were freed from the 5 per cent tax.

July 10. The bilateral payments agreement with Spain was terminated, and all trade and financial transactions with that country were to be settled in convertible currencies.

November 8. Imports were prohibited, with the exception of (a) products in Lists 1, 2, 3, 4, and 8, (b) goods from LAFTA countries, shown in Argentina’s National List, and (c) authorized imports, within the expressly approved quotas, of parts and components for tractors, motor vehicles, and internal-combustion engines. A new committee, the Committee for the Rationalization of Imports, was to study import procedures for the prohibited products.

November 28. Exports of meat were limited, and exports of cattle on the hoof were suspended in order to combat domestic shortages.

December 17. The suspension of imports of used machinery, which had come into effect in 1960, was extended until further notice.

Australia

Exchange Rate System

The par value is Australian Pound 1 = US$2.24. Official rates are fixed for spot transactions in sterling: £A 125 buying, and £A 125/10/–selling, per £ stg. 100. The rates for spot transactions in other currencies quoted by the authorized banks are based on the closing buying and selling rates of the previous day in London and New York. The rate for the U.S. dollar as at December 31, 1963 was US$2.2389 buying, and US$2.2258 selling, per £A 1.

Administration of Control

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

Prescription of Currency

Australia is a member of the Sterling Area, and settlements between residents of Australia and residents of other Sterling Area countries may be made in sterling, in another Sterling Area currency, or in Australian currency through the account of a bank domiciled in any other country in the Sterling Area with a bank in Australia. 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 or area 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, in Australian currency from an appropriate nonresident account, or in any foreign currency which is freely exchangeable for External Account sterling.

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 on a nonresident account may be withdrawn in convertible currency.

Imports and Import Payments

Almost all goods may be imported freely without import licenses. No restrictions are imposed on payments for imports, provided that the prescription of currency requirements are observed.

Payments for Invisibles

All payments for invisibles are subject to exchange control, but they are not restricted; the control operates 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 that the exchange control is, satisfied that the exchange is to be used for bona fide travel expenses and not an unauthorized capital transfer. Limits are placed on remittances for family maintenance and gifts; however, applications for such transfers are treated liberally, and amounts beyond the normal limit for family maintenance are approved on application. A traveler may take out up to £A 50 in Australian currency, without special authorization; of this amount, up to £A 2 may be coins.

Exports and Export Proceeds

With minor exceptions, exports require licenses issued by the Department of Customs and Excise, to ensure that the full proceeds are received in a currency and within a period approved by the Reserve 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 Reserve Bank or a trading bank acting as its agent.

Proceeds from Invisibles

Proceeds from invisibles received in Sterling Area currencies may be disposed of freely. Proceeds from invisibles in other currencies do not have to be surrendered, but they must be reported and may be disposed of only with permission.

Capital

All transfers of capital from Australia require approval. Transfers abroad of resident capital are allowed only in special cases. Approval is normally granted for the repatriation of capital by nonresidents, but no advance commitments are given.

No restrictions are placed on the receipt of capital funds from abroad, but residents must obtain prior 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 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 that the securities are held within the Sterling Area. The export of securities and practically all transactions in foreign securities are subject to approval.

Changes during 1963

March 1. Licensing control was removed from imports of aluminum and certain aluminum products.

April 7. It was announced that a system of decimal currency, based on a major unit equal to the present ten shillings, would be introduced. February 1966 was set, tentatively, as the date for the changeover.

May 1. Licensing control was removed from imports of certain aircraft parts.

June 9. Restrictions on the export of iron ore were eased to permit the development of increased export trade.

July 31. The amount of Australian currency that a traveler could take out of Australia without special authority was increased to £A 50; of this amount, up to £A 2 might be coins.

Austria

Exchange Rate System

The par value is Austrian Schillings 26.00 = US$1. The official limits for the U.S. dollar are S 25.80 buying, and S 26.20 selling, per US$1—rates at which the Austrian National Bank will buy or sell. The rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Austria and such limits in force in the country of the other currency concerned.

“Agreement dollars” (see section on Prescription of Currency, below) are quoted at par with the U.S. dollar. Egyptian pounds on the clearing account with the United Arab Republic may be purchased in the exchange market in Vienna; quotations at the end of the year were S 55.50 per LE 1.

Forward premiums and discounts are left to the interplay of market forces.

Austria accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from August 1, 1962.

Administration of Control

The Austrian National Bank administers the exchange control and issues exchange licenses where required. Most exchange transactions pass through those Austrian banks which have been authorized to implement many exchange control regulations.

The customs issue freely and without delay licenses required for imports of liberalized goods. Licenses, if required, for other imports and for exports have to be obtained from the competent ministry, viz., the Federal Ministry of Trade and Reconstruction (Licensing Office) or the Federal Ministry of Agriculture and Forestry.

Prescription of Currency

Settlements with the countries with which Austria maintains bilateral payments arrangements1 are made through clearing accounts expressed in U.S. dollars. Settlements with the United Arab Republic are, in practice, made in convertible currencies, although under the agreement with that country Austrian traders may make payments in agreement Egyptian pounds.

Settlements with all other countries may be made either in convertible currencies or through Free Schilling Accounts.

Nonresident Accounts

There are two categories of nonresident accounts in schillings: Free Schilling Accounts and Blocked Accounts.

Free Schilling Accounts may be freely credited with proceeds from the sale of gold, gold coins, or convertible currencies by a nonresident to the Austrian National Bank, or to an authorized bank, as well as with payments permitted by the National Bank on the basis of a general or individual authorization. Transfers between these accounts are free. The accounts may be freely debited for payments to Austrian residents, with the exception of loans granted by nonresidents to residents, which require individual licenses. Balances on these accounts may be freely converted into any foreign currency.

Blocked Accounts consist of funds that are due to nonresidents and which may not be transferred abroad. The National Bank authorizes the use of Blocked Account funds for payments for invisibles and for many capital payments to residents of countries with which Austria makes settlements in convertible currencies. As a result, Blocked Accounts largely represent funds due to residents of countries with which Austria settles payments through bilateral accounts.

Imports and Import Payments

All imports not included in the Annex to the Foreign Trade Law are free of import licensing and may be imported from any country without quantitative restriction. All imports included in the Annex require licenses. Most of these imports are free of quantitative restriction—the liberalization depending on the group of countries from which they are imported; for such liberalized goods, licenses are issued by the customs at the time of clearance.2 Liberalized imports from European OECD countries, their overseas possessions, and many other countries3 include goods covered by more than 1,500 tariff numbers (or parts thereof). Imports from Canada and the United States and its possessions are liberalized to the same degree as those from the European OEGD countries, except that slaughtered poultry is subject to quantitative restrictions when imported from Canada or the United States. Imports from 19 other countries4 are treated practically the same as imports from European OECD countries.

Nonliberalized imports may be obtained under various procedures, namely, state trading, global quotas, bilateral quotas, discretionary licensing, and barter.

State trading covers tobacco in any form, salt, spirits, and various bread and feed grains. Global quotas apply to specified imports from OECD countries and from all GATT countries, except Cuba, Czechoslovakia, and Japan. Discretionary individual licensing is applicable to all other private imports not covered by the procedures listed above. Licenses are usually granted if the imports concerned do not adversely affect domestic industries. Licenses may be granted for goods imported under compensation (barter) transactions, if there is no other way of settling payments; at present, trade under such arrangements is negligible.

Grains and other specified goods are imported in accordance with a special system of controls and regulations maintained under so-called Marketing Laws. In addition to grains, the following groups of products are covered by Marketing Laws: milk and butter; cattle, pigs, and horses for slaughter; products from these animals for human consumption; and certain fertilizers.

In principle, import licenses are issued only to importers who have received trade licenses. For new importers there is a newcomers’ quota, which is up to a maximum of 20 per cent of the corresponding global quota. Import licenses are not transferable and are valid for six months, but this period may be extended.

Payments for imports from, and originating in, countries with which Austria makes settlements in convertible currencies do not require exchange licenses.5 Payments for imports from, and originating in, countries with which Austria maintains bilateral payments agreements require exchange licenses, which are granted without restriction if the payments are made in the appropriate bilateral currencies.

Payments for Invisibles

All payments to bilateral payment agreement countries for invisibles require licenses. With few exceptions, residents are permitted to conclude transactions involving current invisibles with residents of countries with which Austria makes settlements in convertible currencies. Exceptions comprise transactions concerning transport, films, and insurance. For transactions in current invisibles that involve payments to residents of all other countries, individual licenses are required. The licenses are granted after account is taken of the terms of existing bilateral payments arrangements and other considerations, such as the principle of reciprocity and hardship cases; certain liabilities (e.g., freight payments, handling charges, commissions, etc.) are covered by general licenses.

Payments on account of authorized invisibles to residents of countries with which Austria makes settlements in convertible currencies may be made freely, provided that no capital transfer is involved. Residents traveling to those countries may buy exchange from authorized banks up to the equivalent of S 15,000 for each trip. There is, in addition, a quota for business trips of S 3,000 a person for each trip. Should a resident traveler require more foreign exchange, the increase may be authorized by the National Bank. In addition, Austrian residents may arrange for trips abroad through travel agents and pay in schillings to cover expenditures for hotels and food as well as transportation. Persons leaving Austria may take with them S 15,000 in Austrian notes and coins and any amount in foreign notes and coins.

Exports and Export Proceeds

Licenses for exports regulated under the Foreign Trade Law have to be obtained from the competent ministry. Goods exported under compensation (barter) arrangements are subject to licensing by the Federal Ministry of Trade and Reconstruction. For most other exports, licenses are not required. Export licenses are issued with due consideration to the provisions of relevant bilateral trade agreements and the fulfillment of quotas established in accordance with such agreements, and to the needs of the Austrian economy.

Export claims must be declared. Export proceeds may either be surrendered or be deposited in accounts with authorized banks. Such deposits in convertible currencies may be used freely for authorized payments. Deposits in bilateral clearing currencies may be used in accordance with the terms of an individual payments license.

Proceeds from Invisibles

Exchange receipts from invisibles have to be declared within eight days from the date of collection. They may either be surrendered or be deposited with an authorized bank and subsequently used in the same way as proceeds accruing from exports. Persons entering Austria may bring in Austrian or foreign banknotes and coins without limit.

Capital

Direct investments by nonresidents are generally permitted, if made with convertible currencies or from free or originally owned blocked schilling balances. For investments financed in other ways (imported Austrian currency, inconvertible currencies, investment loans, goods), authorization is granted on the merit of each case.

Residents are permitted to obtain from nonresidents loans and credits as follows: (1) commercial credits for a period of up to one year; (2) loans with maturities of five years or more, to be used for investment purposes (e.g., for expansion of production equipment); (3) loans to be used by enterprises in Austria in which the nonresidents participate; (4) loans secured by export claims; and (5) loans for a period of up to five years, to be used abroad for definite merchandise transactions. Also, a number of authorized banks are permitted to accept and to employ abroad foreign funds in convertible currencies for a period of up to five years.

The Austrian National Bank permits the transfer abroad of (1) proceeds from the liquidation of various foreign investments in Austria (shares or participation in Austrian enterprises, Austrian securities, real estate in Austria) and (2) repayments by residents of foreign loans and credits.

The transfer of funds owned by emigrants, and payments due to nonresidents on account of dowries, inheritances, and settlements under certain agreements between heirs, are permitted.

Residents are allowed to acquire participation rights in foreign companies, associations, and other enterprises, and to establish, acquire, or extend foreign agencies or individually owned firms; earnings accruing from such investment may be reinvested. Residents also are permitted to acquire real estate abroad, to grant commercial or investment credits, and to grant credits secured by mortgages in Austria or abroad. Domestic insurance companies may conclude with nonresidents life insurance contracts in Austria.

Transactions and operations mentioned in the four preceding paragraphs are licensed upon documentation, provided that they are concluded with the residents of countries with which Austria makes settlements in convertible currencies.

Residents are allowed to purchase from nonresidents, without restriction, foreign securities quoted on foreign stock exchanges and Austrian securities; in the case of foreign securities and Austrian external bonds, the transactions must be carried out on a spot basis through authorized banks and the securities purchased must be kept with such banks. Payments for these purchases to residents of countries with which Austria makes settlements in convertible currencies may be made in those currencies, whereas payments to residents of countries with which Austria has bilateral payments agreements may be made only by crediting a Blocked Account. Residents may sell securities deposited with Austrian authorized banks, in accordance with the aforementioned provision, to nonresidents only on a spot basis against payment in convertible currencies and through authorized banks. The proceeds of the sale, as well as the foreign exchange obtained as a result of redemption of the foreign securities by the debtor, may be kept on account with an authorized bank.

Changes during 1963

January 1. The percentage of import liberalization vis-à-vis GATT countries (except Cuba, Czechoslovakia, and Japan) that are not members of the OECD was raised from 75 per cent to 93 per cent, the same as that relating to imports from OECD countries. Licenses for liberalized imports from all these countries would be issued automatically by the customs. Imports that were freed from quantitative restrictions were included in a combined list; a detailed list of countries covered by the import liberalization arrangements was published.

January 1. Global quotas for imports subject to quantitative restriction from OECD countries were increased by a further 10 per cent and were extended to imports from other GATT countries (except Cuba, Czechoslovakia, and Japan).

June 29. The limit for the export of schilling notes was increased from S 10,000 to S 15,000; the prescribed reporting obligation for holdings of notes and coins of freely convertible currencies in excess of S 2,000 was abolished.

July 1. The free import list was further extended by adding about 100 tariff items. Global import quotas were revised and increased by 20 per cent.

July 2. A number of authorized Austrian banks were permitted to accept foreign funds in convertible currencies for a period of up to five years, and also to employ abroad, for a period of up to five years, funds in convertible currencies.

The obligation to report holdings was abolished for capital earnings, up to the equivalent of S 15,000 for each person annually, from foreign estates, from foreign securities, and Austrian foreign investments, and from profits from shares in foreign enterprises.

The National Bank permitted Austrian residents to endorse guarantees of claims of foreigners, to acquire real estate abroad, and to grant foreigners commercial and investment credits and credits secured by mortgages in Austria or abroad.

The contractual partner abroad, as well as the final beneficiary of the payment involved in operations mentioned in the three preceding paragraphs, had to reside in a country with which Austria made settlements in convertible currencies.

November 15. Residents were permitted to obtain from nonresidents loans with maturities of five or more years for investment purposes (e.g., for expansion of production equipment); to receive loans from the foreign associates of resident enterprises; to finance abroad their export claims; to receive loans of up to five years for merchandise import transactions, the proceeds of the loans to be used abroad; and, in the case of domestic insurance companies, to conclude life insurance contracts with nonresidents in Austria. All these transactions and operations were permitted provided that they were at market rates of interest (not applicable to life insurance contracts) and with residents of countries with which Austria made settlements in convertible currencies.

Belgium-Luxembourg1

Exchange Rate System

The par values are Belgian Francs 50,00 = US$1 and Luxembourg Francs 50.00 = US$1. There are two exchange markets—the official and the free.

In the official exchange market, only authorized banks may carry out exchange transactions permitted in that market.2 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 convertible currencies fluctuate between limits which result from combining the official limits for the U.S. dollar maintained by Belgium-Luxembourg and such limits in force in the country of the other currency concerned. Most exchange transactions are settled through the official market.

In the free exchange market, all currencies (including banknotes) may be bought and sold at freely fluctuating rates. Convertible currencies acquired through the free market may be sold in the official market, but no other direct connection between the two markets exists. As at December 31, 1963, the free market rates for the U.S. dollar were approximately BF 50.20 buying, BF 50.22 selling, per US$1.

Depending on the category of payments and receipts, either one or both of the exchange markets may be used for settlements with so-called convertible area countries, which include all countries except those in the bilateral group.3 If receipts from bilateral group countries are obtained in convertible currencies, they are to be ceded on the official market. Most exchange transactions are settled through that market.

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 or Luxembourg francs, and with nonresidents in any of the convertible currencies.

Belgium and Luxembourg accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15,1961.

Exchange Control Territory

There is no exchange control between Belgium and Luxembourg (the Belgian-Luxembourg Economic Union); the two countries constitute a single exchange control territory in relation to other countries.

Administration of Control

The ultimate responsibility for the administration of exchange control in the Belgian-Luxembourg Economic Union (BLEU) is exercised by the Institut Belgo-Luxembourgeois du Change. Exchange control powers for most payments and transfers are delegated to authorized banks. Import and export licenses are issued by the Licensing Offices of the BLEU.

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, industrial expenses (e.g., costs of processing), and other commercial expenses including insurance; List B covers settlements of travel firms, salaries, pensions, fees, subscriptions, taxes, and public administration payments; List C covers administration expenses, income on securities, loans, etc., rents, exploitation rights, repatriation of certain foreign long-term investments, and transfers by emigrants of foreign nationality; List D covers gifts, life insurance payments, family maintenance payments, capital investments, liquidation of investments, dealings in gold, transfers by emigrants of Belgian or Luxembourg nationality, transfers by immigrants, inheritances, forward covering of merchandise, private travel expenses, and all transactions not in any of the other three lists.

Foreign countries are divided into two groups: the bilateral countries (see footnote 3) and the convertible area (all other countries).

The permissible methods of settlement for foreign payments are summarized in the accompanying table. In dealing with countries in the convertible area, there is a choice between the official and the free market for convertible currencies received from transactions in Lists C’ and D or paid for transactions in Lists A, B, and C; such settlements with the convertible area if made in Belgian or Luxembourg francs can also be settled through a Financial or a Convertible Account.

In addition to the general methods of settlement described above, individual licenses are granted in order to allow transfers through the official market for some of the transactions mentioned in List D. These cover essentially direct investment by enterprises and some capital transfers by individuals.

Summary of Permissible Methods of Settlement for Foreign Payments
Transaction ListCountry GroupForeign CurrencyExchange MarketNonresident Account in Francs
Outward Payments
A, B, and CConvertibleAnyOfficial or freeAny
DConvertibleAnyFreeFinancial
A, B, C, and DBilateralBilateral4
Inward Payments
A and BConvertibleConvertibleOfficialConvertible
C and DConvertibleConvertible OtherOfficial or free Free
Convertible or Financial
A, B, C, and DBilateralConvertibleOfficialConvertible or Bilateral4

Nonresident Accounts

Belgian or Luxembourg franc accounts of nonresidents are classified as follows:

1. Convertible Accounts. Balances on these accounts are equivalent to currencies negotiated on the official market, and these accounts may be opened in the name of any nonresident. They are not related to any country or monetary area. They may be used for settlements which either must or may be made through the official market, and may be credited with proceeds from the sale by a nonresident of convertible currencies in the official market 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. Financial Accounts. These accounts may be opened only for residents in convertible area countries,5 and they are not related to any country or monetary area. They may be used for settlements which either must or may be made through the free market, and may be credited with proceeds from the sale by a nonresident of gold or any currency in the free market and of convertible currencies in the official market. Domestic banknotes and proceeds from the sale in the free market of foreign banknotes deposited with authorized banks by foreign travelers in Belgium-Luxembourg or by persons residing abroad may be credited freely to Financial Accounts. Transfers between Financial Accounts are free. Balances on these accounts may be used to purchase gold or any currency negotiated on the free market.

3. Bilateral Accounts. These accounts may be opened for residents of bilateral countries (see footnote 3), and they are related to a country of residence of the account holder. They are used for settlements with bilateral countries, and may be credited with proceeds from the sale by a nonresident of convertible currencies in the official market. Balances on Bilateral Accounts may be transferred to other Bilateral Accounts related to the same country. Transfers may be made freely between Bilateral Accounts related to Burundi, Congo (Leopoldville), and Rwanda. In practice, the authorities permit the conversion of balances on Bilateral Accounts of the central banks into foreign currencies.

Imports and Import Payments

Individual licenses are required for (1) all imports from Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hong Kong, Hungary, Japan, North Korea, Outer Mongolia, Poland, Rumania, the U.S.S.R., and North Viet-Nam, (2) certain imports from Luxembourg, and (3) a number of imports from all other countries. The imports for which individual licenses are required include mostly agricultural products, foodstuffs, coal, and kerosene. All other imports, which constitute about four fifths of total imports, are free of license and quantitative restriction. Only a simple form completed by the importer giving notification of the import is required. Many imports subject to individual licensing are also admitted without quantitative restriction.

No exchange control 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). If 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 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. Foreign and domestic banknotes may be exported freely.

Exports and Export Proceeds

Individual licenses are required for (1) all exports to Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Outer Mongolia, Poland, Rumania, the U.S.S.R., and North Viet-Nam, (2) a few exports to Luxembourg, and (3) specified exports to other countries. All other exports are free of license; and only a simple form completed by the exporter giving notification of the export is required.

No exchange control 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 convertible 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 convertible 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 convertible currencies from other transactions (Lists C and D) may be retained or sold in the official or the free market. Receipts in all other currencies may be retained or sold in the free market. Foreign and domestic banknotes may be imported freely.

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. Direct investments by enterprises and some capital transfers by individuals, including gifts, family maintenance payments, remittances by emigrants of Belgian or Luxembourg nationality, and inheritances, but not transactions of a financial character, may also be made through the official market, subject to individual license. In addition, incoming capital may be received in convertible currencies through the official market or in Belgian or Luxembourg francs to the debit of a Convertible Account. The exchange control authorities may guarantee the repatriation of approved foreign investments made in Belgium-Luxembourg. 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 the financial settlement of such transactions must conform to the general regulations.

Changes during 1963

October 1. Some settlements and transfers mentioned in List D (payments regarding forward covering of merchandise, direct investments by enterprises, and capital transfers by individuals) could be made through the official market, subject to individual license.

Note.—A ministerial decree of January 16, 1964 eliminated the licensing requirement for nonresidents, who have to produce a license only if it is also required for residents.

Bolivia

Exchange Rate System

On May 14, 1953, a par value for the Boliviano was established by Bolivia with the Fund. However, exchange transactions no longer take place at rates based on that par value. A single, freely fluctuating rate was established by virtue of Supreme Decree 4538 of December 15, 1956. All exchange transactions are carried out in a free market, in which the exchange rate has remained stable since January 1959. On January 1, 1963, the boliviano was replaced by the Bolivian peso at a rate of Bs 1,000 = $b 1.00.

For operational purposes, the free market is divided into two sectors: the public sector and the private sector. The Monetary Department of the Central Bank of Bolivia operates in the public sector, buying foreign exchange from the Government and the official enterprises, including the Bolivian Mining Corporation, and selling foreign exchange to the Banking Department of the Central Bank, the banks, the Government, and its official agencies. The exchange rate of the Monetary Department of the Central Bank on December 31, 1963 was $b 11.875 buying, $b 11.885 selling, per US$1. The Banking Department of the Central Bank, the banks, and the foreign exchange dealers operate in the private sector, where the exchange rate on December 31, 1963 was $b 11.865 buying, $b 11.910 selling, per US$1. All sales of foreign exchange in the private sector are subject to a 2 per cent exchange tax and a 2 per mill stamp tax.

Prescription of Currency

There are no prescription of currency requirements. Settlements are usually made in U.S. dollars or other convertible currencies.

Imports and Import Payments

The import of a number of goods listed under some 40 headings in the Bolivian customs tariff requires the prior authorization of the Ministry of National Economy. The goods include such items as live cattle, dairy produce and other foods, animal and vegetable fats and oils, petroleum products, plastics and synthetic materials, rubber tires, and motor vehicles. Goods not listed under the 40 headings may be imported freely. Exchange to pay for imports may be purchased in the free market, subject to the requirement that the commercial documents involved in the transaction are submitted.

Payments for Invisibles

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

Exports and Export Proceeds

Exports are not subject to licensing. 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 Bolivian 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.

Proceeds from Invisibles

Exchange derived from invisibles may be sold in the free market.

Capital

Inward and outward capital transfers by residents or nonresidents are free of control and may be made through the free market. Foreign investments in Bolivia, except those involving petroleum and mining, are governed by the provisions of the Investment Law of December 16, 1960, which guarantees the free convertibility and repatriation of profits and amortized capital. Companies established before the passage of this law may also benefit from its provisions. Investments in petroleum and mining are governed by the Mining Code.

Changes during 1963

January 1. The boliviano was replaced by a new currency unit, the Bolivian peso, at a rate of Bs 1,000 = $b 1.00. For two years from this date, both currency units will be in circulation as legal tender, and the Central Bank of Bolivia will freely exchange bolivianos for the new Bolivian peso.

January 18. By the terms of a decree, the import of motor vehicles, wheeled tractors, electric generating sets, and other equipment and machinery using diesel fuel was made subject to the authorization of the Ministry of National Economy.

August 22. By the terms of a decree, the import of a number of commodities listed under some 36 tariff headings or their parts was made subject to the authorization of the Ministry of National Economy.

Brazil1

Exchange System

On July 14, 1948, a par value for the Brazilian Cruzeiro was established by Brazil with the Fund. However, exchange transactions no longer take place at rates based on that par value.

There are two main exchange markets: a “special” market and a “free” market. In the, special market, operated by the Bank of Brazil, exchange rates are fixed at Cr$600 buying, and Cr$620 selling, per US$1. These rates apply to (1) receipts from exports of coffee, sugar, and petroleum; (2) payments for imports of wheat, petroleum, and petroleum derivatives, equipment, parts and accessories for the use of Petrobras (national petroleum agency), and (temporarily) newsprint; and (3) payments for the servicing of the Brazilian Foreign Debt, government commitments to the Export-Import Bank of Washington (Eximbank), to the International Monetary Fund, and to the Brazilian Treasury Delegation in New York, loans with gold guarantee, and similar government commitments. All exchange transactions other than those described above are carried out in a separate (free) market at freely negotiated rates. This market is operated by the authorized banks and the Bank of Brazil. The exchange rates quoted by the authorized banks were Cr$l,400 buying, and Cr$l,450 selling, per US$1, on March 5, 1964. In its transactions with the public, the Bank of Brazil applies exchange rates which, in principle, follow those of the authorized banks; on March 5, 1964, these rates were Cr$l,100 buying, and Cr$l,140 selling, per US$1. The Bank of Brazil has separate rates for purchases of foreign exchange from, and sales to, authorized banks. Rates for convertible currencies in both markets are based on the U.S. dollar rates indicated above and the dollar quotations for such currencies in international markets. Exchange rates for “agreement currencies,” used for settlements with bilateral agreement countries, are quoted by the Bank of Brazil 5 per cent below its rates for convertible currencies; exceptions are “agreement dollars” used for settlements with Portugal, Rumania, and the U.S.S.R., which are fixed at par with the U.S. dollar, and “agreement sterling” used for settlements with Mainland China, which is fixed at par with the pound sterling.

Banknotes and travelers checks sold by foreign travelers are negotiated at free rates, which at the beginning of March 1964 fluctuated around Cr$1,400 per US$1.

Other effective rates result from the following: a 15 per cent tax on exchange proceeds from exports of cocoa beans and cocoa paste;2 a 5 per cent tax on exports of cocoa derivatives; various arrangements applicable to the proceeds of exports of coffee (see section on Exports and Export Proceeds, below); a compulsory deposit of 100 per cent (in some cases, 200 per cent) of the value of the exchange sold for most private payments (see section on Imports and Import Payments, below); and the practice of selling foreign exchange for payments for imports of petroleum at rates which, as a rule, are kept unchanged for three-month periods.3

The foreign exchange transactions are effected through the Bank of Brazil, the authorized banks, and the exchange houses. The exchange houses may deal only in travelers checks and banknotes. The Bank of Brazil carries out a large proportion of all exchange transactions. It receives, directly or indirectly, all exchange proceeds from exports of coffee, sugar, petroleum, and iron ore. It handles almost two thirds of total exchange sales for (1) payments for imports of wheat and petroleum, parts and accessories for the use of Petrobras, newsprint, and, in practice, for certain private imports up to specified limits which are set by the Director of the Exchange Department of the Bank of Brazil, and (2) the Bank’s commitments to service government financial obligations and to make other nontrade payments at special market rates. In addition, all transactions in bilateral currencies are made through the Bank of Brazil.

With the exception of proceeds of exports of iron ore, the limited volume of sales for payments for private imports, mentioned above, and a few minor transactions, all exchange transactions carried out through the intermediary of the Bank of Brazil are effected at special market rates. The Bank does not resell to authorized banks foreign exchange purchased by it, either in the special or the free market.

Authorized banks handle most of the free market exchange transactions. In practice, they also purchase foreign exchange from exporters of coffee, sugar, and petroleum, but they must resell such exchange to the Bank of Brazil. They are not permitted to sell foreign exchange to one another. Subject to certain conditions, exchange held by an authorized bank may be used by its branches in different cities.

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 exercises over-all supervision of the operations of the foreign exchange market. Through a unit within the Department (FIBAN), it enforces controls and restrictions. The Department also organizes the auctions of promessas de licença (which entitle the holder to receive an import license for Special Category imports), and establishes the total value of promessas de licença on the basis of criteria approved by the Council of SUMOC and with the advice of the Foreign Trade Department of the Bank (CACEX).

Government departments and public entities are requested to present to the Exchange Department semiannual estimates of their needs for imports and service payments. These are reviewed by the Council of SUMOC and eventually included in the foreign exchange budget.

CACEX issues export and import licenses and verifies price quotations, weights, measures, classifications, and types in export and import operations that are subject to licensing. The Customs Policy Council decides on changes in the categories of import commodities, subject to the approval of the Ministry of Finance.

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, Finland, France, the Federal Republic of Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden, 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. These accounts are maintained in clearing dollars with Bulgaria, Czechoslovakia, Eastern Germany, Greece, Hungary, Israel, Poland, Portugal, Rumania, Turkey, the U.S.S.R., and Yugoslavia; in Danish kroner with Denmark; and in clearing sterling with Iceland and Mainland China.

On the basis of provisions for the settlement with certain countries of outstanding balances or transactions under bilateral agreements now terminated, a few payments with some countries are settled in agreement dollars. All trade with Bolivia, except Brazilian exports of coffee and cocoa, and frontier trade with Paraguay are settled in cruzeiros. Settlements with other 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

There are three main import procedures applied to the following groups: (1) General Category, (2) selected imports within the General Category, and (3) Special Category.

General Category imports, included in a published list, are mainly raw materials, equipment goods, spare parts, and some essential goods not produced in Brazil in sufficient quantities. All other imports are covered by the Special Category. Secondhand goods, which are included in the Special Category, may be imported only if they are (a) certified to be in good operating condition, (b) not obsolete, (c) to be used by the importer himself, and (d) considered to contribute directly to domestic productive process. Imports of new automobiles and recreational boats of a value over US$3,500 are prohibited.

General Category imports are free of quantitative restriction. However, to obtain a visa from the Brazilian consular authorities abroad (which is necessary for shipment of the goods) and to clear the goods through customs, the importer must obtain a “certificate of exchange cover,” which is issued by the Exchange Department of the Bank of Brazil, subject to the following conditions: (1) The importer must have closed an exchange contract with the Bank of Brazil or an authorized bank, for no more than 180 days, for the full value of the import. As a rule, at present, foreign exchange is not sold for less than 120 days. (2) The importer must provide evidence that, within 5 days of the closing of the contract, a deposit in cruzeiros equivalent to 100 per cent of the contract has been made at the Bank of Brazil. The deposit is 200 per cent of the contract for a number of specified commodities considered as nonessential and for raw materials and semimanufactured goods used in the domestic production of such nonessential goods. Specified imports are exempt from the deposit requirement. Thirty days after the deposit is made the importer receives, against the deposit, Bank of Brazil notes for an equal amount, maturing in 180 days and carrying no interest.4 (3) CACEX must be supplied with information on the foreign prices of the goods and any other information which the Department may consider necessary.

At the time the importer closes the exchange contract, he is required to deposit with the bank 10 per cent of the value of the foreign exchange, if the contract is concluded in convertible currencies for a period exceeding 30 days. The deposit may be for a larger amount, depending on banking practices. While authorized banks usually ask for guarantee deposits of up to 50 per cent (charging interest on the balance up to 100 per cent), the Bank of Brazil usually requires a 100 per cent deposit for payment against letter of credit, and 20 per cent for “collection”; for certain imports, the required deposits are lower. When settlement is made in bilateral currencies, the required deposit is 20 per cent. When the contracts are liquidated, deposits may be used for payment for foreign exchange.

Each importer may purchase no more than US$30,000 in convertible currencies, and no more than US$20,000 in bilateral agreement currencies, in any one week. These limits do not apply to imports, included in the National List of Brazil, from countries of the Latin American Free Trade Association. The limits may be waived by the Bank of Brazil, and waiver is normally granted to importers who in the past customarily imported goods in average weekly amounts larger than these limits. Moreover, to the extent that he does not purchase convertible exchange, an importer may acquire bilateral agreement currencies in addition to the US$20,000 limit, up to US$50,000 weekly.

Special Category imports are subject to global quotas. They represent a minor proportion of total imports. Importers are required to obtain an import license from CACEX, and for this purpose they must purchase a promessa de licença on the stock exchange, where promessas are offered in global amounts for auction. Importers must also comply with the requirements established for obtaining a “certificate of exchange cover” for General Category imports, as described above (p. 52)—the deposit comparable to that under (2) above being 200 per cent for all imports—and with the requirement to lodge whatever guarantee deposit the bank may request (a requirement similar to that for General Category imports). Purchases of foreign exchange for Special Category imports are not included in the weekly limits given above for General Category imports.

The procedure for the auction of the promessas de licença is as follows: Each week the Exchange Department of the Bank of Brazil, determines the amount to be offered at auction. The promessas are expressed in only two currencies, “free U.S. dollars” and “agreement dollars,” and are offered in lots of US$100 and US$500. There is a minimum bid only for auctions of promessas in agreement dollars, which is Cr$662.60 per US$1. Within 3 business days, beginning with the day following the date of the auction, a successful bidder must pay the price of the promessa to the Bank of Brazil. The promessa is valid for 30 days, and within this period the importer must close an exchange contract for the payment of the import. A promessa entitles the holder to obtain import licenses for a total value equal to the amount of the promessa. Promessas in agreement dollars are valid for imports from any bilateral payments agreement country, while promessas in free U.S. dollars are valid for imports from any other country.

Special procedures are applicable to certain imports (petroleum, wheat, newsprint, maps, books, magazines, and newspapers) and imports with foreign financing. Foreign exchange to pay for these imports is purchased, as a rule, from the Bank of Brazil.

Payments for Invisibles

The special market is used for the following invisibles: freight incidental to trade transactions settled through the special market; and payments related to servicing the Brazilian Foreign Debt, government commitments to the Export-Import Bank of Washington, the International Monetary Fund, and the Brazilian Treasury Delegation in New York, loans with gold guarantees, and similar government commitments. All other payments for current invisibles are made at freely negotiated rates.

All payments for current invisibles are subject to the approval of the FIBAN. In addition, remittances on account of income from foreign capital, royalties, and technical, scientific, and administrative assistance are allowed only where the foreign capital concerned, and the contracts for patents, trademarks, and technical, scientific, and administrative assistance, are registered in accordance with established rules; the transfer of income from foreign investment is allowed only up to 10 per cent annually of registered foreign capital. Total annual transfers on account of royalties and technical, scientific, and administrative assistance may not exceed 2 per cent of the cost of, or the gross value of, the sale of the manufactured products concerned. Moreover, remittances on the basis of contracts for technical, scientific, or administrative assistance may be made only for the first 5 years of the operation of the enterprise in Brazil or for 5 years from the date of the application of the special production process; this period may be extended for 5 years by the Council of SUMOC.

The Bank of Brazil, in practice, sells foreign exchange only for current invisibles related to those trade transactions for which it has closed an exchange contract, and for the nontrade transactions carried out through the special market. The authorized banks, through which all payments for current invisibles are made, are obliged to keep weekly sales of exchange for payments within the weekly average recorded during the year ended August 1962. Moreover, 70 per cent of weekly transfers are reserved for payment of contractual obligations (i.e., freight and insurance payments related to imports, royalties, technical assistance, amortization of loans, interest, dividends, and profits realized by foreign capital, subscriptions to newspapers, and other obligations). In addition to the weekly limit of 30 per cent of the total amount which may be transferred by a bank, payments for invisibles not related to contractual obligations are subject to a further limitation, namely, remittances by any one person may not exceed, in principle, US$500 in a monthly period. Banks sell exchange for travel expenses only to bona fide travelers, upon presentation of valid passports and tickets.

All payments for current invisibles are subject to an advance deposit equal to 100 per cent of sales; it is kept at the Bank of Brazil for account of SUMOC for a period of 210 days. These advance deposits are covered by the same procedure as that applicable to import payments (see section on Imports and Import Payments, above).

Letters of credit opened for payment in inconvertible or “agreement” currencies for imports contracted on an f.o.b. basis must contain a clause requiring that the goods be transported on a ship under the flag of Brazil or the exporting country.

Travelers may take out domestic and foreign banknotes freely.

Exports and Export Proceeds

All exports require licenses, with the exception of exports of coffee, which require authorization by the Brazilian Coffee Institute. Export licenses are granted without limitation except when (1) the export is contrary to the national security or to obligations arising from international agreements, (2) payment is to be received in an inconvertible currency, the acceptance of which is considered by FIBAN to be inconvenient, or (3) it is considered necessary to guarantee adequate domestic supplies of the goods concerned. Restrictions on account of the last-mentioned reason are limited to a few products.

All exports are subject to shipping permits issued by FIBAN. To obtain this permit it is necessary to present the export license (for coffee, the authorization of the Brazilian Coffee Institute) and evidence that the exchange proceeds have been negotiated through an authorized bank or the Bank of Brazil.

The Brazilian Coffee Institute does not grant the authorization to export coffee unless the sale contract is based on a price per pound which is at least equal to the minimum registration price fixed by the Institute. Exporters of coffee are required to surrender to SUMOC, through the Bank, without compensation a portion (retention) of their foreign exchange receipts, the cruzeiro equivalent of which is transferred to a Coffee Defense Fund. In practice, exporters receive (1) payment of a fixed cruzeiro amount per bag corresponding to a preestablished price in U.S. dollars5 and (2) a bonus added to the special market exchange rate for any foreign exchange surrendered in excess of this price. The bonus is paid out of the Coffee Defense Fund and is set periodically in such a way as to make the effective rate applicable to these transactions equivalent to the Bank of Brazil’s buying rate in the free market.6

Proceeds from exports of sugar and petroleum are negotiated at the special market exchange rate. All other exports are sold at freely negotiated exchange rates, but exporters of cocoa beans and cocoa paste are required to surrender to SUMOC without compensation 15 per cent of their exchange proceeds; and exporters of cocoa derivatives are required to surrender without compensation 5 per cent of exchange proceeds. The cruzeiro equivalent of these deductions is used to finance a program of price support and plantation improvement for cocoa.

Exports of consumer durable goods and capital goods for which payment is to be made in convertible currency on a medium-term or long-term basis may be licensed by CACEX provided that (1) the financing in foreign currency does not exceed 80 per cent of the invoiced value and (2) information is furnished about the transaction and, in particular, about guarantees given by the importer who finances a percentage of the export.

CACEX may refinance up to 75 per cent of the credit granted by the exporter, provided that the export proceeds are negotiated with the Bank of Brazil. A refinancing by the Exchange Department of the whole of the credit granted by the exporter is also provided for, but only for the first 360 days.

The Exchange Department of the Bank of Brazil is authorized, in connection with the refinancing mentioned above, to place in foreign financial markets securities in foreign currencies up to the nominal total net value of US$50 million, with maturity related to the financing of exports, for periods not exceeding 7 years.

Proceeds from Invisibles

Exchange proceeds from current invisibles are sold through the Bank of Brazil or the authorized banks at freely negotiated rates. Travelers checks and foreign banknotes are sold in a separate free market through exchange houses. Travelers may bring in domestic and foreign currency notes freely.

Capital

For the purpose of repatriation and the remittance of income, foreign capital must be registered with SUMOC. Foreign capital is defined as (1) assets, machinery, and equipment which have entered the country without a corresponding expenditure of foreign exchange and which are to be used to produce goods or to render services, and (2) financial and monetary resources brought into the country for investment in economic pursuits, provided that, in either case, the owner is a person or legal entity domiciled abroad.

Foreign capital is classified as investments, loans, and financing. Investment is defined as that foreign capital which constitutes part of corporate capital and participates directly in the risk inherent in an economic undertaking. Loans are considered to be foreign capital that is not part of the corporate capital of any enterprise and which does not participate directly in capital risk. Any loan obtained to purchase capital goods abroad, whether conceded by the manufacturer himself or a third party, is considered to be financing.

To register foreign capital, it is necessary to prove that the capital has entered Brazil. To register loans and financing that are made in foreign currency, it is necessary to certify that the interest rate corresponds to that prevailing in the country of the lender, and that the prices of the imported goods correspond to the prices of comparable goods in the country of origin. The registration of financing (usually known as suppliers’ credits) requires the prior authorization of SUMOC, on advice from CACEX and the Exchange Department of the Bank of Brazil.

The registration of direct investment is subject to the following rules: The capital that enters or entered Brazil is registered in foreign currency. Reinvestments, defined as the unremitted portion of remittable earnings (i.e., up to 10 per cent), is registered in cruzeiros. The reimportation into Brazil of remitted earnings of foreign capital is, however, registered in foreign currency. So-called supplementary capital, i.e., earnings in excess of 10 per cent, and so-called monetary adjustments, i.e., monetary revaluation of fixed assets, must be registered in cruzeiros. Capital registered in cruzeiros is not treated as foreign capital. Remittances for the repatriation of foreign investment, up to 20 per cent a year, are allowed only when the foreign capital concerned is registered.

All capital transfers abroad are subject to the approval of FIBAN.

Exchange transactions concerning private capital are effected through an authorized bank or the Bank of Brazil at freely negotiated rates.

Table of Exchange Rates (as at March 5, 1964)7(cruzeiros per U.S. dollar)
BuyingSelling
600 (“Special” Market Rate)8,9

Exports of coffee, sugar, and petroleum.
620 (“Special” Market Rate)9 Imports of wheat, petroleum and petroleum derivatives, parts and accessories for the use of Petrobras, and newsprint; servicing of Brazilian Foreign Debt, government commitments to Eximbank, IMF, Brazilian Treasury Delegation in N.Y., loans with gold guarantees, and similar government commitments.
1,100 (Bank of Brazil Free Market Rate)9

Receipts not negotiated at “special” market rate and offered to Bank of Brazil.
1,140 (Bank of Brazil Free Market Rate)9

Payments through Bank of Brazil for selected transactions.10
1,190 (Authorized Banks’ Free Market Rate less 15%)11

Exports of cocoa beans and cocoa paste against convertible currencies.
1,330 (Authorized Banks’ Free Market Rate less 5%)12

Exports of cocoa derivatives against convertible currencies.
1,400 (Authorized Banks’ Free Market Rate)

Receipts not negotiated at “special” market rate.
1,450 (Authorized Banks’ Free Market Rate)

Payments not negotiated at “special” market rate.
1,450 (Fluctuating Rate)

Foreign banknotes and incoming travelers checks.
1,480 (Fluctuating Rate)

Foreign banknotes.

Changes during 1963

March 13. The exchange tax on proceeds of exports of cocoa and cocoa paste was reduced from 15 per cent to 10 per cent.

April 23. By SUMOC Instruction 239, the exchange rates in the free market were changed from Cr$460 buying, Cr$475 selling, per US$1, to Cr$600 buying, Cr$620 selling, per US$1.

April 23. Payments for imports of petroleum and petroleum products continued to receive the benefit of the Cr$475 rate.

April 23. The exchange tax on proceeds from exports of cocoa and cocoa paste was raised from 10 per cent to 20 per cent; an exchange tax of 8 per cent was introduced on exports of cocoa derivatives; and a tax of Cr$40 per US$1 was introduced on proceeds of cotton exports.

April 23. The period of retention for the advance deposit requirement applied to imports was extended from 150 days to 240 days; the rate of deposit remained at 80 per cent. As an alternative to making this deposit, importers could purchase 1-year interest-bearing Treasury bills (Series B) for 60 per cent of the value of the import.

April 23. The retention on coffee exports was increased from US$22 to US$26 per bag of 60 kilograms.

June 28. By SUMOC Instruction 241, the exchange taxes on cocoa and cocoa paste, and cocoa derivatives were reduced to 15 per cent and 5 per cent, respectively.

June 28. It was established that imports of machinery and equipment financed with foreign credit would be approved only when they were related to projects of high interest to the Brazilian economy and when the financing was for a period of at least 7 years and the first repayment installment was due after at least 2 years. No imports of machinery and equipment that could be produced “satisfactorily” in Brazil would be permitted.

July 1. By SUMOC Instruction 240 and the Brazilian Coffee Institute Resolutions 258, 261, and 268, the retentions on coffee exports were changed. For exports of the 1963-64 crop, effective retentions ranging from US$17.92 to US$18.97 a bag were established, the amount depending on the quality of the coffee. For exports of coffee of earlier crops, the effective retentions ranged from US$23.91 to US$25.75 a bag.

August 9. By SUMOC Instruction 243, imports of goods included in the National List of Brazil from countries of the Latin American Free Trade Association were exempted from the deposit requirement.

August 27. By SUMOC Instruction 244, an exchange bonus of Cr$270 per-US$1 was established for specified incoming invisibles; and an exchange surcharge of Cr$280 per US$1, for specified outgoing invisibles.13

September 3. By SUMOC Instruction 248, an exchange tax of Cr$40 per US$1 on cotton exports was abolished for cotton of the 1963-64 crop.

September 3. By SUMOC Instruction 249, exporters of manufactured goods were accorded a priority for the closing of exchange contracts for imports of raw materials, parts, accessories, machinery, and equipment for a value of 30 per cent of the export drafts. These imports were also exempted from the advance deposit requirement.

October 11. By SUMOC Instruction 254, the percentage of the advance deposit on imports was raised from 80 per cent to 100 per cent; the retention period was fixed at 210 days; and the option of purchasing Treasury bills (see April 23, above) was eliminated. The depositor would receive Bank of Brazil 180-day notes, bearing no interest, 30 days after the deposit was made.

October 23. By SUMOC Instruction 256, the percentage of the advance import deposit was raised to 200 per cent for Special Category imports and for specified commodities (usually less essential goods) in the General Category.

October 31. By SUMOC Instruction 258, the list of General Category imports subject to the 200 per cent advance deposit requirement was published.

November 11. By SUMOC Instruction 258, a bonus was established for exchange receipts from exports of specified manufactured goods. The bonus was to be changed in accordance with changes in the cost of production (see footnote 13).

Note.—The following changes took place in 1964:

January 21. Decree 53451, which included detailed regulations about the implementation of the “profit remittance law,” went into effect.

February 19. By SUMOC Instruction 263, a new exchange system was introduced based on two markets: (1) a “special” market with fixed rates applicable to proceeds from exports of coffee, sugar, and petroleum, and to payments for imports of petroleum, wheat, and (temporarily) newsprint, as well as for specified financial obligations and (2) a free market with a fluctuating rate for all other duly authorized transactions. The exemption from the advance deposit requirement for remittances for invisibles of up to US$100 was abolished.

British Guiana

Exchange Rate System

The par value is West Indian Dollars 1.71429 = US$1. The West Indian dollar is issued by the British Caribbean Currency Board and has a fixed relationship to sterling of BWI$4.80 = £1.1 The banks in British Guiana base the rates for other currencies on the current London market rates.

Administration of Control

Exchange control authority is vested in the Governor and the Minister of Finance. Authority for approving normal import payments and providing allocations of foreign exchange for other current payments is delegated to the two banks authorized for this purpose. Import licensing is the responsibility of the Ministry of Trade and Industry.

Prescription of Currency

British Guiana is a member of the Sterling Area and maintains prescription of currency requirements similar to those of the United Kingdom. Authorized settlements with residents of other parts of the Sterling Area may be made in any Sterling Area currency. Authorized payments, including payments for imports, by residents of British Guiana to residents of countries outside the Sterling Area may be made in any foreign currency or by crediting West Indian dollars or sterling to an External Account. Receipts from countries outside the Sterling Area may be obtained in any foreign currency or in sterling or British West Indian dollars from an External Account.

Nonresident Accounts

There are three categories of accounts for persons who are not residents of British Guiana: External (Sterling Area) Accounts, External (Non-Sterling Area) Accounts, and Blocked Accounts.

External (Sterling Area) Accounts are held by residents of Sterling Area countries other than British Guiana. They may be credited with all authorized payments by residents of British Guiana to other Sterling Area countries and with transfers from other External (Sterling Area) Accounts; other credits require approval. They may be debited for payments for any purpose due from residents of other countries in the Sterling Area to residents of British Guiana, for transfers to other External (Sterling Area) Accounts in British Guiana, and for withdrawals by the account holder while he is in British Guiana; other debits require approval.

External (Non-Sterling Area) Accounts are held by residents of countries outside the Sterling Area. They may be credited with all authorized payments by residents of British Guiana to the residents of countries outside the Sterling Area and with transfers from other External (Non-Sterling Area) Accounts; other credits require approval. They may be debited for any payments due from residents of countries outside the Sterling Area to residents of British Guiana, for transfers to other External (Non-Sterling Area) Accounts in British Guiana, and for withdrawals by the account holder while he is in British Guiana; other debits require approval.

Blocked Accounts are credited with funds that are not placed at the free disposal of nonresidents (e.g., capital proceeds). These accounts may be debited for authorized payments, including the purchase of approved securities.

Imports and Import Payments

Imports subject to individual licensing cover a wide range; they include coffee, sugar, vegetables, cereals, meat, poultry, dairy products, fats, copra, vegetable and animal oils, petroleum products and other fuels, building materials, gold, diamonds and jewelry, and firearms. The granting of individual licenses and the conditions attached thereto depend on current policy; at the end of 1963, licenses were not being issued for some of the categories mentioned above. Other goods may be imported under an open general license.

Payments for authorized imports are permitted upon application and submission of the necessary documentary evidence. Exchange control forms have to be completed only for transactions exceeding BWI$240.

Payments for Invisibles

All payments for invisibles require approval, which is given freely. As a working rule, limits are usually applied to certain payments on an annual basis, e.g., for travel abroad (BWI$666), for education at schools abroad (BWI$3,360 for each child), for education at universities and comparable institutions (BWI$4,800 for each student), and for family maintenance (BWI$4,800).

Travelers going abroad may take with them West Indian currency notes not exceeding BWI$100; these notes do not form part of any allotment of exchange for travel. In addition, notes to the value of BWI$50 may be taken out in the form of foreign currency notes as part of any travel exchange allowance.

Exports and Export Proceeds

Most exports are free of export license, but are supervised by the authorized banks and the Customs and Excise Department to ensure that the exchange proceeds are repatriated and, if obtained in specified currencies,2 surrendered. Exchange control forms have to be completed only for exports exceeding BWI$2,000 in value.

Proceeds from Invisibles

Receipts in the specified currencies on account of invisibles must be sold to an authorized bank. Travelers may bring in any currency notes freely.

Capital

New investments by nonresidents require the approval of the exchange control. Such approval is normally given for direct investments in new projects that would benefit British Guiana; it carries with it an assurance that profits may be remitted and that upon liquidation of the investment the proceeds, including any capital increments, may be repatriated in full.

Finance institutions (other than banks) and life insurance companies, both local and foreign, are required to invest locally 75 per cent of their newly acquired resources. These companies are also required over a period of ten years from December 1961 to bring their existing local investments to 75 per cent of their total resources.

The export of capital by residents is not normally permitted. Specified currencies obtained by residents through capital transactions must be surrendered to an authorized bank.

Changes during 1963

During the course of the year, some imports were freed from, and others were made subject to, individual licensing.

November. All previous import and export controls were consolidated under a new Trade (Control of Import and Export) Order.

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 kyatsterling rate and the rates for other currencies in the London exchange market.

Administration of Control

Exchange control is administered by the Exchange Control Board. All imports and most exports are handled by various government agencies under the Ministry of Supply and Cooperative and the Ministry of Trade Development. Private exporters must register with the Registration Board. Export licenses are issued by the Directorate of Imports and Exports.

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 are made in a Sterling Area currency. Payments to Mainland China, with which Burma has a bilateral payments agreement, are made through a clearing account denominated in sterling. 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

All imports are made by the Government and government agencies. Most consumer goods are imported by the Peoples Stores Corporation. Imports from South Africa are prohibited. Also prohibited are imports of a few commodities—principally opium and similar narcotics, monkeys, playing cards, and gold and silver bullion.

Authorized banks will automatically provide exchange (see section on Prescription of Currency, above) to pay for permitted imports.

Payments for Invisibles

All payments for invisibles are subject to licensing. 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 resulting from investment have been temporarily suspended. Most personal money order remittances to neighboring countries through post offices are not permitted.

Foreign exchange for tourist travel by residents requires individual licenses; allocations for this purpose are, however, temporarily suspended. However, residents going abroad for any purpose may take out freely the equivalent of K 50 in the currency of the country of destination (except India) or, if that currency is not available, in sterling notes. 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 converted into kyats. The export of Burmese currency notes is prohibited.

Exports and Export Proceeds

Products of any importance1 are exported solely by government agencies. There is a list of prohibited exports: iron and steel, brass, copper and aluminum and scraps thereof, foreign manufactures, and commodities of domestic origin which it is desired to conserve for domestic requirements. Private exports of commodities not reserved for handling by government agencies require licenses, which are granted freely, but the exporter must obtain the export proceeds in a manner satisfactory to the exchange control authorities. In general, exporters are required to surrender their foreign exchange proceeds to an authorized exchange dealer. Unless specifically exempted, private exporters must be registered with the official Registration Board. Exports to South Africa are prohibited.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered. Travelers may bring in, subject to declaration, any amount in foreign currency. The import of Burmese currency notes is prohibited.

Capital

Foreign investments in Burma are governed by the provisions of the Union of Burma Investment Act, 1959, and the Investment Rules of February 25, 1960 issued under authority of the Act. Investment proposals are considered by an Investment Committee, to ascertain whether the proposed enterprise will utilize domestic raw materials, increase domestic employment, conserve foreign exchange, and generally conform to the economic plans of the Government. However, since February 15, 1963 when the Government announced a new policy of government ownership, permission has not been granted for setting up new private industries.

The investment law provides for the transfer abroad of profits after taxes and for the withdrawal of imported capital at any time after five years from the time of entry, in annual quotas not exceeding 25 per cent of its original value. Proceeds from the liquidation or sale of an enterprise may also be transferred abroad. All such transfers may be made at the official rate of exchange prevailing at the time of the transaction.

The repatriation of personal assets and family remittances has been temporarily suspended for foreign nationals employed in the private sector.

When the transfer abroad of payments in favor of nonresidents is not permitted, 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 are not usually permitted to remit funds abroad for investment.

The import, export, and transfer of securities involving nonresident interests require individual licenses.

Changes during 1963

January 1. All foreign firms were prohibited from making imports.

January 15. Customs duties on kenaf and kapok seeds were abolished.

February 6. The amount of foreign currency that residents going abroad for any purpose might take out of Burma was reduced from the equivalent of K 100 to the equivalent of K 50.

February 15. The Government announced a new policy of government control over external trade, manufacturing, distribution, and rice procurement.

February 18. The Government announced that it would handle the purchase of all paddy in 1964 and would, in the interim, subject all private transactions to government-controlled price ceilings.

February 19. The issuance of import licenses under the export incentive scheme was stopped and the scheme abolished.

February 23. All private banks were nationalized.

February 26. The Civil Stores Committee No. 2 announced that all products of domestic industries henceforth would be sold only through the Committee, unless specifically exempted.

March 22. The Union Bank of Burma stopped providing Indian currency notes and coins to travelers from Burma to India.

May 23. The Government banned all postal money orders for remittances abroad (except when specially exempted) and cash-on-delivery orders for imported goods.

July. The Government suspended temporarily family remittances and transfers of personal savings by foreigners employed in the private sector, provision of foreign exchange for pilgrimages, remittances for profits, and remittances of general insurance surplus funds and of capital assets stemming from the voluntary liquidation of foreign companies.

July 25. It was announced that for the year beginning October 1, 1963 the Government and government agencies would have a monopoly over the purchase, sale, and export of 10 specified crops (rice, matpe, tapioca, Virginia tobacco, jute, kapok, cotton of the long-staple Mahlaing 5/6 variety, wagyi, wagale, and wheat), and the export of 14 crops (maize, gram, pesingon, butter beans, red and white pelun, pedisein, suntani, suntapya, bokate, peyin, soya beans, groundnuts, castor seeds, and sugar cane).

August 1. Private commission agency business was no longer permitted. Firms in the Burma Economic Development Corporation (BEDC) were not affected.

September 7. The BEDC was dissolved, and its 39 subsidiary firms were to function provisionally under the BEDC Reorganization Committee, pending their transfer to various government departments, boards, and corporations.

September 24. The Peoples Stores Corporation was established. The Civil Stores Committees (Nos. 1, 2, and 3) were merged into the new Corporation, which was given the task of importing for distribution all except a few consumer goods during the year beginning October 1, 1963.

October 1. The State Timber Board took over all trade in teak, other hardwoods, and railroad sleepers.

October 1. The Rangoon Drug House took over the import of all drugs and medicines.

October 1. The Government assumed control over all imports and most exports.

October 1. The nine Joint Venture Corporations were fully nationalized and their activity absorbed by the Peoples Stores Corporation.

October 1. The Myanma Export-Import Corporation was established, to deal with external trade not handled by other institutions, and it was placed under the administrative control of the Ministry of Supply and Cooperative.

October 11. Licenses for the export of oil cakes were no longer issued to private exporters. The export of oil cakes was taken over by Myanma Export-Import Corporation.

Burundi1

Exchange Rate System

No par value for the currency of Burundi has been established with the Fund. The official unit of currency is the Rwanda-Burundi franc, which is at par with the Belgian franc, giving the relationship of RBF 50.00 = US$1.2 This official rate applies to the following transactions: all export proceeds; payments for specified essential imports (see section on Imports and Import Payments, below); transportation and insurance payments connected with trade transactions at the official rate and certain other payments for invisibles which are authorized up to specified amounts (see section on Payments for Invisibles, below); amortization payments on foreign debts; and certain receipts from invisibles, including embassy expenditures, workers’ remittances, and foreign aid. There is a free market for all other transactions. In December 1963, the free rate was about RBF 90 per US$1.

Authorized banks must carry out permitted exchange transactions at rates between the buying and selling rates fixed by the Bank of Issue (Banque d’Emission du Rwanda et du Burundi) for currencies quoted by that Bank, and at rates fixed freely with their customers for other currencies.

Administration of Control

Control over foreign exchange transactions and foreign trade is vested in the Bank of Issue; authority to carry out some of these transactions is delegated to the commercial banks.

Prescription of Currency

Outgoing payments may be made in any currency; receipts must be obtained in one of the currencies quoted by the Bank of Issue; other currencies may also be accepted, provided that the authorized bank concerned can convert them into a specified currency at a discount not exceeding 5 per cent.

Imports and Import Payments

All imports except trade samples, luggage, and merchandise not intended for sale and valued up to RBF 1,000 require licenses. Applications for licenses must be submitted to the Bank of Issue through an authorized bank. For the purposes of import licensing and exchange allocation, goods are classified in two lists—List A and List B. List A includes goods considered by the authorities to be essential. For these goods, an application for an import license must be submitted on a form entitled Import License and Payment Authorization. The approval of such an application by the Bank of Issue constitutes an authorization also to obtain “allocated foreign exchange” at the official rate. List B includes goods considered by the authorities to be non-essential, they are mostly goods for consumption by Europeans in Burundi, e.g., alcoholic beverages, European fruits, cheeses, films, air conditioners, refrigerators, private motor vehicles. For these imports, licenses are issued without an allocation of foreign exchange, and exchange must be purchased in the free market. Import licenses must be presented to the customs officials when the goods are cleared through customs. The number and date of expiration must be entered on the customs clearance form, called the Consumption Declaration, a copy of which is then sent to the Bank of Issue by the customs office.

Payments for Invisibles

Foreign exchange is sold by the Bank of Issue at the official rate for transport and insurance connected with official rate imports and exports, and transfers of up to 50 per cent of the salaries of nonresidents up to a maximum of RBF 50,000 a month.

Approval is granted for the purchase by residents traveling abroad of foreign exchange up to the equivalent of RBF 18,000 for each person once a year. Under a special agreement, payment for air travel by residents between Usumbura (the capital of Burundi) and Brussels may be made in Rwanda-Burundi francs. Transfers of insurance premiums and of interest and amortization of foreign debt are authorized on an ad hoc basis. Remittances for payments for certain other invisibles may also be authorized on an ad hoc basis.

Foreign exchange for all other categories of invisibles must be purchased in the free market.

Exports and Export Proceeds

All exports are subject to a prior declaration entitled Declaration of Collection of Foreign Exchange. The Declaration must be presented for certification by the Bank of Issue through an authorized bank. It is valid for a period of six months, but extensions may be granted by the Bank of Issue. Payments must be collected not later than 90 days after the goods have left the country. All exchange proceeds from exports must be surrendered to an authorized bank at the official rate of exchange, within 8 days from their collection.

Proceeds from Invisibles

Exchange from specified receipts from invisibles must be surrendered at the official rate of exchange, e.g., receipts from expenditures by foreign embassies, workers’ remittances, and foreign aid. All other receipts from invisibles—including those resulting from the sale of goods and services to nonresidents staying temporarily in Rwanda, visitors’ expenses, and remittances to missions, private schools, and other private institutions—may be exchanged at the free market rate.

Capital

The Investment Code of August 6, 1963 stipulates the rules under which domestic and foreign private investments may be made in Burundi. Investments of foreign capital are permitted in the form of participation through the acquisition of stocks or shares and loans granted for a period exceeding five years and constituting a determining financial element in the firm established in Burundi.

Investments in specified existing economic activities (e.g., industrial development, farming, fisheries, tourist industries), as well as new investments in activities that fulfill certain conditions relating to the realization of the economic development plan, may be accorded specified priority rights. Such rights consist mainly of exemptions from import duties and from taxes on income from investments. Moreover, certain of the above enterprises, when expanding their activities, may be granted additional concessions. Applications for priority status must be submitted to the Minister of Economy, who forwards it to an Investment Commission. Recognition of priority status is pronounced by a royal decree. Foreign capital, as defined above, which is invested in a priority enterprise, may be repatriated after five years. The transfer of profits and interest of up to 5 per cent per annum of the invested capital is permitted.

Capital transfers by residents are usually not permitted.

Changes during 1963

February 1. Imports of private motor vehicles were included in List B.

August 6. The Investment Code of August 6, 1963 was promulgated. It included regulations under which domestic and foreign private investments could be made in Burundi.

November 20. The Investment Code of August 6, 1963 went into effect.

December 31. Rwanda announced its decision to end the monetary union with Burundi.

Cambodia1

Exchange Rate System

The Cambodian Riel is defined as a monetary unit containing 0.0253905 gram of fine gold. Exchange transactions in U.S. dollars and pounds sterling are carried out at parity rates based on the gold content of the riel and the respective currencies; these rates are Riels 35 = US$1 and Riels 98 = £1. Although the official parity for the French franc is Riels 7.08 = F 1, transactions take place at the rate of 10 riels per French franc. Other multiple exchange rates result from the free negotiation of balances in EFAC accounts (see section on Exports and Export Proceeds, below), and from an arrangement by which foreign tourists staying at hotels of the Société Khmère des Auberges Royales at Siemréap are given coupons for 25 riels over and above the rate of 35 riels for each U.S. dollar sold (see section on Proceeds from Invisibles, below).

Sales and purchases of foreign banknotes quoted on the Phnôm-Penh official market are made at the selling rate plus 3 per cent and at the buying rate minus 1 per cent, respectively. Rates for foreign banknotes quoted “indicatively” on that market are determined by the authorized banks on the basis of the average rates announced by the National Bank of Cambodia plus a commission of 1 per cent for purchases and of 4 per cent for sales. Authorized banks are empowered to negotiate for their own account, and at a rate mutually agreed with their customers, foreign banknotes other than those quoted officially or “indicatively” by the National Bank of Cambodia.

Arbitrage operations involving convertible currencies may be authorized by the National Exchange Office. If the operations take place in Cambodia, they are carried out at the rate of the day on the Phnôm-Penh exchange market. Arbitrage operations involving EFAC accounts in French francs must be carried out on the Paris exchange market at the rate in that market.

Administration of Control

Exchange control is administered by the National Exchange Office in cooperation with the National Bank of Cambodia; this office is empowered to authorize all operations related to settlements with foreign countries, to foreign investments, and to nonresident accounts. Authorized banks are permitted to carry out specified exchange control operations.

The Ministry of National Economy is in charge of import and export controls, but it has delegated this authority to the Director of Foreign Trade. Import licenses are issued by the Department of Foreign Trade and are subject thereafter to certification by the National Exchange Office.

Prescription of Currency

Settlements with nine countries with which Cambodia has bilateral payments arrangements are made through bilateral accounts. Those maintained for Mainland China, Czechoslovakia, Eastern Germany, Poland, the U.S.S.R., and North Viet-Nam are denominated in pounds sterling; and those for Bulgaria, the Republic of Viet-Nam, and Yugoslavia in U.S. dollars.

Currencies prescribed for settlements with other countries are usually specified in the licenses. Payments for imports from the French Franc Area must be made in French francs through special accounts. Payments for imports from other countries are ordinarily made in the currency of the country of the exporter.

Foreign investments must be made in a currency acceptable to the National Bank. Profits on, and proceeds from the liquidation of, foreign investments may be transferred abroad in the currency in which the investment was made.

Nonresident Accounts

The following categories of account may be maintained for nonresidents: Foreigners’ Accounts in Riels, Capital Accounts, Nonresident Accounts, and Foreign Currency Accounts. In addition, Cambodian nationals staying abroad temporarily but not recognized as nonresidents, and foreigners staying in Cambodia but not recognized as residents, may maintain special Internal Accounts of Nonresidents.

Foreigners’ Accounts in Riels may be opened, without permission, for foreigners residing abroad. They are related to the country of residence of the account holder. They may be freely credited with (1) proceeds from the sale on the Phnôm-Penh market of the currency (but not banknotes) of the country of the account holder; (2) payments for authorized imports (including incidental expenses) from the country of the account holder; (3) earnings on investments in Cambodia and receipts from repayments on Cambodian stocks and bonds and on other investments made in Cambodia after May 1956; and (4) interest paid by the banks on funds kept in the accounts. These accounts may be freely debited on account of normal expenses in Cambodia and purchases on the Phnôm-Penh market of banknotes of the country of the account holder. Transfers between Foreigners’ Accounts in Riels related to the same country are free.

Capital Accounts may be opened without permission. Subject to authorization, these accounts may be credited with (1) proceeds from the sale in Cambodia of Cambodian stocks and bonds imported from abroad or kept with an authorized bank in a dossier related to the country of the account holder; (2) proceeds from the sale in Cambodia of participations in corporations other than by purchases of stocks and bonds; (3) contractual or advance repayments of Cambodian stocks and bonds; (4) proceeds from the sale through an authorized notary of real estate or businesses located in Cambodia and in the possession of a nonresident account holder since January 1, 1955 or acquired by him either through inheritance or with the permission of the National Exchange Office; (5) repayment of loans granted to residents prior to January 1, 1955, or after that date with the approval of the National Exchange Office; and (6) transfers from another capital account related to the country of the account holder. Capital Accounts may be freely debited for (1) living expenses of the account holder or his family up to 1,000 riels a person a day, and up to a maximum of 50,000 riels monthly, and (2) expenses connected with the administration of foreign assets in Cambodia (stocks and bonds, buildings, land, etc.). Subject to authorization from the National Exchange Office, these accounts may be debited for (1) purchases in Cambodia of Cambodian stocks and bonds; (2) subscriptions to, or increases in capital of, a Cambodian firm; (3) purchases through an authorized notary of title to immovables or businesses located in Cambodia; (4) loans in riels to residents; (5) transfers to another capital account related to the country of the account holder; (6) living expenses in Cambodia of the employees of a firm (corporation, bank, etc.) holding an account; and (7) gifts to individuals and to social, cultural, and religious associations.

Nonresident Accounts may be opened only upon authorization. They may be freely debited for (1) taxes in Cambodia, (2) miscellaneous accounting, correspondence expenses, etc., and (3) living expenses in Cambodia of the account holder and his family, up to 2,000 riels a day. All other operations through these accounts are subject to individual licensing.

Foreign Currency Accounts may be opened only upon authorization. They may be freely credited with foreign exchange from abroad. Account holders may use balances on these accounts (1) to cover expenses abroad, such as those related to travel, missions, and the purchase of foreign merchandise, and (2) to cover expenses of any kind in Cambodia by converting balances on these accounts into riels on the Phnôm-Penh exchange market.

Internal Accounts of Nonresidents may be opened only upon authorization. Balances on these accounts may not be used for transfers abroad. The accounts may be freely credited with (1) proceeds from the sale of foreign exchange on the Phnôm-Penh market; (2) transfers from Foreigners’ Accounts in Riels; (3) wages, salaries, allowances, and payments for expenses of Cambodian nationals employed by Cambodian firms and temporarily residing abroad; (4) income earned in Cambodia by account holders; (5) redeposits of previous withdrawals; and (6) repayment of loans granted to residents out of balances in such accounts. The accounts may be freely debited for (1) living expenses in Cambodia of the account holder or his family, (2) administrative expenses related to the account holder’s property in Cambodia, and (3) loans to residents. All other operations through these accounts require authorization.

Imports and Import Payments

An annual import program is prepared by the Ministry of Commerce. Twice a year, the National Bank of Cambodia places at the disposal of the Ministry a specific amount of foreign exchange to pay for the programed imports.

With the exception of alcohol, imports are effected by a mixed import-export corporation, i.e., a corporation for which up to 40 per cent of the capital may be subscribed by private persons and legal entities and the remainder is subscribed by the Government. Alcohol is imported only by the Government, through the public institution, the Société Khmère des Distilleries.

Exchange is allocated freely for all authorized imports. Payment for specified imports may also be made without an official allocation of exchange by utilizing EFAC balances and the 10 per cent of export proceeds that may be retained for imports of equipment and raw materials (see section on Exports and Export Proceeds, below).

Payments for Invisibles

All payments for invisibles require individual licenses.

A foreigner working in Cambodia and receiving a salary exceeding 5,000 riels in Phnôm-Penh and 3,500 riels in the provinces may transfer up to 30 per cent of his net monthly salary—after payment of taxes—plus 15 per cent of his monthly salary if a dependent wife stays abroad, plus an additional 10 per cent if dependent children or parents stay abroad. The percentage of transferable income may be increased by 2 per cent for each legitimate child or dependent parent or grandparent, up to 10 per cent of the net monthly income as a maximum for each family. Transfer facilities are not granted for salaries and wages exempted from income tax. Overtime pay is considered transferable income only when it is received in payment for courses given in public educational institutions.

Foreign landlords domiciled in Cambodia may transfer up to 30 per cent of the taxable portion of their income from rent, provided that the rent exceeds 5,000 riels for landlords living in Phnôm-Penh and 3,500 riels for landlords living in the provinces. Foreign landlords living abroad may transfer up to 20 per cent of the taxable portion of rent.

Foreigners residing in Cambodia, when leaving the country temporarily or permanently, are permitted to transfer abroad, up to prescribed limits, savings out of their salaries earned in Cambodia.

The transfer of up to 80 per cent of net profits from nonresident investments made prior to May 31, 1956 may be authorized, provided that the investment is recognized by the Ministry of Finance as useful to the economic development of Cambodia.

Net profits that do not exceed 20 per cent of foreign investments made after May 31, 1956 may be transferred.

A resident is entitled to one allocation of foreign exchange a year for travel abroad. Travel allocations vary according to the country to be visited. Exchange for expenses is allocated within reasonable limits for business travel unless such expenses can be met by funds in an EFAC account.

Cambodians studying abroad may receive monthly exchange allocations equivalent to 4,500 riels for France, Belgium, and Japan; 5,000 riels for Switzerland; 3,500 riels for the United States and the United Kingdom; and 4,000 riels for any other country. A Cambodian student granted a scholarship may receive a monthly allocation to cover the difference between the scholarship and the permissible exchange allocation. A married student may, in addition, receive 2,000 riels a month plus 1,000 riels for each child. Exchange allocations to cover expenses for summer vacations and New Year gifts are 10,000 riels and 2,500 riels, respectively.

Resident travelers may buy freely with riels one-way or round-trip tickets for travel abroad. The export of Cambodian currency is prohibited.

Exports and Export Proceeds

In principle, all goods are exported by the mixed import-export corporation (see section on Imports and Import Payments, above). Certain goods may be exported upon presentation of export certificates indicating the method of payment and the repatriation of export proceeds. All other exports require individual licenses, with the exception of exports of lumber, fish, poultry, hogs, and sugar palm to Bangkok, Hong Kong, and Singapore under barter arrangements.

Proceeds from exports must be surrendered within 90 days from the date of shipment.

Under the EFAC (Exportations-Frais Accessories) arrangements, exporters may retain in special EFAC accounts 13 per cent of export proceeds in convertible currencies and 10 per cent of export proceeds in other currencies. Balances in these accounts may be used by the account holder to pay for imports and certain commercial expenses, or they may be sold freely at a rate to be agreed upon by the buyer and the seller. The export of kapok or red maize entitles the exporter to retain a higher percentage of proceeds: for kapok, 40 per cent of proceeds in convertible currencies; for red maize, 30 per cent of proceeds in U.S. dollars or sterling, or 15 per cent of proceeds obtained through bilateral accounts or in inconvertible French francs. EFAC accounts may not be credited in respect of exports for which payment is on a c.o.d. basis, settled under barter arrangements, or not made in accordance with export control regulations. Fifteen per cent of balances in EFAC accounts must be ceded to authorized banks semiannually.

In addition to export proceeds retained under the EFAC arrangements, export industries are allowed to keep 10 per cent of their export proceeds to pay for imports of equipment and raw materials for their own use.

Proceeds from Invisibles

Proceeds from invisibles must be surrendered.

Foreign tourists staying at hotels of the Société Khmère des Auberges Royales at Siemréap are given coupons for 25 riels over and above the rate of 35 riels for each U.S. dollar sold. Certain hotels that act as agents of the authorized banks in purchasing foreign exchange from nonresident travelers, or to which payment in foreign exchange is made by travel agencies abroad, may keep 15 per cent of their exchange proceeds in EFAC accounts. Tourists from countries outside Asia are granted a rebate of 30 per cent on their expenses in Cambodia, provided that they sell, at the official rate, exchange of US$15 a day or its equivalent in pounds sterling.

The import of Cambodian currency is prohibited. Foreign banknotes must be declared by travelers when entering Cambodia; if imported by residents, they must be surrendered within seven days from the day of entry into Cambodia.

Capital

All capital transfers require individual licenses.

No transfer abroad of proceeds from the sale of property by a foreigner to a foreigner is permitted. Foreigners who sell their property to Cambodians and leave Cambodia permanently may transfer initially up to 20 per cent of the proceeds of the sale; up to 20 per cent of the remainder may be authorized for transfer annually, when the total amount involved is small.

Foreigners working in Cambodia may transfer up to 30 per cent of their savings if their families live in Cambodia or if they are single; up to 50 per cent of their savings if their families live in France; and up to a total of F 2,000 or its equivalent in any other currency if their families live in other countries. The transfer of savings is prohibited for foreigners earning less than 5,000 riels a month in Phnôm-Penh and less than 3,500 riels a month in the provinces. Funds representing the repayment of loans originally granted in foreign currency may be considered transferable income. Women of foreign nationality married to Cambodian nationals and working in the private sector are not authorized to transfer their savings to their country of origin.

Up to 10 per cent of the proceeds from the liquidation of investments made prior to May 31, 1956 may be authorized for transfer every year.

Since May 31, 1956, all foreign investments have been subject to authorization from the Ministry of Finance, which requires that a certain percentage of the capital of an enterprise should be reserved for Cambodian participation and that its employees should be Cambodians. Only investments for the creation of activities recognized as useful to the economic development of the country and not involving monopoly or special privilege may be authorized. Proceeds from the liquidation of authorized investments made after May 31, 1956 may be transferred in yearly installments not exceeding 20 per cent of the total investment.

Foreign capital invested after May 31, 1956 is guaranteed the same tax treatment that is applied to resident investments; in addition, special incentives (partial exemption from duties and taxes on reinvested profits, the import of equipment goods or raw materials during the first year of operation) may be accorded to foreign investment considered as exceptionally useful to the Cambodian economy. There is a guarantee of 10-30 years against risks of nationalization or expropriation, and for a just and equitable indemnity in the event of nationalization or expropriation of investments.

Changes during 1963

November. A mixed corporation—i.e., one whose capital is subscribed in part by private persons and legal entities and in part by the Government—was made responsible for all importing and exporting activities, except the import of alcohol.

Cameroon1

Exchange Rate System

No par value for the currency of Cameroon has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Department of Exchange and International Settlements of the Ministry of National Economy.

An annual import program is established by the Minister of National Economy. Import licenses are issued by the Department of Foreign Economic Relations and approved by the Department of Exchange and International Settlements, which checks the financing and other particulars.

The distribution of foreign exchange to importers is carried out by the Technical Committee for Import Distribution (Comité Technique de Répartition des Importateurs—CTRI), composed of nine importers, one representative of industry, and one alternate. It is headed by the Director of Foreign Economic Relations, who is responsible to the Minister of National Economy. The Director of Customs, the Director of Exchange and International Settlements, and the President of the Chamber of Commerce attend CTRI meetings in a consultative capacity.

Prescription of Currency

Cameroon is a member of the French Franc Area and settlements with other countries of the French Franc Area are made in any currency of that Area. Settlements with countries with which Cameroon has concluded bilateral payments agreements3 are made through special accounts under the terms of the agreements. Settlements with all other countries are usually made through banks in France: those with Rumania—with which France maintains a payments agreement that applies also to transactions with Cameroon—through Rumanian Foreign Accounts in Bilateral Francs;4 those with all remaining countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely, but certain merchandise (liqueurs and wines) is subject to quota. Imports from all other countries are subject to licensing and to an annual import program. This program, established by the Minister of National Economy, is communicated to the joint French-Cameroonian Committee; however, this Committee does not determine the exchange needs of the country.

Import licenses are not issued until the importer has received his allotment of foreign exchange from the Technical Committee for Import Distribution in accordance with his exchange needs as determined by the Committee. For purposes of this distribution, registered importers are classified according to the value of their annual imports, although exchange may also be made available, under certain conditions, to newly established importers and industrial enterprises that are not registered importers.

Separate global quotas are established for imports from EEC countries and for imports from all other countries outside the Sino-Soviet bloc. Under quotas established for imports from EEC countries, only goods originating in those countries may be imported. Under the quotas for other countries, goods originating in any country outside the Sino-Soviet bloc may be imported.

To encourage the economic development of the northern part of Cameroon, a priority quota of exchange is reserved for the exclusive use of importers doing business in that region. To qualify for this quota, importers must prove that the goods they import will be sold exclusively in the north. Usually, this priority quota averages 30 per cent of total allotments. The authorities also have power (1) to set aside foreign exchange for imports by a government service or public utility enterprise of goods considered essential to the public interest, before the regular distribution is made to private importers; (2) to instruct the Technical Committee for Import Distribution to earmark foreign exchange in any amount for the importation by private importers of goods considered essential to the economy; and (3) to grant priority to imports to be used by processing industries located in Cameroon.

Import licenses which do not involve a request for foreign exchange e.g., gifts, items sent as guarantees, publicity articles, and supplies for foreign religious missions, may be approved by the Exchange Office in special cases, provided that justification of the need for the goods in question and evidence of the means of payment are submitted. Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. The transfer of profits from foreign investments is permitted freely. Travelers to other countries in the French Franc Area may take out any amount of CFA banknotes. Travelers to other destinations may take out F 750 in French banknotes, or CFAF 75,000 or CFPF 75,000 in legal tender notes and coins, or the equivalent of F 750 in other currencies.

Exports and Export Proceeds

Exporters must sign an exchange obligation for all exports. Certain exports require prior authorization, which is issued by the Department of Foreign Economic Relations. Certain items classified as “natural resources” require special authorization for export to any destination. These include coffee (green or roasted), unshelled cocoa beans, ores, mineral products, and common metals and their alloys.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be surrendered within three months from the date of their receipt. Exporters may, however, retain 12 per cent of their U.S. dollar proceeds, and 8 per cent of their proceeds in other currencies, in special EFAC (Exportations-Frais Accessoires) accounts. These percentages may be increased by 3 per cent with the approval of the Exchange Office. Balances on these accounts, which are not transferable, may be used by the exporters to import raw materials or equipment needed in their own business, for representation and advertising expenses, and for business travel abroad.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding CFAF 50,000 earned in those countries from foreign securities, must be collected and surrendered within a month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

An Investment Code, adopted on June 11, 1960, establishes four preferential schemes for acceptable investments. Scheme A allows exemption from all import and export taxes and duties, and from excise taxes, to medium-sized firms whose activities will definitely contribute to the development of the country. Scheme B allows exemption from direct taxes to firms having a somewhat greater importance than those included in Scheme A. Scheme C, which concerns projects of major interest that are part of the Economic and Social Development Plan and that produce priority items, enables firms to enter into special agreements with the Cameroon Government. Scheme D, which applies to major projects involving considerable investment, allows not only the benefits of the other schemes, but also additional tax exemptions for a maximum period of 25 years.

In other respects, the import and export of capital from Cameroon is subject to regulations similar to those applied in France.

Changes during 1963

July 1. Hungary was included in the area of convertibility. Previously, part of the settlements with Hungary were made through Hungarian Foreign Accounts in Bilateral Francs.

July 11. Financial relations were re-established with Guinea.

Canada

Exchange Rate System

The par value is Canadian Dollars 1.08108 = 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

No prescription of currency requirements are in force.

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, the export of a few commodities to all destinations is under export control. For security reasons, the export of certain specified commodities to all destinations except the United States is under export control. 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

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

Capital

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

Changes during 1963

February 20. Temporary import surcharges, which had been applied on June 24, 1962 to more than 50 per cent of Canadian imports, were eliminated for a substantial number of imports and were reduced for others.

April 1. All remaining temporary import surcharges were abolished.

Central African Republic1

Exchange Rate System

No par value for the currency of the Central African Republic has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by commercial banks under the direction of the Exchange Office. The Ministry of Economic Affairs makes allocations of exchange to each importer for goods included in the annual import program; it also issues import licenses with the consent of the Exchange Office.

Prescription of Currency

The Central African Republic is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs;3 those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from all other countries are subject to licensing and to an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Central African Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the Sino-Soviet bloc. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for the other countries may be used to import goods originating in any country except those in the Sino-Soviet bloc, to which special quotas apply.

For goods included in the annual import program, the Ministry of Economic Affairs publishes each year an announcement of the exchange allotted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Ministry an application for a license within the limits of the quota that has been assigned to him. When the license is issued, the Exchange Office makes the exchange available to the importer through his bank. Import licenses are valid for 9 months and may be extended twice for 3 months, i.e., the maximum period of validity is 15 months.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. The transfer of profits from registered foreign investment is permitted freely. Travelers to other countries in the French Franc Area may take out any amount of CFA banknotes. When traveling to other countries, they may take out banknotes up to a maximum of F 1,000 in metropolitan francs or francs issued by the Institute of Issue of the Overseas Departments, or CFAF 75,000 or CFPF 75,000 in legal tender notes and coins. Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses, which are issued freely.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be surrendered within one month from the date of their receipt. Exporters may, however, retain 10 per cent of their export proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts, which may be used by the exporters themselves to pay for export promotion expenses and for modernization and expansion needs of their industries.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 5,000 earned in those countries from foreign securities, must be collected and surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

Under Law No. 62.355 of February 19, 1963, industrial, tourist, agricultural, and mining enterprises (both foreign and domestic) established in the Central African Republic are granted, under certain conditions, reduced duties and taxes on the import of specified equipment; in addition, certain enterprises receive exemption from direct taxes on specified income.

The Law also provides for three categories of preferential treatment, in accordance with which fiscal and other privileges may be accorded to firms investing in new enterprises or in the expansion of existing ones in most sectors of the economy, except the commercial sector. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of the Central African Republic; it is granted for a period of up to 10 years. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatment C, which contains the most favorable provisions, is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for up to 25 years.

Requests for approval for preferential treatment must be submitted to the Minister of Economy, who is the Chairman of the Investment Commission which considers the application. If a positive decision has been given by the Commission, the proposed authorization is submitted to the Council of Ministers. Preferential treatments A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Board of Directors of the Equatorial Customs Union upon the recommendation of the Council of Ministers.

The transfer of proceeds from the liquidation of registered foreign investment is permitted freely.

Changes during 1963

February 19. Law No. 62.355 provided that industrial, tourist, agricultural, and mining enterprises (both foreign and domestic) established in the Central African Republic be granted, under certain conditions, reduced duties and taxes on the import of specified equipment; in addition, certain enterprises were to receive exemption from direct taxes on specified income. The Law also provided for three categories of preferential treatment, A, B, and C, in accordance with which fiscal and other privileges were to be accorded to enterprises in most sectors of the economy, except the commercial sector. The transfer of profits from, as well as proceeds from the liquidation of, registered foreign investment was to be permitted freely.

Ceylon

Exchange Rate System

The par value is Ceylon Rupees 4.76190 = US$1. Exchange rates are based on the fixed sterling-Ceylon rupee rate (Cey Rs 13.33 = £1) and the rates for other currencies against sterling in London.

Administration of Control

Exchange control is administered by the Department of Exchange Control of the Central Bank of Ceylon, as agent of the Government. All transactions in foreign exchange in Ceylon must be made through banks authorized to carry out operations 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 fe handled by the Controller of Imports and Exports.

Prescription of Currency

Ceylon is a member of the Sterling Area, and the regulations prescribing the currencies for settlements with other countries are similar to the regulations of other Sterling Area countries. Payments to the Sterling Area may be made in any Sterling Area currency; and receipts from the Sterling Area may be accepted in any Sterling Area currency.

Settlements with 12 countries with which Ceylon has bilateral payments agreements1 must be made through the relevant clearing accounts. Payments to all other countries may be made by crediting sterling or Ceylon rupees to a sterling External Account or an External Rupee Account, or in the currency of the creditor country. Receipts from all other countries may be accepted in sterling or Ceylon rupees from a sterling External Account or an External Rupee Account, in any specified currency,2 or in any nonspecified, non-Sterling Area currency marketable in the United Kingdom, i.e., freely exchangeable for sterling. Transactions involving deviation from the general regulations require the prior approval of the Controller of Exchange.

Nonresident Accounts

Nonresident accounts may be held in Ceylon by banks, corporations, or persons residing abroad. Balances in these accounts may be freely transferred to Sterling Area Accounts or External Accounts.

Blocked Accounts are used for holding funds that may not be transferred abroad and that are owned by nonresidents, repatriates, and emigrants. Such funds, unless they originate from payments for imports, may be used for specified investments in Ceylon. Proceeds from the liquidation of such investments must be credited to Blocked Accounts.

Imports and Import Payments

The value and composition of imports are established by an annual import program. Foodstuffs and drugs described in the Hospital Formulary may be imported freely under open general license. All other imports require individual licenses;3 these imports are divided into three groups—essential goods, less essential goods, and nonessential goods. Licenses to import goods in the first and second groups are issued up to the limits of quotas based on past imports. Imports of many nonessential goods are either prohibited or considerably restricted.

The right to import is restricted to registered importers and government-sponsored corporations. All imports from countries in the “Ceylonized” area4 and a few imports from any source are restricted to registered Ceylonese traders—a special group of registered importers. Imports of specified commodities5 are restricted to government or state corporations or the Cooperative Wholesale Establishment. In order to allocate quotas, applicants for import licenses are divided into three groups: (1) actual users of industrial raw materials, machinery, etc., (2) those who import other goods for their own use and not for resale, and (3) established importers who import goods for trading purposes.

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 the 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, there must be a declaration to that effect on the application.

The import of certain less essential goods (air-conditioning equipment, alcoholic beverages, motorcars, etc.) that are specifically covered by individual import licenses must be made on a letter of credit basis, and banks are required to obtain a cash deposit of 50 per cent from the importer at the time the letter of credit is established.

Payments for Invisibles

All payments for invisibles require individual licenses. The remittance of profits and of dividends declared out of the current year’s profits, net of taxes, is freely permitted to nonresident investors.

Net income from emigrants’ investments in Ceylon may be transferred with prescribed limits until such emigrants obtain citizenship; thereafter, it may be transferred freely.

The remittance of life insurance premiums on policies in foreign currencies which are purchased by nonnationals residing temporarily in Ceylon is permitted.

Foreign exchange for tourist travel abroad is granted only after an interval of seven years from the last occasion of such travel. The regulations distinguish two groups of countries: (1) the “Indian group”6 and (2) all other countries. The maximum allowance permitted for an adult is Rs 500 for travel to “Indian group” countries and £ stg. 150 for travel to other countries; and the seven-year rule is applied to travel to each group separately. Moreover, if a traveler has used the allowance for the “Indian group” since March 1, 1962, that amount will be deducted from his allowance for travel to other countries. For business travel, exchange up to a maximum of £ stg. 6 a day for a maximum period of 30 days is allowed to representatives of business concerns engaged in industrial activity or in the export of Ceylonese products.

Exchange for educational expenses is made available only for courses of study that will be of positive value to the country and that are not available in Ceylon. For study in educational institutions in “Indian group” countries, exchange up to a maximum of Rs 350 a month is allowed; for study in educational institutions in other countries, exchange is made available at £ stg. 60 a month for postgraduate studies and £ stg. 45 a month for undergraduate studies, plus actual fees and costs of books.

For travel and other expenses for medical reasons, exchange is authorized if a certificate is produced from a medical specialist in Ceylon that equally effective treatment cannot be obtained in Ceylon; the amount authorized will depend on the estimated cost, as certified by the specialist.

Indian and Pakistani nationals are permitted to remit for family maintenance a maximum of Rs 750 a month or one third of their gross monthly income, whichever is less. Other foreign nationals are permitted to remit £ stg. 85 a month for a wife and £ stg. 55 for a child, provided that, where the amount claimed on this basis exceeds one third of the gross monthly income, the excess will be deducted from the amount available to a repatriate at the time of his departure. Temporary residents on short-term contracts are allowed to remit up to two thirds of their gross monthly income.

Nonresident travelers may take out foreign exchange and Ceylonese currency notes and coins declared to the customs at the time of entry. Residents may take out Ceylonese or foreign currency notes and coins not exceeding the equivalent of Rs 50 a person (Rs 25 for children under 12), once in 12 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 other commodities except 36 items, mostly minor agricultural products or handicrafts. Licenses for exports to Albania, Austria, Bulgaria, China (Mainland), China (Taiwan), Czechoslovakia, Hungary, North Korea, Republic of Korea, Poland, Rumania, North Viet-Nam, Viet-Nam, 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.

The Controller of Exchange issues the license for a commercial export when he is satisfied that payment representing fair value for the goods will be received in Ceylon under prescribed regulations, and, usually, within four months from the date of shipment. Foreign exchange proceeds from exports must be surrendered.

Proceeds from Invisibles

Foreign exchange proceeds from invisibles must be surrendered.

A traveler entering Ceylon must declare his holdings, including currency notes and coins. The amount of foreign funds that may be carried into Ceylon in the form of travel credit instruments is not restricted. For each traveler, the import of sterling notes is restricted to £50, and the import of Indian, Pakistan, and Ceylon notes is restricted to a maximum of Rs 75 in the aggregate, of which Pakistan notes should not exceed Rs 20. Other currency notes and coins may be taken in without restriction.

Capital

Investments of foreign capital from a Sterling Area country are permitted in projects which are specifically approved by the Government, or in shares of public companies incorporated in Ceylon. Investments of foreign capital by residents of other countries are permitted only in approved projects. Proceeds from the sale or liquidation of investments in approved projects may be repatriated, along with capital appreciation. Proceeds from the sale or liquidation of investments not approved by the Government may not be transferred abroad; but they may be reinvested in Ceylonese securities and the current income thereon may be remitted. Investments abroad by residents are not normally permitted.

Resident-owned securities on which the principal, interest, or dividends are payable (either contractually or at the option of the holder) in U.S. or Canadian dollars must be registered with the Controller of Exchange, and the sale or transfer of such securities is allowed only with the permission of the Minister of Finance.

Upon leaving, an emigrant is allowed to transfer £ stg. 150 for incidental expenses, provided that he has not been granted foreign exchange for tourist travel during the preceding seven years. He is not permitted other capital remittances.

Repatriates leaving Ceylon for residence in the country of their permanent domicile are permitted, at the time of their departure, to transfer a maximum of Rs 250,000 of their net assets. Transfers thereafter are restricted to Rs 25,000 a year, beginning one year after departure. For the purpose of buying a house, Indian and Pakistan nationals may remit 50 per cent of their entitlement—and other foreign nationals may remit Rs 75,000—during the 12 months prior to the date of retirement. These amounts are deducted from the maximum capital remittance of Rs 250,000.

Changes during 1963

January 29. A new trade and payments agreement was signed with Iran.

February 27. Individual licenses were required for imports of diesel oil, furnace oil, gas oil, and petroleum.

April 1. Exchange control authorities prohibited authorized banks from purchasing Ceylon banknotes and coins from foreign banks.

April 18. Individual licenses were required for imports of fish, fish products, and fish preparations, tinned or canned.

December 4. Individual licenses were required for imports of fertilizers, petroleum products, and patent fuel.

December 6. A bilateral payments agreement with North Korea was concluded.

Chad1

Exchange Rate System

No par value for the currency of Chad has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by authorized banks under the direction of the Exchange Office, which has delegated to the banks considerable authority in these matters. The Ministry of Economic Affairs and the Exchange Office control the allocations of exchange for imports from countries outside the French Franc Area.

Prescription of Currency

Chad is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs;3 those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from all other countries are subject to licensing and to an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Chadian Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries except the U.S.S.R. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for the other countries may be used to import goods originating in any country except the U.S.S.R., to which special quotas apply.

For goods included in the annual import program, the Ministry of Economic Affairs publishes each year an announcement of the exchange allotted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Ministry an application for a license within the limits of the quota that has been assigned to him. When the license is issued, the Exchange Office makes the exchange available to the importer through his bank. Import licenses are valid for six months, and may be freely extended for another six months. Extensions are not granted beyond the period of one year except, in unusual circumstances, for manufactured goods when evidence is presented concerning the delay in manufacture.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted hors contingent for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office, which, however, has delegated authority to authorized banks to approve many transactions. Residents traveling abroad are granted a tourist allocation equivalent to F 5,000 for each passport for each trip. There are no limits to the amount of foreign exchange which may be obtained for bona fide business trips. The transfer of profits from registered foreign investment is permitted freely.

Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country. There is no limit on the means of payment denominated in francs that travelers to other countries in the French Franc Area may take out. Resident and nonresident travelers to other destinations may take out up to CFAF 75,000 or up to F 1,000 in banknotes and coins; however, prior to their departure, nonresidents may exchange into foreign currencies means of payment denominated in francs and purchased against payment in foreign exchange.

Exports and Export Proceeds

Exports to countries in the French Franc Area may, with a few exceptions, be made freely; exports to all other countries require licenses.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be repatriated and surrendered within three months from the date of their receipt. Exporters may, however, retain from 6 to 15 per cent of their export proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts, which may be used by the exporters themselves to pay for any expenses outside the French Franc Area.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due from residents of other countries must be repatriated and surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins; however, travelers from other countries in the French Franc Area must surrender, within one month, amounts in foreign exchange exceeding the equivalent of F 1,000.

Capital

Investments by residents of countries outside the French Franc Area are subject to the authorization of the Exchange Office; however, authorized banks and notaries have been granted the authority to approve certain types of investments.

Under the Investment Code of August 26, 1963, any enterprise established in Chad, whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports, as well as exemption from direct taxes on specified income.

The Code also provides for three categories of preferential treatment, in accordance with which fiscal and other privileges may be accorded to firms investing in specified new industries or in the expansion of existing ones. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of Chad. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatments A and B are granted for a period of up to 15 years. Preferential treatment C is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for up to 25 years.

Requests for approval for preferential treatment must be submitted to the Minister of Economy, who, after examining the documents, transmits them to the Investment Commission. After an opinion has been given by that Commission, the project is submitted to the Council of Ministers. Preferential treatments A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Board of Directors of the Equatorial Customs Union upon the recommendation of the Council of Ministers.

The transfer of proceeds from the liquidation of registered foreign investment is permitted freely.

Residents may obtain loans from persons outside the French Franc Area up to an amount equivalent to F 1 million, with interest up to 4 per cent per annum and for a period not exceeding 2 years.

Changes during 1963

During the year the following changes were made:

(1) Balances on EFAC accounts could be utilized for all transfers abroad.

(2) The tourist allocation for residents traveling abroad was increased from the equivalent of F 3,500 to F 5,000 for each passport for each trip.

Chile

Exchange Rate System

No par value for the Chilean Escudo (which was introduced on January 1, 1960) has been established with the Fund. The par value for the Chilean peso established with the Fund on October 5, 1953, is not applied to any transactions under the present exchange system.

There are two exchange markets: the official market (known as the banking market) and the brokers’ market, in both of which only commercial banks are allowed to operate. The rates of exchange in both markets fluctuate freely. Through the banking market pass government transactions, proceeds from exports, sales of exchange by the large mining companies, receipts from a few invisibles, and payments for imports and for some commercial invisibles. The servicing and withdrawal of some capital received through the brokers’ market may be effected through the banking market. On December 31, 1963, the exchange rate in the banking market was E° 2.146 buying, E° 2.148 selling, per US$1. Transactions not permitted in the banking market may be settled in the brokers’ market, but in some cases the approval of the Central Bank must first be obtained. The exchange rate in the brokers’ market on December 31, 1963 was E° 3.018 buying, E° 3.036 selling, per US$1.

Administration of Control

The Foreign Trade Department of the Central Bank of Chile is in charge of the operation of the exchange control system. Some functions of the Department have been delegated to local commissions in important cities. Only the commercial banks are authorized to operate in the banking market and in the brokers’ market.

Prescription of Currency

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 copper and 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.

Imports and Import Payments

Imports are classified as either permitted or prohibited. Imports on the permitted list are not subject to license, but government departments and agencies must have permission from the Ministry of Economy, Development, and Reconstruction for imports other than for national defense purposes. All imports are entitled to exchange in the banking market, but this cannot be obtained until 120 days after the date of the bill of lading covering the goods. Imports of goods on the prohibited list, except for automobiles and most trucks, are permitted through the “free port” zones of Arica, Megallanes, and Aysén, but are subject to certain customs duties.

Most imports are subject to surcharge, but the following items are exempt: imports by large companies concerned with mining iron, copper, nitrates, or iodine; crude petroleum and diesel oil destined for the nitrate, subnitrate, and iodine industries; imports by the University of Chile; 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; spare parts for agricultural machinery; planes and parts for Chilean airlines; jute sacks, magnetic enamels, etc.; certain capital goods; and goods on the permitted list for import into the “free port” zone of Magallanes. The surcharges range from 0.1 per cent to 200 per cent of the c.i.f. value and are paid in escudos at the rate of exchange in the banking market.

Virtually all imports on the permitted list are subject to advance deposit requirements. Exceptions are imports by the Government, the municipalities, the universities, certain specified state enterprises, the large mining companies, and the fishing industry; imports financed by international organizations or under agreements for U.S. agricultural surpluses; imports on a deferred payments basis; imports into the “free port” zones; imports of foodstuffs into the principal mining area; imports to replace machinery and equipment damaged or destroyed in the 1960 earthquake; and imports that originate in other member countries of the LAFTA and are included either in Chile’s National List for the LAFTA countries or in Chile’s List of Privileges extended to Paraguay and Ecuador. There are eight categories of advance deposit rates, namely, 5, 10, 100, 200, 300, 1,000, 5,000 and 10,000 per cent of the c.i.f. value of the imported merchandise (the 10,000 per cent rate applies to only two commodities). The deposit must be made by lodging securities denominated in U.S. dollars with the Central Bank at the time of import registration, and it is retained until customs clearance or until 90 days after the date of import registration.

Payments for Invisibles

Payments for invisibles by private individuals may be made freely; payments by incorporated and unincorporated business enterprises must be approved by the Central Bank. Payment at the rate of exchange in the banking market is permitted for a few commercial invisibles; all other transactions take place in the brokers’ market.

Exports and Export Proceeds

Most goods may be exported freely, but exports of some items are prohibited or are subject to quota. In order to enforce these requirements and to ensure the repatriation of export proceeds, all exports must be registered with the Foreign Trade Department of the Central Bank.

The proceeds of exports of copper by the large mining companies 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), exporters must repatriate within 90 days from the date of shipment the total value of their exports and must sell the exchange within 10 days from its repatriation, through an authorized bank at the exchange rate in the banking market. The large copper companies, however, sell exchange to the Central Bank only to the extent needed to meet their local requirements. 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 news and communications agency fees, from specified transactions by national insurance companies, from commissions, from reimbursements of insurance claims, and from credit granted in foreign currency by the commercial banks must be sold in the banking market. Exchange derived from other invisibles, including tourism, may be sold in the brokers’ market 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.

Capital may be brought into Chile through either exchange market. Normally, capital is subject to the same exchange market treatment on exit as on entry; this policy applies also to remittances of dividends and profits on the capital.

Under the terms of a decree-law of March 30, 1960, capital may be brought into Chile (in the form of foreign currency, credits, or plant and equipment) under special conditions for the purpose of introducing, developing, improving, or resuming productive activities related to agriculture, mining, fishing, or any other industry officially defined as being in the national interest. New plant and equipment imported for these purposes may be exempted from consular charges and from all duties and fees normally collected by the customs. The President is empowered to grant by decree a number of privileges and guarantees to the foreign investor, covering such matters as future taxation, depreciation allowances, withdrawal of capital, remittances of profits, etc. The privileges granted under this decree-law will normally be in force for 10 years, but in special cases the period may be extended to 20 years. Chilean firms already established, or which may be established in a business similar to that for which such privileges have been granted, will enjoy equal privileges for as long as such privileges are extended to foreign investors.

Capital is also 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.

Under individual contracts with the Central Bank, incoming capital for investments that will lead to an increase in exports may be sold in the brokers’ market, and servicing and withdrawal may take place through the banking market. In such cases, annual remittance of profits or interest of up to 7 per cent a year of the invested capital is permitted; withdrawal may start two years after entry and may amount, annually, to up to 12½ per cent of the invested capital; and the total servicing and withdrawal through the banking market must not exceed 50 per cent of the amount of exchange that results from the physical increase in exports and that is effectively repatriated.

Changes during 1963

January 19. With certain exceptions, imports of goods on the prohibited list through Arica became subject to import surcharges. These were established at 200 per cent of the c.i.f. value.

February 28. With two exceptions, the last of the additional import surcharges established on October 4, 1962 were removed.

March 21. Authorized banks could sell exchange forward to cover installment payments on imports made under the deferred payments system; but the contract date could not be more than 60 days in advance of the due date of the installment.

March 27. Private persons buying exchange in the brokers’ market had to show that their income taxes were paid.

March 27. Banking enterprises were authorized to cover with their lines of credit all imports originating in the United States which remained unpaid after 120 days.

March 29. The payments agreement with Yugoslavia was terminated.

April 8. Imports of raw sugar were made subject to a new advance deposit rate of 5 per cent.

April 29. Certain imports were made subject to a new advance deposit rate of 300 per cent. This rate would be applied provisionally to goods newly added to the permitted list, and these goods would become subject to a 200 per cent advance deposit as soon as an import surcharge had been established for them.

April 29. The percentage of the advance deposit was reduced for seven groups of merchandise on the permitted list. In addition, five groups of items were exempted from the advance deposit requirement.

May 3. Access to the brokers’ market was confined to authorized banks.

May 8. Gold trading on the brokers’ market was terminated, and the Central Bank retained the sole right to effect transactions in gold coins and gold bars.

May 18. The Central Bank announced that it was willing to buy gold coins and bars from private persons and firms, but would sell gold only to industrial and professional users associated with the Bank. Exporters of minerals and ores were obliged to repatriate and surrender, within 180 days from the day of shipment, either any gold obtained in the refining process or its countervalue.

June 12. Import surcharges on goods imported on a registered deferred payments basis became payable in installments coinciding with the installments of the exchange payments.

June 17. Chilean currency requested by foreign banking or financial institutions could be converted to foreign currency only on declaration of the origin of the resources.

July 8. Export documents under documentary credits could be negotiated by the commercial banks prior to stamping by the Central Bank.

July 13. The Central Bank notified the commercial banks that it would not make official exchange available for interest in excess of 9 per cent on import letters of credit or collections.

October 23. The amount of taxes payable to the Treasury could be added to the list of charges on import letters of credit or collections for which the Central Bank made foreign exchange available (see July 13, above).

November 4. A new regime was established for capital investments designed to increase exports. Incoming capital could be sold in the brokers’ market, and servicing and withdrawal could take place through the banking market. Remittance of profits or interest of up to 7 per cent a year of the invested capital would be permitted, and withdrawal could start two years after entry and amount, annually, to 12½ per cent of the invested capital. The total of servicing and withdrawal through the banking free market must not exceed 50 per cent of the amount of exchange that results from the physical increase in exports and that is effectively repatriated.

November 12. The Central Bank announced that, for a list comprising 23 items or groups of items, import letters of credit could no longer be established, even if such imports were made c.o.d. or under collection.

November 13. The Central Bank recommended that the commercial banks refrain from increasing their foreign currency debts abroad.

November 26. Exporters of agricultural and nontraditional products could obtain banking credit in local currency to facilitate exports.

December 10. Two new items were added to the list of permitted exports, and one was eliminated.

December 17. Only the Central Bank could deal in spot purchases of surrendered foreign exchange proceeds from exports. Accordingly, the commercial banks could make only forward purchases of this exchange.

China

Exchange Rate System

No par value for the New Taiwan Dollar has been established with the Fund. The official buying and selling rates for the U.S. dollar are NT$40 and NT$40.10, respectively. Buying and selling rates for certain other currencies are also officially fixed.1 Currencies for which rates are not officially fixed are accepted by appointed banks, and the rates are calculated in accordance with the foreign market quotations. With certain exceptions, earners of foreign exchange must sell it at these rates to banks appointed by the Central Bank of China.

Administration of Control

The Executive Yuan is responsible for policies concerning foreign exchange and trade controls. The Foreign Exchange and Trade Control Commission (FETCC) is the executive agency concerned with foreign exchange and trade matters. The functions of the FETCC are to formulate policies and plans on foreign exchange and foreign trade; to screen and approve the use of foreign exchange (including the issuance of exchange and trade licenses); to coordinate the use of U.S. aid; to determine the official buying and selling rates of exchange; to act as a coordinating agency among various authorities in connection with foreign exchange and trade transactions; and to deal with other relevant matters pursuant to orders of the Executive Yuan. Decisions of the FETCC are implemented through the appropriate organizations and authorized banks. Exchange and trade licensing is administered by several committees in accordance with the nature of the applications. These committees refer applications for import licenses to the FETCC only in exceptional cases.

The Central Bank of China is responsible for the over-all management of foreign exchange and the supervision of the appointed banks, of which the Bank of Taiwan is the most important. The Bank of Taiwan issues import and export licenses on instructions from the FETCC; however, licenses for imports under U.S. Aid Commercial Procurements are issued by the Bank of China.

Prescription of Currency

Export receipts must be obtained in deutsche mark, French francs, Hong Kong dollars, Italian lire, Malayan dollars, pounds sterling, or U.S. dollars. Also, these are the foreign currencies that may be used by residents of other countries to finance investments in Taiwan. Settlements with Spain are made in U.S. dollars through a bilateral account.

The currency and method for making payments to residents of foreign countries are not prescribed.

Nonresident Accounts

China’s exchange control regulations do not provide for a clear distinction between residents and nonresidents. As a consequence, persons who would be considered nonresident under many other exchange control systems are not granted treatment essentially different from that accorded to residents of the Republic of China in exchange control matters.

Accounts in new Taiwan dollars of persons who are residents of other countries are treated in the same way and are subject to the same regulations as other accounts in new Taiwan dollars. The exchange control regulations do not provide for blocked balances and blocked accounts held in the name of residents of foreign countries.

Subject to permit, residents may maintain accounts in foreign currencies. These accounts—designated Foreign Currency Deposits—may be used for making authorized payments abroad. They are of two categories: (1) Foreign Currency Deposits maintained by government organizations, insurance and transportation companies, and private productive enterprises. These cover exchange either earned by account holders or directly allocated by the exchange authorities on the basis of individual permits, which are granted only exceptionally. (2) Foreign Currency Deposits maintained by individuals are subdivided into interest-bearing time deposits and personal passbook accounts (which do not bear interest). Balances on these accounts originate from exchange obtained by account holders prior to their arrival in Taiwan or from earnings and other receipts from their private resources outside Taiwan.

Imports and Import Payments

All imports require individual licenses. Imports from communist countries are prohibited. The Chinese authorities license and check imports from Hong Kong in such a way as to induce importers to obtain certain imports directly from the country of production and to control effectively imports from Mainland China.

Imports are divided into three groups: (1) prohibited, (2) controlled, and (3) permissible. The prohibited imports comprise not only narcotics and some other goods usually excluded by most countries from importation but also a number of luxury goods and less essential items, such as certain Chinese foods, cigarettes, cigars and liquors, jewelry, certain medicines, sugar (and its substitutes), and molasses. Liquor and cigarettes are imported from time to time by the government monopoly organizations responsible for selling these commodities. The controlled list contains three types of goods: some luxury items; certain goods that are also produced locally of good quality and in an amount satisfying domestic demand, and whose factory prices are not more than 25 per cent higher than the c.i.f. prices of comparable imported goods; and goods subject to regulation and allocation. The first two types are licensed restrictively; goods of the third type are often imported by government agencies, which offer them for sale either by allocation or by auction. Imports on the permissible list are licensed liberally.

According to the intended utilization, goods may be imported by one of four main groups of importers: government trading agencies, registered private traders, registered private traders on a commission basis, and end-users and manufacturers. The Central Trust of China is the main government trading agency. It handles imports financed with U.S. aid funds; imports for government and military organizations, as well as public enterprises; and imports for other customers. Another government trading agency is the Taiwan Supply Bureau, which is in charge of imports for the Taiwan Provincial Government, cooperatives, teachers’ organizations, etc.

Firms that want to operate as authorized (“registered”) importers must obtain approval (“registration”) from the FETCC. Those who apply must be firms operating in accordance with certain laws and having a minimum capital of NT$200,000. Traders registered as operating on a commission basis may act only as agents for traders or foreign suppliers.

End-users and manufacturers are permitted to import raw materials, machinery, and replacement equipment needed for their factories. In granting licenses to this category of importer, the licensing authorities take into account such criteria as production capacity and equipment. In processing applications for licenses to import capital equipment for the construction of new plants, the licensing authorities consider the feasibility of the project and its priority from the point of view of the economic needs of the country. Imports to be used for processing or producing goods for export are automatically licensed (e.g., raw cotton, wool, wood for the production of plywood).

Private importers (i.e., importers other than government agencies and public enterprises) handle about two thirds of the imports paid for with currencies provided from official exchange reserves.

According to the methods of financing, imports may be divided into two broad categories: (1) imports for which exchange is allocated directly out of official exchange reserves, and (2) imports which are made without recourse to official exchange reserves, and which comprise (a) those made under the U.S. aid program and (b) those paid for with self-provided exchange or exchange supplied by foreign investors and foreign lenders. Imports obtained with self-provided exchange are those financed by importers out of their own foreign exchange obtained by them prior to their coming to Taiwan or originating from exchange receipts exempted from the surrender requirement.

Payments for Invisibles

All payments for invisibles require approval. Payments for invisibles directly related to trade are permitted freely when the basic trade transaction has been approved. The transfer of interest, profits, and earnings on authorized foreign investments in Taiwan may be made without restriction.

Foreign exchange for payments for certain other invisibles is allocated only up to established limits or on a percentage basis. Foreign technicians are allowed to remit to their dependents abroad up to 70 per cent of their basic monthly salary (year-end bonus, profit sharing, overtime pay, and insurance payments are excluded), with the maximum amount permitted for family maintenance being the equivalent of US$250 a month to Japan, US$400 to Europe, and US$500 to the United States; remittances of larger amounts require special approval. Employees of the Government or of educational institutions may remit to their dependents in Hong Kong or Macao up to HK$150 a month. Membership fees to foreign institutions and certain payments for news services, books, magazines, etc., are approved up to certain limits. Up to 70 per cent of the net amount of motion-picture film rental may be transferred abroad; the remainder is to be used for local expenses and investment in Taiwan. A maximum of US$2,400 a year is provided for tuition and living expenses of students studying abroad. Foreign exchange is made available for business travel.

Applications for exchange to pay for certain other types of invisibles are approved as liberally as possible, with account taken of the merits of submitted applications and of exchange reserves; for instance, persons who want to go abroad for health reasons are allocated exchange if the exchange control authorities feel that such a trip is justified. Applications for exchange to pay for some other invisibles, e.g., pleasure trips, are not approved.

Persons leaving Taiwan may take with them no more than NT$1,000 in domestic banknotes and coins, and the equivalent of US$200 in foreign currencies. Travelers from abroad are allowed, upon their departure, to repurchase against new Taiwan dollars the foreign currency (up to the equivalent of US$200) which they have sold to appointed banks during their stay in Taiwan. Those travelers who have stayed in Taiwan less than six months may take with them any unspent portion of the foreign currency which they registered upon entry.

Exports and Export Proceeds

All exports require licenses, mainly in order to ensure the surrender of foreign exchange. Licenses may be issued only for exports to noncommunist countries. The re-exportation of imported goods is permitted after they have been processed.

Quota limitations are maintained on the export of citronella and canned mushrooms. The export of a few foodstuffs is restricted, and seasonal restrictions are applied to the export of vegetables to Hong Kong. Minimum prices are established for exports in order to prevent underinvoicing by exporters.

Manufacturers who use imported raw materials to produce goods for export are refunded various charges imposed on such raw materials, namely, import duties, defense surtax on import duties, harbor dues, and commodity tax. Some preferential treatment is accorded to payers of income tax related to the production of goods for export, provided that the taxpayers submit satisfactory proof of such exports; complete exemption from the tax is not granted, however.

Exporters are required to surrender exchange earnings accruing from exports immediately after their collection. Subject to approval, bona fide gifts and commodity samples up to the value of US$25 can be sent abroad. When leaving Taiwan, tourists are allowed to take out Taiwan products valued up to US$100.

Proceeds from Invisibles

Exchange surrender requirements applicable to proceeds from invisibles are the same as those applicable to export proceeds. Interest, earnings, and profits on investments made by Chinese investors outside the country, and originally approved by the FETCC, must be surrendered to the banks.

Travelers may bring in any amount of foreign currency and either hold or surrender it. The import of domestic banknotes expressed in new Taiwan dollars is limited to NT$1,000 for each traveler; a license from the Ministry of Finance is required for importing a larger amount.

Capital

Investments by foreigners may be made in capital equipment or raw materials, or through the transfer of foreign currencies to Taiwan. In accordance with the Foreign Investment Law of July 14, 1954, liberally revised in 1959, and the Statute for Encouragement of Investment, enacted in 1960, new foreign investments approved by the authorities are guaranteed (1) unrestricted transfer of net annual profits or earned interest; (2) repatriation of capital, including reinvested earnings, two years after completion of the investment plan, at an annual rate not exceeding 15 per cent, calculated in relation to the originally invested funds; (3) the right to re-export invested capital in its original form; (4) favorable treatment in respect of rezoning and requisition of agricultural land for industrial use; and (5) compensation for expropriation where the foreign investment constitutes less than 51 per cent, and immunity from expropriation for 20 years where the foreign investment constitutes at least 51 per cent, of the total investment. In addition, foreign investments are granted the same treatment accorded to new domestic investments. Laws for the encouragement of foreign investments provide for the minimum of preferential treatment which might be granted on more favorable terms in specific cases.

To obtain the benefits of the investment laws, investments by foreign nationals must be made in enterprises conducive to the economic and social development of the country, such as mining, communications, and manufacturing for domestic needs. Preference is given to foreign investors who intend to produce goods for export or for replacing imports.

Foreign investors who intend to make investments in Taiwan stocks and want to take advantage of privileges provided under foreign investment laws, as described above, must obtain approval from the Ministry of Economic Affairs. Purchases and sales of stocks by foreign investors must be made through the intermediary of registered brokers, such as the Trust Department of the Bank of China and the Trust Division of the Central Trust of China.

Subject to approval, investments may be made outside Taiwan only in the form of technical know-how, semifinished products, and locally manufactured equipment.

Chinese nationals who want to emigrate, and persons who had settled in Taiwan and wish to return to their native countries, are not accorded any special transfer facilities in respect of proceeds from the liquidation of their assets in Taiwan. Persons outside Taiwan who acquired in Taiwan assets or balances in new Taiwan dollars on account of dowries, inheritances, gifts, and the like are not normally granted the right of transferring them from Taiwan.

Changes during 1963

October 1. The foreign exchange certificate system was abolished. The official buying and selling rates for the U.S. dollar were established at NT$40.00 and NT$40.10, respectively. Official buying and selling rates for certain other currencies were also established.

December 5. Up to NT$1,000 in domestic banknotes could be imported or exported; previously, the limit had been NT$500.

Colombia

Exchange Rate System

On December 17, 1948, a par value for the Colombian Peso was established by Colombia with the Fund. However, exchange transactions no longer take place at rates based on that par value. There is a buying rate, which is fixed by the Monetary Council, of Col$7.10 per US$1 for the foreign exchange proceeds of exports of coffee, gold, and certain manufactured products, and for incoming capital for the exploration and exploitation of petroleum and for the metal-extracting industries. A fixed rate of Col$9.00 per US$1 is applied to proceeds from official foreign loans to the National Government for local currency expenditures. A rate equal to the average free market rate of the preceding week is applied to all other export proceeds. To obtain foreign exchange to pay for imports, freight, government expenses abroad, and students’ remittances, it is necessary to purchase an exchange certificate. These certificates are sold by the Bank of the Republic at public auction; at the end of 1963, this “auction” or certificate rate was Col$9.00 per US$1. All other transactions take place in a free market; on December 31, 1963, the selling rate in the free market was Col$9.99 per US$1. (See Table of Exchange Rates, below.)

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, and repayments of, capital registered before June 17, 1957.

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. Exchange certificates for payments entitled to be made at the “auction” rate must be purchased at the auctions of the Bank of the Republic and may be purchased 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 this 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, Finland, and Spain for commercial transactions must be made through a clearing account in accordance with the provisions of the relevant bilateral payments agreement. Under the agreement with Denmark, goods originating in third countries and purchased in one of the agreement countries may be settled through the agreement account by mutual consent of the partners. The National Federation of Coffee Growers has concluded agreements with Czechoslovakia, Eastern Germany, Hungary, Poland, Rumania, 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 three lists of imports: goods whose import is prohibited; goods whose import is subject to prior licensing by the Superintendency of Imports; and goods that may be imported freely.

Prior registration at the Exchange Office is required for all imports; the charge for import registration forms is Col$5.00 for imports valued at less than US$20.00 and Col$100.00 for other imports. An advance deposit of 1 per cent is required for registration of the following: imports of capital goods and spare parts not destined for resale; imports of capital goods intended for the establishment of die-forging works; imports of raw materials and basic foodstuffs brought into the country by the National Institute of Health for the preparation of pharmaceutical products; raw materials for tires; 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 the 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 that 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 Col$1.00 is required for imports of capital goods and spare parts not intended for trade but for the use of the National Government or the regional or municipal governments. Other advance deposits required as a prerequisite to import registration are as follows: 10 per cent for capital goods of considerable value payable in installments; 30 per cent for certain essential goods; 65 per cent for certain metals and paper and some chemicals; 90 per cent for other metals; and 120 per cent for all other goods. These advance deposits are not required on imports from LAFTA countries of goods included in Colombia’s National List or in the special concession lists for Paraguay and Ecuador. For imports of gold and silver coins, an advance deposit of 500 per cent is required. As a general rule, the advance deposit is returned 90 days after the merchandise is cleared through customs or, if the import is received in installments, at the time of the last shipment. However, when the advance deposit is to be used to buy the exchange certificates necessary to make the payment abroad, the deposit may be returned 45 days after customs clearance.

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 for them, may buy exchange certificates covering the value of their imports at 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 National Institute of Supply.

Payments for Invisibles

Payments by the National Government for services are made at the “auction” 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, may be made with exchange certificates obtained at the “auction” rate but are subject to the 10 per cent remittance taxi Exchange certificates are also required for remittances to students engaged in postgraduate or special studies abroad, or in technical or vocational studies at the university level not available in Colombia, or in studies on behalf of official or semiofficial institutions, etc., and for 80 per cent of import freights. Payments for other invisibles must be made through the free market.

Exports and Export Proceeds

Prior application for registration is required for all exports except crude oil. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. When registering an export transaction, the exporter must make a local currency deposit of (1) 30 per cent for major exports (e.g., coffee) and for those exports with an imported raw material component that exceeds 50 per cent of the export value, and (2) 5 per cent for minor exports. The deposit is returned when the export proceeds are surrendered.

Exchange proceeds from all exports, except crude oil, must be surrendered. The exchange proceeds of exports of coffee and of precious metals except platinum must be surrendered to the Bank of the Republic at the buying rate of Col$7.10 per US$1 fixed by the Board of Directors of the Bank. The proceeds of all other exports are negotiated at the average buying rate in the free market for the preceding week. Manufactured export products in which imported materials or elements are used are, however, subject to the following system: when the value of the imported raw material component is less than 50 per cent of the export value, the buying rate for the foreign exchange proceeds of the export is the average free market rate of the preceding week; when it exceeds 50 per cent, the foreign exchange proceeds of the export must be sold to the Bank of the Republic at the buying rate fixed by the Bank, i.e., Col$7.10 per US$1.

Exports of coffee are subject to a minimum surrender price fixed at US$59.00 per 70-kilogram bag; the surrender price for bananas and other products varies according to the quantity exported and the price that the exporter may obtain in accordance with world market conditions. When the surrender price is higher than the f.o.b. export price, exporters have to purchase foreign exchange to fulfill the surrender requirement. This exchange may be purchased in the free market or from the Bank of the Republic at the free market rate for the day. Further, coffee exporters are required to retain in kind the equivalent of approximately 5 per cent of the volume of coffee exported.

Proceeds from Invisibles

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

Capital

Capital imported for the exploration and exploitation of petroleum and for the metal-extracting industries must be registered with the Exchange Registration Office, and all such capital imported in the form of foreign exchange must be sold to the Bank of the Republic at the rate of Col$7.10 per US$1. Foreign capital invested in these industries and net profits on such capital are remitted according to special laws and contracts.

For other industries, there is at present a dual system: Those registered before June 17, 1957 may pay amortization and profits on foreign capital with “auction” exchange, covering the remittance tax of 10 per cent with U.S. dollars purchased in the free market, or they may purchase the exchange in the free market, in which case the remittance tax is not payable. Capital imported after June 17, 1957 does not have to be registered with the Exchange Registration Office and may enter freely through the free market; amortization and profits on such capital must also be negotiated through the free market.

Table of Exchange Rates (as at December 31, 1963)(pesos per U.S. dollar)
BuyingSelling
7.101 (Fixed Rate)

Exports of coffee, gold, and manufactured products with an import component exceeding 50 per cent. Capital for the exploration and exploitation of petroleum and for the metal-extracting industries.
9.001(“Auction” Rate)

All imports. Payments by the National Government, students’ expenses, and freight payments on merchandise transported by conference ships.
9.00 (Fixed Rate)

Official foreign loans to National Government for local currency expenditures.
9.98 (Average Free Market Rate of the Preceding Week)

All other exports and foreign exchange sales to Bank of the Republic.
9.98 (Free Market Rate)

Invisibles. Other private capital.
9.99 (Free Market Rate)

Other invisibles and capital.

Changes during 1963

January 8. The concessions granted with regard to customs duties on imports from LAFTA countries and included in the Colombian National List were modified. Decree No. 811 of March 30, 1962 was repealed.

January 11. The Bank of the Republic pegged the free market rate.

January 19. The rate for conversion into local currency of official foreign loans granted to the National Government was established at Col$9.00 per US$1.

February 26. Some items of the customs tariff were transferred to the list of those goods which require a license from the Superintendency of Imports.

February 28. The advance deposit applying to two categories of imports was reduced to 1 per cent.

March. The prohibition on the export of a wide range of agricultural products was lifted.

March 1. The quantity of coffee which coffee exporters must surrender to the National Coffee Fund prior to registration (excelso coffee or its pergamino equivalent) was reduced from 15 per cent to 5 per cent of the volume of the coffee exported.

March 11. Raw materials could be imported free of import duties and advance deposits, provided that they were used exclusively in the manufacture of products for export.

April 4. The advance deposit applying to four categories of imports was reduced to 10 per cent.

April 19. A new system for determining surrender prices for foreign exchange proceeds of certain export products was established.

May 13. The application of the auction rate of exchange for freight payments was limited, with minor exceptions, to national and foreign ships belonging to a shipping conference.

May 22. The advance deposit applying to one category of imports was reduced to 30 per cent, and that applying to two categories of imports was reduced to 10 per cent.

June 5. The total export quota for sugar was reduced by 60 per cent for 1963.

June 11. Standards were established for regulating loans in foreign exchange granted by the Bank of the Republic to finance exports and imports of capital goods.

June 11. It was determined that the value of the contributions in foreign capital represented by machinery and plant, imported into the country to subscribe to shares in corporations, would be liquidated at the dollar exchange rate in the free exchange market on the date of importation of the goods.

July 6. Exports of sugar were prohibited.

August 29. The Bank of the Republic was authorized to receive, in advance, foreign currency proceeds from exports; in this case, guarantees of the surrender of the currency would not be required.

September 7. Charges of Col$5.00 for imports valued at US$20.00 or less, and Col$100.00 for imports in excess of US$20.00, were levied on the import forms to be filled out when registering import transactions.

September 20. The Monetary Council was established. Its functions included, among others, those previously exercised by the Board of Directors of the Bank of the Republic.

October 16. Chassis for cars and trucks were taken off the prohibited list; imports had to be financed with credit of at least five years extended by the exporter to the Bank of the Republic.

October 22. It was announced that 40,000 tons of rice could be exported.

Congo (Brazzaville)1

Exchange Rate System

No par value for the currency of Congo (Brazzaville) has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by commercial banks under the direction of the Exchange Office. The Ministry of Economic Affairs allots to each importer exchange for goods included in the annual import program; it also issues import licenses with the consent of the Exchange Office.

Prescription of Currency

Congo (Brazzaville) is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs;3 those with all other countries in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from all other countries are subject to licensing and to an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Congolese Committee.

Separate global quotas are established for imports from EEC countries and for imports from all other countries outside the Sino-Soviet bloc. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for the other countries may be used to import goods originating in any country except those in the Sino-Soviet bloc, to which special quotas apply.

For goods included in the annual import program, the Ministry of Economic Affairs publishes each year an announcement of the exchange allotted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Ministry an application for a license within the limits of the quota that has been assigned to him. When the license is issued, the Exchange Office makes the exchange available to the importer through his bank. Import licenses are valid for one year, and no extensions are granted except for specially manufactured goods when evidence is presented concerning the delay in manufacture.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. However, for the following categories, authorized banks may sell foreign exchange without prior authorization from the Exchange Office: (1) for travel, up to the equivalent of CFAF 250,000 a person for each trip; (2) for study and for living expenses connected therewith, upon presentation of supporting documents from the educational institution attended by the student; (3) for family maintenance, upon presentation of supporting documents; and (4) for vacation expenses abroad, up to the equivalent of CFAF 12,500 a person a month, with a maximum equivalent to CFAF 50,000. In addition, the Exchange Office authorizes the sale of foreign exchange freely for the following: payments for patent rights, royalties, trademarks, licenses, etc.; the net amount of salaries received by foreigners employed in Congo (Brazzaville); expenditures and earnings of foreign governments; and medical expenses and living expenses abroad for reasons of health.

Travelers to other countries in the French Franc Area may take out any amount of CFA banknotes. Travelers to other destinations may take out up to CFAF 75,000 or CFPF 75,000 in banknotes, and up to an equivalent amount in banknotes of countries outside the French Franc Area. Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses, which are issued freely.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be surrendered within one month from the date of their receipt. Exporters may, however, retain 10 per cent of their export proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts, which may be used by the exporters themselves to pay for export promotion expenses and for modernization and expansion needs of their industries.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 5,000 earned in those countries from foreign securities, must be collected and must be surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

Under the Investment Code of June 1961, any enterprise established in Congo (Brazzaville), whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports as well as exemption from direct taxes on specified income.

The Code also provides for three categories of preferential treatment, in accordance with which fiscal and other privileges may be accorded to firms investing in specified new industries or in the expansion of existing ones. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of Congo (Brazzaville); it is granted for a period of up to 10 years. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatment C is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for a period of up to 20 years. The granting of any one of the three kinds of preferential treatment automatically includes the application of specified exemptions from direct taxes which are granted under the provisions of the ordinary law (see above).

Requests for approval for preferential treatment must be submitted to the Minister of Finance and Planning, who, after examining the documents, transmits them to the Investment Commission. After an opinion has been given by that Commission, the project is submitted to the Council of Ministers. Preferential treatment A is granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Executive Committee of the Equatorial Customs Union upon the recommendation of the Council of Ministers. Preferential treatment C requires legislation.

Controls over foreign investments in Congo (Brazzaville) are administered along the lines established by exchange control regulations in France.

The transfer of profits from, as well as the proceeds from the liquidation of, registered foreign investment is permitted freely. However, nationals of Portugal residing either in Congo (Brazzaville) or in Portugal, and companies controlled by Portuguese, are prohibited from making financial transfers to Portugal.

Changes during 1963

No significant changes took place during 1963.

Congo (Leopoldville)1

Exchange Rate System

No par value for the currency of the Republic of Congo (Leopoldville) has been established with the Fund. The official unit of currency is the Congo franc. The official buying rate is CF 150 = US$1 and applies to all exchange proceeds; the official selling rate is CF 180 = US$1 and applies to all exchange payments. The buying and selling rates for other currencies are fixed on the basis of official cross rates between each of those currencies and the U.S. dollar.

Administration of Control

Exchange control is administered principally by the Monetary Council, which is responsible for global allocations of foreign exchange for payments for imports and invisibles. The President of the Monetary Council acts also as Foreign Exchange Controller and in this capacity is directly responsible to the Prime Minister for the broad formulation and control of exchange programs. The Bureau of Economic Coordination in the Prime Minister’s office, together with the Office d’Approvisionnement in the Ministry of Economic Affairs, is responsible for the determination of more detailed priorities for imports and the allocation of import quotas to recognized importers. On the basis of decisions reached by the above-mentioned agencies, licenses and authorizations for payments for imports are issued by the Licensing Office, and authorizations for payments for invisibles are issued by the Exchange Office. Both these offices are under the authority of the Monetary Council. An Exchange Commission, composed of representatives of the economic ministries and of the Monetary Council, deals with contraventions of exchange control regulations.

Prescription of Currency

There are no prescription of currency regulations. Congo (Leopoldville) is not a party to any bilateral payments agreements.

Imports and Import Payments

The Monetary Council determines the total amount of foreign exchange to be made available for payments for imports under a quarterly exchange budget, which is subdivided according to imports financed by foreign aid and those financed by Congo’s own resources.

Within these limits, the Office d’Approvisionnement assigns quotas for import categories in accordance with priorities established by it and by the Bureau of Economic Coordination. The Office then allocates individual quotas to recognized importers, subject to the approval of the Bureau of Economic Coordination. An importer who is granted a quota must apply to the Licensing Office, through an authorized bank, for an import license and a payment authorization.

In addition, for enterprises deemed essential to the economy, a system of “exchange allocation agreements” is in force. Under this system, the essential enterprises are guaranteed access to limited currency resources; and certain proportions of export proceeds (specified for individual exporting companies on the basis of agreements reached by each company with the Monetary Council), surrendered at the rate of CF 150 per US$1, are credited at the rate of CF 180 per US$1 to so-called Foreign Currency Resident Accounts. These accounts may be debited exclusively for payments for authorized categories of direct imports and invisibles required by the account holder in connection with his own business. The imports concerned are not subject to import quota requirements, and the banks in which the Foreign Currency Resident Accounts are held make payments against the presentation of import documents.

Annual allocations of exchange (for direct imports or for invisibles) may be granted under similar conditions to nonexporting producers and to service enterprises. Imports under this arrangement are not subject to quota requirements, but an import license and authorization for payment in accordance with the provisions of the respective exchange allocation agreements are required.

An application for an import license must be accompanied by a statement specifying the merchandise to be imported, its unit price and country of origin, the transport and insurance charges connected with it, and the currency in which the payment is to be made. The import license and payment authorization that are granted are normally valid for four months. Within that period, importers must complete the importation and make the payment authorized.

Banks are permitted to open letters of credit for importers to whom import licenses have been granted. The importers must forthwith provide to the banks the countervalue in Congo francs, calculated at the prevailing rate of exchange for imports; however, by that action they are not relieved of any exchange risk involved. Payment to the foreign exporter may not be made until the bank has received documents evidencing the shipment to Congo of the merchandise described in the import license. As a rule, a certificate of verification of the quantity, the quality, and the country of origin of the merchandise, issued by an overseas correspondent of the Société Congolaise de Surveillance, must be part of these documents.

A similar licensing procedure applies to imports with “foreign financing,” which are allowed under certain conditions. These imports are confined mainly to materials and spare parts, and to the needs of institutions, including schools and charitable organizations. An import license is required, but there is no corresponding payment authorization and no foreign exchange is made available.

The quota and licensing procedure, as well as the verification formalities, apply as a rule to all private imports, including those financed by foreign aid. However, for the latter, any provisions connected with the granting of the foreign aid must also be observed.

Payments for Invisibles

Policy related to payments for invisibles is formulated by the Monetary Council. Normally, exchange is granted for items connected with trade. Transfers abroad of current revenue by foreign nationals resident in Congo (Leopoldville) are authorized, within certain limits. Airlines and other travel companies are, as a rule, reimbursed for the foreign exchange costs of fares incurred by Congo (Leopoldville) residents on official travel abroad. There are basic allocations for official and business travel and students’ expenses abroad. Transfers for certain administrative expenses abroad by enterprises, interest on private loans, and certain portions of insurance premiums are, as a rule, authorized. No exchange is made available for transfers of investment income.

All payments for invisibles are subject to authorization by the Exchange Office. Provisions covering the invisibles listed above are included in the agreements allocating foreign exchange and in annual exchange allocations. In these cases, the exchange is made available in accordance with procedures similar to those described in the section on Imports and Import Payments, above.

The export of Congolese banknotes is prohibited.

Exports and Export Proceeds

All exports require an export license. Banks are normally authorized to extend such licenses to exporters who submit a declaration of collection of exchange. Such declarations must specify the nature of the merchandise to be exported, the price, and the currency in which payment is to be received. Export licenses are normally valid for three months; within this period, the proceeds must be received and surrendered.

However, under the system of “exchange allocation agreements” (see section on Imports and Import Payments, above), certain proportions of the export proceeds surrendered may be repurchased by the exporters concerned in accordance with the procedures described above. Exporters of agricultural products may use up to 25 per cent of repatriated export proceeds to purchase authorized imports and invisibles. Agreements with mining companies provide for allocations ranging from 33 per cent to 40 per cent of their export proceeds surrendered.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered. The import of Congolese banknotes is prohibited, except that travelers to Congo (Leopoldville) may import such banknotes up to an amount not exceeding CF 15,000 a trip; additional local currency may be obtained by selling foreign currency at the official buying rate.

No one on Congo (Leopoldville) territory (whether resident or non-resident) is allowed to hold foreign banknotes or other means of payments in amounts exceeding the equivalent of US$300. Nonresidents traveling to Congo (Leopoldville) and carrying amounts in excess of this limit must deposit the excess amounts in a local bank; they are allowed to recover them on departure. Residents who leave Congo and wish to export foreign banknotes and foreign means of payments in excess of the equivalent of US$300 must submit to the customs authorities an official certificate showing that the banknotes and other means of payments have been acquired legally.

Capital

Capital transfers abroad, except some relating to the Government, are not authorized.

Changes during 1963

February 5. Following a Presidential Ordinance of January 9, re-establishing monetary unity throughout the territory of the Republic of Congo (Leopoldville), the Monetary Council started currency conversion in the province of South Katanga. The conversion was carried out at a ratio of 1 Katanga franc to 1 Congo franc, and no quantitative limit was imposed on the exchange.

March 15. The import deposit requirement was raised from 30 per cent to 40 per cent of the value of imports.

May 20. The proportion of repatriated export proceeds which agricultural exporters were allowed to use under the system of exchange allocation agreements was raised from 20 per cent to 30 per cent.

June 1. The import deposit requirement was raised from 40 per cent to 100 per cent of the value of imports.

September 1. All transfers abroad for invisibles were suspended, with the exception of those relating to the Government and to students’ expenses abroad.

October 1. The limit for repatriated proceeds that could be used by exporters of agricultural products under the system of “exchange allocation agreements” was reduced from 30 per cent to 25 per cent.

October 31. Authorizations for payments for invisibles were resumed on the same basis as that prior to September 1, 1963.

November 9. The Congo franc was devalued. In lieu of the previous effective exchange rate of CF 64 = US$1, a buying rate of CF 150 = US$1, applicable to all exchange proceeds, and a selling rate of CF 180 = US$1, applicable to all exchange payments, were established.

November 9. The import deposit requirement was abolished.

Costa Rica

Exchange Rate System

The par value is Costa Rican Colones 6.625 = US$1. The Central Bank buys exchange derived from exports and other exchange tendered to it at a fixed rate of ₡ 6.62 per US$1. Exchange may be purchased freely by the public in a market in which the Central Bank maintains the rate at ₡ 6.65 per US$1. Costa Rica has no exchange restrictions on foreign payments. Export proceeds, except those of foreign-owned banana companies that have contracts with the Government, have to be surrendered. Other exchange receipts may be disposed of freely.

Administration of Control

The controls over export receipts are operated by the Central Bank of Costa Rica. Purchases and sales of exchange are made through the Central Bank or through commercial banks authorized for this purpose.

Prescription of Currency

There are no prescription of currency requirements. In practice, nearly all exchange transactions in Costa Rica are expressed in U.S. dollars. Costa Rica does not maintain any payments or clearing agreements with other countries. Payments to El Salvador, Guatemala, Honduras, and Nicaragua in respect of trade and invisibles may be made in Costa Rican colones through the Cámara de Compensación Centroamericana, a clearing house established by the central banks of Central America to foster the process of economic integration of their countries. Payments to Mexico in respect of trade and invisibles may also be made in Costa Rican colones through the clearing house.

Imports and Import Payments

There is no system of import licensing and all payments may be made freely.

Payments for Invisibles

Payments for invisibles are not controlled, and exchange may be purchased freely.

Exports and Export Proceeds

The Central Bank supervises exports to assure a supply of exchange to the market. Export licenses from the Central Bank are necessary for the physical exportation of merchandise, and the license is granted if the exporter agrees to surrender the exchange proceeds; the Bank may require the exporter to provide a guarantee in this respect. In addition to the export license issued by the Central Bank, other export licenses are required as follows: (1) strategic materials, such as armaments, munitions, scrap iron, and scraps of nonferrous base metals, require export licenses from the Ministry of Economy and Finance; (2) sugar requires an export license from the Ministry of Economy and Finance in order that shipments under the sugar quotas may be controlled; (3) lumber and root of ipecacuanha require export licenses from the Institute for Lands and Colonization; (4) beans, rice, potatoes, onions, cotton, meat, and purebred and other cattle require export licenses from the National Council of Production; (5) airplanes require export licenses from the Civil Aviation Board; (6) Indian art objects made of gold, stone, or clay require export licenses from the National Museum; (7) tobacco requires an export license from the Tobacco Defense Board; and (8) coffee requires a sales contract approved by the Coffee Office, in order to control exports under the coffee quotas, and an approval from a commercial bank stating that there are no liens on the coffee.

The exchange proceeds of all exports must be surrendered. Foreign-owned banana companies that have contracts with the Government are exempt from this requirement, but they sell foreign exchange to Costa Rican banks in amounts necessary to meet their local currency requirements for carrying out their activities in Costa Rica. There are export taxes on sugar and coffee.

Proceeds from Invisibles

Exchange receipts from invisibles may be retained or sold freely.

Capital

Transfers of capital may be made freely by residents and nonresidents. The Organic Law of the Central Bank provides that foreign investments may be registered with the Central Bank and repatriation of the capital and income thereon assured.

Changes during 1963

July 26. The Costa Rican Congress ratified the General Treaty for Central American Economic Integration.

October 8. Following the establishment of clearing arrangements between the central banks of the Central American countries and the Bank of Mexico, payments to Mexico in respect of trade and invisibles could be made in Costa Rican colones through the Cámara de Compensación Centroamericana.

November 9. The entry of Costa Rica into the Central American Common Market became effective.

Cyprus

Exchange Rate System

The par value is Cyprus Pound 1 = US$2.80. Exchange rates are based on the fixed rate for sterling, with which the Cyprus pound is at par, and London market rates for sterling against other currencies. The rate for the U.S. dollar as at December 31, 1963 was US$2.80⅜ buying, US$2.80 316 selling, per £C 1.

Administration of Control

Exchange controls are administered by the Central Bank of Cyprus (Exchange Control Department); trade controls, by the Ministry of Commerce and Industry. Certain authority to approve applications for the allocation of foreign exchange within the scope of instructions issued by the Ministry of Commerce and Industry has been delegated to the commercial banks.

Prescription of Currency

Cyprus is a member of the Sterling Area, and settlements between residents of Cyprus and residents of other Sterling Area countries may be made freely in sterling or another Sterling Area currency. Settlements with countries covered by bilateral payments agreements must be made through the appropriate account.1 Payments to other countries may be made by crediting sterling or Cyprus pounds to an External Account, or in any foreign currency. The proceeds of exports to other countries may be received in sterling or Cyprus pounds from an External Account, in any specified currency,2 or in any other currency freely exchangeable for sterling.

Nonresident Accounts

No distinction is made between the accounts of residents of Cyprus and those of residents of other parts of the Sterling Area, and the funds on all such accounts are freely transferable within the Sterling Area. Residents of countries outside the Sterling Area may maintain with authorized banks nonresident accounts, designated External Accounts. These may be credited with authorized payments from the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currency by nonresidents. External Accounts may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of foreign currency.

Blocked Accounts are maintained in the name of a nonresident for certain payments of a capital nature which, under the existing exchange control regulations, may not be transferred outside Cyprus. These accounts may be in the form of deposits with local banks earning interest which may be freely transferred abroad.

Imports and Import Payments

Most imports may be made freely under an open general license. Individual import licenses are, however, required for 51 items (certain agricultural and textile products, a few metals, and most nonelectrical machinery) and for all goods originating in countries with which Cyprus maintains bilateral payments agreements (see footnote 1). Individual import licenses are not required for bona fide gifts not exceeding £C 10 in value and not to be sold, for returned goods, or for certain special transactions.

Payments for all authorized imports may be made freely.

Payments for Invisibles

Payments for invisibles to residents of other Sterling Area countries may be made freely. All remittances to countries outside the Sterling Area require the approval of the exchange control authorities. Profits, dividends, and interest from foreign investments may be transferred abroad, after payment of any charges and taxes due. For certain categories of payments, limits are imposed. For study abroad, the lower limit is £C 400 a year, and the upper limit is £C 1,400 a year; the amount allowed depends on the cost of living in the country concerned—e.g., for study in countries in the Middle East, £C 450; in the United States and Canada, £C 1,400; in other countries, £C 850. For tourist travel, the limit is £C 250 a person annually; for business travel, £C 5 to £C 15 a day is granted in addition to the tourist allowance. Travelers may take out Cyprus or Bank of England notes up to £10 and Turkish currency notes not exceeding LT 500. Nonresident travelers may take out any other foreign currency notes which they brought into Cyprus.

Exports and Export Proceeds

Exports to Sterling Area countries are free. All exports to countries outside the Sterling Area require export licenses, which are issued freely provided that the transaction is being cleared through an authorized bank through which the net export proceeds will be repatriated and those in non-sterling currency surrendered.

Proceeds from Invisibles

Receipts from invisibles in currencies other than those of the Sterling Area must be sold to an authorized bank. Persons entering Cyprus may not bring in more than LT 500 in Turkish currency notes; the import of other foreign currency notes and Cyprus currency notes is not restricted.

Capital

No control is exercised over capital receipts or payments in Sterling Area currencies. Receipts in other currencies must be offered for sale to an authorized bank; payments of a capital nature in those currencies require prior approval.

Foreign investments in Cyprus by residents of countries outside the Sterling Area require the prior approval of the exchange control authorities. In considering such applications, due regard is given to the purpose of the investment, the extent of possible foreign exchange savings, the number of persons to be employed, the extent of the foreign exchange liability which might arise from the investment, and possible competition with existing industries. Foreign investment involving participation in domestic industries not exceeding 49 per cent of the share capital is normally approved; participation above this limit may be permitted in exceptional circumstances. Proceeds from the liquidation of approved foreign investments may be repatriated after payment of any charges and taxes due.

Foreign nationals who repatriate or take up residence outside the Sterling Area, and Cypriots who emigrate to countries outside the Sterling Area, may have £C 5,000 of their assets transferred abroad. Any excess amount is deposited in a Blocked Account.

Transactions in foreign securities owned by residents require prior permission from the authorities.

Changes during 1963

June 27. The Central Bank of Cyprus was established and the administration of exchange control was taken over by the Exchange Control Department of the Central Bank.

November 1. The annual limits of foreign exchange for study abroad were changed from a lower limit of £C 350 to £C 400 and from an upper limit of £C 1,500 to £C 1,400 (depending on the cost of living in the country concerned).

Dahomey1

Exchange Rate System

No par value for the currency of Dahomey has been established with the Fund. The unit of currency is the CFA franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc giving the relationship CFAF 246.853 = US$1.2 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at rates resulting from the relation CFAF 1 = 0.02 French franc plus or minus a commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

Administration of Control

Exchange control is administered by the Exchange Office. Foreign exchange transactions are handled by authorized banks under the direction of the Exchange Office. Import licenses and certificates of importation are issued by the Department of Economic Affairs and approved by the Exchange Office.

Prescription of Currency

Dahomey is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with Ghana are made through a special account under the terms of the payments agreement concluded with that country. Settlements with all other countries are usually made through banks in France: those with Rumania—with which France maintains a payments agreement that applies also to transactions with Dahomey—through Rumanian Foreign Accounts in Bilateral Francs;3 with all remaining countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Most imports from other countries are subject to licensing; they are admitted in accordance with an annual import program, which is determined each year in a joint French-Dahomean Committee, as provided for by the Economic Cooperation Agreement with France. Under this program, global quotas are established for imports from EEC countries other than France and for imports from most other countries outside the French Franc Area, and bilateral quotas are fixed under the terms of the prevailing trade agreements. The quotas fix the limits up to which import licenses are issued for specified commodities to licensed traders and to industrial or agricultural producers. For certain goods admitted without quantitative restriction, certificates of importation are issued.

The import license or certificate of importation entitles the importer to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank. Under the EFAC arrangement (see section on Exports and Export Proceeds, below), licenses for the import of goods to be used directly by exporters are approved freely, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely; those to other countries are subject to the approval of the Exchange Office. Payments for invisibles related to trade are authorized freely when the basic trade transaction has been approved. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also approved freely. Payments for other invisibles are subject to administrative decision. Travelers to countries outside the French Franc Area may obtain an exchange allowance in an amount equivalent to CFAF 120,000 per annum. Representation, advertising expenses, and business travel may be financed with funds from EFAC accounts (see section on Exports and Export Proceeds, below).

Travelers to Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta may take out, without limit, banknotes issued by any bank of issue within the French Franc Area. Travelers going directly to other countries in the French Franc Area may take out, without limit, banknotes issued by any bank of issue in the French Franc Area, with the exception of those issued by the BCEAO, for which the limit is CFAF 75,000. Travelers going to countries outside the French Franc Area may take out in banknotes or coins up to a maximum of F 750 in metropolitan francs, or up to 75,000 in CFA or CFP francs, or the equivalent of F 750 in notes and coins denominated in any French Franc Area currency other than the French franc.

Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses.

Export proceeds in currencies of countries outside the French Franc Area that are not used to make authorized payments abroad must be surrendered within three months from the date of their receipt. Exporters may, however, retain the following percentages of export proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts: 12 per cent for proceeds from Canada and the United States, irrespective of the currency used for payment; 8 per cent for proceeds from other countries, irrespective of the currency used for payments; and 6 per cent for proceeds of exports on consignment. Except for proceeds of exports on consignment, these percentages may be increased by 3 per cent by enterprises engaged principally in export business. Balances on these accounts may be used to make any payment outside the French Franc Area, provided that general or special authorization has been obtained within the framework set up for their use.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due from residents of countries outside the French Franc Area in respect of services, and income exceeding the equivalent of CFAF 25,000 earned in those countries from foreign securities, must be collected, and they must be surrendered within one month of receipt. Travelers from Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta may bring in any amount of CFA banknotes issued by the BCEAO. Travelers from other countries may bring in up to CFAF 75,000 in banknotes issued by the BCEAO. All travelers may bring in any amount of banknotes and coins issued by a bank of issue of the French Franc Area other than the BCEAO, as well as any amount of banknotes and coins of countries outside the French Franc Area (except gold coins).

Capital

Capital movements between Dahomey and other French Franc Area countries are free of control; those between Dahomey and all other countries require approval.

The Investment Code of December 31, 1961 provides for preferential status that may be granted to foreign and domestic investments in industry, agriculture, and, in some cases, commerce, when such investments are deemed to be of value to national development. Three preferential regimes are established. Plan A is intended for small and medium-sized investments and provides for exemption, during a period of up to 5 years, from import duties and taxes on materials necessary for the production of the proposed product. Plan B, for larger projects, is granted for a maximum period of 8 years, and provides, in addition to the benefits of Plan A, exemption during the first 5 years of operation from the tax on industrial and commercial earnings as well as certain other taxes. Plan C is intended for very large enterprises and is granted for a period of up to 25 years. In addition to the benefits of Plans A and B, Plan C guarantees marketing stabilization for products, free choice of suppliers, and certain other advantages.

Transfers abroad of proceeds from the liquidation of foreign investments are authorized freely.

Changes during 1963

February 25. It was announced that export proceeds in currencies of countries outside the French Franc Area must be surrendered within three months from the date of collection. Previously, such currencies had to be surrendered within one month from the date of collection.

March 7. It was announced that balances on EFAC accounts could henceforth be used to make any payments to countries outside the French Franc Area, provided that general or special authorization was obtained within the framework set up for their use.

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 intervene; the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for the Canadian dollar and specified European currencies1 are quoted daily. Authorized exchange dealers may engage in arbitrage with one another and with their foreign correspondents in convertible and externally convertible currencies, including Danish kroner, both spot and forward for up to 12 months. Forward premiums and discounts are left to the interplay of market forces. Forward transactions with residents must have a commercial basis.

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., banks and the stock exchange brokers who are members of the Copenhagen Stock Exchange. Permission, when required, for foreign direct investments in Denmark has to be obtained from the Ministry of Commerce. Licenses for imports and exports, when required, are issued by 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 any currency of the area or in Danish kroner, except from a Bilateral 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

Most accounts held in Danish kroner for nonresidents are convertible. Bilateral Krone Accounts are maintained for a few countries (see footnote 2). Both Convertible Krone Accounts 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 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, and for authorized payments to residents of Denmark from any foreign country.

Bilateral Krone Accounts may be credited with transfers from any Convertible Krone Account, with transfers from another Bilateral Krone Account of the same country and 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 and 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 play only an insignificant part in settlements with foreign countries.

Capital Accounts are kept for nonresidents by authorized exchange dealers for holding capital, income from capital, pensions, and other funds owned by or accruing to Danish emigrants within the first three years after emigration and which are not transferable abroad because they amount to more than the yearly allocation granted for the transfer of such funds. Balances on Capital Accounts may be used for the same private payments in Denmark as those generally allowed from Convertible and Bilateral Krone Accounts, but may be used only within certain limits for commercial payments in excess of DKr 2,000. Within the limits set for transfers of emigrants’ funds, i.e., up to DKr 40,000 a person in each of the three years after emigration, balances may be transferred abroad, used for commercial payments in Denmark, or transferred to other Capital or to Foreign Accounts. After three years, emigrants may transfer remaining balances on Capital Accounts without limitation, and the account is then reclassified either as a Convertible Krone Account or as a Bilateral Krone Account.

Foreign Accounts are nonresident accounts with savings banks, small cooperative banks, and the Public Trustee’s Office. These accounts are kept mainly by private persons and for private purposes. The rules governing such accounts follow broadly the same principles as those established for Convertible Krone Accounts, except that transfers abroad may be made only through an authorized exchange dealer.

Imports and Import Payments

All goods not on a restricted list may be imported without license from the “Free List Area,” which comprises most countries outside the Soviet bloc. For imports from the “Free List Area” of commodities on a restricted list, licenses are issued on the basis of global (regional) quotas and may be used for any country in the “Free List Area.”3 Imports from countries outside the “Free List Area” require licenses; these are granted in accordance with bilateral trade agreements and traditional trade relations, and apply to the specific country concerned.

Payments for imports and the related shipping expenses may be made freely within two years from the end of the month in which the goods were cleared through customs, or within five years for imports of ships, aircraft, large machines, and major plants. The authorized exchange dealer may make payment before clearance of the goods, provided that the probable date of clearance lies within a year from the date of payment.

Payments for Invisibles

The authorized exchange dealers are permitted to make payments for most invisibles freely; only in a few cases is approval from the National Bank required. Transfers of up to DKr 2,000 for any permitted purpose may be made without delivery of forms. Foreign exchange for travel is allocated liberally and may be obtained in convertible or externally convertible currencies for travel to any country, including the bilateral account countries. Foreign exchange in banknotes and coins may be purchased from agencies or individuals other than the authorized exchange dealers, provided that the amount does not exceed DKr 2,000 for each transaction.

Travelers may take out freely DKr 2,000 in Danish banknotes and coins, and any amount in foreign banknotes or other means of payment. The DKr 2,000 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 require export licenses issued by the Ministry of Agriculture or the Ministry of Fisheries. Exports of a few industrial products to the “Free List Area” and of all products to other countries require licenses issued by the Ministry of Commerce, the primary purposes of the regulations being to safeguard the fulfillment of bilateral obligations, to avoid excessive credits to importing countries, to serve strategic purposes, and to avoid re-export and transit transactions involving loss of convertible or externally convertible currencies.

Export proceeds must be transferred to Denmark without undue delay unless the National Bank permits otherwise. However, this obligation does not apply to amounts which are to be used within three months to settle or to offset the cost of certain commercial expenses. Foreign exchange receipts must be offered for sale to the National Bank or to an authorized exchange dealer without undue delay, except that an individual resident may hold foreign banknotes and coins not exceeding DKr 2,000 in value.

Proceeds from Invisibles

Foreign exchange derived from invisibles must be transferred to Denmark, unless the National Bank permits otherwise, and offered for sale to the National Bank or to an authorized exchange dealer without undue delay, with exceptions similar to those which apply to export proceeds (see section on Exports and Export Proceeds, above).

Travelers may bring in any amount in Danish 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 200,000 in a calendar year to subsidiary companies, etc., or to a member of the resident’s family, and to buy foreign securities that do not represent direct investments in foreign commercial or industrial enterprises, provided that the securities are acquired on the basis of a subscription right to shares or the like owned by the resident concerned or provided that the resident furnishes proof that he has repatriated a corresponding amount within the last 12 months from the sale of foreign securities to a nonresident. Permission from the National Bank is required for most other transfers abroad of a capital nature by residents.

Danish emigrants are granted an exchange allowance of up to DKr 40,000 a year for each person during the first three years after emigration. Funds exceeding this amount must be credited to a Capital Account in the name of the owner and may be transferred abroad after three years.

Direct investment in Denmark by nonresidents may be made without any special license if the transaction concerns industry, commerce, handicrafts, hotel business, or transportation, and if the investment does not increase total direct foreign investment in the enterprise concerned by more than DKr 40,000 in each calendar year. Other direct investment by nonresidents requires permission, which is granted liberally. The purchase by a nonresident of real property in Denmark usually requires a special license from the Ministry of Justice. A nonresident who is or has been a Danish national may freely purchase or subscribe to securities expressed solely in Danish kroner which do not represent direct investment. Other nonresidents may purchase or subscribe to bonds that are quoted daily and are expressed solely in Danish kroner, when the funds have been obtained from the liquidation of investments in Denmark. They may purchase or subscribe to shares that are quoted daily, are expressed solely in Danish kroner, and do not represent direct investment, when the funds have been obtained from the liquidation of Danish shares or when the acquisition is made on the basis of subscription rights to shares. Nonresidents may grant credits within certain limits to residents to finance purchases of commodities abroad and to finance the granting of credits for exports. They may, further, grant loans up to DKr 200,000 per borrower in a calendar year to commercial and industrial enterprises connected with the lender as subsidiary companies, branches, etc., or to members of their families.

Transfers of proceeds from the sale or liquidation of all sorts of investments and other funds in Denmark owned by nonresidents other than newly emigrated Danish nationals are permitted freely, irrespective of when and how the original investment was acquired. Interest and repayment of 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 and gifts to relatives may normally be transferred to any country without limitation. Individual payments above DKr 2,000 as gifts to persons other than relatives require approval from the National Bank. Such approval is normally given for bona fide gifts.

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. 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 1963

January 1. Additional commodities were freed from import restrictions; these included various vegetable and animal fats and oils, certain construction products, a number of mechanical products, and special-purpose motor trucks and vans.

July 1. Imports were further liberalized. Among the items freed from restriction were electric motors, oil burners, refrigerators, electric water heaters and stoves, building materials, cordage and tubing, buses, and bicycles.

July 1. Israel was included in the “Free List Area.”

Dominican Republic

Exchange Rate System

The par value is Dominican Peso 1.00 = US$1. Exchange transactions in U.S. dollars between the Central Bank of the Dominican Republic and other banks take place at the par value. Exchange transactions by commercial banks with the public also take place at the par value. All payments abroad must be made through banks. The commercial banks are required to transfer to the Central Bank exchange purchased from exporters. Exchange that does not have to be surrendered is available for payments abroad; its negotiation outside the commercial banks gives rise to a premium on the parity rate.

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

Foreign exchange control is administered by the Central Bank.

Prescription of Currency

No obligations are imposed on importers, exporters, or other residents in respect of the method to be followed or the currency to be used for payments to or from nonresidents.

Imports and Import Payments

Licenses for imports are not required. With the exception of goods imported from the United States under the program of the Agency for International Development (AID) and imports financed from self-provided exchange, all payments for imports are subject to approval by the Central Bank.

Payments for many imports are settled on a draft for collection basis: when the draft is presented for collection, the importer pays the full amount in pesos to the commercial bank; the bank then transfers this deposit to the Central Bank and waits for the latter to release exchange for the remittance. Other imports are paid for by letter of credit or a direct transfer of exchange: the commercial banks transmit daily to the Central Bank a list of importers’ applications for exchange; the Central Bank authorizes the commercial banks to open letters of credit, and when this has been done, it transfers foreign exchange to the commercial banks.

Payments for Invisibles

All payments for invisibles require the approval of the Central Bank which, in some cases, reduces the amount requested. The Bank may also postpone approval. The export of Dominican banknotes and coins is prohibited.

Exports and Export Proceeds

Export licenses are required for sugar, in connection with the operation of export quotas established under the International Sugar Agreement. Within 48 hours of receiving payment, exporters of Dominican products must surrender through the commercial banks to the Central Bank foreign exchange equal to 100 per cent of the f.o.b. value of their exports.

Proceeds from Invisibles

The foreign exchange proceeds from invisibles are not subject to surrender requirements, and may be used by the recipient. The import of Dominican banknotes and coins is prohibited.

Capital

There are no restrictions on the inward movement of capital by either residents or nonresidents. Applications for licenses for outward capital remittances must be submitted through the commercial banks to the Central Bank. Outward remittances of capital are seldom approved.

Changes during 1963

January 1. The automatic sale by banks of foreign exchange for family maintenance, gifts, etc., up to the equivalent of RD$50 a month for each applicant was discontinued, and all applications for exchange for such purposes had to be submitted to the Central Bank.

March 1. The automatic sale by banks of foreign exchange for travel abroad up to the equivalent of RD$250 a trip was discontinued, and all applications for exchange for this purpose had to be submitted to the Central Bank.

May 15. The Export-Import Coordinating Committee was abolished. All imports were exempted from the licensing requirement.

June 1. All exporters of Dominican goods were required to surrender the total proceeds of their exports (calculated on an f.o.b. basis) to a commercial bank, which had to transfer to the Central Bank the exchange purchased.

July 29. The automatic sale by banks of foreign exchange for travel abroad, up to the equivalent of RD$200 a trip, was permitted.

October 1. The automatic sale by banks of foreign exchange for travel abroad was reduced to the equivalent of RD$100 a trip, up to a maximum of two trips a year.

Ecuador

Exchange Rate System

The par value is Ecuadoran Sucres 18.00 = US$1. The official rates are S/ 17.82 buying, and S/ 18.18 selling, per US$1. These rates apply to nearly all export receipts, to payments for all imports and related invisibles, to official transactions, to other essential invisibles, to registered capital, and to all contractual registered private foreign debt operations entered into after July 14, 1961. For all other transactions there is a free market, in which the rates as at December 31, 1963 were S/ 18.45 buying, and S/ 18.57 selling, per US$1.

Administration of Control

The Monetary Board classifies transactions according to the exchange market through which they must be settled. Most transactions pass through the official market, which is under the control and supervision of the Central Bank of Ecuador. The Central Bank also issues import licenses. Transactions that do not qualify for the official market may enter the free market—conducted mainly by exchange houses and several commercial banks—where such transactions are free of supervision by the exchange control authorities.

Prescription of Currency

Exchange proceeds must be received in convertible currencies, usually U.S. dollars.

Imports and Import Payments

Permitted imports are divided into two categories: List I, consisting of essential and semiessential goods, and List II, consisting of less essential and luxury goods. All goods not included in these two lists are prohibited. Prior import licenses are required for all permitted imports exceeding a value of US$100, except those financed by official foreign loans. However, the licenses are issued freely provided that the required taxes have been paid and the appropriate advance deposits have been made. The licenses automatically entitle the holders to obtain exchange at the official rate to cover the c.i.f. value of the imports. The Monetary Board is authorized to shift items between Lists I and II and to prohibit the import of goods when the economic situation of the country and the balance of payments situation so requires.

The advance deposit requirement applies to almost all private imports. The only exceptions are imports under the Agricultural Surplus Agreement with the United States, imports of special types of cotton from countries of the Latin American Free Trade Association (LAFTA), and all imports from Paraguay. The deposit must be made in sucres by the importer before the import license is issued. The rates are currently 25 per cent of the c.i.f. value for imports in List I, 50 per cent for about 100 articles in List II, and 100 per cent for most other imports in List II. In practice the importer uses a part of the advance deposit—9 per cent of the f.o.b. value of imports and 50 per cent of the duties applicable to imports—for the settlement of consular fees and customs duties when the goods have been cleared through customs, and the remaining part for payments for imports when such payments are authorized.

A consular fee of 10½ per cent of the f.o.b. value, and import taxes of 3 per cent of the f.o.b. value and 3¼ per cent of the c.i.f. value, are levied on all imports. In addition, an import tax of 6 per cent is levied on the c.i.f. value of List I goods, and of 17 per cent of the c.i.f. value of List II goods; of these, 5 per cent on the List I goods and 15 per cent on the List II goods must be paid at the time the license is issued; the remaining import taxes, as well as the fees, are paid when the goods are cleared through customs.

Payments for Invisibles

Payments for transactions in invisibles that may be made through the official market require an exchange license from the Central Bank; the license is granted freely for all authorized transactions. These transactions include invisibles connected with trade (e.g., freight and insurance); necessary expenses (i.e., travel, tuition, and living expenses up to US$100 a month) of Ecuadoran students abroad who are registered with the Central Bank; most payments of the Government and of official entities; contractual interest (and amortization) payments on loans and other obligations abroad which are registered with the Central Bank; payments of dividends, profits, and amortization on registered private foreign investment up to 15 per cent annually; and contractual private foreign debt operations entered into and registered after July 14, 1961. Other payments for invisibles may be made freely through the free market.

Exports and Export Proceeds

All exports except those of certain foreign mining companies require licenses—which are issued by the Central Bank—to ensure, among other things, the full surrender of the exchange proceeds; the official rate applies to all such proceeds. Minimum prices are established for exports of bananas according to port of shipment, destination, and season. Exports of coffee, cacao, and bananas are subject to an export tax of 5 per cent. Exporters of rice receive from the Government an export subsidy of S/ 3 for each U.S. dollar surrendered.

Proceeds from Invisibles

Receipts from invisibles related to trade and all receipts of the Government and of official entities have to be sold at the official rate. Other receipts from invisibles (including those from tourism) may be sold in the free market.

Capital

Receipts of private foreign capital must be surrendered to the Central Bank at the official buying rate if registration is desired. This also applies to foreign exchange sold by foreign companies for the purpose of obtaining local currency for salaries, taxes, and other local expenses, if this capital is to be registered with the Central Bank. Foreign capital entering in the form of machinery and equipment may also be registered with the Central Bank. The Central Bank can refuse to register foreign capital if the investment is not considered to be in the interest of the Ecuadoran economy at that particular time. All unregistered private capital may enter without limitation through the free market.

Foreign exchange at the official rate may be obtained for the withdrawal of registered foreign investment from Ecuador up to a total of 15 per cent per annum of the amount registered; this percentage includes dividends, profits, and amortization. Contractual repayments of registered foreign loans may also be made at the official rate. All other capital remittances, either by residents or nonresidents, may be made through the free market.

Capital receipts of the Government and of official entities are converted at the official buying rate, and payments at the official selling rate. However, the proceeds from certain U.S. Government loans to finance local currency expenses are converted by the Central Bank at the official selling rate of S/ 18.18, instead of at the official buying rate of S/ 17.82, per US$1. In such instances, the Central Bank receives from the Treasury a payment of S/ 0.072 per US$1 as reimbursement for the Central Bank’s share of the normal spread between the official buying and selling rates.

Changes during 1963

Prohibitions on the import of certain commodities were lifted on various dates during the year. Only the date for automobiles is noted below.

September 7. Decree No. 497 was promulgated. Under this decree, an importer in practice would use part of the advance import deposit—9 per cent of the f.o.b. value of imports and 50 per cent of the duties applicable to imports—for the settlement of consular fees and import duties when the goods were cleared through customs and the remaining part for payments for imports when such payments were authorized. (See also September 20, below.)

September 9. Imports of rope, cord, and twine of sisal, jute, or hemp, and agave with a thickness of 4 millimeters were prohibited.

September 16. All permits for the import of raw materials for the edible oil and fat industry required approval of the Ministry of Commerce and Banking. Approval would be based on a report of the Department of Development.

September 20. Decree No. 497 came into effect. (See September 7, above.)

October 18. Imports of automobiles were permitted.

El Salvador

Exchange Rate System

The par value is Salvadoran Colones 2.50 = US$1. The rates of the Central Reserve Bank for transactions with the public are ₡ 2.49 buying, and ₡ 2.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at or within these limits and are subject to a tax of ¼ of 1 per cent. 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.

Administration of Control

Exchange control authority is exercised by the Central Reserve Bank of El Salvador through its Exchange Control Department. Authority to approve certain payments is delegated to the commercial banks. The Central Reserve Bank is also empowered to license imports and exports, but this power has not been exercised.

Prescription of Currency

Settlements for merchandise transactions with Spain must be made through special accounts in accordance with the terms of a bilateral payments agreement with that country. Payments to Costa Rica, Guatemala, Honduras, and Nicaragua in respect of trade and specified invisibles are settled in Salvadoran colones through the Cámara de Compensación Centroamericana, a clearing house established by the central banks of Central America to foster the process of economic integration of their countries. Payments to Mexico are also settled in Salvadoran colones through the clearing house. Otherwise, residents are free to make authorized payments in any currency they choose.

Nonresident Accounts

The accounts of nonresidents may be utilized freely, but the commercial banks must make periodic reports to the Central Reserve Bank of the movements on such accounts. Accredited diplomatic missions and other foreign institutions or persons established in El Salvador may be authorized to hold nonresident accounts in U.S. dollars with authorized banks, provided that such accounts are credited with foreign exchange received from abroad. The maximum balance which may be held on these accounts is fixed by the Exchange Control Department.

Imports and Import Payments

Import licenses are not required. Payments and transfers abroad require exchange licenses, which are granted freely for all imports. The commercial banks are authorized to provide exchange for import payments not exceeding US$2,000; larger amounts have to be approved by the Central Reserve Bank. When suppliers abroad request payment in advance, a prior deposit calculated on the value of the advance payment is required from the importer as a guarantee. The deposit varies according to the nature of the goods: 10 per cent on raw materials not produced domestically; 20 per cent on other raw materials and machinery; 50 per cent on manufactured goods not classified as luxury items; and 80 per cent on luxury goods. Imports paid for against letters of credit are subject to a prior deposit of 25 per cent (10 per cent for imports of machinery, equipment, and raw materials). When the importer is a manufacturer rather than a merchant, the prior deposit is usually waived. The deposit is refunded upon completion of the import transaction.

Payments for Invisibles

Payments for current invisibles require exchange licenses, which are granted freely for most items, although for certain payments only up to specified limits. Net profits may be remitted up to a limit of 10 per cent a year of the registered capital. The commercial banks provide exchange up to the equivalent of US$200 a person each six months for tourist travel. For larger amounts, authorization by the Exchange Control Department is required; as a general rule, under such authorization, each person is granted up to US$30 a day while traveling abroad, subject to a maximum of US$2,000. Persons who require exchange in excess of US$2,000, for medical treatment abroad or for other special reasons, must deposit 25 per cent of the amount exceeding US$2,000 with the Central Reserve Bank at the time the authorization is issued; the deposit is refunded when the Department receives the required proof. The Department also authorizes transfers of up to US$500 a month plus US$50 for each child to Salvadorans with permanent residence abroad. Students are allowed US$200 a month; those with families are allowed US$250 a month plus US$50 for each child. Foreign exchange in excess of the limits given above is seldom granted.

The exchange control regulations permit travelers to take out up to ₡ 200 in local currency, but this amount may be increased to facilitate border trade with other Central American countries.

Exports and Export Proceeds

Export licenses are not required, but the proceeds of exports must be received through a bank in El Salvador and the foreign exchange must be surrendered to the Central Reserve Bank or an authorized commercial bank. The proceeds of exports to Spain must be obtained through special accounts (see section on Prescription of Currency, above).

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered to the Central Reserve Bank or an authorized commercial bank. The exchange control regulations permit travelers to bring in up to ₡ 200 in local currency, but this amount may be increased to facilitate border trade with other Central American countries.

Capital

All exchange receipts arising out of capital transactions must be surrendered. Payments abroad representing capital movements require exchange licenses; such licenses are not granted for resident-owned capital. The entry of capital in the form of foreign investment is subject to the advance approval of, and registration by, the Ministry of Economy. Registration ensures (1) the remittance of net profits up to a limit of 10 per cent a year of the registered capital (larger amounts may be authorized in special cases by the Ministry of Economy at the time of registration of the investment) and (2) amortization payments, and repatriation of the proceeds from the sale of the assets of the enterprise, provided that such payments do not exceed the value of the registered investment. Foreign investments in El Salvador prior to June 1, 1961 must also be registered by the Ministry of Economy or the Exchange Control Department in order to enjoy the same facilities. For long-term foreign loans, the Exchange Control Department authorizes, without restriction, the remittance abroad of foreign currency for the payment of interest and amortization. The same treatment is granted to short-term foreign loans that have been approved by and registered with the Exchange Control Department.

Changes during 1963

June 21. Substantial increases in tariffs on certain luxury items, combined in part with increased excise and consumer taxes, became effective. The items affected were alcoholic beverages, cigarettes, certain radio and television sets, passenger cars, cameras and related equipment, cosmetics, toilet articles, wheat, and wheat flour.

July 19. A three-year commercial agreement with Japan was signed. Under this agreement, the two countries would grant each other most-favored-nation treatment with respect to tariffs, taxes, jurisdiction, business activities, etc.

October 8. Following the establishment of clearing arrangements between the central banks of the Central American countries and the Bank of Mexico, payments to Mexico were to be settled in Salvadoran colones through the Cámara de Compensación Centroamericana.

Ethiopia1

Exchange Rate System

The par value is Ethiopian Dollars 2.5 = US$1. The official rates are Eth$2.48125 buying, and Eth$2.5175 selling, per US$1.

Administration of Control

All transactions in foreign exchange must be carried out through authorized banks under the control of the National Bank of Ethiopia. All payments abroad and exports are subject to the supervision of the Exchange Controller, whose office is a department of the National Bank.

Prescription of Currency

Outgoing payments are normally made in foreign exchange appropriate to the country of the recipient or in U.S. dollars or sterling. The net proceeds of exports must be received in a foreign currency which is freely convertible, or in any other foreign currency acceptable to the Exchange Controller. Settlements with the United Arab Republic are made through accounts established under the bilateral payments agreement with that country which came into effect on June 1, 1961.

Imports and Import Payments

No import licenses are required. However, payments abroad for imports require exchange licenses; these licenses are granted freely in the currency appropriate to the country of origin, or in any convertible currency that may be requested. Goods ordered through a third country must be supported by evidence of original cost. Payment is normally authorized by letter of credit, mail transfer, telegraphic transfer, or cash against documents at sight or on an acceptance basis; for goods which were previously subject to advance deposit requirements, however, the usance must not exceed 90 days.

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 nationals may remit a maximum of 35 per cent of their salaries or annual taxable income, provided that they have resided in Ethiopia for less than six years; this time limit does not apply to foreign nationals who are in contractual service with the Ethiopian Government or with an autonomous government organization and who have an employment contract specifically entitling them to remit a percentage of their earnings. Ineligible persons may apply for exchange to meet expenses for maintenance of bona fide dependents, education of children, medical care, and premiums on insurance policies taken out before April 2, 1962. Subject to proper provision having been made for local taxation, foreign companies may remit dividends on their invested and reinvested capital in any currency; for approved projects, they may also transfer amortization at the rate of 10 per cent per annum.

Persons traveling abroad are allowed foreign exchange equivalent to Eth$100 a day for a maximum period of six weeks if the journey is made for business purposes, and up to the equivalent of Eth$1,050 a year for persons 16 years of age or over and Eth$735 a year for those under 16, if the journey is made for pleasure and/or vacation. Travelers may take with them a maximum of Eth$100 in Ethiopian banknotes.

Exports and Export Proceeds

All commodities require export licenses. When applying for a license, an exporter must give details of the goods to be exported, the destination, and the value. 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 National Bank of Ethiopia within three months 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$100 in Ethiopian banknotes. All foreign exchange must be declared by travelers on entry, and its re-export is permitted up to the amount declared on entry.

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; these concessions include exemption from taxes for a period of five years, admission of all imports of machinery free of duty, and permission to foreign investors to remit abroad 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 any currency. Emigrants’ allowances, transfers of legacies, and savings of foreign employees upon retirement are permitted up to the equivalent of Eth$70,000 in foreign currency. Transfers of sums in excess of this amount are authorized up to a total of Eth$70,000 in any subsequent 12-month period.

Changes during 1963

April 8. Requirements for importers to obtain exchange licenses before actually placing orders were withdrawn. For imports that were previously subject to advance deposit requirements, payment by clean transfer (mail or telegraphic transfer), letter of credit, or cash against documents at sight or on an acceptance basis with a maximum usance of 90 days was authorized.

April 8. The maximum transferable amount for emigrants’ allowances, legacies, and savings of foreign employees upon retirement was increased from Eth$50,000 to Eth$70,000.

July 27. By Order No. 30 of 1963, the National Bank of Ethiopia was created. It was to assume the functions of a central bank on January 1, 1964; on that date, the State Bank would cease to operate.

September 16. A decree to provide for the encouragement of capital investment in Ethiopia was issued. It included the following provisions: (1) income tax relief for five years for new enterprises with investments of Eth$200,000 or more; (2) exemption from import duties and taxes for machinery and equipment for use in agricultural and industrial enterprises; and (3) exemption from export duties for manufactured goods for export if such assistance were needed to make the exports competitive.

December 25. The “Foreign Exchange Proclamation, 1963” was promulgated. It combined previously existing regulations pertaining to foreign exchange control matters and provided for the administration of exchange control by the National Bank of Ethiopia.

December 31. The par value of the Ethiopian dollar was changed from Eth$2.48447 to Eth$2.50000 = US$1.

Note.—The following changes took place early in 1964:

January 1. The National Bank of Ethiopia assumed the functions of a central bank; these functions included the administration of foreign exchange control.

January 20. Exchange commission charges on foreign transactions were reduced from 1 per cent to ¾ per cent; the new official rates were Eth$2.48125 buying, and Eth$2.5175 selling, per US$1.

February 1. The amount of Ethiopian currency which travelers could bring into and take out of Ethiopia was reduced from Eth$150 to Eth$100.

Finland

Exchange Rate System

The par value is Finnish Markkas 3.20 = 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 certain other currencies1 vary between limits which result from combining the official limits for the U.S. dollar maintained by Finland and such limits in force in the country of the other currency concerned. Forward premiums and discounts are left to the interplay of market forces. Official, fixed, buying and selling rates are applied to a few currencies, including dollars, when used as a unit of account on bilateral clearing accounts. Authorized banks may deal among themselves, with their Finnish customers, and with foreign authorized banks, in U.S. dollars and certain other currencies.1 Forward transactions may be concluded freely for periods not exceeding 12 months; forward transactions with residents must have a commercial basis.

Administration of Control

The Bank of Finland operates the exchange control system, delegating authority to the authorized exchange dealers (mainly commercial banks). Import and export 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 a representative of the Bank of Finland.

Prescription of Currency

For prescription of currency purposes, countries are divided into two groups: the bilateral countries2 and the convertible currency countries (all others). Settlements with the bilateral countries must be made in the currency of the agreement or in Finnish markkas through Restricted Accounts. Settlements with the convertible currency countries may be made in any convertible currency or through Convertible Accounts. Payments for imports from Brazil may be made only to Brazilian banks.

Nonresident Accounts

There are four categories of nonresident accounts: Foreign Exchange Accounts, Convertible Markka Accounts, Restricted Markka Accounts, and Capital Accounts.

1. Foreign Exchange Accounts are held by nonresidents in convertible or bilateral currencies.3 These accounts may be credited with amounts received in the currency in which the account is kept; with payments authorized to be made in the currency in which the account is kept; and with interest accrued on such accounts. They may be debited for transfers to Capital Accounts; for payments to residents of Finland; and for withdrawals in Finnish currency. If the account is held in a convertible currency, it may also be debited for transfers to other Foreign Exchange Accounts in any convertible currency, and for transfers abroad or withdrawals in any convertible currency. If the account is held in a bilateral currency, it may be debited for transfers to other Foreign Exchange Accounts in the same currency and for transfers to the respective bilateral country.

2. Convertible Markka Accounts may be credited with the equivalent in Finnish markkas of convertible currencies sold to an authorized bank; with authorized remittances from residents of Finland to residents of convertible currency countries; with transfers from other Convertible Markka Accounts; with the value of Finnish banknotes received by an authorized bank from a bank in a convertible currency country; and with interest accrued on the account. They may be debited for authorized payments in Finland, including the purchase of foreign exchange; for remittances abroad; and for transfers to other Convertible Markka, Restricted Markka, or Capital Accounts.

3. Restricted Markka Accounts are held by residents of countries with which Finland has bilateral payments agreements (see footnote 2). They may be credited with proceeds from the sale of U.S. dollars, the currencies listed in footnote 1, or the currency of the country of the account holder; with transfers from another Restricted Markka Account of the same country; with authorized remittances payable to the country of the account holder; with the value of Finnish banknotes received by an authorized bank from a bank in the country of the account holder; and with interest accrued on the account. They may be debited for authorized payments in Finland in accordance with the relevant payments agreement; for transfers to other Restricted Markka Accounts related to the country of the account holder; for transfers to the country of the account holder; and for transfers to Capital Accounts.

4. Capital Accounts comprise all other nonresident accounts. They may be credited with funds available for credit to a Convertible or a Restricted Markka Account; with proceeds from the sale to a resident of any asset held by a nonresident; with interest on the account; with income from nonresident-held assets; and with sums obtained from the redemption of bonds. If the account holder is a bank, the account may also be credited with transfers from a Capital Account of a resident of the same country. Capital Accounts may be debited for the travel and living expenses in Finland of the account holder and nonresident members of his family or, if the holder is a firm, members of its staff traveling at the firm’s expense, up to Fmk 1,000 for each person for each period of ten days; for payments not exceeding Fmk 1,000 for support of a person in distress in Finland; for payments for expenses incurred by a bank in administering the assets of the account holder; for investment in bonds quoted on the stock exchange and issued after August 31, 1939 which are not tied to any foreign currency and are purchased by a bank on behalf of the holder; for acquisitions of shares on the basis of subscription rights to shares belonging to the same account holder and held in the custody of a bank; for the purchase through the Helsinki stock exchange of shares in place of other shares, held in the custody of a bank, that have been sold not more than a month before; for transfers to the Capital Account of a bank located in the same country as that of the account holder; and for monthly transfers abroad up to Fmk 1,000 to an account holder who has resided abroad during the last three years, provided that he is destitute in his country of residence. Other transfers between Capital Accounts and other transfers abroad of funds deposited in Capital Accounts require the specific permission of the Bank of Finland.

There are also special transfer accounts for nonresident funds awaiting repatriation.

Imports and Import Payments

Most goods may be imported free of license from the license-free area (i.e., nearly all countries with which Finland does not have bilateral payments agreements), provided that the goods are purchased from and originate in that area. Certain other goods may be imported from the license-free area under the global quota system, by which import licenses are issued up to the limits of certain value quotas for specified commodity groups. Payments for imports from the license-free area may be made in convertible currencies; however, from Brazil only direct import is permitted and payment must be made direct to a Brazilian bank. Imports from the bilateral countries are admitted under licenses up to quotas provided for under the related trade agreement. All other imports require individual licenses.

Exchange 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 that the goods are already in the country or there is sufficient evidence to guarantee their importation. Importers of specific consumer durable goods must make payment abroad or deposit cash for their imports before customs clearance can be obtained; otherwise, with certain exceptions, payment for imports must be made within six months after the arrival of goods in the country. For imports on credit of over six months, payment must be authorized by the Bank of Finland.

Payments for Invisibles

The authorized banks have general permission to effect payments for most current invisibles, subject in some cases to maximum allowance or other conditions; for other transactions, with few exceptions, exchange licenses are granted liberally by the Bank of Finland. All contracts involving payments to nonresidents for which general permission has not been granted must be submitted to the Bank of Finland for approval.

A Finnish resident going abroad may purchase from commercial banks foreign exchange equivalent to Fmk 400 for each visit to the Scandinavian countries and Fmk 800 for each visit to other countries. Resident and nonresident travelers may take out Fmk 200 in Finnish notes and coins and any reasonable amount in foreign notes and coins.

Exports and Export Proceeds

Export licenses are required only for exports of metal scrap. Exports of other goods require only an export control declaration, which is approved automatically by the Licensing Office except in a few specified cases. All foreign exchange acquired through commodity exports must be surrendered to the Bank of Finland or an authorized exchange dealer.

The authorized exchange dealers 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 or with banks abroad. 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 freight earnings, foreign exchange receipts derived from current invisibles do not have to be surrendered. The import of Finnish and foreign means of payment by nonresident travelers and returning Finnish residents is unrestricted.

Capital

Most outward transfers of nonresident capital are subject to approval by the Bank of Finland, which is granted in certain circumstances. Inheritances are in most cases transferable without limitation and, subject to certain conditions, are generally transferred automatically, up to Fmk 32,000 for each beneficiary. Nonresidents who have resided outside Finland for three years are permitted to repatriate their blocked assets (1) by annual installments of Fmk 2,500 for amounts not exceeding Fmk 25,000 (to the annual installments may be added interest accrued on the account calculated in conformity with the ordinary rate of bank interest paid on deposits), and (2) by ten equal installments for amounts exceeding Fmk 25,000. During the entire period of transfer, the funds must be held on special transfer accounts. Moreover, persons who have resided abroad since September 1, 1939 are permitted to repatriate freely blocked funds up to Fmk 10,000 if these funds had been deposited with a bank prior to that date.

Nonresident bondholders may repatriate amounts falling due on account of redemption of bonds in markkas issued before September 1, 1939.

Nonresidents may purchase through an authorized bank, against convertible or externally convertible currencies or by debiting a Convertible Markka Account, bonds or shares quoted on the Helsinki stock exchange. When the securities so acquired by a nonresident are deposited in the custody of the authorized bank, the nonresident purchaser is permitted to sell the securities on the stock exchange through the authorized bank and to repatriate the proceeds of the sale in a convertible or an externally convertible currency. No permission is needed for the acquisition of bonds issued after August 31, 1939 with funds classified as Capital Accounts, but proceeds of the sale of such securities may not be repatriated without the permission of the Bank of Finland. Any other transactions in, and the export of, securities involving nonresident interests require approval. If the securities were acquired with convertible foreign exchange or with markkas from a Convertible Markka Account, approval for their export can be obtained freely. The import of securities by nonresidents and returning Finnish residents is unrestricted.

The regulations concerning foreign investments are as follows. All incoming capital transactions must be approved by the Bank of Finland, which considers the foreign exchange aspect. The Bank grants permission liberally, except where it would be contrary to the national interest. At the time the Bank approves an incoming transaction, it may state the conditions for repatriation of the invested capital. Foreign investments that involve a participation of more than 20 per cent in the capital of the enterprise require, in certain cases, the approval of the State Council. This approval, when required, is usually granted liberally. The primary reason for the 20 per cent limit is concern for the protection of natural resources, mainly forests.

On demand of the Bank of Finland, residents must declare their foreign assets and yields on their property owned abroad. Proceeds from the sale of securities and real property abroad must be surrendered. Outward transfers of capital by residents require individual approval. For direct investment, approval is granted on the merits of each case.

Finnish residents emigrating are granted an exchange allowance of up to Fmk 2,500 a person.

Changes during 1963

January 1. A new monetary unit—the new markka—replaced the old markka on the basis of 1 new markka = 100 old markkas. All prices and wages would be converted into the new currency in the same ratio.

January 1. Payments with Yugoslavia were placed on a convertible currency basis.

January 1. The following countries were included among those receiving license-free import treatment: Algeria, Burundi, Jamaica, Rwanda, Syrian Arab Republic, Trinidad and Tobago, Uganda, Western Samoa, and Yugoslavia.

June 26. The total value of global quotas for 1963 was increased to about US$138 million, representing an increase of about 16 per cent over the original 1963 allocations. The revised quotas were made retroactive to January 1, 1963.

July 15. License-free import treatment was extended to Morocco, and a corresponding increase (about US$300,000) was made in the global quotas.

December 20. A number of items, representing about 15 per cent of global quota imports in 1962, were removed from the list of imports subject to licensing. This measure would become effective on January 1, 1964.

France1

Exchange Rate System

The par value is Francs 4.93706 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of F 4.90 buying, and F 4.9740 selling, per US$1. Market rates for Western European currencies and a few other currencies fluctuate between limits which result from combining the official limits for the U.S. dollar maintained by France and such limits in force in the country of the other currency concerned. Forward exchange transactions take place at freely negotiated rates. Authorized banks in continental France (including Corsica) and in the Principality of Monaco, as well as banks established abroad, are permitted to deal spot or forward in the exchange market in France. While authorized banks and banks established abroad may deal spot on this market in any currencies, the latter group of banks may carry out forward operations only in currencies of countries in the area of convertibility. Authorized banks may also deal with their correspondents in foreign markets in all currencies except those of the bilateral group.

France accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Exchange Control Territory

The French Franc Area comprises (1) the territory of the French Republic, i.e., continental France, Corsica, the Overseas Departments (Guadeloupe, Martinique, Guiana, and Réunion), the Overseas Territories except French Somaliland (Comoro Islands, St. Pierre and Miquelon, New Caledonia, Wallis and Futuna Islands, and French Polynesia); (2) the Condominium of the New Hebrides; and (3) Algeria, Cameroon, Central African Republic, Chad, Congo (Brazzaville), Dahomey, Gabon, Guinea, Ivory Coast, Malagasy Republic, Mali, Mauritania, Monaco, Morocco, Niger, Senegal, Togo, Tunisia, and Upper Volta. Payments from France to other parts of the French Franc Area are free of restriction.

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

Settlements with other parts of the French Franc Area may be made in the currency of any part of that Area. Settlements with countries in the area of convertibility, which includes all countries except Rumania, may be made in any of the currencies of those countries, or through Nonresident Foreign Accounts in Convertible Francs (see section on Nonresident Accounts, below). Payments to Rumania—the remaining country with which France has a bilateral payments arrangement—are made by crediting a Rumanian Foreign Account in Bilateral Francs. Payments from Rumania may be received through a Rumanian Foreign Account in Bilateral Francs, or in the same way as payments from countries in the area of convertibility. Settlements with Laos and Viet-Nam are subject to special regulations.

Nonresident Accounts

A nonresident account in francs may be opened by an authorized bank for a nonresident foreigner or for a French national who has been residing abroad for at least two years. Nonresident accounts in francs may not show a debit balance unless specifically permitted. Residents of countries in the area of convertibility may maintain Nonresident Foreign Accounts in Convertible Francs; they are not related to a specific country. Residents of Rumania may maintain Rumanian Foreign Accounts in Bilateral Francs.

Foreign Accounts in Convertible Francs may be used for settlements with residents of the French Franc Area (including settlements for imports and exports). They may be credited freely with francs obtained from sales of currencies of countries in the area of convertibility in the exchange market in France or through a French authorized bank in an exchange market abroad; with transfers from other Foreign Accounts in Convertible Francs; with French francs obtained from the sale of foreign banknotes; and with French banknotes and coins received by authorized banks from their correspondents in countries in the area of convertibility. They may be debited freely for purchases in the exchange market in France of any foreign currency negotiated in that market; for purchases of the currency of any country in the area of convertibility through a French authorized bank in an exchange market abroad; for transfers to the credit of another Foreign Account in Convertible or Bilateral Francs; for the purchase of foreign banknotes; and for French banknotes and coins dispatched by authorized banks to their correspondents in countries in the area of convertibility.

Rumanian Foreign Accounts in Bilateral Francs may be used for settlements with residents of the French Franc Area (including settlements for imports and exports), provided that the nonresident concerned resides in Rumania. They may be credited freely with proceeds from sales in the exchange market in France of currencies of countries in the area of convertibility; with transfers from Foreign Accounts in Convertible Francs; with French francs obtained from the sale of foreign banknotes; and with French banknotes and coins received by authorized banks from their correspondents in Rumania. Transfers between Rumanian Foreign Accounts in Bilateral Francs may be made freely.

Other transactions through Foreign Accounts require individual permits. Three other categories of nonresident accounts (Tourist Accounts, Suspense Accounts, and Nonresident Internal Accounts) are of minor significance, in practice.

Imports and Import Payments

Goods originating in and brought from other parts of the French Franc Area are generally admitted free of quantitative restriction and individual license. Imports of certain goods which originate in countries outside the French Franc Area and are not covered by French import liberalization require individual licenses.

For import control purposes, countries outside the French Franc Area are divided into four groups according to the extent of import liberalization: (1) OECD countries in Europe, their dependent territories and associated countries, Andorra, and Finland; (2) Canada and the United States; (3) 44 specified countries;2 and (4) all other countries.

Commodities that may be imported free of quantitative restrictions from one group on the list include all the commodities that may be freely imported from the next listed group plus some other specified commodities. Goods covered by the import liberalization arrangements applicable to one group may be imported freely from any country in that group, provided that the country of origin and the country of shipment both benefit from the liberalization. Imports of practically all industrial products from countries in groups (1) and (2) are free of quantitative restrictions, but such restrictions are applied to a number of agricultural products; there is relatively little difference between the lists of goods which may be imported freely from groups (1) and (2). A large part of imports from countries in group (3) are also free of quantitative restriction. A number of raw materials and other commodities may be imported freely from all countries. Several agricultural products may be imported without quantitative restrictions from 11 countries,3 on the basis of an import attestation visaed by the Director of External Economic Relations.

For liberalized imports not exceeding F 10,000 in value, only an invoice has to be submitted to the customs; most liberalized imports exceeding this figure are admitted on the basis of a customs declaration completed by the importer. (These two procedures account for more than 75 per cent of imports.). Some liberalized imports (spare parts, etc.) require an administrative visa, which is stamped on an import attestation. But imports of the products of the European Coal and Steel Community require individual licenses.

Other imports generally require individual import licenses. However, the application of other procedures is not excluded: (1) imports under quotas determined on an individual commodity basis and applicable to specified countries or areas in accordance with trade agreements or an import plan drawn up for a definite period; (2) special import procedures which provide for the liberal importation under IMEX and EXIM procedures4 of raw materials or other goods needed to produce goods for export. 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 that such imports are paid for with funds from EFAC accounts. The import facilities under EFAC arrangements, as well as those under IMEX and EXIM procedures, have only limited importance, in view of the high degree of import liberalization. Imports effected through compensation transactions are mainly agricultural items from countries in the Soviet bloc and are a very small proportion of total imports.

Imports exceeding F 10,000 in value, and all imports for which payment is required before the goods reach France, must be domiciled (registered) with an authorized bank, to which the necessary import documents must be presented and through which all payments related to the import must be made. For goods imported under the import declaration or attestation 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 spot or forward exchange. As a general rule, payment to the foreign exporter may be made only after documents have been presented to prove that the goods have been shipped. However, special authorization may be given to importers to purchase exchange forward for a period of more than six months and to make total or partial prepayment at a date preceding that of importation by more than six months.

Payments for Invisibles

Payments for current invisibles are controlled, but applications for. remittances are approved, provided that no unauthorized capital transfer is involved.

If justifying documents are presented and certain exchange control requirements are met, authorized banks are permitted to approve applications for transfers without any limitation for many categories of current invisibles, and up to established limits for many categories of other current invisibles. Applications for other transfers for invisibles are referred to the Bank of France to prevent unauthorized capital transfers.

Transfers without limitation which may be authorized include those related to approved trade transactions; to maritime contracts of any kind; to income accruing to nonresidents in the form of profits, dividends, and royalties; to banking commissions, patent fees, and specified categories of taxes; to specified insurance payments; to fees to medical doctors, lawyers, etc.; to rents and similar payments due to nonresident owners and administrators of firms in France; to participation in foreign congresses, conferences, etc.; to alimony in accordance with court decisions; to fees for education and cost of maintenance of students abroad; to business travel abroad; and to net salaries of nonresidents employed in France within three months from the date of payment.

Transfers up to established limits which may be approved include those by residents traveling abroad for pleasure (up to F 5,000 for each trip), by residents for family maintenance (up to F 1,000 a month for each beneficiary), and by residents on account of rebates, refunds, discounts, etc. (up to F 10,000). Also, authorized banks may approve transfers up to F 500 for any purpose.

In addition to the exchange allocation for tourist purposes (up to the equivalent of F 5,000 for each trip), authorized banks may grant resident tourists going abroad exchange for renting rooms and villas abroad; these tourists may freely make travel arrangements through licensed travel agencies operating in France or purchase credit cards in France for their traveling expenses abroad, without limitation, and buy tickets in France against French francs for any transportation abroad. Also, they are permitted to take with them up to the equivalent of F 1,000 in foreign notes and coins which they did not spend during previous travel abroad.

Nonresident travelers leaving France may exchange into foreign currency French banknotes and coins up to F 1,000 without any formality, and larger amounts upon presentation of proof that such banknotes and coins were obtained from the sale of foreign currency or from debiting a nonresident account within the two months preceding their departure from France.

Both resident and nonresident travelers crossing the border may take out of France banknotes or coins (except gold coins) up to F 1,000 in metropolitan francs, or up to F 75,000 in CFA francs or CFP francs, or up to the equivalent of F 750 in banknotes issued by any other bank of issue in the French Franc Area. These banknotes and coins may be spent abroad or exchanged for other currencies.

Exports and Export Proceeds

Some exports require individual licenses; but if the total value does not exceed F 500, the exports may be permitted without any formality, subject to certain limitations. Regardless of their value, exports under the IMEX or EXIM procedure, or through compensation transactions with certain countries,5 require licenses if the commodities are those for which export licenses are required; otherwise, they are subject to exchange commitments. Other exports are free of trade or exchange controls. Exports exceeding F 5,000 in value are subject to a specific commitment concerning the surrender of the exchange proceeds.

Goods that are purchased in France by nonresidents against checks or travelers checks expressed in any currency, or against checks issued by foreign correspondents of French banks to the debit of nonresident accounts, are considered as exports and are exempt from turnover taxes.

Exporters may grant credit for 180 days or, subject to administrative authorization, for a longer period; but thereafter, the proceeds must be collected within 30 days. Exporters are permitted to sell forward their anticipated export proceeds. Foreign exchange proceeds may be used to make authorized payments abroad within three months from the date of their receipt; the remainder must be surrendered. Certain percentages of export proceeds are exempt from the surrender requirement and are kept in special EFAC (Exportations-Frais Accessoires) accounts. The highest percentage is accorded to holders of exporters’ cards, which are issued to enterprises that export a certain percentage of their production. EFAC accounts are separate for each foreign currency; for proceeds received in francs from nonresident accounts, an account may be credited in convertible or bilateral francs, according to the type of nonresident franc account debited for the payment. EFAC accounts may be used only by the account holder, for all authorized transfers abroad.

Proceeds from Invisibles

Residents are obliged to collect within a month from the date that payment is due all amounts accruing from services rendered by them abroad and, in general, all proceeds accruing from any other source abroad. If the settlement is in foreign currencies, these currencies must be ceded on the exchange market within three months, unless they were used for payments for authorized transactions.

Residents are, however, exempted from this requirement in respect of proceeds of up to F 1,000 accruing from the collection of coupons of foreign securities held abroad and from immovable property located abroad. When the limit of F 1,000 is reached, such proceeds must be repatriated prior to March 31 of the year following the year in which the limit was exceeded.

Travelers may bring in any amount of banknotes and coins (except gold coins) in metropolitan francs, CFA francs, CFP francs, or any foreign currency; however, the exchange of banknotes issued by some banks of issue in the French Franc Area is limited to certain amounts for each traveler.

Residents returning from abroad may retain foreign coins and banknotes up to the equivalent of F 1,000 for use during their next trip abroad.

Capital

All capital transactions involving nonresident interests must be carried out through the intermediary of authorized banks.

Most outward transfers by residents for the purpose of making investments abroad require approval; these include direct investments in foreign enterprises as well as the establishment of branches by French firms. Requests for the authorization of direct investments abroad are approved liberally. Residents are permitted to deal in securities abroad, within the limitations described below.

Capital assets abroad of residents are not subject to repatriation. Residents of French nationality may use such assets in accordance with a general or individual license. Residents of foreign nationality may dispose freely of their assets abroad. However, the exchange proceeds accruing from the sale of securities abroad by residents (regardless of nationality) must be surrendered, if not used by the seller to purchase other securities abroad within three months.

Transfers abroad are permitted freely in respect of legacies and dowries due to nonresidents and in respect of assets of persons of foreign nationality who, after staying in France as residents, leave to establish residence abroad. Emigrants are allocated F 5,000 in addition to the tourist allowance.

Nonresidents are permitted freely to make direct investments in France and to deal in securities in France within the limits described below. They are permitted to repatriate the proceeds accruing from the liquidation of approved investments and from the sale of their securities in France.

The following investments may be made freely in France by non-residents: (1) subscriptions to an increase in the capital of a French company, provided that its shares are officially quoted on a stock exchange in France; (2) 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 the securities issued by a private enterprise are officially quoted on a stock exchange in France; (3) acquisition on a spot basis through the intermediary of a notary public of immovable property or rights to such property located in France; (4) loans to residents of up to F 1 million (or its equivalent in foreign currency) in accordance with certain prescribed conditions; and (5) purchases of securities in France as described below. Other investments by nonresidents in France require individual licenses. Repatriation of the proceeds from the liquidation of approved investments is permitted.

Dealings in securities are subject to special regulations; all dealings must take place on stock exchanges. Nonresidents are permitted to deal on a stock exchange in France in any security officially quoted on that stock exchange; and residents are permitted to deal in France or abroad in any security officially quoted on a stock exchange. Special conditions are, however, attached to transactions in certain foreign securities listed by the Ministry of Finance and Economic Affairs.

Securities may be imported and exported freely through authorized banks as follows: imported on behalf of residents or nonresidents; exported on behalf of nonresidents (except French securities belonging to residents of Rumania), or exported on behalf of residents for the purpose of selling the securities in accordance with the regulations mentioned in the preceding paragraph. Dealings in securities on a spot basis may be made in France by all nonresidents; dealings on a forward basis may be made only by residents of countries in the area of convertibility. Residents may carry out spot or forward transactions in securities on foreign stock exchanges.

Nonresidents must make payments for securities purchased in France in accordance with prescription of currency regulations applicable to countries in the area of convertibility; they are permitted to transfer abroad the proceeds accruing from the sale of securities in France.

Exchange proceeds from the sale of securities abroad by residents may be disposed of in one of the following ways: (1) repatriated and surrendered, (2) used to acquire securities abroad, or (3) if exchange control regulations in the country where the sale took place do not permit the transfer of proceeds from the sale of securities, ceded to a resident for the subsequent purchase of securities in that country.

The purchase of securities by a resident on a stock exchange abroad can be financed by (1) the purchase of foreign exchange on the exchange market in France, (2) the use within three months of the proceeds from the sale abroad of securities by the seller, (3) the use of funds in foreign currency held by the buyer and not subject to surrender requirements, and (4) the use of funds in foreign currency acquired from any person in the French Franc Area if such funds may not be repatriated because of exchange control regulations abroad.

Changes during 1963

January 1. According to Decree No. 62-1320 of November 9, 1962, the French monetary unit which had been established by the law of December 27, 1958 ceased to be designated as “new franc” and was called “franc”; “F” became its abbreviation. The legal monetary unit in use prior to January 1, 1960 was designated as “old franc.” Obligations entered into, as well as prices quoted, after January 1, 1963 were to be expressed in francs and centimes; obligations entered into after January 1, 1960 and expressed in new francs were to be legally settled in francs and centimes for the full nominal amount of such obligations; obligations entered into prior to January 1, 1960 were to be legally settled in francs and centimes for one hundredth of the nominal amount of such obligations. Banknotes of the Bank of France in circulation remained legal tender; those expressed in the monetary unit in existence prior to January 1, 1960 and not restamped as new francs continued to be accepted in payment for one hundredth of the nominal value of such banknotes.

January 1. The new franc became the legal monetary unit in the Overseas Departments of Guiana, Guadeloupe, and Martinique.

January 1. Trade and exchange controls over exports were reduced; many exports were exempted entirely from such controls.

February 17. The technique of settlements by air transport companies operating in France with foreign countries was simplified by channeling all related transfers through a centralized account.

February 17. Imports and exports on cash on delivery terms were permitted to be made through the intermediary of air and maritime transport companies.

March 4. Conditions under which transfers by nonresidents to foreign countries for insurance and reinsurance operations were permitted to be carried out, were modified, and were made more liberal; French insurance and reinsurance companies could use their funds in France or abroad for settlements resulting from their reinsurance operations in foreign currency. The new regulation also established the terms on which reinsurance accounts with authorized banks were to be operated. Transfers and payments abroad by insurance companies for many categories of insurance contracts could be made without licenses, provided that the beneficiary abroad was a foreign national residing abroad, a French citizen residing abroad for at least two years or holding a foreign account in francs, or a French or foreign legal entity operating on behalf of its branches abroad.

June 29. Hungary was included in the area of convertibility. Previously, a part of the settlements with Hungary was made through bilateral accounts.

July 2. Imports of a number of raw materials and finished products from 44 specified countries were exempted from quantitative restrictions.

July 6. The regulation of March 8, 1960, under which all transfers to and from Guinea were prohibited, was abolished.

July 18. Authorized banks were permitted to approve payments for (1) damages due to nonresidents resulting from breach of contract, on condition that such damages were paid to carry out a decision by a tribunal or an award by a court of arbitration and (2) taxes and rights due to a foreign local government.

July 18. Authorized banks were permitted to give financial assistance to French firms in connection with bids on supply contracts or on public works contracts abroad. The banks’ assistance could assume the form of guarantees required on the tendering of bids.

July 26. Various provisions concerning import controls were codified. A comprehensive list of imports from various groups of countries which would be free of quantitative restrictions was published. A list of agricultural products that could be imported freely from communist countries, subject to an import attestation visaed by the Direction des Relations Economiques Extérieures, was established. The validity of attestation was set at six months; it could be abolished any time by an announcement in the Journal Officiel.

August 7. It was decided that loans could be granted by nonresidents to residents, under the following conditions: the term could not exceed two years; the interest rate could not exceed 4 per cent per annum; the loan could not exceed F 1 million or its equivalent in foreign currency provided that the total amount of loans not yet repaid did not exceed this limit at any time. Previously, the loan could not exceed F 2 million; the term could not be more than five years; and the rate of interest could not exceed 5 per cent.

August 31. A few imports from OECD countries in Europe and their overseas territories and a number of other countries were freed from quantitative restrictions.

September 1. Nonresidents who intended to purchase French securities quoted on a stock exchange through “application”—i.e., through the intermediary of a stockbroker, but without making a purchase on a stock exchange—were required to obtain authorization from the Ministry of Finance and Economic Affairs if a price used in such a transaction would differ from a quotation on a stock exchange on the day of the transaction.

October 31. A few imports from all OECD countries and their overseas territories and a number of other countries were freed from quantitative restrictions.

Note.—The following changes took place in 1964:

February 1. Eastern Germany was included in the area of convertibility.

March 1. Czechoslovakia was included in the area of convertibility.

Gabon1

Exchange Rate System

No par value for the currency of Gabon has been established with the Fund. The official unit of currency is the GFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by commercial banks under the direction of the Exchange Office. The Ministry of National Economy allots to each importer exchange for goods included in the annual import program; it also issues import licenses, which must be approved by the Exchange Office.

Prescription of Currency

Gabon is a member of the French Franc Area, and settlements with other countries of the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs;3 those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely, provided that they originate in that Area. Imports from all other countries are subject to import licensing and to an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Gabonese Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for other countries may be used to import goods originating in any country except the U.S.S.R. and Mainland China.

For goods included in the annual import program, the Ministry of National Economy publishes each year an announcement of the exchange allotted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Foreign Trade Department of the Ministry of National Economy an application for a license within the limits of the quota that has been assigned to him. When the license is issued, the Exchange Office makes the exchange available to the importer through his bank. Import licenses are valid for six months; the license may be renewed three times for imports of capital goods and twice, for three months at a time, for imports of supplies, provided that the importer presents valid reasons for requesting the renewal.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

A tax of 15 per cent of the c.i.f. value of specified luxury imports is levied in addition to the customs duties; the specified imports include such items as crystal glassware, jewelry, air conditioners, refrigerators, radios, and phonograph records.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. Foreigners hired by contract and holding an employment card may transfer to their country of origin their total net salaries. There is a basic tourist allocation up to the equivalent of CFAF 250,000 a person for each trip to countries outside the French Franc Area. Travelers to those countries on business may obtain an amount in excess of the above limit for bona fide living expenses, the amount depending on the destination and the duration of the trip. Persons having the status of residents and traveling to other countries in the French Franc Area may take out any amount of CFA banknotes. When traveling to other countries, they may take out banknotes up to a maximum of F 1,000 in metropolitan francs or francs issued by the Institute of Issue of the Overseas Departments or CFAF 75,000 or CFPF 75,000 in legal tender notes and coins. Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country, minus the amounts of French Franc Area banknotes that are taken out.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely. For exports to all other countries licenses, which are issued freely, are required; exceptions are products whose export is unrestricted (e.g., wood, manganese, cocoa), for which exchange commitments must be registered at the Exchange Office. The exporter undertakes to repatriate the export proceeds within a maximum period of 180 days from the date of arrival of the goods at their destination. When settlement is made in foreign currency, the exporter must surrender it on the Paris exchange market within three months following settlement.

Exporters may retain, however, between 8 per cent and 15 per cent of their export proceeds (depending on the export) in special, nontransferable, EFAC accounts (Exportations-Frais Accessoires), which may be used by the exporters themselves to pay for export promotion expenses and for modernization and expansion needs of their industries.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 50,000 earned in those countries from foreign securities, must be collected and must be surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

Under the Investment Code promulgated on December 4, 1961, any enterprise established in Gabon, whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports, as well as exemption from direct taxes on specified income.

The Code also provides for three categories of preferential treatment, in accordance with which fiscal and other privileges may be accorded to firms investing in specified new industries or in the expansion of existing ones. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of Gabon; it is granted for a period of up to 10 years. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatment C is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for a period of up to 20 years. The granting of any one of the three kinds of preferential treatment automatically includes the application of specified exemptions from direct taxes which are granted under the provisions of the ordinary law (see above).

Requests for approval of preferential treatment must be submitted to the Minister of Economy and Planning, who, after examining the documents, transmits them to the Investment Commission. After an opinion has been given by that Commission, the project is submitted to the Council of Ministers. Preferential treatments A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Executive Committee of the Equatorial Customs Union upon the recommendation of the Council of Ministers.

Controls over foreign investments in Gabon are administered along the lines established by exchange control regulations in France.

Changes during 1963

January 1. A tax of 15 per cent of the c.i.f. value of specified luxury imports, to be levied in addition to the customs duties, became effective. The specified imports included crystal glassware, jewelry, air conditioners, refrigerators, radios, and phonograph records.

November 15. For tourist travel to countries outside the French Franc Area, authorized banks were empowered to sell foreign exchange up to the equivalent of CFAF 250,000 a person for each trip. For persons going to those countries on business, exchange in excess of the above limit could be sold for bona fide living expenses, the amount depending on the destination and the duration of the trip.

Federal Republic of Germany1

Exchange System

The par value is Deutsche Mark 4.00 = US$1. The limits established by the Deutsche Bundesbank for its dealings with banks are DM 3.97 buying, and DM 4.03 selling, per US$1. For the banks’ transactions with their customers, these rates are 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 certain other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Germany and such limits in force in the country of the other currency concerned. All other currencies are also admitted to market quotations in Germany. Premiums and discounts on forward exchange transactions are left to the interplay of market forces. There are no restrictions on foreign exchange dealings by residents or nonresidents.

There are no restrictions on payments and no prescription of currency requirements. Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Germany or abroad at the choice of the holder. Accounts in deutsche mark or in any foreign currency may be held in Germany by any nonresident. Balances on these accounts may be transferred freely to any account and used for any payment in Germany or abroad, including the purchase of any foreign currency; these accounts may be credited freely with any payment. However, credit balances on nonresident accounts, except savings accounts in deutsche mark of individual persons, may not carry interest, although general permission has been granted to all credit institutions to pay interest on time deposits or on customers’ balances held as cover for letters of credit.

The Federal Republic of Germany accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Administration of Control

The administration of control 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), Import and Storage Agencies (Einfuhr-und Vorratsstellen), and the Land Ministries of Economics. The Deutsche Bundesbank is primarily the authority in charge of exchange control for certain capital transactions. All banks in Germany are permitted to carry out foreign exchange transactions.

Imports and Import Payments

Quantitative restrictions are not applied to imports of most commodities purchased from and originating in countries outside the Sino-Soviet bloc; out of a total of some 6,600 items, 6,200 may be imported freely from those countries. In addition, some 150 items are liberalized for imports originating in European OECD countries and their dependent territories. Certain solid fuels are liberalized only when purchased and imported from other member countries of the European Coal and Steel Community.

Imports free of quantitative restriction are not subject to licensing, and no prior control is exercised over such imports; however, an import declaration stamped by the Deutsche Bundesbank, which serves as documentation for customs control and for statistical purposes, is required. For imports still subject to quantitative restriction (with certain exceptions, such as books, maps, etc., and small parcels through the post), an individual import license is required. Import licenses may be allocated to importers either on a first-come, first-served basis, or account may be taken of conditions of price, delivery, quality, etc., or of the total value of applications in relation to the quotas established for specified commodities.

For manufactured goods, the period of validity of the license is usually six months, but it may be extended in certain cases (e.g., heavy machinery) to a period necessary for the production of the goods. For agricultural products also, the usual period is six months; however, for seasonal imports, it may be shorter. No fees are charged for licenses to import manufactured goods.

Payments for imports are free, even if the underlying import transaction is still restricted. Commodity futures may be dealt in freely. Transit trade transactions may in principle be carried out freely; but when they involve certain countries, they are subject to certain conditions.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. German and foreign notes and coins and other means of payment may be exported freely.

The following transactions—but not the related payments—between residents and nonresidents are subject to restriction: the chartering of foreign ships from residents of specified countries; the use of foreign boats in certain inland waterways traffic; transactions with specified countries (which do not grant reciprocal treatment) for hull and marine liability insurance and aviation insurance, except passenger accident insurance; the production of motion pictures in association with nonresidents; and certain contracts with nonresidents pertaining to motion-picture films.2

Exports and Export Proceeds

With few exceptions, export transactions may be carried out freely. For all goods, only an export notification, for statistical purposes, is required. Certain exports—mostly strategic goods—are subject to individual licensing. 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 they may be used for all payments. Claims of more than DM 2,000 that have been overdue for more than three months must be reported, for statistical purposes.

Proceeds from Invisibles

With few exceptions, services performed for nonresidents do not require licenses. However, special licenses are required for transactions related to specific sea services, and for technical assistance through the delivery to residents of Eastern bloc countries of constructional drawings, materials, and instructions for manufacture, insofar as such assistance is for the production of goods whose export requires a license.

There are no restrictions on the receipt of payments for services rendered to nonresidents. However, receipts exceeding DM 500 on account of such services have to be reported.

German and foreign notes and coins and other means of payment may be imported freely.

Capital

Residents and nonresidents may import or export capital freely without a license. However, domestic money market paper (Treasury bills, etc.) and domestic fixed-interest-bearing securities—if in the latter case the contracts contain an obligation to reacquire the securities later at a definitely fixed price—may not be sold to nonresidents without an individual license. All credit transactions exceeding DM 500, or the equivalent in foreign currency, with residents of foreign countries must be reported if a maturity of 12 months or more was fixed when the contract was concluded. Securities of all types may be imported or exported freely. There are no limitations on the disposal of legacies located in Germany and inherited by nonresidents, or on legacies located abroad and inherited by residents.

Changes during 1963

No significant changes took place during 1963.

Ghana1

Exchange Rate System

The par value is Ghana Pound 1 = US$2.80. Exchange rates 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 Accra base their rates on the current London market rates plus the exchange charge of ½ of 1 per cent levied on sterling transactions and a brokerage fee of ⅛ of 1 per cent. The authorized banks may exchange Ghanaian currency for any foreign currency and engage in arbitrage in all currencies, spot or forward.

Administration of Control

Exchange control is administered by the Exchange Control Committee under the Ministry of Finance. The Committee is comprised of representatives of the Ministry of Finance, State Control Commission, Planning Commission, Government Statistician, and Ministry of Trade. Authorized banks are empowered to approve payments for imports, as well as for certain invisibles.

Import policy is formulated by the Minister of Trade, subject to approval by the Cabinet of Ministers, and the import and export system is administered by the Controller of Imports and Exports, whose office is in 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 shipped.

Prescription of Currency

Ghana is a member of the Sterling Area, and has prescription of currency requirements similar to those of the United Kingdom. Settlements between residents of Ghana and residents of other Sterling Area countries may be made in Ghana pounds through Sterling Area accounts, in sterling, or in other Sterling Area currencies. Authorized payments, including payments for imports, by residents of Ghana to residents of countries outside the Sterling Area may be made in Ghana pounds to the credit of a Foreign Account, in sterling to the credit of an External Account, or in any foreign currency. Receipts from residents of countries outside the Sterling Area may be obtained in Ghana pounds from a Foreign Account, in sterling from an External Account, or in any non-Sterling Area currency which is freely exchangeable for sterling or Ghana pounds. However, settlements related to transactions covered by bilateral trade and payments agreements are made through clearing accounts maintained by the Bank of Ghana and/or the central or state banks of the countries concerned.2

Nonresident Accounts

Accounts in Ghana pounds held by residents of countries within the Sterling Area are designated Sterling Area Accounts. These accounts may be credited with authorized payments by residents of Ghana, with transfers from Foreign Accounts and from other Sterling Area Accounts, and with the proceeds of sales of foreign currencies. They may be debited for payments to residents of the Sterling Area countries, for transfers to other Sterling Area Accounts, and for purchases of Sterling Area currencies.

Accounts in Ghana pounds held by residents of countries outside the Sterling Area with authorized banks in Ghana are designated Foreign Accounts. The opening of these accounts is subject to approval of the Bank of Ghana. The accounts may be credited with authorized payments by residents of the Sterling Area countries, with transfers from other Foreign Accounts, and with the proceeds of sales of non-Sterling Area currencies. They may be debited for payments to residents of the Sterling Area, for transfers to other Foreign Accounts, and for purchases of foreign currency.

Nonresident accounts maintained under the provisions of bilateral payments agreements are called “Territorial Accounts.” These accounts may be credited with authorized payments by residents of Sterling Area countries, with transfers from Foreign Accounts, with payments received through the Bank of Ghana on account of settlements with bilateral payments agreement countries, and with proceeds from sales of non-Sterling Area currencies. They may be debited for authorized payments to residents of Ghana and for transfers to other Territorial Accounts related to the same country.

Blocked Accounts are nonresident accounts of another category, the purpose of which is to receive funds that are not placed at the free disposal of nonresidents, e.g., certain types of capital proceeds. These may be debited for authorized payments, including the purchase of approved securities.

Imports and Import Payments

Certain imports from all countries are prohibited. There are two open general licenses listing commodities which may be imported freely. All other imports require individual licenses. Licenses to import from the bilateral agreement countries may be used to import from any of those countries. Licenses to import from other countries are valid for any country in that group. Certain imports may be obtained only from bilateral payments agreement countries, and 20 per cent of other specified imports must be obtained from those countries. Imports from South Africa, South West Africa, and the Portuguese Monetary Area are not permitted. A great part of the import trade is carried out through the state-owned Ghanaian National Trading Corporation; other goods are imported by private importers, who must be registered. In practice, registration is freely granted, and there are some 3,600 registered importers.

When the importer has obtained a license, payments for authorized imports are permitted. After arrival of the goods, the importer must supply the exchange control with evidence of importation.

Payments for Invisibles

Payments for most invisibles require specific approval of the exchange control, and documentary evidence must support all applications. Authorized banks are empowered to approve the payments for (1) buying commissions up to 3 per cent, (2) personal remittances of expatriate employees (foreign nationals in Ghana) up to the permitted limits, i.e., 50 per cent of their annual earnings up to a maximum of £G 2,500 a year, and (3) interest charges on bills up to 6½ per cent per annum. Net profits after tax may be freely remitted abroad. The remittance of insurance premiums is permitted only for certain life insurance contracts agreed prior to July 5, 1961, and for some other insurance which cannot be obtained in Ghana.

The basic annual travel allowance for Ghanaians is £G 50 for each person 12 years of age or over and £G 35 for each person under that age. Other nationals resident in Ghana but domiciled elsewhere in the Sterling Area are allowed up to £G 250 out of their personal remittance quota. All residents may buy tickets in Ghana to the country of destination and back.

Persons leaving Ghana may take with them foreign currency notes (including West African franc notes) equivalent to £G 60, provided that not more than £G 20 is taken in any one currency. Ghanaian banknotes may be taken out up to £G 10, but may be spent only on Ghanaian aircraft and ships.

Exports and Export Proceeds

There are two open general licenses for exports, covering such articles as trade samples, advertising materials, postage stamps, specified gifts, passenger baggage, etc. All other exports require specific licenses from the Controller of Imports and Exports prior to shipment. Most items are exported through the Ghana Agricultural Produce Marketing Board. Exports to South Africa, South West Africa, and the Portuguese Monetary Area are prohibited.

Exporters are required to collect proceeds from their exports within six months of shipment; export, proceeds in foreign exchange must be surrendered.

Proceeds from Invisibles

All receipts from invisibles must be sold to an authorized bank. Foreign currency notes may be imported freely, except that CFA franc notes may be imported only with the approval of the Bank of Ghana. Travelers may not bring in Ghanaian currency notes in excess of the amount that may be taken out.

Capital

Foreign investment in Ghana requires prior approval if repatriation is to be guaranteed. Subscription to the memorandum of association of a company incorporated under the Companies Ordinance of Ghana by a nonresident requires approval. Capital invested with such permission is accorded “approved status” and qualifies for automatic repatriation to the country (or monetary area) from which it came.

The Capital Investments Act, 1963, calls for the establishment of a Capital Investments Board with representatives from the Bank of Ghana, the Ministry of Finance, the Ministry of Trade, the Ministry of Industries, the National Investment Bank, and the Office of the Planning Commission, and three other persons to be appointed by the President. This Board decides which foreign investments are to be granted tax holidays, initial capital allowances, and capital (including capital gains) and profit repatriation rights. The Act also stipulates that the assets of foreign investors may not be expropriated and that, when approved enterprises are taken over in the public interest, fair compensation to be agreed voluntarily between the parties or through arbitration by the International Bank for Reconstruction and Development should be paid.

All outgoing capital movements must be approved, and applications for such transfers must be supported by documentary evidence. Transfers to beneficiaries under wills and intestacies and transfers of deceased persons’ estates are approved, provided that all local indebtedness has been paid. Foreign nationals who reside in Ghana are allowed, when they retire and return to their home country, an initial repatriation of their personal assets of up to £G 5,000, according to circumstances; any remaining assets are transferable over a period of five years. Emigrants are granted £G 5,000 for a family unit plus £G 100 for each family member to meet landing expenses at destination; amounts exceeding these limits are blocked and released at a rate of 20 per cent a year thereafter.

Transactions in securities are controlled to ensure that capital is not transferred abroad without express permission. In respect of portfolio investments, residents have to obtain approval for any switch in their holdings of securities issued by nonresidents.

Changes during 1963

January 11. Open General Licenses Nos. 1-7 for the year 1963 were issued. Various items—such as corned beef, rice, wheat flour, milk, cream, sugar, cattle, sheep, and goats—were no longer included in the open general licenses, but required individual import licenses.

February 1. A new Open General License No. 8 was issued covering imports of various foodstuffs, foodgrains, and soap originating in West African countries.

March 1. The administrative authority for Exchange Control was transferred to an Exchange Control Committee under the Ministry of Finance.

April 19. The Capital Investments Act, 1963, entered into force.

August 12. The basic annual travel allowances were reduced from £G 100 to £G 50 for each person 12 years of age or over, and from £G 70 to £G 35 for each person under 12 years of age.

October 22. All importers had to be registered with the Ministry of Trade.

October 31. The provision whereby nonresident companies were required to reinvest in Ghana at least 60 per cent of their net profits was repealed.

December 27. All open general licenses for imports were revoked. Importers were informed that applications could be submitted until January 17, 1964 for licenses to import about 40 commodities or groups of commodities for the period January-December 1964.

Note.—The following changes took place in 1964:

January 10. Three open general licenses for imports were established.

January 20. Six open general licenses for imports were established, in addition to those introduced on January 10, 1964.

February 21. All open general licenses and individual licenses were revoked, except those covering flour, sugar, milk, and rice.

February 24. Two open general licenses for imports were established; these covered such items as bona fide trade samples, gifts, books, newspapers, and fish. It was announced that individual import licensing would be resumed without delay. Priority was to be given to imports of machinery and equipment for various development projects, pharmaceuticals, water-treating chemicals, and essential foods.

February 24. Two open general licenses for exports were established.

Greece1

Exchange Rate System

The par value is Greek Drachmas 30.00 = US$1. The official rates are Dr 29.85 buying, and Dr 30.15 selling, per US$1. Market rates for other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Greece and such limits in force in the country of the other currency concerned.

Administration of Control

Controls are administered on the policy level by the Ministry of Coordination, the Ministry of Trade, and the 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. Settlements with countries with which Greece has bilateral payments agreements are made through controlled accounts, with the U.S. dollar as the currency of account, or in the currency of the partner country.2 Settlements with all other countries are made in any convertible currency or through Foreign Sight Deposit Accounts in drachmas.

Nonresident Accounts

Nonresidents are permitted to open with Greek banks convertible Foreign Sight Deposit Accounts in drachmas or convertible currencies. These accounts may be credited with convertible foreign exchange or the proceeds from sales of convertible currencies, with authorized payments by residents of Greece for imports or services payable in 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 the purchase and transfer abroad of any convertible currency. Any withdrawal from drachma accounts for use in Greece and any conversion of foreign exchange withdrawals into drachmas entail the loss of the conversion right of the sums withdrawn. The maximum rate of interest on such accounts is 1½ per cent per annum.

Nonresident investors enjoying the privileges of Legislative Decree No. 2687/53 (see section on Capital, below) may also establish time deposits, for a minimum period of six months and with a minimum deposit in convertible currencies equivalent to US$10,000; balances on these accounts earn interest of between 4 per cent and 5 per cent, and principal and interest are freely transferable in the currency of the deposit.

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, balances on blocked accounts may be used for such purposes as personal expenses in Greece up to specified amounts, purchases of securities officially listed on the stock exchange in Greece, and purchases of real estate in Greece. Blocked balances may also be deposited with a commercial bank, where they earn interest at current rates for sight deposits. Specified amounts of balances on blocked accounts may be transferred abroad with the prior approval of the Bank of Greece.

Imports and Import Payments

All imports require prior approval. Apart from imports for which special licenses are required, two general import procedures (E and D) are applicable to private imports, mainly for statistical purposes. Under procedure E, the approval of an authorized bank is required (1) for imports from countries in the European Monetary Agreement (EMA); (2) for imports from Canada or the United States when payment is to be made in free dollars, i.e., not on the basis of procurement authorizations under U.S. aid; and (3) for imports from countries with which Greece has concluded bilateral agreements when payment is to be made through the relevant clearing account. No license is necessary under procedure E, but import applications that have been approved by an authorized bank are registered with the Bank of Greece. Under procedure D, an import approval issued by the Bank of Greece is required for imports financed by U.S. aid and for imports other than those covered by procedure E.

Special licenses are required for imports of commodities in List A (certain luxury items, textiles, automobiles, and certain foodstuffs including rice) and List B (certain types of machinery and machinery spare parts). Imports of petroleum products similar to those produced by Greek oil refineries require prior licenses. Special regulations govern imports of a few other items, such as goods under monopoly control, medicines, wheat and flour, sulphur, and motion pictures, as well as a few barter transactions based on clearing agreements.

Payments for imports may be made by letter of credit, by cash against shipping documents, or by acceptance of time drafts (which is permitted only for goods in Lists P-3 and P-6, the time limit being three months for List P-3 and one year for List P-6, except machinery and spare parts, for which the time limit is three years). When time drafts are accepted, a personal written undertaking amounting to 4 per cent or 8 per cent of the amount of the draft is required as a guarantee that the payment will be made within the prescribed time limits.

Advance deposits in cash are required only for private imports included in Lists F-50 and F-100: for goods in List F-50, a cash margin of 45 per cent plus 18 per cent as security for import duties and other taxes is required; for List F-100, the advance deposits are 90 per cent plus 36 per cent. When imports are financed with U.S. aid funds, an additional deposit of 10 per cent has to be made in cash or by bank guarantee and in favor of the Greek State. All these deposits have to be made with the intervening bank (1) at the time the import approval is obtained, for imports under procedure E, and (2) within 10 days (for Athens and the Piraeus area) or 20 days (for the provinces) of obtaining the import approval, for imports under procedure D. The deposits are reduced by the amount of any advance payments remitted; otherwise, they are refunded at the time of final settlement.

Advance payments may be made to foreign suppliers for all imports. Special regulations govern imports by state agencies, public entities, and public utility companies.

Payments for Invisibles

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

Greek residents going abroad for family reasons, tourist travel, or business are entitled to US$200 for each trip and for any number of trips a year. Exporters and manufacturers are allowed US$20 a day for a maximum of 45 days when they travel to the United States, Canada, or the Far East; for all other countries the allowance is US$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 2,000 in Greek banknotes. Nonresident travelers holding Greek passports are required to declare their foreign exchange when leaving Greece if the amount of such exchange exceeds US$500 or its equivalent; no declaration is required from holders of foreign passports.

Exports and Export Proceeds

All exports require individual licenses, but most exports are free of quantitative limitation. Export proceeds must be surrendered within 150 days from the date of export of the goods; in special cases, however, the authorities are empowered to extend this period up to one year.

Proceeds from Invisibles

Exchange receipts representing payments for services must be surrendered. 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.

Travelers may bring in a maximum of Dr 2,000 in Greek banknotes. Greek residents returning to Greece must declare the foreign exchange in their possession. Nonresident travelers of foreign nationality need not declare their holdings of foreign exchange at the time of entering the country, and nonresidents holding Greek passports are required to declare their foreign exchange only if they intend, when leaving Greece, to take out again foreign exchange in excess of US$500 or its equivalent.

Capital

Investments in Greece by nonresidents are subject to approval. Under Legislative Decree No. 2687/53, approved foreign investments which aim at the promotion of national production or otherwise contribute to the economic advancement of Greece may be granted preferential treatment. Under Law No. 4171/61, as amended by Legislative Decree No. 4256/62, further privileges are provided for foreign capital participating in investment projects in Greece exceeding Dr 60 million in value. Moreover, Legislative Decree No. 4256/62 provides additional repatriation facilities for foreign investments which promote exports.

Repatriation facilities are as follows: (1) Approved investments according to the provisions of the legislation mentioned above may not be repatriated before one year from the date the enterprise begins to operate productively and in no case before one year from the date the capital was imported. (2) The repatriation of foreign capital may not exceed 10 per cent a year of the amount of capital imported. The repatriation of dividends on equity capital and of interest on loan capital may not exceed 12 per cent a year and 10 per cent a year, respectively. (3) Under the provisions of Law No. 4171/61, profits on approved foreign investments may be transferred abroad in amounts not exceeding 6 per cent a year of the repatriated portion of the capital, provided, however, that the amount of profits transferred shall not exceed 8 per cent of the foreign exchange earnings of the enterprise from the sale of its products abroad. (4) Under the provisions of Legislative Decree No. 4256/62, the repatriation of capital and profits of foreign investments approved under the provisions of Legislative Decree No. 2687/53 can exceed the rates specified in (2) above, up to 70 per cent of the foreign exchange earnings of the enterprise from the sale of its products abroad. Also, foreign loans approved under Legislative Decree No. 2687/53 can be repatriated at an annual rate of up to 20 per cent, provided that the amount of the loan does not exceed double the value of the capital of the corporation.

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 investment 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 1963

January 26. Controls were lifted from imports of certain types of machinery and spare parts.

April 1. The centralized accounts kept by the Bank of Greece for transactions with EMA countries were abolished and settlements with these countries could be carried out directly by the commercial banks. Centralized accounts continued to be maintained for settlements with Portugal, Spain, and Turkey.

November 20. Specified amounts of balances on blocked accounts could be transferred abroad with the prior approval of the Bank of Greece.

Note.—On January 13, 1964, the foreign exchange allocation of US$200 a trip for travel abroad for family reasons, tourism, or business was made available for any number of trips a year; previously, the allocation had been limited to two trips a year.

Guatemala

Exchange Rate System

The par value is Guatemalan Quetzal 1.00 = US$1. The official rates are Q 1.00 buying, and Q 1.01 selling, per US$1. The Bank of Guatemala quotes exchange rates for certain other currencies1 on the basis of their rates in the New York market. 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.

Administration of Control

Exchange control is administered by the Bank of Guatemala (Exchange Department) under the direction of the Monetary Board. Foreign exchange transactions of the public sector are carried out exclusively through the Bank of Guatemala; those of the private sector are carried out through the medium of authorized banks for the account of the Monetary Stabilization Fund maintained by the Bank of Guatemala.

Prescription of Currency

All exchange transactions must be carried out through banks. Payments to Costa Rica, El Salvador, Honduras, and Nicaragua in respect of trade and invisibles are settled in Guatemalan quetzales through the Cámara de Compensación Centroamericana, a clearing house established by the central banks of Central America to foster the process of economic integration of their countries. There are no obligations prescribing the currency for payments to and from other countries.

Imports and Import Payments

Import licenses are not required except for imports of maps of Guatemala, explosives, poultry, and wheat flour. Importers must register with the Bank of Guatemala any firm order to import merchandise. (Imports originating from Central American countries and included in the General Treaty for Central American Economic Integration are exempt from this requirement.) Importers then have 90 days in which to effect their registered imports; in practice, however, this period is not rigorously enforced.

All remittances abroad to pay for imports require exchange licenses, which are granted freely by the Bank of Guatemala. Checks denominated in quetzales are authorized freely for payment for specified imports from Central American countries. The permitted methods of payment are as follows: Payments for imports which have to be fully or partially prepaid must be made by letter of credit. When it is impossible to establish a letter of credit and the prepayment exceeds Q 1,000, a deposit equal to 25 per cent of the amount of foreign exchange requested must be made with the Bank of Guatemala or an authorized bank in cash or in government bonds by importers who are not established importers in the country or who are unable to provide sufficient proof that the import will be delivered; the deposit is refunded when the goods arrive in Guatemala. Importers of merchandise for which payment must be made in cash or in installments, and importers of merchandise on consignment, must present the original documents usually required by the Guatemalan customs for the clearance of goods.

Authorizations to withdraw imports from customs must be obtained from the Exchange Department, except for imports whose value does not exceed Q 50, household goods, samples, printed advertising material, and those imports originating in Central American countries and included in the General Treaty for Central American Economic Integration. The Exchange Department issues such authorizations without delay. The customs officials may refuse clearance of goods if discrepancies are found between the information contained in the authorization issued by the Exchange Department and the actual conditions. For the specified imports from Central American countries, the importer must complete, at either the Exchange Department or the customs office, a special form required by the Exchange Department, giving a description of the merchandise to be imported and the date on which he made the advance payment or the date on which he undertakes to pay in the future. If these forms are completed at the customs office, they must be forwarded daily to the Exchange Department.

A surcharge of 100 per cent of the customs duty may be applied to products originating in or imported from countries with which Guatemala has an unfavorable trade balance. The list of countries is prepared by the Government on the basis of a study of foreign trade for the preceding year. As of December 31, 1963, this surcharge applied to imports from 24 countries.2 This surcharge is waived if the goods are transported in Guatemalan ships. Moreover, all imports from other areas which are included in the agreed uniform tariff list of the countries participating in the General Treaty for Central American Economic Integration are exempt from the surcharge.

Payments for Invisibles

All transfers abroad on account of current invisibles require authorization by the Exchange Department, mainly for the purpose of checking capital transactions. Payments of up to Q 200 to Costa Rica, El Salvador, Honduras, and Nicaragua do not require authorization by the Exchange Department.

Requests for foreign exchange for payment for current invisibles must be supported by such documents as may be required by the Exchange Department to verify that the operation is genuine. The sale of foreign exchange for most categories of current invisibles, including remittances of income from and repayments of registered foreign loans and investments, is authorized freely. For certain payments for current invisibles, exchange is sold up to established limits; in some cases, requests in excess of these limits are approved. There is an exchange allowance equivalent to a maximum of Q 1,500 a person in any one year for tourist travel abroad, as follows: to Mexico, Panama, and the Caribbean area, Q 300; to Canada and the United States, Q 500; to South America, Q 750; and to other continents, Q 1,500. Minors not traveling alone are entitled to half these allowances. The exchange allocation for remittances abroad for family maintenance is Q 250 a month for each relative (Q 200 for those under 18 years of age), up to a maximum of Q 700 a month for each beneficiary family. Foreign technical personnel employed in Guatemala may remit abroad up to two thirds of their salaries if their families reside abroad, or up to one third if their families reside in Guatemala. Limits are also imposed on remittances for students’ expenses abroad and for business travel.

The export of Guatemalan banknotes is not prohibited; however, Guatemalan banknotes received from abroad are not converted by the Bank of Guatemala unless they come from Costa Rica, El Salvador, Honduras, and Nicaragua. For these countries, the Bank of Guatemala guarantees monthly conversions into U.S. dollars up to the following limits: Costa Rica, Q 125,000; El Salvador, Q 300,000; Honduras, Q 300,000; and Nicaragua, Q 125,000. There are no regulations prohibiting the export of foreign banknotes.

Exports and Export Proceeds

All exports require an export license from the Exchange Department of the Bank of Guatemala. Exports to Central American countries and included in the General Treaty for Central American Economic Integration are exempt from this requirement; for these goods, the exporter must complete a special form required by the Exchange Department presenting evidence that the export proceeds have been sold or have been committed to be sold to an authorized bank. The application for an export license must be accompanied by a full description of the nature of the transaction, including the terms and method of payment. The Exchange Department issues licenses only if certain conditions have been met: (1) for exports paid for in advance or in cash, it requires evidence that the export proceeds have been sold or committed to be sold to an authorized bank; (2) for exports on credit, it requires an undertaking to sell the relevant exchange to an authorized bank within 90 days of the date the license is issued; (3) for exports on consignment, it requires the exporter’s certified declaration showing the value of the export and his undertaking to sell the relevant exchange to an authorized bank within a period not exceeding 180 days after the declaration date.

Proceeds from Invisibles

Foreign exchange proceeds from invisibles must be surrendered. The purchase of Salvadoran banknotes by authorized banks is limited to ₡ 500 a person.

Capital

All foreign capital investments in Guatemala must be registered with the Exchange Department of the Bank of Guatemala. AH outgoing capital payments require exchange licenses, which are granted freely in respect of remittances of proceeds from the liquidation of all registered foreign investments. Transfers abroad of resident-owned capital are not permitted.

Changes during 1963

January 1. For the first quarter of 1963, each importer was entitled to receive exchange for payments for nonessential goods up to 50 per cent of the value of his imports in the corresponding quarter of 1962. The exchange surcharge of 2 per cent on the issue of exchange licenses for this purpose remained unchanged.

April 1. For the second quarter of 1963, each importer was entitled to receive exchange for payments for nonessential goods up to 60 per cent of the value of his imports in the corresponding quarter of 1962.

May 25. The “Emergency System for International Transfers” was replaced by the “Emergency System for Control of International Transfers on Account of Capital Movements.” The system of multiple rates was abolished and a unitary exchange rate system was re-established, in which all foreign exchange transactions were to take place at the rate of the par value for the quetzal. With the exception of foreign exchange sold for official operations by diplomatic agents and for minor transactions by tourists, all foreign exchange receipts had to be sold to the Bank of Guatemala or an authorized bank. All transactions involving payments abroad had to be registered with and authorized by the Bank of Guatemala. In principle, restrictions were to be maintained only for transfers of capital, but the Monetary Board retained the power to impose quotas on imports on the basis of essentiality, when required to maintain equilibrium in the balance of payments. For a number of current invisibles, limits were established up to which foreign exchange was made available. Allowances were announced for students’ expenses abroad, as well as business travel. The following exchange allowances were established for tourist travel for each individual trip, up to a maximum of Q 800 in any one year: Q 200 for travel to Mexico, Panama, and the Caribbean area; Q 400 for travel to Canada and the United States; Q 500 for travel to South America; and Q 750 for travel to other continents. The exchange allowance for family maintenance remittances was established at Q 200 a month for each beneficiary (Q 150 for persons under 18), with a limit of Q 500 a month for each family unit. A limit of 12 per cent of the invested capital was placed on remittances of profits and dividends or the amortization of capital, these being mutually exclusive choices at the option of the applicant concerned.

October 8. Following the establishment of clearing arrangements between the central banks of the Central American countries and the Bank of Mexico, payments to Mexico were to be settled in Guatemalan quetzales through the Cámara de Compensación Centroamericana.

October 9. The limitation was removed on remittances abroad of profits and dividends earned on, and the repayment of, foreign capital invested in Guatemala and registered with the Exchange Department of the Bank of Guatemala. The withdrawal of such capital was also freed. The exchange allocations for tourist travel abroad (see May 25, above) were increased to Q 300 for travel to Mexico, Panama, and the Caribbean area; Q 500 to Canada and the United States; Q 750 to South America; and Q 1,500 to other continents. The exchange allocation for family maintenance (see May 25, above) was increased to Q 250 a month for each relative (Q 200 a month for those under 18), with a maximum of Q 700 a month for each family unit.

December 4. Owing to difficulties in administration in connection with the payments arrangement with Mexico, the application of this arrangement was suspended, and payments to Mexico have since been made in U.S. dollars.

Guinea1

Exchange Rate System

No par value for the currency of the Republic of Guinea has been established with the Fund. The unit of currency is the Guinean Franc (introduced March 1, 1960), defined as a monetary unit containing 0.0036 gram of fine gold. It corresponds to GF 50 = 1 French franc and GF 246.853 = US$1.

Exchange transactions of the Bank of the Republic of Guinea with the public are carried out at fixed rates.

Administration of Control

The Central Bank of the Republic of Guinea is the only authority in exchange control matters; this authority is carried out through the Exchange Control Office, which is administered by the Bank. The Bank has not delegated any of its exchange control powers to any other bank or institution. All settlements with foreign countries, including payments for imports, require individual licenses from the Exchange Control Office.

The National Licensing Commission screens all applications for import and export licenses. Licenses are issued, within the framework of an annual program, by the Ministry of Commerce (the Directorate for Programs and Commercial Agreements) only for those applications which are submitted by the National Licensing Commission.

Prescription of Currency

Settlements on account of transactions covered by bilateral payments agreements are made in currencies prescribed by, and through accounts established under, the provisions of the agreements.2 Settlements with other countries are made in convertible currencies.

Imports and Import Payments

Import controls are based on an annual import program. All imports require individual licenses; these licenses are valid for six months only. When they are certified by the Exchange Control Office they constitute an authorization for payments. Most imports are carried out by state trading companies that specialize in various types of commerce.

Payments for Invisibles

All payments for invisibles require authorization from the Exchange Control Office. The export of Guinean currency is prohibited.

Exports and Export Proceeds

All commercial exports require individual licenses in order (1) to assure the implementation of the annual export program, particularly in respect of obligations assumed under bilateral trade agreements; (2) to permit the Treasury to levy certain duties (e.g., mining companies must pay export taxes of 6 per cent on the value of ores); (3) to prevent the shortage of goods needed for domestic consumption; and (4) to prevent the export of capital. Most exports are made by the two state export institutions: Guinexport (for the main agricultural commodities) and Prodex (for minerals and less important export commodities).

Licenses for the export of certain processed and semiprocessed minerals (bauxite, aluminum, iron ore) are granted to the exporting companies that have special agreements with the Government. The export of the main agricultural products is a monopoly of Guinexport, and producers must sell all such products to this company. Licenses for the export of diamonds are granted only to buyers registered with the Bourse de Diamants. Licenses for the re-export of goods imported into Guinea can be granted to any exporter.

Exports of the following goods require, in addition to regular licenses, special authorization from designated agencies: wild animals (dead or alive), edible animals, articles of historical or ethnographical interest, jewelry, articles made of precious metals, and plants and seeds.

All export proceeds must be surrendered. An export license is granted only when the exporter assumes the obligation to surrender the proceeds immediately after they are collected.

Proceeds from Invisibles

Exchange proceeds earned by residents in respect of invisibles must be surrendered. The import of Guinean currency is prohibited.

Capital

All capital transactions and transfers involving nonresidents are subject to individual licenses.

A foreign investment law of April 6, 1962, which replaced the more restrictive one of May 1960, provides guarantees against nationalization for foreign investments in the industrial and mining sectors; it also provides for preferential tax and customs treatment applicable to foreign investments and for the transfer of profits and proceeds accruing from the liquidation of such investments. The actual conditions under which foreign investments may be made are subject to negotiations within the terms of this code.

Changes during 1963

January 26. The National Licensing Commission was created by Presidential Decree No. 59/PRG to screen import and export applications. Licenses were to be issued by the Ministry of Commerce and authorization for payment granted by the Exchange Office only for those applications which were submitted by the National Licensing Commission.

Haiti

Exchange Rate System

The par value is Haitian Gourdes 5.00 = US$1. This rate is applicable to all transactions. Exchange transactions by commercial banks with the public are subject to small banking commissions. There are no controls or restrictions on foreign transactions. 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 nonresidents are imposed.

Imports and Import Payments

Although the law provides for the imposition of quantitative restrictions on imports, none has so far been imposed. A few imports are controlled for other than balance of payments reasons. Payments abroad may be made freely.

Exports and Export Proceeds

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

Payments for and Proceeds from Invisibles

Payments for invisibles are not restricted. 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 1963

February 12. The tax of 3 per cent on remittances abroad by insurance companies of amounts derived from insurance premiums was canceled by decree.

Honduras

Exchange Rate System

The par value is Honduran Lempiras 2.00 = US$1. The official rates are L 1.98 buying, and L 2.02 selling, per US$1. Banknotes and coins in Costa Rican colones, Guatemalan quetzales, Nicaraguan córdobas, and Salvadoran colones are purchased at parity rates minus an official exchange commission of 1 per cent and sold at parity rates plus an official exchange commission of ½ of 1 per cent. 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 nonresidents are imposed. Payments to Costa Rica, El Salvador, Guatemala, and Nicaragua in respect of trade and invisibles may be settled in Honduran lempiras through the Cámara de Compensación Centroamericana, a clearing house established by the central banks of Central America to foster the process of economic integration of their countries. Payments to Mexico may also be settled in Honduran lempiras through the clearing house.

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

Exports do not require licenses. 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 1963

October 8. Following the establishment of clearing arrangements between the central banks of the Central American countries and the Bank of Mexico, payments to Mexico could be settled in Honduran lempiras through the Cámara de Compensación Centroamericana.

Hong Kong

Exchange Rate System

The par value is Hong Kong Dollars 5.71429 = US$1. The exchange rate system comprises official rates and free market rates; as far as rates for the U.S. dollar are concerned, these are, in practice, within 1 per cent of the par value. As at December 31, 1963, rates in the official market were 1s. 3132d. buying, and 1s. 21516d. selling, per HK$1, or HK$5.67⅜ buying, and HK$5.75½ selling, per US$1; rates in the free market on that date were HK$5.73¼ buying, and HK$5.73½ selling, per US$1. The official market rates are those of 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 proceeds in U.S. dollars of exports not of local or neighboring origin, and to most authorized non-dollar transactions. The free market rates apply to other transactions.

Administration of Control

Exchange control authority is vested in the Financial Secretary of the Colony. Forty-eight banks are 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 permitted to conclude exchange transactions only at the official market rates. The free market is operated by other banks and financial institutions. Import and export licensing is carried out by the Director of Commerce and Industry.

Prescription of Currency

The Colony of Hong Kong is part of the Sterling Area, and all settlements except those through the free market must be made by the method and in the currency prescribed in the exchange regulations, as described in the following paragraphs.

Settlements for exports to and imports from other parts of the Sterling Area may be made in any Sterling Area currency. Licenses are required, however, for all payments made from Hong Kong to, or received in Hong Kong from, residents of other parts of the Sterling Area, except that authorized banks may freely make or receive such payments in respect of the following: (1) bona fide trade between Hong Kong and other Sterling Area territories; (2) payments between authorized banks or their branches in the Sterling Area for the purpose of transferring banking funds to an authorized bank or for the settlement of the exchange transactions of an authorized bank; (3) bulk payments in favor of banks or recognized dealers in Hong Kong where the payments are for bona fide family remittances and no individual payment exceeds HK$8,000; and (4) other payments not exceeding £500 or the equivalent in other Sterling Area currencies.

Payment in Hong Kong dollars for exports to China (Mainland), China (Taiwan), and Macao is permitted; imports from these territories may be paid for in Hong Kong dollars (but not to the credit of an External Account; see section on Nonresident Accounts, below) without exchange control approval. The proceeds of exports to all other countries outside the Sterling Area must be received in Hong Kong dollars from an External Account, in sterling from an External Account held with an authorized bank in the Sterling Area, in a foreign currency emanating from outside Hong Kong and freely exchangeable for sterling or Hong Kong dollars (the foreign currency must be surrendered to an authorized bank), or by international money order issued outside the Sterling Area; however, U.S. dollar proceeds of exports to the dollar area or to the Republic of Korea of goods originating in China (Mainland), China (Taiwan), Hong Kong, the Republic of Korea, or Macao may be sold in the free market to the extent of the f.o.b. value of the goods; proceeds from freight and insurance payments have to be surrendered to an authorized bank. Payment for imports from countries outside the Sterling Area may be made by crediting sterling or Hong Kong dollars to an External Account or in any foreign currency.

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 a Sterling Area currency to the credit of an External Account or in any foreign currency, provided that the incoming payment is received in a Sterling Area currency from an External Account or in a foreign currency from outside Hong Kong and which is freely exchangeable for sterling or Hong Kong dollars.

Nonresident Accounts

The treatment of nonresident accounts distinguishes between those of residents of other parts of the Sterling Area (their accounts being treated the same as accounts of residents of Hong Kong), those of recognized banks situated outside the Sterling Area (External Accounts), and those of other nonresidents outside the Sterling Area.

The accounts of companies and individuals resident outside the Sterling Area are treated the same as the accounts of residents, except that, without exchange control permission, they may not be overdrawn or be debited for any payment outside Hong Kong.1

The accounts of recognized banks situated outside the Sterling Area are termed External Accounts. These may be credited with permitted payments from residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currencies to authorized banks. They may be debited freely, but they may not normally be overdrawn, and an order for the purchase of foreign currency may be executed only by an authorized bank.

Imports and Import Payments

Except for certain dutiable and dangerous commodities, imports are free of license. If the prescription of currency requirements are fulfilled, and if related shipping documents are presented when the value of the consignment exceeds £250, the authorized banks may freely make payments to residents of countries in the Sterling Area for imports from the Sterling Area, and to residents of other countries for individual shipments not exceeding £10,000 in value from those countries.2 To make payment or establish letters of credit through an authorized bank for imports from the dollar area for local consumption or for re-export to China (Mainland), China (Taiwan), or Macao, the importer must surrender to an authorized bank U.S. dollars or Canadian dollars in amounts equivalent to the value of the imports; these currencies may be purchased in the free market. Imports from China (Mainland), China (Taiwan), or Macao are normally paid for in Hong Kong dollars (but not to the credit of an External Account), and exchange control approval is not required.

An exchange control form must be submitted for prior approval for payments for imports not covered by the regulations described above. These include (1) imports for which documents are not presented, payment is required in advance of shipment,3 and payment is not in accordance with the usual prescription of currency requirements; (2) goods imported specifically for re-export; and (3) all imports of diamonds, ships, and boats.

Payments for Invisibles

Payments made through authorized banks and not exceeding £500, or the equivalent in other Sterling Area currencies, to other parts of the Sterling Area do not require approval; for larger amounts, exchange control permission is necessary. The authorized banks have power to approve payments to nonresidents for most invisibles up to certain limits (no exchange control form is required when the payment does not exceed £100 or the equivalent). Payments for invisibles above these limits need the approval of the exchange control, which is normally granted. The basic allowance of exchange at the official rate for residents (for exchange control purposes) of Hong Kong traveling to countries outside the Sterling Area or beyond Macao is £250 or the equivalent for each individual journey. Applications for exchange in excess of this allowance to cover genuine travel expenses may be made to the exchange control. In any event, payments may be made freely through the free market by holders of Hong Kong dollars.

Exports and Export Proceeds

Exports to any destination of certain strategic goods and of such commodities as textiles and garments are subject to restrictive licensing. For exports to countries outside the Sterling Area, China (Mainland), China (Taiwan), and Macao, the exporter must submit to the Department of Commerce and Industry, for approval, a declaration showing how the export proceeds will be collected. If payment is not being received within six months and in accordance with prescription of currency requirements, the circumstances must be reported to the exchange control. The U.S. dollar proceeds of exports to the dollar area or to the Republic of Korea of goods originating in China (Mainland), China (Taiwan), Hong Kong, the Republic of Korea, or Macao are freely disposable to the extent of the f.o.b. value of the goods; proceeds from freight and insurance payments have to be surrendered to an authorized bank. The proceeds of exports must be obtained in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

Receipts exceeding £500, or the equivalent in other Sterling Area currencies, from other parts of the Sterling Area require permission. When freight and insurance on exports that have originated in China (Mainland), 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 market rate. Other exchange receipts from invisibles need not be surrendered.

Capital

Licenses are required for transfers abroad of capital in currencies other than the U.S. dollar; these are granted at the official market rate only for approved purposes or, if the equivalent in U.S. dollars has been sold to an authorized exchange bank, at the discretion of the local control. Exchange for the repatriation of foreign capital is normally provided at the official market rate if the exchange control had given prior approval of the investment. Transfers of capital may be made freely in Hong Kong dollars through the free market. However, licenses are required for all receipts from, as well as transfers to, other parts of the Sterling Area which exceed £500 or the equivalent in other Sterling Area currencies; these licenses are granted for all bona fide transactions between Hong Kong and other parts of the Sterling Area.

Changes during 1963

February 1. The basic allowance of exchange at the official rate for residents of Hong Kong traveling to countries outside the Sterling Area or beyond Macao was changed from £250, or the equivalent, for each person in any 12-month period to £250 for each individual journey. Also, a Hong Kong resident returning to Hong Kong was permitted to retain any foreign exchange then in his possession, and a resident who had been issued exchange for travel but who had not left the Colony when he originally intended was permitted to retain the exchange for subsequent travel—the retention period not to exceed 9 months from the date on which the exchange was issued.

Iceland

Exchange Rate System

The par value is Icelandic Krónur 43.00 = US$1. The official rates are IKr 42.95 buying, and IKr 43.06 selling, per US$1. Rates for other currencies are based on these rates and the dollar rates for such currencies in other countries. Rates for settlements through clearing accounts are fixed. The authorized banks are permitted to carry out exchange transactions among themselves and to engage in arbitrage in foreign markets.

Exchange Control Territory

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

Administration of Control

The Ministry of Commerce has the ultimate decision on matters concerning import licensing and on payments for invisibles. The Central Bank of Iceland is responsible for the regulation of foreign exchange transactions and of exchange control, and for ensuring that all foreign exchange due to residents is surrendered to the authorized banks and that such exchange is disposed of as authorized. The two largest Icelandic banks, the National Bank of Iceland and the Fisheries Bank, are the only banks, other than the Central Bank, that are authorized to deal in foreign exchange. In addition, they issue import and exchange licenses in consultation with the Ministry of Commerce.

Prescription of Currency

All settlements with the seven countries with which Iceland maintains bilateral payments agreements must be made exclusively through clearing accounts, denominated as follows: with Rumania and the U.S.S.R., in Icelandic krónur; with Brazil, Hungary, and Poland, in sterling; with Czechoslovakia, in Icelandic krónur and Czechoslovak korunas; and with Eastern Germany, in U.S. dollars. As a general rule, exchange receipts from other countries must be obtained in convertible currencies. In practice, settlements with countries in the dollar area are made in U.S. dollars; with countries in the Sterling Area and some other countries, in sterling; and with all other countries, in their respective currencies.

Nonresident Accounts

There are two categories of nonresident krónur accounts: Foreign Accounts and Special Accounts.

Foreign Accounts may be credited with the proceeds from the sale of foreign currency to authorized banks and with authorized payments due to nonresidents from residents. Balances on Foreign Accounts may be used for authorized payments to residents and may be converted into the currency of the country of residence of the account holder. These accounts are in practice seldom used, payments for international transactions generally being made in U.S. dollars or sterling.

Special Accounts may be opened by agreement with an authorized bank. The most important of these accounts are those of foreign banks and foreign insurance companies. They may be credited freely, up to certain limits, with payments from residents.

Imports and Import Payments

Goods on List A (about 70 per cent of all imports on a 1962 basis) may be imported freely from all countries without quantitative restriction and without an import license. A large proportion of all other goods is contained in List B; these goods require individual licenses. List B distinguishes between goods for which licenses are issued on the basis of bilateral quotas or ad hoc arrangements for imports from countries with which Iceland has bilateral payments agreements, and those which may be imported from all other countries under global quotas.

A fee of ½ of 1 per cent (minimum IKr 10.00) is charged as a license fee on the krónur amount of the import license at the time the license is issued. This fee is not charged on licenses for imports from countries with which Iceland maintains bilateral payments agreements.

Importers of goods not requiring licenses do not have to obtain a foreign exchange permit prior to shipment from abroad, provided that the purchase is payable at sight. On the other hand, the goods will not be cleared by the customs unless payment has already been made or the importer has arranged with an authorized bank for the payment. An importer may either open a letter of credit or obtain a payment certificate which enables him at any time to buy foreign exchange to pay for the goods. For imports that require individual licenses, foreign exchange is granted in accordance with the terms stipulated in the license.

Payments for Invisibles

No exchange license is required for government payments (such as interest and amortization on external loans, expenses of the foreign service, payments to international organizations, payments for postal, telegraphic, and telephone services), for banking commissions, or for bank charges on foreign exchange transactions.

Most other outgoing payments are licensed freely on the basis of bona fide documents. An exchange allocation for tourist travel is granted up to US$280 a year, or its equivalent in other currencies, for each person. Applications for exchange for repair of ships, repair of means of transport other than ships and aircraft, transactions and transfers in connection with direct insurance, and insurance business operations abroad are considered on their merits.

Residents traveling abroad may take with them foreign banknotes and coins which they possess legally, and Icelandic banknotes and coins not exceeding IKr 2,500. Nonresidents may re-export the foreign banknotes and coins, and up to IKr 2,500 of the Icelandic banknotes and coins, which they brought into Iceland.

Exports and Export Proceeds

All commercial exports require licenses. Exchange receipts accruing from exports must be surrendered without undue delay.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered without undue delay. The owners of Icelandic ships and aircraft are, with the approval of the authorized banks, permitted to retain their foreign exchange receipts from freight, passenger tickets, or other charges, and to use them for operating purposes and for purchases of necessities for the homeward journey of the ship or aircraft. Icelandic insurance companies which reinsure abroad are permitted to retain foreign exchange earned from premiums and indemnities and to use it to pay reinsurance premiums, claims, and other regular expenditures of the insurance business in the country where the foreign exchange was earned.

Residents may bring in, upon re-entering the country, up to IKr 2,500 in Icelandic banknotes and coins; the limit for nonresident travelers is IKr 5,000. There are no limitations on the import of foreign banknotes and coins.

Capital

All foreign investments in Iceland are subject to individual approval. The participation of nonresidents in Iceland’s joint stock companies may not exceed 50 per cent. Nonresident-owned foreign capital entering in the form of foreign exchange must be surrendered. Nonresidents may be authorized to open nonresident accounts for these funds, in which case their retransfer abroad may be permitted.

Residents are obliged to surrender foreign exchange accruing to them on account of capital transactions and payments. Without the approval of the Government, residents may not obtain loans abroad, including loans for financing imports, for periods exceeding one year. In practice, the acceptance of loans exceeding 90 days is also subject to restriction, while loans up to 90 days are freely permitted for financing imports other than imports of cars and other motor vehicles for personal use and imports of various household appliances. Transfers of capital abroad by residents require approval, which is granted only in exceptional cases.

Nonresidents may acquire Icelandic securities and other assets with imported funds; the transfer abroad of the proceeds from the sale of these assets and securities requires authorization. Securities held in Iceland by nonresidents must be registered, and all transactions and operations concerning them are subject to licensing. The import and export of securities by residents are subject to the approval of the Central Bank.

Changes during 1963

September 16. The general permission to use suppliers’ short-term credit (loans up to 90 days) freely was abolished for financing imports of cars and other motor vehicles for personal use and imports of various household appliances.

September 24. With the removal of price control over maritime freight, the restriction previously imposed on the chartering of ships, whereby Icelandic companies were given a preferential position with regard to the carrying of exports and bulk goods for import, was removed.

November 20. The following payments for invisibles, which had been subject to restrictions or limits, were to be licensed freely, subject to presentation of justifying documents: those for repair and assembly; processing; finishing; salaries and wages; differences, margins, and deposits; charges for documentation; profits from business activity; dividends and other shares in profits; interest; rent; family travel for private reasons; current maintenance and repair; sport prizes; and racing earnings.

India

Exchange Rate System

The par value is Indian Rupees 4.76190 = US$1. Transactions in foreign exchange are conducted through authorized dealers, as follows: in sterling, at rates fixed by the Foreign Exchange Dealers Association; in other currencies, at rates fixed on the basis of the London market rates for sterling against the other currency concerned. 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 As at December 31, 1963, market rates for telegraphic transfers on London were 1s. 6332d. buying, and 1s. 53132d. selling, per Re 1, and for telegraphic transfers on New York they were Rs 4.7525 buying, and Rs 4.7850 selling, per US$1.

Administration of Control

Exchange control is administered by the Reserve Bank of India, in accordance with the general policy laid down by the Government of India in consultation with the Reserve Bank. Much of the routine work of 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

India is a member of the Sterling Area and has an exchange control system similar to that of the United Kingdom but adapted to suit local requirements. 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 any 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 group3 or in any listed currency.4 Receipts from the Convertible Account group may be obtained in any listed currency,4 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 and Nepal are treated as resident accounts.5 Accounts related to all other foreign countries are treated as nonresident accounts. The treatment of these accounts distinguishes between those of banks and of 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, with authorized transfers from the nonresident accounts of private firms or persons, with proceeds of sales of the currency of the country or monetary area of the account holder, and with 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 to residents of India. These accounts may also be debited for remittances 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 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 are not normally permitted from nonresident accounts of individuals or firms to nonresident accounts of banks, unless the amounts originally credited to such accounts could have been transferred abroad.

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 normally 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 licenses may be issued ad hoc, or on the basis of quotas allocated to established importers in accordance with their imports in a base period and to actual users on the basis of their entitlements/certified requirements. Generally licenses may be used to import from any country except South Africa and South West Africa. At the beginning of each financial year, 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. Licensing is in most cases on an annual basis, subject to the condition that only the first half of the annual license may be used in the first six months of the validity period of the annual license, and the second half of the license will, subject to such change as may be decided upon, be endorsed for use in the second six months and within the extended period of validity allowed for this purpose. In other cases, licenses are issued for the first six months, and a supplementary license is issued later for the second six months. There are special procedures applicable to imports of capital goods, of heavy electrical plant, and of 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 financing such imports 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 can be submitted are not normally allowed; 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. 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 nonresident beneficiaries, provided that 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, for the support of their families, and other expenses. Authorized dealers may allow such remittances by foreign nationals other than nationals of Pakistan up to Rs 1,500 a month, provided that this amount does not exceed 50 per cent of the remittor’s net income. Nationals of Pakistan are allowed to remit up to Rs 50 a month for the support of their dependents in Pakistan.

Applications for foreign exchange for travel or education abroad are considered on an individual basis. Travel agents and companies are not permitted to book passages abroad for persons resident in India unless the traveler has been granted travel exchange by the Reserve Bank or has been specifically granted permission by the Reserve Bank to book his passage.

The export of Indian currency notes and coins except by travelers to Nepal is, in general, prohibited. However, deck passengers to Burma, Malaysia, Singapore, Persian Gulf ports, and East Africa, and travelers to Ceylon and Pakistan, may take with them Rs 20 a person at any one time. Residents may take out foreign notes and coins up to Rs 40 a person: authorized money-changers at airports and seaports are permitted to sell foreign currency notes up to a value of Rs 40 a person to all passengers, whether Indian or foreign, who have made payment for the fare in rupees in India; nonresidents may take out the foreign notes and coins which they declared on entry, less the amounts sold to authorized dealers in India.

Exports and Export Proceeds

Export licenses are required for only a few items, and most commodities may be exported without a license. Most of the controlled commodities are licensed freely to all shippers; a few may be exported through established shippers; and a few commodities are subject to export quotas. Exports to Pakistan of potatoes, potato seed, and onions are allowed under open general license. Exports to South Africa and South West Africa are prohibited.

Exchange control is exercised over the proceeds of exports to countries other than Bhutan and Nepal. An exporter must declare that the full export proceeds will be received and dealt with in accordance with the prescription of currency regulations.

Foreign exchange holdings, including the proceeds of exports, in most currencies6 must be offered for sale against rupees to an authorized dealer, unless the holder has been authorized by the Reserve Bank to retain them, or the holdings are the balance as at July 8, 1947 in a sterling account held by him, or he is not domiciled in India and the funds do not represent the proceeds of an export.

Proceeds from Invisibles

Proceeds from invisibles in certain currencies6 must be surrendered.

The import of Indian currency notes and coins is, in general, prohibited. However, deck passengers from Malaysia, Singapore, Persian Gulf ports, and East Africa, and travelers from Ceylon and Pakistan, may import into India Rs 20 a person against presentation of evidence that they previously had exported this amount from India. Persons coming to India from Burma are allowed to bring in Indian currency notes up to a value of Rs 50 for an adult and Rs 25 for a child between the ages of 12 and 18. Travelers from Nepal may bring in up to Rs 75 a person. Foreign currency notes may be brought into India without limit, provided that 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 is to form part of an investment requiring the prior approval of the Indian Government. Foreign investments once admitted are eligible for the same treatment that Indian enterprises receive. Repatriation of capital owned by persons residing in Sterling Area countries other than Pakistan, and 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) are not normally granted any foreign exchange facilities for emigration purposes. In exceptional cases, foreign exchange may be released up to a limit of Rs 20,000 at the time of emigration and in three subsequent annual installments of Rs 10,000 each. The remainder of an emigrant’s assets are blocked; only income on such blocked assets is thereafter allowed to be remitted up to a limit of Rs 20,000 per annum. Foreign 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 a limit of Rs 75,000 at the time of retirement and the remainder in annual installments not exceeding Rs 20,000 per annum, provided that 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.

There are no restrictions on the import into India of Indian or foreign securities. The export of securities and their transfer to non-residents require approval, as does also the sale, transfer, or other disposal of foreign securities. Persons resident in India are permitted to hold foreign securities that have been acquired in a manner not involving a breach of the Indian exchange regulations.

Changes during 1963

January 1. A limit of Rs 20,000 per annum was imposed on the amount of income from blocked assets of emigrants that could be transferred abroad.

January 2. The general permission granted to travelers to Pakistan to take out their personal gold jewelry was rescinded.

February 16. The accounts of individuals, firms, and companies resident in the Tibet region of Mainland China were declared “nonresident” for exchange control purposes.

February 21. The general permission granted to travelers to take out and bring in Indian currency notes up to a total of Rs 75 a person was rescinded. Travelers leaving India who made payment for the fare in rupees in India were allowed to purchase Rs 40 a person in foreign currency notes from authorized money-changers. Deck passengers to Burma, Malaysia, Singapore, Persian Gulf ports, and East Africa, and travelers to Ceylon and Pakistan, were permitted to take with them, in Indian or foreign currency, up to Rs 20 a person at any one time.

March 1. A surcharge at the uniform rate of 10 per cent of the existing tariff was levied on all imports.

March 11. Provisions of the Foreign Exchange Regulation Act, 1947, were extended to Goa, Daman, and Diu. However, the accounts with banks in India of residents of these territories who are of Portuguese nationality remained frozen, and all operations concerning these accounts were subject to the prior approval of the Reserve Bank. All imports and exports of these territories from and to countries outside India required licenses.

April 1. The import licensing policy for the year ending March 31, 1964 was announced. Some 80 items were liberalized and, in addition, some quotas were increased, mainly for spare parts and industrial raw materials. Quotas for some 75 items, including chemicals, textile machinery, and spare parts for cars, were cut.

April 1. Authorized dealers were given permission to effect maintenance remittances of up to Rs 50 a month to Pakistan; the routing of applications through district authorities required hitherto was withdrawn. Remittances in excess of this limit must be referred to the Reserve Bank for prior approval.

May 2. Travelers entering India from Burma were permitted to bring in Indian currency notes up to a value of Rs 50 for each adult and up to Rs 25 for each child between 12 and 18 years of age.

August 31. The bilateral payments arrangement with Pakistan expired.

October. The provision of foreign exchange for educational travel abroad was eased.

October/December. The Government announced that there would be no cuts in the import licensing program for the second half of the fiscal year 1963/64.

December 23. Certain categories of magazines and periodicals were excluded from the general permission granted to authorized dealers to pay subscriptions to foreign magazines and periodicals.

December 31. The bilateral payments agreement with North Korea expired.

Indonesia

Exchange Rate System

No par value for the Indonesian Rupiah has been established with the Fund. The official rate is Rp 45.00 per US$1, but this is used only for accounting purposes. The effective buying and selling rates of the Bank Indonesia are Rp 314.55 and Rp 315.45 per US$1; they are formed by adding to the official buying and the official selling rate (Rp 44.55 and Rp 45.45, respectively) an exchange subsidy, or surcharge, of Rp 270 per US$1 (see Table of Exchange Rates, below).

The Bank’s effective buying rate of Rp 314.55 applies to all receipts from invisibles (including those of the Government) and to transactions with foreign oil companies. Exporters are permitted to retain 5 per cent of their exchange earnings. Holders of such foreign exchange are allowed to import less essential goods and to make payment for invisibles authorized under the export retention system. This retention, valued at the unofficial market rate (which at the end of December 1963 was about Rp 1,600 per US$1), together with the 95 per cent that is surrendered at the Bank’s effective buying rate, produced a rate of Rp 379.09 per US$1 at the end of December 1963.

The Bank’s effective selling rate of Rp 315.45 applies to a few essential imports and to payments for most invisibles and capital transactions. This rate plus exchange taxes of Rp 225 and Rp 495 produces rates of Rp 540.45 and Rp 810.45, respectively. The first is used chiefly for imports of raw materials and spare parts, and the second for less essential imports. In addition, subsidies equal to Rp 115, Rp 157.50, Rp 225, and Rp 285 per US$1 are granted for specified imports (see section on Imports and Import Payments, below).

Special exchange arrangements, involving separate currencies, exist for West Irian and the Riau Archipelago; the exchange rates are IBRp 3.62 and KRRp 3.06, respectively, per US$1. All trade and financial transactions with Malaysia have been suspended.

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 of 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 banks. Generally, payments are made in convertible currencies, but settlements with Czechoslovakia and Mainland China, with which Indonesia has bilateral payments arrangements, are made through special clearing accounts. In addition, there is an arrangement between the Bank Indonesia and the Netherlands Bank in accordance with which payments for imports from the Netherlands may be settled through a special account.

Nonresident Accounts

Nonresident accounts are classified as (1) accounts of foreign banks or (2) all other nonresident accounts.

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 210,000 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, except in special circumstances, since January 1, 1954.

Imports and Import Payments

There is a registry of authorized importers, and a deposit is required for registration. Most imports require licenses, which are issued in accordance with an exchange budget. Imports by state enterprises account for approximately 80 per cent of total imports.

Imports are classified in three categories; in practice, however, most imports fall in the first two. Category I imports (rice, fertilizers, raw auxiliary materials for the textile industry, some medicines, newsprint, and textbooks) are subject to the Bank’s selling rate of Rp 315.45. As from June 1, 1963, subsidies of Rp 115 per US$1 for medicines, Rp 157.50 for newsprint, Rp 225 for fertilizers, and Rp 285 for textbooks have been granted. Category II imports (chiefly raw materials for industry and spare parts) are subject to the rate of Rp 540.45. Category III imports (items regarded as less essential) are subject to the rate of Rp 810.45; only a few licenses for these imports were issued in 1963. Category III goods may also be financed with the 5 per cent retention permitted from proceeds of exports (see section on Exchange Rate System, above); for these imports, licenses are not required.

Import licenses are issued only for the c. & f. value of the import; insurance has to be covered in Indonesia. After obtaining the import license, the importer is required to conclude an exchange contract with an authorized bank, which then opens a letter of credit. Importers are subject to a 100 per cent cash cover requirement against the letter of credit, except for incidental imports of essential goods and imports by industries of raw materials for their own use. 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 most invisibles are made at the rate of Rp 315.45 and require either a general or a special license from the Foreign Exchange Institute. Payments for invisibles may also be made from the 5 per cent retention of earnings permitted to exporters (see section on Exchange Rate System, above). General licenses are issued to the authorized banks to make payments for specified invisibles (e.g., those related to trade) 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 the 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, up to the equivalent of US$3,158 is allowed to each remittor in independent professions and up to US$4,210 to each employed person. A general license permits nonresidents to remit from their Income Accounts up to Rp 210,000 annually, converted at the Bank’s selling rate of Rp 315.45 per US$1 (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 (except those oil companies to which special arrangements apply) are required to surrender to an authorized bank in Indonesia 95 per cent of their export proceeds at the rate of Rp 314.55. The remaining 5 per cent may be used for payment for imports and certain invisibles. In addition, there is an automatic allocation of exchange licenses, which for exporters amounts to 10 per cent of the amount of exchange surrendered, and for exporter-producers to 15 per cent. These allocations are not transferable and may be used, after payment of the prescribed import rates, for imports in either Category I or Category II, including those formerly monopolized by state trading enterprises.

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 rupiahs, but must be invoiced in a currency acceptable to the Bureau for Exports.

Proceeds from Invisibles

Residents must surrender to an authorized bank in Indonesia all foreign exchange to which they become entitled; the effective exchange rate is Rp 314.55 per US$1. Foreign nationals resident in Indonesia may retain all income not resulting from foreign trade.

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 Rp 314.55 per US$1. Authorized banks must restrict their purchases of certain currencies to specified denominations, and no dealings in Malayan dollars are permitted.

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. All incoming and most outgoing capital transfers are made at the exchange rate of Rp 314.55 and Rp 315.45 per US$1, respectively.

The licensing policy for capital transfers is determined on the basis of the foreign exchange budget for the year. This means that capital transfers by those who are, according to the regulations, entitled to make them, are sometimes temporarily suspended. For determining the treatment to be given to capital transfers, the regulations classify, in three groups, companies operating in Indonesia with foreign capital.

Group I, also known as “old, active companies,” includes investments before January 1, 1954 in companies in Indonesia but which are 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. Estates

  • b. Mining

  • c. Industry

  • a. Transport and communications

  • b. Energy

  • c. Other industries

  • d. Printing

  • e. Banks

  • f. Development

  • g. Foreign trade

  • h. Domestic trade

  • a. Insurance and administration

  • b. Hotels

  • c. Enterprises in the cultural field

Twenty 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 80 per cent may be used as follows: For the companies in Category 1, it may all be transferred abroad at the Rp 315.45 rate; in Category 2, 60 per cent may be transferred abroad at the Rp 315.45 rate and the remaining 20 per cent retained for private use in Indonesia. Companies in Category 3 are not permitted to transfer any of the 80 per cent; these reserve profits may be used for such purposes as the purchase of Treasury notes and bills, new investments in the companies concerned, or investments in certain Indonesian enterprises, subject to the approval of 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, known as “new investment companies,” comprises companies in Indonesia in which foreign capital has been invested 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 accorded to companies in Group I. Transfers of profits and authorized repatriation of capital by “new investments” are made at the Rp 315.45 rate.

Group III includes companies in Categories 1 and 2 of Group I, but which are not entitled to transfer profits because they are registered in Indonesia or are not owned by one or a few foreigners residing abroad. This group is allowed to transfer dividends on behalf of shares held abroad. 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.

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 that a nonresident does not benefit thereby, directly or indirectly. Nonresidents are permitted to trade in specified domestic securities, provided that 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 requires a 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 the end of December 1963)1(rupiahs per U.S. dollar)
BuyingSelling
314.55 (Rp 44.55 plus Exchange Subsidy of Rp 270)

All receipts from invisibles including government receipts. Transactions with oil companies. Capital receipts.
315.45 (Rp 45.45 plus Exchange Surcharge of Rp 270)

Category I imports (chiefly rice, textiles, and fertilizers). Payments for most invisibles, including government payments. Capital transfers.
379.09 (Rp 45 plus Exchange Subsidy of Rp 270 plus 5% Retention2)

All exports.
540.45 (Rp 45.45 plus Exchange Surcharge of Rp 270 plus Exchange Tax of Rp 225)

Category II imports (chiefly raw materials and spare parts).
810.45 (Rp 45.45 plus Exchange Surcharge of Rp 270 plus Exchange Tax of Rp 495)

Category III imports (chiefly less essential goods).
1,600.00 (Unofficial Market Rate)

Less essential imports and invisibles authorized under the export retention system.

Changes during 1963

May 1. A separate currency system, foreign exchange regulations, and trade controls were introduced for West Irian. The Irian Bar at rupiah became the unit of currency with a rate of IBRp 3.62 per US$1; in relation to the rupiah, the basic rate is IBRp 1 = Rp 12.43.

May 27. An exchange subsidy or surcharge of Rp 74.58 per IBRp 1 was introduced, resulting in an effective rate of IBRp 1 = Rp 87.01.

May 27. The system of exchange rates was revised. Effective exchange rates were depreciated sharply, and the system of rates was made considerably less complex. At the same time, the monopoly held by state enterprises on imports of certain goods was ended by permitting private importers to obtain import licenses for these goods.

July 15. Trade and financial relations with the Netherlands were resumed.

October 1. Exporters to West Irian received an additional Rp 53.11 for each Irian Barat rupiah, which resulted in an effective rate of Rp 140.12.

October 15. A currency system, foreign exchange regulations, and trade controls pertaining exclusively to the Riau Archipelago became effective. The Kepulauan Riau rupiah was introduced, with a rate of KRRp 3.06 per US$1. In relation to the rupiah, the basic rate was KRRp 1 = Rp 14.70; this rate plus an exchange subsidy or surcharge of Rp 88.20 resulted in an effective rate of KRRp 1 = Rp 102.90. Moreover, exporters to the Riau Archipelago were provided with an extra Rp 61.27 for each Kepulauan Riau rupiah, which produced an effective rate of KRRp 1 = Rp 164.17.

December 1. The Malayan dollar circulating in the Riau Archipelago ceased to be legal tender.

Iran

Exchange Rate System

The par value is Iranian Rials 75.75 = US$1. The official rates are Rls 75.00 buying, and Rls 76.50 selling, per US$1. Exchange rates for other currencies quoted by the central bank1 are based on these buying and selling rates for the U.S. dollar, taking into consideration the exchange rate of the quoted currencies in the international exchange markets. Exchange rates for currencies not quoted by the central bank are determined by the authorized banks with due regard to the rates currently quoted in the international exchange markets.

The following charges are levied by the authorized banks on the amount of exchange sold for imports: ½ of 1 per cent for sanitary services, and 110 of 1 per cent of the invoice amount under the Export Promotion Fund.

Administration of Control

Exchange control authority is vested in the Bank Markazi Iran (the central bank). All foreign exchange transactions must take place through authorized banks. The Ministry of Economy determines the classification of imported and exported commodities.

Prescription of Currency

Payments and receipts are normally settled in sterling, U.S. dollars, or the currency of the country concerned, provided that the currency is one which is quoted by the central bank.

Transactions with the six countries with which Iran has bilateral payments agreements must be conducted in the currency specified in each agreement: U.S. dollar accounts are used for transactions with Hungary, Turkey, Czechoslovakia, and Poland; sterling for transactions with Ceylon; and rials for transactions 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, provided that such funds originate abroad.

Imports and Import Payments

All imports into Iran are subject to control by the Central Government. The import policy is re-examined annually, and a new Import List, effective for the next Iranian year, is published by the Ministry of Economy. The Import List distinguishes between “authorized,” “unauthorized,” and “prohibited” goods. “Authorized” imports, consisting of nonluxury goods which either are not produced in Iran or are produced in Iran but not in quantities sufficient to meet domestic requirements, are divided into three main categories: (1) imports for which orders may be placed without prior approval by government agencies;2 (2) imports that are subject to prior approval by government agencies before the import order is placed; and (3) goods that may be imported only from countries with which Iran has bilateral agreements—provided that the goods are produced in those countries—or under frontier barter transactions. “Unauthorized” imports include goods which have been shifted from the “authorized” list to the “unauthorized” list, as well as goods which may be permitted occasionally by the Ministry of Economy when the supply of the protected local product is considered insufficient. For “prohibited” goods, no authorizations are given.

Specified commodities, such as tobacco and cigarette paper, are imported under state monopoly, although special permits to import these commodities may be issued to private importers by the Ministry of Finance. Gold may be imported only by the central bank.

Payments for imports may be made either against bills for collection or documentary letters of credit. Payments against bills for collection may be made without authorization for goods listed in the Schedule attached to Circular No. 122 of September 22, 1962 (Iranian date 31.6.1341), for goods (mainly capital goods) listed in Schedule 1, as well as for goods listed in Schedule 2 and consigned to domestic manufacturers. Payments for imports of other goods required by domestic industries may also be made against bills for collection with special permission from the central bank. All other import payments must be made against documentary letters of credit.

Foreign exchange obtained from the sale of exports to countries whose currencies are not quoted by the central bank may be utilized by the exporters concerned or by others to import authorized goods from these or other countries. Also, foreign exchange obtained by residents from persons abroad, other than from the sale of exports, may be used to import authorized goods. However, transactions of this nature do not exempt importers from paying the 110 of 1 per cent tax on imports and the difference between the buying and selling rates of foreign exchange. The import of gifts is restricted to Rls 10,000 for each person a year.

Advance deposits apply to all imports for which payments are made against documentary letters of credit. The deposit must be made by the importer in rials when the documentary letter of credit is opened by the authorized bank. The rates are currently 15, 40, and 100 per cent (depending on the essentiality of the goods) and 30 per cent for imports received under foreign aid.

Authorized banks make payments for permitted imports against the presentation of shipping documents. Approval of the shipping documents by the authorized banks represents approval of the foreign exchange transfer.

Almost all imports are subject to commercial profits taxes, in addition to tariffs, which are either specific or ad valorem. The ad valorem commercial profits tax ranges from 1 per cent to 225 per cent. Monopoly taxes are included in the commercial profits taxes. The authorities specify the commercial profit taxes for each year in the Import List. Imports from Japan, except certain raw materials and spare parts for machinery of Japanese origin, are subject to an additional 5 per cent tax. All taxes are paid to the customs before the customs clearance. The clearance through customs is authorized upon the presentation of shipping documents approved by the authorized banks, specifying that payment has been made or will be made, and, when required, that the special import authorization has been received from government agencies.

Payments for Invisibles

Payments for invisibles related to imports are made on the same basis as payments for those imports. Exchange is granted to merchants for insurance of imports against bills for collection; for imports covered by documentary letters of credit, insurance must be taken out in Iran. Exchange is not granted to merchants for insurance of Iranian exports sold f.o.b. Payments for noncommercial invisibles require licenses from the central bank. Nonresidents working in Iran as technical assistants and whose employment has been approved by the Government may take out in foreign exchange about 50 per cent of their earnings. The annual travel allowance for Iranian nationals—which is limited to US$500 or its equivalent in other currencies for travel in Europe, the United States, or the Far East, and to US$100 for other countries—may be sold by authorized banks upon presentation of the traveler’s visaed passport. For children under 12 years of age accompanied by Iranian adults the allowances are 30 per cent of the above amounts.

Travelers leaving Iran may take with them Rls 3,000 in Iranian banknotes. Travelers of foreign nationality may not export foreign currency in excess of the amount they imported less the amounts they have sold to authorized banks, as recorded in their passports; they may, however, convert into other currencies for traveling expenses up to the equivalent of US$50 upon presentation of their visaed passports.

Exports and Export Proceeds

Exports of some commodities, including grain and flour, require licenses. A commercial profits tax is imposed on a few exports, mainly consumer goods or raw materials. The commercial profits tax charged at the time of import on materials contained in goods for export may be returned to the exporter after the export has taken place. The proceeds from the 5 per cent tax on imports from Japan (see section on Imports and Import Payments, above) are used to subsidize exports to Japan; the rate of the subsidy is 25 per cent of the f.o.b. value of the export proceeds and it is paid by the Ministry of Economy. Under a general system of export subsidies, the rates are 20 per cent of the f.o.b. value of exports of iron ore, lead ore, manganese ore, chromite, sultanas, and salambone, and 10 per cent of the value of exports of zinc. However, for ores, sultanas, and zinc, the actual rates paid to the exporter by the Ministry of Economy are 18 per cent, 15 per cent, and 9 per cent, respectively; the remainder is put at the disposal of the Ministry of Economy to promote exports.

The exporter must surrender the foreign exchange value of his exports, as appraised by the customs, within eight months after the goods have been exported. Authorized banks accept export proceeds only in specified currencies (see footnote 1). Export proceeds in other currencies may be used to purchase imports from the same or other countries.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered unless used to import authorized goods.

The import of Iranian currency by travelers to Iran is permitted in unlimited amounts. The repatriation of Iranian banknotes through the mail is not permitted. Upon arrival in Iran, travelers of Iranian nationality must either sell their foreign exchange to an authorized bank or deposit it in a temporary foreign exchange account, from which transfers abroad or to nonresident accounts require licenses from the central bank. 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 central bank. Except as noted below, such approval is given only in exceptional circumstances.

In accordance with the law concerning the encouragement and protection of foreign capital investment in Iran (1955) and regulations implementing the law, foreign capital invested in approved development or productive activities in industry, mining, agriculture, or transport may be repatriated, together with net profits (in accordance with the provisions contained in the implementing regulations), in the form of foreign exchange and/or goods. Transfers of exchange must be made at the selling rate prevailing at the date of transfer. However, the central bank has the option of buying the exchange or accepting it as a deposit to be converted into rials at a rate mutually agreed upon in a separate agreement, and this rate is applicable to the funds when they are repatriated. Capital imported in the form of foreign exchange must be in currencies acceptable to the central bank; the exchange is converted into rials at the buying rate prevailing at the date of application for conversion. The law does not set up any limit of participation with respect to the ratio of foreign to domestic investment, but the Supervisory Board encourages participation by Iranians in the proposed investments.

Changes during 1963

March 21. The Import/Export Regulations for the Iranian year 1342 (March 21, 1963–March 20, 1964) were published by the Ministry of Economy. The import/export policy of Iran remained substantially the same as in the previous year. Imports of 42 items, which were previously permitted, were added to the list of unauthorized imports. These included certain lubricating oils, certain sizes of tires, many synthetic textiles, some plastic materials, and certain kinds of cement. However, imports of 14 items previously unauthorized were now authorized. These included certain cosmetics, nonelectric refrigerators, electric coolers operating without water, and new or used passenger and sports cars.

March 21. The import profits tax on raw materials (150 items) imported by industries for their own use was reduced by 95 per cent. Also, the number of items which could be imported only from countries with which Iran had bilateral arrangements and frontier trade was increased from 25 to 34 (the main commodities being tea, bananas, and liquors).

April 29. An import tax of 5 per cent (retroactive to January 5, 1963) was levied on all imports from Japan, except certain raw materials and spare parts for machinery of Japanese origin. The proceeds of this tax were to be used to subsidize exports to Japan at a rate of 25 per cent of the rial value of the export proceeds.

September 1. A system of export subsidies was introduced, as follows. Export subsidies of 20 per cent of the f.o.b. value of exports of iron ore, lead ore, manganese ore, chromite, sultanas, and salambone, and of 10 per cent for the export of zinc were appropriated. For mineral ores, sultanas, and zinc, the actual rates paid to the exporter by the Ministry of Economy were 18 per cent, 15 per cent, and 9 per cent, respectively; the remainder was put at the disposal of the Ministry of Economy.

December 5. The system of fixed exchange rates at 1 per cent on either side of the par value relationships for specified currencies was abolished. Under the new arrangements, the 1 per cent margin on either side of the par value applied to the U.S. dollar only. Exchange rates for other currencies quoted by the central bank (see footnote 1) were based on the buying and selling rates for the U.S. dollar in Iran and on the exchange rates for the quoted currencies in the international exchange markets. Exchange rates for currencies not quoted by the central bank were determined by the authorized banks with due regard to the rates currently quoted in the international exchange markets.

December 12. An advance deposit of 15 per cent was required on those imports for which the deposit had been 20 per cent. For imports not listed in Schedules 1, 2, 3, and 4, the deposit was reduced from 70 per cent to 40 per cent.

Iraq

Exchange Rate System

The par value is Iraqi Dinar 1 = US$2.80. Transactions in the official market are carried out in any of the listed currencies1 or in Iraqi dinars through nonresident accounts in Iraq. The Central Bank of Iraq quotes official rates for the listed currencies for its transactions with authorized dealers. The official rates for the U.S. dollar as at December 31, 1963 were US$2.796875 buying, and US$2.78825 selling, per ID 1. There is a small free market (mainly in banknotes) in Iranian rials and Saudi Arabian riyals.

Administration of Control

The Board of Administration of the Central Bank of Iraq is entrusted with all powers and responsibilities in connection with exchange control; it has delegated this authority to the Foreign Exchange Committee, headed by the Governor of the Central Bank, to the Directorate of Foreign Exchange of the Central Bank, and to the licensed dealers. Foreign exchange transactions must take place through a licensed dealer unless otherwise authorized by the Board of Administration. The Directorate-General of Imports and Exports in the Ministry of Commerce is the licensing authority for imports and exports.

Prescription of Currency

Settlements must be made in any of the listed currencies,1 or, under bilateral payments agreements,2 in dinars through the appropriate clearing account.

Nonresident Accounts

The opening of a nonresident account requires the approval of the exchange control authorities. Transactions permitted in convertible currencies may alternatively be settled in Iraqi dinars through nonresident accounts.

Imports and Import Payments

Imports from Lebanon are free of restriction. All imports from Israel and imports of 66 items from all other countries are prohibited. All other imports are subject to individual licensing and quotas. Quotas for certain goods (accounting for about 30 per cent of the value of import licenses granted in 1960) are subject to the decision of the Minister of Economy; they represent items the licensing of which is more restrictive than that of other items. Import allocations for the remaining items are subject to the decision of the Directorate-General of Imports and Exports. Import licenses are valid for imports from all countries except Israel. Only licensed importers and contractors who have entered into contracts with the Iraqi Government may import; they are divided into groups according to the category of imports in which they specialize. New importers who meet the requirements may also be granted import privileges.

The licensed dealers make exchange available upon presentation of the exchange control copy of the import license, except in certain cases where reference has to be made to the Central Bank.

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. basis, insurance premiums, royalties, etc. Exchange is not granted to merchants for the insurance abroad of their imports or exports. Exchange is provided for the transfer of interest and profits 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 that remittances do not exceed half of the resident’s monthly income; it is necessary to refer to the exchange control authorities for amounts exceeding this limit.

For tourist travel, there is a basic yearly allowance of ID 150 for each person 18 years of age or over and of ID 75 for persons under 18. Iraqi nationals traveling to Iran or to the countries of the Persian Gulf are allowed half of these amounts. Exchange to meet the costs of business travel is subject to administrative approval. Travelers may take out ID 15 in Iraqi currency notes and the equivalent of ID 15 in foreign currency. Pilgrims to Saudi Arabia are permitted to take out ID 150 in Iraqi notes or its equivalent in Saudi Arabian riyals.

Exports and Export Proceeds

Exports to Kuwait are free of restriction. All exports to Israel and exports of certain goods to all other countries are prohibited. Specified exports (e.g., certain kinds of livestock, certain foodstuffs in short supply, cereals and fruits, and raw materials in short supply) may be prohibited, and some of these (e.g., wheat and certain fruits) may be exported only if specially authorized by the High Supply Committee. All other exports are licensed freely. The re-export of such goods as cars and agricultural machinery is prohibited.

Exporters must undertake to repatriate their foreign exchange proceeds through a licensed dealer and to surrender them. Proceeds from exports of dates undertaken by sailing boats to countries of the Persian Gulf (excluding Iran) are exempt from these requirements.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers may bring in foreign exchange, including currency notes, in unlimited amounts, provided that they are declared to the Iraqi customs; foreigners may re-export any unused amount. Pilgrims returning from Saudi Arabia may bring in ID 150, and other travelers ID 15, in Iraqi notes.

Capital

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 companies setting up as importers into Iraq are allowed to use only Iraqi capital. Otherwise, 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. Imports of capital from Israel are prohibited. All transfers of capital abroad require exchange control approval. The transfer of capital abroad by residents is not allowed.

Under the Industrial Development Law (No. 31 of 1961), specified enterprises in Iraq are granted partial or total exemption from income tax, stamp duties, and customs duties, provided that (1) the principal work of the enterprise is done by machine; (2) the number of non-Iraqi workers and employees (excluding Palestinian Arabs) does not exceed 10 per cent of the total staff employed, excluding essential technicians; (3) the value of machinery and tools required, excluding power-generating plant, exceeds ID 3,000; and (4) foreign non-Arab participation in the enterprise does not exceed 40 per cent. The specified enterprises are those whose main purpose is to process raw materials into semimanufactured or finished products or to process semimanufactured products into finished products, including assembly. Under the Iraqization Law of June 1961, all branches of foreign firms and all foreign-owned firms (except banks) must have a majority of equity capital held by Iraqi nationals; this law does not cover export agencies and operations requiring special skills.

Changes during 1963

January 4. Further restrictions on foreign investment in Iraq were announced. Companies setting up as importers into Iraq would in future be allowed to use only Iraqi capital. This measure would affect only new companies applying for import permits.

January 19. The requirement of a special authorization for import and export licenses vis-à-vis France was removed.

March 8. Reapplication of the provisions of the Trade Agreement and the Economic Integration Agreement, concluded with the United Arab Republic in 1958, was announced.

March 8. The lifting of all restriction on imports from Lebanon and on exports to Kuwait was announced.

April 20. Imports of 132 commodities, including many pharmaceutical goods, some machinery and equipment, certain construction materials, and transport equipment, were freed of licensing control.

September 11. Licensing control was reimposed on the commodities that had been freed on April 20.

Ireland

Exchange Rate System

The par value is Irish Pound 1 = US$2.80. Transactions in sterling take place at parity. Exchange rates for other currencies are based on London market rates. On February 15, 1961, Ireland accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange control is operated by the Department of Finance. 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 a member of the Sterling Area, and payments to and from other parts of the Sterling Area may be made freely in any Sterling Area currency. 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 must be received in Irish pounds or sterling through an External Account or in any specified currency.1

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. These 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 funds that are due to persons resident outside the Sterling Area, Denmark, the Faroe Islands, Greenland, Norway, and Sweden, and are 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 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 Ireland or in the United Kingdom.

Imports and Import Payments

The import of goods into Ireland is subject to two types of administrative control. Under one type, which covers only a limited range of commodities for protective purposes, 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 and are used to limit the quantity of goods imported. All other imports are free of import licensing. Under the other type of control, prior permission of the Department of Finance is required before orders may be placed for goods originating outside the Sterling Area, if they are not to be used in Ireland or are to be delivered more than nine months after the date of the order.

For permitted imports, appropriate exchange or permission to credit Irish pounds or sterling to an External Account is granted automatically. Exchange control forms are required for import payments exceeding £2,000 to countries outside the Sterling Area.

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 residents of countries outside the Sterling Area require approval. Approval to make payments for most invisibles is given by the authorized banks; for other invisibles, it is given by the Department of Finance.

For tourist travel outside the Sterling Area there is a basic allowance of £250 for each person for each journey. For business travel, up to £2,500 is allowed for each journey. Limits are also established for allowances for education and other purposes. Applications for larger amounts are approved, provided that 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. There is no restriction on the amount of banknotes that may be taken to 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 must obtain payment for the goods 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 £2,000 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. Any foreign exchange held by a person after his return from a trip abroad may be retained for nine months from the date he received the exchange, for use on a subsequent trip abroad. 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 up to a limit of £5,000 a family; those from other persons are considered on their merits. Incoming capital received in specified currencies must be sold to an authorized bank; certain capital receipts in foreign currency may be invested in securities payable in that currency, provided that the investment is carried out within six months from the date of receipt 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 1963

July 1. The majority of import quotas were increased by 10 per cent. Also, quantitative restrictions on imports of rubberized garments were removed.

July 5. Quantitative restrictions on imports of cycle tires from member countries of the Organization for Economic Cooperation and Development were removed.

Israel

Exchange Rate System

The par value is Israel Pounds 3.00 = US$1. All exchange transactions take place at rates based on the par value.

Administration of Control

Exchange control is administered by the Department of Foreign Exchange Control of the Ministry of Finance under the responsibility of the Controller of Foreign Exchange in cooperation with other government agencies, and is carried out through authorized banks.

Prescription of Currency

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

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; when in Israel, he may convert funds held on the account into local currency at the official rate. Local currency accounts of nonresidents are of two types: (1) Registered Accounts—for foreign aviation, shipping, insurance, and film companies and for former residents—may be established only with special approval. Registered Account funds may be used for investment in listed Israel securities, for purchase of real estate, for tourist expenses in Israel up to an amount of If 100 a day for the account holder and for each member of his family, for remittances of up to I£2,500 in support of relatives who are residents of Israel, and for the payment of taxes payable in Israel by the owner of the account. (2) Blocked Accounts may be used for the same purposes as Registered Accounts. Balances on Blocked and Registered Accounts may not be transferred from one nonresident to another; they may only be liquidated by purchasing foreign securities against Israel pounds and selling them abroad against foreign exchange. Blocked Accounts are opened for the holding of funds derived from former investments (see section on Capital, below); other nontransferable funds are credited to Registered Accounts.

Imports and Import Payments

Importers of goods listed in the Free Import Orders (about half of total imports) must be approved as importers by the Ministry of Commerce and Industry. These goods are free of all licensing and restriction. All other imports are subject to licensing. For commodities on the Automatic Approval List (about 30 per cent of total imports), licenses are issued automatically upon application. All individual import licenses must be countersigned by the Department of Foreign Exchange Control of the Ministry of Finance.

The currency and method of payment are prescribed in each license; if a convertible currency is prescribed, payment may be made in any convertible currency.

Exchange to pay for items listed in the Free Import Orders or to pay for licensed imports is granted automatically. An import license may prescribe whether, if payment is to be made by documentary credit, the full amount of foreign currency required must be purchased at the time of opening the credit; in such cases, funds not transferred abroad immediately must be deposited in a special account with the Bank of Israel until transfer is made. With the exception of government agencies and persons importing for export, importers utilizing credit facilities must, at the time of opening the credit, deposit 50 per cent of the cost of the goods. Licenses are issued for imports of goods on consignment provided that the recipient of the license imports goods valued at US$250,000 within three months and undertakes to deposit 10 per cent of the value of the goods with the Bank of Israel through an authorized bank. An importer cannot receive more than two such licenses a year.

Payments for Invisibles

Most payments abroad for invisibles require individual licenses. Each resident is allowed exchange equivalent to US$30, which is obtainable on demand, for the purchase of books, membership dues, etc., and US$50 for certain other purposes (e.g., registration in a university). For tourist travel abroad, there is an exchange allowance equivalent to US$500 a traveler for each journey. Not more than I£100 in Israel banknotes, in denominations of up to I£10, may be taken out by travelers. 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£900.

Exports and Export Proceeds

Most exports do not require licenses. For some commodities, however, export licensing is retained for the purpose of quality control. Exports to certain clearing countries are not permitted unless the value added domestically is at least 20 per cent. Export proceeds in foreign currencies must be surrendered or held on a PAZAK account (see section on Proceeds from Invisibles, below).

Proceeds from Invisibles

Exchange proceeds from invisibles must, in general, be surrendered. Alternatively, they may be kept in foreign exchange on PAZAK accounts, balances on which may be exchanged into Israel currency at any time or used to make authorized payments.

One third of the foreign exchange received by residents of Israel as restitution payments, and as pensions by disabled soldiers who served in World War II, may be retained in TAMAM accounts (see section on Capital, below).

For ten years after entering Israel, new immigrants are exempt from surrendering their foreign exchange to the Treasury, and they may keep these currencies with authorized banks in Israel or with banks abroad.

Tourists visiting Israel are expected to bring with them the amounts of foreign currency that they will need during their stay. Not more than I£100 in Israel banknotes, in denominations of up to I£10, may be brought in by travelers. Tourists and others visiting Israel who are holders of Registered Accounts or Blocked Accounts (see section on Nonresident Accounts, above) may 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 that they have held the account for one year or-more.

Capital

Foreign exchange representing incoming capital has to be surrendered at the official rate or held in a PAZAK account (see section on Proceeds from Invisibles, above). 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 at the official rate. Repayment and amortization of capital may also be transferred on the following terms: if the investment has been kept for less than five years, 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 immediately. Foreign investments made in Israel without taking advantage of the 1959 law do not benefit from these transfer privileges, but most old investments have in fact been recognized as approved investments. Interest and dividends on bonds or shares registered on the stock exchange which have been purchased by nonresidents with exchange converted 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 shares.

Payments due to nonresidents and not permitted to be transferred abroad may be credited to Registered Accounts or Blocked Accounts.

Proceeds accruing from the repatriation or liquidation of foreign assets held by residents are treated in the same way as proceeds from invisibles. New immigrants may, for ten years from the date on which they first entered, retain their foreign assets and use them freely. Transfers abroad of a capital nature by residents are generally not permitted.

Holders of TAMAM accounts (see section on Proceeds from Invisibles, above) may use them to purchase abroad, for themselves or their families, foreign securities quoted on an official stock exchange and, subject to submission of evidence to the authorized bank maintaining the account, for legal costs in respect of restitution payments and for travel expenses abroad exceeding the basic travel exchange allocation of US$500. Foreign securities purchased by debiting, a TAMAM account may be sold abroad for foreign currency and the proceeds again credited to a TAMAM account, or the securities may be sold to other residents in a free securities market.

Changes during 1963

During the year, some 100 imports hitherto prohibited were added to the Automatic Approval List; only the dates on which the largest number of additions were made are noted below.

January 18. Some 300 items were transferred to the Free Import Orders.

February 5. The proportion of foreign exchange received as restitution payments that may be retained in TAMAM accounts was raised from one fourth to one third. This facility was also extended to disabled soldiers who served in World War II in respect of their pensions, etc., received in foreign exchange. All receipts in foreign exchange except those deriving from exchange allocations by the Treasury could be held in PAZAK accounts. Holders of PAZAK accounts were permitted to use them directly in foreign exchange for authorized payments.

February 10. Investments maintained for more than five years could be withdrawn immediately instead of in annual installments.

March 1. Eleven items, hitherto prohibited, were added to the Automatic Approval List.

March 31. The issue of import licenses for goods on consignment was permitted on condition that the importer would undertake to deposit 10 per cent of the value of the goods in Israel pounds with the Bank of Israel.

June 26. Thirty-two items, hitherto prohibited, were added to the Automatic Approval List.

June 28. Eight items were transferred to the Free Import Orders.

July 1. The basic travel allowance was increased from US$400 to US$500.

November 20. Twenty-one items, hitherto prohibited, were added to the Automatic Approval List.

Italy

Exchange Rate System

The par value is Italian Lire 625.00 = US$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 certain other currencies1 vary between limits which result from combining the official limits for the U.S. dollar maintained by Italy and such limits in force in the country of the other currency concerned. Forward premiums and discounts are left to the interplay of market forces. Authorized banks are allowed to engage in spot exchange transactions in any currencies, and in forward exchange transactions in U.S. dollars, Canadian dollars, and externally convertible European currencies. Transactions in foreign banknotes take place at freely negotiated rates.

Italy accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

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. Import and export licenses, when required, are issued by the Ministry of Finance at the request of the Ministry of Foreign Trade. Payments to and from the Republic of San Marino and the Vatican City are not subject to exchange control.

Prescription of Currency

Settlements with foreign countries may be made in U.S. dollars, Canadian dollars, or externally convertible European currencies, or in lire on Foreign Accounts. All settlements with Somalia must be made in lire through a special centralized account.

Nonresident Accounts

The main types of accounts in Italian lire which nonresidents are allowed to maintain with authorized banks in Italy are Foreign Accounts, for current transactions and Italian investments abroad, and Capital Accounts, for foreign investments in Italy. The use of these accounts, and of Special Accounts for certain investments, is described below.

1. Foreign Accounts may be credited with transfers from other Foreign Accounts or from Capital Accounts, with authorized current payments, with payments for approved investments abroad by residents of Italy, and with the proceeds of sales of U.S. dollars, Canadian dollars, and externally convertible European currencies. They may be debited for purchases of any of these currencies, for transfers to any other Foreign Account or Capital Account, for payments to residents of Italy for current transactions, and for payments due to residents of Italy on account of their disinvestments abroad.

2. Capital Accounts may be credited with transfers from Foreign Accounts and from other Capital Accounts, with Italian banknotes sent to Italy by banks abroad, and with the proceeds from the liquidation of foreign investments in Italy not made under the provisions of Law No. 43 of February 7, 1956 (see below). They may be debited for transfers to any other Capital Account or to Foreign Accounts, for drawings in cash by the holder of the account or his delegates, and for the purchase of investments.

3. Special Accounts Under Law No. 43 of February 7, 1956 are accounts in the names of nonresidents who have invested in Italy convertible currencies or externally convertible European currencies in accordance with the above-mentioned law. These accounts may be credited with transfers from other Special Accounts and with the proceeds of sales of investments that have been made in accordance with Law No. 43. They may be debited for purchases of the same currency that was originally sold and for investments in Italy, and balances on them may be transferred to Foreign Accounts or Capital Accounts.

Imports and Import Payments

Practically all imports from countries other than Japan and the Sino-Soviet bloc are free of quantitative restriction. Commodities that still require individual licenses when imported from these countries are included in a negative list (Tabella A Import); this list contains about 60 items of the customs tariff, of which 23 relate to agricultural products and foodstuffs. However, the general permission to import goods not included in the Tabella A Import applies to Iran, Somalia, the United Arab Republic, and Yugoslavia only if the goods originate in and are shipped directly from the respective country; in addition, in respect of imports from Somalia, the payee must reside in that country, and in respect of imports from the United Arab Republic, the payee must reside in that country or in one of the European OECD countries.

A more extensive list (Tabella C Import) contains those commodities which require an individual license when imported from the Sino-Soviet bloc countries. The list includes 146 tariff items or subitems related to agricultural products and foodstuffs, and more than 1,000 tariff items or subitems related to other goods. Special lists contain those commodities on the Tabella C Import which may be imported freely from some of the countries2 to which the Tabella C Import applies, provided that the goods originate in and are shipped from one of these countries.

A separate negative list applies to Japan indicating the goods (listed under 119 tariff items or their parts) which are subject to individual import licensing when imported from that country. A special list contains those commodities (at present comprising 74 tariff items or subitems) for which import licenses are issued freely. All other goods from Japan may be imported freely provided that they originate in and are shipped directly from that country.

For imports not exceeding Lit 250,000 in value, no exchange control form is required; for imports from Lit 250,000 to Lit 500,000 in value, a form completed by the importer is required; for imports over Lit 500,000 in value, an import document completed by an authorized bank is required.

For all authorized imports, the authorized banks provide exchange or permit payment in Italian lire to a nonresident account. International postal money orders may be used to pay for imports not exceeding Lit 250,000 in value, or any lower amount within the limits established for each country to which this service is provided.

Payments for Invisibles

In principle, payments abroad for invisibles require licenses issued by the exchange control authorities. Under general authorization, however, the authorized banks may sell foreign exchange freely provided that the necessary documents are submitted, although for certain transactions3 there are limits beyond which the banks may make payments only after examination of the supporting documents by the Italian Exchange Office. Exchange is granted freely for remittances of earnings on investments. Residents may use international postal money orders for financial payments in the currency and within the limits established for each country.

Certain transactions (but not the related payments) in respect of services are subject to approval by the Ministry of Foreign Trade or the Ministry of Industry. These transactions can be divided into two groups: (1) contracts which require a permit if they involve residents of specified countries4 and (2) contracts which require a permit regardless of the nationality of the nonresidents involved. The first group includes transactions giving rise to expenditures for chartering of ships; repairs to ships which are not urgent and not necessary for safety of operation; news agencies and newspaper correspondents (for accounts not exceeding Lit 5 million a month for the same payee); purchase of publication rights, information agencies, etc. (for amounts exceeding Lit 5 million a year per contract); copyrights (for amounts exceeding Lit 5 million a year per contract); services of professional workers and company managers (for amounts exceeding Lit 5 million); and services of entertainers and athletes (for amounts exceeding Lit 5 million). The second group includes transactions giving rise to expenditures for production abroad of films and advertising shorts; utilization of films, scripts, synchronization, etc.; collaboration in cinematography; civil liability insurance; insurance of ships and aircraft against risks of operation; brokerage for merchandise transactions, whenever the settlement is made after the end of the year following that in which the export or import took place;5 and other transactions not permitted by general authorization.

Residents traveling to foreign countries may obtain from the banks exchange equivalent to Lit 500,000 for each trip for tourism, business, and education; banks are authorized to supply foreign exchange above these allowances, provided that they are satisfied that no unauthorized capital transfer is involved. 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 500,000 in Italian banknotes.

Exports and Export Proceeds

A few commodities in a special list (Tabella Esport) require export licenses. For exports not exceeding Lit 250,000 in value, no exchange control form is required; for exports from Lit 250,000 to Lit 500,000 in value, a form completed by the exporter is required; for exports exceeding Lit 500,000 in value, an export document completed by an authorized bank is required.

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 may be retained by authorized banks on behalf of the recipients in foreign exchange accounts for six months, during which period such balances may be used for permitted transactions or be sold to authorized banks; the banks are allowed to sell these currencies to residents for authorized transactions or to negotiate them freely with the Exchange Office or among themselves. After expiration of the retention period, unused balances must be sold to the Exchange Office at the lowest official exchange rate quoted during the retention period (these official rates are determined daily on the basis of the average closing rates in Milan and Rome).

Proceeds from Invisibles

Receipts from invisibles are subject to the same requirements as receipts from exports. Shipping and insurance companies and travel and forwarding agencies may keep operating accounts in U.S. dollars, Canadian dollars, and externally convertible European currencies. Residents may retain up to the equivalent of Lit 100,000 in foreign banknotes and coins left over from trips abroad and may use this exchange for other trips abroad or sell it at any time to an authorized bank. Persons may bring in any amount in Italian or foreign banknotes.

Capital

Inward and outward movements of nonresident capital are free. However, loans of any kind from nonresidents to residents and from residents to nonresidents require specific authorization from the Ministry of the Treasury or the Ministry of Foreign Trade, respectively. Repayment of such loans may be made freely, provided that it is in accordance with the repayment schedule authorized by the above-named ministries when the loan was approved.

Direct investment in EEC countries is permitted in any form and without any limit. Direct investment in other countries must be in the same line of business as that of the Italian firm making the investment and may not exceed the limit of the paid-up capital of that firm; other types of direct investment to such countries require special authorization from the Ministry of Foreign Trade. The general license to make these direct investments also covers the reinvestment of earnings and the use for this purpose of the liquidation of previous investments (after crediting the proceeds of the disinvestment to bank accounts similar to those established for export proceeds; see section on Exports and Export Proceeds, above).

Residents of Italy are free to buy and sell, through the Bank of Italy or the authorized banks, any foreign securities issued or payable abroad and quoted on foreign stock exchanges, and to deal in such securities among themselves against payment in lire. Such foreign securities have to be deposited with an Italian bank or with a bank abroad for account of an Italian bank.

Transfers in connection with inheritances and dowries may be made freely. Donations up to the equivalent of Lit 10 million for each beneficiary who is related to the donor are permitted; in other cases, prior authorization from the Ministry of Foreign Trade is required. The transfer of property of permanent emigrants is allowed in two steps: up to the equivalent of Lit 4 million a person upon presentation of specified documents at the time of leaving Italy (plus Lit 50,000 in Italian banknotes), and the remainder when residence has been established abroad. If the transfer is to the EEC area, the documentation for the transfer of a higher initial sum is examined by the Italian Exchange Office.

Commercial credits for periods of up to five years for trade operations may be extended freely to residents of the EEC area. Furthermore, short-term and medium-term loans and credits not connected with commercial transactions or with the performance of services may be freely granted and repaid to residents of EEC countries, provided that the duration of such loans or credits does not exceed five years and the amount is not more than Lit 50 million. The interest rate on loans and credits extended by nonresidents to residents may not exceed 6 per cent per annum. Commercial credits in favor of residents of countries other than the EEC countries may be granted for a maximum period of 360 days following the export of the goods or the rendering of the service; for commercial credits of from one to five years’ duration that are granted to residents of countries not in the EEC, applications are considered by the Ministry of Foreign Trade on the basis of the financial risk involved.

The export of securities is not permitted, except of those which are owned by nonresidents and have been purchased against U.S. dollars, Canadian dollars, or externally convertible European currencies, or against funds on a Foreign Account or Capital Account.

Changes during 1963

Tabella A Import was shortened on several occasions during the year; goods included in this list are still subject to individual licensing even when imported from countries outside the Sino-Soviet bloc and Japan.

February 9. Imports from Israel were made subject to the same treatment as imports from countries to which Tabella A Import applies; in addition, imports of 6 additional commodities (mainly bromine and bromine products) remained subject to licensing when imported from Israel.

March 28. Residents were permitted to buy and sell, through the Bank of Italy or the authorized banks, any foreign securities issued or payable abroad and quoted on foreign stock exchanges, and to deal in such securities among themselves against payment in lire. Such foreign securities had to be deposited with an authorized bank, or with a bank abroad for account of an Italian bank. Previously, only specified nonbank financial institutions domiciled in Italy were permitted to acquire all types of portfolio investments abroad, and private residents were permitted to acquire only bonds issued by international financial organizations in which Italy participated as a member country.

March 28. The list of imports from Japan requiring an individual license was shortened to contain commodities listed under some 119 tariff items or their parts (previously the list contained about 180 tariff items). In addition, the separate list of imports for which licenses were also required, but were issued freely up to the amounts applied for, was extended by some 20 tariff headings.

April 1. A trade agreement between Italy and Yugoslavia, signed on March 28, 1963, became effective. The agreement was to be valid for one year and would be considered renewed unless revoked by one of the parties three months prior to its expiration. Yugoslavia was included among those countries to which Tabella A Import applies. Yugoslavia was to apply to trade with Italy the treatment given to countries belonging to the zone of convertibility. The agreement also provided for quotas for the import into Italy of cattle and beef and for the favorable consideration by the Yugoslav authorities of the export of specified wood products to Italy.

April 8. Residents of Italy were permitted to grant and repay to residents of the EEC countries short-term and medium-term loans and credits not connected with commercial transactions or the performance of services, in an amount not exceeding Lit 50 million and for a period up to five years. The interest rate on loans and credits extended by nonresidents to residents could not exceed 6 per cent per annum. Previously, credits for a period up to five years could be granted only in connection with a commercial transaction or the performance of services.

September 17. The conditions governing contractors’ projects abroad were liberalized and a provision introduced by which cash drawings from nonresident capital accounts might be made not only by the holder of the account himself, but also by his delegate (previously, such drawings could be made by close relatives of the holder of the account). Furthermore, it would no longer be necessary to submit supporting documents for examination by the Italian Exchange Office for payments beyond certain limits to foreign countries, if these payments were for the cost of representation, technical assistance rendered by nonresidents, transfer and utilization of patents, compensation for failure to fulfill contracts, and profits and dividends of companies engaged in the motion-picture business.

Finally, while it was still required that direct investment in other countries not belonging to the EEC must be in the same line of business as that of the Italian firm making the investment, the provision which required that the amount of the investment should not exceed the investing firm’s paid-up capital would now be applicable only to investment not in the form of securities.

Ivory Coast1

Exchange Rate System

No par value for the currency of Ivory Coast has been established with the Fund. The unit of currency is the CFA franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at rates resulting from the relation CFAF 1 = 0.02 French franc. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

Administration of Control

Exchange control is administered by the Department of Foreign Exchange and Credit of the Ministry of Finance, Economic Affairs, and Planning. Foreign exchange transactions are handled by authorized banks under the direction of the Foreign Exchange Department. Global annual programs for imports from countries outside the French Franc Area are coordinated by the Ministry of Finance, Economic Affairs, and Planning. Import licenses (for imports subject to quotas) are issued by the Foreign Trade Department, after the transaction in question has been checked and approved by the Department of Foreign Exchange and Credit (Office of Exchange Operations). Import certificates (for imports not subject to quota restrictions) are approved by the Department of Foreign Exchange and Credit (Office of Exchange Operations).

Prescription of Currency

Ivory Coast is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania through Rumanian Foreign Accounts in Bilateral Francs;3 those with all other countries in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

There are two types of nonresident accounts: Foreign Accounts and INR Accounts. Foreign Accounts apply to residents of countries outside the French Franc Area or to residents of French Franc Area countries who have resided outside the Area for more than two years. INR Accounts (intérieurs de nonresidents) apply to residents of French Franc Area countries who have resided outside the Area for less than two years and to residents of countries outside the Area but who have lived within the Area for less than two years. Foreign Accounts are fully convertible; INR Accounts are not transferable (except between two INR Accounts), but any balance may be transferred when the holder leaves the country.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from countries outside the Area are admitted in accordance with an annual program, which is determined by the Foreign Trade Department. Under this program, global quotas are established for imports from EEC countries other than France and for imports from all other countries outside the French Franc Area. The quotas fix the limits up to which import licenses are issued for specified commodities to licensed traders and, in exceptional cases, to industrial and agricultural producers who are considered as end-users of the imported goods. Certain products, contained in a liberalized list, may be freely imported from countries outside the French Franc Area.

Private persons cannot obtain import licenses except for transactions not involving foreign exchange. For certain goods admitted without quantitative restriction, certificates of importation are issued.

The import license or certificate of importation entitles the importer to purchase the necessary foreign exchange, provided that the shipping documents are submitted to the authorized bank.

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely; those to other countries are usually subject to certain limits and require the approval of the Office of Exchange Operations. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved. Payments for transportation costs may be made freely; for payments abroad for insurance, the approval of the Director of Insurance is required. The exchange allowances are as follows: for tourism, up to the equivalent of CFAF 125,000 a year; business travel, up to the equivalent of CFAF 100,000 for each trip; family support, up to the equivalent of CFAF 27,500 a month for each beneficiary. In all cases, supplementary allowances may be given, provided that the applicant presents reasonable justification. Income accruing to nonresidents from profits, dividends, or royalties may be remitted abroad, subject to supervision. Nonresident workers in Ivory Coast may remit abroad 50 per cent of their monthly salaries. Payments in respect of many other categories of invisibles are also subject to supervision.

Travelers to Dahomey, Mauritania, Niger, Senegal, Togo, and Upper Volta may take out, without limit, banknotes issued by any bank of issue within the French Franc Area. Travelers going directly to other countries in the Area may take out, without limit, banknotes issued by any bank of issue in the Area, with the exception of those issued by the BCEAO, for which the limit is CFAF 75,000. Travelers going to countries outside the French Franc Area may take out in banknotes or coins up to a maximum of F 750 in metropolitan francs, or up to 75,000 in CFA or CFP francs, or the equivalent of F 750 in notes and coins denominated in any French Franc Area currency other than the French franc. Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses, mainly to ensure repatriation of the proceeds. For certain export commodities subject to international quotas, the export license must be accompanied by an authorization issued by the organization responsible for the management of the quota.

Export proceeds in currencies of countries outside the French Franc Area must be surrendered in their entirety within three months from the date of their receipt.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts in respect of services and interest due from residents of other countries and all income earned in those countries must be collected and must be surrendered within two months of receipt. Travelers may bring in without limit CFA or other banknotes and coins (excluding gold coins), with the exception of Guinean and Malian currencies. Imported foreign banknotes must be declared to the customs authorities and must be surrendered to an authorized bank within one month.

Capital

Capital movements between Ivory Coast and other French Franc Area countries are free of control; those between Ivory Coast and all other countries are subject to authorization.

Foreign investment in Ivory Coast is subject to the prior approval of the Office of Exchange Operations; approval depends on the nature and purpose of the proposed investment, a liberal policy being followed in this respect. Law No. 59-134 of September 3, 1959 provides tax and customs duty benefits and other privileges for new companies that are recognized as having priority status.

Changes during 1963

February 20. Global quotas for the first half of 1963 were announced for imports from all countries outside the French Franc Area. The foreign exchange allocation for countries of the EEC (excluding France) totaled CFAF 1.3 billion, while that earmarked for imports from the rest of the world amounted to CFAF 743 million. Goods for which quotas were allocated included foodstuffs, cotton prints, clothing, household articles, tobacco, air conditioners, refrigerators, office machines, pharmaceuticals, and insecticides.

June 29. Global quotas for the second half of 1963 were announced for imports from all countries outside the French Franc Area. The goods for which the quotas were announced were the same as those included in the import program for the first half of 1963. Total imports stipulated under the 1963 import program amounted to CFAF 8.6 billion, including CFAF 1.9 billion for imports from EEC countries other than France, CFAF 550 million for imports from bilateral agreement partners, and CFAF 6.1 billion for imports from all countries other than the above.

July 4. A decree dated June 24, 1963 was published which gave the Government discretionary power to restrict or to prohibit the import of any goods, in order to protect domestic industrial enterprises.

Jamaica1

Exchange Rate System

The par value is Jamaican Pound 1 = US$2.80. The currency is freely convertible into sterling at parity, subject to banking commissions. Exchange rates for other currencies are based on the buying and selling rates in the London market. The Bank of Jamaica is authorized by law to levy a commission charge of up to ¾ of 1 per cent on inward and outward transfers; at present, these charges are 316 of 1 per cent on inward transfers and ⅜ of 1 per cent on outward transfers. Jamaica accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 22, 1963.

Administration of Control

The Bank of Jamaica administers exchange control on behalf of the Ministry of Finance, subject to certain limitations in respect of which the approval of the Ministry is required. The commercial banks are designated as authorized dealers and have authority to release foreign exchange for imports, basic travel allowances, and certain other payments. Imports are regulated by the Ministry of Trade and Industry.

Prescription of Currency

Jamaica is a member of the Sterling Area and has prescription of currency requirements similar to those of other Sterling Area countries. Settlements with other parts of the Sterling Area may be made freely in any Sterling Area currency. Payments to countries outside the Sterling Area may be made by crediting Jamaican pounds to an External Account or in any foreign currency. Receipts from countries outside the Sterling Area must be received to the debit of an External Account, or in any specified currency,2 or in any other foreign currency that is freely exchangeable for sterling.

Nonresident Accounts

No distinction is made between the accounts of residents of Jamaica and those of residents of other parts of the Sterling Area.

The commercial banks are empowered to open External Accounts in Jamaican pounds for residents of countries outside the Sterling Area. The funds on these accounts are treated as equivalent to External Account sterling and may be transferred freely between residents of countries outside the Sterling Area. External Accounts may be credited with payments by residents of the Sterling Area approved by the exchange control authority, with transfers from other External Accounts, and with the proceeds from the sale to an authorized dealer of gold or foreign currencies. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for the purchase of foreign currencies.

Accounts which are credited with funds that may not be placed at the free disposal of nonresidents (e.g., proceeds from the sale of sterling and Jamaican pound securities or other capital proceeds) are designated Blocked Accounts. Permission may be given for these funds to be transferred to London, where their disposal is subject to the approval of the U.K. exchange control authorities. Blocked funds may be reinvested in Sterling Area securities which are not redeemable either optionally or contractually within five years from the date of acquisition; the income from such securities, and the proceeds at maturity of any that are redeemable, are normally available for credit to an External Account. Applications for the release of funds in Blocked Accounts for use in Jamaica by the nonresident owner must be referred to the Bank of Jamaica.

Imports and Import Payments

Most goods may be imported freely under an open general license. Other imports, i.e., those included in a special schedule and all imports originating in the Sino-Soviet bloc, South Africa, or Cuba, require individual import licenses. The special schedule comprises (1) goods for which specific quotas are assigned to importers according to their past performance, e.g., footwear and detergents (for these items vouchers are issued to importers on the basis of which licenses are granted by the Trade Administrator); (2) goods which are prohibited, e.g., canned milk, cement, and cheap clothing; and (3) goods the licensing of which depends upon local supply, e.g., poultry, eggs, and vegetables.

Payments for imports from the Sterling Area may be made freely in any Sterling Area currency. Payments for imports from other countries may be made by crediting an External Account or by purchasing foreign exchange from an authorized dealer, provided that the licensing requirements, if any, have been met, and that the importer presents documentary evidence of importation and a copy of the settlement invoice or other evidence of purchase and value.

Payments for Invisibles

Payments for invisibles originating in the Sterling Area may be made freely in any Sterling Area currency. Payments for invisibles originating outside the Sterling Area require the approval of the authorities. Approval is granted freely for payments for all commercial transactions, when the application is supported by the appropriate documentary evidence. For payments for certain other purposes, e.g., insurance premiums, approval is granted upon request. A basic exchange allocation of £J 250 for each journey for travel outside the Sterling Area is made available automatically to residents by the authorized dealers, and additional amounts for travel will be approved by the Bank of Jamaica upon presentation of satisfactory documentation (e.g., tickets, hotel reservations, and estimates of daily expenditures). Moreover, authorized dealers may, subject to the presentation of supporting evidence, sell foreign exchange for the following: cash gifts of up to £J 250 from each donor; refunds of income tax due to nonresidents; consular fees without limit, as well as transfers from the Ministry of External Affairs to accounts in the names of embassies and their established staffs, High Commissioners, and diplomats; up to a limit of £J 1,000 for (1) advertising and promotional expenses, (2) renewal and refund of premiums due to nonresident insurers, and (3) subscriptions to trade organizations; up to a limit of £J 2,000 for commissions and expenses due by Jamaican firms to their agents and representatives and for serial rights in Jamaica of newspaper and magazine articles, photographs, strip cartoons, etc.; specified payments, up to a limit of £J 2,500, that are due by Jamaican insurers to nonresident insured parties under life or endowment insurance policies; agents’ expenses and fees, up to £J 2,500, due by Jamaican insurers to nonresidents in respect of direct insurance policies; loan or overdraft facilities to nonresident individuals and nonresident-owned or nonresident-controlled Jamaican companies, up to £J 1,000 and £J 10,000, respectively. Other standard allocations include, on an annual basis, £J 2,000 for each student studying abroad and £J 500 from each remittor for each charity; applications for exchange within these limits are approved automatically by the Bank of Jamaica if supported by the appropriate documentary evidence. Requests for additional amounts or for purposes for which there are no standard limits (e.g., remittances by charitable institutions) are approved if the authorities are satisfied that no capital flight is involved.

Travelers going abroad may take with them Jamaican banknotes not exceeding £J 10 and other notes, with the exception of U.K. notes, not exceeding £J 100 in value. Nonresidents may take out the foreign currency notes they brought in.

Exports and Export Proceeds

Many exports, particularly to the dollar area, require export licenses. Some exports (e.g., vegetables) are subject to licensing to ensure adequate local supplies. Exporters to countries in the Sterling Area are not required to repatriate their export proceeds; exporters to other countries are required to surrender their exchange proceeds, which must be obtained in one of the specified currencies, to authorized dealers within six months from the date of shipment. However, certain exporters may retain, with the approval of the exchange control authorities, an agreed portion of their proceeds to facilitate the import of items necessary for their operations.

Proceeds from Invisibles

Receipts from invisibles in specified currencies must be sold to an authorized dealer. Receipts in other currencies may be retained. Travelers to Jamaica may not bring in Jamaican and/or U.K. banknotes of an aggregate value exceeding £J 10 (i.e., £ stg. 10); nonresident travelers may bring in any amount of non-Sterling Area banknotes.

Capital

Investments in Sterling Area securities by residents are permitted freely. Investments in other securities require the approval of the exchange control authorities, and such securities may only be purchased in the United Kingdom with “reinvestment” currency. The sale of securities by residents to nonresidents may be allowed, provided that the full proceeds are received in External Account sterling or in foreign currency; the latter must be surrendered to an authorized dealer in Jamaica if permission is not given to reinvest the proceeds in other securities.

Direct investments in the Sterling Area may be made freely by residents. Direct investments in other countries are restricted, but permission may be granted for investments that would enable Jamaica to earn foreign exchange in a short period.

Direct investments in Jamaica by nonresidents require the approval of the exchange control authorities (which is usually granted) and must be made in the currency appropriate to the country of permanent residence of the investor or in External Account sterling. To qualify for “approved status,” an enterprise must have adequate capital and the nonresident investor must take an active part in management. For foreign investments granted “approved status,” repatriation of the capital (including any appreciation in value) is permitted at any time; remittances of profits and dividends are permitted when the application is supported by the appropriate set of accounts. Remittances of profits arising from foreign investment permitted to enter with “nonapproved status” are not restricted, but the realization of the invested capital (if the enterprise is bought by a resident) has to take place through Blocked Accounts (see section on Nonresident Accounts, above).

Payments for amortization of, and interest on, foreign loans used for investments with “approved status” are automatically approved by the exchange control authorities in accordance with the schedule established in the “approved status” agreement. If the foreign loans have been obtained for investments which do not have “approved status,” requests for amortization must be submitted to the exchange control authorities with evidence that the loans exist and that the proceeds of the loans were actually received in Jamaica; amortization payments on these loans are subject to specific authorization by the exchange control authorities.

Transfers to nonresident beneficiaries under wills and intestacies are approved, provided that all local indebtedness has been met.

Changes during 1963

Several additions to, and a few deletions from, the list of imports subject to special licensing were made during the year.

March 8. An initial par value for the Jamaican pound of £J 1 = US$2.80 was established with the International Monetary Fund.

May 31. Authorized dealers were given authority, subject to the presentation of supporting evidence, to sell foreign exchange for the following categories of current payments for invisibles without prior reference to the Bank of Jamaica: a basic exchange allocation of £J 250 for each trip; cash gifts of up to £J 250 for each donor a year; refunds of income tax due to nonresidents; consular fees without limit, as well as transfers from the Ministry of External Affairs to accounts in the names of embassies and their established staffs, High Commissioners, and diplomats; up to a limit of £J 1,000 for (1) advertising and promotional expenses, (2) renewal and refund of premiums due to nonresident insurers, and (3) subscriptions to trade organizations; up to a limit of £J 2,000 for commissions and expenses due by Jamaican firms to their agents and representatives and for serial rights in Jamaica of newspaper and magazine articles, photographs, strip cartoons, etc.; specified payments up to a limit of £J 2,500 that are due by Jamaican insurers to nonresident insured parties under life or endowment insurance policies; agents’ expenses and fees, up to £J 2,500, due by Jamaican insurers to nonresidents in respect of direct insurance policies; loan or overdraft facilities to nonresident individuals and nonresident-owned or nonresident-controlled Jamaican companies, up to £J 1,000 and £J 10,000, respectively.

Japan1

Exchange Rate System

The par value is Japanese Yen 360.00 = US$1. The official limits of buying and selling rates for U.S. dollars (spot), which are set by the Ministry of Finance, are ¥ 362.70 (upper limit) and ¥ 357.30 (lower limit), per US$1; the exchange authorities will buy or sell exchange at rates within this range. Authorized banks may freely carry out spot and forward exchange transactions. Japan accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement as from April 1, 1964.

Administration of Control

The exchange control system is operated by the Ministry of Finance, the Ministry of International Trade and Industry (MITI), and the Bank of Japan as the Government’s agent. However, much of the authority for approving normal payments is delegated to authorized banks. Import and export licensing is handled by MITI.

Prescription of Currency

Payments to all countries except the Republic of Korea may be made in any currency, and receipts from those countries may be obtained in any of the designated receivable currencies;2 receipts in other currencies require an individual license. Settlements in yen with those countries must be made through a Nonresident Free Yen Account. Payments to and from the Republic of Korea are made through accounts established under the bilateral payments agreement with that country, but payments from Korea may also be accepted in any of the designated receivable currencies and payments for specified invisibles may be made without using these accounts.

Nonresident Accounts

There are two main nonresident accounts, as described below.

1. Nonresident Free Yen Accounts. Free Yen Accounts may be opened by any nonresident with any authorized bank in Japan and may be credited with the yen proceeds from exports of goods to Japan and from other authorized transactions incidental thereto, with yen proceeds from sales of designated receivable foreign currencies, with transfers from other Free Yen Accounts, and with proceeds from other authorized payments. There are no restrictions on payments from these accounts. The yen balance on these accounts may be converted into any foreign currency.

2. Nonresident Yen Deposit Accounts. These accounts may be held by any nonresident with any authorized bank in Japan. Proceeds from the sales of debentures and beneficiary certificates sold within six months from the date of validated acquisition are deposited in these accounts. The balances on these accounts may be remitted abroad directly, within a certain limit. Transfers to other Nonresident Yen Deposit Accounts are authorized freely, thus enabling the individual account holder to repatriate his funds by selling them to another nonresident in return for foreign currency.

In addition, there are Foreign Investors’ Deposit Accounts in which certain proceeds of investments liquidated by foreigners may be placed. Balances on these accounts may be used for remittances abroad or for making other investments under certain conditions. However, these accounts are of limited importance, because proceeds of foreigners’ liquidated investments may be remitted through Nonresident Free Yen Accounts without having been placed in Foreign Investors’ Deposit Accounts.

Imports and Import Payments

Imports are subject to individual licensing by the authorized banks, but in practice 93 per cent of nongovernment imports are liberalized. There are different licensing procedures for imports requiring payment in foreign currencies: (1) Under the Import Quota System (covering imports of goods on the “negative list”), the importer must first obtain from the trade control authorities an import quota, which is based on the quantitative principle. If the quota is granted, the importer receives an import quota certificate which entitles him to receive an import license from an authorized bank automatically upon application. Import quota certificates are issued on a global basis, without regard to the country of origin or the currency of settlement. (2) Under the Automatic Import Quota System, import quotas for specified categories of imports are granted automatically on a global basis and without restriction by MITI. (3) Under the Automatic Approval System, imports are, in effect, free of quantitative restriction, since licenses to import the commodities specified under this system are issued freely and without limitation by the authorized banks, on application. All items subject to the Automatic Approval System may be imported from any country.

Payment for imported goods must be made under one of the standard methods of settlement for imports (generally within a period from the date of receipt of the shipping documents or the goods to four months after customs clearance). When the settlement proposal is not in accordance with one of the standard methods, prior approval of MITI must be obtained.

In general, importers must make a deposit with an authorized bank; the amount of this deposit is either 5 per cent or 35 per cent of the value of the intended imports, depending on the goods to be imported (for imports from the Ryukyu Islands, the deposit is 110 of 1 per cent). The deposit is returned after 80 per cent of the goods has been imported or if the import transaction is canceled for a reason acceptable to the control authorities. The percentage of deposit can be increased or decreased, or the requirement can be suspended temporarily. The 5 per cent deposit must be made in cash; the other deposits may be made in the form of securities or other collateral.

Payments for Invisibles

Payments for invisibles require approval. However, most payments are granted freely by authorized banks without any limitation or within certain established limits. Payments for certain invisibles, including payments that exceed the established limits, are referred to the Bank of Japan for the purpose of capital control; except for tourism, they are automatically approved without undue delay, upon verification of the authenticity of the current transaction. For tourism, an allowance equivalent to US$500 a person for one trip a year is automatically made available; for additional amounts, special authorization is required. A tourist is permitted to pay in yen, before departure, the cost of transportation to and from his destination. Certain contracts require approval; but when a license for a contract has been granted, any payment arising from the contract may be made freely. Settlements which are not made under a “standard” method require, in principle, individual approval; under this method, payments for services, etc., may not be made more than three months before, or later than six months after, receipt of the services, etc.

Both residents and nonresidents may take out freely ¥ 20,000 in Japanese currency. A nonresident may take out freely foreign currencies up to the amount which he brought into Japan.

Exports and Export Proceeds

All exports (except exports without exchange) must be registered with an authorized bank (“bank certification”), in order that the requirements concerning prescription of currency and surrender of proceeds may be enforced.

Licenses are not generally required, except for goods subject to the following restrictions: restrictions on strategic goods to control their export to communist countries; restrictions on goods in short supply in the domestic market (e.g., minerals, fertilizers, and staple foodstuffs); and restrictions designed to forestall the imposition of import restrictions by other countries (e.g., on such commodities as pottery and porcelain, sewing machines, and certain textiles). Exports under processing and consignment sale contracts, and exports for which settlement is not under the standard method, require individual approval.

Under the standard method of settlement for exports, the value of the exported goods must, in general, be settled by drawing a bill of exchange payable within five months after sight or within six months after shipment in a designated receivable currency.

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/or sterling from exports and invisibles for a maximum of 20 days; during this period, they may use the exchange to make approved payments for their imports or for current invisibles, or sell it to the authorized banks for yen.

Proceeds from Invisibles

Receipts under the standard method of settlement may be accepted without a license. Under this method, receipts for the value of services, etc., must be obtained within one year before, or within six months after, rendering the service, etc. But contracts for services performed for nonresidents when payment is to be received by a nonstandard method are subject to individual licensing. 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 receivable foreign currencies.

Both residents and nonresidents may bring in freely any amount in foreign or Japanese currency.

Capital

Foreign investments in Japan are generally subject to approval, mainly in accordance with the Foreign Investment Law (No. 163 of May 10, 1950). All acquisitions of stock, debentures, beneficiary certificates, and claims in the form of loans by foreign investors are subject to validation or license. However, acquisitions of stocks in the securities market are automatically approved by the Bank of Japan as follows: up to 15 per cent of the stock of a corporation not classified as a restricted industry, up to 10 per cent of the stock of a corporation classified as a restricted industry,3 and up to 5 per cent of total capital of any corporation if acquired by a single holder. Acquisition of stock for participation in management is subject to individual validation, but it is approved in principle if there is no adverse effect on the Japanese economy. All these acquisitions, to be validated, must be made against 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. The following are deemed to be the same as yen proceeds from the sale of foreign exchange, if they are reinvested in Japan and if approval had been obtained for their acquisition: proceeds from the redemption after maturity of debentures, beneficiary certificates, or claims in the form of loans; dividends on stocks; interest on debentures or on claims in the form of loans; distributed profits of beneficiary certificates; receipts from technological assistance contracts; and proceeds from sales of stocks, debentures, and beneficiary certificates.

In the event of expropriation or compulsory sale of a foreign investment, the amount paid on account of expropriation may be repatriated freely.

Remittance of the proceeds from the sale of validated stock, as well as transfers abroad of earnings on foreign investments acquired with foreign currency, are permitted. Proceeds from validated debentures and beneficiary certificates may be remitted after six months from the date of acquisition.

When foreign companies desire to establish a branch or a plant in Japan, they are required to file this fact with the Bank of Japan; and when the branches or plants wish to bring in funds from their main offices abroad, they are required to obtain licenses. The branches established in accordance with such procedures are permitted to remit their profits and principal abroad.

Transfers of capital abroad and investments abroad by residents are subject to approval.

Securities acquired with approval under the Foreign Investment Law may be imported and exported freely.

Changes during 1963

February 21. The Government announced that, in view of the improvement in the balance of payments, Japan no longer claimed balance of payments justification under Article XII of the GATT for the maintenance of import restrictions.

April 1. Imports of 25 items, including copper ingots, molybdenite, mercury, and bananas, were liberalized; thus, 229 items were left on the “negative list.” The percentage of trade liberalized was raised from 88 per cent to 89 per cent, based upon 1959 import values.

April 1. The limits up to which authorized banks could approve payments for business travel abroad by members of Japanese firms engaged in international business (commercial firms, banks, transportation, and insurance companies) were fixed at $2,000 a trip. For other business travel, authorized banks could approve up to $500 for each person a year. Payments for such remittances as screening rights of foreign films and services in Japan by such persons as nonresident artists, etc., were approved automatically by the Bank of Japan.

April 1. The waiting period for the repatriation of proceeds from the sale of stocks by nonresidents was abolished.

April 20. Payments for marine freight and cargo insurance with a contract not exceeding one year were liberalized, and maximum limits on payments for miscellaneous transactions in invisibles, such as adjustment and cancellation money approved by foreign exchange banks, were abolished.

April 22. Official limits of buying and selling rates of the Ministry of Finance for U.S. dollars (spot) were changed to ¥ 362.70 (upper limit) and ¥ 357.30 (lower limit) per U.S. dollar. Previously, the buying rate had been fixed at ¥ 358.20 and the selling rate at ¥ 361.80.

June 1. Two items, accordions and felt hats, were liberalized, leaving 227 items on the “negative list.”

July 1. All foreign investments by nonresidents were made subject to approval under the relevant regulations and, if approved, the principal and income therefrom would subsequently be repatriated. In this connection, the so-called yen base or nonvalidated foreign investment system, under which there were no restrictions on yen investments by nonresidents provided that the principal and income therefrom would not be remitted, was abolished. When foreign companies desired to establish a branch or a plant in Japan, they were required to file this fact with the Bank of Japan, and when the branches or plants wished to bring in funds from their main offices abroad, they were required to obtain licenses. The branches established in accordance with such procedures were permitted to remit their profits and principal abroad. At the same time, the screening standards and procedures for foreign investment in Japan were eased and simplified. Foreign investment and foreign technological assistance in Japan would be permitted in principle, provided that they did not have an adverse effect on the country’s national economy.

July 1. Payments of up to $30,000 a contract for technical assistance contracts whose term was not more than one year were to be automatically approved by the Bank of Japan.

August 31. Imports of 35 items, including sugar, were liberalized, leaving 192 items on the “negative list.” The percentage of trade liberalized was raised from 89 per cent to 92 per cent.

November 20. Restrictions were either eased or abolished for about 40 of the 82 items restricted under the OECD codes for invisibles and capital. Items which were liberalized included the following: ship chartering and marine cargo insurance contracts with a period of more than one year; compensation for supply of news; copyrights of literature, music, etc.; costs of advertisements; contributions and insurance premiums related to social security and social insurance; taxes; court expenses; exports and imports of securities held by nonresidents. The extent of approval by the authorized banks or by the Bank of Japan on payments for a number of items was increased. These items included costs of advertisements; expenses for market research; expenses for exhibitions or trade fairs; compensation for damage; donations; subscription fees of periodicals. The remittance of balances on Nonresident Yen Deposit Accounts was also permitted up to one fifth of the balance at the end of the year or $2,000, whichever was the higher.

Note.—The following changes took place early in 1964:

Japan liberalized imports of 3 items (under the Brussels nomenclature) in January 1964: 7 items, including lead and zinc goods, in February; and 8 items, including color television receivers and electric generators with a capacity of 400,000 kw. or less, on April 1. This reduced the number of items still restricted to 174 and raised the liberalization ratio by 1 percentage point, to 93 per cent.

March 18. The rates for deposits which importers are required to make with an authorized bank were increased temporarily from 1 per cent and 5 per cent to 5 per cent and 35 per cent, respectively.

April 1. Japan accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

April 1. The foreign exchange budget was abolished. For the goods still restricted, importers had to obtain an import license from the Ministry of International Trade and Industry.

April 1. The Ministerial Council, the main function of which was to establish the foreign exchange budget and approve its revision, was abolished.

April 1. For tourism—for which no payments had been permitted hitherto—an allowance equivalent to US$500 a person for one trip a year became available automatically: for additional amounts, special authorization was required. Furthermore, a tourist was permitted to pay in yen, before departure, the cost of transportation to and from his destination.

April 1. With regard to yen-based investment (i.e., foreign yen investments made in Japan before July 1963 on the understanding that the income and principal would not be transferable in foreign currency), the Ministry of Finance announced that, from April 1, the transfer of current income from the investment would be permitted, and the principal and income accrued therefrom could be deposited in a Nonresident Yen Deposit Account.

Jordan

Exchange Rate System

The par value is Jordan Dinar 1 = US$2.80. The official rates for the U.S. dollar are US$2.82 buying, and US$2.78 selling, per JD 1. Rates for other currencies are based on the rates in the London market. Fees are levied on the issue of import licenses at the rate of 4 per cent when the goods are to be paid for in foreign exchange, and ½ of 1 per cent for goods imported without exchange. A fee of ½ of 1 per cent is levied on exchange permits approved for sales of exchange for invisibles, except education expenses and remittances by government departments and certain other approved institutions.

Administration of Control

Exchange control is administered by the Currency Control Department of the Ministry of Finance under the direction of the Controller of Currency.1 Import policy is formulated by an Import Committee, which is composed of the Controller of Imports, the Undersecretary for National Economy, the Director of Customs, the Controller of Currency, the Director of Income Tax, and two persons representing the Chambers of Commerce. The decisions of the Import Committee are carried out by the Controller of the Import Department of the Ministry of National Economy.

Prescription of Currency

Jordan is a member of the Sterling Area, and most of its trade is financed in sterling. Payments to residents of the Sterling Area (except for imports of certain commodities from India)2 may be made in any Sterling Area currency. In practice, such payments are made in sterling to a Resident Account or in Jordan dinars to a nonresident Sterling Area Account. Payments to residents of countries outside the Sterling Area (except Yugoslavia)3 must be made in sterling to an External Account or in Jordan dinars to a nonresident External Account, or in currency appropriate to the country of residence of the recipient and/or the country of origin of the goods.

Proceeds from exports and invisibles must be collected, and surrendered where required, as follows: from residents of the Sterling Area, in resident sterling or Jordan dinars from a nonresident Sterling Area Account; from residents of countries outside the Sterling Area, in external sterling or Jordan dinars from a nonresident External Account or in any specified currency.4

Nonresident Accounts

Subject to the prior approval of the Controller of Currency, authorized banks may open nonresident accounts designated either Sterling Area Accounts or External Accounts, according to the permanent residence of the account holder. These accounts must be fed with appropriate funds. The approval of the Controller of Currency is necessary for redesignation of residence, for transfers from resident to nonresident accounts, and for transfers from Sterling Area to External Accounts. Transfers between similarly designated nonresident accounts, transfers from External to Sterling Area Accounts, and transfers from nonresident to resident accounts are permitted freely.

Imports and Import Payments

Imports of certain items5 from any source and all imports from Israel are prohibited. Imports of fruits and vegetables are exempt from licensing requirements. All other imports, except those covered by an agreement between Jordan and the exporting country, require import licenses. These are granted freely by the Ministry of National Economy, except for certain items which are subject to scrutiny by either the Import Committee or the Undersecretary for National Economy, whose prior approval is also required for imports of industrial machinery and of all materials needed for the establishment or expansion of an industrial firm.

A fee of 4 per cent is payable on licenses for imports paid for in nonresident account dinars or foreign exchange. A fee of ½ of 1 per cent is payable on licenses issued without exchange (e.g., for samples, household effects, charitable donations in kind).

Licenses for imports originating in Arab League countries6 are valid for 4 months and those for imports originating in other countries 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 that 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. A fee ½ of 1 per cent is levied on exchange permits approved for payments abroad for all invisibles except expenses for education and remittances by government departments and certain other approved institutions. Payments for the following types of invisibles are generally permitted: income of nonresidents; savings of foreign nationals who intend to return to their own countries; remittances to refugee dependents; reasonable living expenses of Jordanian nationals abroad; expenses of Jordanian residents traveling abroad; expenditures for education; expenses of medical treatment; business expenses abroad; and insurance payments in accordance with special regulations.

The policy in respect of these payments is, in general, liberal and not discriminatory. However, foreign exchange is not granted for travel to Lebanon and the Syrian Arab Republic, though residents of Jordan and nationals of Lebanon or Syria traveling to these countries may take out up to JD 100 in Jordanian notes and coins. Otherwise, persons leaving Jordan may not take out more than JD 25 in Jordanian notes and coins or the equivalent in foreign currency; in addition, tourists and other nonresidents may take out foreign currency notes which they had previously brought into the country. Remittances for family maintenance may be made by postal order at a rate not exceeding JD 10 a month to any one person resident abroad.

Exports and Export Proceeds

Export proceeds exceeding JD 20 must be collected and the foreign exchange, including sterling, surrendered. Proceeds from exports of vegetables, fruits, and other perishable commodities to certain neighboring countries are exempt from the surrender requirement. Exports to Israel are prohibited.

Proceeds from Invisibles

Foreign exchange (including sterling) receipts from invisibles must be surrendered to an authorized bank. Travelers entering Jordan may bring in a maximum of JD 100 in Jordanian currency notes and any amount in foreign currencies. Any person regarded for exchange control purposes as resident in Jordan may be required by the Controller of Currency to surrender to an authorized bank any foreign currency (including sterling) at his disposal.

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, repatriation of the 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.

Changes during 1963

No significant changes took place during 1963.

Kenya1

Exchange Rate System

No par value for the currency of Kenya has been established with the Fund. The unit of currency is the East African Shilling, which is officially maintained at par with the U.K. shilling, giving the relationship EA Sh 1 = US$0.14. It circulates freely in the East African currency area, which comprises Aden, Kenya, Tanganyika, Uganda, and Zanzibar. In transactions equivalent to at least £ stg. 5,000 with the public, the East African Currency Board stands ready to issue East African currency in exchange for sterling and to supply sterling in exchange for East African currency. In transactions covering smaller amounts, the public has to deal through the authorized banks. The buying and selling rates for such transactions are at present within ⅛ per cent and ⅜ per cent, respectively, of parity. The banks in Kenya base their rates for other currencies on the current market rates in London.

Administration of Control

Exchange control is administered by the Treasury. Authority for approving normal import payments and providing standard allocations of foreign exchange is given to authorized banks. Import and export controls are administered by the Ministry of Commerce.

Prescription of Currency

Kenya is a member of the Sterling Area and maintains prescription of currency requirements similar to those of the United Kingdom. Settlements with residents of other countries in the Sterling Area may be made in any Sterling Area currency. Authorized payments, including payments for imports, by residents of Kenya to residents of countries outside the Sterling Area may be made in sterling or in East African shillings to the credit of an External Account or in any foreign currency. Receipts from countries outside the Sterling Area may be obtained in sterling or East African shillings from an External Account or in any foreign currency. However, settlements with the United Arab Republic related to merchandise transactions are made in sterling through centralized accounts, in accordance with a payments arrangement.

Nonresident Accounts

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

Imports and Import Payments

With few exceptions, imports from countries in the East African currency area are unrestricted. Goods from specified areas or groups of countries outside the East African currency area may be imported either under open general license or under license that permits specific transactions not authorized under open general license. Most commodities from the majority of countries are at present covered by open general license. All imports from South Africa and metropolitan Portugal are prohibited.

When the importer has obtained a license from the Controller of Imports and Exports, or if the transaction is covered by an open general license, exchange is provided automatically by an authorized bank upon application and submission of the necessary documentary evidence.

Payments for Invisibles

Payments for invisibles may be made freely to residents of other Sterling Area countries. Sales of exchange for other purposes require the approval of the exchange control authorities.

Exports and Export Proceeds

Exports of certain foodstuffs and agricultural products require licenses and may be subject to restriction. Exports of minerals, precious stones, and strategic materials are also subject to licensing. Other goods may be exported without licenses. With few exceptions, exports of goods to other countries in the East African currency area are unrestricted. All exports to South Africa and metropolitan Portugal are prohibited.

Export proceeds, other than those in Sterling Area currencies, must be offered to an authorized bank in Kenya for conversion into East African shillings.

Proceeds from Invisibles

Receipts from invisibles in currencies other than those of the Sterling Area must be sold to an authorized bank. Travelers may bring in freely foreign currency notes; the import of domestic currency notes must not exceed EA Sh 1,000 in value for each traveler.

Capital

Movements of capital between Kenya and other Sterling Area countries are not restricted. There is no restriction on the investment of foreign funds in Kenya; but to ensure eventual repatriation, it is necessary to obtain “approved status” for the investment, which in normal circumstances is given freely.

Changes during 1963

November 29. A number of imports (certain foodstuffs, spices, and casein) were made subject to specific import licensing.

December 2. A payments arrangement with the United Arab Republic came into force; it provided for settlements related to merchandise transactions in sterling through centralized accounts.

December 12. The Government of Kenya decided to impose prohibitions on imports from, and exports to, South Africa and metropolitan Portugal.

Korea

Exchange Rate System

No par value for the Korean Won has been established with the Fund. All transactions take place at a banking rate, which consists of two components: a fixed basic rate of W 125 per US$1, and a certificate rate (the certificates themselves are no longer issued) which may be varied from time to time. The certificate rate as at December 31, 1963 was W 5 per US$1, making the banking rate W 130 per US$1. Eighteen items (mainly products of secondary industries) are eligible for export subsidies, which are fixed in terms of won per U.S. dollar. Moreover, under an import-export linking system, and under barter arrangements, import rights are negotiated at a premium.

Administration of Control

The Ministry of Finance determines exchange rates, subject to the approval of the Cabinet. It carries out policy with respect to prescription of currency and method of settlement, foreign exchange operations, payments for nonmerchandise transactions, and capital transactions and transfers. The Bank of Korea, as the Government’s agent, executes the above functions in part; it has been delegated authority to control receipts and payments related to invisibles. The Bank of Korea and five commercial banks are authorized to deal in foreign exchange.

Most imports and exports are subject to approval by the Ministry of Commerce and Industry or the ministries concerned.

Prescription of Currency

Under a bilateral payments agreement with Japan, settlements with that country must be made through a bilateral clearing account, except for settlements on account of certain trade transactions requiring cash payment in U.S. dollars.

The proceeds of exports must be obtained in U.S. dollars, Hong Kong dollars, pounds sterling, deutsche mark, or a currency authorized by the Ministry of Finance. The methods of payment on account of other settlements are set forth in licenses or conditions attached to sales of exchange by the Bank of Korea.

Nonresident Accounts

Nonresidents may maintain foreign currency deposit accounts with the Bank of Korea. Remittances from such accounts and withdrawals in the form of currency notes upon departure from Korea may, in general, be made freely. The approval of the Bank of Korea is required for remittances from balances that have accrued from remuneration for services in Korea, air or ship passage fares, or insurance premiums received in Korea, or from exchange deposited in accordance with a decision of the Ministry of Finance (except exchange registered at the customs on entry or remitted from abroad). The deposits may be disposed of by sale to the Bank of Korea at the prevailing banking rate, and they may be debited, subject to the approval of the Ministry of Finance, for salary payments to foreign employees.

Imports and Import Payments

The total value and composition of imports are established under semiannual import programs. Under an automatic approval procedure, 109 items may be imported without license or restriction. All other imports require individual licenses. No licenses are issued for any goods originating from all communist countries and for certain imports from all other countries. Imports are divided into two categories: those (including most raw materials and capital goods) paid for with U.S. aid funds and those paid for with exchange from other sources (so-called KFX imports). In certain cases, payment for imports usually financed with U.S. aid funds may be made with KFX exchange. Certain imports are reserved only for end-users, i.e., manufacturers and exporters who need specified raw materials.

Import licenses are granted only to registered traders; to maintain the status of a registered trader, a certain minimum value of exports is required each year. The licenses are granted under the import-export linking system (see section on Exports and Export Proceeds, below) or under a barter system. For imports of aid goods, a minimum of W 20 per US$1 must be deposited at the time the application for a “subauthorization” is filed; a minimum of W 50 per US$1, at the time the import license is issued; and the remainder, at the time the bill of lading is released.

Full payment in won is required when the letter of credit covering imports paid for with KFX exchange is opened.

Payments for Invisibles

All remittances abroad to pay for invisibles require individual licenses. Foreign and Korean currency notes may not be exported without special permission. Departing foreigners may reconvert unused won notes into U.S. dollars up to US$100, and they may take out any foreign exchange that they had registered on entry.

Exports and Export Proceeds

All exports to communist countries, and exports of certain goods (such as tobacco; raw cotton; raw hides; precious metals; certain ores, minerals, and chemicals; bituminous coal; cement; pulp; and lumber) to all other countries, are prohibited.

Certain exports require individual licenses. All other exports may be made freely under an automatic approval procedure.

The export proceeds in foreign exchange must be surrendered at the banking rate. The principal exports receive subsidies, which are fixed from time to time by the Ministry of Commerce and Industry in terms of won per U.S. dollar. Exporters may apply to the Bank of Korea for subsidy payments only after receipt of the export proceeds.

Under the import-export linking system, import rights (valid for a period beginning from the date of surrender of export proceeds until the end of the next month) are granted to exporters up to the value of net exchange earnings for exported processed commodities and up to the value of total exchange proceeds for other exports. Subject to a few exceptions, import rights are not transferable. Exporters who have import rights at their disposal may arrange to import for other residents under proxy contracts. Both the transfer of import rights and importing under proxy contracts give rise to premium payments.

Specified goods may be exported under barter arrangements. They are not eligible for subsidies, and individual licenses are required. Traders who export under barter arrangements are entitled to import goods equivalent in value to 50 per cent of the total value of exports of general items and up to 100 per cent of the net earnings of foreign exchange for manufactured items whose raw material content is imported, provided that any single transaction does not exceed the equivalent of US$100,000; these import rights cannot be transferred to other traders.

Proceeds from Invisibles

All proceeds derived from invisibles must be sold to the Bank of Korea at the banking rate. 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. Foreign capital investment, loans from abroad, and imports of capital goods on a long-term basis can secure a guarantee of repayment and repatriation under the Foreign Investment Encouragement Law, the Law Guaranteeing Repayment for Loans, and the Law Governing Importation of Capital Goods on Long-Term Repayment Basis, respectively.

Changes during 1963

January 1. A new export subsidy scheme was applied. Priority was given to commodities exported for the first time since the end of 1957 or to a new market, to manufactured commodities instead of primary products, and to mineral products exported to countries other than Japan in Southeast Asia. About 28 commodities were to be subsidized in 1963, compared with about 104 in the second half of 1962. Under the new scheme, exports were grouped in five categories, and subsidies were established at rates ranging from W 5 to W 60 per US$1 of export proceeds, compared with rates ranging from W 5 to W 25 per US$1 in 1962.

January 5. The import-export linking system was expanded.

March 8. Five items essential for industry and domestic consumption (e.g., scrap iron, billets, pig iron, pulp, and cement) were excluded from the import-export linking system.

April 11. The Law Governing Importation of Capital Goods on Long-Term Repayment Basis (Law No. 1317) and the Law Controlling Foreign Aid Resources (Law No. 1316) were amended.

July 1. A newly established Foreign Exchange Council was authorized to approve applications for exchange allocations for trips abroad. Passenger fares could be authorised for tourist class only; the per diem allowance was reduced from the equivalent of US$30 to US$20. Extra allowances were established at US$50 (formerly US$100) for travel to Southeast Asia and at US$100 for travel to other areas.

July 3. The amount up to which unused won notes that departing foreigners might reconvert into U.S. dollars was changed from US$200 to US$100.

July 18. Individual licenses were required for all KFX imports.

July 26. It was announced that, under the Decree Implementing Special Measures Governing Importation of Capital Goods on Long-Term Repayment Basis, the amount of the loan must be at least the equivalent of US$200,000, and half-yearly repayments may not exceed one fifth of the contracted loan.

July 31. An over-all quota for barter transactions involving goods other than fertilizers was established. All KFX imports were made subject to the import-export linking system.

September 10. The export subsidy system was revised. The number of commodities to be subsidized was reduced to 18, and the amount of subsidy was raised for several items.

September 11. Under an automatic approval procedure, a number of items could be imported without license or restriction.

November 5. A 100 per cent advance import deposit was introduced for goods imported on credit.

November 12. Aid imports were made subject to a levy of W 50 per US$1.

Kuwait

Exchange Rate System

The par value is Kuwaiti Dinar 1 = US$2.80. The dinar is officially defined in terms of gold and is at par with the pound sterling. The commercial banks’ rates for telegraphic transfers on London are KD 0.9975 buying, and KD 1.0025 selling, per £ stg. 1. Rates for other currencies in the official market are based on London market rates. There is a free market in which exchange may be dealt in without restriction as to its origin or use, and in which rates, in practice, differ from official market rates by less than 1 per cent. On December 31, 1963, the average selling rate for the U.S. dollar in the official market was KD 0.359 per US$1, and in the free market it was within a range of KD 0.359 to KD 0.361 per US$1. On April 5, 1963 Kuwait notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

There is no exchange control legislation in Kuwait. Control is exercised only over the provision of exchange in the official market for payments to territories outside the Sterling Area and over the manner of payment to other Sterling Area territories. It is administered by the Exchange Control section of the Ministry of Finance and Industry. Authority to provide exchange for imports and related payments and, within limits, for travel is delegated to the banks operating in Kuwait. Individual Letters of Recommendation, required for other payments through the official market in currencies other than those of the Sterling Area, are issued by the Exchange Control.

The limited control over imports and exports is administered by the Ministry of Customs and Ports.

Prescription of Currency

Kuwait is a member of the Sterling Area, and the banks operating in Kuwait observe prescription of currency requirements broadly similar to those of other parts of the Sterling Area. Payments to other countries in the Sterling Area may be made in sterling or another Sterling Area currency. Payments through the official market to countries outside the Sterling Area may be made in sterling to the credit of an External Account or in a non-sterling currency appropriate to the area to which the payment is made. Payments from other countries in the Sterling Area may be received in any Sterling Area currency. Apart from payments to the Government, payments from countries outside the Sterling Area are not, in practice, received through the official market.

Nonresident Accounts

No distinction is made between accounts held by residents and those held by nonresidents.

Imports and Import Payments

Import licenses are required only for arms, ammunition, alcohol and alcoholic beverages, and narcotics. All imports from Israel, including imports of Israeli manufacture and those which contain Israeli materials or are manufactured by companies financed by Israeli capital, and all imports from South Africa are prohibited.

Sterling Area currencies are provided freely for payments to residents of the Sterling Area for imports or for other purposes. Imports from any source may be paid for with exchange acquired in the free market.

The banks operating in Kuwait are authorized to provide External Account sterling or a non-sterling currency for payments for imports from outside the Sterling Area, provided that they receive a full set of documents covering the import and, when payment is to be made in sterling to the credit of an External Account, that they provide confirmation that they are satisfied that the goods will be landed in Kuwait. When payment is made in a non-sterling currency, the banks operate on the basis of blanket or non-specific Letters of Recommendation which authorize them to obtain non-sterling currencies in London up to certain limits and to transfer them to accounts in the country of the currency involved. When a limit is reached, the bank obtains a further authorization under a new Letter of Recommendation on presentation of an accounting of how the previous allocation has been used.

For payments for goods purchased in countries outside the Sterling Area for resale without shipment to Kuwait, exchange is provided through the official market only if a bank guarantees that the proceeds of the resale will be returned to Kuwait.

Payments for Invisibles

Payments for invisibles may be made freely to residents of other Sterling Area countries, or to residents of any country in exchange acquired in the free market.

Payments through the official market to residents of countries outside the Sterling Area may be made in sterling to the credit of an External Account or in a non-sterling currency for expenses related to imports (such as freight and insurance), as part of the arrangements on payments for imports and thus subject to the same conditions (see section on Imports and Import Payments, above). The banks operating in Kuwait have been granted general authority to sell to Kuwaiti nationals non-sterling currencies up to the equivalent of KD 250 a person for each trip for travel outside the Sterling Area, without specific reference to the Exchange Control. For business travel, the amount may be increased up to KD 20 a day for a maximum period of three months; this allowance is applicable to all members of the family who accompany a business traveler. Travelers may take with them any amount in Kuwaiti or other banknotes.

For all other payments for invisibles to countries outside the Sterling Area which are made through the official market, a separate Letter of Recommendation must be obtained from the Exchange Control for each payment. Such authorization will be granted to provide exchange for medical or educational expenses abroad, if approval is obtained from the appropriate ministry. Foreign nationals working in Kuwait may remit abroad up to 75 per cent of their basic wages or salaries and, on departure, may transfer their savings. The transfer of income on foreign capital invested in Kuwait is authorized up to the amount of net profits, including past earnings, on presentation of an audited statement. Similarly, a Letter of Recommendation will be issued to cover payments for business services, if the application is accompanied by an audited certificate.

The Exchange Control will also issue to Kuwaiti nationals Letters of Recommendation providing an annual allowance in any currency of the equivalent of up to KD 3,000 for each family. This may be used for additional travel funds, for personal remittances, or for any other purpose including the transfer of capital. This exchange is automatically available; larger amounts require special authorization by the Minister of Finance and Industry.

Exports and Export Proceeds

Exports of sheep, poultry, and fats are prohibited, while those of arms, ammunition, and scrap metal require licenses. Exports of other foodstuffs may be either licensed or prohibited in times of emergency or shortage; currently, exports of sugar are prohibited. Export licenses are not required for other exports or re-exports. All exports to South Africa are prohibited.

There are no requirements attached to receipts from exports or re-exports; the proceeds need not be repatriated or surrendered, and they may be disposed of freely, regardless of the currency involved.

Proceeds from Invisibles

No requirements are attached to the use or disposal of receipts in any currency. Travelers entering Kuwait may bring with them any amount in Kuwaiti or other banknotes.

Capital

There are no exchange control obligations on the transfer to Kuwait of resident or nonresident capital in any currency, although government agreement is necessary for the participation of nonresident capital in corporations in Kuwait.

No control is imposed on outward capital payments by residents or nonresidents to other countries in the Sterling Area, or to any country if the payment is made through the free market. A Letter of Recommendation from the Exchange Control is required if a currency other than a Sterling Area currency is to be transferred through the official market. When a firm in which nonresident capital is involved is liquidated, permission is given automatically for the repatriation through the official market of the nonresident capital involved, in a currency appropriate to the residence of the investor.

Under a resolution of September 1963 of the Ministry of Finance and Industry, Kuwaiti nationals may be granted permission to transfer capital, within limits approved by the Exchange Control, to countries outside the Sterling Area for investment purposes, provided that the application is supported by sufficient information regarding the purpose of the investment and the country to which the remittance is made. Local banks are granted permission without restriction to invest their deposits outside the Sterling Area.

Transfers of capital for other purposes by residents through the official market to countries outside the Sterling Area are generally not permitted beyond an amount equivalent to KD 3,000 a family per annum (see section on Payments for Invisibles, above). Additional amounts are subject to the approval of the Minister of Finance and Industry, which is granted only in exceptional cases.

Changes during 1963

April 26. An initial par value of KD 1 = US$1.00 was established with the International Monetary Fund.

September 1. A resolution of the Ministry of Finance and Industry provided that Kuwaiti nationals could be granted permission to transfer capital, within limits approved by the Exchange Control, to countries outside the Sterling Area for purposes of investment, provided that the application was supported by sufficient information regarding the purpose of the investment and the country to which the remittance was to be made. Permission was to be granted without restriction to local banks to invest their deposits outside the Sterling Area.

October 1. All trade with South Africa was prohibited.

October 27. The export of sugar was prohibited until further notice.

November 1. The travel allocation for Kuwaiti nationals was increased from KD 200 to KD 250 for each trip.

Laos1

Exchange Rate System

No par value for the Laotian Kip has been established with the Fund. The official rate is K 240 = US$1. This rate applies to imports of aid goods, government requirements, and specified invisibles. All other transactions take place in an official free market.2 The National Bank of Laos conducts exchange transactions with authorized banks only in U.S. dollars, French francs, and pounds sterling, at rates equivalent to K 237.60 buying, and K 242.40 selling, per US$1. Banks are authorized to charge commissions not exceeding 1 per cent on purchases and sales of these currencies.

Residents and nonresidents are permitted to maintain accounts in foreign currencies with authorized banks. These accounts may be credited with unlimited amounts in foreign exchange and may be debited for any payments by the account holder. Transfers between these accounts are free. Balances on these accounts may be sold against kips either at the free market rate or, for specified purposes, at the official rate.

Administration of Control

Under the Chairmanship of the Minister of Finance, the Commission Gouvernementale de Coordination des Finances Extérieures prepares quarterly reviews of the basic exchange control regulations and may suggest changes to the Government in the light of existing conditions. The National Exchange Office3 jointly with the Department of Customs authorizes imports under the foreign assistance import programs, records all imports, authorizes payments for invisibles, and records exports. The Foreign Trade Department of the Ministry of National Economy issues export licenses. The five commercial banks are authorized to deal, on account of customers only, in foreign exchange at the official and free market rates.

Prescription of Currency

No prescription of currency requirements are imposed on receipts or payments, but the National Bank provides exchange for authorized payments and accepts export proceeds only in U.S. dollars, French francs, and pounds sterling. There is a bilateral payments agreement with the U.S.S.R., providing for payments to be made through a clearing account maintained in French francs as the unit of account.

Nonresident Accounts

Nonresidents are permitted to maintain accounts in foreign currencies with authorized banks (see section on Exchange Rate System, above).

Imports and Import Payments

All importers must pay an annual registration fee to the Government. Imports of charcoal, bricks, roof tiles, coffee, soft drinks, ice cream, gold, and silver are prohibited, although import licenses are granted when shortages arise. Since February 1963, licenses for imports of gold have been issued within an established quota on a monopoly basis to one commercial bank. Imports are divided into two categories: (1) those made in accordance with the import programs financed by assistance from Australia, the United Kingdom, and the United States; (2) all other imports, for which the importer has to supply his own foreign exchange.

There is a list of commodities which may be imported under the import program financed by the United States; certain of these commodities may not be imported from specified countries.4 However, petroleum products, for which specific U.S. aid is made available, may be imported from some of the countries on the list of excluded countries. Under the various import programs financed with foreign aid, importers apply to the National Exchange Office for licenses; after clearance by the customs authorities in respect of valuation, the exchange licenses automatically become import licenses. Under the U.S. import program, the National Bank provides the importer with exchange at the official rate from its own holdings, and the relevant authorities reimburse the Bank when the goods have arrived in Laos and they have certified them as conforming to the list of commodities qualified for foreign financing. Under the U.K. import program, foreign exchange is made available by the United Kingdom directly to the commercial banks upon the opening of letters of credit. Under the Australian import program, the Laotian Government requests the Australian Government to purchase and deliver to Laos specified goods. The Australian Government makes payment to the suppliers and covers all costs up to the Laotian port of entry, when the goods become the property of the Laotian Government.

The National Bank does not make foreign exchange available to pay for imports outside the import programs, with the exception of imports to meet government requirements. However, importers are free to obtain exchange through the official free market for any amount of imports.

Under the import programs financed with foreign aid, all importers are required to make a covering payment of 100 per cent for letters of credit opened, and an additional deposit of 20 per cent with the National Bank as security. The security deposit is refunded to the importer when the goods have been cleared through customs.

Payments for Invisibles

Payments for certain specified invisibles that are granted foreign currencies at the official rate of K 240 per US$1 require licenses, which are issued by the National Exchange Office. Freight and insurance in connection with imports under the foreign aid import programs are regarded as a part of the import payment. The following are the main categories of payments for invisibles for which the National Bank sells foreign exchange: official expenditures by the Government; study abroad (initial installation, monthly allowances up to specified limits, transport, and other miscellaneous expenses); family maintenance; and specified insurance and reinsurance payments. All other payments for invisibles are unrestricted, but must be conducted through the free market.

Exports and Export Proceeds

All exports require licenses, and all exporters must pay an annual registration fee. Exports of gold and silver are prohibited. Sixty per cent of all export proceeds in U.S. dollars, French francs, or pounds sterling must be surrendered at the official rate to the National Bank; the remainder may be kept abroad or with domestic banks. Should an exporter be paid in a currency other than U.S. dollars, French francs, or pounds sterling, he must exchange the part that is subject to surrender into one of the acceptable currencies.

Proceeds from Invisibles

Exchange surrender requirements are applied to the following invisibles: official expenses, other than salaries of foreign employees, by embassies, missions, representatives, and various foreign institutions; settlements from insurance companies; incomes of public service companies; and transfers to the benefit of Laotian companies and individuals.

Capital

Incoming capital and outgoing capital are not subject to any exchange control requirements. Transactions are conducted through the free exchange market.

Changes during 1963

No significant changes took place during 1963.

Note.—The following changes came into effect on January 1, 1964:

(1) The official rate of K 240 per US$1 replaced the previous rate of K 80 per US$1. The new official rate applies to imports of aid goods, government requirements, and to specified invisibles. A legal free market was established for all other transactions, including nonessential imports, tourism, and capital transfers. The changes in the exchange system were made as part of a stabilization program supported by financial assistance from Australia, France, the United Kingdom, and the United States.

(2) The additional deposit requirement for imports financed with foreign aid was reduced from 50 per cent to 20 per cent.

(3) In place of nonresident accounts held in Laotian currency, nonresidents were permitted to maintain accounts in foreign currencies. Residents were also permitted to keep such accounts.

Lebanon

Exchange Rate System

On July 29, 1947, a par value for the Lebanese Pound was established by Lebanon with the Fund. However, exchange transactions no longer take place at rates based on that par value. Practically all transactions take place at free market rates, which for the U.S. dollar as at December 31, 1963 were LL 3.07 buying, and LL 3.0750 selling, per US$1. Under an agreement with the United Arab Republic, a special rate of LL 8.00 = LE 1 is applied to exchange purchased from Egyptian tourists. There are no restrictions on foreign payments.

Prescription of Currency

In general, no requirements are imposed on exchange payments abroad or receipts in Lebanon. In some cases, transactions with certain countries with which Lebanon has payments agreements specifying the method or channel of payment may be made through specific accounts.1

Imports and Import Payments

Imports of a few goods from any source and all imports from Israel are prohibited. Imports of certain commodities (dried milk, wheat, barley, menthol, leather bags, ladies’ dresses, industrial machinery, olive oil, brushes, poultry, etc.) that are for the most part produced locally are subject to prior licensing. Licenses are granted for six months, and may be renewed for an additional six months (or longer, for imports of industrial machinery). 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

No restrictions are placed on payments for invisibles. Exchange may be obtained freely through the free market.

Exports and Export Proceeds

Exports of a few goods (scraps of iron, cast iron, copper, lead, and tin) to any country and all exports to Israel are prohibited. Exports of a few items—such as livestock, wheat and wheat products, barley, Egyptian cotton, newsprint, petroleum, petroleum products, industrial and agricultural machines and equipment, and certain metals—to any country and all products intended for export to North Korea require export licenses. Exchange receipts from exports may be retained, used, or sold freely in the free market.

Proceeds from Invisibles

Exchange receipts from invisibles may be retained, used, or sold freely in the free market.

Capital

There are no limitations on capital payments or receipts. Exchange may be obtained or sold freely through the free market.

Changes during 1963

June 21. Eleven tariff items were exempted from import licensing and 20 tariff items from export licensing.

October 11. Imports of all sorts of Bioprotin were prohibited. Garlic and acetic acid and its anhydride were included in the licensing system.

Liberia

Exchange Rate System

The par value is Liberian Dollar 1 = US$1. U.S. currency is in circulation along with Liberian coinage. Official accounts are kept in dollars and cents. There are no restrictions on foreign exchange transactions.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

There is no general system of import control. A few items (e.g., arms and ammunition, explosives, used clothing, and pharmaceuticals) require prior licenses. Also, imports of certain goods (e.g., obscene literature, narcotics other than for medicinal purposes) and all imports from South Africa are prohibited.

Exports and Export Proceeds

Export licenses are required for precious metals and precious stones. The surrender of the proceeds of exports is not required, and exchange receipts are freely disposable.

Payments for and Proceeds from Invisibles

There are no limitations on payments for or receipts from invisibles. There are, however, restrictions on the circulation of U.S. banknotes in denominations over $20.

Capital

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

Changes during 1963

March 13. An initial par value of Liberian dollar 1 per US$1 was established with the International Monetary Fund.

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, 1963 were US$2.792732 buying, and US$2.791732 selling, per £L 1.

Administration of Control

Exchange control is administered by the Bank of Libya, which has delegated some of its powers to the authorized banks. Policy relating to import and export licensing is determined by a consultative Import and Export Council, under the chairmanship of the Minister of National Economy and comprising officials of the Ministries of National Economy and Finance, the Economic Controllers in Tripoli, Benghazi, and Sebha, and officials of the Bank of Libya.

Prescription of Currency

The Kingdom of Libya is a member of the Sterling Area, and has an exchange control system similar to that of the United Kingdom but adapted to suit local requirements. Settlements with other parts of the Sterling Area may be made in any Sterling Area currency or by crediting Libyan pounds or sterling to a Scheduled Territories Account (see section on Nonresident Accounts, below). Settlements with countries outside the Sterling Area may be made in Libyan pounds or sterling through an External Account or in any foreign currency.

Libya has a trade and payments agreement with the United Arab Republic, under which settlements are made through a centralized bilateral clearing account maintained in sterling.

Nonresident Accounts

Subject to the approval of the 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 the Sterling Area are designated Scheduled Territories Accounts, and those of residents of other countries, External Accounts (the only exceptions being 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.

With the approval of the exchange control authority, funds on blocked accounts may be used for expenditures in Libya up to £L 500 a year to cover the cost of current visits to Libya by the owner of the funds or a close relative; for payments in Libya of legal fees, taxes, etc.; for remittances to the owner of the funds in his country of permanent residence, up to £L 1,000 in a calendar year; for remittances in cases of hardship; and for investments in property in Libya or in other Libyan enterprises. When the funds have been on a blocked Libyan pound account for five years, they qualify for remittance in full to the owner in his country of permanent residence.

Imports and Import Payments

Most imports do not require an individual import license. Imports subject to individual licensing include processed foodstuffs, goods that are manufactured locally, and several revenue-producing commodities. 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 that 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. Applications for 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 20; residents may, in addition, take without a license, in any period of 12 months, foreign currency notes, travelers checks, and letters of credit not exceeding a total value of £L 140 as a basic travel allowance. Children under 12 years of age are allowed one half of this amount. 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 which they declared on entry.

Exports and Export Proceeds

Export licenses are required for all commodities. Export proceeds must be surrendered. Exports to Israel are prohibited.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers checks or foreign currency notes may be cashed only at an authorized bank or at an exchange office licensed by the Bank of Libya.

Travelers entering Libya may bring with them Libyan currency notes not exceeding a total of £L 20, and other currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable instruments in unlimited amounts. Libyan currency notes may be repatriated through banking channels, provided that details are given to establish that the notes within the authorized amount were obtained from bona fide travelers from Libya.

Capital

Under the provisions of the Foreign Capital Investment Law of January 30, 1958, foreign capital invested in projects deemed to contribute to the economic development of the country, as well as profits thereon, and salaries of foreign staff employed on such projects may be transferred freely to the country of origin. Residents of Libya taking up permanent residence abroad are permitted to transfer up to £L 5,000 for a family. Nonresident capital that is not permitted to be transferred abroad is credited to blocked accounts (see section on Nonresident Accounts, above).

Changes during 1963

No significant changes took place during 1963.

Malagasy Republic1

Exchange Rate System

No par value for the currency of the Malagasy Republic has been established with the Fund. The official unit of currency is the Malagasy franc, which is equivalent to 0.02 French franc, giving the relationship FMG 246.853 = US$1. There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by the commercial banks under the direction of the Exchange Office. Import licenses are issued by the Department of Economic Affairs with the consent of the Exchange Office; import licenses not involving the granting of foreign exchange are issued by the Exchange Office.

Prescription of Currency

The Malagasy Republic is a member of the French Franc Area, and settlements with other countries of the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs;2 those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

A few imports (e.g., secondhand goods, batteries, beer above a certain alcoholic content) are subject to licensing when originating in any country, including countries in the French Franc Area. Licenses are also required for imports from countries in the Area if such goods originated from outside the Area and have not undergone transformation in a French Franc Area country in accordance with certain rules. All other goods from the Area may be imported freely.

All imports from countries outside the French Franc Area are subject to import licensing.

For restricted imports an annual import program is established. This program and the amount of foreign exchange required to implement it are determined by a joint French-Malagasy Committee. The import program is based on the establishment of quotas that fix the limits up to which specified commodities may be imported. Certain quotas (i.e., for fabrics, clothing, tools, and cutlery) may be used only up to fixed percentages for imports from the Far East. Separate quotas are established for imports from EEC countries. Imports from countries outside the French Franc Area which do not require financial settlement require licenses not involving foreign exchange; certain of the imports are also restricted by an import quota.

Issue of an import license serves as authorization to the commercial bank to make payment.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

All payments for invisibles may be made freely to countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. Residents traveling abroad may obtain a foreign exchange allocation up to the equivalent of FMG 125,000 per annum; in addition, they may take out for each trip up to F 750 in French franc banknotes or up to FMG 75,000 in Malagasy francs.

Exports and Export Proceeds

Export licenses are required only for exports to countries outside the French Franc Area. Proceeds of exports to those countries must be repatriated within three months from the date of their collection. Exporters paid in U.S. dollars may, however, retain 12 per cent, or, if paid in other currencies, 8 per cent, of their proceeds in special, non-transferable, EFAC (Exportations-Frais Accessoires) accounts. These accounts may be used by the exporters themselves to pay for raw materials or equipment needed in their own business, for representation and advertising expenses, and for business trips abroad.

Proceeds from Invisibles

Residents are obliged to collect, and surrender within one month from the date of receipt of foreign exchange, amounts due from nonresidents in respect of services, and all income exceeding FMG 5,000 from foreign securities. Travelers may bring in any amount of domestic and foreign banknotes and coins (except gold coins).

Capital

Capital movements between the Malagasy Republic and other French Franc Area countries are free of control. Foreign investments of any kind from countries outside the French Franc Area are subject to prior authorization of the Exchange Office. Preferential—“approved”—status may be granted enterprises of special interest for the economy. Such enterprises may benefit from specified advantages relating to import and export duties, income taxes, the obtaining of supplementary foreign exchange allocations above those allotted in the annual import program for necessary imports, etc. Authorizations for the repatriation of proceeds from the liquidation of foreign investments to countries outside the French Franc Area are decided in accordance with the merits of each case.

The transfer of capital to countries outside the French Franc Area by residents is subject to individual approval.

Changes during 1963

March 2. Global quotas were published for imports from all countries except those of the French Franc Area for the period March 15 to September 14, 1963.

March 16. Separate additional quotas were published for imports originating in EEC countries.

July 13. A decree was published establishing the Malagasy franc (franc malgache) as the legal currency in the Malagasy Republic, with effect from July 1, 1963; its legal abbreviation was to be FMG.

September 14. Global quotas were published for imports from all countries except those of the French Franc Area for the period September 15, 1963 to March 14, 1964.

Malaysia

Exchange Rate System

The par value is Malayan Dollar 3.06122 = US$1. The Central Bank of Malaysia has not established official buying and selling rates for foreign currencies. The Currency Board buys and sells sterling at 2s. 4⅛d. per M$l, and sells it at 2s. 3⅞d. The commercial banks quote agreed rates for customers for most Sterling Area currencies and for specified currencies.1 The rates are calculated on the basis of quotations for Malayan dollars against sterling in the Malaysian exchange market and the quotations for other currencies against sterling in the London exchange market. As at December 31, 1963, the market rate for the U.S. dollar was M$3.06 per US$1.

Administration of Control

The Central Bank of Malaysia administers exchange control on behalf of the Treasury in the States of Malaya. Exchange control continues, for the time being, to be under the jurisdiction of the respective State Governments in Singapore, Sarawak, and Sabah. Much of the authority for approving normal current payments is delegated to commercial banks authorized for this purpose. The administration of import control is still the responsibility of the various State Governments. Import controls in the former Federation of Malaya are administered jointly by the Ministry of Commerce and Industry and the Royal Customs and Excise Department, and in Singapore by the Department of Imports and Exports Control and Registration.

Prescription of Currency

The Federation of Malaysia is a member 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 an External 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 an External Account, or in any specified currency that is freely offered and freely transferable to Malaysia.

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 Malaysia, 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. Accounts of residents of Indonesia are designated Indonesian Accounts. All debits and credits to such accounts require prior approval.

Imports and Import Payments

Tariffs and import controls of the various parts of the Federation have not as yet been unified, although steps toward full unification are being taken. Some tariffs and other trade restrictions still exist between parts of the Federation that previously were independent. Imports are permitted freely under open general licenses or specific licenses, depending on the nature and origin of the goods. A few imports are controlled for health, security, or moral reasons, and certain conditions must be satisfied before licenses are issued.

In respect of the former Federation of Malaya, imports of certain textiles from Mainland China are prohibited as a measure to protect the local textile industry; imports of rice from any country are conditional on the importer purchasing one ton of rice from official stocks for every two tons imported; and all imports from South Africa are prohibited. Singapore controls its imports of torchlight and transistor radio batteries and radiopack batteries, monosodium glutamate, and wheat flour.

Where necessary, permission is given freely for payments in foreign currency 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 £ stg. 250 in foreign notes may be taken out of Malaysia by travelers.

Exports and Export Proceeds

Only exports exceeding M$20,000 in value to countries outside the Sterling Area, and exports to Indonesia of gold, platinum, precious stones, rubber, tin, and cigarettes, 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.

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 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. Permission is also required for the import of currency notes of India and Indonesia. 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 Malaysian securities are normally permitted, provided that 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 since 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 Malaysia to the Scandinavian countries by Scandinavian nationals in respect of their own assets are permitted freely on application.

Changes during 1963

March 1. Import controls by the Federation of Malaya of poultry from Thailand under a quota system, were abolished.

July 9. A final agreement was concluded in London providing for the establishment of Malaysia, comprising the territories of the Federation of Malaya, Singapore, British North Borneo (to be known hereafter as Sabah), and Sarawak. Brunei would be free to join the new Federation at a later date. The agreement’s primary economic objective was the establishment of a common market through gradual elimination of internal tariffs and other trade barriers, and harmonization of the external tariffs so that one external tariff eventually could be established. Special provisions were made to protect Singapore’s entrepôt trade. The agreement provided for a tariff advisory board for Malaysia. Foreign exchange and central bank regulations would apply equally to the former independent states. The currency to be used in the entire territory of Malaysia would be the Malayan dollar issued by the Board of Commissioners of Currency of Malaya and British Borneo, which was constituted under a currency agreement between the former Federation of Malaya, Singapore, North Borneo, Sarawak, and Brunei. The issuance of currency would be taken over by the Central Bank of Malaysia when the Board of Commissioners of Currency ceased to have authority to issue currency.

September 13. All imports to Singapore of torchlight and radio batteries, monosodium glutamate, and live oral poliomyelitis vaccine were to be authorized by the Singapore Department of Imports and Exports Control and Registration.

September 16. The new Federation was formed.

September 16. The name of the Central Bank of Malaya was changed to the Central Bank of Malaysia. The preparation of orders to extend the operations of the Central Bank throughout Malaysia were begun.

October 1. The Government of Singapore removed the specific licensing and quantitative controls on various medical preparations, cosmetics, and rubber shoes.

October 9. The Malaysian Government took steps to control financial dealings with Indonesia. A new designation, Indonesian Accounts, was assigned to “external” accounts of Indonesian nationals. All debits and credits over such accounts required prior approval of the exchange control authorities.

Mali1

Exchange Rate System

No par value for the currency of the Republic of Mali has been established with the Fund. The official unit of currency is the Mali franc, defined as a monetary unit containing 0.0036 gram of fine gold. Parity rates for the CFA franc, the French franc, and the U.S. dollar are MF 1, MF 50, and MF 246.853, respectively.

Only the Bank of the Republic of Mali is authorized to carry out exchange transactions with the public. Purchases and sales of French francs and CFA francs are made by the Bank of the Republic at their respective parities. The official buying rate for the U.S. dollar is MF 244.50, and the selling rate is MF 245.50; for 16 additional currencies,2 official buying and selling rates also are fixed. Rates for other currencies are established separately for each operation. Bilateral payments agreements with 16 countries (see section on Prescription of Currency, below) provide for settlements of transactions covered by these agreements through accounts denominated either in Mali francs or in other specified currencies; rates for these specified currencies are unitary.

The Bank of the Republic is in charge of settlements covered by bilateral payments agreements. Settlements with other countries are made either directly with the countries concerned or through the intermediary of the Paris exchange market. The Bank of the Republic occasionally concludes with foreign banks forward exchange transactions on behalf of its customers.

Administration of Control

The Bank of the Republic has sole authority in exchange control matters; it exerts this authority through the Exchange Control Office, one of its departments. None of its exchange control powers has been delegated to any other bank or institution.

Licenses for imports are issued by the Ministry of Commerce and Transportation; those for imports of investment goods must be counter-signed by the State Ministry of Planning and Economic and Financial Coordination. Unless confirmed by the Bank of the Republic, import licenses do not constitute authorization for making payment for imports.

Prescription of Currency

Settlements on account of transactions covered by bilateral payments agreements are made in currencies and through accounts established under such agreements. Bilateral accounts with Bulgaria, Czechoslovakia, the U.S.S.R., and Viet-Nam are denominated in Mali francs; with Cuba, Eastern Germany, Poland, and Yugoslavia—in U.S. dollars; with Mainland China and the United Arab Republic—in pounds sterling; with Algeria—in Algerian francs; with Ghana—in U.S. dollars and pounds sterling; with Guinea—in Guinean francs and Mali francs; with Hungary—in French francs; with Morocco—in dirhams; with Senegal—in CFA francs and Mali francs.

There are no special prescription of currency regulations applicable to settlements with other countries; settlements with these countries that require individual licenses must be made in convertible currencies.

Nonresident Accounts

Exchange control regulations provide for two categories of non-resident accounts: (1) Free Nonresident Accounts in Convertible Currencies and (2) Nonresident Accounts in Mali Francs. The first category may be credited only with transfers from abroad of convertible currencies; the accounts may be used for all payments in Mali and for transfers abroad subject to the approval of the Bank of the Republic, which is granted freely. Transfers between these accounts are free. The second category may be credited with amounts due to nonresidents in Mali francs for rents, capital receipts, etc. Debits from these accounts may be made in accordance with the provisions of the exchange control regulations. All operations through these accounts require the approval of the Bank of the Republic.

Certain categories of nonresident funds in Mali francs of a capital or other nature are credited to special foreign accounts, which are de facto blocked.

Imports and Import Payments

Imports of a few commodities are prohibited for health, safety, and similar reasons. Imports of all other goods require individual licenses, which are issued in accordance with an annual import program that provides quotas for each import category. Licenses for imports from bilateral payments agreement countries are valid only for imports from those countries. Licenses for imports from other countries may be used to import from any of those countries. Licenses are valid for up to six months; however, if the need for a longer period is justified, they may be extended for three months.

The 1963 import program provided for total imports valued at MF 16.4 million; about two thirds were consumption goods, and one third, investment goods. Imports may be made either by private importers (whose share in total imports for 1963 was established at 40 per cent) or by state enterprises, among which the Société Malienne de l’Import-Export (SOMIEX) is by far the most important, having monopoly over the import of 11 items.3

The Ministry of Commerce establishes quarterly quotas for each private importer on the basis of coefficients, calculated for each importer by taking into account import fees paid by him, the number of his employees, and the number of branches operated by him. Import licenses are issued to the private importer up to the limits of the quarterly quotas accorded to him. In addition, private importers may import goods under the EXIC procedure (see section on Exports and Export Proceeds, below). Payments for imports may be made only when authorized by the Bank of the Republic, the import license being a document required for customs clearance.

Payments for invisibles

Payments for invisibles require individual licenses, which are issued on a restricted basis. Payments for expenses incidental to foreign trade are permitted when payment for the basic import transaction is authorized, or when the export transaction is permitted. Specified current payments are licensed up to established limits (e.g., percentages of salaries drawn by foreigners).

Income and profits from nonresident investments in Mali that are granted benefits under the special foreign investment law (see section on Capital, below) may be transferred in accordance with provisions of investment agreements concluded by the Government with individual nonresident investors. Foreign enterprises operating in Mali that are not granted the benefits of the special foreign investment law may transfer abroad only 25 per cent of their income or profits.

Residents of Mali may purchase foreign exchange up to the equivalent of MF 3,000 a day for official or business trips. This daily exchange allowance may be increased to the equivalent of MF 5,000 a day if the increase is justified by the high cost of living in the country to be visited. In exceptional cases, higher exchange allowances may be granted.

Nonresidents leaving Mali after a temporary stay may export foreign means of payment up to the amount declared upon entry into the country. They may also exchange Malian currency for foreign currency provided that they can prove the previous sale of such foreign currency to the Bank of the Republic or to an authorized agent. The export of Malian currency is prohibited.

Exports and Export Proceeds

Exports require individual licenses in order to assure the repatriation of export proceeds. The export of ground nuts, hides, skins, and meat, which constitute most of the controlled export trade, is reserved for state enterprises.

With the exceptions mentioned below, proceeds accruing from exports must be surrendered. At the time the export licenses are issued, exporters are required to make a deposit equal to 10 per cent of the value of the intended exports.

Under the EXIC (Exportation-Importation Concomitante) procedure, exporters of cattle and fish may use 50 per cent of their export proceeds for payment for their own imports made through regular official channels. For exports other than products covered by the monopoly of state trading companies, the percentage of retained export proceeds may be as high as 40 per cent. Balances on EXIC accounts and import rights under the EXIC procedure are not transferable.

Proceeds from Invisibles

Proceeds accruing from transactions in invisibles must be surrendered. The import of Malian currency is prohibited.

Capital

Residents of both foreign and Malian nationality may not make capital transfers on private account.

Foreigners leaving Mali permanently are permitted to transfer abroad (1) funds up to a total of six months’ salary, resulting from the sale of personal property that was in their possession for at least six months, and (2) savings out of their salary and income earned in Mali, provided that they have not taken advantage of transfer privileges in respect of their salary (see section on Payments for Invisibles, above). Funds specified under (1) and (2) may be transferred abroad in five equal annual installments.

Nonresident enterprises operating in Mali are permitted to transfer abroad in ten equal annual installments funds accruing from the partial or total liquidation of such enterprises. Funds mentioned in this and the preceding paragraph that are kept on special foreign accounts with the Bank of the Republic bear 3 per cent interest a year, which is transferable.

All or part of certain categories of funds in Mali francs owned by nonresidents must be used either to purchase 3 per cent 20-year bonds issued by the Bank of the Republic or to make investments that are approved by the Ministry of Planning. Proceeds from the amortization of bonds as well as interest on them may be transferred abroad.

According to Law No. 62 of January 15, 1962, the Government may grant special privilege status, providing for transfer, tax, and other preferential treatment, to nonresident investments that would be of special interest to the Malian economy and that are compatible with the goals of the Economic Plan. Under this law, each foreign investment is treated individually.

Preferential investment treatment may permit (1) the transfer of profits during a period not exceeding 15 years and the repatriation of proceeds accruing from the liquidation of an investment or (2) the transfer during a period to be established in each case of amounts that would include the value of investments and profits, the maximum yearly rate of which is also to be agreed. In the latter instance, an enterprise becomes the property of the Government without any indemnity, after the established period has lapsed.

Changes during 1963

January 25. Imports from EEC countries, as well as from countries with which Mali had concluded trade agreements providing most-favored-nation treatment, were exempted from customs duties.

June 8. Mali concluded a bilateral trade and payments agreement with Senegal.

June. Deposits required from exporters at the time of the issuance of export licenses were reduced to 10 per cent of the value of exports. Previously they had ranged from 10 per cent for exports valued up to MF 500,000 to 25 per cent for exports exceeding MF 5,000,000.

June. The Exportation-Importation Concomitante (EXIC) procedure was established. Under this procedure, exporters of specified products who repatriated their export proceeds were granted import licenses for the value of a part of the proceeds and were permitted to use this part of the proceeds to pay for their imports.

July 22. Mali concluded a bilateral payments agreement with Algeria.

Mauritania1

Exchange Rate System

No par value for the currency of Mauritania has been established with the Fund. The unit of currency is the CFA franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at rates resulting from the relation CFAF 1 = 0.02 French franc plus or minus a commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the other currency concerned, and include a commission.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by the commercial banks under the direction of the Exchange Office. Import and export licenses and certificates of importation are issued by the Department of Economic Affairs with the consent of the Exchange Office.

Prescription of Currency

Mauritania is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania through Rumanian Foreign Accounts in Bilateral Francs;3 those with all other countries in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Most imports from other countries are subject to licensing; they are admitted in accordance with an annual import program, determined each year by a joint French-Mauritanian Committee. Under this program, global quotas are established for imports from EEC countries other than France and for imports from most other countries outside the French Franc Area. The quotas fix the limits up to which import licenses are issued for specified commodities to licensed traders and to industrial or agricultural producers. For certain goods admitted without quantitative restriction, certificates of importation are issued.

The import license or certificate of importation entitles the importer to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank. Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses for the import of goods to be used directly by exporters are approved freely, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to countries in the French Franc Area; those to other countries are usually subject to the approval of the Exchange Office. However, authorized banks may, without prior authorization from the Exchange Office, sell foreign exchange for the following categories of invisibles: (1) expenses related to approved commercial transactions, such as transportation, sundry expenses, insurance; (2) various services, e.g., subscriptions, banking charges, rent, farm leases, support allowances paid under court decisions; (3) tourist travel up to the equivalent of CFAF 250,000 a person for each trip; and (4) any payment not exceeding the equivalent of CFAF 25,000. In addition, the Exchange Office authorizes freely the transfer of profits from foreign investments in Mauritania. Representation, advertising expenses, and business travel may be financed with funds from EFAC accounts (see section on Exports and Export Proceeds, below). Travelers to Dahomey, Ivory Coast, Niger, Senegal, Togo, and Upper Volta may take out, without limit, banknotes issued by any bank of issue within the French Franc Area. Travelers going directly to other countries in the Area may take out, without limit, banknotes issued by any bank of issue in the Area, with the exception of those issued by the BCEAO, for which the limit is CFAF 75,000. Travelers going to countries outside the French Franc Area may take out in banknotes or coins up to a maximum of F 750 in metropolitan francs, or up to 75,000 in CFA or CFP francs, or the equivalent of F 750 in notes and coins denominated in any French Franc Area currency other than the French franc. Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely. Goods that are not liberalized for export to all other countries require a license; those that are liberalized require an exchange commitment, which is subject to approval by the Exchange Office.

Export proceeds in currencies of countries outside the French Franc Area that are not used to make authorized payments abroad must be surrendered within three months from the date of their receipt. Exporters may, however, retain a specified percentage of export proceeds in special EFAC (Exportations-Frais Accessories) accounts, which may be used by the exporters themselves to pay for imports of raw materials or equipment needed in their own business, for representation and advertising expenses, or for business trips abroad.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 50,000 earned in those countries from foreign securities, must be collected, and they must be surrendered within one month of receipt.

Travelers from Dahomey, Ivory Coast, Niger, Senegal, Togo, and Upper Volta may bring in any amount of CFA banknotes issued by the BCEAO. Up to CFAF 75,000 in banknotes issued by the BCEAO may be brought in by travelers from other countries. All travelers may bring in any amount of banknotes and coins issued by a bank of issue of the French Franc Area other than the BCEAO, as well as any amount of banknotes and coins of countries outside the Area (except gold coins).

Capital

Capital movements between Mauritania and other French Franc Area countries are free of control; those between Mauritania and all other countries require approval.

The Investment Code (Law 61-122) enacted on June 26, 1961 provides for two kinds of preferential treatment for the establishment of specified companies in Mauritania: a priority regime and a long-term fiscal stability regime. Under the first regime, the proposed investment must amount to at least CFAF 75 million, to be made within a period of up to 2 years, and must provide employment for at least 20 persons. The benefits accorded under this regime include exemptions for a specified number of years from duties on the import of certain materials as well as from taxes on specified income. Under the second regime, certain companies considered to be of exceptional importance to the development of the country and making a minimum investment of CFAF 1 billion in less than 5 years are accorded special benefits, which consist mainly of the stabilization of some or all taxes for a period of up to 25 years.

Changes during 1963

No significant changes took place during 1963.

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 rates on December 31, 1963 were Mex$12.49 buying, and Mex$12.49125 selling, per US$1. There are no exchange restrictions on foreign payments. 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 nonresidents are imposed on importers, exporters, or others. In accordance with the payments agreement between the Bank of Mexico and the Spanish Foreign Exchange Institute, payments for transactions with Spain are recorded by the Bank of Mexico through a special account. Payments to Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua in respect of trade and invisibles may be settled in Mexican pesos through the Cámara de Compensación Centroamericana, a clearing house established by the central banks of Central America.

Imports and Import Payments

Payments and transfers abroad may be made freely. Payments for imports from Spain are recorded through a special account. For a considerable number of items, import licenses from the Ministry of Industry and Trade are required 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 specified commodities (mainly cotton) of an equivalent value. Imports by official Mexican agencies are subject to prior approval by the Committee of Public Sector Imports.

Payments for Invisibles

Payments for invisibles are not restricted. Transactions with Spain are recorded through a special account (see section on Prescription of Currency, above). The contracting of insurance 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 with. Mexican companies or with branches of foreign companies established in Mexico in accordance with Mexican law.

Exports and Export Proceeds

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

Proceeds from Invisibles

No exchange control requirements apply to proceeds from invisibles.

Capital

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

Changes during 1963

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

October 8. Following the establishment of clearing arrangements between the Bank of Mexico and the central banks of the Central American countries, payments to Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua in respect of trade and invisibles could be settled in Mexican pesos through the Camara de Compensación Centroamericana.

Morocco

Exchange Rate System

The par value is Moroccan Dirhams 5.06049 = US$1. The rate of the dirham in relation to the French franc is fixed at DH 1.025 per F 1. The Bank of Morocco’s buying and selling rates for the other currencies it negotiates1 are based on quotations in the leading foreign exchange markets. The rates of the Bank of Morocco for the U.S. dollar as at December 31, 1963 were DH 5.0150 buying, and DH 5.0302 selling, per US$1. Transactions in clearing dollars under bilateral payments agreements are carried out on the basis of the official par values declared to the International Monetary Fund. All sales and purchases of foreign currency are centralized in the Bank of Morocco, but the authorized banks are permitted to offset their foreign exchange transactions with their private customers. The authorized banks must sell to the Bank of Morocco each day the balance of their purchases and sales in each currency; compensation between banks is not permitted, so that no foreign exchange market exists in Morocco. The Bank of Morocco makes its own purchases and sales of foreign currency in the Paris exchange market. Forward exchange transactions are not permitted.

Administration of Control

Exchange control is administered by the Moroccan Exchange Office, an agency under the Ministry of Finance. This office has delegated the execution of certain exchange control measures to authorized banks. Import and export licenses are issued either by the Ministry of Commerce or by its provincial delegations; they must be countersigned by the Moroccan Exchange Office.

Prescription of Currency

Morocco is one of the territories of the French Franc Area. For prescription of currency purposes, countries are classified as follows: (1) the French Franc Area countries; (2) Rumania, with which France maintains a payments agreement that applies also to transactions with Morocco; (3) the payments agreement group, comprising countries with which Morocco maintains bilateral payments agreements;2 and (4) all other countries, the area of convertibility.

Settlements with other parts of the French Franc Area are made in French francs or, with the exception of settlements for imports and exports, in dirhams through French Franc Area Accounts (see section on Nonresident Accounts, below). Settlements with the payments agreement group are made by debiting or crediting the payments agreement accounts established for this purpose.3 Imports originating in countries in the area of convertibility may be paid for only in currencies negotiated by the Bank of Morocco (see footnote 1). Other settlements with countries in the area of convertibility may be made only in currencies negotiated by the Bank of Morocco or through Foreign Accounts in Convertible Dirhams.

Nonresident Accounts

The various types of nonresident accounts are as follows:

1. French Franc Area Accounts are held in Moroccan currency by residents of other countries of the French Franc Area. These accounts may be used for settlements with residents of other countries in the French Franc Area, except for the payment for imports from those countries.

2. Foreign Accounts in Convertible Dirhams are reserved for residents of countries in the area of convertibility. These accounts may be credited freely with authorized payments due to residents of countries in the area of convertibility (but not in respect of imports or related invisibles), and with dirhams obtained from the sale to the Bank of Morocco of convertible currencies negotiated by it, excluding banknotes. They may be debited freely for payments in Morocco and for purchases from the Bank of Morocco of the currencies negotiated by it, excluding Spanish pesetas and banknotes. Transfers between Foreign Accounts in Convertible Dirhams may be made freely.

3. Accounts of the Bilateral Payments Agreement Countries are held by the Bank of Morocco for central banks (or similar institutions) of the countries with which Morocco maintains its own bilateral payments agreements (see footnote 2); they are used only for settlements with these countries, including settlements for imports and exports. All transactions on these accounts require approval.

4. Capital Accounts, which may be held by any nonresident, are credited with funds that may not be transferred abroad. Transfers between Capital Accounts related to countries in the same currency group (the area of convertibility, the French Franc Area) or related to the same country in the payments agreement group are permitted freely. Subject to certain limitations, they may be debited for purchases of Moroccan securities on the Casablanca stock exchange; for subscriptions to the capital of Moroccan companies whose shares are quoted on the Casablanca stock exchange; for subscriptions to shares with a fixed long-term or short-term yield issued by a Moroccan entity; for custody charges and commissions on securities held for nonresidents; and for payment of the costs of maintenance repairs, taxes, and insurance on real estate located in Morocco. All other operations through Capital Accounts require individual licenses.

5. Tourist Accounts are designed mainly for the deposit of Moroccan banknotes held by nonresidents.

6. Nonresident Internal Accounts are intended mainly for foreign persons staying temporarily in Morocco or for Moroccan residents staying temporarily abroad. They may be used only for certain collections and certain payments in Morocco on behalf of the account holder. No transfers are permitted between Nonresident Internal Accounts.

7. Suspense Accounts are used for holding nonresident funds not available for credit to any of the accounts mentioned above. Balances on these accounts may be used freely to pay taxes due to the Moroccan authorities, but all other debits to these accounts require approval.

Imports and Import Payments

All imports, except those made through the post, must be domiciled (registered) with an authorized bank, which may make payments upon submission of the required documents.

With certain exceptions, an advance deposit of 25 per cent must be made by importers at the time the import transaction is domiciled with an authorized bank; the bank must pay half the deposit to the Bank of Morocco to be held for account of the Treasury. For most imports from other parts of the French Franc Area, the transaction must be domiciled one month before importation takes place. For imports from other countries, the transaction must be domiciled within a period of 15 days from the date that the Exchange Office approves the import authorization. The following are exempt from the advance deposit requirement: government imports; imports financed with U.S. aid; imports from countries in the payments agreement group; specified essential imports; and imports by specified organizations. The deposit is refunded when the import has taken place and payment is being made, or if the license is not used or the “import commitment” is allowed to expire.

Imports from other parts of the French Franc Area do not require import licenses; but for certain imports for which there are protective quotas, “quota certificates” are required. Payments for these imports may be made freely, upon presentation of an “import commitment” (engagement d’importation) to the authorized bank with which the transaction is domiciled, one month before the actual importation. This period of one month does not apply to imports of certain essential commodities or to government imports. Imports made and settled through postal channels are exempt from these requirements.

Imports from countries outside the French Franc Area require individual licenses. Commodities imported from countries in the area of convertibility are divided into two groups: List A, for which import licenses are issued up to the limit of importers’ needs, and List L, for which the issue of licenses is limited to the published quotas. Imports from countries in the payments agreement group are made in accordance with the quotas established in the respective trade agreements. Imports can also be licensed under EFAC arrangements (see section on Exports and Export Proceeds, below) and under compensation arrangements.

Payments for Invisibles

Payments for invisibles are authorized by the Exchange Office upon presentation of the necessary justification. The authorized banks are permitted to make payments and settle expenses incidental to the commercial transaction covered by the relevant import documents. Earnings on approved nonresident investments in Morocco are transferable to the investor’s country of residence, provided that appropriate provision has been made by the company concerned for payment of its contribution to the National Investment Fund. Some payments are subject to limitations: A foreign employee may transfer to his country of origin, subject to the approval of the Exchange Office, 50 per cent of his wages or salary if his family does not reside in Morocco, or 30 per cent if he is single or his family lives in Morocco. An allocation of foreign exchange equivalent to DH 500 a year is granted for tourist travel; this can be increased by DH 300 in Spanish currency if the tourist travels through Spain. Expenses incidental to business travel must normally be made by drawing on balances in EFAC accounts (see section on Exports and Export Proceeds, below). Barring this possibility, applications of the persons concerned must be directed to the Exchange Office. The allocation issued for business travel under the above conditions can be added to the allocation issued for tourist travel. For study abroad, a monthly allocation of foreign exchange up to DH 500 is granted. For family maintenance, there is a monthly allocation of DH 250. Travelers may take with them DH 300 in Moroccan banknotes for each trip, in addition to the exchange allocation.

Exports and Export Proceeds

Most exports may be made freely. Export licenses are required, however, for a few items.

All exporters must sign an undertaking to repatriate and surrender the foreign exchange proceeds of their exports. Collection of the proceeds must take place within a maximum period of one month from the date the payment is due. The date on which the payment is due is the maturity date fixed in the commercial contract; this date must not be set, in principle, more than 90 days after the date of arrival of the merchandise at the place of destination. When the bank receiving the funds that represent the proceeds from exports receives the advice of credit in foreign currency from abroad, it must surrender the foreign exchange immediately to the Bank of Morocco.

Exporters may retain 8 per cent of their proceeds in currencies other than those of the French Franc Area in EFAC (Exportations-Frais Accessoires) accounts. These accounts may be used to pay commissions to nonresident representatives and agents; advertising expenses abroad; for imports of raw materials, equipment goods, and other goods intended exclusively for the firm that holds the account, provided that a license is granted; and for business travel made on account of the export enterprise, with a limit of DH 1,000 for each trip. The use of balances on EFAC accounts for other purposes requires authorization. Every six months, 50 per cent of the outstanding balance on each EFAC account must be surrendered to the Bank of Morocco.

Proceeds from Invisibles

Residents of Moroccan nationality and Moroccan companies must repatriate exchange receipts accruing from all their noncommercial claims and surrender them to an authorized bank. Other residents must surrender noncommercial receipts only if the receipts arise from current transactions, and only when they accrue in foreign currencies other than those of the French Franc Area. Domestic and foreign banknotes may be brought in freely.

Capital

Residents of Moroccan nationality, as well as companies established in Morocco, are obliged to declare to the Exchange Office all foreign-held assets exceeding DH 250, and to repatriate and surrender certain of these assets. The disposal of other foreign-held assets requires permission. The transfer of capital abroad by residents must be approved.

Exchange is allocated to emigrants and repatriates up to DH 35,000 a person, and on account of dowries and inheritances up to the same amount.

Foreign investments in Morocco must be approved by the Exchange Office. Foreign investments approved by the Investment Committee are granted various tax and customs tariff benefits and investment bonuses similar to those granted to domestic investments, in accordance with measures put into effect on February 10, 1961; they are also granted a guarantee of repatriation of the proceeds from liquidation of the investment, when the investment has been financed either with convertible currencies or in conformity with the rules governing settlements with other countries. The Exchange Office may also grant a guarantee of retransfer of investments which are not examined by the Government Commission. The guarantee of repatriation is transferable between all nonresidents (if the investment has been financed with convertible currencies) and between nonresidents of the same country or currency area (if the investment has been financed with other currencies). Proceeds from the liquidation of other investments are credited to Capital Accounts.

All transactions in securities involving nonresident interests, as well as the import and export of securities, require approval.

Changes during 1963

March 29. The general import program for 1963 was published. As in 1962, the program comprised two lists of commodities: List A (Adaptable), for which import licenses would be issued to the extent of importers’ needs, and List L (Limitatif), for which the issue of import licenses would be restricted to the published quotas.

June. It was provided that imports of French Franc Area provenance had to be paid for in French francs purchased from the Bank of Morocco.

October 16. Foreign Accounts in Bilateral Dirhams were abolished.

November 1. Imports from countries other than the French Franc Area had to be domiciled within 15 days from the date that the Exchange Office approved the import authorization. Previously, the imports had to be domiciled before the application for an import license was submitted to the Ministry of Commerce.

Nepal

Exchange Rate System

No par value for the Nepalese Rupee has been established with the Fund. The official rate of exchange vis-à-vis the Indian rupee is NRs 160 = Rs 100, giving a relationship of approximately NRs 7.619 = US$1. Most of Nepal’s foreign exchange transactions are in terms of Indian rupees; but where other currencies are involved, the rates are based on the above relationship and the exchange rate for the other currency concerned against the Indian rupee. As at December 31, 1963, the rate for the U.S. dollar was NRs 7.60 buying NRs 7.68 selling.

Administration of Control

A Foreign Exchange Committee, consisting of representatives from the Nepal Rastra Bank and several ministries, prepares a foreign exchange budget for foreign currencies other than the Indian rupee. Permission is required from the Ministry of Finance for all foreign payments except payments for imports from India. Import licensing is the responsibility of the Ministry of Industry and Commerce.

Prescription of Currency

No prescription of currency requirements apply to outgoing payments, and these may be made in the foreign currency supplied by the Nepal Rastra Bank—in practice mostly Indian rupees, sterling, or U.S. dollars. The proceeds of exports to India are obtained in Indian or Nepalese rupees, and the proceeds of exports to other countries in a freely convertible currency or a currency mutually agreed upon. The exchange received from exports, other than Indian rupees, must be surrendered to the Nepal Rastra Bank. Nepal has a trade and payments agreement with Pakistan and a provisional payments arrangement with Mainland China.

Imports and Import Payments

All imports of goods except those of Indian origin require import licenses from the Ministry of Industry and Commerce. Imports of vegetables, vegetable oil, margarine, animal fat, beef, arms and ammunition, explosives, chemicals to be used for explosives, and wireless transmitters are prohibited. Under the Trade and Transit Treaty of September 11, 1960, Nepal and India agreed to freedom of trade between themselves in Nepalese and Indian goods; Indian goods may be imported freely, and imports of all commodities subject to excise duty in India benefit from reimbursement of tax by the Government of India to the Government of Nepal.

Applications to the Ministry of Finance for foreign exchange to pay for imports from countries other than India are considered on their merits; an application must, however, be in accordance with the annual foreign exchange budget and its list of commodities. Exporters entitled to import goods valued at a certain percentage of their export earnings in the preceding year are, within the limits of their entitlement and the exchange budget, granted a license automatically (see section on Exports and Export Proceeds, below).

Payments for Invisibles

Payments to India may be made freely in Indian or Nepalese rupees. Payments to other countries for invisibles related to commercial transactions are usually authorized; payments for freight and insurance are given the same treatment as the related import payments.

For travel to countries other than India for medical treatment, foreign exchange is allowed up to the equivalent of US$1,000; students studying at their own expense in these countries are allowed up to US$1,500 a year. Nepalese banknotes may be taken out freely. The maximum amount of Indian banknotes which a traveler may take out of Nepal is restricted to Rs 75. Additional amounts for travelers to India may be permitted by the Nepal Rastra Bank in the form of travelers checks. Banknotes of other countries may not be taken out by residents except with permission; nonresidents, however, may take out the unexpended amount of any they brought in.

Exports and Export Proceeds

Exports of old coins, gold and silver and coins and jewelry made of these metals, cows, buffalos, and rhinoceros horns are prohibited. The re-export to India of non-Nepalese goods is not normally permitted, and re-exports to any destination of kerosene, petrol, cement, iron bars, and packaged foodstuffs are prohibited. All other goods may be exported freely.

The exchange proceeds of exports, except Indian rupees, must be declared and surrendered to the Nepal Rastra Bank. However, a proportion of the total exchange surrendered by an exporter during the year is made available to him in the following year to pay for imports; this proportion varies between 35 and 75 per cent, the percentage increasing with the amount of exchange surrendered.

Proceeds from Invisibles

No conditions are attached to foreign exchange proceeds derived from invisibles. Nepalese and foreign banknotes may be brought in freely, except that not more than Rs 75 in Indian banknotes may be brought in.

Capital

No conditions are laid down concerning receipts and remittances in respect of capital transactions, but official exchange is not normally provided for capital remittances by Nepalese nationals.

Foreign investors in Nepal who obtain an investment guarantee may remit yearly profits of at least 10 per cent of the capital invested and, in any one year, up to 25 per cent of the principal. Industrial enterprises capitalized at US$65,000 or more may be wholly owned by foreign interests. Nepal has a bilateral Investment Guarantee Agreement with the United States.

Changes during 1963

March 21. The maximum amount of Indian banknotes which a traveler could bring into or take out of Nepal was restricted to Rs 75. However, additional amounts for travelers to India could be permitted by the Nepal Rastra Bank in the form of travelers checks.

April 12. The Industrial Enterprises Act of 1961 was amended in order to make investment in Nepal more attractive to foreigners. The amended law permitted industries capitalized at US$65,000 or more to be wholly owned by foreign interests. Better conditions with respect to taxation and the retention of foreign currency accrued from exports were laid down for these industries. Full or partial exemption from export and import duties could be authorized by the Government.

June 4. The Investment Guarantee Agreement with the United States, which was concluded on May 17, 1960 and guarantees against inconvertibility, expropriation, and war risk, was extended to cover losses from revolution and insurrection.

June 17. The Foreign Exchange Regulation Act of 1962 was enforced in the Kathmandu Valley and 20 urban areas of the country. The Act outlawed transactions in foreign currencies by persons other than license holders, without prior permission from the Nepal Rastra Bank.

July 4. The rates of duty on a number of goods imported from countries other than India and Tibet were reduced considerably. The reductions ranged from 50-75 per cent on such commodities as medicines, hosiery, shoes, tanned leather, canned meat and fish, bicycles, and iron and steel rods. The rates on cars, trucks, and buses were also reduced. Thus, rates were brought closer to those imposed on imports from India and Tibet.

August 16. To increase the use of Nepalese rupees, accounts in Indian rupees with the Nepal Bank (the commercial bank) were converted into accounts in Nepalese rupees, in accordance with the enforcement of the Foreign Exchange Regulations Act of 1962. The conversion was made at the rate of NRs 160 = Rs 100. Banks and authorized dealers were given permission for currency-exchange-business only.

Netherlands

Exchange Rate System

The par value is Netherlands Guilders 3.62 = US$1. The official limits are f. 3.59¼ buying, and f. 3.64¾ selling, per US$1, at which rates the exchange authorities stand ready to deal; the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for other currencies vary between limits that result from combining the official limits for the U.S. dollar maintained by the Netherlands and such limits in force in the country of the other currency concerned.

Authorized banks are permitted to buy and sell convertible currencies1 and to sell inconvertible currencies, both spot and forward for up to 12 months’ delivery, against convertible currencies, including guilders on Convertible Guilder Accounts. Forward exchange contracts by authorized banks for more than 12 months require individual licenses, which are granted freely. The authorized banks may also purchase inconvertible currencies from banks abroad against any foreign currency or guilders on a Convertible Guilder Account or a Bilateral Guilder Account (see section on Nonresident Accounts, below), provided that the amounts bought are used for current payments. Residents are permitted to conclude spot transactions with other residents, including authorized banks, and they may conclude forward transactions for up to 12 months’ delivery with authorized banks.

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.

The Kingdom of the Netherlands accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Exchange Control Territory

All transactions with the Netherlands Antilles 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 the 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. Practically all commercial banks are authorized 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 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.

All foreign countries except Indonesia and the U.S.S.R. are included in 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 countries in this area 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); however, receipts may also be collected in other currencies provided that the amounts received are deposited with an authorized bank and are only used for current transactions. Transactions with Indonesia and the U.S.S.R. are settled in guilders by crediting or debiting the Bilateral Guilder Account of a banking institution of the country concerned; receipts 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 guilder accounts are as follows:2

1. Convertible Guilder Accounts. These accounts may be held by any nonresident. They may be credited with transfers from other Convertible Guilder Accounts, with permitted payments by residents of the Netherlands to residents of the convertible guilder 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 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 Indonesia and the U.S.S.R., and are used for the settlement of transactions between the Netherlands and the respective country. They may be credited with transfers from any Convertible Guilder Account or from another Bilateral Guilder Account of the same country, and with proceeds from the sale in the Netherlands of gold or convertible currencies. They may be debited for transfers to another Bilateral Guilder Account related to the same country.

3. K Accounts. These accounts may be held by all nonresidents, regardless of nationality. 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, with transfers from Convertible Guilder Accounts or with funds which may be credited to Convertible Guilder Accounts, with transfers from other K Accounts, and with proceeds from the sale of securities. K Accounts may be debited for purchases of securities, for transfers to any other K Account, and for purchases of foreign currencies. 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 residents’ sales of foreign securities to nonresidents).

Imports and Import Payments

Import licenses are required only for imports from the Sino-Soviet area, Hong Kong, and Japan, and for the import of goods of unknown origin and of a limited number of products mainly from the agrarian sector.

Payments for imports may be made freely, provided that the method of payment conforms with the general prescription of currency regulations.

Payments for Invisibles

Payments abroad for invisibles are permitted freely. Exchange for travel is provided up to the countervalue in the appropriate currency of f. 3,000 for trips lasting up to two weeks, and the entire allowance may be taken, if the traveler wishes, in Netherlands banknotes. For longer visits, exchange equivalent to f. 150 a day will be provided for further periods up to 75 days, making an additional allowance of f. 11,250 a person. A resident traveler abroad may have, in addition to the aforementioned amounts, the equivalent of f. 1,500 remitted to him through banking channels. Payments for interest, dividends, and contractual amortization due to nonresidents are permitted freely by crediting the appropriate nonresident account.

Nonresidents may export all unutilized negotiable instruments and foreign and Netherlands banknotes and coins which they have imported or have obtained in the Netherlands by drawing on their accounts or exchanging other currencies.

Exports and Export Proceeds

Export licenses are required only for a few commodities, mostly of a strategic character, and for some agrarian products.

The surrender of export proceeds is not obligatory; but any surrender that is made must be at the official rate. The collection of export proceeds is obligatory.

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. 500 derived from current invisibles, the recipient must indicate to an authorized bank the nature of the underlying transaction, as well as the amount and currency received.

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, to an authorized exchange office, or, in the case of foreign banknotes, to an authorized depository, or they may be used to pay tourist expenses in the Netherlands. Residents are obliged to bring back to the Netherlands any unutilized portion of the banknotes and coins which they were entitled to take with them on their outward journey.

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 are granted for most types of capital transaction.

New capital investments in the Netherlands by nonresidents are in general permitted, if made in convertible currencies. All authorized capital transactions, other than transactions in securities, take place at the official exchange market rates. All payments for 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 to pay residents for transactions in securities.

Residents may buy foreign securities from, or sell them to, other residents. Residents may sell securities abroad against any foreign currency. 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 securities officially quoted either in the Netherlands or abroad.

Nonresidents may have their securities, Netherlands or foreign, exported to them, except securities held in W-deposits (see footnote 2).

Emigrants may avail themselves of the same facilities as travelers (see section on Payments for Invisibles, above), i.e., export up to f. 14,250 for each person. Emigrants acquire the status of nonresidents upon leaving the Netherlands, provided that they have declared their intention to settle abroad for more than three years; they may then have remitted to them the total of their assets in the Netherlands.

Changes during 1963

January 22. Residents were permitted to receive in currencies other than the convertible currencies payments in respect of claims which under the normal prescription of currency should be collected in convertible currencies, provided that the amounts received were deposited with an authorized bank and were used only for current payments.

Netherlands Antilles

Exchange Rate System

The par value is Netherlands Antilles Guilders 1.88585 = US$1. Exchange transactions between commercial banks and the public take place at Ant. f. 1.87 buying, and Ant. f. 1.89 selling, per US$1, plus a tax of Ant. f. 0.015 per US$1 on sales of exchange, making the effective selling rate for the U.S. dollar Ant. f. 1.905 per US$1. The selling rates for other currencies (mainly Netherlands guilders and pounds sterling) are set from time to time on the basis of the rates for the U.S. dollar in the Netherlands and the United Kingdom.

Administration of Control

Exchange licenses, where required, are issued by the Foreign Exchange Control Board. The commercial banks have authority to provide foreign exchange for practically all current transactions.

Prescription of Currency

Payments may be made in any currency except Netherlands Antilles guilders. Receipts may be accepted in any convertible currency except Netherlands Antilles guilders. For statistical purposes, all payments made by the authorized banks in foreign exchange must be reported to the exchange control.

Imports and Import Payments

Licenses are required only for imports of certain luxury goods. These licenses must be obtained from the Foreign Exchange Control Board and are, as a rule, valid for five months, although in some cases they may be extended for a further three months. Payments for permitted imports may be made freely.

Payments for Invisibles

Payments related to foreign trade, current payments on account of services and short-term banking and credit facilities, and remittances for family maintenance, medical care, education, etc., may be made freely through the authorized banks. For payments representing interest on loans or net income from other investments, and for amortization of loans or depreciation of direct investments, licenses are granted on application, subject to verification of the facts.

Nonresidents may take with them on departure foreign currency which they brought in on arrival. The export of Netherlands Antilles banknotes is limited to Ant. f. 100 a person, or Ant. f. 200 a person for those leaving by a ship of the Royal Dutch Steamship Company.

Exports and Export Proceeds

All exports require licenses, which are usually granted. Exchange proceeds must be surrendered to an authorized bank.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered to an authorized bank.

Travelers may bring with them checks or letters of credit in Netherlands Antilles currency, and checks, letters of credit, or notes in foreign currency, in unlimited amounts. Each traveler may also bring in Ant. f. 100 in Netherlands Antilles banknotes, or Ant. f. 200 when arriving by a ship of the Royal Dutch Steamship Company.

Capital

Foreign investment in the Netherlands Antilles requires a license, which is, in general, granted if the investment is in the economic and social interests of the islands.

Life insurance contracts between residents and foreign insurance companies for a minimum term of ten years are licensed freely up to an amount which is fixed annually, depending on the foreign exchange position (in 1962, such contracts were permitted up to US$25,000 a person).

Investments by individual residents in officially quoted foreign securities are licensed freely up to amounts fixed annually, depending on the foreign exchange position (in 1962, these investments were permitted up to US$15,000 a person). In considering applications by other residents for such investments, the Foreign Exchange Control Board takes into account the merits of each case and, in particular, the limited opportunity for domestic investment.

Changes during 1963

No significant changes took place during 1963.

New Zealand

Exchange Rate System

The par value is New Zealand Pound 1 = US$2.7809. Official rates are fixed for transactions in sterling (telegraphic transfers): £NZ 100/7/6 buying, and £NZ 101/-/- selling, per £ stg. 100. Except for the Australian pound, the rates for spot transactions in other currencies quoted by the New Zealand trading (commercial) banks are based on the closing buying and selling rates of the previous day in London. The rate for the U.S. dollar as at December 31, 1963 was US$2.7921 buying, and US$2.7605 selling, per £NZ 1.

The trading banks are also permitted to conclude with their customers forward exchange transactions for up to six months to cover genuine trade transactions. These forward transactions are at freely determined rates, except that rates for forward sterling are the relative spot rates adjusted by 1/10 of 1 per cent a month for the period of the contract. Cover for longer periods may be arranged in special cases if approved by the Reserve Bank of New Zealand.

Administration of Control

Exchange control is administered by the Reserve Bank of New Zealand under powers delegated to its Governor by the Minister of Finance. The Reserve Bank in turn has given discretionary authority to the trading banks in New Zealand to approve applications for certain remittances of funds overseas. Import and export licensing is the responsibility of the Customs Department.

Prescription of Currency

New Zealand is a member of the Sterling Area and has prescription of currency requirements similar to those in force in other parts of the Sterling Area. Payments to and from other parts of the Sterling Area may be made in any Sterling Area currency except New Zealand pounds. Authorized payments to countries outside the Sterling Area may be made in sterling to the credit of an External Account or in any non-Sterling Area currency, and the proceeds of exports to countries outside the Sterling Area may be received in sterling from an External Account, in any specified currency,1 or in any other currency freely exchangeable for sterling. The accounts in New Zealand pounds of overseas banks may also be used for the settlement of transactions with countries in the currency area of the overseas bank concerned.

Nonresident Accounts

The New Zealand exchange control regulations do not provide for special treatment for the accounts of residents of other countries. However, the accounts in New Zealand pounds of overseas banks may be used for the settlement of transactions with other countries. Banks in other parts of the Sterling Area generally do not maintain accounts in New Zealand, and their remittances to and from New Zealand are made through the London offices of banks in New Zealand.

Imports and Import Payments

Imports are controlled through an Annual Import Licensing Schedule, which groups imports into different categories to which various import procedures are applied. The import categories included in the Schedule for July 1, 1963-June 30, 1964, as revised, are as follows: Category “E” includes petroleum, lubricating oils, certain other raw materials, and printed books which may be imported without license. Category “A” goods are licensed up to 75 per cent of the 1962-63 import licenses, with provision for further licenses against actual needs. A “Basic” category comprises items for which licenses are granted by reference to a previous licensing period. Category “C” licenses are granted on an individual basis on such criteria as essentiality, availability, and price. Category “D” includes items for which licenses are issued only in exceptional circumstances. Category “T” permits token imports of specified items. All licenses issued are available for imports from any source at the applicant’s discretion.

Under a special arrangement which has been in force since 1951, private individuals holding certain overseas funds are permitted to import goods for their own personal use under “no-remittance import licenses.” Motorcars are the principal import under this arrangement. Under an extension of this arrangement, specified overseas funds owned by private individuals and business concerns may, on application, be used to finance commercial imports of motorcars and other items on the Import Licensing Schedule, subject to the condition that 20 per cent of the applicant’s funds which qualify under the scheme be repatriated through the banking system.

Payments for Invisibles

The commercial banks are permitted to sell exchange for payments up to established limits for many categories of invisibles, subject in appropriate cases to the submission of justifying documents. Payments beyond the established limits, and for categories not included in the commercial banks’ permitted list, require the specific approval of the Reserve Bank; applications must be supported, where appropriate, by justifying documents. For nonbusiness travel to any part of the world, there are travel allowances of up to £NZ 600 for each adult in any period of 12 months (the allowance being calculated on the basis of £NZ 6 a day for each day spent on land) and of up to £NZ 420 for each child under 12 years of age (the daily allowance being £NZ 4/4/–). An additional amount of up to £NZ 400 (£NZ 280 for children) in foreign exchange is granted to persons who have not traveled abroad in the preceding five years. Larger amounts of exchange for business and other similar travel are authorized at the discretion of the Reserve Bank.

Travelers to the United Kingdom may take with them up to £NZ 15 in New Zealand currency, of which £NZ 5 may be in coins; for travelers to any other country, the limit is £NZ 7, of which £NZ 2 may be in coins. Banknotes taken out may not be in denominations larger than £NZ 1.

Exports and Export Proceeds

With minor exceptions, all exports require export licenses. These are issued by the Customs Department and ensure that the net export proceeds will be surrendered to a trading bank in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

Disposal of currencies other than those of the Sterling Area, except by transfer to New Zealand through the banking system, requires the consent of the Reserve Bank. No control is exercised over the disposal of receipts of Sterling Area currencies derived from invisibles.

Travelers may bring into the country unlimited amounts of foreign banknotes and coins and local currency. Foreign banks are permitted to remit for exchange, within certain limits, New Zealand banknotes and coins purchased by them from New Zealand travelers.

Capital

There is no restriction on capital receipts. However, to be eligible for repatriation, capital must have been initially transferred to New Zealand through normal banking channels or in some other way approved by the authorities, such as imports of plant or machinery. Capital so transferred, including capital gains and capitalized profits, may be repatriated, after the formal approval of the Reserve Bank has been obtained. Overseas companies seeking to commence business in New Zealand require the approval of the Minister of Finance.

Remittances on account of legacies up to £NZ 750 from the estate of a New Zealand resident in any 12-month period are approved by the trading banks. Remittances of legacies for larger amounts and all other outward capital remittances require the approval of the Reserve Bank.

Transactions in non-sterling securities owned by New Zealand residents require the approval of the Reserve Bank.

Changes during 1963

March 20. The Import Licensing Schedule for July 1963-June 1964 was announced. It maintained the 1962-63 level of £NZ 250 million for import payments. Printed books were included in the “E” (exempt) category; 91 commodities were added to the “A” category; the “MC” category was eliminated, with the result that uniform treatment was accorded to import licensing of motor vehicles from dollar and nondollar sources; the number of items in the “D” category was reduced by 68.

June 17. Liberalization measures providing for the importation of some 12,500 motor vehicles having a value of £NZ 4.75 million were announced.

June 17. The extension of the commercial “no-remittance” scheme on a continuing basis was announced.

July 22. The remaining discrimination between the Sterling Area and non-Sterling Areas in respect of remittances for maintenance purposes and/or gifts was eliminated.

August 6. It was announced that New Zealand would change over to a 10-shilling decimal currency unit on July 11, 1967.

October 13. It was announced that non-Sterling Area currencies and securities held by New Zealand residents would no longer have to be offered to the Reserve Bank. The sale, transfer, or other dealings in such currencies or securities would, however, still require the consent of the Reserve Bank.

Nicaragua

Exchange Rate System

The par value is Nicaraguan Córdobas 7.00 = US$1. All exchange transactions take place at the official rates of C$7.00 buying, and C$7.0525 selling, per US$1.

Administration of Control

The control system is administered by the Central Bank of Nicaragua, which by law has the sole authority to buy and sell foreign exchange. This authority has been delegated to the commercial banks, and the Central Bank deals with the public only to the extent that it accepts deposits in foreign currency, and for purposes of monetary control. Certain agencies are also authorized to buy and sell foreign exchange; but they may sell exchange only for payments for invisibles. The Central Bank is responsible for classifying imports and determining the advance deposits required.

Prescription of Currency

There is no prescription of currency, but the customs authorities have the power to prohibit an export if the currency stipulated for payment is not readily convertible into U.S. dollars in international markets. Payments to Costa Rica, El Salvador, Guatemala, and Honduras in respect of trade and invisibles may be settled in Nicaraguan córdobas through the Cámara de Compensación Centroamericana, a clearing house established by the central banks of Central America to foster the process of economic integration of their countries. Payments to Mexico may also be settled in Nicaraguan córdobas through the clearing house.

Imports and Import Payments

All importers are required to be registered. There are two categories of registered importers: those who are permitted to import any kind of merchandise and those who may import only for their own industrial needs. Import licenses are not required, but import transactions must be registered with the Central Bank. Imports of certain types of footwear are prohibited, except footwear manufactured in countries signatory to the General Treaty for Central American Economic Integration.

For the purpose of advance deposit requirements, imports are listed in three categories on the basis of essentiality. For items on List II, the importer must deposit in domestic currency 40 per cent of the c.i.f. value, and for items on List III (comprising all goods not included on Lists I and II), 100 per cent. The deposits must be made prior to the shipment of the merchandise. The commercial bank that receives the deposit must immediately transfer it to the Central Bank. When the goods reach Nicaragua and the importer makes payment, the deposit at the Central Bank is released. No deposit is required for items on List I. In addition, advance deposits are not required for (1) imports by the Government or autonomous state institutions, (2) imports from the other signatories to the General Treaty for Central American Economic Integration (Costa Rica, El Salvador, Guatemala, and Honduras), and (3) imports for certain investment projects made under an Industrial Development Law.

Payments for imports must be made with exchange purchased from banks.1 Payments are usually made by sight draft, prepayment, or letter of credit. The Central Bank may also authorize deferred payment or payment with funds derived from properly authenticated credits obtained abroad, provided that the imports are goods not subject to the advance deposit requirement, or are capital goods, irrespective of the list in which they have been classified, intended for development or production or for basic works complementary to production.

Payments for Invisibles

Payments for invisibles are not subject to license, and may be made freely. Domestic and foreign currency notes may be exported freely.

Exports and Export Proceeds

Export licenses are not required, but a declaration to the customs authorities must be completed for statistical purposes. The exchange proceeds of exports do not have to be surrendered; however, they may not be used to pay for imports (exchange for which must be purchased from a bank, with the exception noted in footnote 1). For certain agricultural exports (live cattle, beans, rice, corn, and cottonseed), the Ministry of Economy can fix minimum export prices or can temporarily prohibit their export in order to avoid domestic shortages.

Proceeds from Invisibles

The surrender of foreign exchange derived from invisibles is not required. Domestic and foreign currency notes may be imported freely.

Capital

Remittances on account of foreign capital and capital transfers by residents and nonresidents may be made freely under the general provisions of the Exchange Law of March 1, 1963 or under the Law on Foreign Investments of February 26, 1955 (effective March 11, 1955). Under the 1955 law, foreign investments approved by the Central Bank and registered are guaranteed the following privileges: repatriation of the registered capital; transfer of earnings, profits, or interest on the capital; and re-exportation of goods imported for investment.

Changes during 1963

March 1. The exchange system was unified by permitting all transactions to be settled freely at the official market rates, which previously had applied only to approved transactions. As a result of this unification, the free exchange market previously used for some invisibles and some capital transactions virtually disappeared. The surrender requirements applied to foreign exchange receipts were eliminated.

October 8. Following the establishment of clearing arrangements between the central banks of the Central American countries and the Bank of Mexico, payments to Mexico could be settled in Nicaraguan córdobas through the Cámara de Compensación Centroamericana.

Niger1

Exchange Rate System

No par value for the currency of Niger has been established with the Fund. The unit of currency is the CFA franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at. rates resulting from the relation CFAF 1 = 0.02 French franc plus or minus a commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

Administration of Control

Exchange control is administered by the Exchange Office. Foreign exchange transactions are handled by the commercial banks under the direction of the Exchange Office. Import licenses and certificates of importation are issued by the Ministry of Finance and Economic Affairs, with the approval of the Exchange Office.

Prescription of Currency

Niger is a member of the French Franc Area, and settlements with other countries of the French Franc Area are made in any currency of that Area. Settlements with the United Arab Republic are made through a special account under the terms of the payments agreement concluded with that country. Settlements with all other countries are usually made through banks in France: those with Rumania—with which France maintains a payments agreement that applies also to transactions with Niger—through Rumanian Foreign Accounts in Bilateral Francs;3 with all remaining countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from countries outside the French Franc Area are usually limited to capital and other goods that are considered essential to the economy and cannot be obtained at a reasonable cost from the French Franc Area. Such imports are admitted in accordance with an annual program which is determined each year by a joint French-Niger Committee. Under this program, global quotas are established for imports from EEC countries other than France and for imports from most other countries outside the French Franc Area. The quotas fix the limits up to which import licenses are issued. For certain goods without quantitative restriction, certificates of importation are issued.

The import licenses or certificates of importation entitle importers to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank. Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses for the import of goods to be used directly by exporters may be issued, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely; those to other countries are subject to the approval of the Exchange Office. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when the basic transaction has been approved. Payments for many other invisibles are subject to administrative decision. Residents traveling to countries outside the French Franc Area may obtain an exchange allocation of an amount equivalent to CFAF 175,000 a year for each person. Any balances of foreign exchange remaining after return to Niger must be surrendered. The transfer of the entire salary of a foreigner working in Niger is permitted upon presentation of the appropriate pay voucher, and provided that the transfer takes place within three months of the pay period. Residents may, upon presentation of appropriate documents, send to relatives abroad up to CFAF 37,500 a month as family assistance or gifts. Payments for study abroad may also be authorized upon presentation of appropriate documents. Representation, advertising expenses, and business travel may be financed with funds from EFAC accounts (see section on Exports and Export Proceeds, below). Travelers to Dahomey, Ivory Coast, Mauritania, Senegal, Togo, and Upper Volta may take out, without limit, banknotes issued by any bank of issue within the French Franc Area. Travelers going directly to other countries in the French Franc Area may take out, without limit, banknotes issued by any bank of issue in the French Franc Area, with the exception of those issued by the BCEAO for which the limit is CFAF 75,000. Travelers going to countries outside the French Franc Area may take out in banknotes or coins up to a maximum of F 750 in metropolitan francs, or up to 75,000 in CFA or CFP francs, or the equivalent of F 750 in notes and coins denominated in any French Franc Area currency other than the French franc.

Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses for nonliberalized products and a foreign exchange commitment for liberalized products.

Export proceeds in currencies of countries outside the French Franc Area that are not used to make authorized payments abroad must be surrendered within one month from the date of their receipt. Exporters may, however, retain 10 per cent of their foreign currency proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts, which may be used by the exporters for imports of raw materials or equipment needed in their own businesses, for representation and advertising expenses, or for business trips abroad.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due from residents of other countries in respect of services, and all income exceeding the equivalent of CFAF 25,000 earned in those countries from foreign securities, must be collected, and they must be surrendered within one month of receipt. Travelers from Dahomey, Ivory Coast, Mauritania, Senegal, Togo, and Upper Volta may bring in any amount of CFA banknotes issued by the BCEAO. Travelers from other countries may bring in up to CFAF 75,000 in banknotes issued by the BCEAO. All travelers may bring in any amount of banknotes and coins issued by a bank of issue of the French Franc Area other than the BCEAO, as well as any amount of foreign banknotes and coins of countries outside the French Franc Area (except gold coins). The import of Guinean and Malian currency is prohibited.

Capital

Capital movements between Niger and other French Franc Area countries are free of control; those between Niger and all other countries require approval.

The Investment Code of July 12, 1961 provides for preferential status that may be granted to new enterprises in industry, agriculture, real estate, and, in some cases, commerce, when such investments are deemed to be of value to national development. Three preferential regimes are established: A, B, and C. The most liberal benefits are offered by Regime C, which is applicable to enterprises or industries of particular importance for the implementation of Niger’s economic and social development plan. This regime provides for stabilization of part or all of taxes and other state-imposed costs for a period of from 10 to 20 years. Regimes A and B grant many of the same benefits but for a much shorter period, with a maximum of 10 years. Repatriation of profits from, and proceeds from the liquidation of, foreign investments are subject to the exchange regulations of the French Franc Area.

Changes during 1963

February 1. Law No. 63-6 modified certain provisions of the Investment Code of July 12, 1961 and made the repatriation of profits from, and proceeds from the liquidation of, foreign investments subject to the exchange regulations of the French Franc Area. Henceforth, uniform standards would be applied to the repatriation of such funds. Under the original law, the conditions and terms of such repatriation were specified individually by the Niger authorities for each enterprise financed by foreign capital.

July 2. A bilateral payments agreement with the United Arab Republic came into force.

September 16. The Government published a decree in which import licensing was subjected to a more rigorous policy intended to reduce the increasing deficits in the balance of payments with countries outside the French Franc Area. The new provisions stipulated that (1) imports from countries outside the French Franc Area would be authorized only for capital and other essential goods, and (2) imports of other goods would not be authorized if it were possible to import them from countries within the French Franc Area, at a reasonable cost.

Nigeria

Exchange Rate System

The par value is Nigerian Pound 1 = US$2.80. The Central Bank of Nigeria notifies the authorized dealers of the rates at which it is prepared to buy and sell pounds sterling; these rates are £100/2/6 buying, and £99/15/– selling, per £N 100. The Central Bank publishes daily spot rates for U.S. dollars, based on London market quotations. Premiums and discounts on forward exchange transactions are left to the interplay of market forces.

Authorized dealers may buy any foreign currency for spot delivery. When dealing in currencies other than U.S. dollars, sterling, or any other Sterling Area currencies, authorized dealers normally base the transactions on rates for sterling or U.S. dollars. They may freely sell any Sterling Area currency on a spot basis for payments to residents of the Sterling Area, except that payments to any destination related to the repatriation of capital, to compensation transactions, to the purchase of foreign securities, to the transfer of profits, or to stakes in football pools and other betting arrangements require the approval of the Minister of Finance. Authorized dealers may sell spot all other currencies for approved payments.

Authorized dealers may enter freely into contracts with residents of Nigeria for the purchase or sale of any foreign currency for delivery at a future date, provided that the transaction is one that would be acceptable on a spot basis (see above) and that, where a currency other than a Sterling Area currency is involved, the transaction relates to a firm commercial contract for the import or export of goods or to freight charges on a specific shipment of goods, and is expressed as payable in a foreign currency. Forward contracts related to imports from countries outside the Sterling Area must not extend more than six months beyond the expiration date of the import license, or beyond the date of import where the license has no expiration date or no license is required. Forward contracts related to exports to countries outside the Sterling Area may cover any necessary period, provided that payment for the goods is to be received within six months of shipment, or such longer period as may have been authorized.

Administration of Control

The Federal Minister of Finance is responsible for basic exchange control policy and for approving applications for the following: the repatriation of capital and transfer of profits to any country outside Nigeria; the raising of external loans, including repayment of such loans; borrowing in Nigeria by companies controlled directly or in-directly from outside Nigeria; the granting of “approved status” to nonresident investments in Nigeria; and any dealings in foreign securities. The Central Bank of Nigeria is the principal administrator of the exchange control. Some commercial banks are authorized by the Minister of Finance to deal in foreign currencies and to approve applications in accordance with instructions issued by the Central Bank. Any application which does not fall within the scope of the authority of these authorized dealers must be submitted to the Central Bank, or, for the transactions mentioned above, to the Ministry of Finance.

The administration of trade controls is carried out by the Federal Minister of Commerce and Industry.

Prescription of Currency

Nigeria is a member of the Sterling Area, and settlements between residents of Nigeria and residents of other Sterling Area countries may be made freely in sterling or any other Sterling Area currency (except for those transactions for which exchange control approval is required). Authorized payments to countries outside the Sterling Area may be made in sterling to the credit of an External Account or in any non-Sterling Area currency. The proceeds of exports to countries outside the Sterling Area may be received in sterling or Nigerian pounds from an External Account, or in the currency of any country outside the Sterling Area which is freely exchangeable for Nigerian pounds or sterling; an exception is payment for exports of rubber, which must be received in Nigerian pounds from an account with an authorized dealer in Nigeria.

Nonresident Accounts

Accounts in Nigerian pounds of persons resident outside Nigeria are divided into two categories: Scheduled Territories Accounts, maintained for persons permanently resident in a country within the Sterling Area, and External Accounts, maintained for residents of all other countries.

Scheduled Territories Accounts may be credited with authorized payments by residents of Nigeria, with transfers from other Scheduled Territories Accounts and from External Accounts, and with proceeds from sales of foreign currencies, i.e., all currencies except Nigerian pounds. They may be debited for payments to residents of Nigeria, for transfers to other Scheduled Territories Accounts, and for purchases of sterling or other Sterling Area currencies for approved purposes.

External Accounts may be credited with authorized payments by residents of Nigeria to residents of countries outside the Sterling Area, with transfers from other External Accounts, and with proceeds from sales of foreign currencies other than Sterling Area currencies. They may be debited for payments to residents of Nigeria, for transfers to other External Accounts and to Scheduled Territories Accounts, and for purchases of foreign currencies other than Sterling Area currencies.

Imports and Import Payments

The import of certain goods is prohibited for health, safety, moral, or religious reasons. Certain imports (altogether about 20 commodities or groups of commodities) are also prohibited unless specific conditions have been complied with; these conditions are specified in the licenses authorizing such imports. Most other commodities may be imported under open general license. Individual import, licenses are, however, required for the following: (1) imports from all countries of petroleum products, gold, gold chloride, and other gold products, tin ore and by-products of tin, cement, and products the export of which is subject to Marketing Board control in Nigeria (see section on Exports and Export Proceeds, below); (2) imports from the dollar area of all items under (1), above, and also secondhand clothing, sugar (beet and cane, refined); coal, coke, and briquettes; (3) imports from Japan of all items under (1), above, and of sugar (beet and cane, refined), all textile materials, fishing nets, cargo nets, cordage, cable, rope, twine, blankets, traveling rugs, and clothing; (4) all imports from Mainland China, Eastern Germany, Hong Kong, North Korea, the Republic of Korea, Rumania, South. Africa, South West Africa, and Yugoslavia; (5) imports of wheat and sugar from countries which are not parties to the International Wheat and Sugar Agreements.

Authorized dealers may grant foreign exchange for all authorized imports where documentary evidence of importation is available, except for advance payments when the approval of the Central Bank is required.

Payments for Invisibles

Payments for invisibles to residents of other Sterling Area countries may be made freely, provided that the underlying transaction does not involve any interest outside the Sterling Area, except that payments to any destination related to profits or to participation in football pools or other betting arrangements, or which take the form of compensation deals, require approval from the Minister of Finance.1

Payments for invisibles to residents of countries outside the Sterling Area are subject to individual approval, but this is granted freely by the authorized dealers for many categories of invisibles. Applications for payments that are not approved by the authorized dealers are forwarded to the Central Bank, which gives approval freely provided that tax and other requirements have been satisfied. However, as mentioned above, certain applications require approval from the Minister of Finance.

Residents going to any country in the Sterling Area may buy unlimited amounts of foreign exchange for travel purposes. For travel outside the Sterling Area, £250 a year in foreign exchange may be sold to residents by authorized dealers. In addition, travel agents and shipping and airline companies in Nigeria may sell transportation tickets and vouchers for certain services (e.g., hotel accommodations, meals en route) for anywhere in the world against payment in Nigerian currency.

Persons going abroad are permitted to take with them £50 in sterling or Nigerian banknotes. Residents are permitted to take the equivalent of their basic allowance of £250 for travel outside the Sterling Area in foreign currency notes; nonresident visitors may take out the amounts they brought into Nigeria in foreign currency notes.

Exports and Export Proceeds

Most locally produced goods may be exported freely, under open general license, to any country except South Africa and South West Africa (exports to these two countries require individual licenses). Individual export licenses are required for exports of cigarettes and tobacco, columbite, tin and by-products of tin, tantalite, unrefined gold, petroleum products, goods made wholly or partly of imported components, and products covered by the Central Marketing Board Ordinance (e.g., cocoa, cotton, cottonseed, benniseed, groundnuts, groundnut oil, palm oil, and palm kernels). The export of certain goods (African antiquities or works of art produced before 1918, objects that are being used or have been used in African ceremonies) is prohibited, except under prescribed conditions. The export of explosives, other than industrial explosives, is also prohibited.

Export proceeds obtained in specified currencies2 must be surrendered to an authorized dealer in Nigeria or in the United Kingdom within six months from the day of shipment. For goods valued at more than £1,000 f.o.b. and destined for a country outside the Sterling Area, the exporter is required to submit an exchange control declaration at the time of shipment.

Proceeds from Invisibles

Receipts from invisibles in specified currencies (see footnote 2) must be offered for sale to an authorized dealer. Persons entering Nigeria may bring in freely foreign and domestic banknotes.

Capital

Except for the purpose of financing imports or exports, permission from the Minister of Finance is required for any individual, firm, company, or branch resident in Nigeria to borrow in any country outside Nigeria. Nonresidents intending to make direct investments in Nigeria are invited to apply to the Minister of Finance for “approved status,” the granting of which means that sympathetic consideration will be given to future requests to repatriate the capital. The granting of “approved status” is not applicable to the purchase of shares on the stock exchange in Nigeria unless this forms an integral part of the approved investment project. The repatriation of foreign capital requires approval from the Minister of Finance.

The permission of the Minister of Finance is also required for borrowing in Nigeria (1) by any nonresident individual or company, (2) by any company registered in Nigeria (other than a bank) which is controlled directly or indirectly from outside Nigeria, or (3) by any branch in Nigeria of a nonresident company (other than a bank). However, to enable entities mentioned under (2) and (3) to meet temporary shortages of funds, licensed banks in Nigeria may grant loans or overdrafts for periods not exceeding 14 days, or may increase the amount of any advance or overdraft by the amount of loan interest or bank charges payable thereon. General permission is also given for any loan, bank overdraft, or other credit facility to be arranged to finance Nigerian imports or exports of goods.

Residents of Nigeria may not deal in foreign currency securities nor may they buy from or sell to nonresidents any security payable in Nigerian pounds. Residents of Nigeria are not obliged to deposit their foreign securities with banks in Nigeria.

The capital proceeds of securities registered in Nigeria and owned by nonresidents may be collected and negotiated through authorized dealers, provided that prior permission of the Minister of Finance is obtained.

Changes during 1963

April 17. An initial par value for the Nigerian pound of £N 1 = US$2.80 was established with the International Monetary Fund.

August 1. Payment for exports of rubber had to be received in Nigerian pounds from an account with an authorized dealer in Nigeria.

August 22. Imports of textile fabrics and allied products from Japan were made subject to specific import licensing procedure.

September 26. The import under open general license of goods originating in Hong Kong was not permitted.

Norway1

Exchange Rate System

The par value is Norwegian Kroner 7.14286 = US$1. The official limits for the U.S. dollar are NKr 7.09 buying, and NKr 7.20 selling, per US$1—rates at which the exchange authorities will buy or sell; the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for most Western European currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Norway and such limits in force in the country of the other currency concerned. Forward premiums and discounts are left to the interplay of market forces.

Administration of Control

Import and export licenses, where required, are generally issued by the Ministry of Commerce. However, import licenses are issued by the Ministry of Agriculture for most agricultural goods; export licenses for fish and fish products are issued by the Ministry of Fisheries. Imports and exports of precious metals, and of semimanufactured articles thereof, are licensed by the Bank of Norway. 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 make payments freely for imports not requiring an import license and for most invisibles. Payments for goods that require a license must, in general, be approved by the Ministry of Agriculture (for most agricultural goods), the Ministry of Commerce (for other goods), or the Bank of Norway (for precious metals, invisibles, and capital).

Prescription of Currency

For prescription of currency purposes, foreign countries are divided into two groups: the bilateral area2 and the convertible area (all other countries). Settlements with a country in the bilateral area must be made in the manner prescribed in the relevant payments agreement. Settlements with countries in the convertible area may be made in any convertible currency, including Norwegian kroner on Convertible Krone Accounts (see section on Nonresident Accounts, below).

Nonresident Accounts

The main type of nonresident account 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 to countries in the convertible area, with transfers from other Convertible Krone Accounts, and with proceeds from the sale in Norway of convertible currencies. They may be debited for authorized payments from the convertible area to residents of Norway, for transfers to other Convertible Krone Accounts, and for purchases in Norway of any foreign currency.

Nonresident-owned capital that may not be transferred abroad is deposited in Capital Accounts. These accounts may be used by the holder for expenses in Norway, such as personal taxes, insurance premiums, and traveling expenses, as well as for direct investments, upon approval, and for investments 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 which, according to the general rules or specific permission, is transferable abroad may be credited to a Convertible Krone Account.

Imports and Import Payments

Practically all goods may be imported freely from the free list area3 upon presentation of the original invoice. Import licenses are required only for the few items on the list of nonliberalized commodities,4 and for goods on two special lists—one applicable to imports from Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, and the U.S.S.R.; the other applicable to imports from Japan, many of which are licensed automatically.

Four of the six commodities on the nonliberalized list are also on a global quota list, permitting them to be imported, up to certain limits, from any country. Sugar is subject to bilateral quotas, while specialized and secondhand ships are licensed freely, provided that certain regulations (requiring in principle that such purchases be fully financed by foreign loans with maturities of at least five years from the date of delivery) are complied with. A small number of imports are prohibited for health and similar reasons, and certain goods (some grains, alcoholic beverages, equipment and materials for the fishing industry, pharmaceutical products, and drugs) are imported by government monopolies.

If no license is required, or when an import license has been obtained, payment may be made 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. Payments for invisibles to a country in the bilateral area must be made in the manner prescribed in the relevant payments agreement, a liberal practice being followed with regard to most invisibles.

The basic exchange allowance for tourist travel abroad is equivalent to NKr 3,500 a year for each adult and NKr 1,750 a year for each child under 12 years of age. For business travel, the banks may sell reasonable amounts. Each person leaving Norway may take with him up to a maximum of NKr 350 in Norwegian banknotes and coins, in denominations not exceeding NKr 100. Nonresidents leaving Norway may, in addition, export any foreign banknotes brought into the country by them.

Exports and Export Proceeds

Most goods may be exported freely to countries in the convertible area, against a declaration or a license, which is granted automatically. Exports subject to regulation are listed and require export licenses.

Payments must be received within 12 months of shipment and 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 bring in Norwegian banknotes and coins, in denominations not exceeding NKr 100, up to a maximum of NKr 1,000, and other means of payment without limit.

Capital

Inward transfers of capital and investments in Norway by non-residents must be approved by the Bank of Norway. Outward transfers of capital require individual licenses; the granting of these licenses depends on the merits of the case. Licenses for outward transfers of proceeds from the sale or liquidation of investments made in Norway by nonresidents are granted freely, and nonresident capital may be repatriated automatically. Payments for contractual amortization are also permitted freely. Norwegian securities purchased by nonresidents from Norwegian residents by special permission may be resold to Norwegian residents who will be granted licenses for the transfer of the proceeds from the sale.

Inheritances and dowries may be transferred freely to OECD countries. Emigrants are granted the equivalent of US$5,000 a person, in addition to the tourist allowance; an emigrant may transfer an additional US$5,000 one year after emigration and any remaining assets upon being declared a nonresident. Gifts to relatives are permitted up to US$5,000 a year for each recipient. Repatriation of personal capital of foreign nationals changing their country of residence is permitted.

Most transactions in securities involving nonresident interests are subject to approval.

In general, resident-owned capital assets abroad, other than securities, real estate, and other authorized investments, 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.

Changes during 1963

January 1. The basic exchange allowance for tourist travel was increased from NKr 2,000 to NKr 3,500 a year for each adult, and from NKr 500 to NKr 1,750 for each child under 12 years (instead of under 16 years) of age. For business travel, the banks were allowed to sell exchange in reasonable amounts, and the previous limits of NKr 200 and NKr 300 a day were removed.

January 1. In accordance with a trade agreement with Japan (concluded in September 1962), a special list applicable to imports from Japan was introduced, listing the goods for which import licenses would be required. Since goods not listed could be imported freely, about two thirds of imports from Japan were thereby liberalized. Japan was included in the global quota area.

January 1. Some commodities, including hydrogenated oils and fats, reconstituted wood, bathtubs, household refrigerators and deep freezers, television sets, and certain items of furniture, were removed from the list of nonliberalized imports.

January 1, The obligation that 75 per cent of coffee imports should originate in Brazil was lifted.

April 30. The bilateral payments agreement with Hungary was terminated.

July 1. The global quota list was made applicable to all countries.

November 15. Imports of coffee were liberalized.

December 31. The bilateral payments agreement with Rumania was terminated.

Note.—The following change became effective on January 1, 1964:

Some commodities (wood charcoal, oakum of true hemp, and oakum of jute) were removed from the list of nonliberalized imports.

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. As at December 28, 1963, market rates for telegraphic transfers on London were 1s. 6132d. buying, and 1s. 53132d. selling, per rupee, and on New York they were PRs 4.7425 buying, and PRs 4.7925 selling, per US$1. Other effective rates arise from the negotiation of bonus vouchers which certain exporters and a few Other earners of exchange may sell at freely determined rates to importers who need them in order to obtain import licenses for various commodities. As at December 28, 1963, these bonus vouchers were quoted at rates around PRs 159.25 per PRs 100 of nominal value.

Administration of Control

The State Bank of Pakistan has delegated to 30 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. Applications for import licenses are submitted through these commercial banks.

Prescription of Currency

Pakistan is a member of the Sterling Area, and the prescribed methods for settling both trade and nontrade transactions are similar to those of most other Sterling Area countries.

Exchange receipts must be obtained through an authorized dealer. 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 dealer. 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. For imports, payment is made to the country of origin of the goods.

No exchange control is exercised over transactions with Afghanistan, and settlements are made in Pakistan rupees or afghanis. Trade transactions under “barter” agreements are settled through special accounts in inconvertible currencies. Trade with Nepal in specified commodities is settled through a clearing account maintained in inconvertible 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 require licenses, except goods imported by the Central Government for defense or other purposes, 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 specific country licenses are issued in accordance with trade, aid, or loan agreements with particular countries. Import licenses are issued on a c. & f. basis to established commercial importers and industrial consumers and for commodities specified in the semiannual import program. Applications for licenses are not required from established importers, and the quantities to be imported by them are determined by the authorities on an historical basis. However, various other import procedures exist for the different industries and categories of commodities: (1) The “automatic” licensing procedure allows importers of specified commodities to apply for another license when an earlier license has been partly or fully utilized. (2) The “Open General License” procedure, applicable to specified commodities and groups of commercial importers (mostly small ones), provides for the issue of licenses for stated amounts. (3) The “request” procedure allows a number of specified industries to estimate their own import needs; licenses are issued to certain industries for the quantities requested, and up to a maximum related to imports of the previous 6 months to the others. (4) Under the “barter” arrangements concluded with foreign governments or with concerns abroad, licenses are issued for specified items.

Import licenses are also issued under the Export Bonus Scheme. The holder of a bonus voucher (entitlement to import) must apply within a month (12 months for imports of heavy machinery and equipment) of the receipt of the voucher for the issue of an import license for any of the items eligible under the Export Bonus Scheme. This license is issued without restriction and without the importer having to be registered. Import licenses issued against bonus vouchers are valid for 6 months from the day of their issue, except for imports of heavy machinery and equipment, for which the period may be extended up to 24 months.

Where a valid import license is held, the required exchange is released by an authorized dealer. The license holder may make payment by opening a letter of credit or by remitting a sight draft. Remittances are not normally permitted before shipping documents are received, but in special cases, e.g., machinery and other capital goods for which deposits have to be made with foreign manufacturers, the State Bank may authorize advance payments for a part of the value of the goods.

Payments for Invisibles

Payments for invisibles are controlled by the State Bank and require licenses. Under authority delegated to them, authorized dealers may sell exchange or make remittances in accordance with detailed regulations. Certain remittances of a personal nature are subject to annual quotas, but most are approved at the discretion of the State Bank. Separate regulations govern payments to India and Burma for such purposes as family maintenance. Remittances by Pakistan nationals to their families abroad require special authorization.

Payments for invisibles connected with imports are generally given the same treatment as that accorded the underlying trade transaction. Transport insurance must, except with respect to certain aid shipments, be taken out with insurance companies in Pakistan.

The remittance of dividends declared out of current profits is allowed freely to foreign shareholders where the investment was made with the Government’s approval.

Tourist travel is restricted to a limited number of persons a month (and to one trip every three years for any one person) for each specified geographic area, but there is an annual allowance for pilgrims to Saudi Arabia. Exchange for business travel, medical treatment, students’ expenses, and sponsored cultural trips may be granted on an individual basis. Exporters may use a limited percentage of their entitlements under the Export Bonus Scheme for business travel or for opening and maintaining branch offices outside Pakistan. All Pakistan nationals may, once a year, receive up to £ stg. 300 for travel against the surrender of a corresponding amount of bonus vouchers.

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. Individual permission is required for the export of other currencies. Persons traveling on Category “A” visas (to India) may not take out any Pakistan currency notes or coins.

Exports and Export Proceeds

Exports of most commodities are allowed freely. However, export licenses are required for 21 listed items, as well as for certain types of sports goods and a few other items below minimum export prices, and for mill-made cotton piece goods and ready-made garments intended for export to the United Kingdom.

The State Bank exercises control over exchange receipts and requires a declaration by the exporter that, when payment in accordance with the prescribed method is received, he will surrender the exchange within a certain period of time. After making certain that the exporter’s declaration meets all conditions, the authorized dealer certifies the shipment. Exporters are obliged to collect and surrender export proceeds from India within two months and from other sources within four months.

There is an Export Bonus Scheme applicable to exporters of all goods other than the following major items: raw jute; raw cotton; hides and skins, including lambskins but excluding furs and reptile skins; wool, including wool waste; rice, excluding superior varieties (namely, basmati, parmel, and begmi); and tea. After surrendering all their exchange receipts for local currency, exporters of other primary products, by-products, semimanufactured goods, including unfinished cotton piece goods and manufactured goods involving simple manufacturing process, are issued bonus vouchers of a value equivalent to 20 per cent of the net exchange surrendered, while for exports of fully manufactured goods the percentage is 40. For certain commodities, however, the bonus percentages are as follows: cotton yarn, 15; jute manufactures, 20; tobacco, 30; fresh fruits and potatoes, 35; and chromite and manganese ores, 40. Exporters must apply to the State Bank within 45 days of the retirement of bills of exchange relating to exports made under the scheme for the issuance of bonus vouchers. These vouchers are freely transferable and entitle the holder to import a wide range of specified commodities.

Proceeds from Invisibles

With the exception of Afghan currency, which may be retained, incoming foreign exchange derived from invisibles must be surrendered at the official rate within one month. Pakistanis who are either employed or carrying on business abroad are entitled to receive bonus vouchers equivalent to 30 per cent of all remittances of savings made by them to their relatives in Pakistan; earners of foreign exchange from certain services (aircraft repairs, salvage operations, and ship repairs) are entitled to receive bonus vouchers equivalent to 20 per cent of the net foreign exchange earned by them; and earners of foreign exchange from shipping are entitled to receive bonus vouchers equivalent to 30 per cent of their exchange earnings. The vouchers recorded in all cases are freely transferable and entitle the holder to import a wide range of specified commodities. Under the Bonus Scheme for Hotels, hotels are entitled to receive import licenses, equivalent to 20 per cent of their earnings from foreign tourists on account of board and lodging, for a number of items required by the hotel industry.

The facility of the Bonus Scheme applies also to Indus Basin contracts; all suppliers are entitled to bonus vouchers equivalent to 30 per cent of the foreign exchange earned from machinery items and 20 per cent from all other supplies.

Persons traveling on Category “A” visas (from India) may not bring in any Pakistan currency notes or coins. Other travelers may bring in PRs 80 in Pakistan currency notes, subject to declaration to the customs, and Rs 5 in coins that are legal tender in India. There is no limitation on the import of other currency notes, but they must be declared to the customs on entry.

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. It is, however, expected that local rupee expenditure will ordinarily be met from local equity 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.

Foreign nationals in Pakistan or abroad may register their investments in National Prize Bonds issued by the Government of Pakistan, and thus facilitate repatriation at any time of the principal and prize winnings.

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, other than Indian nationals, are permitted to sell foreign securities upon approval by the State Bank, provided that 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 1963

February 12. The regulation on bonuses under the Indus Basin contracts was amended. Henceforth, all suppliers would be entitled to bonuses equivalent to 30 per cent of the foreign exchange earned from machinery items and 20 per cent from all other supplies.

August 31. The limited payments agreement with India expired. Except for the outstanding balance and for payments for imports for which licenses had been issued under the agreement, all settlements with India were to be made in the manner applicable to other Sterling Area countries.

September 1. A Bonus Scheme applicable to incoming remittances from Pakistanis working abroad was introduced. Under this arrangement, Pakistanis who were either employed or carrying on businesses abroad were entitled to receive bonus vouchers equivalent to 30 per cent of all remittances of savings made by them to their relatives in Pakistan either through a bank or through post offices in foreign countries. These vouchers would have validity similar to those granted under the Export Bonus Scheme. The Scheme does not apply to remittances by Pakistanis employed with international organizations, to students/trainees, or to other persons who receive foreign exchange quotas from Pakistan.

September 9. The bonus applicable to foreign exchange received from shipping was raised to 30 per cent.

October 16. The bonus applicable to foreign exchange earnings from tobacco exports was raised to 30 per cent.

November 29. The bonus applicable to foreign exchange earnings from manganese ore exports was raised to 40 per cent.

Panama

Exchange Rate System

The par value is Panamanian Balboa 1.00 = US$1. U.S. currency notes and coins circulate freely in Panama, and local currency is represented only by limited amounts of silver balboas 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.

Administration of Control

Most import licenses are issued by the Ministry of Agriculture, Commerce, and Industry. The licensing of exports subject to export taxes is administered by the Ministry of Finance and Treasury. Other export licensing is the responsibility of the Ministry of Agriculture, Commerce, and Industry.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

Import licensing applies mainly to imports of foodstuffs. Quotas are imposed on imports of 43 commodities competing with domestic production. Other imports are free. Payments abroad may be made freely.

Exports and Export Proceeds

Authorization is required for exports of coffee in any form, coconuts, copra, and beef cattle. Merchandise on which export taxes are imposed are also subject to licensing. Export taxes are imposed on the following: gold, silver, and platinum; manganese; other minerals; bananas; coconuts; scrap metals; pearls; animal wax; nispero gum; ipecac root; and rubber. Exports of wheat flour, firearms, and ammunition are prohibited. The proceeds of exports are not subject to exchange control.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

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

Changes during 1963

No significant changes took place during 1963.

Paraguay1

Exchange Rate System

On March 1, 1956, a par value for the Paraguayan Guarani was established by Paraguay with the Fund. However, exchange transactions no longer take place at rates based on that par value. Exchange transactions take place at free market rates, which since October 1960 have been $ 123.60 buying, and ₲ 126.00 selling, per US$1. Settlements with Spain are made through a clearing account at a fixed rate of ₲ 125.00 per US$1. All purchases and sales of foreign exchange must be made through the commercial banks, except those related to government payments for imports and services, which are carried out through the Central Bank. The making available of foreign exchange by the banks has at times been subject to delay.

Administration of Control

The Central Bank of Paraguay supervises the foreign exchange transactions carried out by the commercial banks.

Prescription of Currency

Settlements with Spain under a bilateral payments agreement with that country must be made through a clearing account maintained in terms of U.S. dollars. Otherwise, there are no prescription of currency requirements.

Imports and Import Payments

Imports of a few commodities are temporarily prohibited.2 All other imports are free of quantitative restriction and licensing. Imports of certain commodities are subject to an advance deposit of 100 per cent of the f.o.b. value, which is retained for a minimum of 120 days, or if the deposit is made after the date of shipment, 180 days, or for nonexempted commodities imported through the Spanish free zone in Paraguay, 90 days. Advance deposits are not required for government imports, imports by diplomats and by certain international organizations, imports from Argentina, Bolivia, Brazil, and Uruguay, certain Spanish goods imported through the Spanish free zone in Paraguay, and imports from LAFTA countries of items included in the Paraguayan concession list.

Surcharges, calculated on the c.i.f. value, are payable on most imports even if no foreign exchange payment takes place, as follows: petroleum fuels, 15 per cent; wheat, 19 per cent; other imports, 24 per cent. Imports of construction material are subject to an additional charge of 1 per cent. These surcharges are collected by the banks 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. The following are exempt from surcharge: imports for the Government, for diplomats, and for certain international organizations; imports from Argentina, Bolivia, Brazil, and Uruguay; Spanish agricultural and industrial machinery and implements imported through the Spanish free zone in Paraguay; and imports from LAFTA countries of certain items included in the Paraguayan concession list.

Imports on credit for a term of more than six months require approval from the Central Bank.

In principle, exchange is freely available to pay for all imports, but in practice there may be a delay in the actual making available of such exchange.

Exports and Export Proceeds

Certain exports require licenses, in order to assure domestic supplies. The proceeds of exports must be collected and the exchange sold to a commercial bank. With the exception of a number of agricultural and forestry products, exports are subject to a tax in guaranies of 7½ per cent of the value of the goods.

Payments for and Proceeds from Invisibles

There are no requirements imposed on exchange payments for, or exchange receipts from, invisibles, but the making available of exchange for such payments may at times be subject to delay.

Capital

There are no requirements imposed on capital receipts or payments by either residents or nonresidents, but the making available of exchange for capital payments may at times be subject to delay.

Changes during 1963

January 4. By Decree No. 26470, the import of certain commodities, including edible oils (exclusive of olive oil), rice, sugar, confectionery, cigarettes, portland cement, hides, matches, and certain items of clothing and footwear, was temporarily suspended.

April 1. By Decree No. 27753, the Paraguayan Government placed an additional charge of 1 per cent on imports of all kinds of construction materials (i.e., about 70 items). This surcharge was in addition to the 24 per cent surcharge placed on the c.i.f. value of most imports. Construction materials which appear on lists negotiated with the LAFTA were exempted from both surcharges.

June 27. Act No. 116, Resolution No. 6, required commercial banks to surrender 15 per cent of their foreign exchange income to the Central Bank in order to provide foreign exchange for the import of oil products.

October 18. The import of potatoes was temporarily prohibited.

October 22. The ban on the import of various foods and of articles for personal use included in the list of imports temporarily suspended in January 1963 was rescinded, for the most part. For articles still on the prohibited list see footnote 2.

November 12. The import of onions was temporarily prohibited.

December 30. Exemptions and concessions to meat packing industries were extended for a period of one year.

Note.—On February 21, 1964, the ban on the import of potatoes and onions was rescinded.

Peru

Exchange Rate System

On December 18, 1946, a par value for the Peruvian Sole was established by Peru with the Fund. However, exchange transactions no longer take place at rates based on that par value. All exchange transactions are settled through the exchange market, in which the rate on December 31, 1963 was S/. 26.82 per US$1. There are no restrictions on foreign payments. Peru accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

Imports are permitted freely, except imports from Eastern Europe (excluding Czechoslovakia) and Mainland China. Exchange for payments abroad may be obtained freely in the exchange market.

Exports and Export Proceeds

Exports are not subject to license, and no control is exercised over export proceeds.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

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

Changes during 1963

February 26. Many of the import surcharges imposed in 1958 on items for which the import duties are bound under the GATT were abolished.

April 30. Some other import surcharges on items for which the import duties are bound under the GATT were abolished.

June 10. The remaining import surcharges on items bound under the GATT were abolished.

November 25. Under Law No. 14729, surcharges at a rate of 10 per cent ad valorem were established on imports. However, some imports (e.g., basic food items, medicines, fertilizers, insecticides, industrial machinery, and certain household appliances that do not compete with similar domestic items) were exempt from this surcharge.

Philippines

Exchange Rate System

The par value is Philippine Pesos 2.00 = US$1. A fluctuating rate applies to all exchange payments and to all receipts other than 20 per cent of proceeds from merchandise exports. To this 20 per cent the par value rate of ₱ 2.00 per US$1 applies, resulting in a mixing rate of approximately ₱ 3.51 per US$1 for total export proceeds. On December 31, 1963, the fluctuating rate averaged ₱ 3.89 buying, and ₱ 3, 91 selling, per US$1.

Administration of Control

The few remaining exchange controls are administered by the Central Bank of the Philippines. The Central Bank may issue circulars and directives to the authorized agent banks on the basis of policy decisions reached by its Monetary Board.

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, pounds sterling, deutsche mark, Swiss francs, Canadian dollars, French francs, Italian lire, or Netherlands guilders.

Imports and Import Payments

With the exception of advance deposit requirements, which apply to less essential commodities, and the prohibition of certain agricultural imports for protective reasons, there are no restrictions on imports. Before goods can be cleared through the customs, the importer must present a release certificate issued by the Central Bank through an authorized agent bank to show that any required advance deposit has been paid. The percentages of advance deposits required vary according to the degree of essentiality of the imports, viz., 25 per cent for semiessential producer goods; 75 per cent for nonessential producer goods and semiessential consumer goods; and 100 per cent for non-essential consumer goods and unclassified items. Advance deposits must accompany the import letter of credit; they must be retained for at least 120 days as time deposits, or in the form of government notes, securities, or bonds, with banks, which must keep 100 per cent of these amounts with the Central Bank. The advance deposit requirements apply both to imports covered by letters of credit opened by the banks and to “no-dollar” imports (financed by importers’ own exchange), the only exceptions being imports under the U.S. aid program and imports by local industries of raw materials to be used in their own operations. Imports not subject to the advance deposit requirements can be financed by means of documents against payment or documents against acceptances not exceeding 90 days.

Payments for Invisibles

Payments for all invisibles may be made freely. Travelers may take out any amount of foreign or domestic currency.

Exports and Export Proceeds

Exports are not in general 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 and items deemed essential for industrialization and economic development are prohibited.

The proceeds of all exports must be obtained in U.S. dollars, pounds sterling, deutsche mark, Swiss francs, Canadian dollars, French francs, Italian lire, or Netherlands guilders. As a general rule, no commodity may be exported unless it is covered by a draft drawn in one of these currencies and unless collection of the proceeds will be undertaken by an authorized agent bank; however, payment by means of telegraphic transfer, check, or mail transfer may be allowed. Payments for exports on a cash, collection, or consignment basis must be arranged through an authorized agent bank, which must specifically contract with the exporter to buy the exchange proceeds. Export proceeds must be surrendered to an authorized agent bank: 20 per cent at the par value rate and 80 per cent at the free market rate.

Proceeds from Invisibles

The free market rate is applied to all receipts from invisibles. Travelers may bring in any amount of foreign or domestic currency.

Capital

There are no restrictions on capital movements. The banks may request applicants for exchange for capital transfers to complete a special form prescribed by the Central Bank.

Changes during 1963

No significant changes took place in 1963.

Portugal

Exchange Rate System

The par value is Portuguese Escudos 28.75 = US$1. Transactions in pounds sterling with the public by the Bank of Portugal and authorized banks take place at fixed exchange rates of Esc 80.17 buying, and Esc 80.83 selling, per £ stg. 1. Exchange rates for the U.S. dollar and other quoted currencies1 are based on these buying and selling rates for the pound sterling and on the exchange rate of the quoted currency in London. For settlements with countries with which Portugal has bilateral payments agreements,2 the U.S. dollar rate applies to transactions in “agreement dollars” and fixed exchange rates apply to other agreement currencies.

Authorized banks may deal in foreign exchange with the Bank of Portugal. They are also allowed to deal in foreign exchange with banks abroad at the rates prevailing in the Portuguese foreign exchange market. In dealing with their customers, the authorized banks buy and sell foreign exchange in convertible currencies for their own account; their purchases and sales of bilateral agreement currencies are made for the account of the Bank of Portugal. Banks are required to obtain the prior approval of the Bank of Portugal to accept deposits in foreign currencies and to obtain short-term credits abroad.

There is no forward exchange market in operation in Portugal, but authorized banks may enter into forward transactions with individual customers. The exchange rates for these transactions may not be higher than the spot buying rate or lower than the spot selling rate.

Exchange Control Territory

Portugal and the Portuguese overseas territories constitute a single exchange control territory, the Portuguese Monetary Area. The exchange control regulations of Portugal are for the most part applied uniformly throughout the Area, and current payments between the various territories are made freely through multilateral clearing accounts.

Administration of Control

Exchange controls are administered by the Ministry of Finance and the Bank of Portugal, with the assistance of the commercial banks authorized for this purpose.

Trade control policy is formulated by the Commission of Economic Coordination in the Ministry of Economy. A Directorate-General of Commerce in the Ministry of Economy administers the trade control; import and export licenses (“bulletins”) are issued by the Department for Licensing Foreign Trade, operating within the Directorate-General’s office. Licenses for imports of certain goods are issued by professional associations.

Prescription of Currency

Transactions with countries with which Portugal does not have bilateral payments agreements may be settled in any of the currencies quoted by the Bank of Portugal (see footnote 1) or, for Portuguese exports, in escudos to the debit of a demand foreign account in escudos (see section on Nonresident Accounts, below). Transactions with countries with which Portugal has bilateral payments agreements (see footnote 2) are settled through clearing accounts maintained in U.S. dollars, escudos, or the currency of the partner country.

Nonresident Accounts

The main categories of nonresident accounts are as follows:

“Foreign Accounts in Escudos” in the name of persons resident or domiciled in countries with which Portugal does not have bilateral payments agreements or arrangements: These accounts are divided into (1) “Time Foreign Accounts in Escudos,” for which the opening, debiting, and crediting are subject to special advance authorization of the Bank of Portugal, and (2) “Demand Foreign Accounts in Escudos,” which may be opened, debited, and credited without prior authorization of the Bank of Portugal for (a) payments for transactions expressed in escudos and duly authorized in that currency, for imports and exports of goods, services, and capital between metropolitan Portugal and foreign countries, (b) purchases or sales of escudos against the foreign currencies quoted by the Bank of Portugal, and (c) transfers between these accounts. For all other debit and credit operations, authorization of the Bank of Portugal is required.

The granting of credit in the form of overdrafts on the above accounts for periods of one year or less requires the authorization of the Bank of Portugal. For periods longer than one year, authorization is required from the Inspectorate-General of Credit and Insurance with the agreement of the Bank of Portugal.

“Foreign Accounts in Escudos” in the name of persons resident or domiciled in countries with which Portugal has bilateral payments agreements or arrangements: These accounts are opened, debited, and credited according to instructions issued by the Bank of Portugal.

There are also provisions for resident and nonresident accounts in foreign currencies, but these accounts are of limited importance.

Imports and Import Payments

Imports of certain products are prohibited, mainly for sanitary reasons, for the protection of public order and morals, and for the prevention of trade frauds. Any physical or juridical entity may be an importer, the only requirement being that the importer pay income taxes regularly.

Most imports consigned from and originating in the Portuguese overseas territories are free of restriction. In exceptional cases, a registration procedure is applied, for payment control purposes. Controls are also exercised to ensure that goods originating in Soviet bloc countries do not enter Portugal via Macao. Imports of certain products, such as sugar, cotton, some oilseed products, and a few other goods, from the Portuguese overseas territories benefit from quantitative restrictions which apply to such imports from third countries.

Practically all imports from outside the Portuguese Monetary Area are effected on the basis of “bulletins.” For imports free of quantitative restriction, the bulletin serves a statistical purpose and enables the importer to obtain the necessary foreign exchange as specified in the bulletin. For imports subject to restriction, the bulletin is equivalent to an import license.

Goods not on the so-called negative list may be imported freely from most countries that are members of the GATT. The negative list comprises about 61 tariff items, and includes certain foodstuffs, other agricultural products, certain natural or manufactured raw materials, some textile fibers, and a number of finished products, including vehicles and equipment. The liberalization does not apply, however, to Ghana, India, Japan, and Nigeria; imports from these GATT members of goods liberalized from other GATT countries are subject to individual authorization.

Nonliberalized imports from countries that are GATT members are admitted either under global quotas or under individual authorization. There are, in addition, global quotas for certain imports from EFTA countries.

All imports from countries that are not members of the GATT are based on individual authorizations.

Payments for Invisibles

Payments to the Portuguese overseas territories for current invisibles may be made freely through authorized banks. Such payments to foreign countries are also free of quantitative restrictions, but are subject to procedures which differ in respect of the amounts of foreign exchange that authorized banks may grant freely for the various transactions.

For payments to countries with which Portugal does not have bilateral payments agreements, the authorized banks may grant any amount of foreign exchange for expenditures incidental to trade; up to the equivalent of Esc 50,000 per capita and per annum for tourism; and up to the equivalent of Esc 100,000 for most transactions in invisibles not mentioned above, including income on imported capital. For payments to countries with which Portugal has bilateral payments agreements, the authorized banks may effect freely payments for invisibles listed in the respective payments agreements. Application must be made to the Bank of Portugal for exchange for payments of items not referred to above and for payments in excess of the above-mentioned limits.

Travelers may take out freely domestic and foreign banknotes and foreign coins for their travel expenses.

Exports and Export Proceeds

Exports and re-exports are effected on the basis of “bulletins” (similar to the import bulletins). Export bulletins are issued freely, with few exceptions; the primary purpose of this procedure is to enforce the prescription of currency and surrender regulations. The export of a few domestically produced goods is restricted, mainly to assure adequate supplies to domestic industries and to avoid depletion of local resources. Baggage and exports and re-exports of merchandise whose value does not exceed Esc 2,500 do not require a bulletin so long as they are not expressly excluded from this exemption.

Exporters are required to sell to an authorized bank, within the period stipulated in the export bulletin, the total amount of the export proceeds, in the foreign exchange indicated in the bulletin. The Bank of Portugal may, however, authorize the deduction of commission expenses abroad, and freight, insurance, or other c