Chapter

Member Countries of the International Monetary Fund

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1963
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Afghanistan1

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 March 22, 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 50 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.2 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 allowed. 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 1962

No significant changes took place during 1962.

Note.—On March 22, 1963, the exchange system was reformed and simplified and an initial par value for the afghani of Af 45.00 per US$1 was established with the International Monetary Fund.

Argentina 1

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 28, 1962 was M$N 134.10 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 bilateral payments agreements with Spain and 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. All imports except those from LAFTA countries are subject to a special tax of 5 per cent. Consular fees of 1½ per cent, payable in U.S. dollars, are payable on all import invoices.

For import purposes, commodities are grouped in lists according to their essentiality and local 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:

20per cent on numerous raw materials, drugs, iron and steel bars, tinplate, woodpulp, etc. (List 2)
46per 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)
92per cent on semiprocessed products or raw materials produced locally (List 8)
115per 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)
172per 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
230per cent on nonessential and luxury items, e.g., whisky, bicycle chains, transistor radios, starters and fluorescent tubes, textiles and ready-made clothing of cotton, wool, artificial silk, etc. (List 7); and, until December 31, 1963, an additional surcharge (except on imports from LAFTA countries) of 100 per cent of the normal import price on many nonessential articles, e.g., manufactured foods, fine furs, leather goods, furniture, notions, perfumes, chinaware and porcelain, textiles in general, ceramics, glassware, 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 local 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, foreign investments, 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.

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 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 1962

January 1. Special tax exemptions, outside the general system, became effective for certain imports from Brazil, Chile, Mexico, Paraguay, Peru, and Uruguay, under the agreement reached with these member countries of the LAFTA.

January 4. A surcharge of 20 per cent was applied to imports of crude petroleum and petroleum by-products above the normal quotas.

January 5. State agencies which perform activities related to petroleum, coal, iron and steel industries, railroads, and power, and which benefit from a special system of freedom from surcharges for imports of machinery and spare parts not manufactured locally, had to obtain permission from the Ministry of Economy in order to secure such exemptions.

January 24. The following measures in respect of surcharges became effective: (1) Imports of production lines (except those intended for the iron and steel, petrochemical, woodpulp, and construction industries and fulfilling certain conditions) were no longer exempt from surcharges. (2) Imports of used machinery were no longer exempt from surcharges. (3) A temporary additional surcharge of 100 per cent was established, to be effective until December 31, 1962, on the normal import price of some nonessential articles (manufactured food products, fine furs, leather goods, furniture, notions, perfumes, chinaware and porcelain, textiles in general, ceramics, glassware, etc.), except when imported from LAFTA countries. This additional surcharge was subsequently extended until December 31, 1963. (4) The exemption from surcharges for certain goods originating in Bolivia was extended until March 31, 1962, and later extended to December 31, 1962.

January 26. A surcharge of 40 per cent was established for imports of machinery not manufactured locally.

February 2. Special ad valorem charges were established for imports of forestry products from countries not belonging to the LAFTA.

March 19. Exchange market operations were suspended.

April 1. The tax exemptions in effect for certain member countries of the LAFTA were extended to Colombia (see January 1, above).

April 4. The exchange market was reopened.

April 9. An emergency 20 per cent additional surcharge was imposed on most imports.

June 13. All settlements with Brazil for any purpose were required to be made in convertible currency.

July 17. The provision prohibiting the import of automobiles having a weight in excess of 1,500 kilograms and a value in excess of US$2,000 was revoked.

August 10. Regulations were prescribed for the system by which exporters obtain a credit in their names for surcharges, customs and additional duties, and other charges paid on imports of raw materials or other goods incorporated in their export products.

August 15. The bilateral trade and payments agreement with the U.S.S.R., signed on August 5, 1953, expired.

September 1. The agreement on fruit trade with Brazil, signed on September 1, 1958, expired.

September 1. The emergency 20 per cent additional surcharge imposed on most imports on April 9, 1962 was abolished.

September 10. A system of financial support for goods not traditionally exported was established.

October 3. Tax exemptions were granted for certain products originating in Ecuador.

November 1. All imports except those from LAFTA countries were made subject to a special tax of 5 per cent.

Note.—The following changes were made early in 1963:

January 1. New consular fees of 1½ per cent payable in U.S. dollars on all import invoices came into effect.

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 of raw materials (Lists 1 and 2); goods already in transit; and goods covered by irrevocable letters of credit already in force and cleared through customs before June 1, 1963. The additional surcharges are 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.

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, 1962 was US$2.2438 buying, US$2.2307 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 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 license. No restrictions are imposed on payments for imports, provided that the prescription of currency requirements are observed.

Payments for Invisibles

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

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 specific exchange control approval. Transfers abroad of resident capital are allowed only in special cases. Approval is normally granted for the repatriation of capital by nonresidents; however, no advance commitments are given in such cases.

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

Foreign securities owned by Australian residents 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 specific exchange control approval.

Changes during 1962

July-October. Temporary quantitative restrictions were imposed on imports of timber and antibiotics—items whose import had been increasing under conditions threatening serious injury to domestic producers.

October 18. With the exception of the temporary restrictions noted in the foregoing paragraph and the restrictions on imports of aluminum, ball bearings, and secondhand excavating, earth-moving, and material-handling equipment, all remaining quantitative restrictions on imports were removed.

Austria 1

Exchange Rate System

The par value is Austrian Schillings 26.00 = US$1. The official limits for the U.S. dollar are S 25.80 buying, and S 26.20 selling, per US$1, at which rates the Austrian National Bank stands 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 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. 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 authorized Austrian banks, to whom much of the detail of exchange control has been delegated. Licenses required for imports free of quantitative restriction from the OECD and most other GATT countries are issued by the customs. Otherwise, export or import licenses for goods listed in the Foreign Trade Law must be procured from the competent ministry, viz., the Federal Ministry of Trade and Reconstruction (Licensing Office), the Federal Ministry of Agriculture and Forestry, or the Federal Ministry of the Interior.

Prescription of Currency

Settlements with countries with which Austria has bilateral payments arrangements2 are made through clearing accounts expressed in U.S. dollars. Settlements with all other countries may be made in any convertible currency, or through Free Schilling Accounts.

Nonresident Accounts

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

Free Schilling Accounts, which are maintained with Austrian banks, originate from the sale of gold, gold coins, or convertible currencies by a nonresident to the Austrian National Bank or any Austrian bank, as well as from transactions authorized by a special or general license of the Austrian National Bank. These accounts may be used freely, including transfers from one Free Schilling Account to another and the conversion of balances into any foreign currency.

Blocked Accounts are applied mainly vis-à-vis the bilateral countries (see footnote 2) and have little significance.

Imports and Import Payments

Imports of commodities not listed in the Foreign Trade Law, as well as certain minor imports, may be imported without license from any country. All other imports are subject to license. Goods included in an extensive liberalization list applicable to the OECD and other GATT countries (except Cuba, Czechoslovakia, and Japan) are free of quantitative restriction and import licenses are issued freely and promptly by the customs.3 For goods listed in the Foreign Trade Law that are not included in the liberalization list, licenses are issued under global quotas applicable to the same countries as are covered by the liberalization list; these quotas are being gradually increased. In addition, a large number of items imported from Japan and Yugoslavia are licensed freely. All other imports are dealt with under various procedures, such as bilateral quotas provided for under certain bilateral trade agreements, compensation (barter) transactions, and individual, discretionary licensing. Imports under compensation (barter) transactions are usually licensed only in cases where Austria does not maintain a payments agreement with the exporting country and there is no other way of settling payments.

Payments for goods imported from and/or originating in countries with which Austria has bilateral payments agreements require exchange licenses. For payments related to imports from other countries, importers may utilize freely their retained export proceeds and other receipts in convertible currencies held with authorized banks, or they may purchase such currencies freely from them.

Payments for Invisibles

Payments for all permitted transactions may be made freely to countries which settle with Austria in convertible currencies. For payments to other countries, i.e., those with which Austria has bilateral payments arrangements, licenses are granted after account is taken of the terms of existing bilateral agreements and other considerations, such as the principle of reciprocity and hardship cases.

Residents traveling to countries which settle with Austria in convertible currencies may buy from authorized banks exchange up to the equivalent of S 15,000 for each trip. Larger amounts are granted by the National Bank provided that no capital transfer is involved. Persons leaving Austria may take with them S 10,000 in Austrian notes and coins and any amount in foreign notes and coins.

Exports and Export Proceeds

Exports regulated under the Foreign Trade Law require licenses. In the issuance of export licenses, due consideration is given to the provisions of any relevant bilateral trade agreements and the fulfillment of quotas established in accordance with such agreements, and to the needs of the Austrian economy. Other exports are free of license.

Export claims must be declared at the time the goods are shipped. Export proceeds may either be surrendered or deposited in an account with an authorized bank. Such deposits in convertible currencies may be used freely for conversion into any other convertible currency or for payment of the holder’s debts to creditors in countries which settle with Austria in convertible currencies, as far as such payments are permitted under general or individual license. Such deposits in bilateral clearing currencies may be used if an individual license is obtained.

Proceeds from Invisibles

Exchange receipts from invisibles, if not surrendered or deposited in an account with an authorized bank, have to be declared within eight days from the date of collection. Travelers are free to bring in Austrian or foreign notes and coins without limit.

Capital

Direct investments and purchases of Austrian securities in Austria by nonresidents are generally permitted if made with convertible currencies or out of free or originally owned blocked schilling balances. Foreign exchange brought in for these purposes must be surrendered or deposited in an account with an authorized bank. Licenses are required for investments financed by other means, e.g., through investment loans, the import of schilling notes, the import of goods, or inconvertible currencies. These licenses are granted on the merits of each case. Short-term commercial credits up to one year are licensed freely vis-à-vis countries which settle with Austria in convertible currencies. Licenses for other short-term credits and for longer-term credits and loans are granted on the merits of each case.

The Austrian National Bank permits, upon application and documentation, transfers abroad to residents of countries which settle with Austria in convertible currencies as follows: (1) proceeds from the liquidation of Austrian enterprises in which these nonresidents have participated, as well as proceeds from the sale of shares in such enterprises; (2) proceeds from the sale of Austrian securities; (3) proceeds from the sale of real estate in Austria (or shares in such real estate); (4) repayment of loans and credits by Austrian residents to nonresidents insofar as the payments do not represent contractual amortization (the transfer of contractual amortization is free); (5) payments for claims which have passed from Austrian residents to nonresidents by inheritance; (6) the acquisition from nonresidents of participation rights (not in the form of securities) in foreign companies, associations, or other enterprises; (7) the establishment, acquisition, and extension of foreign agencies or individually owned firms; (8) the reinvestment of earnings accruing abroad in foreign enterprises of the type referred to in 6 and 7, above; (9) the granting of loans to foreign enterprises, including loans out of earnings accruing abroad; (10) the granting of credits to nonresidents for periods up to five years, provided that the credits are connected with commercial transactions to which a resident is a party; (11) the transfer of dowries; (12) capital transfers under inheritance agreements (Erbenübereinkommen); and (13) the transfer of the personal capital of emigrants.

Transactions under items 6, 7, 8, and 12 must, however, cover enterprises and property situated in countries which settle with Austria in convertible currencies; moreover, transactions under items 6, 8, and 9 should establish or maintain permanent commercial relations between Austrians and residents of these countries.

Foreign securities belonging to nonresidents and held by them in Austria may be exported freely.

Residents are allowed to purchase from nonresidents, without restriction, foreign securities quoted on foreign stock exchanges and Austrian external bonds, provided that the transactions are carried out on a spot basis through authorized banks and the securities purchased are kept with such banks. Payments for these purchases to residents of countries which settle with Austria in convertible currencies may be made freely 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 such securities 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 1962

January 1. The percentage of import liberalization vis-à-vis OECD countries was raised from 90 to 93, and that vis-à-vis other GATT countries (excluding Cuba, Czechoslovakia, and Japan) from 50 to 70. (The base years for calculation of the liberalization percentages are 1952 for the former OEEC countries, 1953 for Canada and the United States, and 1959 for other GATT countries.)

January 1. A list of global quotas for imports subject to quantitative restriction from OECD countries came into effect.

April 27. The yearly allocation for Austrian residents traveling abroad as tourists was raised from the equivalent of S 10,000 for an adult and S 5,000 for each child under the age of 12, to the equivalent of S 15,000 for each person irrespective of age, retroactive to January 1, 1962.

April 27. The National Bank issued regulations further liberalizing internal trade in gold and gold coins.

July 1. The percentage of import liberalization vis-à-vis GATT countries (excluding Cuba, Czechoslovakia, and Japan) that are not members of the OECD was increased from 70 to 75.

July 1. Global quotas for imports subject to quantitative restriction from OECD countries were increased by 20 per cent.

July 4. Residents were allowed to purchase from nonresidents, without restriction, foreign securities quoted on foreign stock exchanges and Austrian external bonds, provided that the transactions were carried out on a spot basis through authorized banks and the securities purchased were kept with such banks. Payments for these purchases to residents of countries which settle with Austria in convertible currencies may be made freely in the same 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 such securities to nonresidents against payment in a convertible currency on a spot basis and through authorized banks.

August 1. Austria accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Articles of Agreement of the International Monetary Fund.

September 1. An amendment to the Foreign Trade Law provided for the simplification of the licensing procedure for liberalized goods: Importers of liberalized goods from Canada, the United States, and most other GATT countries, and importers of goods included in the supplementary OEEC liberalization list (3 per cent of imports from OEEC countries on a 1952 basis), would be given licenses by the customs offices at the point of entry, without formalities, free of charge, and without delay in the customs clearance of the goods. A consolidated list of goods to which the new import procedure applied came into effect.

October 1. The import of 742 items from Japan was liberalized.

October 1. Global quotas for imports subject to quantitative restriction from OECD countries were increased by 30 per cent.

December 21. The basic exchange allocation for tourists was increased to S 15,000 for each trip and was made available to all residents regardless of the purpose of the travel. It was also announced that if larger amounts were required, foreign exchange would be authorized by the National Bank on justification.

December 21. The Austrian National Bank announced that it would issue licenses to residents submitting the appropriate supporting documents for the following payments to countries which settle with Austria in convertible currencies: (1) the acquisition from nonresidents of participation rights (not in the form of securities) in foreign companies, associations, or other enterprises; (2) the establishment, acquisition, and extension of foreign agencies or individually owned firms; (3) the reinvestment of earnings accruing abroad in foreign enterprises of the type referred to in 1 and 2, above; (4) the granting of loans to foreign enterprises, including loans out of earnings accruing abroad; (5) the granting of credits to nonresidents for periods up to five years, provided that the credits are connected with commercial transactions to which a resident is a party; (6) the transfer of dowries; (7) capital transfers under inheritance agreements (Erbenübereinkommen); and (8) the transfer of the personal capital of emigrants. Transactions under items 1, 2, 3, and 7 must, however, cover enterprises and property situated in countries which settle with Austria in convertible currencies; moreover, transactions under items 1, 3, and 4 should establish or maintain permanent commercial relations between Austria and residents of these countries.

Note.—The following changes became effective on January 1, 1963:

(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 all these imports would be issued automatically by the customs.

(2) 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).

Belgium-Luxembourg

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—official and free. Current transactions are settled through the official market and financial (i.e., capital and certain current) transactions through the free market, although for most outgoing and a few incoming current payments there is a choice between the two exchange markets.

In the official exchange market, only authorized banks may carry out exchange transactions permitted in that market.1 The spot exchange rate for the U.S. dollar fluctuates within official limits of BF 49.625 buying, and BF 50.375 selling, per US$1; the rates for the other currencies fluctuate between limits 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. Forward rates are left to the interplay of market forces. Authorized banks in Belgium-Luxembourg may deal with other authorized banks in any foreign currency against Belgian and Luxembourg francs, and with nonresidents in any of the convertible currencies.1

Residents may sell exchange derived from certain transactions of a noncommercial nature in the free exchange market, and they may use exchange purchased in the free market for all payments except to bilateral countries. In the free market, all currencies (including banknotes) may be bought and sold at freely fluctuating rates. Convertible currencies acquired in the free market may be sold in the official market, but no other transfers between the two markets are permitted. Exchange transactions in connection with the free gold market are also carried out in the free exchange market. Rates in the free exchange market correspond to rates in free exchange markets in other countries; as at December 31, 1962, the rate for the U.S. dollar was approximately BF 49.78¾ buying, BF 49.79½ selling, per US$1.

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

Prescription of Currency

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

All inward and outward transactions are classified in four groups, which may be summarized as follows: List A covers merchandise, transport expenses, 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 (Burundi, the Congo,2 Rwanda, and the U.S.S.R.) 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.

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 DBilateralBilateral3
Inward Payments
A and BConvertibleConvertibleOfficialConvertible
C and DConvertibleConvertible OtherOfficial or free FreeConvertible or Financial
A, B, C, and DBilateralConvertibleOfficialConvertible or Bilateral3

Nonresident Accounts

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

1. Convertible Accounts. These accounts are not denominated by the country of residence of the account holder, and may be opened in the name of any nonresident. They may be credited with proceeds from the sale 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. Bilateral Accounts. These are accounts of residents of bilateral countries (see section on Prescription of Currency, above). They 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 also be made freely between Bilateral Accounts related to Burundi, the Congo, and Rwanda.

3. Financial Accounts. These accounts are not denominated by the country of residence of the account holder, and may be opened for any nonresident except a resident of a bilateral country.4 They are primarily for capital transfers and traveling expenses, although other specified settlements, such as those related to dealings in gold, may be made through them. Balances on Financial Accounts may be transferred only to other Financial Accounts. Financial Accounts may be credited with proceeds from the sale by a nonresident of gold or any currency in the free market and of 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. Balances on Financial Accounts are exchangeable into gold or any currency through the free market.

Imports and Import Payments

Imports of certain goods from all countries require import licenses, as do 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. All other imports are free of license, and only a simple form completed by the importer giving notification of the import is required.

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). Where the requirements are not fulfilled, the authorized bank submits a request to the central exchange control authority for special permission.

Payments for Invisibles

If payments for invisibles are to be made through the official exchange market or by crediting Belgium 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

Exports of certain goods to all countries require export licenses, as do 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. 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. 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 1962

No significant changes took place during 1962.

Bolivia 1

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, the official enterprises, and 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 January 1, 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 January 1, 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

Imports are free of import and exchange licensing, and exchange to pay for imports may be purchased freely through the free market.

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 license. 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 1962

No significant changes took place during 1962.

Note.—On January 1, 1963, 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.

Brazil

Exchange Rate 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 is a free exchange market where, in principle, exchange rates should be freely negotiated. At present, however, the rate for the U.S. dollar is held at Cr$460 buying, Cr$475 selling, per US$1. Exchange rates for other convertible currencies are based on these rates and the dollar quotations for such currencies in international markets. Exchange rates for bilateral agreement currencies are quoted at a 5 per cent discount, except those for Mainland China and the U.S.S.R., which are quoted at par. The calculation of the effective rates must, however, take account of certain costs related to exchange transactions, namely, (1) deductions from coffee and cocoa export proceeds; (2) the expense of financing the advance deposit of 80 per cent of the value in cruzeiros of payments in excess of US$100; and (3) a variable bonus in cruzeiros (Cr$240 per US$1 as at the end of 1962) which is added to coffee export proceeds in excess of the minimum surrender price. Foreign banknotes and travelers checks are dealt in at freely determined rates; as at December 31, 1962, the rate for the U.S. dollar was around Cr$800 per US$1.

A large proportion of the exchange transactions is carried out through the Bank of Brazil. The Bank of Brazil does not supply the authorized banks with foreign exchange, nor does it sell foreign exchange for financial remittances,1 except where there are contractual commitments. The authorized banks may use for all outgoing payments the foreign exchange purchased by them, except for 60 per cent of coffee and cocoa receipts (not including the retention quota), which they must transfer to the Bank of Brazil. The total of exchange which a bank may sell in any one week for payments for financial remittances may not exceed the weekly average of such sales by that bank during the preceding 12 months.

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 is the authority for approving applications for foreign exchange for financial remittances. It also organizes the auctions of promessas de licença (which entitle the holder to receive an import license for Special Category imports), having established the total value of promessas de licença on the basis of criteria approved by the Council of the SUMOC and after having obtained the opinion of the Foreign Trade Department of the Bank.

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 the SUMOC and eventually included in the foreign exchange budget.

The Foreign Trade Department of the Bank of Brazil issues export and import licenses, and exercises control over prices, weights, measures, classifications, and types in export and import operations that are subject to license. The Customs Policy Council presides over changes in the categories of import commodities, subject to the approval of the Ministry of Finance.

Most sales and purchases of exchange pass through the Bank of Brazil and banks authorized for this purpose. All receipts under bilateral payments agreements must pass through the Bank of Brazil.

Prescription of Currency

Prescription of currency is in principle related to the country of origin of imports or the country of final destination of exports, unless otherwise specifically prescribed or authorized. Settlements with the dollar area, Austria, Belgium-Luxembourg, Finland, France, the Federal Republic of Germany, Italy, Japan, the Netherlands, Norway, Sweden, and the United Kingdom may be made in the currency of any of these countries or in U.S. dollars. Settlements with other countries with which Brazil has no payments agreements or arrangements are usually made in U.S. dollars or other convertible currencies. 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 wth Denmark; and in clearing sterling with Iceland and Mainland China. Frontier trade with Bolivia, except Brazilian exports of coffee and cocoa, and with Paraguay is settled in cruzeiros.

Imports and Import Payments

The Bank of Brazil makes quarterly contracts to sell exchange at an agreed rate of exchange for imports of petroleum and petroleum derivatives. All other imports are classified in two categories, in accordance with their essentiality: General Category—raw materials, equipment goods, spare parts, and some essential consumer goods not produced in Brazil in sufficient quantities, e.g., medicines—and Special Category—all other goods.

General Category imports are free from quantitative restriction. However, to obtain a visa from the Brazilian consular authorities abroad (which is necessary for the shipment of the goods) and in order to clear the goods through customs, the importer must secure a certificate of exchange cover, which is issued by the Exchange Department of the Bank of Brazil, subject to the following: (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; at present, the Bank of Brazil does not as a rule sell foreign exchange 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 80 per cent of the exchange, to be retained for 150 days free of interest, has been made at the Bank of Brazil; as an alternative, the importer may purchase 1-year Treasury bills at 8 per cent interest.2 (3) The Foreign Trade Department of the Bank of Brazil must be supplied with information on the foreign prices of the goods and any other information which the Department may consider necessary. (4) If the exchange contract exceeds 30 days, the importer must lodge with the bank a guarantee deposit in cruzeiros equal to 10-100 per cent (depending on banking practices) of the value of the contract. The deposit may be used to pay for the actual purchase of the foreign exchange when the contract is liquidated. As a result of this requirement and of the requirement under (2) above, the importer makes a total cruzeiro deposit of up to 180 per cent of the value of the exchange contract at about the time the contract is closed.

Each importer of goods in the General Category 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 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, the 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. Importers are required to obtain an import license from the Foreign Trade Department of the Bank of Brazil, and for this purpose they must purchase a promessa de licença on the stock exchange, where fixed amounts of promessas are offered weekly at auction. Importers must also comply with the four requirements described above 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 “bilateral agreement currencies,” and are offered in lots of US$100 and US$500. There is a minimum bid, established at Cr$662.60 per US$1, for all promessas, whether expressed in U.S. dollars or in agreement currencies. Promessas in U.S. dollars are valid for imports from any country with which Brazil does not have a bilateral payments agreement; those in agreement currencies are valid for imports from any bilateral payments agreement country. 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.

For imports financed abroad of machinery and equipment for the establishment of industrial units or the expansion of existing ones, import licenses from the Foreign Trade Department of the Bank of Brazil are required. Other imports without exchange cover also require individual licenses issued by the Foreign Trade Department, which grants the license only when it is satisfied that the import represents a genuine investment or donation.

Payments for Invisibles

Payments for freight and insurance on imports are subject to the same regulations as payments for the related goods.3 Letters of credit covering imports contracted on an f.o.b. basis and paid for in inconvertible or bilateral agreement currencies must contain a clause requiring that the goods be transported on a ship of the Brazilian flag or of the flag of the exporting country.

All payments for other invisibles are subject to approval by the Exchange Department of the Bank of Brazil. The Bank of Brazil does not sell exchange for current invisibles except for contractual obligations, and the authorized banks are required to keep weekly sales of exchange for all invisibles within the limit of the weekly average for the preceding 12 months. (Certain expenses connected with exports are, however, excluded from this limit.) Moreover, 70 per cent of weekly transfers must be for contractual obligations (these include freight and insurance on imports, payments for royalties, technical assistance, amortization of loans, interest, dividends and profits on foreign capital, subscriptions to newspapers, and other items). For payments for invisibles not considered as contractual obligations, besides the weekly limit of 30 per cent of the total amount transferred by a bank, there is the further limitation that remittances for any one person may not, as a rule, exceed US$500 in any one month. With some exceptions, payments in excess of US$100 are subject to an advance deposit in cruzeiros equal to 80 per cent of the transfer. This deposit is kept at the Bank of Brazil for account of the SUMOC for a period of 150 days, free of interest; alternatively, the remittor may purchase 1-year Treasury bills at 8 per cent interest. Remittances of US$100 or less by individual remittors may not be made more than once every 30 days.

Subject to approval by the Bank of Brazil, banks and travel agencies may sell up to US$250 in travelers checks to bona fide travelers for travel abroad, upon presentation of valid passports and tickets. Travelers may take out domestic and foreign currency notes freely.

Exports and Export Proceeds

All exports are subject to export license, with the exception of exports of coffee, which are subject to authorization by the Brazilian Coffee Institute. Export licenses are granted without limitation except when (1) the export is contrary to 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 the Exchange Department of the Bank of Brazil to be inconvenient, or (3) it is considered necessary to guarantee adequate domestic supplies of the goods concerned. All exports are subject to shipping permits issued by the Exchange Department. To obtain this permit it is necessary to present the export license (or the authorization of the Brazilian Coffee Institute) and evidence that the exchange proceeds will be surrendered through an authorized bank or to the Bank of Brazil.

Exporters of coffee are required to surrender to the SUMOC through the Bank of Brazil without compensation an amount of foreign exchange equal to US$26 per bag for coffee from the 1961-62 crop, and to US$22 per bag for coffee from the 1962-63 crop, the cruzeiro equivalent of which is deposited in a Coffee Defense Fund. Exporters of coffee from the 1961-62 crop receive a fixed cruzeiro price per bag against surrender of foreign exchange. Moreover, all coffee exporters receive a variable bonus in cruzeiros (currently Cr$240 per US$1) for exchange proceeds in excess of the minimum dollar surrender price. Exporters of cocoa beans and cocoa paste are required to surrender to the SUMOC without compensation 15 per cent of their exchange proceeds; the countervalue in cruzeiros is used to aid a program of price support and plantation improvement for cocoa. Mining companies are permitted to retain abroad a percentage, which is determined by the Council of the SUMOC, of their export proceeds to service registered loans contracted to pay for goods and services to develop their industry. All other export proceeds must be surrendered to the Bank of Brazil or to an authorized bank. The authorized banks may use these receipts for any payment, except that they may use only 40 per cent (after delivery of the quota to the SUMOC) of their receipts from exports of coffee and cocoa; the remainder must be transferred to the Bank of Brazil.

Proceeds from Invisibles

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

Capital

The provision of exchange for outgoing capital movements requires the prior approval of the Exchange Department of the Bank of Brazil.

All foreign loans, credits, and financing, as well as investments and reinvestments in Brazil in whatever form (including contracts covering royalties, technical assistance, etc.) and changes in the monetary value of foreign-owned capital, have to be registered with the SUMOC. Incoming registered capital must be surrendered to the Bank of Brazil or to an authorized bank at the announced free exchange rate. Registered capital may be repatriated at a rate not exceeding 20 per cent a year, and income thereon may be remitted at a rate not exceeding 10 per cent a year, of the registered amount.

At the end of each calendar year, residents and firms in Brazil must declare their assets and securities abroad and justify any changes that have occurred.

Table of Exchange Rates (as at December 31, 1962)4(cruzeiros per U.S. dollar)
BuyingSelling
391.00(Free Rate less 15% Contribution Quota)
Exports of cocoa beans and cocoa paste.
460.00(Free Rate)475.00(Free Rate)
All other exports. All invisibles. Capital.All payments not subject to other rates.
485.30(Special Rate)
Imports of petroleum.5

Changes during 1962

During the course of the year the announced free market rate was depreciated several times, from Cr$310 buying, Cr$318 selling, to Cr$460 buying, Cr$475 selling, per US$1.

January 1. The amount of the 150-day advance deposit requirement applied to imports and related expenses (which had to be made against Bank of Brazil notes) was reduced from 150 per cent to 140 per cent, and at the beginning of each succeeding month it was to be reduced by a further 10 percentage points. The 180-day deposit requirement on financial remittances was reduced from 50 per cent to 40 per cent, and at the beginning of each succeeding month was to be reduced by a further 10 percentage points.

March 8. In accordance with a bilateral payments agreement of April 21, 1961 with Bulgaria, all payments covered by the agreement had to be settled in agreement dollars.

April 1. Settlements with Spain were placed on a convertible currency basis and arrangements were announced for the liquidation of existing balances in agreement dollars.

April 16. All settlements with Chile were placed on a convertible currency basis. (Payments for imports from Chile had been made in convertible currencies since October 1, 1961.)

April 30. It was announced that the 180-day advance deposit requirement on financial remittances would remain at 10 per cent and not be reduced to zero on May 1, as originally provided (see January 1, above).

May 14. In accordance with a bilateral payments agreement of August 21, 1961 with Mainland China, all payments covered by the agreement had to be settled in sterling through a special account.

May 18. The reduction by 10 percentage points each month of the 150-day advance deposit requirement applied to imports and related expenses (see January 1, above) was suspended until September 30, 1962. The proportion of this deposit which had to be made by delivery of Bank of Brazil notes was reduced to 30 per cent.

May 18. The amount that exporters of coffee are required to surrender to the SUMOC through the Bank of Brazil without compensation was increased from US$22 per bag to US$23. The percentage of the remaining proceeds of exports of coffee and cocoa that authorized banks had to transfer to the Bank of Brazil was reduced from 80 to 60.

May 23. It was announced that, for the time being, the amount of foreign exchange which the commercial banks could sell for financial remittances would be limited to 30 per cent of their previous day’s sales of foreign exchange for imports plus the amount of any exchange transferred voluntarily by them on that day to the Bank of Brazil.

June 6. The limit on the commercial banks’ sales of foreign exchange (see May 23, above) was raised from 30 per cent to 50 per cent of the previous day’s sales.

June 25. The exchange rate for imports of wheat was made the same as that applying to payments for other imports (except petroleum).

July 7. All purchases of foreign exchange, including foreign banknotes, by authorized banks had to be transferred to the Bank of Brazil, which would provide cover for meeting “legitimate import needs.”

August 15. The instruction of July 7 was canceled and the authorized banks were no longer required to transfer their purchases of foreign exchange to the Bank of Brazil, except for 60 per cent of the exchange proceeds from exports of coffee and cocoa.

August 15. All sales of exchange for financial remittances (including capital transfers) were made subject to prior approval from the Bank of Brazil. Such sales, including those related to loans registered with the SUMOC, could not exceed a weekly limit for each authorized bank equivalent to the weekly average of such sales by that bank in the preceding 12 months. Seventy per cent of the total of such sales had to be related to contractual commitments abroad. Concerning the remaining 30 per cent, banks could not, as a general rule, transfer more than US$500 a month for each remittor. Sales of foreign banknotes and travelers checks continued to be restricted to a maximum of US$250 for each traveler. Sales of exchange for financial remittances exceeding US$100 were made subject to an advance deposit equal to 80 per cent (instead of 10 per cent) of the remittance, to be held for 150 days (instead of 180 days) in cruzeiros at the Bank of Brazil without interest. Remittances of US$100 or less by individual remittors could not be made more than once every 30 days. The 150-day advance deposit required from importers (see May 18, above) was reduced from 100 per cent to 80 per cent of the value of the payment, and 30 per cent of the deposit no longer had to be made in Bank of Brazil bills. Thus, the advance deposit requirements for sales of exchange for financial remittances and those for payments for imports and related expenses were now the same. (See also September 30, below.)

August 15. The weekly quota of convertible exchange allowed to each importer for General Category imports was reduced from US$50,000 to US$30,000.

September 1. The authorized banks and exchange dealers were permitted to sell foreign banknotes freely without limit or other formalities.

September 1. Settlements for trade in fruit with Argentina were placed on a convertible currency basis.

September 6. The amount that exporters of coffee from the 1961-62 crop were required to surrender without compensation was increased from US$23 to US$26 per bag, but exporters were guaranteed fixed prices per bag in respect of their exchange proceeds. The amount that exporters of coffee of the 1962-63 crop would be required to surrender without compensation was fixed at US$22 per bag, subject to adjustment if the buying rate for the cruzeiro exceeded Cr$460.00 per US$1. A bonus, to be announced weekly by the Exchange Department of the Bank of Brazil and payable from the Coffee Defense Fund, would be payable on the exchange proceeds of coffee exports exceeding the minimum U.S. dollar price fixed by the Brazilian Coffee Institute. The bonus was currently announced as Cr$230 per US$1.

September 27. Law No. 4131 of September 3, 1962 concerning foreign investment in Brazil came into effect: All capital had to be registered and, if in foreign exchange, surrendered to the Bank of Brazil or to an authorized bank at the announced free exchange rate. Registered capital could not be repatriated at a rate exceeding 20 per cent a year, and profits, etc., could not be remitted at a rate exceeding 10 per cent a year, of the registered amount.

September 30. The 150-day advance deposit required from importers could be transformed after 30 days into Treasury bills (see also November 7, below).

October 19. The bonus payable on coffee export proceeds exceeding the minimum price (see September 6, above) was lowered from Cr$230 to Cr$180 per US$1.

October 24. Regulations for the implementation of Law No. 4131 (see September 27, above) were promulgated. Foreign investments and loans, credits, and financing, in whatever form, made before September 27, 1962 had to be registered with the SUMOC by March 26, 1963; all investments made on and after September 27, 1962 had to be registered within 30 days of (1) the surrender of the exchange to the Bank of Brazil or to an authorized bank; (2) clearance of the goods through customs; or (3) where profits have been reinvested, the date of approval by the competent agency of the enterprise. Contracts covering royalties, technical assistance, etc., and involving the transfer of income abroad, and changes in the monetary value of capital, had also to be registered. Residents and firms in Brazil had to declare their assets and securities presently held abroad and whenever acquired in the future, as well as annually at the end of each calendar year with justification for any changes that have occurred. Loans, credits, and financing for authorized imports had to be registered within 30 days from the utilization of the credits. Loans, credits, and financing in currency, i.e., through the capital market, had to be registered within 30 days from the settlement of the exchange operation.

November 7. In modification of the regulations concerning advance deposit requirements (see September 30, above), importers were given the option of purchasing 1-year Treasury bills as an alternative to making the 150-day advance deposit without interest. This option was also extended to sales of exchange for financial remittances. The Treasury bills would be issued to bearer, normally at par, in denominations of Cr$20,000, Cr$50,000, Cr$100,000, and Cr$l,000,000, for a term of one year, and would bear interest at 8 per cent per annum payable on the date of redemption of the bill.

November 23. The bonus payable on coffee export proceeds exceeding the minimum price (see September 6 and October 19, above) was increased from Cr$180 to Cr$240 per US$1.

Note.—The following changes, which took place on April 23, 1963, are not taken into account in the foregoing survey:

(1) The exchange rate in the free market was changed from Cr$460 buying, Cr$475 selling, per US$1, to Cr$600 buying, Cr$620 selling, per US$1.

(2) The tax (retention) of US$22 per bag on coffee exports was increased to US$26 per bag, and that on cocoa exports was increased to 20 per cent.

(3) Taxes (retentions) of 8 per cent on exports of cocoa derivatives and Cr$40 per US$1 on exports of cotton were introduced.

(4) The period of retention for the advance deposit requirement applied to imports was extended from 150 days to 240 days. 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.

British Guiana

Exchange Rate System

The par value is British West Indian Dollars 1.71429 = US$1. The British West Indian dollar is issued by the British Caribbean Currency Board and has a fixed relationship to sterling of BWI$4.80 = £1. The banks in British Guiana base their 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 standard allocations of foreign exchange 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 by crediting British West Indian dollars or sterling to an External Account or in any foreign currency. Receipts from countries outside the Sterling Area may be obtained in sterling or British West Indian dollars from an External Account, or in any foreign currency.

Nonresident Accounts

There are two main categories of account for residents of countries outside British Guiana: External (Sterling Area) Accounts and External (Non-Sterling Area) 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 specific consent. 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 specific consent.

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 countries outside the Sterling Area and with transfers from other External (Non-Sterling Area) Accounts; other credits require specific consent. They may be debited for payments for any purpose 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 specific consent.

Funds that are not placed at the free disposal of nonresidents (e.g., capital proceeds) are credited to Blocked Accounts, which may be debited for authorized payments, including investments in approved securities.

Imports and Import Payments

Most goods may be imported under an open general license. Other imports require an individual import license.

Exchange is provided automatically by an authorized bank for all permitted imports 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 for all current transactions, including remittances of profits, dividends, and interest. 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 British West Indian currency notes not exceeding BWI$100; these notes do not form part of the basic travel allowance or of any other allotment of exchange for travel. In addition, notes to the value of BWI$50 may be taken out in the form of British West Indian currency notes or 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 in specified currencies,1 surrendered. Exchange control forms have to be completed only for exports exceeding BWI$2,000 in value.

Proceeds from Invisibles

Receipts from invisibles in the specified currencies must be sold to an authorized bank. Travelers may bring in all currency notes freely.

Capital

New investments by nonresidents require the approval of the exchange control. Such approval, which is normally given for direct investments in new projects which would benefit British Guiana, 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. Holdings of the specified currencies must be surrendered to an authorized bank in British Guiana in exchange for local currency.

Changes during 1962

No significant changes took place during 1962.

Burma

Exchange Rate System

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

Administration of Control

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

Prescription of Currency

Burma is a member of the Sterling Area and has prescription of currency requirements similar to those of the United Kingdom and other Sterling Area countries. Payments to other parts of the Sterling Area must be made in a Sterling Area currency. Payments to Mainland China, with which Burma has a bilateral payments agreement, must be 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

Unless specially exempted, private importers must be registered with the Registration Board. Most imports that are made through agents must be made through registered Burmese firms, which alone are allowed to handle such business.1 There are nine open general licenses, accounting for about 5 per cent of total imports, under which specified commodities may be imported from any country except South Africa, from which no imports are allowed. Imports under individual import licenses, accounting for about 25 per cent of total imports, are divided among registered private traders, industries, and mines. Goods which may be imported for private trade are classified in 38 groups. Licenses are issued for each group, primarily to registered private traders, and directives are issued by the Directorate of Imports and Exports to indicate which commodities in each group may be imported and under what limitations and conditions.

Government and government-sponsored agencies account for about 70 per cent of total imports. Bulk licenses to import certain categories of goods, such as foodstuffs, textiles, hardware, building materials, and a few selected industrial materials, are granted to the nine Joint Venture Corporations (in which both private investors and the Government participate). Similarly, the central cooperatives are granted a bulk license to import various goods. A number of government agencies are allowed to import certain goods either for distribution to the private sector or for the use of government corporations and agencies.

There is a short list of prohibited imports, principally opium and similar narcotics, monkeys, playing cards, and gold and silver bullion.

If evidence of importation has been or will be presented, the authorized banks automatically provide exchange (see section on Prescription of Currency, above) to pay for permitted imports.

Payments for Invisibles

All payments for invisibles are subject to license. In general, payments for items connected with trade are allowed and payments for other purposes are considered on a case-to-case basis. Remittances of income arising from investment are permitted freely on application, subject to presentation of evidence that all taxes due in Burma have been paid.

Requests for foreign exchange for tourist travel by residents are subject to individual license; allocations for this purpose are, however, temporarily suspended. Residents going abroad may take out the equivalent of K 1002 in the currency of the country of destination 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

Burma has a list of prohibited exports: iron and steel, brass, copper and aluminum and scraps thereof, foreign manufactures, and commodities of local origin which it is desired to conserve for local requirements. No license is required for the export of commodities not specifically included in the lists of items subject to license, but the exporter must obtain the export proceeds in a manner satisfactory to the exchange control authorities. In general, exporters are required to surrender their foreign exchange proceeds to an authorized exchange dealer. Unless specially exempted, exporters must be registered with the official Registration Board. 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, save foreign exchange, and generally conform to the economic plans of the Government. Approved enterprises are granted certain privileges, including priority in receiving foreign exchange allocations for imports of necessary raw and auxiliary materials.

The law also provides for the transfer abroad of profits after taxes and for withdrawal of the 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.

Foreign nationals are allowed to repatriate all their personal assets when they retire, and foreign insurance companies operating in Burma are permitted to remit their surplus funds to their home offices.

When payments in favor of nonresidents are not permitted to be transferred abroad, the authorities can allow such payments to be credited to blocked accounts. The use of balances on blocked accounts is subject to individual permit.

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

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

Changes during 1962

March 19. Open General License No. IX was issued, permitting the unrestricted import of specified kinds of livestock for breeding, seeds for planting, vaccines, preventive and curative drugs, parasiticides, and feed supplements for livestock.

April 10. Open General License No. VII was amended by removing bicycle tires, tubes, and flaps from the list.

June 23. It was announced that, owing to the almost complete utilization of the balance in favor of Burma on the Burma-U.S.S.R. clearing account, the U.S.S.R. was excluded from the list of clearing account countries and all transactions with that country would be effected on a cash basis through the authorized dealers. (Previously, such transactions were handled exclusively by the State Commercial Bank of Burma.)

July 4. Fifteen items of industrial chemicals were added to the list of goods under Open General License No. VIII.

September 5. Exports and imports of Burmese currency notes were prohibited.

October 1. Foreign firms registered as traders were no longer permitted to import goods under the open general license system, except for the reimport of machinery sent for repair and films sent for developing. It was also announced that, from January 1, 1963, no foreign firm would be allowed to engage in import trade.

October 1. The import of goods under open general license by Burmese industrial enterprises was confined to those goods listed in Open General Licenses Nos. I and VIII.

October 6. Various petroleum products (including certain mineral oils, kerosene, grease, lubricating oils, and motor and aviation spirit) were removed from Open General License No. I.

November 15. All trade with South Africa was banned.

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

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

Imports and Import Payments

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

Exports and Export Proceeds

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

Payments for and Proceeds from Invisibles

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

Capital

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

Changes during 1962

May 2. A new par value for the Canadian dollar of Can$1.08108 per US$1 was established with the International Monetary Fund. Previously, the exchange value of the Canadian dollar was allowed to fluctuate, although after June 20, 1961 the market had been subject to official intervention (in the manner outlined in the Thirteenth Annual Report on Exchange Restrictions, page 61).

June 24. The Canadian authorities announced the temporary imposition of a special graduated surcharge on more than 50 per cent of Canadian imports. For the main body of imports subject to the surcharge, the surcharge was to be 5 per cent; for a small proportion of imports (luxury items), the surcharge was to be 15 per cent; for the remaining group of affected imports (for most of which purchases can be deferred or diverted to Canadian products), the surcharge was to be 10 per cent. (At various times during the second half of 1962, these special surcharges were reduced on some commodities and abolished on certain others, and with effect from April 1, 1963, they were abolished entirely.) In addition, a temporary reduction in the duty-free allowance to Canadian travelers for goods brought back from abroad was announced: the allowance was reduced by two thirds for travelers returning from overseas, and by three fourths for tourists returning from the United States.

Ceylon

Exchange Rate System

The par value is Ceylon Rupees 4.76190 = US$1. The exchange rate system is uniform, the rate for the U.S. dollar being based on the fixed sterling-Ceylon rupee rate and the sterling-U.S. dollar rate in London, maintained between official limits. The market rate as at December 31, 1962 was Cey Rs 4.7425 buying, Cey Rs 4.7675 selling, per US$1.

Administration of Control

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

Prescription of Currency

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. Imports from the Sterling Area may be paid for in any Sterling Area currency. Imports from other countries may be paid for by crediting sterling or Ceylon rupees to a sterling External Account or an External Rupee Account, or in the currency of the country of export. Receipts from exports to the Sterling Area may be accepted in any Sterling Area currency. Receipts from exports to other countries may be accepted in sterling or Ceylon rupees from a sterling External Account or an External Rupee Account, in any specified currency,1 or in any non-specified, non-Sterling Area currency marketable in the United Kingdom, i.e., freely exchangeable for sterling. Settlements with countries with which there are bilateral payments agreements2 must be made through the relevant clearing accounts. Transactions involving deviation from the general regulations require the prior approval of the Controller of Exchange.

Nonresident Accounts

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

Imports and Import Payments

Except for five items (foodstuffs, petroleum, fuels, fertilizers, and drugs described in the Hospital Formulary) which are under open general license, all imports are subject to individual import license. For a number of commodities, including those which are produced locally, no licenses are issued; and some essential items (e.g., rice, flour, and sugar) are imported only on government account. Individual import licenses—on which a tax of 1 per cent is payable—are issued for the remaining items up to the limits of quotas based on past imports. For this purpose an Import Allocation Scheme classifies imports in three groups: (1) imports by established importers, who import goods for trading purposes; (2) imports of industrial raw materials, etc., on an “actual user” basis (an “actual user” importer is defined as one who imports his own requirements of raw materials and accessories for use in an industrial process); and (3) imports by other importers (including State Corporations) who import goods for their own use and not for resale. Licenses for imports from the “Ceylonized” area,3 and for certain goods from any source, are issued only to registered Ceylonese traders.4

An authorized dealer may approve an application to remit foreign exchange or to credit a nonresident account when the applicant furnishes, or undertakes to furnish, evidence of importation and cost of goods together with a valid importer’s and exchange control copy of the import license. When the goods are under open general license, the applicant must have made a declaration to that effect on the application.

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

Payments for Invisibles

All payments for invisibles are subject to exchange license. The remittance of profits and of dividends declared out of the current year’s profits, net of taxes, is freely permitted to nonresident investors.

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”5 and (2) all other countries. The maximum allowance permitted is Cey Rs 500 for travel to the “Indian group” of 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, foreign 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 which will be of positive value to the country and in respect of which adequate facilities are not available in Ceylon. For study in educational institutions in the “Indian group”5 of countries, foreign exchange up to a maximum of Cey Rs 350 a month is allowed; for study in educational institutions in other countries, foreign exchange is made available at £ stg. 60 a month for postgraduate studies and £ stg. 45 a month for undergraduate studies, plus actual fees and cost of books.

For travel and other expenses for medical reasons, foreign 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.

Remittances by foreign nationals for family maintenance are subject to quantitative limits: Indian and Pakistani nationals are permitted to remit 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 on a per capita monthly basis £ stg. 85 for a wife and £ stg. 55 for a child, provided that, where the amount claimed on this basis exceeds one third of gross monthly income, the excess will be deducted from the amount available to a repatriate at the time of his departure. However, 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 equivalent to not more than Cey Rs 50 a person (Cey 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 but a few commodities. Licenses for exports to Albania, Austria, Bulgaria, China (Mainland), China (Taiwan), Czechoslovakia, Hungary, Poland, Rumania, and the U.S.S.R. are issued only to registered Ceylonese traders. Exports of certain manufactured goods and re-exports of foreign manufactured articles are allowed only under special permit. Re-exports of nonmonetary gold, silver, and diamonds are allowed only in special circumstances.

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 in an approved manner, usually within four months from the date of shipment. The currencies and methods in which payments for exports must be received are stipulated in the exchange control regulations (see section on Prescription of Currency, above), and the foreign exchange must be surrendered.

Proceeds from Invisibles

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

Travelers are not restricted in the amounts of foreign funds they may carry into Ceylon in the form of travel credit instruments, but they are obliged upon entering to declare their holdings, including currency notes and coins. The import of sterling notes is restricted to £50, and the import of Indian, Pakistan, and Ceylon currency notes is restricted to a maximum of Rs 75 in the aggregate, of which Pakistan notes should not exceed Rs 20. The import of other currency notes and coins is not restricted.

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 from other countries are permitted only in approved projects. The proceeds of investments in approved projects may be repatriated, along with capital appreciation, upon sale or liquidation. The proceeds from the sale or liquidation of investments not approved by the Government may not be transferred abroad; but they may be reinvested in Ceylon 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 forbidden except with the permission of the Minister of Finance.

Emigrants from Ceylon are not permitted capital remittances, but net income from local investments may be transferred freely to them abroad up to prescribed limits. Upon leaving, emigrants are also allowed to transfer £ stg. 150 for incidental expenses, provided that they have not been granted foreign exchange for tourist travel during the preceding seven years.

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

Changes during 1962

January 1. The regulations concerning the basic travel exchange allocations were simplified by giving the same treatment for travel to the “Middle Eastern group” of countries as for travel to the “Indian group” of countries. At the same time, the allocation for travel to the combined area was reduced to Cey Rs 500 a year and the period between the issue of the basic allowance was increased from five years to seven years. The allocation of exchange for business travel was reduced from £7/10/- a day for a maximum of 30 days to £6/-/-.

January 17. All payments to Hungary arising from current transactions had to be made through a clearing account maintained in sterling by the Central Bank of Ceylon with the National Bank of Hungary.

March 17. It was announced that nonresident firms and persons would no longer be permitted to remit abroad the proceeds of the sale of their movable or immovable property in Ceylon.

March 29. The sale of foreign notes and coins to outgoing travelers up to the equivalent of Cey Rs 50 a person (Rs 25 for children under 12) was limited to those entitled to foreign exchange for travel purposes by reason of a special permit issued by the Department of Exchange Control.

April 10. The authorized dealers were informed that Ceylon had entered into a bilateral payments agreement with Eastern Germany, in terms of which current payments between Ceylon and Eastern Germany would be settled through clearing accounts maintained by the respective central banks.

April 10. All applications for remittances abroad by personnel attached to foreign diplomatic missions in Ceylon had to be referred to the Controller of Exchange for prior approval.

April 27. Under the Ceylonization of Trade arrangements, a list of some 740 registered Ceylonese importers for 1962 was published.

April 28. The authorized dealers were informed that Ceylon had entered into a bilateral payments agreement with Iran, in terms of which current payments between the two countries would be settled through clearing accounts maintained by the respective central banks.

May 9. The authorized dealers were permitted to provide exchange without prior reference to the exchange control in respect of dried fish imported by the Food Commissioner in Colombo.

May 21. Under the Ceylonization of Trade arrangements, a list of some 90 registered Ceylonese indent agents for 1962 was published.

June 26. The authorized dealers were informed that loan and overdraft facilities granted to foreign corporate bodies and firms operating temporarily in Ceylon on contract should cease from October 1, 1962. Consideration would, however, be given to applications for such facilities in limited amounts and for short periods to tide the firms concerned over temporary difficulties.

July 7. The authorized dealers were informed that all standing letters of authority permitting them to approve applications to export commodities on a consignment basis would be valid only until September 1, 1962. However, application could be made for revalidation of such letters of authority.

July 18. The period for the receipt of the full foreign exchange proceeds of exports was reduced from six months to four months, except for teas sent to the London auctions by British companies.

July 26. Customs duties were increased on imports of some 130 consumer goods items.

August 3. Customs duties were increased by 20 per cent on all imports except of foodstuffs for human consumption, petroleum products, and the items for which duties had already been increased on July 26.

October 10. Imports of all goods except foodstuffs, petroleum, fuels, fertilizers, and drugs included in the Hospital Formulary of the Department of Health, were made subject to individual import license.

October 11. Authorized dealers were informed that they should submit all import documents for examination by the visiting Assistant Controllers, irrespective of value, country of export, or method of financing.

October 31. It was announced that at a date to be notified later, the import of goods would be restricted to registered importers. For purposes of registration, intending importers were requested to supply certain details, including the total value of their imports in 1961 and in the first ten months of 1962.

November 6. Authorized dealers were informed that documents drawn under letters of credit already established were exempt from examination by the visiting Assistant Controllers (see October 11, above).

December 5. It was decided that a tax of 1 per cent would be levied on all imports subject to license, payable when the import license was issued.

December 5. A scheme was announced for the allocation of advance import quotas for 1963, and it was stated that for 40 groups of commodities issues of quotas would begin on January 3, 1963.

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), where only commercial banks are allowed to operate, and the brokers’ market, where commercial banks and authorized exchange dealers 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. On December 29, 1962, the exchange rate in the banking market was E° 1.625 buying, E° 1.645 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 rate in the brokers’ market on December 29, 1962 was E° 2.384 buying, E° 2.416 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. The commercial banks and various exchange dealers, tourist agencies, and hotels are authorized as dealers 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. There is a bilateral payments agreement with Yugoslavia requiring settlements through an account in clearing dollars.1

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, Magallanes, 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; imports of crude petroleum and diesel oil destined for the nitrate, subnitrate, and iodine industries; imports under loans or credits from the Export-Import Bank of Washington or the International Bank for Reconstruction and Development; imports under the Surplus Agricultural Commodities Agreement with the United States; imports of spare parts for agricultural machinery; imports of jute sacks, magnetic enamels, etc.; and imports of certain capital goods. 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.

Imports on the permitted list are subject to advance deposit requirements, except for imports by the Government, the municipalities, certain other specified state enterprises, and the large mining companies, or where the goods originate in other member countries of the LAFTA. There are six categories of advance deposit rates, namely, 10, 100, 200, 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 is retained for 90 days.

Payments for Invisibles

Payments for invisibles by private individuals may be made freely; payments by incorporated and unincorporated business enterprises are subject to approval by the Central Bank. A few commercial invisibles are permitted to be paid at the rate of exchange in the banking market; 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, and from reimbursements of insurance claims, 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, but it 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 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 this 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.

Changes during 1962

January 15. Two exchange markets were instituted—an official market (known as the banking market) with a fixed exchange rate of E° 1.051 buying, E° 1.053 selling, per US$1, and a brokers’ market with a fluctuating rate. Most transactions in invisibles were required to be carried out through the brokers’ market.

January 15. A large number of commodities were classified as prohibited imports. Most of the goods on the prohibited list could be imported through certain “free port” zones, subject to the payment of certain duties; foreign exchange for these goods could be obtained through the brokers’ market. Official exchange for the payment of permitted imports would not be made available until 90 days after the date of the bill of lading covering the import. The requirement of an advance deposit of 10,000 per cent on all imports, established on December 27, 1961, was abolished.

June 18. Advance deposit requirements were re-established for imports on the permitted list, except for imports by the Government, the municipalities, certain other specified state enterprises, and the large mining companies, or where the goods originated in other member countries of the LAFTA. Four categories of deposit were established, namely, 10, 100, 200, and 1,000 per cent of the c.i.f. value of the imported merchandise.

July 9. Certain imports were made subject to a new advance deposit rate of 5,000 per cent.

July 31. Two import commodities were made subject to a new advance deposit rate of 10,000 per cent.

September 20. The compulsory deferment period for payments for imports on the permitted list was extended from 90 days to 120 days after the date of the bill of lading covering the import.

October 4. Surcharges on a wide range of import commodities were increased substantially.

October 15. The official support for the exchange rate in the banking market was withdrawn, and it was announced that this rate would in future be determined by market forces.

December. Payments for all imports (both permitted and prohibited) were allowed to be made with exchange purchased in the banking market.

China (Taiwan)

Exchange Rate System

No par value for the New Taiwan Dollar has been established with the Fund. The official buying rate is NT$40 per US$1. The buying rates for other currencies are determined by the Central Bank of China on the basis of their respective parities to the U.S. dollar. Earners of foreign exchange must either sell it to the appointed banks of the Central Bank of China at these rates or surrender it for exchange certificates, which are valid for 180 days.

There are no official selling rates. Foreign exchange for authorized payments is supplied by the appointed banks against exchange certificates, which are submitted either by original holders, or by those who purchased them from holders or from a government-designated agency; this agency obtains them from, and sells them on instruction from, the exchange control authority at a rate which is stabilized at NT$40.03 per US$1. The rates for exchange certificates denominated in other currencies are determined on the basis of the respective parities to the U.S. dollar. The appointed banks stand ready to convert exchange certificates denominated in one currency into certificates expressed in any other currency.

Administration of Control

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

Prescription of Currency

Export receipts must be obtained in U.S. dollars, Hong Kong dollars, pounds sterling, Malayan dollars, deutsche mark, French francs, or Italian lire. The currency and method for making payments to nonresidents are not prescribed.

Nonresident Accounts

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

Imports and Import Payments

All imports are subject to individual license. Imported goods are classified in three categories: prohibited, controlled, or permissible. The list of prohibited goods, besides narcotics and some other items usually prohibited by most countries, includes certain luxury items, some of which are licensed occasionally. The controlled list covers some consumer goods classed as luxuries, goods that compete with locally produced commodities, and other goods subject to allocations; these goods are admitted on an ad hoc basis according to special criteria. All other goods are on the permissible list and are licensed freely if the application is accompanied by an exchange certificate.

Only government agencies, registered private traders, end-users, and manufacturers are entitled to obtain import licenses.

When the import license is granted, the holder is automatically entitled to obtain the necessary foreign exchange from an appointed bank through the surrender of an exchange certificate.

Imports may also be paid with self-provided exchange, which normally arises either from resident-owned balances abroad or from profits and earnings on residents’ overseas investments.

Payments for Invisibles

All payments for invisibles require approval, but those related to trade (e.g., freight and insurance) are permitted freely when the basic trade transaction has been approved. Applications for exchange for other types of invisibles are treated as follows: A maximum of US$2,400 is provided for tuition and living expenses of students studying abroad. Foreign technicians are permitted to remit their salaries to their dependents abroad after a reduction has been made for their estimated living expenses in Taiwan. 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 also approved. The remittance of a part of earnings is permitted for film rentals and foreign entertainment. Foreign exchange is approved for business travel, but there is no basic exchange allocation for other types of travel.

Persons leaving Taiwan may take with them no more than US$200 in foreign currency and no more than NT$500 in Taiwan currency. However, 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. There are quota limitations on the export of citronella. Controls are also maintained over the export of a few foodstuffs. Seasonal restrictions are applied to the export of vegetables to Hong Kong. Minimum export prices are established for all exports, and exporters are required to repatriate and surrender all exchange exceeding US$25.

Proceeds from Invisibles

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

Capital

Capital payments due to nonresidents are not in general permitted, but the repatriation of foreign investments may be allowed. 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) transfer of net annual profits, or accrued interest, in any foreign currency, at an annual rate not exceeding 15 per cent of the total investment; (2) repatriation of capital, including reinvested earnings, two years after the investment has been made, at the same rate as indicated under 1, above; (3) a broad range of tax exemptions and reductions; (4) 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 order to obtain the benefits of the investment laws, investments by foreign nationals must be in enterprises conducive to the economic and social development of the country, such as industry, mining, communications, and domestically needed manufacturing.

Residents are permitted to make capital investments abroad only in the form of technical services and locally manufactured equipment. Residents are permitted to retain capital receipts on foreign currency accounts at the appointed banks and may sell this exchange to the appointed banks for local currency or use it for making authorized payments abroad.

Changes during 1962

No significant changes took place during 1962.

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, fixed by the Board of Directors of the Bank of the Republic in conformity with Law No. 1 of 1959, of Col$7.10 per US$1 for the foreign exchange proceeds of exports of coffee, precious metals except platinum, and certain manufactured products, and for incoming capital for the exploration and exploitation of petroleum and for the metal-extracting industries. An exchange 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 1962, this “auction” or certificate rate was Col$9.00 per US$1. All other transactions take place in a free market; on December 27, 1962, the selling rate in the free market was Col$11.0946 per US$1.

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. (See Table of Exchange Rates, below.)

Administration of Control

To import from, export to, or make payments to, foreign countries, prior application for registration of the transaction must be made at the Exchange Registration Office, which is responsible to the Bank of the Republic. 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. There are also agreements concluded by the National Federation of Coffee Growers 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 import registration is required for all imports; if the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. An advance deposit of 1 per cent is required for registration of the following: imports of capital goods and spare parts not destined for resale; imports under clearing agreements concluded for the foreign marketing of coal and products of Acerias Paz del Río S.A., subject to the exchange and trade regulations; foodstuffs imported by the National Institute of Supply, with 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. 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. The advance deposit on imports of gold and silver coins is 500 per cent. 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 also be made with exchange certificates obtained at the “auction” rate but are subject to the 10 per cent remittance tax. 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. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted.

The foreign exchange proceeds of exports of coffee 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.

Minimum surrender prices are established for the proceeds from exports of coffee (US$59.00 per 70-kilogram bag) and bananas (US$0.30 per stem for exports to the United States and US$17 per ton for exports to Europe). 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 can be purchased in the free market or from the Bank of the Republic at the average of the free market rate for the preceding week. Further, coffee exporters are required to retain in kind the equivalent of approximately 15 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 27, 1962)(pesos per U.S. dollar)
BuyingSelling
7.101(Fixed Rate)

Exports of coffee, precious metals except platinum, 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.
10.11(“Auction” Rate plus 10% Remittance Tax)2

Service on and repayments of capital registered before June 17, 1957.
11.08(Free Market Rate)

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

Other invisibles and capital.
11.11(Average Free Market Rate of the Preceding Week)

All other exports.

Changes during 1962

January 1. The exchange tax on the proceeds of exports of coffee, bananas, raw cowhides, and precious metals was abolished by Law No. 146 (implemented by Decree No. 3235) of 1961. Also, the amount of coffee that exporters are required to retain was restored to 15 per cent of the volume exported.

April 5. The compulsory surrender price for the proceeds from exports of coffee was reduced from US$66.50 to US$61.00 per 70-kilogram bag.

April 5. The advance deposits applying to five categories of imports were increased as follows: from 5 per cent to 20 per cent; from 20 per cent to 50 per cent; from 50 per cent to 150 per cent; from 75 per cent to 180 per cent; and from 100 per cent to 200 per cent.

July 1. The advance deposits applying to five categories of imports were reduced as follows: from 20 per cent to 15 per cent; from 50 per cent to 40 per cent; from 150 per cent to 110 per cent; from 180 per cent to 150 per cent; and from 200 per cent to 170 per cent.

August 1. The advance deposits applying to five categories of imports were reduced as follows: from 15 per cent to 10 per cent; from 40 per cent to 30 per cent; from 110 per cent to 90 per cent; from 150 per cent to 120 per cent; and from 170 per cent to 150 per cent.

September 1. The advance deposits applying to three categories of imports were reduced as follows: from 90 per cent to 65 per cent; from 120 per cent to 90 per cent; and from 150 per cent to 120 per cent.

September 18. By Decree No. 2551, all merchandise on the import free list except 11 customs tariff items was transferred to the list of goods subject to prior licensing.

October 24. The tax of ⅛ of 1 per cent levied on minor exports (i.e., other than coffee, bananas, raw cowhides, and precious metals) was abolished by Decree-Law No. 2821.

November 7. Merchandise included in the import free list and the prior licensing list was transferred temporarily to the list of prohibited imports.

November 20. The “auction” rate of exchange was allowed to depreciate from Col$6.70 to Col$9.00 per US$1.

December 6. Some customs tariff items were transferred from the list of prohibited imports to the import free list.

December 17. Decree No. 3337 amended the import lists by shifting 522 customs tariff items from the list of prohibited imports to the prior licensing list.

December 20. The compulsory surrender price for the proceeds from exports of coffee was reduced from US$61.00 to US$59.00 per 70-kilogram bag.

December 21. The exchange rate applicable to the proceeds of exports of coffee, bananas, raw cowhides, and precious metals and to incoming capital intended for the exploration and exploitation of petroleum and for the metal-extracting industries, which had been Col$6.50 per US$1, was fixed by Resolution No. 36 of the Board of Directors of the Bank of the Republic at Col$7.10 per US$1.

December 26. By Law No. 83, bananas, raw cowhides, and platinum were removed from the major export category. Accordingly, the proceeds of these exports had to be sold to the Bank of the Republic at a rate equivalent to the average exchange rate registered in banking operations in the free market during the previous week.

December 31. The bilateral payments agreement with Ecuador was terminated.

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 Ȼ 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 Ȼ 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 in respect of 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.

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, and scrap iron, 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, root of ipecacuanha, wildlife, and purebred and other cattle require export licenses from the Ministry of Agriculture; (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 the carrying out of 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 1962

April 18. Law No. 2992 ratified the Preferential Trade Agreement between Costa Rica, Nicaragua, and Panama, which had been signed on August 2, 1961.

August 29. The exchange tax of 10 per cent on sales of exchange by foreign-owned banana companies was withdrawn, having been ruled by the Costa Rican courts as being in violation of the contractual arrangements between these banana companies and the Costa Rican Government. This eliminated the last vestige of a multiple currency practice from Costa Rica’s exchange system.

Cuba

Exchange Rate System

The par value is Cuban Peso 1.00 = US$1. The official rates are 1.00 peso buying (and selling for certain capital transfers), and 1.02 pesos selling (including a 2 per cent tax on the export of funds, securities, etc.), per US$1. All foreign trade and exchange transactions are centralized in special institutions established by the State. On December 18, 1953, Cuba notified the Fund that it assumed fully the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

The National Bank of Cuba is the exchange control authority, and all foreign exchange transactions must be carried out through it. The Ministry of Foreign Trade controls all import and export transactions, which are carried out by special foreign trade enterprises established by the Ministry.

Prescription of Currency

All remittances abroad must be made through the National Bank. Settlements with Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Ghana, Hungary, Morocco, Poland, Rumania, and the U.S.S.R. are made mainly through bilateral agreement accounts denominated in U.S. dollars, sterling, or (under the agreement with Ghana) in Ghana pounds. Settlements with Spain are made through clearing accounts denominated in Cuban pesos.

Nonresident Accounts

Local currency held in the names of nonresidents at credit institutions or other agencies in Cuba may be used by these persons only with the express authorization of the National Bank. Withdrawals from nonresident accounts are subject to a 2 per cent exchange tax if the funds are sent or used abroad or made payable in foreign currency. There are special clearing accounts for transactions with those countries with which Cuba has bilateral payments agreements (see section on Prescription of Currency, above).

Imports and Import Payments

Imports may be carried out only by the twelve state trading organizations, which specialize in various products. There is an exchange tax of 2 per cent on exchange payments and transfers on account of imports.

Payments for Invisibles

Insurance of imports for account of Cuban residents must be obtained in Cuba. A 2 per cent exchange tax is charged on all payments on account of invisibles. All exports of and payments and transfers abroad of foreign exchange, checks, securities, or other foreign means of payment require the authorization of the National Bank. The granting of exchange for personal remittances and capital transfers is considered on the basis of their essentiality, the need for them, and their urgency. Remittances abroad of income earned by foreign specialists whose services were contracted in Cuba are permitted only within the limits determined by the National Bank.

Foreigners temporarily in Cuba may take with them on departure foreign currency up to the amounts they imported and registered with the customs office, after deduction of the amounts expended during their stay in Cuba. The export of Cuban pesos requires approval. Cubans or other residents traveling abroad temporarily may be allowed to take with them small sums of national currency to finance necessary expenditures upon their return to Cuba.

Exports and Export Proceeds

Exports may be carried out only by the twelve state trading organizations, which specialize in various products. Exchange proceeds from exports must be surrendered to the National Bank.

Proceeds from Invisibles

Exchange earnings from invisibles must be surrendered to the National Bank. The import of Cuban pesos requires the approval of the National Bank.

Capital

Incoming capital in the form of foreign exchange must be surrendered to the National Bank. Outgoing capital movements require the approval of the National Bank.

Changes during 1962

January 27. A bilateral trade and payments agreement with Ghana came into effect.

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, 1962 was US$2.80⅜ buying, US$2.80316 selling, per £C 1.

Administration of Control

The administration of exchange and trade controls is carried out by the Ministry of Commerce and Industry, which also deals with matters relating to foreign investments. Certain authority to approve applications for 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, no exchange control form being required. Payments to countries outside the Sterling Area may be made by crediting sterling or Cyprus pounds to an External Account, or in any foreign currency. The proceeds of exports to countries outside the Sterling Area may be received in sterling or Cyprus pounds from an External Account, in any specified currency,1 or in any other currency freely exchangeable for sterling. However, settlements for imports and exports with countries for which Cyprus maintains bilateral clearing accounts must be made through the appropriate account.2

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.

Accounts held in Cyprus pounds with authorized banks by residents of countries outside the Sterling Area (except Blocked Accounts) are 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.

In addition to External Accounts, there are Blocked Accounts. Their purpose is to receive funds (e.g., capital proceeds) which are not placed at the free disposal of nonresidents but which may be used for authorized purposes, including investments in approved securities.

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 in respect of which Cyprus maintains clearing accounts (see footnote 2). Individual import licenses are not required for bona fide gifts valued at not more than £C 10 and not to be sold, for returned goods, or for certain special transactions.

Exchange is granted automatically for all authorized imports, but for imports from a bilateral clearing country, payment must be made through the appropriate clearing account.

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, and limits are imposed for certain items. The annual limits are between £C 350 and £C 1,500 (depending on the particular requirements of the student concerned) for study abroad. For tourist travel the limit is £C 250 a person annually, and £C 5 to £C 15 a day is granted in addition to the tourist allowance for business travel. 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

All exports to destinations outside the Sterling Area require export licenses, which are issued freely provided the transaction is being cleared through an authorized bank through which the net export proceeds will be received and non-sterling exchange 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, but the import of other foreign currency notes and (since February 18, 1959) 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, and 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 participation in domestic industries not exceeding 49 per cent of the share capital is normally approved; participation above this limit may be approved in exceptional circumstances. Profits, dividends, interest, and capital in respect of approved 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 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 1962

During the year, six trade and payments agreements providing for settlements through clearing accounts were signed, as follows: with Bulgaria on February 2, with Czechoslovakia on February 6, with the United Arab Republic on February 10, with Hungary on March 6, with Poland on March 16, and with Rumania on June 19. (A similar agreement with the U.S.S.R. had been signed on December 22, 1961.)

May 17. A new open general license was issued, under which all commodities except 51 specified items could be imported freely from all countries except those in respect of which Cyprus maintains bilateral clearing accounts (see footnote 2). Gifts, returned goods, and certain special transactions were also exempted from the requirement of an individual import license.

July 25. An initial par value for the Cyprus pound of £C 1 = US$2.80 was established with the International Monetary Fund.

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, however, applicable to persons who are or have been of Danish nationality.

Convertible Krone Accounts may be credited with transfers from other Convertible Krone Accounts, with the proceeds from sales of currencies of countries in the convertible area, and with authorized payments to countries in the convertible area. They may be debited for transfers to other Convertible Krone Accounts or to Bilateral Krone Accounts, for purchases of any foreign currency, 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. They have the character of restricted accounts and are operated according to detailed regulations. They are related to the country of residence of the account holder.

Capital Accounts are kept for nonresidents by authorized exchange dealers for holding capital, capital income, 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 Foreign Accounts. After three years, emigrants may transfer remaining balances on Capital Accounts without limitation. Transfers from a Capital Account belonging to a resident of a bilateral account country to other nonresident krone accounts may be made only to an account belonging to a resident of the same country. Exceptions to these rules can be authorized by the National Bank.

Foreign Accounts, which are kept for nonresidents by savings banks, cooperative banks, and the Public Trustee’s Office, may be credited with payments for imports and other current commercial payments (freight, commissions, etc.), when the account holder is or has been a Danish national; with donations, etc., but if the amount exceeds DKr 2,000, only from the account holder’s family; with funds derived from the liquidation of nonresidents’ investments made in conformity with the regulations; and with the proceeds of loans extended by residents to nonresidents in accordance with the regulations. All other payments accruing to the account holder may be credited freely. Foreign Accounts may be debited freely for current payments in Denmark by the account holder (except that, if the account holder is or has been a Danish national who emigrated in the past three years, commercial payments may not exceed DKr 2,000). They may also be debited for the following capital payments in Denmark: on account of direct investments, subject to the regulations; for purchases of or subscriptions to Danish securities quoted daily and payable only in kroner, if the investor is or has been a Danish national or the funds have been obtained from the liquidation of investments in Denmark or are being used to take up subscription rights to shares owned by the subscriber; and for loans to the account holder’s family up to DKr 200,000 per borrower in a calendar year. Balances on Foreign Accounts owned by nonresidents other than newly emigrated Danish nationals may be transferred abroad without limitation. The rules for transfers between Foreign Accounts are the same as those for Capital Accounts (see above).

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. Most goods on the restricted list require either regional licenses, i.e., import licenses which may be used for imports from any country in the “Free List Area,” or individual country licenses issued in accordance with the terms of Denmark’s bilateral trade agreements.

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 effect 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 current invisible are permitted freely. 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 OECD countries, their associated territories, Finland, and all countries in Central and South America except Brazil and Colombia, and most exports of such goods to other countries, require export licenses issued by the Ministry of Commerce. Certain exports are subject to restrictive licensing to safeguard the fulfillment of bilateral obligations, to avoid excessive credits to importing countries, to serve strategic purposes, to avoid re-export and transit transactions involving loss of convertible or externally convertible currencies, and to ensure the domestic supply of essential goods.

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 within eight days after receipt, 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 within eight days after receipt, 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 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 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 and are expressed solely in Danish kroner, 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 may be transferred freely to any country without limitation. Individual payments as gifts to persons who are not relatives of the donor may not exceed DKr 2,000.

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 1962

January 1. Further commodities, including deep-frozen fish fillets, cranberries, pyrotechnic articles, stencils, electric accumulators, and certain musical instruments, were taken off the restricted import list.

July 1. The global quotas applicable to imports from countries in the “Free List Area” were increased, and most goods previously imported only against individual country licenses became subject to global quotas. Additional commodities were taken off the restricted import list; these included bananas, fresh grapes, lignite briquettes, and tugs and other vessels of 1,000 tons gross or less.

Dominican Republic 1

Exchange Rate System

The par value is Dominican Peso 1.00 = US$1. U.S. dollar transactions between the Central Bank and other banks take place at parity. Exchange transactions by commercial banks with the public also take place at the par value, subject to small banking commissions (except on the purchase of travelers checks). All payments abroad must be made through banks. 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. The granting of exchange to pay for licensed imports and for invisibles is subject to delay. On August 1, 1953, the Dominican Republic notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange licenses are issued by the Central Bank of the Dominican Republic, and the commercial banks have the obligation to submit daily applications for exchange to the Central Bank. Import licenses are issued by the Import-Export Coordinating Committee, which is comprised of representatives of the Central Bank and various government departments. The Foreign Trade Stabilization Division of the Ministry of Industry and Commerce serves as secretariat of the Committee.

Prescription of Currency

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

Imports and Import Payments

Import licenses are required for all imports: an import application (on Form CE-31) must be submitted to the Import-Export Coordinating Committee, which decides upon each application individually. The form is returned to the importer with the goods he is authorized to import recorded on it. Importers of motor vehicles, household electrical appliances, and fluid gases are given individual annual quotas on the basis of their imports in a previous period. The period of validity of import licenses is 180 days; in case of necessity, the period may be extended for another 90 days. Importers are not allowed to apply for the import of the same commodity twice in the same month unless satisfactory evidence can be presented that there is a shortage of that commodity. Import licenses are generally approved automatically where no foreign exchange payment through the banks is required.

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 bank transmits the importer’s application for exchange to the Central Bank; when the Central Bank authorizes the commercial bank to open a letter of credit or to make a direct transfer, it sends to the commercial bank a check in foreign currency to make the payment.

Payments for Invisibles

All payments for invisibles require exchange licenses, which are granted by the Central Bank on a restricted basis. The export of Dominican banknotes and coins is prohibited.

Exports and Export Proceeds

Export licenses are required only for sugar, in connection with the operation of export quotas established under the International Sugar Agreement, and for a few other special items. Within 48 hours of receiving payment, exporters of Dominican products must surrender through the commercial banks to the Central Bank, for conversion into local currency, foreign exchange equal to not less than 90 per cent of the f.o.b. price of their exports. The exchange which is not surrendered may be used by the exporter.

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 exchange for outward capital remittances must be submitted by the banks to the Central Bank. In present circumstances, outward remittances of capital are seldom approved.

Changes during 1962

January 20. The import and export of Dominican banknotes and coins was prohibited.

May 23. The import of explosives, and of substances which might be used to manufacture explosives, was prohibited.

November 1. All new import licenses were given a termination date of 180 days from the date of issue, with the possibility in cases of necessity of extending this period for 90 days. Previously, import licenses were valid indefinitely.

Note.—The following changes took place early in 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 per 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.

Ecuador 1

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 and payments for imports and related invisibles, to official transactions, to other essential invisibles, to registered capital, and to all contractual 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, 1962 were S/ 21.99 buying, and S/ 22.41 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

Imports are divided into two categories—essential and semiessential goods (List I) and nonessential and luxury goods (List II). All goods not included in these two lists are prohibited. The Monetary Board is authorized to make shifts between the lists and to make additions to or deletions from them. Prior import licenses are required for substantially all imports exceeding a value of US$100, other than those representing official foreign loans and those of certain foreign companies, but the licenses are issued freely provided that the various import taxes are paid and the appropriate advance deposit has been made. The license entitles the holder to obtain exchange at the official rate. Advance deposits in sucres based on the c.i.f. value are required for all nongovernmental imports (except those under the Agricultural Surplus Agreement with the United States), as follows: List I goods, 25 per cent; most List II goods, 50 per cent; and other List II goods, 100 per cent. These deposits are refunded at the time of remittance of the import payment.

A consular fee of 10½ per cent of the f.o.b. value, and import taxes of 4¼ per cent2 of the c.i.f. value and (since November 1955) 2 per cent of the f.o.b. value, apply to all imports. In addition, import taxes of 6 per cent of the c.i.f. value for List I goods and 17 per cent of the c.i.f. value for List II goods must be paid to the Central Bank.

Payments for Invisibles

Payments for most invisibles may be made at the official rate but require an exchange license from the Central Bank. Licenses are granted for the following items: all invisibles connected with trade, e.g., freight and insurance; payments and remittances of the Government and official entities; contractual interest payments, repayments on loans, and other obligations abroad which are registered with the Central Bank; payments of dividends, profits, interest, and amortization on registered private foreign investments, up to 15 per cent annually; contractual private foreign debt operations entered into after July 14, 1961; and foreign exchange required by persons taking specialized courses abroad, provided that such persons are registered with the Central Bank and that the amounts do not exceed passenger fares, other expenses of travel, tuition, and a maximum of US$100 a month for living expenses. Exchange in payment of other invisibles and capital transactions may be obtained in 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 (since July 1961) subject to an export tax of 5 per cent.

Proceeds from Invisibles

Receipts from invisibles related to trade and other essential transactions have to be sold at the official rate. Other receipts may be sold in the free market and are not subject to exchange control.

Capital

Receipts of foreign capital may enter at the official rate if they are for approved purposes and are registered with the Central Bank. Registered capital and earnings of up to 15 per cent may be transferred annually at the official rate (see section on Payments for Invisibles, above). Foreign capital for official investments, and foreign capital in the form of foreign exchange sold by foreign companies for the purpose of obtaining local currency to pay local salaries, taxes, and other charges, must be surrendered at the official rate. The Central Bank may refuse to register capital. Unregistered capital is free to enter through the free market in unlimited quantities. Foreign capital entering in the form of machinery, tools, etc., is treated like foreign monetary capital and requires a license, except when it represents foreign official loans or the capital of certain foreign companies under contractual agreements with the Government. Machinery, equipment, implements, materials, and other similar items brought into the country as foreign investments and intended for the development of national production are exempt from taxes if such exemption is authorized by the Ministry of the Treasury; their re-export is free and exempt from duties.

Changes during 1962

On various dates during the year, certain commodities were shifted between the two import lists; others were deleted from or added to the lists, i.e., their import was temporarily prohibited or a temporary prohibition was lifted.

June 1. The bilateral payments agreement with Spain was terminated.

December 31. The bilateral payments agreement with Colombia was terminated.

Note.—With effect from January 1, 1963, import taxes were increased as follows: 1 per cent on the c.i.f. value of all imports (Legislative Decree dated November 7, 1962, published on November 23, 1962), and 1 per cent on the c.i.f. value of List I goods and 2 per cent on the c.i.f. value of List II goods (Legislative Decree dated November 5, 1962, published on December 26, 1962).

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 Ȼ 2.49 buying, and Ȼ 2.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at or within these limits 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 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. 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 machinery and raw materials, 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, except for imports of machinery, equipment, and raw materials, to which a deposit of 10 per cent applies. 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 annually of the registered capital. The commercial banks provide exchange up to US$200 a person each six months for tourist travel. For larger amounts, authorization by the Exchange Control Department is required, which as a general rule grants each person 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 or, for those with families, US$250 a month plus US$50 for each child. Applications for foreign exchange in excess of the limits given above are seldom granted.

The exchange control regulations permit travelers to take out up to Ȼ 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 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 Ȼ 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, which 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 1962

No significant changes took place during 1962.

Ethiopia

Exchange Rate System

The par value is Ethiopian Dollars 2.48447 = US$1. The official rates are Eth$2.4750 buying, and Eth$2.5250 selling, per US$1.

Administration of Control

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

Prescription of Currency

Outgoing payments 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

There are no import licenses, but payments abroad for imports require exchange licenses. These licenses are granted freely in the currency appropriate to the country of origin, or in U.S. dollars or sterling for goods ordered through a third country. Application for an exchange license must be made prior to the arrival of the goods. Payment is normally authorized by letter of credit, cash against documents, mail transfer, or telegraphic transfer.

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 the currency of the original investment; for approved projects, they may also transfer amortization at the rate of 10 per cent per annum. Emigrants’ allowances and transfers of legacies are permitted up to Eth$50,000 or the equivalent in foreign currency. For larger sums, reference has to be made to the Foreign Exchange Advisory Committee; the policy of the Committee in such cases is to spread the total transfer over a period of years so that the amount transferred in any 12-month period does not exceed Eth$50,000.

Persons traveling abroad are allowed foreign exchange equivalent to Eth$100 a day for a maximum period of six weeks if the journey is made for business purposes, and up to the equivalent of Eth$l,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$150 in Ethiopian banknotes.

Exports and Export Proceeds

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

Proceeds from Invisibles

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

Capital

All receipts of capital in the form of foreign exchange must be surrendered. There is no discrimination regarding the currencies in which foreign investments are accepted. Special concessions are made to approved new enterprises financed by foreign capital, including exemption from taxes for a period of 5 years, admission of all imports of machinery free of duty, and permission to foreign investors for the remittance abroad of earned profits after taxation (see section on Payments for Invisibles, above). Upon liquidation, transfer of the entire imported capital and reinvested profits is permitted in the original currency, provided that in any 12-month period no more than the equivalent of Eth$50,000 is transferred. All payments to foreign countries on account of capital are subject to individual exchange license. Foreign exchange is allowed for repayment abroad of matured capital and for the obligations of temporary residents. Foreign employees may remit all their savings upon retirement, provided that not more than Eth$50,000 is transferred in any one 12-month period. Other types of capital transfer are handled on a case-to-case basis.

Changes during 1962

April 2. The advance deposit requirements, which had applied to imports of certain goods, were withdrawn.

April 2. The proportion of taxable income which foreign nationals are permitted to transfer abroad was raised from 30 per cent to 35 per cent, but such transfers would be restricted to foreign nationals who have resided in Ethiopia for less than six years. This time limit would not, however, 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.

April 2. The travel allowance for business purposes was raised from Eth$50 to Eth$100 a day for a maximum period of six weeks, and that for tourist purposes was raised from Eth$700 a year for each person over 20 years of age to Eth$l,050 for each person 16 years of age or over.

Finland 1

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 currencies2 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 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.2 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 countries3 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 account: 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.4 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 3). They may be credited with proceeds from the sale of U.S. dollars, the currencies listed in footnote 2, 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 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 Nmk 1,000 for each person for each period of ten days; for payments not exceeding Nmk 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 investments in bonds expressed in Finnish currency and purchased by a bank on the account holder’s behalf; 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 Nmk 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 are subject to individual import license.

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 consumer durable goods must deposit cash for their imports before customs clearance can be obtained.

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, while 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 Nmk 400 for each visit to the Scandinavian countries and Nmk 800 for each visit to other countries. Resident and nonresident travelers may take out Nmk 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 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 Nmk 32,000 for each beneficiary. Nonresidents who have resided outside Finland for three years are permitted to transfer their blocked assets to their country of residence: by immediate transfer, if the total assets do not exceed Nmk 2,500; in annual installments of Nmk 2,500, if the total assets do not exceed Nmk 25,000; and in ten equal annual installments, if the total assets exceed Nmk 25,000. During the entire period of transfer, the funds must be held on special transfer accounts.

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

Nonresidents may purchase through an authorized bank, against U.S. dollars or one of the currencies listed in footnote 2 or by debiting a Convertible Markka Account, bonds or shares quoted on the Helsinki stock exchange. When the securities so acquired 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 one of the currencies mentioned above. No permission is needed for the purchase of bonds with funds classified as Capital Accounts, but proceeds from 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 Finnish markkas from a Convertible Account, approval for their export can be obtained freely. The import of securities by nonresidents and returning Finnish residents is unrestricted.

All inward capital transactions must be approved by the Bank of Finland, which grants this permission liberally, except where it would be contrary to the national interest. At the time it approves each incoming transaction, the Bank of Finland may state the conditions for repatriation of the 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, which also examines other aspects. The approval of the State Council, when required, is also granted liberally.

On demand of the Bank of Finland, residents must declare their foreign assets and yields on their property owned abroad. Outward transfers of capital by residents are subject to individual approval. For direct investments, approval is granted liberally on the merits of the case.

Emigrants are granted an exchange allowance of up to Nmk 2,500 a person.

Changes during 1962

January 1. Export licensing was eliminated, except for exports of metal scrap.

January 1. Japan, Kuwait, Muscat and Oman, Sierra Leone, and Tanganyika were added to the list of countries benefiting from license-free import treatment; the Republic of Korea and the Republic of Viet-Nam were removed from the list. License-free import treatment was extended to certain groups of commodities; certain agricultural commodities were transferred from the license-free list to the list of restricted imports. All global import quotas for 1962 were enlarged by at least 20 per cent.

March 1. The list of payments for invisibles which the Finnish authorized banks are permitted to effect without reference to the Bank of Finland was extended by including payments related to ship registration fees, charges for the hire of transport abroad for the conveyance of passengers, and participation in foreign correspondence courses.

March 1. Travel tickets could be obtained for, and dispatched to, persons who are resident in Finland but staying temporarily abroad, without prior permission from the Bank of Finland.

March 1. Capital transfers were further liberalized by allowing private persons of any nationality who have resided outside Finland for three years to transfer to their country of residence blocked assets they own in Finland: assets not exceeding a total of Fmk 250,000 could be transferred abroad immediately; assets not exceeding Fmk 2,500,000 could be transferred in annual installments of Fmk 250,000; assets exceeding Fmk 2,500,000 could be transferred in ten equal annual installments. During the entire period of transfer, the funds must be held on special transfer accounts.

March 1. Insurance companies were permitted to issue insurance policies in convertible currency for nonresidents, provided that the premiums were paid in convertible currency.

March 1. The term “bilateral account” was replaced by the term “restricted account.”

October 19. Regulations were issued by the Bank of Finland requiring importers of consumer durable goods to deposit cash for their imports before customs clearance could be obtained. In special cases, the Bank of Finland could grant exemption from the regulations.

Note.—The following changes became effective on January 1, 1963:

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

(2) Payments with Yugoslavia were placed on a convertible currency basis.

France 1

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 certain 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 transactions take place at freely negotiated rates. Authorized banks in continental France (including Corsica and the Principality of Monaco) are permitted to deal spot or forward in the exchange market in France in all currencies; they may also deal with banks abroad spot in any currency and forward in the currencies of countries in the area of convertibility. Forward contracts concluded by the banks with their customers must be based on commercial transactions and must be for the same period as that of the transaction.

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 Reunion), 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) the Republic of Algeria, the Republic of Cameroon, the Central African Republic, the Republic of Chad, the Republic of the Congo (Brazzaville), the Republic of Dahomey, the Gabon Republic, the Republic of Guinea, the Republic of the Ivory Coast, the Malagasy Republic, the Republic of Mali, the Islamic Republic of Mauritania, Monaco, Morocco, the Republic of Niger, the Republic of Senegal, the Republic of Togo, Tunisia, and the Republic of Upper Volta.

Payments agreements concluded by France usually provide for settlements between the French Franc Area as a whole and the other country concerned. Payments from France to other parts of the French Franc Area, except Guinea, are free of 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. For prescription of currency purposes, countries outside the French Franc Area are divided into two groups: the bilateral group2 and the area of convertibility (all other countries). Settlements with countries in the area of convertibility may be made in any of the currencies of those countries, or through Foreign Accounts in Convertible Francs (see section on Nonresident Accounts, below). Payments to countries in the bilateral group are made by crediting a Foreign Account in Bilateral Francs related to the country concerned. Payments from the bilateral group may be received through a Foreign Account in Bilateral Francs related to the country concerned, or in the same way as payments from countries in the area of convertibility. Settlements with countries in the bilateral group may also be made in their respective currencies if the regulations of the other country permit this, as in the case of Czechoslovakia. Settlements with Hungary, Laos, and Viet-Nam are subject to special regulations.

Nonresident Accounts

The classification of nonresident accounts in French francs corresponds to the grouping of countries for prescription of currency purposes: Foreign Accounts in Convertible Francs for residents of countries in the area of convertibility and Foreign Accounts in Bilateral Francs for residents of countries in the bilateral group. Foreign Accounts in Convertible Francs are not related to a specific country, while Foreign Accounts in Bilateral Francs are designated according to the country of residence of the account holder. 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.

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 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 dispatched by authorized banks to their correspondents in countries in the area of convertibility.

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 the foreign country to which the account to be used is related. 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 received by authorized banks from their correspondents in countries in the bilateral group. Transfers between Foreign Accounts in Bilateral Francs related to the same country may be made freely. In addition, these accounts may be credited with the proceeds of sales in the exchange market in France of the currency of the other country concerned when the regulations of that country permit, as in the case of Czechoslovakia.

Other transactions through Foreign Accounts require individual permits.

Three other categories of nonresident accounts (Tourist Accounts, Suspense Accounts, and Internal Accounts) are of minor significance.

Imports and Import Payments

Imports from other parts of the French Franc Area are generally free of quantitative restriction and individual license; all imports from the Republic of Guinea are, however, subject to individual license.

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, Andorra, and Finland; (2) Canada and the United States; (3) 44 specified countries;3 and (4) all other countries. The import free list (i.e., the list of commodities that may be imported free of quantitative restriction) applicable to each group includes all the commodities on the list applicable to the succeeding group plus other 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 from 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) is also free from quantitative restriction. Certain raw materials and other commodities may be imported freely from all other countries.

Liberalized imports not exceeding F 10,000 in value require only the submission of an invoice to the customs; above this figure, most liberalized imports are admitted on the basis of a declaration completed by the importer. (These two procedures account for over 75 per cent of imports.) Some liberalized imports (spare parts, etc.) require an administrative visa, which is stamped on an import attestation.

Other imports require individual import licenses, which are granted (1) within quotas determined on an individual commodity basis and applicable to specified countries or areas in accordance with trade agreements and an import plan drawn up for a definite period; (2) in accordance with special import procedures; or (3) on an individual basis. Raw materials or other goods needed for the production of goods to be exported may be imported liberally under IMEX and EXIM procedures.4 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. A very small proportion of imports is effected through compensation transactions, mainly agricultural items from the Soviet bloc.

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. However, as a general rule, payments to the foreign exporter may be made only after the shipping documents have been presented, unless earlier payment is to be made in accordance with the provisions of an import license, or of a commercial contract approved by the authorities.

Payments for Invisibles

Payments for current invisibles are subject to control, but applications for remittances are approved provided no unauthorized capital transfer is involved.

Payments which the authorized banks are permitted to approve without limitation, subject to the presentation of supporting documents, include those related to approved trade transactions and to maritime contracts of any kind; income accruing to nonresidents in the form of profits, dividends, and royalties; banking commissions, patent fees, and specified categories of taxes; fees to lawyers, medical doctors, etc.; rents and similar payments due to nonresident owners and administrators of firms in France; participation in foreign congresses, conferences, etc.; alimony in accordance with court decisions; education fees and cost of maintenance of students abroad; and business travel abroad.

Payments which the authorized banks are permitted to approve up to specified limits include those by emigrants (F 5,000 in addition to the tourist allowance); by residents traveling abroad as tourists (F 5,000 for each trip); by nonresidents employed in France (the net salary for the three months preceding the date of the transfer); by residents for family maintenance (F 1,000 monthly for each beneficiary); and by residents on account of rebates, refunds, discounts, etc. (F 10,000). In addition, the authorized banks may approve transfers up to F 500 for any purpose.

Applications for all other transfers for invisibles are referred to the Bank of France.

In addition to the exchange allocation for tourist travel, residents may buy from the authorized banks any amount of exchange for renting rooms, villas, etc., abroad, and 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.

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 resulted 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 may take out of France banknotes and coins (except gold coins) up to F 1,000 in metropolitan francs, or up to 75,000 francs 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 used abroad or exchanged for other currencies.

Exports and Export Proceeds

Some exports are subject to individual license; but such exports may be made, subject to certain limitations, without any formality if the total value does not exceed F 500. Exports free of license may be made without formality if the total value does not exceed F 5,000.

Export proceeds may be the object of a 180-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; the remainder must be surrendered. Certain percentages of export proceeds are, however, exempt from the surrender requirement.5 These retained percentages of export proceeds are kept in special EFAC (Exportations-Frais Accessoires) accounts, which are separate for each foreign currency or, in the case of export proceeds received in francs, according to the type of the nonresident franc account debited for the payment. EFAC accounts may be used only by the account holder, for all authorized payments.

Proceeds from Invisibles

Amounts due from residents of countries outside the French Franc Area exceeding F 500 in respect of services, and exceeding F 1,000 in respect of income from foreign securities, must be collected and, if not used to make authorized payments abroad, must be surrendered within three months from the date of receipt. Residents returning from abroad may retain foreign banknotes and coins up to the equivalent of F 1,000 for use during their next trip abroad.

Travelers may bring in any amount of banknotes or coins (except gold coins) in metropolitan francs, CFA francs, CFP francs, or any foreign currency. However, the exchange of banknotes issued by the Banque Centrale des Etats de l’Afrique de l’Ouest is limited to 75,000 CFA francs a traveler.

Capital

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.

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.

All capital transactions involving nonresident interests must be carried out through authorized banks. The following investments may be made freely in France by nonresidents: (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 intermediacy of a notary public of immovable property or rights to such property located in France; (4) loans to residents up to F 2 million (or the 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 are subject to individual license. Repatriation of the proceeds from the liquidation of approved investments is permitted.

Transactions in securities are subject to special regulations. 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 on a stock exchange, in France or abroad, in any security officially quoted. 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 countries in the bilateral group), or exported on behalf of residents for the purpose of selling the securities in accordance with the regulations mentioned in the preceding paragraph.

Nonresidents purchasing securities in France must make payment in accordance with the 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 any of the following ways: (1) repatriated and surrendered; (2) used for the acquisition of securities abroad; or (3) in cases where the exchange control regulations in the country where the sale took place do not permit the transfer of proceeds from the sale of securities, sold to another 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 (1) by the purchase of foreign exchange on the exchange market in France; (2) by the use within three months of the proceeds from the sale abroad of securities by the seller; (3) with foreign currency held by the buyer and not subject to surrender requirements; and (4) with foreign currency acquired from any person in the French Franc Area, where the exchange control regulations abroad prevent repatriation of the currency.

Changes during 1962

At various times during the year, the import free lists were enlarged. These changes are not listed below.

January 1. Import procedures were simplified. Only imports quantitatively restricted remained subject to licensing requirements, and imports free of quantitative restrictions could be made either on the basis of a declaration or, if subject to the requirement of an administrative visa, on the basis of an attestation. In addition, export controls and procedures were simplified.

February 1. Exchange accruing from exports and from ship charters could now be sold on a forward basis in the exchange market in France for periods exceeding six months. Residents were now permitted to purchase exchange on a forward basis in the exchange market in France to pay for ship chartering expenses related to imports and exports and to repay loans granted by authorized banks in connection with imports and exports.

February 24. The following measures of liberalization in respect of invisibles and capital came into effect:

(1) The exchange allowance for a resident tourist going abroad was increased from NF 2,500 a calendar year to NF 3,500 for each trip.

(2) Authorized banks were permitted to make transfers for a resident tourist going abroad for renting rooms, villas, etc., up to the equivalent of NF 3,500 (previously NF 500). Such transfers could be made in addition to the basic tourist allowance.

(3) The amount of foreign banknotes and coins which a resident was permitted to retain after his return from a trip abroad for the purpose of using them during his next trip abroad was raised from the equivalent of NF 500 to NF 750. A resident going abroad was permitted to take with him banknotes up to NF 750 in metropolitan francs, or 75,000 francs in CFA or CFP francs, or the equivalent of NF 750 (previously NF 500) in banknotes issued by any other bank of issue in the French Franc Area.

(4) Nonresident travelers leaving France were now permitted to exchange into foreign currency French banknotes and coins up to NF 750 without any formality, and any amount over NF 750 upon presentation of proof that the banknotes and coins presented for exchange resulted from the sale of foreign currency within two months preceding the traveler’s departure from France.

(5) Transfers abroad by residents to pay education fees and costs of maintenance abroad of students who are residents of France were exempted from the remaining restriction, which limited transfers on account of pocket money.

(6) The limit on transfers for family maintenance was raised from NF 400 monthly for each beneficiary to NF 750.

(7) The limit on transfers for the purpose of making rebates, refunds, discounts, etc., without individual permit was raised from NF 1,000 to NF 2,000.

(8) The exchange allowance permitted to emigrants, in addition to the tourist allowance, was raised from NF 2,500 to NF 3,500.

(9) Authorized banks were permitted to make transfers abroad freely for residents up to NF 250 (previously NF 100) for any purpose.

(10) Amounts not exceeding NF 1,000 (previously NF 500) due to residents from countries outside the French France Area in respect of income from foreign securities were exempted from the surrender obligation.

(11) Authorized banks were permitted to make transfers abroad without limitation on account of legacies due to former residents of French nationality who have had permanent residence abroad for at least four years, and on account of dowries of former residents of either French or foreign nationality who have established permanent residence abroad because of marriage to a nonresident.

(12) The maximum amount of a loan which a nonresident was permitted to grant to a resident without individual authorization was raised from NF 1 million to NF 2 million (or the equivalent in foreign currency).

March 19. The validity of export licenses was extended from three months to six months.

March 20. Balances on EFAC accounts were now permitted to be used freely for all payments abroad for which a special or general license had been given. Ten per cent of unused balances on EFAC accounts had to be surrendered at the end of half-yearly periods instead of, as previously, quarterly periods.

March 28. In view of extending the period of validity of export licenses to six months (see March 19, above), the period of validity of exchange commitments was also extended to six months.

April 2. Nonresidents were authorized, subject to certain conditions, to buy and sell on stock exchanges in France officially quoted foreign securities, and not only French securities as previously. This facility was also extended to nonresidents holding Internal Accounts and Internal Security Dossiers. Residents were authorized to buy and sell French securities on stock exchanges abroad. Moreover, they were permitted to buy on the exchange market in France the foreign exchange required to buy French and foreign securities on stock exchanges abroad, thus putting an end to the devises-titres market (see Thirteenth Annual Report on Exchange Restrictions, page 131).

July 12. Lebanon was included in the list of “specified” countries in the import regulations.

November 15. The bilateral payments agreement with Bulgaria was terminated, and Bulgaria was included in the area of convertibility.

December 21. For the purpose of exchange controls on real estate transactions, the term “resident” was redefined to include persons of foreign nationality who have had their usual residence in France for at least four years, and the term “nonresident” to include persons of French nationality who have had their usual residence outside the French Franc Area for at least two years or are holders of a Foreign Account in Francs.

December 21. The following measures of liberalization in respect of invisibles and capital came into effect:

(1) The limits up to which the authorized banks were permitted to approve payments for a number of invisibles without reference to the exchange control were raised as follows: payments for any purpose, NF 500 (previously NF 250); the exchange allowance for emigrants, NF 5,000 (previously NF 3,500) in addition to the tourist allowance; rebates, refunds, discounts, etc., NF 10,000 (previously NF 2,000), but not to exceed 20 per cent of the amount of the invoice; family maintenance payments, NF 1,000 (previously NF 750) a month for each beneficiary; the allowance for tourist travel abroad, NF 5,000 (previously NF 3,500) for each trip; allocations for business travel, no limit (previously NF 1,000 for each trip); and payments for the renting of rooms, villas, etc., abroad by resident tourists, no limit (previously NF 3,500).

(2) Residents going abroad were permitted to take with them foreign notes and coins which they did not spend during their previous travel abroad up to the equivalent of NF 1,000 (previously NF 750), in addition to the tourist allowance.

(3) Nonresident travelers leaving France were permitted to exchange into foreign currency French banknotes and coins up to NF 1,000 (previously NF 750) without any formality, and any amount over NF 1,000 (previously over NF 750) upon presentation of proof that the banknotes and coins presented for exchange resulted from the sale of foreign currency within two months preceding the traveler’s departure from France.

(4) Both residents and nonresidents were permitted to take with them out of France banknotes and coins (except gold coins) up to NF 1,000 (previously NF 750) in metropolitan francs.

(5) In the case of legacies, the beneficiary could be not only a person of foreign nationality with residence abroad, or a holder of a Foreign Account in Francs, but also a person of French nationality who has resided abroad for at least two years (previously the required period was four years).

(6) The conditions on which the authorized banks were empowered to delegate authority for the purchase of means of payment in foreign currencies from foreign travelers were modified and simplified.

(7) Authorized banks were permitted to open Nonresident Internal Accounts and Dossiers for persons of French nationality with residence abroad (other than civilian and military governmental employees), and for persons of foreign nationality with residence in France, in both cases when the period of residence is less than two years (previously four years).

(8) Regulations governing Foreign Accounts in Francs were further liberalized. Such accounts could be opened for persons of French nationality who have resided abroad for at least two years (previously four years). French banknotes and coins sent from abroad by the correspondents of authorized banks could be credited to Foreign Accounts in Francs. Foreign Accounts in Convertible Francs could be debited for French banknotes and coins dispatched by authorized banks to their correspondents abroad.

December 21. Exchange earnings accruing to residents, if not used to make authorized payments abroad, must be surrendered within three months and not, as previously, within a month, from the date of collection. Balances on EFAC accounts were entirely exempted from surrender requirements.

Note.—The following changes took place on January 1, 1963:

(1) According to Decree No. 62-1320 of November 9, 1962, the French monetary unit established by a law of December 27, 1958 ceased to be designated the “new franc.” The legal monetary unit in use prior to January 1, 1960 was designated as the “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.

(2) The “new franc” became the legal monetary unit in the Overseas Departments of French Guiana, Guadeloupe, and Martinique.

(3) Trade and exchange controls on exports were simplified.

Federal Republic of Germany 1

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 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, but a small charge is made on dollar swap transactions effected by the Deutsche Bundesbank (see section on Changes during 1962, below). 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 credits.

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 controls in Germany in respect of imports and exports of goods and services is operated by the Federal Ministry of Economics, the Federal Office for Trade and Industry (Bundesamt für gewerbliche Wirtschaft), the Foreign Trade Agency for Food and Agriculture (Aussenhandelsstelle für Ernährung und Landwirtschaft), 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 from quantitative restriction are not subject to license, and no prior control is exercised over such imports, but an import declaration stamped by the Deutsche Bundesbank is required, which serves as documentation for customs control and for statistical purposes. For imports still subject to quantitative 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.

Payments for imports are free, even where the underlying import transaction is still restricted. Commodity futures may be dealt in freely. Transit trade transactions may in principle also be carried out freely, but are subject to certain conditions when they involve certain countries.

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 up to a value of DM 1,000, and for certain other exports regardless of value, only an export notification, serving statistical purposes, is required. All other exports require export declarations, and certain exports—mostly strategic goods—are subject to individual license. The customs authorities exercise control over export declarations and also check to see whether a license is required.

Foreign exchange proceeds from exports do not have to be declared or surrendered and may be used for all payments. 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

There are no restrictions on imports or exports of capital by residents or nonresidents; such transactions may be carried out 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 with foreign countries exceeding DM 500 or the equivalent in foreign currency must be reported when a maturity of 12 months or more has been fixed at the time of concluding the contract. Securities of all types may be imported or exported freely. 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 1962

January 2. A charge of ¼ per cent a year on dollar swap transactions was reintroduced.

January 8. The charge of ¼ per cent a year on dollar swap transactions was increased to ⅜ per cent a year.

January 10. The charge of ⅜ per cent a year on dollar swap transactions was increased to ½ per cent a year.

February 1. The prohibition on the payment of interest was lifted on balances held as cover for credits established.

February 14. The minimum term of dollar swap transactions was increased from one month to two months.

March 8. The minimum term of dollar swap transactions was reduced again to one month.

March 30. The charge of ½ per cent a year on dollar swap transactions was reduced to ¼ per cent a year on 61-180 day transactions.

May 1. The prohibition on the payment of interest was lifted on nonresidents’ time deposits, but the interest rates to be paid were made subject to prior approval by the Bundesbank.

July 16. The charges on dollar swap transactions were increased from ½ per cent to ¾ per cent a year on 31-60 day transactions and from ¼ per cent to ½ per cent a year on 61-180 day transactions.

August 1. The charges on dollar swap transactions were increased from ¾ per cent to 1 per cent a year on 31-60 day transactions and from ½ per cent to ¾ per cent a year on 61-180 day transactions.

September 24. The charges on dollar swap transactions were reduced from 1 per cent to ¾ per cent a year on 31-60 day transactions and from ¾ per cent to ½ per cent a year on 61-180 day transactions.3

Ghana 1

Exchange Rate System

The par value is Ghana Pound 1 = US$2.80. Exchange rates are uniform and are based on the fixed rate for sterling, with which the Ghana pound is at par. The Bank of Ghana does not quote rates other than for the pound sterling; it deals in sterling at rates within ½ of 1 per cent on either side of parity, the statutory limits being ¾ of 1 per cent on either side of parity. For other currencies, the commercial banks in 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 Bank of Ghana under powers conferred by the Exchange Control Act and Regulations, 1961. Authority for approving payments for imports is delegated to the authorized banks. Import policy is formulated by the Minister of Finance and 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 constitutes a division of the Ministry of Finance and 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, sterling, or 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 outside the Sterling Area with authorized banks in Ghana are designated Foreign Accounts. These accounts may be credited with authorized payments by residents of the Sterling Area, 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.

Accounts in Ghana pounds held by residents of Sterling Area countries 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, for transfers to other Sterling Area Accounts, and for purchases of Sterling Area currencies.

In addition to Foreign and Sterling Area Accounts, there are Blocked Accounts, 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 purposes, including investments in approved securities.

Imports and Import Payments

There are eight open general licenses listing commodities which may be imported freely in 1963. Most imports are, however, subject to individual license. Imports from South Africa, South West Africa, and the Portuguese Monetary Area are approved only in exceptional circumstances.

All importers must be registered. When the importer has obtained a license, exchange is provide automatically by an authorized bank after the importer has filed an application for foreign exchange and has submitted to the bank the necessary documentary evidence. After arrival of the goods, the importer must supply the exchange control with evidence of importation.

Payments for Invisibles

Payments for invisibles require specific approval of the exchange control, and documentary evidence must support all applications. Applications for some payments are approved on request. These include commercial payments, expenses for study abroad (if the course of study is not available in Ghana), subscriptions, and membership fees. Other applications are approved up to established limits: education expenses in connection with correspondence courses; profits of nonresident firms; transfers of salaries of foreign employees in Ghana and transfers related to leave of self-employed persons and employees of companies; tourist and other travel expenses; gifts; and charitable and missionary remittances by individuals and societies. Nonresident companies are required to reinvest in Ghana at least 60 per cent of their net profits; the remainder may be transferred abroad.

For travel, Ghanaians are granted an exchange allowance for the year ending December 31, 1963 of £G 100 for each person 12 years of age or over and £G 70 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. In addition, 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

Exports of goods require specific licenses from the Controller of Imports and Exports prior to shipment. Most exports are made 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 obtain payment in the prescribed manner within six months of shipment and to surrender the foreign exchange to an authorized bank.

Proceeds from Invisibles

All receipts from invisibles must be sold to an authorized bank. Foreign currency notes may be imported freely, except that West African franc notes may be imported only with the approval of the Bank of Ghana, which in practice permits the import of such notes by visitors, except those from the Republic of Togo, provided that they are declared at the time of entry. Travelers may not bring in Ghanaian currency notes exceeding the amount permitted to be taken out.

Capital

Movements of capital are subject to approval, and applications for such transfers must be supported by documentary evidence.

Investments in Ghana of foreign funds require prior approval if eventual repatriation of the funds is to be guaranteed.

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 are allowed, when they retire and return to their home countries, 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 unit to meet landing expenses at destination, amounts exceeding these limits being blocked.

Transactions in securities are controlled to ensure that capital is not transferred abroad without express permission. In the case of portfolio investments, residents have to obtain approval for any switch in their holdings of securities issued by nonresidents.

Changes during 1962

January 26. A new Open General License No. 5 was issued to cover imports of fish. (Open General Licenses Nos. 1-4 were issued in December 1961.)

January 27. A bilateral trade and payments agreement with Cuba was signed.

February. Persons leaving Ghana could take with them foreign currency notes (including West African franc notes) equivalent to £G 60, provided that not more than £G 20 was taken in any one currency. Previously, travelers could take out any amount in West African francs (except when traveling to the Republic of Togo), and the total limit for the export of other currency notes was £G 80, provided that not more than £G 20 was taken in any one foreign currency.

February 2. A new Open General License No. 6 was issued to cover imports of specified spare parts.

February 20. Open General License No. 7 was issued to cover imports of rice, flour, sugar, milk, soap, corned beef, sardines, and pilchards in tomatoes, shipped on or before June 30, 1962 (later extended to December 31, 1962).

March. The limit for the export of Ghanaian banknotes was reduced from £G 20 to £G 10.

March 24. Foreign private companies and companies owned jointly by the State and foreign private interests were required to reinvest 60 per cent of their net profits in Ghana; the remaining 40 per cent could be transferred abroad. Previously, the entire amount of net profits could be transferred.

May 11. Powers delegated to banks to approve the allocation of foreign exchange for all business and holiday travel (for Ghanaians only) were withdrawn.

May 11. Allowances for cars and motorcycles accompanying Ghanaians traveling abroad, as well as the facility for drawing the unused part of the basic travel allowance for the previous two years, were withdrawn.

Note.—The following changes took place early in 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.

Greece

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 a Currency Committee. Controls are implemented and applied by the Bank of Greece and authorized commercial banks.

Prescription of Currency

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

Nonresident Accounts

Nonresidents are permitted to 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 currency if the account is in drachmas, or for transfers abroad in the currency of the account if it is maintained in a convertible currency.

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 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 as sight deposits, where they earn current interest.

Imports and Import Payments

All imports are subject to 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 for imports from EMA countries when payment is to be made in a convertible or an externally convertible European currency; for imports from countries with which Greece has concluded bilateral agreements when payment is to be made through the relevant clearing account; and 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. 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 the Greek oil refinery 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 a 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). 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 individual licenses, but these are granted freely for expenses incidental to authorized trade transactions and for certain other transactions. Transfers abroad on account of specified categories of insurance (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 two trips a year. Exporters and manufacturers are allowed US$20 a day for a maximum of 45 days when they go to the United States, Canada, or the Far East; for all other countries the amount is 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; if they hold foreign passports, no declaration is required.

Exports and Export Proceeds

All exports are subject to individual license, but most exports are free of quantitative limitation. Export proceeds must be surrendered within 90 days from the date of sale of the goods.

Proceeds from Invisibles

Exchange receipts representing payments for services must be surrendered. Foreign exchange proceeds from shipping are exempt from the surrender requirement, but shipowners have to pay for supplies, repairs, etc., and any taxes and fees, and must cover their disbursements and expenses in Greece, in local currency obtained through the sale of foreign exchange to the Bank of Greece.

Travelers may bring in a maximum of Dr 2,000 in Greek banknotes. Travelers entering Greece, other than nonresident tourists holding foreign passports, must declare the foreign exchange in their possession if, when leaving Greece, the amount of such foreign exchange will exceed 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 per annum 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 per annum 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 1962

January 16. Seven import items were added to List P-6, ten to List P-3, one to List F, and one to List A.

March 23. The time limit for payment by time drafts of imports of machinery, accessories, and spare parts included in List P-6 was extended from two years to three years; for imports of other commodities in List P-6 the time limit was extended from six months to one year.

April 10. Seven import items were deleted from List A.

April 12. Four import items were added to List P-6, six to List P-3, and two to List F; two items were deleted from List F-100.

September 26. Residents going abroad for family reasons, tourist travel, or business were entitled to the equivalent of US$200 for each trip and for two trips a year; previously, the entitlement was US$150 for each trip.

October 19. Legislative Decree No. 4256/62 was passed providing the following further privileges for foreign capital invested in accordance with Legislative Decree No. 2687/53: (1) The amount of foreign exchange which could be granted for the purpose of repatriation of capital and profits was increased to 70 per cent of the foreign exchange earnings of the enterprise from the sale of its products abroad. (2) The amount of foreign exchange which could be granted for the repatriation of foreign loans was increased to 20 per cent if the foreign loan did not exceed double the value of the capital of the corporation. (3) The minimum value of investment projects referred to in Law No. 4171/61 (Art. 1), viz., Dr 90 million, was reduced to Dr 60 million.

November 1. Commodities formerly in List F-200 were transferred to List F-100, and advance deposits required for private imports included in Lists F-100 and F-50 were reduced by 10 per cent.

November 23. Frozen fish and millet were added to import List A.

Guatemala

Exchange Rate System

The par value is Guatemalan Quetzal 1.00 = US$1. There are three markets for foreign exchange transactions: (1) The official market applies to exchange proceeds subject to obligatory surrender and to payments for essential imports and specified invisibles and capital. The rates in the official market are Q 1.00 buying, and Q 1.01 selling, per US$1. (2) In the auction market, exchange licenses are to be offered at least once a week in amounts equal to official exchange holdings considered in excess of the requirements for essential transactions. Holders of exchange licenses may apply them to payments for nonessential imports and specified nonessential invisibles.1 (3) The free exchange market is for incoming exchange not subject to surrender and for all outgoing payments for which exchange is not available through the official or auction markets. Incoming exchange negotiated in the free exchange market includes, inter alia, unregistered foreign capital entering Guatemala for permanent or temporary investment, repatriation of Guatemalan capital invested abroad, tourist exchange, and the proceeds of exports designated as “irregular” or “minor” or “extraordinary.” Authorized banks purchase such free exchange at the official buying rate and issue the seller a “certificate of free exchange,” which gives the holder the right to buy an equal amount of the same foreign currency within eight business days of the date of issue, at the official selling rate. The exchange certificate is freely negotiable at prices determined by supply and demand and subject to Monetary Board regulations. On December 31, 1962, the prices quoted in the free market for certificates expressed in U.S. dollars were Q 0.02 and Q 0.03 per US$1, giving rise to effective rates of Q 1.03 buying, and Q 1.04 selling, per US$1, respectively. (See Table of Exchange Rates, below.) 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 with the Bank of Guatemala; those of the private sector through the medium of authorized banks for the account of the Monetary Stabilization Fund maintained by the Bank of Guatemala. The selection of essential imports is the responsibility of the Monetary Board. The decision on the application of surcharges on imports is made by the Ministry of Economy in consultation with the Ministries of Finance and Foreign Relations.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from nonresidents are imposed, but all exchange transactions must be carried out through banks. Payments to El Salvador, Honduras, and Nicaragua in respect of trade and specified invisibles are settled in Guatemalan quetzales through the Cámara de Compensación Centro-americana, a clearing house established by the central banks of Central America to foster the process of economic integration of their countries.

Imports and Import Payments

Imports are classified in two groups, essential and nonessential. Essential imports are not subject to restriction and exchange to pay for them is sold freely at the official rate up to the amounts applied for. Exchange to pay for nonessential imports may be purchased in the auction market up to the amounts which are allocated for sale through this market by the Bank of Guatemala (but see footnote 1). For all other import payments, exchange has to be obtained in the free market. The current list of essential imports includes, inter alia, raw materials, building materials, asphalt, capital goods, fuels, and lubricants. All imports originating in Central American countries enter Guatemala free of restriction as essential imports at the official rate of exchange.

All importers must obtain an authorization from the Bank of Guatemala or an authorized bank in order to clear the goods through customs. The application for an import authorization must be supported by a full description of the transaction, including the terms and method of payment. Moreover, for imports paid for with foreign exchange supplied through the official and auction markets, the granting of an import authorization is subject to the following conditions: Payments for imports which have to be totally or partially prepaid must be made by letter of credit. Importers of goods on consignment or of goods for which payment is to be made in cash or installments must present the original documents usually required by the Guatemalan customs for the clearance of goods; for nonessential imports the importer has to present, in addition, a valid exchange license purchased in the auction market. For imports paid for with exchange purchased in the free market, the importer must present to the Bank of Guatemala or its authorized agent a note from the authorized bank from which the exchange was purchased or a copy of a declaration to the Bank of Guatemala showing the utilization or transfer of foreign exchange deposits.

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 at December 31, 1962, this surcharge applied to imports from 25 countries.2 This surcharge is waived if the goods are transported in Guatemalan ships. Moreover, all imports 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

Exchange is provided at the official rate for the following remittances: (1) indispensable obligations of the Government and of official institutions; (2) payments for foreign services which the Bank of Guatemala considers to be essential to the economy; (3) interest on registered foreign loans; and (4) dividends and profits on registered foreign capital that is permanently invested in Guatemala, up to 15 per cent a year in at least five years out of ten and up to 5 per cent a year in any of the other years of the same decade. To pay for specified nonessential invisibles, exchange licenses may be purchased in the auction market up to the amounts allocated for sale through this market by the Bank of Guatemala (but see footnote 1). Payments for all other invisibles must be made through the free market.

Exports and Export Proceeds

All exports require an export license from the Exchange Department of the Bank of Guatemala. 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 the presentation of 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 a period not exceeding 60 days; (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 60 days after the declaration date.

Export proceeds are subject to surrender at the official rate of exchange, but those derived from “irregular, minor, or extraordinary” exports may be sold on the free exchange market.

Proceeds from Invisibles

The following foreign exchange proceeds from invisibles are subject to surrender at the official rate of exchange: (1) earnings of insurance and finance companies operating in Guatemala; (2) receipts of the Government, official agencies, and autonomous and semiautonomous institutions; and (3) receipts from any other source determined by the Monetary Board. Foreign exchange from all other sources (e.g., foreign tourists, foreign diplomats, and representatives of international agencies) is considered free exchange and may be sold in the free market.

Capital

Foreign loans and grants registered with the Bank of Guatemala, as well as registered foreign capital permanently invested in Guatemala, are subject to surrender in order to ensure remittance of the service payments at the official rate. The Bank of Guatemala may refuse to register loans and investments if it considers that their purpose is contrary to the national economic interest. All other capital transactions may be negotiated through the free exchange market.

Table of Exchange Rates (as at December 31, 1962)(quetzales per U.S. dollar)
BuyingSelling
1.00(Official Rate)1.01(Official Rate)
Export proceeds. Earnings of insurance and finance companies operating in Guatemala. Receipts of the Government, official agencies, etc. Registered foreign loans and grants. Permanently invested registered capital. Any other receipts determined by the Monetary Board.Essential imports. Indispensable obligations of the Government and of official institutions. Payments for essential foreign services. Interest and amortization on registered foreign loans. Dividends and profits up to specified percentages on permanently invested registered foreign capital.
1.03(Official Rate plus 2% Tax)
Nonessential imports and remittances.
1.03(Free Market Rate)1.04(Free Market Rate)
Proceeds of “irregular, minor, or extraordinary” exports. Salaries and expenses of foreign diplomats and representatives of international agencies. Tourist receipts. Unregistered capital. Repatriation of Guatemalan capital invested abroad. Other incoming exchange not subject to surrender.Any foreign payments not allowed at other rates.

Changes during 1962

April 25. The surcharge of 100 per cent of the customs duty previously applied to certain textile imports from Japan was canceled.

October 13. A government decree enforced the Emergency Regime of International Monetary Transfers contained in the Monetary Law (Decree No. 203) of 1945, and established controls over foreign exchange and import and export transactions. The main provisions of the decree were as follows: (1) Control over exchange transactions was vested in the Bank of Guatemala under the direction of the Monetary Board. (2) All existing exchange holdings inside the country and abroad had to be declared. (3) The following exchange proceeds became subject to obligatory surrender: proceeds from exports, earnings of insurance and finance companies, registered foreign loans and grants, registered foreign capital permanently invested in Guatemala, receipts of the public sector, and any other exchange receipts determined by the Monetary Board. (4) Three separate exchange markets were established for specified transactions: (a) an official market, in which exchange proceeds subject to obligatory surrender were to be sold and which was to be used for payments for essential imports and specified invisibles and capital; (b) an auction market for exchange licenses, to be fed from official holdings of exchange and to be used for payments for nonessential imports and specified nonessential remittances; and (c) a free exchange market, which was to derive exchange from salaries and expenses of foreign diplomats and representatives of international agencies, foreign investment capital not eligible for the official market, repatriation of Guatemalan capital invested abroad, tourist expenditures, and other incoming exchange not subject to surrender, and which could be used for any foreign payments. The Monetary Board was entitled to replace totally or partially the sale of exchange licenses through the auction system. If rates were fixed by the Board, however, the level to be established for this purpose would have to approximate the results of any auctions which might have taken place and would also have to balance supply and demand.

October 16. The Bank of Guatemala published the list of essential imports for which exchange would be sold freely. The list contained, inter alia, the following types of goods: raw materials, building materials, asphalt, capital goods, fuels, and lubricants.

November 13. The inoperative auction system was replaced for the months of November and December 1962 by sales of exchange at the official rate to importers of nonessential goods, subject to a license tax of 2 per cent; such sales were restricted to 50 per cent of the foreign exchange requirements of individual importers for nonessential goods during the corresponding months of 1961.

Haiti1

Exchange Rate System

The par value is Haitian Gourdes 5.00 = US$1. This is a uniform rate, applicable to all transactions. Exchange transactions by commercial banks with the public are subject to small banking commissions. Haiti has no restrictions on foreign payments. On December 22, 1953, Haiti notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from 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 are subject to license. 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 1962

No significant changes took place during 1962.

Note.—A decree of February 12, 1963 canceled the tax of 3 per cent on remittances abroad by insurance companies of amounts derived from insurance premiums.

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 Salvadoran colones and Guatemalan quetzales are purchased (since January 4, 1963) 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 El Salvador, Guatemala, and Nicaragua in respect of trade and specified 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.

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 1962

No significant changes took place during 1962.

Hong Kong

Exchange Rate System

The par value is Hong Kong Dollars 5.71429 = US$1. The exchange rate system comprises the official rates and the free market rates; so far as the rates for the U.S. dollar are concerned, these are, in practice, within 1 per cent of the par value. As at December 31, 1962, the rates in the official market were 1s. 3132d.2016-10-28 buying, and 1s. 21516d. selling, per HK$1, or HK$5.66 buying, and HK$5.75 selling, per US$1; the rates in the free market on that date were HK$5.70⅞ buying, and HK$5.71 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-seven 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 a part of the Sterling Area, and all settlements except those effected 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.

The proceeds of exports to China (Mainland), China (Taiwan), and Macao may be obtained in Hong Kong dollars; imports from these territories may be paid for in Hong Kong dollars (but not to the credit of an External Account) 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. dollars received from exports to the dollar area or to the Republic of Korea of goods originating in Hong Kong, China (Mainland), China (Taiwan), Macao, or the Republic of Korea may be sold in the free market. Payments 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 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, whose accounts are treated as those 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 operated in the same manner as the accounts of residents, except that they may not be overdrawn, or debited for any payment to outside Hong Kong, without exchange control permission.1

The accounts of recognized banks situated outside the Sterling Area are termed External Accounts. These accounts 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 import license. Provided that the prescription of currency requirements are fulfilled, and that when the value of the consignment exceeds £250 the related shipping documents are presented, 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 from those countries not exceeding £10,000 in value.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 the equivalent in U.S. dollars or Canadian dollars; these 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 shipments for which documents are not presented; where payment is required in advance of shipment;3 where payment is not in accordance with the usual prescription of currency requirements; where the goods are imported specifically for re-export; and for all imports of diamonds, ships, and boats.

Payments for Invisibles

Payments not exceeding £500 or the equivalent in other Sterling Area currencies to other parts of the Sterling Area do not require a license. For other payments through authorized banks, exchange licenses are required. The authorized banks have power to approve payments for most invisibles up to certain limits (no exchange control form is required when the payment does not exceed £100 or the equivalent), above which the approval of the exchange control is required. This approval is normally granted for all invisibles. The basic allowance of exchange at the official rate for residents (for exchange control purposes) of Hong Kong traveling to outside the Sterling Area or beyond Macao is £250 or the equivalent for each person in any 12-month period.4 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. All exports to countries outside the Sterling Area, China (Mainland), China (Taiwan), and Macao require a declaration by the exporter showing how the export proceeds will be collected, to be approved by the Department of Commerce and Industry. If payment is not being received within six months, and in accordance with the prescription of currency requirements, the circumstances must be reported to the exchange control. The U.S. dollar f.o.b. 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. The proceeds of all other exports must be obtained in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

Receipts from other parts of the Sterling Area exceeding £500 or the equivalent in other Sterling Area currencies 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 outgoing transfers 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. The provision of official market exchange for the repatriation of foreign capital is normally conditional on the prior approval of the exchange control having been obtained for the investment. Transfers of capital may be made freely in Hong Kong dollars through the free market, but all receipts from, as well as transfers to, other parts of the Sterling Area exceeding £500 or the equivalent in other Sterling Area currencies require licenses, which are granted for all bona fide transactions between Hong Kong and other parts of the Sterling Area.

Changes during 1962

March 24. The instructions to authorized banks concerning payments to residents of countries outside the Sterling Area for direct imports into other parts of the Sterling Area of goods of non-Sterling Area origin were recodified.

July 23. The instructions to authorized banks concerning payments to residents of countries outside the Sterling Area were recodified. The banks were given authority up to certain limits to approve applications in respect of payments for invisibles, and in such cases the completion of an exchange control form was not required if the amount of the payment did not exceed £100 or the equivalent in other currencies.

August 22. The instructions to authorized banks concerning export proceeds were recodified, and the prescription of currency requirements in this matter were simplified.

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 dealings and of exchange control, and ensures 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 authorized to deal in foreign exchange besides the Central Bank. 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 Hungary, Rumania, and the U.S.S.R., in Icelandic krónur; with Brazil 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 and those with most other countries in sterling.

Nonresident Accounts

There are two categories of nonresident krónur account: 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 usually 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 65 per cent of all imports on a 1958 basis) may be imported freely from all countries without quantitative restriction and without an import license. A large proportion of all other goods are contained in List B, and these are subject to individual license. 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 under global quotas from all other countries.

About one sixth of total imports are subject to import fees of 44, 33, or 16.5 per cent,1 according to the category of the goods; imports of automobiles are subject to fees of 100 per cent or higher. In addition, about two thirds of total imports are subject to a sales tax of 15 per cent.

Importers of goods not subject to license 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 subject to individual license, 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.

A number of other outgoing payments are licensed freely on the basis of bona fide documents, and some others are licensed freely up to established limits or subject to other limitations. Applications for exchange for all other invisibles are considered on their merits. An exchange allocation for tourist travel is granted up to US$280 a year, or its equivalent in other currencies, for each person.

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 and use their foreign exchange receipts from freight, passenger tickets, or other charges, 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 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. 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 license. The import and export of securities by residents are subject to the approval of the Central Bank.

Changes during 1962

January 1. Global quotas for 1962 became effective and procedures were established for the distribution of the related import licenses. In addition, a few items previously subject to global quota arrangements were freed from quantitative restriction.

March 27. The Ministry of Commerce, after consulting with the Central Bank, decided that the annual basic exchange allocation for residents traveling abroad would be increased from the equivalent of US$182 to the equivalent of US$280.

March 30. Additional items were included in the free import list. Certain other items were transferred from the global quota list to the list of goods which can be imported only from the bilateral payments agreement countries.

July 1. Residents traveling abroad were authorized to take with them, when leaving and upon re-entering Iceland, up to IKr 2,500 in Icelandic banknotes and coins. Travelers residing abroad were authorized to bring into Iceland up to IKr 5,000 in Icelandic banknotes and coins and to take out up to IKr 2,500 of these when leaving the country. The import and export of Icelandic banknotes and coins in excess of these amounts continued to be subject to the authorization of the Central Bank.

India 1

Exchange Rate System

The par value is Indian Rupees 4.76190 = US$1. All transactions in foreign exchange must be conducted through authorized dealers, whose dealings with the general public must be effected as follows: in sterling, at rates fixed by the Foreign Exchange Dealers Association; in other currencies, at rates based on the fixed rates for sterling and the London market rates for sterling against the other currency concerned. Authorized dealers are permitted to cover their requirements of foreign currencies in the London market, and to cover their permitted transactions in certain currencies2 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.3 As at December 29, 1962, market rates for telegraphic transfers on London were 1s. 6132d. buying, and 1s. 53132d. selling, per Rs 1, and for telegraphic transfers on New York they were Rs 4.7425 buying, and Rs 4.775 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 Indian Government 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,3 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 group 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. 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 in the same country as the account holder, 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 not exceeding Rs 20,000, to residents of India. These accounts may also be debited for remittances exceeding Rs 20,000 made by Indian nationals resident in the Sterling Area for credit to their accounts in India or for payment to Indian nationals resident in India. Transfers may be made from Convertible Accounts to other Convertible Accounts or to Sterling Area Accounts, and between Sterling Area Accounts. All other entries on Sterling Area Accounts, Bilateral Accounts, and Convertible Accounts require the prior approval of the Reserve Bank.

Nonresident accounts of private individuals or firms may be credited, without prior approval, for payment of dividends and interest on securities and proceeds of small checks up to certain limits. They may be debited for such items as payments for insurance premiums, income taxes, and remittances to relatives, subject to a limit of Rs 1,000 for each transaction. All other credits and debits require the prior approval of the Reserve Bank. Transfers normally are not permitted from nonresident accounts of individuals or firms to nonresident accounts of banks belonging to the same country or monetary area, unless the 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 current requirements. Licenses may be used to import from any country except South 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 can be used in the first six months of the licensing year 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. 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, Malaya, Singapore, Persian Gulf ports, and East Africa, and passengers traveling to Ceylon and Pakistan, may take with them Rs 20 a person at any one time. Residents may take out foreign notes and coins to the extent to which they have been individually permitted; 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 licensing is now not necessary in respect of most items. For items subject to export license, the procedure varies according to the type of exporter, of which there are three categories: established shippers, newcomers, and producers (e.g., manufacturers, mine owners, and growers). All applicants for export licenses must submit income tax verification certificates. There are three open general licenses, which permit exports of certain commodities without the need for an individual export license. Exports of some commodities are subject to quota limitations and those of a few items are not normally permitted. Exports to South 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 currencies5 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, in the case of sterling, he held a sterling account prior to July 8, 1947, 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 currencies5 must be surrendered.

The import of Indian currency notes and coins is in general prohibited. However, deck passengers to Burma, Malaya, Singapore, Persian Gulf ports, and East Africa, and passengers who traveled to Ceylon and Pakistan, may reimport into India Rs 20 a person against presentation of evidence that they exported this amount. 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 as 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) who emigrate are not normally permitted to transfer their assets, which remain blocked; remittance of income on such assets is, however, allowed in full. In exceptional cases, foreign exchange may be released up to a limit of Rs 20,000 at the time of emigration and three subsequent annual installments of Rs 10,000 each. 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 balance 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 nonresidents 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 1962

January 22. The amount of Indian or Pakistan notes or coins which could be taken out by travelers going to Pakistan was changed to Rs 75 on any one day. Previously, the limits were Rs 50 in Indian notes and coins, and another PRs 100 in Pakistan notes and coins, on any one day.

February 6. Restrictions were removed on remittances between India and Goa, Diu, and Daman, and accounts with banks in India of persons of Goan or Indian nationality resident in those territories were treated as resident accounts.

April 1. The import licensing policy for the year beginning April 1, 1962 was announced. Further quota restrictions were imposed on imports of some 55 items; the import of some 10 items was prohibited; and imports of 2 items were liberalized. The net exchange saving to be obtained by these measures was estimated at Rs 10 million in the next six months on the basis of established importers’ quotas which cover about 15 per cent of total imports. A special feature of the import licensing policy for this period was that applications for licenses were to be made to cover a year’s imports; annual licenses would be issued subject to the condition that only the first half of the license would be used in the first six months. In other cases, licenses would be issued in two six-month installments.

May 14. Import licensing policy for Goa, Daman, and Diu for the period April-September 1962 was announced. The import into these territories of 95 consumer items was prohibited; the import of 21 other items was to be licensed liberally; and the import of 23 consumer items was to be restricted to 25 per cent of actual imports of those items in 1961. The re-export of any of these items to the rest of India was prohibited.

June 8. Further restrictions were imposed on imports to achieve a saving of some US$75 million in the current licensing period. These additional restrictions involved cuts in all imports, whether government or private, except those covered by U.S. aid. Established importers were granted licenses for only up to 50 per cent of their entitlement calculated in terms of the import licensing policy announced in April. The volume of licenses granted on an annual basis in two half-yearly installments was also to be reduced by 50 per cent, as was the entitlement to import licenses of Consumers Cooperative Societies. Actual users would be subject to reductions in the licensing of their import requirements when obtained with exchange resources not committed to specific projects; the extent of the cut would be decided on the merits of each case and the availability of foreign exchange. Supplementary licenses were to be issued whenever necessary, subject to the availability of foreign exchange.

June 8. Travel agents and companies could book passages abroad for residents of India only if the traveler had been granted travel exchange by the Reserve Bank or had been specifically granted permission by the Reserve Bank to book his passage.

June 8. All capital transfers, irrespective of the amounts, were made subject to the approval of the Reserve Bank. Previously, authorized dealers had been given general permission to remit capital assets of Sterling Area nationals if their entire assets in India including bank balances did not exceed the equivalent of £ stg. 1,000.

June 25. The distinction between Sterling Area and other nationals in respect of transfers of capital was removed. Non-Indian nationals would henceforth be allowed to repatriate the sale proceeds of their investments, subject to a limit of Rs 75,000, at the time of retirement and the balance in annual installments not exceeding Rs 20,000 per annum, and, as previously, to remit their current remittable assets in full. Formerly, Sterling Area nationals were permitted to repatriate their entire assets to any Sterling Area country, while other foreign nationals were permitted to transfer their current remittable assets in full and the proceeds from the sale of their investments up to an over-all limit of Rs 125,000 for each holder.

July 4. East African shillings were added to the list of currencies that must be surrendered to an authorized dealer.

July 17. The amount of Indian and foreign notes and coins which could be taken out by travelers going to Tibet was restricted to Rs 75 in a month. Previously, travelers to Tibet could take out unlimited amounts of Indian notes and coins.

August 1. The treatment of applications for private remittances by Sterling Area nationals and other nationals temporarily resident in India was unified. Authorized dealers could now allow private remittances by all non-Indian nationals, other than Pakistan nationals, to their own countries up to Rs 1,500 a month, provided that this amount did not exceed 50 per cent of the remittor’s net income. Previously, authorized dealers were permitted to make remittances to the Sterling Area for Sterling Area nationals up to a maximum of £ stg. 150 (Rs 2,000) a month for each individual, while applications by nationals of other countries had to be submitted to the Reserve Bank for approval in order to establish an approved scale for such remittances.

August 1. The facility granted to Indian nationals (including persons domiciled in India) to transfer foreign exchange up to Rs 50,000 a family when they emigrated to another country was withdrawn. Normally, no exchange would now be granted; but where there was a legal requirement in the country of immigration, foreign exchange would be granted to fulfill such requirement on the condition that this would be repatriated to India within one year.

September 9. The export licensing system was substantially liberalized. As many as 107 items were removed from the list of prohibited exports, leaving only 78 items on the list. Further, in respect of some 45 items which were previously allowed to be exported only after consideration of the merits of each case, the formality of obtaining a license was removed.

October 27. All private remittances to China (Mainland) or by Chinese to any country outside India had to be referred to the Reserve Bank.

November 29. Exports to Tibet were made subject to the exchange control applicable to exports to other countries.

December 24. Further reductions were made in the import program for the period October 1, 1962 to March 31, 1963. The import of a large number of items by established importers was prohibited. They would, however, be enabled to import items of special importance either through the grant of supplementary licenses or through the validation of the second half of the annual licenses for the year beginning April 1, 1962. Both types of license would be subject to prescribed cuts; but licenses granted against U.S. aid not provided for specific projects would be exempt from these cuts. For actual users, the second half of the annual licenses would be validated, subject to prescribed cuts, for imports of raw materials and components financed from foreign exchange resources not committed to specific foreign aid projects. A saving of nearly Rs 100 million was expected to result from the reductions in quotas, shared about equally between established importers and actual users.

Note.—The following changes took place early in 1963:

February 16. The accounts of individuals, firms, and companies resident in Tibet would no longer be treated as resident accounts.

February 21. The general permission by which travelers could take out or bring in Indian currency notes and coins up to Rs 75 a person at any one time was withdrawn. An exception was made for deck passengers to Burma, Malaya, Singapore, Persian Gulf ports, and East Africa and travelers to Ceylon and Pakistan, who were permitted, subject to declaration, to take out and bring back up to Rs 20 a person.

Indonesia

Exchange Rate System

No par value for the Indonesian Rupiah has been established with the Fund. The basic official rate is Rp 45.00 per US$1, on which are based the Bank Indonesia’s rates of Rp 44.83125 buying, and Rp 45.28125 selling, per US$1.

The Bank’s effective buying rates vary from Rp 44.83125, which applies to transactions with the oil companies, to Rp 179.83125, the special rate for tourists. There is a retention system for all other exchange receipts which permits exporters and other exchange earners to retain 15 per cent of exchange proceeds for sale on a free market. This produces three effective exchange rates; as at the end of December 1962 these were Rp 169.73156, Rp 171.41906, and Rp 173.10656, per US$1. The Bank’s selling rate of Rp 45.28125 applies to a few essential imports and to payments for some invisibles and capital transactions. This rate plus a 100 per cent transfer tax applies to payments for all other authorized invisibles. Effective rates for other imports range from Rp 90.28125 to Rp 1,170.00 per US$1, as a result of the application of Komponen Harga or Retribusi SIVA levies and the use of general or regional SIVA certificates. (See Table of Exchange Rates, below.)

Administration of Control

Exchange control is administered by the Foreign Exchange Institute (which is under the direction of the Bank Indonesia), on whose behalf combined import and exchange licenses are issued by the Bureau 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 Mainland China and Czechoslovakia, with which Indonesia has bilateral payments arrangements, are made through special clearing accounts.

Nonresident Accounts

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

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

2. All other nonresident accounts: The opening of these accounts and all entries require permission from the Foreign Exchange Institute. These accounts are designated as Capital Accounts or Income Accounts, and transfers from the former to the latter are not allowed. For nonresident accounts of private persons, the authorized exchange banks have been given permission to make routine personal payments in Indonesia and yearly transfers up to a maximum of Rp 30,000 in the currency of the nonresident to the debit of his Income Account. The granting of licenses for remittances to the debit of Capital Accounts, i.e., capital remittances and remittances of inheritances, has been suspended, 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. All imports require licenses, which are issued in accordance with a quarterly exchange budget. Specified goods, amounting to approximately one half of total imports, may be imported only by state enterprises. The state enterprises also import commodities not exclusively reserved for them, so that in practice they handle approximately 80 per cent of total imports.

Imports are classified in five categories, although in practice most imports fall in the first two. Category I imports (rice, fertilizer, raw cotton, and selected goods used directly in the production of exports) are subject either to the Bank’s selling rate of Rp 45.28125 or to the Bank’s selling rate plus a Komponen Harga levy of 100 per cent, giving an effective rate of Rp 90.28125. Category II imports (slightly less essential goods) are subject to the Bank’s selling rate plus a Komponen Harga levy of 500 per cent, giving an effective rate of Rp 270.28125. Category I and II imports in excess of exchange quotas are subject to either the regional or the general SIVA rate (see section on Exports and Export Proceeds, below). Imports in Categories III and IV (luxury goods) are subject to either the regional or the general SIVA rate plus a special tax (Retribusi SIVA) calculated as a percentage of the basic official rate. The rate applicable to imports in Category V (goods requiring a special permit from the Ministry of Commerce) is determined on a case-by-case basis. There are two fees of 1 per cent each in addition to the levies and taxes described above (see footnote 1, page 179).

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. Private 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 Bank’s selling rate and are subject to either general or special license from the Foreign Exchange Institute. Specified payments considered to be nonessential are subject to a transfer tax of 100 per cent. Payments for certain invisibles can also be made at the general or regional SIVA rate (e.g., advertising, opening of branches abroad, travel, and medical expenses). 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, there are annual limits of US$3,158 for each remittor for those in independent professions and US$4,210 for employed persons. A general license permits nonresidents to remit from their Income Accounts up to Rp 30,000 annually converted at the Bank’s selling rate of Rp 45.28125 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. There are no general limitations as to the destination of exports, but the Bureau for Exports will refuse to issue an export license if, for example, the shipment should not conform to existing trade agreements. Exports of high-grade rubber, estate coffee, and tea to Singapore and Malayan ports are prohibited.

Exporters (with the exception of those oil companies to which special arrangements apply) are required to surrender to an authorized bank in Indonesia 85 per cent of their export proceeds. The remaining 15 per cent is exchanged at the Bank Indonesia for a SIVA certificate, which can be transferred once or used by the exporter. One half of the SIVA certificate is general, while the other half authorizes imports for specified regions of the country. SIVA certificates can be used for luxury imports or for essential and semiessential imports in excess of the established quotas, as well as for certain invisibles. Prices of SIVA certificates fluctuate; the price for a general SIVA certificate as at the end of December 1962 was Rp 900.00 per US$1, and that for a regional certificate was Rp 877.50 per US$1.

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; for 85 per cent, rupiahs are provided at the Bank’s buying rate, and for the remaining 15 per cent a SIVA certificate is provided by the Bank Indonesia (see section on Exports and Export Proceeds, above). Foreign nationals resident in Indonesia may retain all income not arising 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 planing 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 179.83125 per US$1. Authorized banks must restrict their purchases of certain currencies to specified denominations.

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 Bank’s buying and selling rates. A few capital payments that are deemed nonessential, e.g., transfers from nonresident Capital Accounts, are subject to a transfer tax of 100 per cent.

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

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

Category 1Category 2Category 3
a. Estatesa. Transport ande. Banksa. Insurance and
b. Miningcommunicationsf. Developmentadministration
c. Industryb. Energyg. Foreign tradeb. Hotels
c. Other industriesh. Domestic tradec. Enterprises in the
d. Printingcultural 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 then be used as follows: In Category 1, it may all be transferred abroad at the Bank’s selling rate; in Category 2, 60 per cent may be transferred abroad at the Bank’s selling rate and the remaining 20 per cent retained for private use in Indonesia. Companies in Category 3 are no longer permitted to transfer their profits. The reserve profits may be used for certain purposes, such 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, also known as “new investments,” comprises foreign capital invested in Indonesia since January 1, 1954. These investments are subject to conditions agreed between the Indonesian authorities and the interested parties. In general, companies in this group benefit from more favorable treatment than that accorded companies in Group I. Most companies in Group II are exempt from the reserve profits requirements applied to Group I; and, as a minimum, they are entitled to the same treatment as that accorded to companies in Group I. Transfers of profits and authorized repatriation of capital by “new investments” are made at the Bank’s selling rate.

Group III includes foreign investments in Indonesia belonging to 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 is subject to license, the issue of which is subject to a special import levy of 33⅓ per cent of the current domestic market value of the security. The proceeds of this levy are payable to the Foreign Exchange Fund. Imported securities representing the reinvestment of securities exported from Indonesia are exempt from this levy.

Table of Exchange Rates (as at the end of December 1962)1(rupiahs per U.S. dollar)
BuyingSelling
44.83125(Bank’s Buying Rate)45.28125(Bank’s Selling Rate)
Exchange sales by oil companies. Capital.Category I imports (rice, fertilizer, raw cotton, and selected goods used directly in the production of exports). Government invisibles. Capital and other private invisibles not subject to the transfer tax.
169.73156(85% at Bank’s Buying Rate and 15% at Regional SIVA Rate)90.28125(Bank’s Selling Rate plus 100% Komponen Harga Levy on Imports or 100% Transfer Tax on Invisibles)
Certain exchange receipts.Other Category I imports. Nonessential capital and other invisibles.
171.41906(85% at Bank’s Buying Rate, and 7.5% at General SIVA Rate, and 7.5% at Regional SIVA Rate)
Certain other exchange receipts.
173.10656(85% at Bank’s Buying Rate and 15% at General SIVA Rate)
All other exchange receipts except from oil companies and tourists.
179.83125(Bank’s Buying Rate plus Rp 135)
Receipts from tourists.270.28125(Bank’s Selling Rate plus 500% Komponen Harga Levy)
Category II imports.
877.50(Regional SIVA Rate)
Category I and II imports in excess of quotas at official rate. Certain invisibles.
900.00(General SIVA Rate)
Category I and II imports in excess of quotas at official rates. Certain invisibles.
922.50(Regional SIVA Rate plus Retribusi SIVA Equal to 100% of Basic Official Rate)
Category III imports.
945.00(General SIVA Rate plus Retribusi SIVA Equal to 100% of Basic Official Rate)
Category III imports.
1,147.50(Regional SIVA Rate plus Retribusi SIVA Equal to 600% of Basic Official Rate)
Category IV imports.
1,170.00(General SIVA Rate plus Retribusi SIVA Equal to 600% of Basic Official Rate)
Category IV imports.

Changes during 1962

Exchange payments are licensed in accordance with an annual budget which is revised quarterly. The budgets for the third and fourth quarters of the year provided for sharp reductions in payments in almost all categories.

March 5. A retention scheme was introduced permitting exporters and other earners of exchange to retain 15 per cent of their proceeds for use in paying for imports and services. They would be granted SIVA certificates equal to 15 per cent of their exchange proceeds, and such certificates could be used by the holder or sold to importers. On the same date, import transactions were reclassified and some imports of a less essential character, as well as imports in excess of quotas, were permitted with the use of SIVA certificates. Some of these imports were made subject to Komponen Harga levies, while others were made subject to a special export promotion tax of Rp 65 per US$1.

July 16. The effective buying rate for exchange sold by tourists visiting Indonesia was changed from Rp 89.83125 to Rp 179.83125 per US$1.

October 1. There was a major reclassification of imports and an increase in the surcharges imposed on imports and other transactions. The special export promotion tax of Rp 65 per US$1 (see March 5, above) was abolished.

Iran

Exchange Rate System

The par value is Iranian Rials 75.75 = US$1. For certain currencies,1 the Bank Markazi Iran quotes fixed buying and selling rates at which authorized banks may deal for approved transactions. These rates are at 1 per cent on either side of the par value relationship; for the U.S. dollar, the rate is Rls 75.00 buying, Rls 76.50 selling, per US$1.

Administration of Control

Exchange control authority is vested in the Bank Markazi Iran (the central bank). Import licenses are issued by the customs authorities and exchange licenses by the Bank Markazi. All foreign exchange transactions must take place through authorized banks. The Ministry of Commerce determines the classification of imported and exported commodities.

Prescription of Currency

Payments and receipts are normally settled in the currency of the country concerned, provided that the currency is one in which the Bank Markazi deals, or in sterling or U.S. dollars. Alternatively, payment may be made in a currency acceptable to both countries.

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

Nonresident Accounts

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

Imports and Import Payments

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

Exchange for imports is allocated freely, except for prohibited imports and commodities included in a list of “unauthorized” imports. Payments for a group of certain essential goods may be made against documentary letters of credit or bills for collection. All other import payments must be made against documentary letters of credit. Advance deposits of 20-100 per cent (depending on the degree of essentiality of the goods) are required when documentary letters of credit are opened. Most authorized imports are subject, in addition, to commercial profit taxes ranging in general from 30 per cent to 70 per cent. The regulations provide that, should the Bank Markazi decide that the foreign exchange reserves of the country are not sufficient for the import of all authorized goods, the Ministry of Commerce, with the cooperation of the Bank, will draw up a list of essential goods, which will receive priority in the provision of foreign exchange. If the foreign exchange position improves, additional exchange may be provided by the Bank Markazi with the agreement of the Ministry of Commerce.

Specified commodities, such as sugar, silkworm eggs, tobacco, and cigarette paper, are imported under state monopoly, although special permits to import these commodities may be issued to private traders or institutions. Imports from Eastern Germany are subject to the authorization of government authorities. Gold may be imported only by the Bank Markazi. Certain goods may be imported only with the consent of appropriate Iranian ministries. Tea may be imported only from producing countries which have trade agreements with Iran. Imports from Japan, except raw materials for industry and spare parts for machinery of Japanese origin, are subject to a 5 per cent state monopoly tax. A group of 25 commodities may be imported only under the terms of bilateral agreements with neighboring countries or by border transactions.

Import licenses, which are required to clear goods through customs, are issued automatically by the customs authorities on receipt of documents showing that payment has been or will be made through an authorized bank. The customs authorities check that the commodity is not on the list of unauthorized or prohibited imports, that it is in accordance with the provisions for payments for imported goods drawn up by the Bank Markazi, and that the commercial profit tax, where required, has been paid.

Authorized banks may make payments for imports against the presentation of shipping documents. Charges are levied on the amount of exchange sold for imported goods of ½ of 1 per cent for sanitary services and 110 of 1 per cent of the invoice amount under the law on encouragement of exports.

Payments for Invisibles

Exchange for expenses directly related to imports is provided on the same basis as exchange for the related import. Payments for noncommercial purposes require licenses issued by the Bank Markazi. The annual travel allocation 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 the authorized banks upon presentation of the traveler’s visaed passport.

The export of Iranian currency is in principle prohibited, but for the time being travelers 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, purchase up to US$50 or the equivalent in other currencies for traveling expenses, upon presentation of their visaed passports.

Exchange is granted to merchants for insurance of imports against bills for collection; but 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.

Exports and Export Proceeds

Exports of some commodities, including grain and flour, are subject to license.

The exporter must undertake to 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 certain currencies (see footnote 1). Export proceeds in other currencies may be used to purchase imports payable in the same currency.

Proceeds from Invisibles

Exchange receipts derived from invisibles must be surrendered unless used to import goods.

The import of Iranian currency is in principle prohibited, but for the time being travelers to Iran are permitted to bring with them unlimited amounts in foreign currencies and Iranian banknotes. 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 the exchange in a temporary foreign exchange account, from which transfers abroad or to nonresident accounts will require a license from the Bank Markazi. Other travelers, during their stay in Iran, may sell their exchange only to an authorized bank at the bank’s buying rate.

Capital

Transfers of capital abroad require the approval of the Bank Markazi. 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. Capital imported in the form of foreign exchange must be in currencies acceptable to the Bank Markazi; the exchange is converted into rials at the buying rate prevailing at the date of application for conversion. The Bank Markazi has the option to buy the exchange, or to accept 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 repatriation. The law guarantees legal protection for foreign capital invested in accordance with its provisions and for the profits thereon, and provides for a committee to make recommendations on proposed investments to the Council of Ministers.

Changes during 1962

January 26. All transfers abroad of exchange were made subject to the prior approval of the Bank Markazi Iran.

February 18. Bilateral trade and payments agreements were concluded with Ceylon, providing for payments through a clearing account denominated in sterling.

March 19. The list of prohibited import items was expanded and a large number of goods were made subject to commercial profit taxes.

April 9. New import regulations were put in effect, classifying imports in five categories. The first comprised those items which could continue to be imported on a documentary letters of credit or bills for collection basis; the second comprised items (raw materials and spare parts) which could be imported on a documentary letters of credit or bills for collection basis by users only; the third comprised a list of semiessential goods which could only be imported on a documentary letters of credit basis with a 20 per cent advance deposit requirement; the fourth comprised nonessentials which could not be imported in the previous year but which could now be imported on a documentary letters of credit basis with a 100 per cent advance deposit requirement; and the fifth comprised goods not included in the other categories or in the prohibited list which could be imported on a documentary letters of credit basis with a 70 per cent advance deposit requirement.

September 3. Raw materials and spare parts could be imported by other than actual users (see April 9, above) against bills for collection with maturity not exceeding nine months from the date of the bill of lading.

September 3. The exchange allocation of the equivalent of US$500 for travel by Iranian nationals to Europe and the United States was extended to include travel to the Far East. For travel to other countries, an exchange allocation of the equivalent of US$100 was introduced.

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, 1962 were US$2.8028125 buying, and US$2.7941875 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, and 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

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 Commerce; 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 Director-General of Imports and Exports. Import licenses are valid for imports from all countries except France (unless specially authorized) and 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 can 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. or a c.i.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.

Exports and Export Proceeds

All exports to Israel and, except when specifically permitted, to France, 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 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 1962

January 1. New regulations relating to importers were announced by the Minister of Commerce. Import licenses, other than those issued to government departments, semigovernmental bodies, and registered factories, would only be issued to individuals or companies that are members of the local Chamber of Commerce and, except in the case of limited companies having a paid-up capital of at least ID 20,000 or successor companies, have held that membership for at least two years. All importers must register with the Directorate-General of Imports and Exports, which would classify them in the light of their previous imports and financial ability and place a maximum value on the total import licenses issued to each class. Certain restrictions were placed on the categories of goods which each importer may handle, and new importers, who must be of Iraqi nationality, could specialize in not more than two categories of similar goods.

February 11. Licensed dealers were authorized to effect transfers in Iraqi dinars from nonresident accounts to resident accounts without the approval of the Central Bank.

June 27. The basic yearly exchange allowance for tourist travel was reduced from ID 200 for each person to ID 150 for persons 18 years of age or over and ID 75 for persons under 18.

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 the first type of control, covering 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 second type of control, the 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. Authority to make payments for most invisibles has been given to the authorized banks. Approval to make payments for other invisibles is given by the Department of Finance.

There is a basic allowance of exchange for tourist travel outside the Sterling Area of £250 for each person for each journey. Allowances for business travel are made available up to a limit of £2,500 for each journey. Limits are also established for allowances for education and other purposes. Applications for larger amounts are approved provided no unauthorized export of capital is involved. Not more than £50 in Sterling Area notes or £250 in other currency notes may be taken out of the country to a destination outside the United Kingdom. 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 are required to 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, however, 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 1962

July 31. The basic exchange allowance for tourist travel was increased from £250 for 12 months to £250 for each journey. Any foreign exchange held by a person after his return was permitted to be retained for nine months from the date of issue for use on a subsequent trip abroad, instead of, as previously required, being exchanged without delay for Irish currency.

August 1. A new law, entitled “Restriction of Import Act, 1962,” entered into force, permitting the authorities to restrict imports from countries with which Ireland has an unfavorable trade balance. (However, no regulations to implement this law were issued in 1962.)

Israel 1

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 the 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 force2 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 used only with special approval. (2) Blocked Accounts may be used for investment in Israel securities; for the purchase of real estate; for the payment of property taxes payable by the account holder; and, if the account has been held for at least one year, for tourist expenses in Israel up to I£100 a day for the account holder and the same amount for each member of his family and for payments of up to I£2,500 to relatives who are residents of Israel. Balances on Blocked Accounts may not be transferred from one nonresident to another, but such accounts may 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 or funds transferred to Israel at the official rate of exchange; other nontransferable funds are credited to Registered Accounts.

Imports and Import Payments

Goods listed in the Free Import Orders (about half of total imports) are free from all licensing and restriction. Importers of these goods must be approved as importers by the Ministry of Commerce and Industry. The remaining imports are subject to license. For commodities on the Automatic Approval list (about 30 per cent of total imports), licenses are issued automatically upon application; however, importers may be required to buy minimum quantities and prices may be checked. 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 effected. 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 importer undertakes to deposit 10 per cent of the value of the goods with the Accountant General through an authorized bank.

Payments for Invisibles

Most payments abroad for invisibles require individual licenses. There is an exchange allowance of US$30 for each resident for the purchase of books, membership dues, etc., which is obtainable on demand. There is also an exchange allowance for tourist travel abroad equivalent to US$400 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, 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.

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, in the case of disabled soldiers who served in World War II, as pensions, may be retained in Tamam accounts (see section on Capital, below).

For a period of 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, subject to permission, 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. 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 in stages within a period of ten years from the date it was originally made. An investment kept for ten years or more may be withdrawn immediately. Foreign investments effected in Israel without taking advantage of the 1959 law do not benefit from these transfer privileges, 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 of first entry, 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$400. 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 1962

February 9. A major reform of the exchange system came into effect. The multiple currency practices were eliminated, and all exchange transactions would take place at a uniform rate. Funds deposited in Pazak accounts after this date could be withdrawn freely. The par value of the Israel pound was changed from I£1.80 per US$1 to I£3.00 per US$1.

March 14. The basic annual exchange allocation for tourist travel abroad was increased from US$150 to US$250 a traveler.

March 19. The bilateral payments agreement with Uruguay was terminated.

May 7. The export licensing requirement was eliminated for most industrial exports.

May 28. The basic annual exchange allocation for tourist travel abroad was increased from US$250 to US$400 a traveler.

June 1. Under a system of Free Import Orders, some 400 items formerly on the Automatic Approval list were freed from all licensing and other restrictions. It was announced also that a few items hitherto prohibited for protective reasons could now be imported under individual license. Wapa accounts, to which advance deposits for imports on a cash-against-documents basis were credited, were abolished.

September 18. The advance deposit applicable to importers utilizing credit facilities was increased from 40 per cent to 50 per cent.

September 25. A further 200 import items were transferred from the Automatic Approval list to the Free Import Orders, and some additional items that had hitherto been prohibited were placed under the individual licensing system (see June 1, above).

October 11. The amount of Israel banknotes in denominations of up to I£10 that may be brought in or taken out by travelers was increased from I£50 to I£100 a person.

October 15. The exchange allocation for tourist travel abroad was increased from US$400 a year for each traveler to US$400 a journey.

December 6. Holders of funds deposited in Pazak accounts before February 9, 1962 were permitted to withdraw those funds before the expiry of the deposit period, provided that the funds were to be invested in an approved savings program.

Note.—The following changes took place early in 1963:

February 5. The proportion of the 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.

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 Accountant General.

Italy 1

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 currencies2 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. Exchange control is not exercised over payments from the Italian Republic to the Republic of San Marino or the Vatican City.

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 account 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 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 the disinvestment of Italian investments 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 immediate relatives, 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 as was originally sold and for investments in Italy, and balances on them may be transferred to Foreign Accounts or Capital Accounts.

There is a special centralized account for transactions with Somalia.

Imports and Import Payments

Practically all imports from countries other than Japan, Yugoslavia, and the Sino-Soviet bloc are free from quantitative restriction. Commodities still subject to individual license when imported from these countries are included in a list (Tabella A Import) which contains 73 items of the customs tariff, of which 31 relate to agricultural products and foodstuffs. However, the general permission to import goods not included in the Tabella A Import applies to Somalia and the United Arab Republic only if the goods originate in and are shipped directly from the respective country and the payee resides, in respect of imports from Somalia, in that country, or, in respect of imports from the United Arab Republic, 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 over 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 countries3 to which the Tabella C Import applies, provided that the goods originate in and are shipped from one of these countries.

Separate lists for Japan and Yugoslavia indicate goods which are subject to individual import license when imported from these countries. For Japan, another list (at present comprising 58 tariff items or sub-items) indicates goods for which import licenses are issued freely. For Yugoslavia, another list indicates some 350 tariff items or subitems out of the list of goods subject to license, and imports of these are permitted freely on a temporary basis; a further list indicates some 13 tariff items or subitems out of the list of goods subject to license, and these goods may be imported up to specified quotas. All goods not listed may be imported freely from Japan and Yugoslavia, respectively, if they originate in and are shipped directly from the country concerned. This condition applies also to those imports made from these two countries under the special permissions.

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 transactions there are limits beyond which the banks may make payments only after examination of the supporting documents by the Italian Exchange Office.4 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. As a rule, when the cost of insurance premiums is being met by Italian exporters or importers, payment to domestic or foreign insurance companies operating in Italy is in lire; premiums may be paid in foreign exchange or in lire credited to a Foreign Account only for goods arriving in Italy or being sent out of Italy the insurance on which has been stipulated by contractual agreement with an insurance company chosen by the seller or buyer abroad.

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 countries5 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 effected after the end of the year following that in which the export or import took place;6 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 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.7 However, the contracting of loans by residents from nonresidents requires specific authorization from the Ministry of the Treasury. Repayment of such a loan may be made freely provided that it is in accordance with the repayment schedule authorized by the Ministry of the Treasury 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 investment abroad require special authorization from the Ministry of Foreign Trade. The general license to make these direct investments also covers the reinvestment of earnings.

The following types of portfolio investment may be acquired abroad: (1) securities quoted on the stock exchange of any country purchased by Italian financial institutions with such provisions in their statutory rules; (2) any portfolio investment purchased by specified nonbank financial institutions domiciled in Italy; (3) bonds issued by international financial organizations in which Italy participates as a member country; and (4) foreign government or government-guaranteed securities of any country purchased by insurance companies operating in Italy. Other portfolio investments abroad require a special authorization from the Ministry of Foreign Trade.8

Foreign companies in Italy without capital participation by residents may not borrow in Italy beyond 50 per cent of their capital; if there is Italian participation in the capital, this limit may be exceeded, but only if additional funds are borrowed in foreign markets.

Transfers in connection with inheritances and dowries may be made freely. Donations up to the equivalent of Lit 10 million a year 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, 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 up to five years for trade operations may be extended freely to residents of the EEC area. 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.

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 1962

January 2. A ministerial decree of December 29, 1961 came into effect. It provided for the unification of the two exchange markets. In particular, the separate free market for transactions related to Capital Accounts and to accounts arising from transactions in banknotes was absorbed into the official exchange market. Transfers could henceforth be made freely from Capital Accounts to Foreign Accounts; thus, balances on Capital Accounts could be repatriated through the official exchange market. As a result, there was no longer a need to use foreign banknotes for capital transactions, and the possibility of using Capital Accounts for the purchase of foreign banknotes through the “banknotes system,” as well as for current transactions, was abolished.

January 9. A revised, shortened list of imports from Japan requiring individual licenses was published.

January 19. Global quotas were published establishing specific limits up to which certain commodities included in the Tabella A Import could be imported from the countries to which the list applied.

January 29. The replacement of quotas by free (open-end) licensing for the import of U.S., Canadian, and British passenger cars and commercial vehicles was announced by the Ministry of Foreign Trade. Such free licensing treatment had been extended earlier to imports of these items (as well as to others) from EEC countries.

March 7. The facility for firms domiciled in Italy, other than financial institutions, to buy bonds of companies in the EEC area was extended to the purchase of such bonds in OECD countries and their related monetary areas.

March 26. The ban on imports of beef, veal, and cattle for slaughter was lifted. These items were now included in the appropriate import Tabellas and quotas were established for imports of them from most European countries, Argentina, Brazil, Uruguay, and Japan.

March 31. The list of imports from Japan subject to individual license was shortened by some 60 tariff items or subitems, but 2 items (cattle for slaughter and bacon) were added to the list; at the same time it was announced that, with effect from April 1, Japan was to participate in the global quotas established for 1962 for countries to which the Tabella A Import applied (see January 19, above).

April 19. The list of imports from Japan subject to restrictive licensing was again shortened considerably. Compared with the previous list, 30 tariff items and subitems under 28 other tariff headings were eliminated. The commodities eliminated from the list were included in a separate List B (which now comprised 51 tariff items or subitems) and import licenses for them would be issued freely. It was also announced that Japan could participate in the global quotas established for imports of hogs and pork from Tabella A Import countries for the period April 1-June 30, 1962.

May 5. An additional protocol to the trade agreement with Yugoslavia was signed. The protocol lifted a series of restrictions on imports of Yugoslav goods. Negative List No. 1 was retained. However, Quota List No. 3, which restricted the import of 37 Yugoslav products to fixed over-all limits, was annulled: only 2 products from this list remained subject to restriction, and they were now included in Quota List No. 2, imports of goods on this list being permitted up to specified quotas; the remaining goods on Quota List No. 3 were added to the list of those goods which could be imported freely on a temporary basis. Moreover, this temporary free import list was substantially enlarged by the transfer of 10 tariff items or subitems from Quota List No. 2, as well as by the addition of many items from Negative List No. 1.

May 15. Residents were permitted to retain up to the equivalent of Lit 100,000 in foreign banknotes and coins left over from journeys abroad and to use such exchange for other trips abroad or to sell it at any time to an authorized bank.

May 22. Quotas were established for some 130 nonliberalized Japanese commodities which could be imported on the basis of the customary individual license up to the limits provided in the quotas; other commodities subject to license could be imported from Japan within the limits of the over-all quota for that country, while import licenses for goods in the separate List B (see April 19, above) continued to be issued freely.

June 30. The period within which advance or deferred payments for international commercial transactions had to be made was fixed at 360 days.

July 6. It was announced that the trade and payments agreement with Somalia had been renewed for a period of two years from July 1, 1962.

July 30. Argentina, Iran, and Israel were deleted from the list of countries to which the Tabella C Import applied. Argentina and Iran were included among the countries to which the Tabella A Import (dollar area liberalization) was applicable. A special list was applied to Israel, comprising all goods on the Tabella A Import plus 10 tariff items or subitems not subject to restriction when imported from Tabella A Import countries.

October 1. A new special list for imports from Japan was issued, extending the liberalization to 10 additional items.

December 3. The two lists, Tabella A Import (applicable to the dollar area and a few other countries) and Tabella B Import (applicable to the European OECD countries and certain other countries) were unified. A new Tabella A Import was established, applicable to imports from all countries to which the former Tabella A and Tabella B applied (i.e., all except Israel, Japan, Yugoslavia, and countries in the Sino-Soviet bloc). In addition to all the items from the former Tabella B, the new list comprised 4 additional items from the former Tabella A, the import of which from countries in the old Tabella B is permitted directly by the customs.

Note.—The following changes took place early in 1963:

January 1. Banknotes in French francs could be accepted by authorized Italian banks to discharge foreign exchange obligations or for credit to foreign exchange accounts.

February 9. Imports of Israeli goods were to be governed, with some limitations, by the new Tabella A Import.

Ivory Coast 1

Exchange Rate System

No par value for the currency of the Ivory Coast 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. 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. Practically all settlements between the Ivory Coast and countries outside the French Franc Area are made through the Paris exchange market. The CFA franc is freely exchangeable for any other currency of the French Franc Area.

Exchange Control Territory

The Ivory Coast is a member of the French Franc Area. It is one of seven West African countries (Dahomey, Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta) having a common currency system and a common central bank, the Banque Centrale des Etats de l’Afrique de l’Ouest. This central bank holds its exchange reserves exclusively in French francs, and settlements with other than the participating countries are made through the central bank’s operations account with the French Treasury. The account reflects not only the transactions of the participating West African countries in currencies of the French Franc Area, but also their transactions in other currencies; the latter are settled through the Paris exchange market.

Administration of Control

Exchange control is administered by the Office of Exchange Operations, which is under the External Finance and Foreign Exchange Service. Foreign exchange transactions are handled by the commercial banks under the direction of the Office of Exchange Operations. 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 are issued by that Ministry with the consent of the Office of Exchange Operations.

Prescription of Currency

Settlements between the Ivory Coast and other countries of the French Franc Area may be made in any of the currencies of the French Franc Area. Settlements with countries outside the French Franc Area are usually made in French francs through banks in France, although prescription of currency regulations similar to those of France are, in principle, applicable.

Nonresident Accounts

The regulations pertaining to nonresident accounts in the Ivory Coast are based on those applied in France, but in the Ivory Coast these accounts have only limited importance.

Imports and Import Payments

Imports from countries in the French Franc Area are generally free of license and quantitative restriction. Imports from other countries are usually limited to products which are considered essential to the economy and cannot be obtained in the French Franc Area. Most of these are admitted in accordance with an annual program, which establishes global quotas for imports from EEC countries other than France and for imports from most other countries outside the French Franc Area, and bilateral quotas for imports from Soviet bloc countries. Goods under quota are subject to import license. Other goods require an import certificate.

Import licenses are issued only to licensed traders and, in exceptional cases, to industrial or agricultural producers who are considered as end-users of the imported goods. Private persons cannot obtain import licenses except for transactions not involving foreign exchange.

The import license entitles the importer to acquire the amount and kind of foreign exchange specified in the license. Applications for licenses for imports of goods to be used directly by exporters are approved freely if the imports are to be paid for with funds from EFAC accounts (see section on Exports and Export Proceeds, below).

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely. In general, all payments for invisibles to other countries are subject to the approval of the Office of Exchange Operations. Payments for invisibles related to trade are permitted when the basic trade transaction has been approved. Income accruing to nonresidents in the form of profits, dividends, or royalties may be remitted abroad subject to supervision. Control over payments in respect of many other categories of invisibles is also supervisory, to ensure that other aspects of the control are not being circumvented.

Travelers may take out up to F 750 in French banknotes, or the equivalent in CFA or CFP francs or other currencies. Nonresident travelers may take out foreign notes and coins up to the amount declared when they entered the country.

Exports and Export Proceeds

Exports to countries in the French Franc Area are free of license; exports to other countries require licenses, mainly to ensure repatriation of the proceeds.

Export proceeds in foreign currencies must be surrendered within one month from the date of their receipt. However, exporters may retain 15 per cent of their proceeds in U.S. dollars, and 11 per cent of their proceeds in other currencies, in special, nontransferable, EFAC (Exportations-Frais Accessoires) 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

Residents are obliged to collect from nonresidents, and if obtained in foreign currencies to surrender within a month from the date of receipt, amounts exceeding F 100 or the equivalent in CFA francs in respect of services and of income from foreign securities. Travelers may bring in up to CFAF 75,000 in notes of the Banque Centrale des Etats de l’Afrique de l’Ouest and any amount of foreign banknotes or coins (except gold coins).

Capital

Capital movements between the Ivory Coast and other French Franc Area countries are free of control. Capital movements between the Ivory Coast and all other countries are subject to approval.

Foreign investment in the 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. In general, in all other respects the regulations regarding capital movements are similar to those applied in France. Law No. 59-134 of September 3, 1959 provides tax and customs duty benefits and other privileges for new companies which are recognized as having priority status.

Changes during 1962

No significant changes took place during 1962.

Jamaica 1

Exchange Rate System

The par value is Jamaican Pound 1 = US$2.80.2 It 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 and for basic travel allowances. 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,3 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 securities or other capital proceeds) are designated Blocked Accounts. Permission may be given for these funds to be transferred to London for sale on the security sterling market, subject to the approval of the U.K. exchange control authorities. These funds may also 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, are subject to individual import license. 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 a year 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). Other standard allocations on an annual basis include £J 2,000 for each student studying abroad, £J 500 from each remittor for each charity, and £J 250 from each remittor as gifts; 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, United Kingdom notes without limit, and other 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 license 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 curencies, 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 resident in Jamaica may not bring in more than £J 10 in Jamaican or foreign banknotes; nonresident travelers may bring in any amount of banknotes.

Capital

Investments by residents in Sterling Area securities are permitted freely. Investments in other securities require the approval of the exchange control authorities, and purchases of such securities may only be effected 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-run period.

Direct investments in Jamaica by nonresidents require the approval of the exchange control authorities and must be made in the currency appropriate to the country of permanent residence of the investor or in External Account sterling. Foreign investments that have been granted “approved status” are permitted free repatriation, at any time, of the capital; remittances of profits and dividends are permitted when the application is supported by the appropriate set of accounts. The criteria employed in granting “approved status” are that the investment must earn or save foreign exchange and/or is of significant benefit to the national economy. 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 for remittance by the exchange control authorities in accordance with the schedule established in the “approved status” agreement. If the foreign loans have been secured 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 credited to Blocked Accounts.

Transfers to nonresident beneficiaries under wills and intestacies are approved, provided that all local indebtedness has been met.

Changes during 1962

November 19. The administration of exchange control was transferred from the Exchange Control Section of the Ministry of Finance to the Bank of Jamaica.

Japan

Exchange Rate System

The par value is Japanese Yen 360.00 = US$1. The official rates of authorized banks for telegraphic transfers in U.S. dollars are maintained between official limits of ¥ 358.20 buying, and ¥ 361.80 selling, per US$1. Authorized banks may freely carry out spot and forward exchange transactions.

Administration of /Control

A Ministerial Council, the main function of which is to establish the foreign exchange budget and approve its revision, is the highest control authority on the policy level. The Ministry of International Trade and Industry (MITI) carries out exchange and trade control policy in respect of merchandise transactions and nonmerchandise transactions incidental thereto. The Ministry of Finance, through its Foreign Exchange Bureau, carries out policy in respect of prescription of currency and method of settlement, the operations of the foreign exchange fund, payments for nonmerchandise transactions, and capital transactions and transfers. The Ministry of Finance also has the function of determining exchange rates. The Bank of Japan, as the Government’s agent, executes the above functions in part. Authorized banks carry out the controls on the technical and administrative level.

Prescription of Currency

Payments to all countries except the Republic of Korea may be made in any currency, and receipts therefrom may be obtained in any of the designated receivable currencies,1 receipts in other currencies requiring an individual license; settlements with these countries in yen 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 incoming payments from Korea may also be accepted in any of the designated receivable currencies1 and payments for specified invisibles may be made without using these accounts.

Nonresident Accounts

There are four main classes of 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, and from sales of designated receivable foreign currencies; with transfers from other Free Yen Accounts; and with other authorized payments. There are, however, some restrictions on crediting other nonresident earnings to these accounts. Yen on these accounts may be exchanged into any other 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 stocks, debentures, and beneficiary certificates sold within six months from the date of validated acquisition are deposited in these accounts. 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.

3. Nonresident Foreign Currency Deposit Accounts. To facilitate the application of exchange control, nonresidents are authorized to keep deposit accounts with authorized banks in the designated receivable foreign currencies.

4. Foreign Investors’ Deposit Accounts. Certain proceeds of foreigners’ liquidated investments may be placed in Foreign Investors’ Deposit Accounts. Balances on these accounts may be used for remittances abroad or for making other investments under certain conditions. However, because of the increased facilities now available through Nonresident Yen Deposit Accounts (see above), these accounts now have only limited significance.

Imports and Import Payments

Imports are subject to individual import license, but in practice 88 per cent of nongovernmental imports are liberalized. Most of the authorized imports are covered by the exchange budget and are communicated to the public through announcements made by the trade control authorities.

There are different licensing procedures for imports requiring payment abroad: (1) Under the Foreign Exchange Fund Allocation System (covering imports of most foodstuffs and some raw materials and other essentials), the importer must first obtain from the trade control authorities an allocation of foreign exchange. If the allocation is granted, the importer receives an exchange allocation certificate which entitles him to receive an import license from an authorized bank automatically upon application. Exchange allocation certificates are issued on a global basis, without regard to the country of origin or the currency of settlement. (2) Under the Automatic Fund Allocation System, allocations of foreign exchange for specified categories of imports are granted automatically and without restriction by the Ministry of International Trade and Industry. (3) Under the Automatic Approval System, imports are, in effect, free from quantitative restriction, since licenses to import the commodities specified under this system are issued freely by the authorized banks on application, up to the total amount appropriated for the system in the exchange budget, and additional amounts are provided if the original appropriation has been exhausted. All items subject to the Automatic Approval System may be imported from any country.

The value of imported goods must be paid by one of the standard methods of settlement for imports (generally within the period from the date of receipt of the shipping documents or the goods to four months after customs clearance). When the proposed payment for an import is not in accordance with one of the standard methods of settlement, prior approval of the Ministry of International Trade and Industry must be obtained. This Ministry also issues import licenses for special transactions, such as imports without exchange.

In general, applicants for import licenses must lodge a deposit with an authorized bank; the amount of this deposit is 1 per cent or 5 per cent of the value of the intended import, according to the goods to be imported (for imports from the Ryukyu Islands, the deposit is 110 of 1 per cent).2 The deposit is returned after 80 per cent of the licensed 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 by the Minister of International Trade and Industry.

Payments for Invisibles

Payments for invisibles require approval. However, the authorized banks automatically approve payments related to foreign trade (i.e., freight—except a few items—insurance, and other incidental costs) as well as such payments as medical expenses, a reasonable amount for living expenses of relatives, subscriptions to newspapers and periodicals, donations, expenses for advertising, market research, and exhibitions or fairs, and expenses for travel abroad for a specific purpose (but payment for these items is limited to actual expenses or to specified amounts). Payments for invisibles other than those mentioned above are subject to licensing by the Bank of Japan or the Government; however, licenses are not granted for the traveling expenses of Japanese tourists abroad. Certain contracts require approval; but when a license for a contract has been granted, any payment arising from the contract may be made freely. Under the standard method of settlement, payment for services, etc., may not be made more than three months before, or later than six months after, receiving the service, 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., pottery and porcelain, sewing machines, and certain textiles). Exports under processing and consignment sale contracts and exports to be settled by a nonstandard method also 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 banks for yen.

Proceeds from Invisibles

Receipts by the standard method of settlement may be accepted without a license. Under the standard method of settlement for invisibles, 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 specified services are subject to individual license, e.g., services between residents which give rise to foreign claimable assets, and services performed for nonresidents when payment is to be received by a nonstandard method. Receipts from invisibles must, as a rule, be surrendered. However, in order to facilitate payments for current invisibles, specified residents (shipping companies, etc.) are authorized to keep foreign currency deposit accounts with banks in the designated 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 stocks, debentures, beneficiary certificates, and claims in the form of loans by foreign investors are subject to individual license if a guarantee for remittance of income or principal is desired. However, acquisitions of stocks in the securities market are generally approved up to 15 per cent of the stock of any corporation not classified as a restricted industry and up to 10 per cent of the stock of any corporation classified as a restricted industry.3 All these acquisitions 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 or 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.

For the purpose of facilitating new foreign investment, the following two formulas have been established: (1) Since July 21, 1959, applicants have been able to obtain “conditional approval” under the Foreign Investment Law for a foreign investment in Japan. For investments so approved, the remittance of principal and earnings is guaranteed, subject to the condition that the Government can temporarily defer the remittance if Japan’s balance of payments situation so requires. (2) A “prior designation” procedure under the Foreign Exchange and Foreign Trade Control Law has also been operative since July 21, 1959. For a foreign investment so designated by the authorities at the time the investor acquires an equity investment (stocks, debentures, and beneficiary certificates) or concludes a technological assistance contract, the remittance of earnings and principal will be automatically approved, subject to the condition that the remittance can be deferred temporarily if Japan’s balance of payments situation so requires.

Proceeds of stocks, debentures, and beneficiary certificates that have been held for six months may be remitted. Proceeds of stocks, debentures, and beneficiary certificates sold within six months from the date of acquisition are deposited in Nonresident Yen Deposit Accounts, balances on which can be transferred to another nonresident in return for foreign currency. Rights to the allotment of newly issued stocks may be sold if the issuing company gives its consent, or the value of the rights can be realized by selling the stocks with rights and purchasing the same stocks without rights or purchasing other stocks. (This constitutes a preferential treatment of foreign investors since, under the Japanese commercial code, the right to the allotment of newly issued stocks may not be sold.)

Investors who obtain a license or approval to acquire an equity investment with yen from a Nonresident Yen Deposit Account may have the income remitted and the principal credited to a Nonresident Yen Deposit Account.

All other capital transactions and transfers having an exchange control aspect are subject to individual license, although in practice, for most transactions, an exchange license is not required for foreign investment in Japan if the investor desires neither remittance of income or principal nor credit to a Nonresident Yen Deposit Account.

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 1962

January 16. The limitation on currencies which could be used for outgoing payments was discontinued.

January 16. The regulations governing transactions in invisibles and payments under the jurisdiction of the Ministry of Finance were incorporated in a Ministerial Ordinance Concerning the Control of Invisible Transactions.

April 1. Imports of miscellaneous items were liberalized, raising the liberalization ratio from 70 per cent to 73 per cent. The remaining 492 restricted items were placed on a “negative list,” based on the Brussels tariff nomenclature.

April 25. Contracts for periods not exceeding one year for technological assistance could be approved automatically up to a specified limit.

August 1. Proceeds from sales of Japanese stocks, debentures, and beneficiary certificates acquired with foreign currency in compliance with the Foreign Investment Law could be remitted in cases where such sales were made after six months from the date of acquisition. Government and local government bonds, short-term government securities, bonds of public corporations, etc., were accorded similar treatment. Furthermore, expenses for advertising and market research and for exhibitions or fairs, within specified limits, could be remitted, subject only to the approval of the authorized banks.

October 1. Imports of 230 items, including crude oil, metal-rolling machines and rollers, automobile tires and tubes, generators with a capacity of less than 200,000 kilowatts, paper pulp, and ball-point pens, were liberalized. This raised the liberalization ratio to 88 per cent.

October 8. The advance deposit on imports of certain raw materials used for the manufacture of export goods was reduced from 5 per cent to 1 per cent.

November 1. The regulation concerning the standard method of settlement was wholly revised for clarification and simplification.

November 1. More freedom was accorded to several categories of payments, e.g., payments for charterage of foreign aircraft and payments for the use of literary copyrights.

November 21. Imports of 8 items were liberalized, leaving 254 items on the “negative list” (i.e., subject to restriction).

December 13. The advance deposit requirements on imports were reduced as follows: The 35 per cent rate was reduced to 5 per cent, and the 10 per cent and 5 per cent rates were reduced to 1 per cent. The authorized banks were no longer required to redeposit these amounts with the Bank of Japan. Only the 5 per cent deposits had to be made in cash; the others could be made in the form of securities or other collateral.

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 of 4 per cent for goods paid for at the official rate and ½ of 1 per cent for goods imported without exchange are payable on import licenses. 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, pending the establishment of a central bank, which will take over these functions. 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)1 may be made in any Sterling Area currency. Payments to residents of countries outside the Sterling Area (except Yugoslavia)2 may be made by crediting sterling or Jordan dinars to an 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 sterling or Jordan dinars from a nonresident Sterling Area Account; from residents of countries outside the Sterling Area, in sterling or Jordan dinars from a nonresident External Account or in any specified currency.3

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 items4 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 countries are valid for 4 months and those for imports originating in other countries for 6 months.5 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 of 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 Jordan nationals abroad; expenses of Jordan 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 Jordan notes and coins. Otherwise, persons leaving Jordan may not take out more than JD 25 in Jordan notes and coins or the equivalent in foreign currency; in addition, they 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

Receipts from invisibles in convertible currencies, including sterling, must be surrendered to an authorized bank. Travelers entering Jordan may bring in a maximum of JD 100 in Jordan currency notes and any amount in foreign currencies.

Capital

Capital may be imported freely, but exports of capital require approval. Current income arising from nonresident investments in Jordan may be transferred abroad. Under the Law for the Encouragement of Foreign Capital Investment, effective May 1, 1955, profits from approved foreign investments may be remitted regularly, without any limitation, in the currency of the original investment. After one year, 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 1962

January 1. Diesel-engined cars, lorries, and buses, and diesel engines for conversion of petrol-driven vehicles, were added to the list of prohibited imports.

February 16. The provisions of Defense Order No. 8 of 1961, under which the import of certain commodities was restricted to those of U.S. origin, were canceled.

May 20. Automobiles without engines or tires, refrigerators, and other cooling apparatus and washing machines without the main parts, were added to the list of prohibited imports.

October 18. A payments agreement was concluded between the Yugoslav Bank for Foreign Trade and the Jordan Phosphate Mines Co. S.A., under which the proceeds of exports of Jordan phosphates to Yugoslavia are credited to a nonconvertible sterling account with the Yugoslav Bank for Foreign Trade; the balance on the account may be used only to pay for imports of Yugoslav goods into Jordan and for approved invisibles.

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, 1962 was W 5 per US$1, making the banking rate W 130 per US$1. Most exports receive subsidies, which are fixed by the Ministry of Commerce and Industry in terms of won per U.S. dollar.

Administration of Control

The Ministry of Finance carries out policy with respect to prescription of currency and method of settlement, the operations of the foreign exchange fund, payments for nonmerchandise transactions, and capital transactions and transfers. The Ministry of Finance also has the function of determining exchange rates, subject to the approval of the Cabinet. 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, and to approve imports and exports in the automatic approval category. Imports and exports of restricted or unlisted items must be approved by the Ministry of Commerce and Industry or the ministries concerned. The Bank of Korea and five commercial banks are authorized to deal in foreign exchange.

Prescription of Currency

The proceeds of exports must be obtained in U.S. dollars, Hong Kong dollars, pounds sterling, deutsche mark, or any other currency authorized by the Ministry of Finance. The methods of payment for imports and other purposes are prescribed through licensing or through conditions attached to sales of exchange by the Bank of Korea. There is a bilateral payments agreement with Japan under which—except in certain cases, e.g., exports of rice and imports of food—settlements with Japan must be made through a bilateral clearing account; in practice, however, any currency may be used to pay for imports from Japan.

Foreign Currency 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. However, the approval of the Governor 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 also 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

Only registered traders are allowed to import; the requirement for maintaining status as a registered importer is a certain minimum value of annual exports. Import commodities are divided into two categories: automatic approval and permission required. The Bank of Korea licenses the automatic approval items freely, provided that the importer applies for a letter of credit and complies with the “check price” system established by the Ministry of Commerce and Industry. All other authorized imports require individual licenses from the Ministry of Commerce and Industry. In general, the former procedure applies to essential goods and the latter to less essential goods. All imports from communist countries, and certain imports from all other countries, are prohibited.

Payments for Invisibles

All remittances abroad to pay for invisibles require approval. Foreign and Korean currency notes may not be exported without special permission. However, departing foreigners may reconvert unused won notes into U.S. dollars up to US$200, and they may take out any foreign exchange that they had registered on entry.

Exports and Export Proceeds

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

The foreign exchange proceeds of exports must be sold to the Bank of Korea at the banking rate. Most 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.

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 Bases, respectively.

Changes during 1962

January 1. A revised subsidy program for 1962 came into effect, under which exports were classified in five categories and subsidies ranged between hw 50 and hw 250 per US$1 of export proceeds (compared with four categories receiving subsidies ranging between hw 100 and hw 250 per US$1 under the previous program).

April 1. Under the Foreign Exchange Control Law promulgated in December 1961, qualified banks and dealers could apply to the Ministry of Finance for authorization to conduct exchange and money-changing business. All five commercial banks were authorized to engage in exchange transactions, except in respect of foreign aid.

May 7. A Cabinet Order implementing the Export Promotion Law required registered traders to maintain export earnings of at least US$5,000 a year; previously, a registered trader was required only to export or import once every six months without any minimum amount being prescribed. Registered traders whose export earnings were below US$10,000 a year would not be permitted to engage in imports financed with Korea’s own foreign exchange.

June 10. The currency unit was changed from the hwan to the won, at the rate of 10 hwan for 1 won, and the banking rate was changed accordingly from hw 1,300 to W 130 per US$1.

July 31. The Law Guaranteeing Repayment for Loans and the Law Governing Importation of Capital Goods on Long-term Repayment Bases were promulgated.

September 17. Under a new procedure announced by the Ministry of Commerce and Industry for imports of fertilizer under barter trade, permission for such deals would be granted only to registered traders (including exporters’ associations) who have exported more than US$100,000 in a year, and exports of counterpart items in such deals would no longer be eligible for subsidies.

October 29. The limit for minimum export earnings of registered traders who engage in imports financed with Korea’s own foreign exchange was raised from US$10,000 to US$30,000 a year.

Kuwait 1

Exchange Rate System

The par value is Kuwaiti Dinar 1 = US$2.80.2 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 January 20, 1963, the selling rate for the U.S. dollar in the official market was KD 0.35825 per US$1 and in the free market it was within a range of KD 0.358 to KD 0.35925 per US$1. Kuwait accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from April 5, 1963.

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 Economy.3 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, and all imports of Israeli manufacture, containing Israeli materials, or manufactured by companies financed by Israeli capital, 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 200 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 Letters of Recommendation to Kuwaiti nationals 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 Economy.

Exports and Export Proceeds

Exports of sheep, poultry, and fats are prohibited, while those of arms, ammunition, and scrap metal are subject to license. Exports of other foodstuffs may be subject to license in times of emergency or shortage; this requirement is not currently applied. Export licenses are not required for other exports or re-exports.

There are no requirements attached to receipts from exports or re-exports; the proceeds need not be repatriated or surrendered and 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, nor 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.

Transfers of capital 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 Economy, which is granted only in exceptional cases.

Laos 1

Exchange Rate System

No par value for the Laotian Kip has been established with the Fund. The official rate is K 80 = US$1. 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 80.00 buying, and K 80.35 selling, per US$1. Banks are authorized to charge commissions not exceeding 1 per cent on purchases and sales of these currencies. There is also an unofficial free market for transactions not covered by the regulations, in which the kip is bought and sold at a considerable discount.

Administration of Control

Under the chairmanship of the Minister of Finance, the Commission Gouvernementale de Coordination des Finances Extérieures prepares the basic exchange control regulations and may grant import licenses for those commodities whose import is normally prohibited. The National Bank of Laos authorizes imports under the U.S. import program, records all other imports, licenses payments for invisibles, and records exports. The Foreign Trade Department of the Ministry of National Economy issues export licenses. The four commercial banks are authorized to deal in foreign exchange.

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

Nonresident accounts with Laotian banks must be held in kips. However, foreign currencies converted into kips and deposited with a bank may be reconverted.

Imports and Import Payments

All traders dealing with imports and exports must pay an annual registration fee to the Government. Imports of charcoal, coffee, soft drinks, ice cream, gold, and silver are prohibited, although import licenses are granted when shortages arise. Imports are divided into two categories: those under the U.S. import program,2 and all other imports (for which the importer has to supply his own foreign exchange).

There is a list specifying the commodities which may be imported under the U.S. import program, some of them only from the United States, the others from the United States or from any other source except certain, specified, countries.3 However, petroleum products, for which specific U.S. aid is made available, may be imported from some of the countries on the excluded list. The importers apply to the National Bank for exchange licenses under the program; after clearance by the customs authorities in respect of valuation, the exchange license automatically becomes an import license. The National Bank provides the importers with exchange from its own holdings, and the U.S. 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 U.S. financing. An exporter who, according to the records of the National Bank, possesses export earnings must use his own foreign exchange before the National Bank will grant him a license to import under the program.

The National Bank does not make foreign exchange available to pay for imports outside the U.S. import program. Importers are, however, free to import in any quantity, provided that they make payment from their own exchange holdings. The importer has to fill out a form with the National Bank, which is forwarded to the customs for verification.

All importers are required to make a covering payment of 100 per cent for letters of credit opened, and an additional deposit of 50 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 invisibles require licenses, which are issued by the National Bank. Freight and insurance in connection with imports are regarded as a part of the import payment. Exchange is made available for bank commissions and for commissions payable by the local insurance company to underwriters abroad, but not for direct insurance payments abroad. Permission to remit profits is granted on the merits of each case, and is limited to 30 per cent. Foreign experts working for the Government or for foreign enterprises in Laos are permitted to remit 20 per cent of their salaries when these are paid in kips.

Students going abroad to continue their education may be granted a monthly allocation of exchange of US$50 to US$200, in addition to a certain amount for installation, depending on the country in which the study takes place. Specified amounts are also made available for medical expenses and recreational trips abroad. Applications for foreign exchange for travel abroad for other purposes are considered on their merits. Not more than K 400 in domestic banknotes and coins may be taken out by travelers. Foreign banknotes may be taken out by residents up to the amount authorized, and by nonresidents up to the amount brought in less sales to authorized exchange dealers.

Exports and Export Proceeds

All traders dealing with imports and exports must pay an annual registration fee to the Government. All exports require licenses, which are issued by the Ministry of National Economy. Exports of gold and silver are prohibited. Sixty per cent of all export proceeds must be surrendered to the National Bank in U.S. dollars, French francs, or pounds sterling; the remainder may be kept abroad or with domestic banks. Should the exporter be paid in another currency, he must convert that part which is subject to surrender into one of the acceptable currencies.

Proceeds from Invisibles

Exchange surrender requirements are not applied to proceeds from invisibles, except that by law tourists and resident aliens are required to exchange their foreign currencies at the official rate with authorized banks. Both residents and nonresidents are permitted to bring in up to K 400 in domestic banknotes and coins. Nonresidents may bring in foreign banknotes and coins totaling no more than K 5,000. Foreign banknotes and coins brought in by residents must be justified by an authorization.

Capital

Incoming capital is not subject to any exchange control requirements. Outgoing payments of a capital nature, such as the repatriation of foreign capital, are subject to license.

Changes during 1962

January 5. Convertibility of the kip was suspended temporarily. Exchange would be granted only in respect of essential imports.

March 29. The Commission Gouvernementale de Coordination des Finances Extérieures was established to prepare and issue exchange control regulations and to license payments for invisibles.

April 11. The Commission Interministerielle d’Importation et d’Exportation was established to prepare quarterly import programs listing essential goods to be imported and the amount of foreign exchange available to pay for them, and to grant import licenses.

November 7. Imports and exports of gold and silver were prohibited.

November 19. Commercial banks were ordered to convert the foreign currency accounts of all foreign missions into kips.

December 1. A bilateral trade and payments agreement was signed with the U.S.S.R.

Note.—On February 18, 1963, the quarterly import budgets were replaced by a new import program, financed by the United States, under which the authorities of the two countries have agreed upon a specified list of goods which may be imported under the program, some only from the United States, the others from the United States or most underdeveloped countries. The National Bank took over the responsibility for exchange control and the issuance of import and exchange licenses.

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, 1962 were LL 3.06 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 are subject to export license. 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 1962

April 7. Imports of sesame oil, and exports of coffee, some fertilizers and insecticides, certain kinds of timber and paper, jute, and jute bags were exempted from license.

June 21. Imports of brushes were made subject to license.

June 22. Exports of cement were exempted from license.

November 14. Imports of poultry were made subject to license.

November 27. A new bilateral trade and payments agreement was concluded with the Republic of Guinea, providing for the exchange of items included in special lists and for payments to be made in U.S. dollars through special accounts.

Liberia1

Exchange Rate System

The par value is Liberian Dollar 1 = US$1.2 U.S. currency is in circulation along with Liberian fractional coinage. Official accounts are kept in dollars and cents. There are no restrictions on foreign exchange transactions.

Prescription of Currency

There are no obligations imposed on importers, exporters, or other residents prescribing the method or currency for payments to or from nonresidents.

Imports and Import Payments

There is no general system of import control. A few items require prior licenses.

Exports and Export Proceeds

Export licenses are not required, except for precious metals and precious stones. The surrender of the proceeds from 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 obligations are imposed on capital receipts or payments.

Changes during 1962

No significant changes took place during 1962.

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, 1962 were US$2.80⅝ buying, and US$2.80532 selling, per £L 1.

Administration of Control

Exchange control is administered by the National Bank of Libya, which has delegated some of its powers to the 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 chief financial officials of the Provinces of Tripolitania, Cyrenaica, and the Fezzan, and officials of the National Bank.

Prescription of Currency

The United Kingdom of Libya 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 settled 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 National Bank of Libya, nonresidents may open accounts with any authorized bank in Libya, in either Libyan or foreign currency. The accounts in Libyan pounds of residents of 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 license 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, and 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 encashed only at an authorized bank or at an exchange office licensed by the National Bank of Libya.

Travelers entering Libya may bring with them Libyan currency notes not exceeding a total of £L 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 were obtained from bona fide travelers from Libya within the authorized amount.

Capital

Under the provisions of the Foreign Capital Investment Law of January 30, 1958, foreign capital invested in projects deemed to contribute to the economic development of the country, as well as profits 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 1962

No significant changes took place during 1962.

Malaya

Exchange Rate System

The par value is Malayan Dollar 3.06122 = US$1. The Malayan dollar has a fixed relationship to the pound sterling based on M$l = 2s. 4d. Rates for U.S. and Canadian dollars are fixed by the Exchange Banks Association of the Federation of Malaya on the basis of the rate abroad for sterling and U.S. dollars. As at December 31, 1962, the market rate for the U.S. dollar was M$3.04 per US$1.

Administration of Control

Exchange control is administered by the Central Bank of Malaya, on behalf of the Treasury. However, much of the authority for approving normal current payments is delegated to commercial banks authorized for this purpose. Import controls are administered by the Comptroller of Customs.

Prescription of Currency

The Federation of Malaya is 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 Malaya.

Nonresident Accounts

The accounts of residents of other countries in the Sterling Area are treated as resident accounts. The accounts of residents of countries outside the Sterling Area are treated as nonresident accounts and, unless specially restricted, are designated External Accounts. External Accounts may be credited with the proceeds of any foreign currency sold to a bank in Malaya, with transfers of Malayan dollars or sterling from other External Accounts, and with funds eligible for transfer to countries outside the Sterling Area. Balances on External Accounts may be transferred to any other account, whether resident or nonresident, and may be converted into any foreign currency.

Imports and Import Payments

Imports are permitted freely under open general license or specific license, 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. Imports of poultry from Thailand are controlled under a quota system. Imports of certain textiles from Mainland China are prohibited as a measure to protect the local textile industry. All imports from South Africa are prohibited. Imports of rice are conditional on the importer purchasing one ton of rice from official stocks for every two tons imported.

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 Malaya by travelers.

Exports and Export Proceeds

Only exports to countries outside the Sterling Area exceeding M$20,000 in value, 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 Singapore, North Borneo, Sarawak, or Brunei may bring in any amount in Malayan notes, and other travelers may bring in M$500. Otherwise, permission is required for the import of Malayan notes and of currency notes of India 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 Federation 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 after January 1, 1950. The proceeds realized from investments in recognized marketable securities are not remittable and must be deposited in a blocked account, except that remittances from Malaya to the Scandinavian countries by Scandinavian nationals in respect of their own assets are permitted freely on application.

Changes during 1962

July 1. Sugar was no longer subject to import license, unless imported from countries in the Soviet bloc (except Czechoslovakia).

July 20. An initial par value of M$3.06122 per US$1 was agreed with the International Monetary Fund.

September 1. The quantity of rice that an importer could import, conditional on his purchasing one ton of rice from official stocks, was changed from one ton to two tons.

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, 1962 were Mex$12.49025 buying, and Mex$12.498125 selling, per US$1. There are no exchange restrictions on foreign payments, but payments to Spain, with which Mexico has a payments agreement, are subject to license. 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.

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, a prior import license must be obtained from the Ministry of Industry and Trade before firm orders are placed; the issuance of such licenses is subject to quantitative restriction. Imports of certain goods (assembled and unassembled automobiles and trucks, iron and steel pipes, firearms, watches, synthetic fibers, some types of jewelry, radios and television sets, equipment, machinery, and whisky, wines, and other liquors) are licensed only if the importer guarantees the export of specified commodities (mainly cotton) of an equivalent value. Imports by official Mexican agencies are subject to the prior approval of the Committee of Public Sector Imports.

Payments for Invisibles

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

Exports and Export Proceeds

Certain exports require export 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 apply to incoming or outgoing capital payments by residents or nonresidents.

Changes during 1962

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

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 NF 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 abroad. The rates of the Bank of Morocco for the U.S. dollar as at December 31, 1962 were DH 5.0115 buying, and DH 5.0366 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 divided into four groups: (1) the French Franc Area; (2) the bilateral group, comprising countries with which France has concluded bilateral payments agreements on behalf also of Morocco;2 (3) the payments agreement group, comprising countries with which Morocco maintains bilateral payments agreements;3 and (4) the area of convertibility, comprising all other countries.

Settlements with other parts of the French Franc Area are made in any currency of that area, or in dirhams through French Franc Area Accounts (see section on Nonresident Accounts, below). Settlements with the bilateral group may be made in either dirhams or French francs through a Foreign Account in Bilateral Dirhams related to the country with which the settlement takes place. Settlements with the payments agreement group are made by debiting or crediting the bilateral accounts established for this purpose. 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 account 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 between residents of Morocco and residents of other countries in the French Franc Area, including settlements for imports and exports. In addition, they may be credited freely with proceeds from sales to the Bank of Morocco of currencies of other countries of the French Franc Area or of convertible currencies, and with proceeds from sales of banknotes issued in other countries of the French Franc Area. They may be debited freely for purchases from the Bank of Morocco of currencies of other countries of the French Franc Area. Transfers between French Franc Area Accounts may be made freely.

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, for purchases from the Bank of Morocco of the currencies negotiated by it, excluding banknotes, and for transfers to Foreign Accounts in Bilateral Dirhams. Transfers between Foreign Accounts in Convertible Dirhams may be made freely.

3. Foreign Accounts in Bilateral Dirhams are reserved for residents of countries in the bilateral group (see footnote 2). They are used for settlements between Morocco and the country of residence of the account holder, including settlements for imports and exports.

4. 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 3); they are used only for settlements with these countries, including settlements for imports and exports. All transactions on these accounts require approval.

5. Capital Accounts, which may be held by any nonresident, are credited with funds which 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 bilateral group or 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 to pay for the costs of maintenance, repairs, taxes, and insurance on real estate located in Morocco. All other operations through Capital Accounts are subject to individual license.

6. Tourist Accounts are designed mainly for the deposit of Moroccan banknotes held by nonresidents.

7. 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 the French Franc Area on behalf of the account holder. No transfers are permitted between Nonresident Internal Accounts.

8. 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 with an authorized bank, which may make payments for imports upon submission of the required documents.

With certain exceptions, a 25 per cent advance deposit 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 as soon as it is known that a foreign payment will have to be made. 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.

Imports from other parts of the French Franc Area do not require an import license; but for certain imports for which there are protective quotas, “quota certificates” are required. Payments for these imports may be made freely, subject to the 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 nor to government imports. Imports made and settled through postal channels are exempt from these requirements.

Imports from countries outside the French Franc Area are subject to individual license. 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. With the exception of the quotas for soft wheat and barley, only 50 per cent of the quotas in List L may be used in the first half of the calendar year. Imports from countries in the bilateral group or the payments agreement group are made in accordance with the quotas established in the respective trade agreements. Imports can be also 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. For business travel, an allocation of foreign exchange equivalent to DH 250 is granted for each trip; additional personal allocations may be granted according to need. 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, however, required for a few items.

All exporters must sign an undertaking to repatriate and surrender the foreign exchange proceeds of their exports. Exporters are given 30 days to collect the proceeds and, in the case of exports to outside the French Franc Area, an additional 30 days to surrender the exchange 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, which may be used to pay commissions to nonresident representatives and agents, advertising costs, premiums for transport insurance, transport expenses, export duties, and consular fees; to pay 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, subject to a maximum of DH 250 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 companies established in Morocco must repatriate exchange receipts accruing from all their noncommercial claims and surrender them to an authorized bank. Other residents must surrender noncommercial receipts only when they do not 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 is subject to approval.

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 are subject to the approval of 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 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, are subject to approval.

Changes during 1962

February 2. The general import program for 1962 was published. As in 1961, 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. Except for imports of soft wheat and barley, only 50 per cent of each quota in List L could be used in the first half of the year. Compared with 1961, several items had been transferred from List A to List L.

May 18. A new bilateral trade and payments agreement with Cuba revised the terms of payment between the two countries. Imports from Cuba would be paid for immediately 25 per cent in U.S. dollars, and the balance would be credited to a clearing account maintained in accounting dollars. Exports to Cuba would be paid for from this account. Cuba was included in the payments agreement group of the exchange control regulations.

June 13. The supplementary exchange allocation for travel through Spain was increased from DH 250 to DH 300.

July 17. A new bilateral trade agreement and a payments agreement were signed with Hungary, and Hungary was included in the payments agreement group of the exchange control regulations.

August 28. A bilateral payments agreement was signed with Mali. All payments between the two countries would be settled in dirhams through a special account maintained by the Bank of Morocco in the name of the National Bank of the Republic of Mali. Mali was included in the payments agreement group of the exchange control regulations.

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, 1962, the rate for the U.S. dollar was NRs 7.60 buying, NRs 7.68 selling, per US$1.

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 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, Indian rupees, sterling, or U.S dollars. The proceeds of exports to India must be obtained in Indian or Nepalese rupees, and the proceeds of exports to other countries in any acceptable currency. The exchange received from exports, other than Indian rupees, must be surrendered to the Nepal Rastra Bank. Nepal has a transit trade and payments agreement with India, a trade and payments agreement with Pakistan, and provisional payments arrangements with Mainland China.

Imports and Import Payments

All imports of goods except those of Indian origin require import licenses from the Ministry of 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 iron, coal, and salt from India up to certain quotas benefit from a reimbursement of tax by the Government of India.

Applications to the Ministry of Finance for foreign exchange to pay for imports from countries other than India are considered on their merits; the application must, however, be in accordance with the annual foreign exchange budget and its list of commodities. Exporters entitled to import for 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 insurance are granted freely, while payments for freight are given the same treatment as the related import payment.

For travel to countries other than India for medical treatment, foreign exchange is allowed up to 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. Foreign banknotes may not be taken out by residents except with permission. Nonresidents may take out the unexpended amount of any foreign banknotes they brought in, but Indian banknotes in excess of Rs 20 may not be taken out by travelers to countries other than India.

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 20 in Indian banknotes may be brought in by travelers arriving from countries other than India.

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.

Changes during 1962

In 1962, a more detailed Exchange Control Act was enacted to replace the Foreign Exchange Act of 1960, but as at December 31,1962 it had not come into operation.

July 15. The proportions of exporters’ total exchange proceeds surrendered in a year which would be made available to them in the following year to pay for imports were raised to 35-75 per cent, the percentage increasing with the amount of export exchange surrendered.

October 19. A protocol to a trade agreement signed with Pakistan provided for trade with that country in specified commodities to be settled through a clearing account maintained in inconvertible Pakistan rupees.

Netherlands 1

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 which 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 currencies2 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, 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, Agriculture, and Home Affairs. 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 2), or in guilders to the debit of a Convertible Guilder Account (see section on Nonresident Accounts, below). Receipts which cannot be collected in convertible currency may be obtained in other currencies. 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 described below.3

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 is in conformity 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, in addition to the aforementioned amounts, have 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 if they are surrendered, it 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 depositary, 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 have been 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 in respect of transactions in securities are channeled through a free market, where payments and receipts must be either in guilders through K Accounts or in convertible currencies through “reinvestment” accounts (see below). In addition, nonresidents may debit their Convertible Guilder Accounts 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.

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 1962

April 24. It was announced that the Netherlands capital market would again be opened for the floating of foreign guilder loans; the preliminary ceiling for 1962 on such issues was established at f. 150 million. The proceeds would be obtainable in convertible foreign currencies at official exchange rates.

June 1. Netherlands residents remaining abroad for more than three months but less than three years could hold accounts in foreign currencies in the country concerned.

July 1. No documents were required for payments and receipts up to an amount of f. 500 (formerly f. 200).

September 24. The regulations in respect of W-accounts and W-deposits belonging to residents of Bulgaria were abrogated.

October 1. The Netherlands authorities informed the Fund that former Netherlands New Guinea was no longer regarded as a territory on behalf of which the Netherlands Government accepted the Fund’s Articles of Agreement.

Note.—With effect from January 1, 1963, a new law on the import and export of goods came into force. The principle of this law is that imports and exports are free. Licenses are required only for imports from the Sino-Soviet area, Hong Kong, and Japan, for the import of goods of unknown origin and a limited number of products mainly from the agrarian sector, and for a few export commodities.

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 1961, 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 1961, 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 1962

No significant changes took place during 1962.

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, 1962 was US$2.7983 buying, and US$2.7666 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 110 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 1,1962-June 30,1963, as revised, are as follows: Category “E” includes petroleum, lubricating oils, and certain other raw materials which may be imported without license. Category “A” goods are licensed up to 75 per cent of the 1960 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 criteria such 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.

Apart from motor vehicles (in a separate Category “M”), all licenses issued are available for imports from any source at the applicant’s discretion. Two types of license are issued for imports of motor vehicles: one for imports from scheduled countries,2 the other for imports from other countries.

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. Applications to the Reserve Bank to use funds for this purpose must have been made by September 1962, but importers may defer applications for the relative import licenses if they wish. Overseas motorcar companies wishing to expand their investments in New Zealand may also participate in this scheme on similar terms.

Payments for Invisibles

The commercial banks are permitted to sell exchange for many categories of invisibles up to established limits, 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 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

All receipts of currencies other than those of the Sterling Area must be offered for sale to the Reserve Bank; however, the Bank has never exercised its legal right to purchase such receipts. Disposal of such currencies, 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 send 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. Capital receipts in currencies other than those of the Sterling Area must be declared or offered for sale to the Reserve Bank. No control is exercised over the disposal by New Zealand residents of capital receipts in Sterling Area currencies.

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 are subject to approval by the Reserve Bank.

Changes during 1962

March 11. The Schedule for private imports for the licensing year beginning July 1, 1962 was announced. It provided for licenses up to an amount of £NZ 240-250 million. The “R” (replacement) and “T” (token) import categories were omitted. The terminology of the new Schedule conformed to that of a new customs tariff also coming into effect on July 1, 1962.

May 28. A “free funds” import scheme was announced, extending an existing scheme available for personal imports by holders of overseas funds. Under the new scheme, commercial imports could be financed, during the 1962-63 licensing period, out of privately held overseas funds. A condition was that 20 per cent of an applicant’s funds qualifying under the scheme be repatriated through the banking system.

September 27. The Government announced its willingness to consider requests from overseas motorcar manufacturers to expand their investments in New Zealand on the same lines as applied under the “free funds” scheme (see May 28, above).

October 19. It was announced that the “T” (token) import licensing category was being reintroduced, that increased import licenses would be made available for a range of specified goods, and that special consideration would be given to applications for imports of certain raw materials.

November 27. In respect of repatriation of capital, the one remaining distinction between investments of Sterling Area residents and others—that repatriation of certain funds by other than Sterling Area residents could be effected only by transfer to a blocked sterling account in London—was discontinued.

Nicaragua 1

Exchange Rate System

The par value is Nicaraguan Córdobas 7.00 = US$1. All 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 issues import licenses and 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 El Salvador, Guatemala, and Honduras in respect of trade and specified invisibles are 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.

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, where required, are issued freely to registered importers for most goods, provided that certain other requirements are met (see below). Imports of equipment for cotton-ginning plants and for processing of milk and meat require approval from the Ministry of Economy. Imports of certain types of footwear are prohibited, except footwear manufactured in countries signatory to the General Treaty for Central American Economic Integration.

Imports of goods not on List I are subject to license. Before the goods are shipped, the importer must apply for an import license from the Central Bank. The license is issued after the appropriate advance deposit has been paid. For the purpose of advance deposit requirements, imports are listed in three categories on the basis of essentiality: No deposit is required for items on List I. For items on List II the importer must deposit in domestic currency 40 per cent of the c.i.f. value, and for items in List III (comprising all goods not included in Lists I and II), 100 per cent. The commercial bank which 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. Advance deposits are not required for (1) imports of List I items; (2) government imports; (3) imports from the other signatories to the General Treaty for Central American Economic Integration (Costa Rica, El Salvador, Guatemala, and Honduras); and (4) imports for certain investment projects made under an Industrial Development Law.

Imports must be paid for with exchange purchased from banks.2 Payments for imports are usually made by sight draft, prepayment, or letter of credit. The Central Bank may also authorize imports with deferred payment or paid for with funds derived from properly authenticated credits obtained abroad, provided that the imports consist of goods not subject to the advance deposit requirement, or that they consist of capital goods, irrespective of the list in which they have been classified, intended for development or production or for basic works complementary to production and are financed by credit.

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 2). 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 Law on Foreign Investments of February 26, 1955 (effective March 11, 1955), 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 1962

April 4. Nicaraguan residents over 21 years of age traveling to El Salvador, Guatemala, or Honduras became entitled to exchange up to the equivalent of C$2,000 in colones, quetzales, or lempiras at the official rate.

May 1. Nicaragua joined the Cámara de Compensación Centroamericana (Central American Clearing House). Thereupon, the remaining bilateral payments agreement, with El Salvador, lapsed.

May 11. Advance deposit requirements for List II imports were lowered from 100 per cent to 90 per cent. The requirement that an importer of List III goods must wait 30 days for a license, after paying his deposit, was eliminated.

June 9. By decree, foreign investors who exported and did not surrender the proceeds could be limited in the amount of official exchange they could obtain from the Central Bank for transferring earnings, profits, and interest and for repatriating capital.

August 1. The Preferential Trade Agreement between Costa Rica, Nicaragua, and Panama, signed on August 2,1961, came into force with the exchange of instruments of ratification.

November 13. Advance deposit requirements for List II imports were lowered to 40 per cent.

Note.—On March 1, 1963, 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. This unification abolished the free exchange market previously used for some invisibles and some capital transactions. The surrender requirements applied to foreign exchange receipts were eliminated.

Niger 1

Exchange Rate System

No par value for the currency of the Niger 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. 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. Practically all settlements between the Niger and countries outside the French Franc Area are made through the Paris exchange market. The CFA franc is freely exchangeable for any other currency of the French Franc Area.

Exchange Control Territory

The Niger is a member of the French Franc Area. It is one of seven West African countries (Dahomey, Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta) having a common currency system and a common central bank, the Banque Centrale des Etats de l’Afrique de l’Ouest. This central bank holds its exchange reserves exclusively in French francs, and settlements with countries other than the participating countries are made through the central bank’s operations account with the French Treasury. The account reflects not only the transactions of the participating West African countries in currencies of the French Franc Area, but also their transactions in other currencies; the latter are settled through the Paris exchange market.

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.

Global annual programs for imports from countries outside the French Franc Area are coordinated by the Ministry of Finance within the framework of an over-all allotment of foreign exchange to the Niger from the Exchange Stabilization Fund of the French Franc Area in Paris. Import licenses are issued by the Ministry of Finance with the consent of the Exchange Office.

Prescription of Currency

Settlements between the Niger and other countries of the French Franc Area may be made in any of the currencies of the French Franc Area. Although prescription of currency regulations similar to those of France are applicable to settlements between the Niger and countries outside the French Franc Area, in practice such settlements are made in French francs through banks in France.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France, but in the Niger these accounts have only limited importance.

Imports and Import Payments

Imports from countries in the French Franc Area are generally free of license and quantitative restriction. Imports from all other countries are subject to import license and are admitted in accordance with an annual program which is determined each year after discussions in a joint French-Nigerois committee, as provided for by the Economic Cooperation Agreement with France. Under this program, global quotas are established for imports from Switzerland and EEC countries (other than France) and for imports from most other countries outside the French Franc Area, bilateral quotas are established for imports from Soviet bloc countries, and some imports from Far Eastern countries are restricted to protect domestic industry. The import program is put into effect through individual licenses, which are applied restrictively to most imports, or through certificates of importation, which provide for the import of a few goods without quantitative restriction. The import of a number of goods is prohibited. Import licenses are issued only to licensed traders and to industrial and agricultural producers.

Import licenses or certificates of importation entitle importers to purchase the necessary exchange, provided that the required documents to prove that the goods have been shipped are submitted to the Exchange Office. With the exception of certain imports, applications for licenses for imports that do not have to be settled in foreign exchange are approved under the program quotas as if they were payable in foreign exchange, i.e., licenses are issued only if there is an available quota balance under the import program. Applications for licenses for imports of goods to be used directly by exporters are approved freely if the imports are to be paid for with funds from EFAC accounts (see section on Exports and Export Proceeds, below).

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely; those to other countries are usually 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. Payments for many other invisibles are approved with varying degrees of restrictiveness.

Travelers may take out banknotes in French francs, in CFA or CFP francs, and in other currencies, up to certain limits. Nonresident travelers may take out foreign notes and coins up to the amount declared when they entered the country.

Exports and Export Proceeds

Exports to countries in the French Franc Area are free of license. Exports to other countries require licenses, mainly in order to ensure that payment conforms to the prescription of currency regulations, to assure adequate supplies for the domestic needs of the Niger or for export to France, and to prevent certain re-exports.

Export proceeds in foreign currencies 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 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

Residents are obliged to collect from nonresidents, and if obtained in foreign currencies to surrender within one month from the date of receipt, amounts exceeding F 100 or the equivalent in CFA francs in respect of services and of income from foreign securities. Travelers may bring in any amount of banknotes or coins (except gold coins).

Capital

Capital movements between the Niger and other French Franc Area countries are free of control. Capital movements between the Niger and all other countries are subject to approval.

Changes during 1962

No significant changes took place during 1962.

Nigeria

Exchange Rate System

The par value is Nigerian Pound 1 = US$2.80.1 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, and is prepared to quote buying and selling rates to authorized dealers for any specified currency 2 or any other Sterling Area currency in relation to a specific transaction. Such quotations are based on international market rates between sterling and the currency concerned. 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. They must accept at market rates any specified curency 2 offered by a resident. 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 indirectly 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.

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 the dollar area of coal, coke, gold, gold chloride, and other gold products, and secondhand clothing; (2) imports from all countries of cement, tin ore, petroleum products, and products the export of which is subject to Marketing Board control in Nigeria (see section on Exports and Export Proceeds, below); (3) all imports from certain countries, mainly those in the Sino-Soviet bloc; (4) imports of wheat and sugar from countries which are not parties to the International Wheat and Sugar Agreements; and (5) all imports originating in South Africa or South West Africa.

Foreign exchange is granted automatically for all authorized imports, except that the approval of the Central Bank is required for advance payments.

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.3

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 foreign exchange for travel purposes without limit. An allowance of £250 in foreign exchange in each year may be sold by authorized dealers to residents for travel outside the Sterling Area. 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 which are subject to individual license). Individual export licenses are required for exports of cigarettes and tobacco, columbite, 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 currencies (see footnote 2) 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 1962

July 16. The Exchange Control Act 1962 came into force, replacing the Exchange Control Act 1950 and amendments. The new Act was designed to simplify and modify the earlier Act to reflect the sovereign status of Nigeria. The principal change was that all currencies except Nigerian pounds were designated as foreign currencies, so that transactions in other Sterling Area currencies, formerly exempt from regulation, were brought under the control of the Minister of Finance. In the orders and instructions issued with the Act, discretionary authority was delegated to the authorized dealers to approve almost all payments to Sterling Area countries and a wide range of payments to outside the Sterling Area. The Central Bank was empowered to approve payments that are not within the authority of the authorized dealers. The Minister of Finance, however, became responsible for authorizing (1) the repatriation of foreign capital and profits, (2) the raising of external loans and their repayment, (3) borrowing in Nigeria by companies controlled directly or indirectly from outside Nigeria, (4) any dealings in foreign securities, (5) payments for football pools and other betting arrangements, and (6) private compensation deals (i.e., transactions not involving the use of official exchange).

Norway1

Exchange Rate System

The par value is Norwegian Kroner 7.14286 = US$1. The official limits for the U.S. dollar are NKr 7.09 buying, and NKr 7.20 selling, per US$1, at which rates the exchange authorities stand ready to deal; 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, and import licenses for coffee are issued by the Wholesale Grocers’ Association. 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 effect payments freely for imports not requiring an import license and for most invisibles. Payments in the restricted sector require, in general, approval from the Ministry of Agriculture (for most agricultural goods), the Ministry of Commerce (for other goods), or the Bank of Norway (for 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 countries 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). Payments to and from Greece must be made through the clearing account of that country with the Bank of Norway;3 however, balances on the account are considered by the Norwegian authorities to be convertible.

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 by residents of Norway to 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 convertible currencies.

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 amounts which, according to the general rules or specific permission, are 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 area upon presentation of the original invoice.4 Import licenses are required only for the few items on a list of nonliberalized commodities,5 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. Most of the commodities on the nonliberalized list are, however, also on a global quota list, permitting them to be imported, up to certain limits, from the global quota area (which is the same as the free list area plus Japan).

Some commodities on the nonliberalized list are subject to bilateral quotas, while others are licensed on an ad hoc basis. Those licensed on an ad hoc basis include specialized and secondhand ships, which 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 countries in the bilateral area must be made in the manner prescribed in the relevant payments agreement, a liberal practice being followed with regard to 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 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 NKr 1,000 in Norwegian banknotes, in denominations not exceeding NKr 100, and any amount in foreign banknotes.

Capital

Inward transfers of capital and investments in Norway by nonresidents are subject to approval by the Bank of Norway. Outward transfers of capital are subject to individual license, the granting of which depends on such circumstances as the merits of the case, the transfer possibilities under a relevant payments agreement, the possibility of compensation with Norwegian assets abroad, etc. Licenses for outward transfers in respect of investments made in Norway after World War II are granted freely, and nonresident capital may be repatriated automatically, provided the investment was made by importing capital. Payments for contractual amortization are also permitted freely.

In accordance with an agreement concluded by Norway with Denmark, Sweden, and the United Kingdom in 1950, transfers of capital belonging to residents of these countries are normally permitted. 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$500 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 1962

January 1. The amount of exchange that banks could sell for business travel without the approval of the Bank of Norway was raised to the equivalent of NKr 200 a day in all European countries and the equivalent of NKr 300 a day in other countries.

January 1. Additional commodities, including passenger cars, confectionery, porcelain, glassware, refrigerators for other than household use, buses, and tugboats were taken off the list of nonliberalized imports. The requirement that coffee importers obtain from Brazil at least 75 per cent of their annual coffee imports was rescinded. Czechoslovakia, Hungary, Poland, and Rumania were taken out of the import free list area, and a “special restricted list” was introduced for imports from Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, and the U.S.S.R.

July 1. Additional commodities, including crude and refined soybean oil, cottonseed oil, groundnut oil, and coconut oil were taken off the list of nonliberalized imports. Increased global quotas for imports became effective for the period to June 30, 1963.

November 1. The bilateral payments agreement with Bulgaria was terminated.

Note.—The following changes came into effect on January 1, 1963:

(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.

(2) 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; goods not listed could be imported freely, so that about two thirds of imports from Japan were now liberalized. Japan was included in the global quota area.

(3) Some commodities, including hydrogenated oils and fats, reconstituted wood, bathtubs, household refrigerators and deep freezers, television sets, and certain furniture, 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 29, 1962, market rates for telegraphic transfers on London were 1s. 6132d. buying, and 1s. 53132d. selling, per rupee, and on New York they were PRs 4.7325 buying, and PRs 4.7825 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 29, 1962, these bonus vouchers were quoted at rates around PRs 159.62 per PRs 100 of nominal value.

Administration of Control

The State Bank of Pakistan has delegated to 27 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.1 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 (but see footnote 1). Payments to countries outside the Sterling Area are made by transferring sterling or Pakistan rupees to a nonresident account or, in some cases, in the recipient’s currency. In the case of imports, payment is made to the country of origin of the goods.

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 are subject to license, 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 19 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. Under the Limited Payments Agreement with India, a specified value of exports of raw cotton to India is paid in Indian currency; any exports above that value are paid in convertible sterling.

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 all other primary products, and of jute manufactures and cotton piece goods, are issued bonus vouchers of a value equivalent to 20 per cent of the net exchange surrendered; for exporters of cotton yarn, the percentage is 10; for exporters of all other manufactures, the percentage is 40; and for exporters of citrus fruits and the Batang variety of pear, the percentage is 35.2 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. Exporters of certain services (aircraft repairs, salvage operations, ship repairs, and shipping) are entitled to receive bonus vouchers equivalent to 20 per cent of the net foreign exchange earned by them; these vouchers are 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 as well as by the restaurants approved by the Directorate of Tourism.

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.

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 1962

January. Sugar could be imported freely against export bonus vouchers.

January 4. Authorized dealers could issue travelers checks to foreign nationals without any limit, against surrender of an equivalent amount of foreign currency. They could also sell foreign currency notes to foreign nationals up to the value of PRs 500 per person, against surrender of an equivalent amount of foreign exchange.

January 19. An advance deposit of 30 per cent for iron and steel and of 25 per cent for 12 other manufacturing products was required against the issue of letters of credit to cover these imports. This prior deposit did not apply to letters of credit opened against licenses issued to industrial consumers, to departments of the Central and Provincial Governments, or to semigovernmental agencies.

January 24. Details of the exchange facilities for the 1962 Haj Pilgrimage were announced. Exchange would be allowed by ballot up to a certain maximum per person, depending on the means of travel and provided that the full amount required for the purchase of the exchange was deposited before drawing.

March 7. Restrictions were imposed on exports of scissors, forceps, and a few other items below certain export prices.

July 24. A maximum of PRs 20 a month was authorized for Burmese nationals resident in Pakistan for remittances on account of family maintenance.

August 21. A 10 per cent bonus on the export of cotton yarn was reintroduced.

October 19. A protocol to a trade agreement signed with Nepal provided for trade between Pakistan and Nepal in specified commodities to be settled through a clearing account maintained in inconvertible Pakistan rupees.

November 27. A bonus of 35 per cent was allowed on exports of citrus fruit and the Batang variety of pear.

December 20. The advance deposit requirements for letters of credit for certain import products which were introduced on January 19, 1962 were canceled.

Panama

Exchange Rate System

The par value is Panamanian Balboa 1.00 = US$1. U.S. currency notes circulate freely in Panama, and local currency is represented only by the silver balboa and subsidiary coins. Exchange transactions by commercial banks are based on New York market quotations. Panama has no exchange restrictions on foreign payments. On November 26, 1946, Panama notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

There are no obligations imposed on importers, exporters, or other residents prescribing the method or currency for payments to or from nonresidents.

Imports and Import Payments

Import licensing is in effect for a few items and a few imports are subject to quantitative restriction. Payments abroad may be made freely.

Exports and Export Proceeds

Export permits are required for a few items and a few exports 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 incoming or outgoing capital payments by residents or nonresidents.

Changes during 1962

No significant changes took place during 1962.

Paraguay 1

Exchange Rate System

On March 1, 1956, a par value for the Paraguayan Guaraní 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 certain commodities are temporarily prohibited.2 All other imports are free from 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. 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 are subject to license, 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 guaraníes 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 1962

July 12. The Central Bank raised its rate for Paraguayan-Spanish agreement dollars from ₲ 121 to ₲ 125 per US$1.

October 23. Decree No. 381/62 drew the attention of exporters to the provisions of the decree of August 9,1957, which established the present exchange system, requiring them to sell the exchange proceeds of their exports to commercial banks in Paraguay.

Note.—On January 4,1963, Decree No. 26470 temporarily prohibited the import of certain commodities (see footnote 2).

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, 1962 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

There are no obligations prescribing the method or currency for payments to or from nonresidents.

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 incoming or outgoing capital payments by residents or nonresidents.

Changes during 1962

January 9. Law No. 13778 of December 20, 1961 came into effect, imposing a surcharge of ¼ of 1 per cent of the c.i.f. value on all imports except the following: imports from other LAFTA members; war equipment imported by the State; goods imported by diplomats; and medicine and medical equipment.

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 ₱ 3.52 per US$1 for total export proceeds. On December 31, 1962, the fluctuating rate averaged ₱ 3.89193 buying, and ₱ 3.91053 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

Aside from advance deposit requirements, which apply to less essential commodities, 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 imports, viz., 25 per cent for semiessential producer goods; 75 per cent for nonessential producer goods and semi-essential consumer goods; and 100 per cent for nonessential consumer goods and unclassified items. Advance deposits must accompany the import letter of credit; they must be kept 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 from the Philippines unless covered by a draft drawn in one of these currencies and unless collection of the proceeds will be undertaken by an authorized agent bank; however, payments by means of telegraphic transfer, check, or mail transfer may also 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 1962

January 22. The final phase of the decontrol program was put into effect. Aside from advance deposit requirements on imports, all restrictions on foreign trade and payments, including capital movements, were withdrawn. A fluctuating rate was applied to all exchange payments and receipts, except that the par value of ₱ 2.00 per US$1 continued to apply to 20 per cent of the proceeds from merchandise exports, and exchange sales under contracts or commitments made before January 22, 1962 were subject to the rate agreed in the original contracts or commitments. The margin fee previously collected by the Central Bank on most sales of exchange was suspended. All imports had to be covered by letters of credit opened by authorized agent banks, except small transactions involving no more than US$100. Import letters of credit had to be accompanied by special time deposits ranging between 25 per cent and 150 per cent of the value of the letter of credit; these time deposits had to be kept for periods no shorter than 120 days and were subject to a reserve requirement of 100 per cent. Authorized agent banks could sell foreign exchange for invisibles freely to any applicant. Applicants for exchange for capital transfers could be required to complete a special form prescribed by the Central Bank. Blocked nonresident fiduciary accounts reverted to the status of ordinary deposits and all special requirements governing them were revoked.

January 30. The Central Bank announced that the advance deposit requirements would apply to “no-dollar” imports, except shipments by the U.S. International Cooperation Administration or its successor entity and other imports of a nonmerchandise nature.

March 2. The Central Bank announced (1) that special time deposits for import letters of credit covering essential producer, essential consumer, and decontrolled items were no longer required, and (2) that the special time deposits and the reserve requirements thereon could be either in cash or in government notes, securities, or bonds.

May 22. The remaining advance deposit requirements were reduced to 25 per cent (semiessential producer goods), 75 per cent (nonessential producer goods and semiessential consumer goods), and 100 per cent (nonessential consumer goods and unclassified items). Imports by local industries of raw materials to be used in their own operations were exempted from the advance deposit requirements. Imports not subject to the advance deposit requirements could be financed by means of documents against payment or documents against acceptances not exceeding 90 days.

Portugal 1

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 currencies2 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, 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, except that, in transactions with Finland, they may use accounts maintained with their Finnish correspondents. 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 centralized 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 2) or, for Portuguese exports, in escudos to the debit of a convertible nonresident account. Transactions with countries with which Portugal has bilateral payments agreements are settled through clearing accounts maintained in U.S. dollars, escudos, or the currency of the partner country.3

Nonresident Accounts

The scope of nonresident accounts in Portugal is limited because authorized payments to nonresidents are seldom made in escudos. In practice, amounts credited to nonresident accounts are derived mainly from sales of convertible currencies to Portuguese banks or from transfers from other nonresident accounts. Most payments out of balances on nonresident accounts may be made freely.

Imports and Import Payments

The import of certain products is prohibited, mainly for sanitary reasons, to protect public order and morals, and to prevent trade frauds. Any physical or juridical entity may be an importer, the only requirement being that the importer pays income taxes regularly.

Most imports consigned from and originating in the Portuguese overseas territories are free from restriction. A registration procedure is applied, in exceptional cases, for payment control purposes, and controls are also exercised to ensure that goods originating in Soviet bloc countries do not enter Portugal via Macao. Imports of certain products from the territories, such as sugar, cotton, some oilseed products, and a few other goods, receive preference over imports from third countries.

Practically all imports from outside the Portuguese Monetary Area are effected on the basis of “bulletins.” For imports free from from 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 also equivalent to an import license.

The so-called negative list comprises some 50 tariff items or subitems that are subject to restrictive licensing; goods not on this list may be imported freely from countries that are members of the GATT. Imports of other goods from most GATT countries are admitted either under global quotas or under individual authorization. There are, in addition, global quotas for certain imports from members of the EFTA.

Payments for Invisibles

Payments for current invisibles to the Portuguese overseas territories may be made freely through the authorized banks. Payments for current invisibles to other countries are also free from restriction, but are subject to procedures which differ in respect of the amounts of foreign exchange that authorized banks are permitted to sell freely for the various transactions.

The authorized banks may sell exchange freely for payments for invisibles incidental to trade, and up to Esc 100,000 for payments for other invisibles, except that for tourism the limit is Esc 50,000 a year for each person. The authorized banks may make payments to Czechoslovakia, Eastern Germany, Hungary, Israel, Poland, and the United Arab Republic for invisibles listed in the respective payments agreements, in accordance with the terms of those agreements.

No particular formality is required for payments not requiring the authorization of the Bank of Portugal. For all other payments, a document (called a “special authorization for sale”) is issued by the Bank of Portugal.

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 main purpose of this procedure being 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, freight, insurance, or other charges pertaining to exports, from the total amount of the export proceeds subject to surrender.

Proceeds from Invisibles

For most invisibles, Portuguese residents may receive payments freely from residents of countries with which Portugal does not have bilateral payments agreements. Incoming invisibles from other countries are subject to the conditions set forth in the agreement concerned. Receipts from invisibles must be surrendered.

Travelers may bring in domestic and foreign banknotes and foreign coins freely to cover their travel expenses.

Capital

Capital transfers between Portugal and the overseas territories are subject to prior authorization by the Inspectorate-General of Credit and Insurance; approval is also required from the authorities of the territory concerned. When the amount exceeds Esc 50 million, the approval of the Minister of Finance and of the Minister of Overseas Territories is required. For most types of transaction, however, authorization to export from Portugal (and to import into the overseas territory) is granted freely.

All capital movements between Portugal and other countries (excluding credits with a term of less than one year) are subject to the prior authorization of the Inspectorate-General of Credit and Insurance; and for transactions exceeding Esc 10 million, the approval of the Minister of Finance is also required. Moreover, before granting an authorization, the Inspectorate may request the advice of the Bank of Portugal as to the monetary and foreign exchange aspects of the transaction involved.

Foreign investments in Portugal are authorized freely if they involve activities that are of recognized interest for the country’s development. In certain branches of the economy, however, foreign investment may not exceed 40 per cent of the total capital of the enterprise in which the investment is made. The transfer abroad of the proceeds from the liquidation of foreign investment which originated in an inward capital movement is authorized.

Foreign credits and loans with a maturity of one to five years are authorized if they are related to a commercial transaction in which a Portuguese resident participates; the repayment of such credits and loans is also authorized.

Investments outside the Portuguese Monetary Area by residents of Portugal are authorized only when the capital involved is not considered necessary for the national economic development. In practice, authorization is granted only for small investments and for the improvement or enlargement of existing Portuguese investments.

Residents of Portugal may reinvest in securities, within time limits fixed by the authorities, the proceeds of the sale of other securities in an OECD country. They may also transfer such proceeds to other residents.

Arbitrage operations in foreign securities carried out by residents of Portugal involving two other OECD countries or between Portugal and an OECD country are authorized freely, provided that no transfer of foreign exchange from Portugal is involved.

Transfers by Portuguese nationals or by foreigners resident in Portugal who emigrate to any other OECD country are authorized up to Esc 100,000. Transfers by nationals of OECD countries who have been resident in Portugal are authorized up to Esc 500,000 a year for a family when they return to their country of origin. Transfers on account of gifts, bequests, inheritances, and dowries to other OECD countries are authorized up to Esc 500,000. For gifts, bequests, inheritances, and dowries exceeding this amount, annual transfers up to Esc 500,000 are authorized. In cases of bequests and inheritances, the legator or the deceased person must have been a resident of Portugal and the legatee or heir a resident of an OECD country at the time of the death.

Transfers to OECD countries in respect of life insurance policies are authorized in favor of the beneficiary when the policy has been taken out in Portugal and when a resident in another OECD country has been authorized to transfer to Portugal the value of the corresponding premium.

Capital movements and transfers of assets not covered by the preceding paragraphs and involving countries other than those mentioned above are authorized on the merits of each case.

Changes during 1962

June 1. An initial par value for the Portuguese escudo of Esc 28.75 per US$1 was established with the International Monetary Fund.

June 7. Global quotas were established for imports of a number of products from members of the GATT.

October. Global quotas were established for imports of certain products from most countries which are members of the GATT.

November 26. Six decrees, to be effective from January 1, 1963, were published, regulating re-exports of merchandise, exports of private capital, invisibles, exchange transactions in Portugal and in the overseas territories, and payments between Portugal and the overseas territories. The activities of exchange brokers were restricted to the purchase of foreign bonds, the purchase and sale of foreign notes and coins, and the purchase of travelers checks. A compensation system for interterritorial exchanges was established.

December 7. The system of free imports was modified and further liberalized, and made applicable to all members of the GATT. The list of goods subject to restrictive import licensing was shortened to some 50 tariff items or subitems.

Note.—On February 21, 1963, a ministerial decree published details of the liberalization of capital movements between Portugal and the overseas territories.

Rhodesia and Nyasaland

Exchange Rate System

The par value is Rhodesia and Nyasaland Pound 1 = US$2.80. The Bank of Rhodesia and Nyasaland stands ready in transactions with authorized banks to buy and sell Rhodesian pounds against sterling at par, subject to a small commission. The authorized banks in the Federation base their rates for other currencies on the current London market rates. As at December 31, 1962, the rate for the U.S. dollar was £R 2.80732 buying, £R 2.80932 selling, per US$1.

Administration of Control

Exchange control is administered by the Bank of Rhodesia and Nyasaland under powers delegated to it by the Minister of Finance. Much of the authority for approving normal current payments is in turn delegated to the commercial banks. Import and export licensing is handled by the Ministry of Commerce and Industry; but certain agricultural products require import licenses issued by the Ministry of Agriculture, and the Ministry of Power is the authority for licensing imports of radioactive substances.

Prescription of Currency

The Federation of Rhodesia and Nyasaland 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 Rhodesian pounds, sterling, or other Sterling Area currencies. Authorized payments, including payments for imports, by residents of the Federation to residents of countries outside the Sterling Area may be made in sterling or Rhodesian pounds to the credit of an External Account or in any foreign currency. Payments from countries outside the Sterling Area may be received in sterling or Rhodesian pounds from an External Account, or in any currency freely exchangeable for sterling.

Nonresident Accounts

Accounts in Rhodesian pounds held by residents of other parts of the Sterling Area are designated Scheduled Area Accounts. These accounts may be credited with the proceeds of sales of other Sterling Area currencies, with authorized payments by residents of the Federation, and with transfers from other Scheduled Area Accounts. Balances on these accounts may be converted freely into other Sterling Area currencies, used to pay residents of Rhodesia and Nyasaland, or transferred to other Scheduled Area Accounts.

Accounts in Rhodesian pounds held with authorized banks by residents of countries outside the Sterling Area are designated External Accounts. These accounts may be credited with authorized payments from residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currency by nonresidents to authorized banks. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts or to Scheduled Area Accounts, and for purchases of foreign currency from the authorized banks.

Imports and Import Payments

Some items are subject to import license regardless of the country of origin.1 All other goods originating in the Sterling Area may be imported free of license or, if originating in certain other countries,2 may be imported freely under an open general license. Certain petroleum products and a few other items regardless of the country of origin, and imports of specified commodities of Japanese origin, may also be imported under an open general license. All other imports are subject to individual import license. Certain new (military type) and used clothing are subject to annual quotas.

Foreign exchange or permission to credit a nonresident account in accordance with the prescription of currency regulations is authorized automatically for all permitted imports, subject to the presentation of the relevant documents.

Payments for Invisibles

Exchange to pay for invisibles related to imports is provided by the commercial banks without prior reference to the exchange control, as is also exchange up to certain limits for other purposes, such as travel. The annual basic exchange allowance for travel is £300 for an adult and £150 for a child under 12 years of age. The allowance is cumulative up to a maximum of £900 for an adult and £450 for a child. Exchange is provided, subject to certain limits, for other purposes, such as education and medical treatment outside the Federation. Applications for amounts exceeding the limits are granted by the exchange control authorities if they are satisfied that the exchange is needed for genuine current payments.

Travelers may not, without permission, take out more than £20 in Federal currency notes and £10 in foreign currency notes.

Exports and Export Proceeds

Most goods may be exported freely; but certain commodities are subject to export license, mainly to ensure domestic supplies of needed goods and of certain strategic materials.3 Export proceeds in foreign currency must be offered for sale to an authorized bank.

Proceeds from Invisibles

Receipts from invisibles in any currency must be offered for sale to an authorized bank. There is no limitation on the amount of foreign currency notes that may be imported by travelers, but not more than £20 in Federal currency notes may be brought in.

Capital

There are no restrictions on inward transfers of capital to the Federation. Outward transfers of capital, including those to other parts of the Sterling Area, are subject to control, but residents of countries outside the Federation are permitted to repatriate their investments when they have satisfied the authorities that the original investment was made with funds brought into the country from external sources.

In general, residents of the Federation are not permitted to transfer capital abroad and, with certain exceptions, are required to offer for sale to an authorized bank any foreign exchange which accrues to them. As a special measure, however, residents of the Federation may purchase securities quoted on recognized stock exchanges in the Sterling Area, provided that the securities so acquired are registered in the names of specified nominees and that in the event of the subsequent disposal of these securities the sale proceeds are repatriated to the Federation. All income earned from these investments must be remitted to the Federation.

Emigrants are granted exchange as follows: £1,000 for a single person and £2,000 for a married couple plus £250 for each child, up to a maximum of £3,000 for a family unit. Annual transfers are allowed subsequently on each anniversary of departure from the Federation up to the amount of the relevant initial basic allowance. Emigrants over the age of 50 are granted an initial exchange allowance of £5,000 and, as with other emigrants, are permitted annual transfers up to the amount of the basic allowance appropriate to their marital status.

Changes during 1962

November 30. The Currency and Exchange Control (Temporary) Act, 1961, which introduced exchange control on payments and transfers to other parts of the Sterling Area in order to prevent the outflow of capital from the Federation, was extended indefinitely.

November 30. The emigration allowance for a family was raised to £2,000 for a married couple plus £250 for each child, subject to a maximum of £3,000 for a man, wife, and four or more children.

Saudi Arabia

Exchange Rate System

The par value is Saudi Arabian Riyals 4.50 = US$1. The Saudi Arabian Monetary Agency sells U.S. dollars to banks at the par value rate, and this serves as the basis for exchange quotations in the market. The Monetary Agency also sells sterling to banks at the appropriate cross rate. There are no restrictions on foreign payments. Saudi Arabia accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from March 22,1961.

Prescription of Currency

There are no obligations imposed on importers, exporters, or other residents prescribing the method or currency for payments to or from nonresidents.

Imports and Import Payments

Import licenses are not required, and exchange for payments abroad may be obtained freely. All imports from Israel are prohibited.

Exports and Export Proceeds

Export licenses are not required, and no control is exercised over export proceeds. All exports to Israel, and the re-export of certain imported items benefiting from government subsidy, are prohibited.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

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

Changes during 1962

No significant changes took place during 1962.

Senegal 1

Exchange Rate System

No par value for the currency of Senegal 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. 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. Practically all settlements between Senegal and countries outside the French Franc Area are made through the Paris exchange market. The CFA franc is freely exchangeable for any other currency of the French Franc Area.

Exchange Control Territory

Senegal is a member of the French Franc Area. It is one of seven West African countries (Dahomey, Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta) having a common currency system and a common central bank, the Banque Centrale des Etats de l’Afrique de l’Ouest. This central bank holds its exchange reserves exclusively in French francs, and settlements with countries other than the participating countries are made through the central bank’s operations account with the French Treasury. The account reflects not only the transactions of the participating West African countries in currencies of the French Franc Area, but also their transactions in other currencies; the latter are settled through the Paris exchange market.

Administration of Control

Exchange control is administered by the Exchange Office, under instructions from the Ministry of Finance and Economic Affairs. Foreign exchange transactions are handled by the commercial banks under the supervision of the Exchange Office.

Prescription of Currency

Settlements between Senegal and other countries of the French Franc Area may be made in any of the currencies of the French Franc Area. Although prescription of currency regulations similar to those of France are applicable to settlements between Senegal and countries outside the French Franc Area, in practice such settlements are usually made in French francs through banks in France. Settlements between Senegal and Guinea are made through accounts denominated in U.S. dollars, under the terms of a bilateral payments agreement.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France, but in Senegal these accounts have only limited importance.

Imports and Import Payments

Imports from countries in the French Franc Area are generally free from license and quantitative restriction. There is an annual global program for imports from all other countries, which is determined each year after discussions in a joint French-Senegalese 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 all countries outside the French Franc Area; some imports from “low-wage” countries are restricted to protect domestic industry. The import program is put into effect through individual licenses, which are applied restrictively to most imports. Certificates of importation provide for the import of certain goods without quantitative restriction. The import of a number of goods is prohibited. Import licenses are issued only to licensed traders and to industrial and agricultural producers.

An import license or certificate of importation entitles the importer to purchase the necessary exchange, provided that the required documents to prove that the goods have been shipped are submitted to the authorized bank. Applications for licenses to import goods to be used directly by exporters are approved freely if the imports are to be paid for with funds from EFAC accounts (see section on Exports and Export Proceeds, below).

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely; those to other countries are usually 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. Payments for many other invisibles are approved with varying degrees of restrictiveness. Business travel may be financed with funds from EFAC accounts.

Travelers to Dahomey, the Ivory Coast, Mauritania, the Niger, Togo, and the Upper Volta may take out any amount of banknotes in CFA francs. Travelers to other destinations may take out CFA banknotes up to CFAF 75,000, and banknotes of countries outside the French Franc Area up to the same amount. French banknotes may be taken out freely to countries in the French Franc Area, and up to the countervalue of CFAF 75,000 to other countries. Nonresident travelers may take out foreign notes and coins up to the amount declared when they entered the country.

Exports and Export Proceeds

With a few exceptions (e.g., gold, diamonds, tunny), exports to countries in the French Franc Area are free of license. Exports to other countries require licenses, mainly in order to ensure that payment conforms to the prescription of currency regulations, to assure adequate supplies for the domestic needs of Senegal, and to prevent certain re-exports.

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 part of their foreign currency proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) 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. The proportions of export proceeds that may be credited to EFAC accounts are 12 per cent for firm sales to the United States and Canada, 8 per cent for firm sales to other countries outside the French Franc Area, and 6 per cent for sales on consignment.

Proceeds from Invisibles

Residents are obliged to collect from nonresidents, and if obtained in foreign currencies to surrender within three months from the date of receipt, amounts exceeding F 100 or the equivalent in CFA francs in respect of services and of income from foreign securities. Travelers may bring in any amount of non-CFA banknotes or coins (except gold coins); imports of CFA banknotes are limited to CFAF 75,000 a person, except that travelers coming from Dahomey, the Ivory Coast, Mauritania, the Niger, Togo, or the Upper Volta may bring in any amount.

Capital

Capital movements between Senegal and other French Franc Area countries are free of control. Capital movements between Senegal and all other countries are subject to approval.

Foreign investment in Senegal is subject to the prior approval of the Exchange Office; approval depends on the nature and purpose of the proposed investment. In accordance with the Investment Code of March 22, 1962, the purpose of which is to encourage domestic and foreign private investment in projects which conform to Senegal’s Four-Year Development Plan, an investor may sign a special founding agreement (convention d’établissement) with the Government by which he receives additional legal, financial, and other assurances in return for his commitment to carry out a certain program. A convention d’établissement is extended only to domestic and foreign investors who propose a minimum investment over three years of CFAF 1 billion.

Changes during 1962

March 22. An Investment Code (Law 62-33) was enacted by the Senegalese National Assembly to encourage private investment, both domestic and foreign.

June 10. The import of certain additional goods was prohibited. These included sugar, matches, certain kinds of cotton thread, cotton textiles, certain textiles of artificial material, sisal carpets, certain types of footwear and clothing, and earthenware flower pots.

Sierra Leone 1

Exchange Rate System

No par value for the currency of Sierra Leone has been established with the Fund. The currency of Sierra Leone is the West African Pound, which is maintained at par with the pound sterling, giving a relationship to the U.S. dollar of £WA 1 = US$2.80. The West African Currency Board stands ready in transactions with commercial banks to buy and sell West African currency in exchange for sterling at par, subject to a maximum commission of ½ of 1 per cent. The authorized banks in Sierra Leone base their rates for other currencies on the current London market rates.

Administration of Control

The administration of exchange control is carried out by the Exchange Control Officer of the Ministry of Finance. Authorized commercial banks are permitted to sell exchange for permitted imports and, in small amounts, for traveling expenses. The Financial Secretary has power to direct payments into Blocked Accounts. Import and export licenses are issued by the Ministry of Trade and Industry.

Prescription of Currency

Sierra Leone is a member of the Sterling Area, and settlements with other Sterling Area countries may be made freely in sterling or any other Sterling Area currency. Authorized payments to countries outside the Sterling Area, including payments for imports, may be made in sterling or West African pounds 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 West African pounds from an External Account, or in any specified currency.2

Nonresident Accounts

Accounts in West African pounds held with authorized banks in Sierra Leone by residents of countries outside the Sterling Area are designated External Accounts. These may be credited with authorized payments from residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currencies by nonresidents. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of foreign currencies. In addition, there are Blocked Accounts, to which are credited amounts due to residents of countries outside the Sterling Area which may not be remitted abroad.

Imports and Import Payments

All imports from countries in the Soviet bloc, except those which are members of the GATT, and a few commodities3 from any source, require import licenses. All other imports may be made without individual import license. Foreign exchange is granted for all permitted imports.

Payments for Invisibles

Payments for invisibles to residents of the Sterling Area may be made freely. Remittances to all other countries require approval.

For travel to countries outside the Sterling Area, residents are entitled to a basic exchange allowance of £250 a travel year. Applications for larger amounts are considered on an individual basis. Travelers may take CFAF 4,000 in banknotes to former French West African territories, West African currency notes without limit to other parts of West Africa, and £10 in West African currency notes to countries outside West Africa. In addition to these limits, travelers may take out, regardless of destination, £25 in foreign banknotes and £10 in sterling banknotes. Travelers to the United Kingdom may take out any amount in sterling notes that are legal tender in the United Kingdom, and to other parts of the Sterling Area they may export, but not on their person or in their baggage, any amount of banknotes in the currency of the territory to which the notes are exported.

Exports and Export Proceeds

Except for a few commodities to certain destinations, all exports are subject to individual export license. The proceeds in specified currencies (see footnote 2) of exports to countries outside the Sterling Area must be sold to an authorized bank in Sierra Leone within six months from the date of export, unless permission to do otherwise is obtained.

Proceeds from Invisibles

Receipts from invisibles in other than Sterling Area currencies must be offered for sale to an authorized bank. Persons entering Sierra Leone may bring in freely foreign and domestic banknotes.

Capital

There are no restrictions on the movement of capital between Sierra Leone and other Sterling Area countries. Investments by residents of countries outside the Sterling Area may be repatriated at any time, together with profits, provided that exchange control permission was obtained initially for the investment.

The Sierra Leone Exchange Control Ordinance imposes control on the issue and transfer of securities. The placing of an issue in Sierra Leone requires permission if the issuer is resident outside the Sterling Area. Permission must also be obtained before a security registered in Sierra Leone may be transferred to a person resident outside the Sterling Area. Capital in respect of securities registered in Sierra Leone may not be transferred outside Sierra Leone without permission. Where permission has been given for securities registered in Sierra Leone to be sold to persons resident outside the Sterling Area, the company is usually required to obtain bank certification of the funds brought into Sierra Leone to ensure that permission will not be given later for taking out appreciably more than was brought in.

Changes during 1962

No significant changes took place during 1962.

Somalia 1

Exchange Rate System

No par value for the Somali Shilling has been established with the Fund. Its official value is equivalent to Sh. So. 1 = US$0.14.

Administration of Control

Exchange control and import licensing are administered by the Internal & Foreign Trade and Exchange Department of the Ministry of Industry and Commerce. All exchange transactions require the prior authorization of that Department. Commercial banks are authorized to purchase foreign exchange and to sell it for approved payments.

Prescription of Currency

Settlements with Italy, the United Arab Republic, and the U.S.S.R. are made through bilateral clearing accounts. Settlements with all other countries may be made in Somali shillings or in convertible currencies.

Nonresident Accounts

Nonresidents may open accounts in Somali shillings with any bank in Somalia. These accounts may be used freely for transactions in Somalia; authorization is, however, required for all transfers abroad. Diplomats, consular agents, and international organizations and their foreign staff may open accounts in U.S. dollars or other convertible currencies. Other individuals may, subject to authorization, open provisional accounts in these currencies.

Imports and Import Payments

Certain goods, especially those originating in Italy, may be imported freely, only the completion of a form by the importer being required in order to obtain the necessary exchange from an authorized bank. Imports of other commodities are subject to individual license. The actual importation of the goods and the related payment should be effected within 120 days from the date of completion of the form or the issuance of the license. Letters of credit to finance imports may not be established for periods exceeding 180 days. For certain goods, imports and exports which do not have to be settled in foreign exchange are authorized up to a limit of Sh. So. 15,000 for each transaction; for governmental interests, this amount may be exceeded under special authorization.

Payments for Invisibles

All payments for invisibles require approval in the form of a license from the Internal & Foreign Trade and Exchange Department of the Ministry of Industry and Commerce. Foreign employees may transfer abroad up to 50 per cent (in some cases, with special authorization, up to 75 per cent) of their salaries and other income.2

Residents traveling abroad are allocated foreign exchange up to the amount specified in the license. In addition, they are permitted to take with them Sh. So. 150 in Somali notes. Nonresident travelers may take with them any foreign exchange which they brought into Somalia.

Exports and Export Proceeds

Exports of certain goods are free of license, only the completion of a form by the exporter being required. Exports of other commodities are subject to individual license. Export proceeds must be surrendered to an authorized bank. Settlements for exports should normally be effected within 120 days after the goods have left the country.

Proceeds from Invisibles

Receipts from invisibles must be surrendered to an authorized bank. There is no limitation on the amount of foreign and domestic currency notes and coins which may be imported.

Capital

All capital transactions and payments involving nonresidents are subject to approval.

In accordance with the provisions of a Foreign Investment Law (effective in February 1960), foreign enterprises must be registered with the Planning Department of the President of the Council of Ministers. For “productive” enterprises (i.e., those which engage in irrigation, improvement of land, establishment of factories, construction of aqueducts, and testing, analyzing, and drilling activities in connection with oil and mineral exploration), profits may be transferred abroad freely up to a limit of 15 per cent per annum of the capital invested. The capital itself may be transferred abroad beginning five years after the date of registration. Profits arising from other foreign investments may be transferred abroad up to a limit of 10 per cent per annum of the capital invested, and the capital itself may be transferred abroad over a minimum period of three years beginning seven years after the date of investment.

Changes during 1962

No significant changes took place during 1962.

South Africa

Exchange Rate System

The par value is South African Rand 1 = US$1.40. Exchange rates are uniform and are based on the fixed rates for sterling against rand (R 199.75 buying, and R 200.75 selling, per £100) and the London market rates for sterling against other currencies. Subject to certain limitations, authorized dealers are permitted to conduct forward exchange operations among themselves and with overseas banks. The rates for the U.S. dollar as at December 31, 1962 were US$1.40⅜ buying, and US$1.39½ selling, per R 1.

Exchange Control Territory

For purposes of control over transactions in securities, residents of Basutoland, Bechuanaland, and Swaziland are regarded as nonresidents. Otherwise, there are virtually no exchange or trade restrictions between the Republic of South Africa, South West Africa, Basutoland, Swaziland, and the Bechuanaland Protectorate, and these territories are regarded as forming with the Republic of South Africa a single exchange control territory.

Administration of Control

Import and export licenses are issued by the Director of Imports and Exports acting on behalf of the Secretary for Commerce and Industries. Exchange licensing is the responsibility of the Treasury, which has delegated this authority to the South African Reserve Bank, which in turn has delegated to the commercial banks much of its licensing power. Appropriate exchange for licensed imports is made available by the authorized dealers upon presentation of suitable documentary evidence.

Prescription of Currency

South Africa is a member of the Sterling Area, and settlements with residents of countries in the Sterling Area may be made in any Sterling Area currency. Settlements with residents of other countries may be made in sterling or rand to or from an External Account or in any specified currency,1 or, for outgoing payments only, in any other non-Sterling Area currency.

Nonresident Accounts

Nonresident accounts are the accounts of residents of countries outside South Africa, South West Africa, Basutoland, Swaziland, and Bechuanaland (except with respect to the Blocked Accounts of residents of the last three territories—see section on Exchange Control Territory, above). They are divided into three categories: Nonresident Sterling Area Accounts, External Accounts, and Blocked Accounts.

Nonresident Sterling Area Accounts are held by residents of other Sterling Area countries. They may be credited with all authorized payments by South African residents to Sterling Area countries; with transfers from other Nonresident Sterling Area Accounts; and with the proceeds of sales to an authorized dealer in South Africa of pounds sterling or the currency of any other country in the Sterling Area (excluding South Africa). They may be debited for payments for exports to countries in the Sterling Area and other payments due by residents of other countries in the Sterling Area to South African residents; for payments to residents of other countries in the Sterling Area for any purpose; for transfers to other Nonresident Sterling Area Accounts in South Africa; for purchases of any Sterling Area currency; and for withdrawals by the account holder while he is temporarily resident in South Africa.

External Accounts are held by residents of countries outside the Sterling Area. They may be credited with all authorized payments by South African residents to countries outside the Sterling Area; with transfers from other External Accounts in South Africa and from External Accounts in the United Kingdom or other countries in the Sterling Area (provided that the transaction has been approved in the Sterling Area country concerned); and with the proceeds of sales to an authorized dealer in South Africa of specified currencies (see footnote 1). They may be debited for payments to South African residents and residents of other countries in the Sterling Area for any purpose; for transfers to other External Accounts in South Africa or in any other country in the Sterling Area; for purchases of any non-sterling currency; and for withdrawals by the account holder while he is temporarily resident in South Africa.

Blocked Accounts represent the proceeds of sales of South African securities by a nonresident to a resident. Such proceeds may not be transferred from South Africa or to another Blocked Account in South Africa, but may be retained on deposit or reinvested in other securities quoted on the Johannesburg Stock Exchange. If invested in Government, Municipal, or Public Utility Stocks, the proceeds on redemption at maturity are freely transferable to the nonresident owner, provided that the securities had at the date of purchase at least five years to run to maturity. Blocked rand may also be used to subscribe to a special issue of five-year, nonnegotiable, nontransferable government bonds, bearing interest at 5 per cent and repayable in foreign currencies applicable to the domicile of the holder in five annual installments from the date of subscription. In special cases, blocked rand may also be used for direct investment in manufacturing enterprises.

Imports and Import Payments

All importers of goods subject to import license must be registered with the Director of Imports and Exports. Most licenses allow importation of a range of commodities, but they are in general to be used for goods of the same type previously brought in by the importer. Import licenses are valid for imports from any country. Imports free of license include goods which are grown, produced, or manufactured in the Federation of Rhodesia and Nyasaland.

The Import Control Regulations for 1963 distinguish the following categories:

(1) Goods that may be imported without import license.

(2) Raw materials, machinery, agricultural equipment, and pharmaceutical products that may be imported only under licenses to be allocated (a) in the case of merchants who import the goods for resale, according to such quotas as may be authorized from time to time, the initial 1963 allocation being equal to 50 per cent of the licenses issued during 1960; and (b) in the case of manufacturers, for the additional import facilities required to bring a manufacturer’s stocks (and unused permits) to a six months’ level at the current rate of consumption, at any time on application. When determining requirements, cognizance is taken of the availability of goods locally.

(3) Motorcars and other vehicles and component parts that may be imported only under licenses to be issued in accordance with quotas to be authorized from time to time.

(4) Consumer and other goods that may be imported only under licenses to be allocated generally on the basis of quotas, as follows: (a) for Group A commodities, including consumer goods of a type not available locally, the 1963 allocation of quotas equals 110 per cent (initial allocation, 60 per cent) of average imports for 1959 and 1960; (b) for “general merchandise” items in Group B, including consumer goods of a type available locally, the 1963 allocation equals 45 per cent (initial allocation, 30 per cent) of the importer’s assessment basis (originally this basis was imports in 1948, but it has been adjusted to take account of the entry of new firms and increased turnover of existing firms); and (c) for rice, the initial 1963 quota allocation equals 50 per cent of 1960 imports.

(5) A restricted list of goods the import of which requires a license specifically describing the item to be imported. Such licenses may be obtained by the surrender of Group B licenses on the basis of R 2 surrendered for R 1 of specific license obtained (after the first R 5,000 of an importer’s annual quota, which may be converted on the basis of R 1 for R 1), provided that the goods to be imported under the specific license fall within the same general category as the goods detailed in the original license. Group A licenses may be exchanged for Group B licenses on the basis of R 2 for R 1, or for specific licenses on the basis of R 4 for R 1.

Licenses are also required for imports of built-up motorcars, whether new or used, with a retail list price exceeding R 1,900 when new, juke boxes, pin tables, novelty tables, and amusement machines, and certain books and periodicals (comics, science fiction, detective magazines, etc.), and their import is virtually prohibited.

Upon presentation to his bank of the necessary consignment documents (proof of importation), an importer is granted exchange to pay for the import.

Payments for Invisibles

All payments to nonresidents for current invisibles require exchange licenses. For some types of transaction there is no limitation on the amount; for others authority is delegated to the commercial banks to approve payments up to established limits. For current income payments, such as declared dividends, profits, royalties, etc., that accrue in South Africa, approval is given by the authorized banks without reference to the Reserve Bank, provided that profits or dividends to be remitted by nonresident-owned branches and subsidiaries are based on profits earned since December 31, 1959 and their remittance does not involve the use of local credit facilities. Limited amounts of exchange to pay for membership fees, family maintenance, etc., are authorized. Income derived from securities acquired with blocked funds or otherwise held by nonresidents is freely transferable to the monetary area of the owner. The basic allowance for tourist travel is R 2,000 for an adult and R 800 for a child under the age of 12, in a calendar year. Separately, there is another annual basic exchange allocation of R 250 for an adult (R 100 for a child under 12) for travel to the Federation of Rhodesia and Nyasaland, the Republic of the Congo (Leopold-ville), and Portuguese East and West Africa. Applications for larger amounts are considered on their merits by the Reserve Bank.

Persons leaving South Africa may take out freely R 100 in South African Reserve Bank notes and the equivalent of R 100 in other notes, as part of the basic travel allowance. Foreign visitors leaving South Africa within 12 months after arrival may take with them any reasonable amount of foreign notes which they brought into the country or obtained from the disposal of instruments of exchange which they brought to and exchanged in South Africa.

Exports and Export Proceeds

The export of commodities considered as being in relatively short supply, or for which domestic prices are substantially lower than those obtainable overseas, are subject to export license irrespective of destination (with the exception of exports to Basutoland, Swaziland, and the Bechuanaland Protectorate). Certain other goods are controlled for strategic reasons only, and permits are required for their export to destinations other than the United Kingdom, any Commonwealth country, any British colony, possession, protectorate, or mandated territory, or the United States. The re-export of imported goods is controlled to prevent commodity and exchange arbitrage.

Unless otherwise permitted, all export proceeds must be surrendered within 6 months from the date of shipment and 30 days from the date of collection.

Proceeds from Invisibles

Proceeds from invisibles must be surrendered within 30 days from the date of their acquisition, unless exemption is obtained. Remittance of the proceeds of repatriated South African Reserve Bank notes depends on the furnishing of satisfactory evidence that they were not exported in contravention of the exchange control regulations.

Capital

The following payments related to nonresident capital may be carried out directly by the authorized banks without reference to the South African Reserve Bank: transfers to nonresidents of the proceeds on maturity of Government, Municipal, and Public Utility Stocks and National Savings Certificates, provided that they were registered in the name of the nonresident transferee (who was not an emigrant) on June 16, 1961 or, if the stocks have been acquired after June 16, 1961, provided that they have been registered continuously in the beneficial owner’s name for a period of not less than five years; normal capital repayments to nonresidents by certain “dying” mines in regular periodic installments; transfers to nonresident owners of small unutilized balances, up to R 50, left over from the reinvestment of blocked funds; and transfers up to R 20,000 a nonresident beneficiary from the proceeds of legacies from estates in South Africa. Emigrant families whose assets do not exceed R 20,000 may have R 10,000 transferred abroad as a settling-in allowance, and those with greater assets may have 50 per cent of their assets, up to R 30,000, transferred; any balance exceeding the permissible transferable amount is blocked. Blocked rand may be used to subscribe to the Government’s issue of blocked rand bonds (in the case of emigrants, up to the limit of R 30,000 a family); this enables the nonresident to secure the transfer of his funds in convertible currencies at official market rates in five equal annual installments, together with interest at 5 per cent a year (see Blocked Accounts in the section on Nonresident Accounts, above).

The South African Reserve Bank may approve transfers of repayments at maturity to nonresident holders of mortgage bonds registered in their names on or before June 16, 1961. Approval is given for the transfer, by nonresident-owned branches and subsidiaries, of open or loan account balances or undistributed profits, or for the transfer of any dividends by them, provided that the remittance does not involve the use of local credit facilities. The physical export of nonresident-owned securities is permitted, except by emigrants in excess of their settling-in allowances.

Foreign exchange accruing to residents from capital transfers and transactions must be surrendered. Outward transfers of capital by residents in general require approval of the South African Reserve Bank and are usually not allowed. Transfers by residents for the purchase of South African (or other) shares on external stock exchanges is not permitted, although South African stockbrokers may engage in arbitrage transactions in securities, subject to certain conditions designed to prevent any net outflow of exchange. Applications by South African residents to retain in, or transfer to, the Federation of Rhodesia and Nyasaland, funds for bona fide long-term investment in specific development projects or for the expansion of existing South African owned or controlled projects may be allowed by the South African Reserve Bank; but such applications are scrutinized, in part to prevent remittances to the Federation from being used as a first step in the onward transfer of capital to other countries. The proceeds of South African securities brought in by immigrants are blocked, except those in respect of securities purchased and held by them on or before June 16, 1961; the blocking is normally for at least three years, but the restriction may be removed from sufficient funds to enable the immigrant to set up a home and to meet current living expenses.

Changes during 1962

March 13. It was announced that the Reserve Bank would permit the purchase in London on behalf of approved financial institutions in South Africa of South African securities not readily available on the Johannesburg Stock Exchange. The Reserve Bank would, however, charge the ordering institution the price ruling in South Africa rather than that at which the stock was purchased in London. Profits accruing to the Reserve Bank from these transactions would go into a special fund to defray the costs of South Africa’s increased defense expenditure. It was also announced that holders of Blocked Accounts would be permitted to subscribe to a special issue of five-year, nonnegotiable, nontransferable government bonds, bearing interest at 5 per cent and repayable in foreign currencies applicable to the domicile of the owner in five annual installments from the date of subscription. For the year 1962-63 the subscription would be limited to R 20 million, but the ultimate limit contemplated was R 50 million. The issue would be open for subscription on June 12, 1962.

March 13. It was announced that, for imports of raw materials, manufacturers would be granted licenses to enable them to increase their stocks to a level representing six months’ consumption, and merchants would be granted licenses bringing their total allocations for 1962 to 75 per cent of their imports in 1960. Importers of capital plant and equipment would be granted licenses for their full requirements, with due regard to supplies available locally. Imports of goods in Groups A and B would be licensed up to the level of 1961 issues, with the possibility of a further increase in mid-1962. Additional allocations would also be made for imports of rice and textile piece goods.

May 21. The basic exchange allowance for tourist travel abroad was increased from R 20 a day for an adult and R 8 a day for a child under the age of 12 (maximum of R 1,000 and R 400, respectively, in a calendar year), to R 2,000 for an adult and R 800 for a child under 12 in a calendar year. A special allocation of R 250 (R 100 for a child under 12) a year was established for travel to neighboring countries. The cost of fares abroad had to be deducted from the basic allowance, except for the direct fare to and from South Africa and the point of destination outside the neighboring territories.

August 28. Within the framework of the present overseas purchase scheme (see March 13, above), the Reserve Bank was authorized, as circumstances permit, to make periodic allocations of sterling, through the Johannesburg Stock Exchange, to finance arbitrage transactions in South African securities between the Johannesburg Stock Exchange and stock exchanges abroad. Moreover, in order to stimulate new investment and to broaden investment opportunities available to holders of blocked rand, the Reserve Bank would consider applications for the use of blocked rand balances for direct investment in the equity or loan capital of new manufacturing enterprises, provided that such enterprises are not in direct competition with existing industries and that the investment is for a period of not less than five years; repatriation of the proceeds after this period would be permitted.

August 28. Emigrants would be allowed to transfer R 10,000 a family if the family’s total assets do not exceed R 20,000; families with greater assets would be allowed to transfer 50 per cent of their assets, up to a maximum of R 30,000. Emigrants would also be permitted to use their blocked rand balances, up to a limit of R 30,000 a family, to subscribe to the 5 per cent blocked rand bonds issued by the Government (see March 13, above).

August 28. A third issue of import licenses for 1962 was announced (see March 13, above). Issues for Group A consumer goods were increased by 25 per cent, raising the total allocation for 1962 to 100 per cent of importers’ averages for 1959 and 1960. An additional issue equivalent to 5 per cent was made for Group B consumer goods, bringing the total issues for 1962 to 40 per cent of an importer’s assessment basis. At the same time, the allocation of licenses for textile piece goods was increased by 10 per cent, bringing the total for the year to 85 per cent of the average of an importer’s imports of textile piece goods during 1959 and 1960.

November 7. The import program for 1963 was announced. For Group A commodities total allocations would be 110 per cent of average imports in 1959 and 1960 (compared with 100 per cent for 1962). For Group B commodities, the allocation would be 45 per cent of an importer’s assessment basis (compared with 40 per cent in 1962). The initial allocations for Groups A and B would be 60 per cent and 30 per cent, respectively (compared with 50 per cent and 25 per cent in 1962). The limit up to which import licenses for Group B commodities may be exchanged for specific import licenses on the basis of R 1 for R 1 was raised from R 3,000 to R 5,000. The initial allocation for importers of raw materials and for importers of stocks of capital plant and equipment would be 50 per cent of 1960 imports. In addition, provision would be made for imports of 42,000 passenger automobiles in the first half of 1963 (compared with 35,000 for the first half of 1962).

December 7. Fifty-two items were deleted from the list of restricted commodities requiring specific import licenses. Most of these items were placed in the raw materials group or under general merchandise in Group B.

Spain

Exchange Rate System

The par value is Spanish Pesetas 60.00 = US$1. The official limits are Pts 59.55 buying, and Pts 60.45 selling, per US$1. Market rates for other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Spain and such limits in force in the country of the other currency concerned. Purchases and sales of clearing currencies are centralized in the Spanish Foreign Exchange Institute, which publishes the rates at which it settles the transactions it carries out direct and the rates applicable to banknotes. These rates are based on the rates of the previous week. Authorized banks are allowed to operate in foreign markets for spot transactions and forward transactions for up to 180 days.

Exchange Control Territory

The Peninsular Territories of the Spanish State, the Canary Islands, the Balearic Islands, Ceuta, Melilla, and the Spanish towns and provinces in Africa constitute a single exchange control territory, the Spanish Monetary Area.

Administration of Control

On a policy level, controls are administered by the Ministry of Commerce, and on a technical administrative level, by the Spanish Foreign Exchange Institute and the General Department of Foreign Trade—both in the Ministry of Commerce—and authorized banks.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles other than those with bilateral payments agreement countries may be made in any specified currency,1 but in practice they are usually made in the currency determined on the basis of the country of origin or destination. Settlements with bilateral payments agreement countries2 are made through agreement accounts expressed in U.S. dollars. Balances on the accounts with Greece and Turkey are settled monthly.

Nonresident Accounts

There are two types of nonresident account: external accounts in convertible pesetas and external accounts in internal pesetas.

External accounts in convertible pesetas may be credited with proceeds from the sale in the Spanish exchange market of any foreign currencies listed in that market, and with proceeds from the sale of Greek or Turkish agreement dollars; with authorized current and capital payments which have been liberalized or authorized by license, when such payments are to be made in pesetas or specified foreign currencies, or in Greek or Turkish agreement dollars; with transfers from other similar accounts in convertible pesetas; and with interest received on balances held on these accounts. They may be debited for the purchase of foreign currencies (including foreign banknotes) listed in the Spanish exchange market; for payments for Spanish exports; for investments in Spain; for transfers to any other external account; and for any other type of payment in Spain. All other entries on these accounts require the prior authorization of the Spanish Foreign Exchange Institute.

External accounts in internal pesetas may be credited with pensions, salaries, profits, and dividends obtained by the account holder and not otherwise transferable; with receipts from the National Lottery; and with interest received on balances held on these accounts. They may be debited to pay the personal expenses of the account holder in Spain, and for the purchase of government bonds and of fixed-interest-bearing stocks issued by Spanish public corporations. They may also be debited for the purchase for the use of the account holder of town and country properties that do not represent investments for commercial, industrial, or agricultural purposes; country properties so purchased may not exceed 4 hectares of irrigated land or 20 hectares of unirrigated land. All other entries on these accounts require the prior authorization of the Spanish Foreign Exchange Institute.

Imports and Import Payments

All imports require either an import license or an “import declaration” issued by the General Department of Foreign Trade. “Import declarations” are issued freely for goods (mostly raw materials, capital goods, and spare parts, but also some consumer goods) included in an import free list that applies to most countries with which Spain has no bilateral payments agreements.3 All other imports are subject to license. There are global quotas for specified imports from countries to which the free list applies.3 Exchange in the appropriate currency to pay for authorized imports is granted freely.

Payments for Invisibles

All transfers abroad and payments by residents in favor of nonresidents on account of current invisibles are subject to authorization, mainly for the purpose of checking capital transactions. For many items, the banks are authorized to effect the transfer under conditions established by the Spanish Foreign Exchange Institute. A large proportion of invisibles is authorized without restriction; some of the remainder are subject to certain limitations, while a few others are severely restricted. Holders of Spanish securities (excluding securities issued by private companies acquired through direct subscription) acquired after July 27, 1959 may freely transfer abroad accrued interest, dividends, and proceeds from the disposal of subscription rights; the securities must have been purchased with convertible pesetas or with pesetas resulting from the sale of foreign exchange quoted in the Spanish foreign exchange market. Profits and dividends on direct investments made after July 27, 1959 for the modernization, expansion, or establishment of Spanish enterprises may also be transferred abroad without restriction. Income from all investments made before July 28, 1959 (which had to be approved on an individual basis) may be transferred without restriction to specified countries,4 and up to 8 per cent per annum to holders in other countries if the income had accrued after July 27, 1959; transfers abroad to holders in other countries of such income accrued before July 28, 1959 are prohibited. A general license permits the reinsurance abroad of risks insured in Spain with Spanish firms or with foreign insurance companies operating in Spain. Other insurance contracts abroad may not be concluded, except where they concern exports and imports of goods.

There is a basic annual exchange allowance of Pts 16,500 a person for tourist travel. For business travel, exchange is made available up to the equivalent of Pts 750 a day for a maximum of 30 days for each trip. For longer business trips, the bank must apply to the Spanish Foreign Exchange Institute for additional exchange, which is granted liberally for this purpose. Travelers may take with them Pts 3,000 in notes of the Bank of Spain.

Exports and Export Proceeds

All exports are subject to prior licensing by the General Department of Foreign Trade. With certain exceptions, licenses are granted freely. All export proceeds must be sold in the exchange market or to the Spanish Foreign Exchange Institute through authorized banks.

Proceeds from Invisibles

All exchange proceeds from invisibles must be sold in the exchange market or to the Spanish Foreign Exchange Institute through authorized banks. Travelers may bring in a maximum of Pts 50,000 in notes of the Bank of Spain.

Capital

All incoming capital representing foreign investment in Spanish enterprises and, with some exceptions, investment in real estate is subject to detailed regulations. Foreign participation in Spanish enterprises is authorized freely up to a limit of 50 per cent of the capital of the enterprise; participation beyond this limit, except in certain sectors of the economy, is subject to special authorization by the Council of Ministers. Investments (both foreign and domestic) not exceeding Pts 30 million for the establishment, modernization, or expansion of Spanish industries may be made without the prior authorization of the competent ministry; all such proposed investments must, however, be reported to the competent ministry, which has 15 days in which to object or to require additional information. Investments in industries producing foodstuffs, vehicles, or petroleum products, and in those enterprises where foreign capital participation exceeds 50 per cent of the total capital, require the prior administrative approval of the competent ministry (usually the Ministry of Industry) if the investment exceeds Pts 2 million. Foreign investment in Spanish companies dealing with oil, banking, insurance, mining, motion pictures, and shipping is subject to special legislation. Capital may be imported in the form of foreign exchange, capital goods, patents, know-how, and some other forms.

Under Decree No. 1054 of May 17, 1962, all proceeds from the liquidation of direct foreign investments made after July 27, 1959 for the establishment, modernization, or expansion of Spanish enterprises may be transferred abroad in foreign exchange at any time and without limitation. All transfers abroad of capital repayments and amortization of investments made before July 28, 1959 are restricted.

The purchase by nonresidents of shares in Spanish companies, other than shares in real estate and in those companies in which investment is subject to special legislation (see above), is permitted without restriction up to a maximum of 50 per cent of the capital of such companies; and in certain sectors of the economy, this limit may be exceeded. The shares must, however, be acquired with convertible pesetas or with pesetas resulting from the sale of foreign exchange quoted in the Spanish foreign exchange market. If the shares have been acquired after July 27, 1959, and were already in circulation at the date of acquisition, the nonresident holder has the right to transfer abroad at any time, in foreign currencies and without limitation, the total proceeds from the disposal of the shares. Similarly, proceeds from the disposal of other Spanish securities issued by Spanish corporations, companies, etc., and already circulating at the date of acquisition, and proceeds from the disposal of securities issued by the Spanish Government and other public agencies, are freely transferable abroad. Proceeds obtained from the sale of nonresident holdings of shares of Spanish companies and other Spanish securities acquired before July 28, 1959 may be used to purchase other Spanish securities, but may not be transferred abroad.

The export of capital belonging to residents is subject to prior authorization, which is always granted provided that it contributes to the expansion of Spanish exports, that it does not imply any unfair competition for such exports, and that there exist guarantees for the repatriation of profits and capital.

Changes during 1962

February 15. A sixth group of commodities was added to the import free list. The group included 93 items of the Spanish tariff, mainly machinery and electrical equipment.

March 27. Japan was included in the list of countries to which the import free list applies.

March 31. The bilateral trade and payments arrangements with Brazil were terminated, and all commercial and financial transactions were to be settled in freely convertible currencies. Brazil was added to the list of countries to which the import free list applies.

April 1. Different kinds of yarn were added to the import free list.

April 7. The export licensing system was simplified, so that exporters had the choice of obtaining individual licenses valid for 3 months or global licenses (for a range of goods) valid for 12 months.

April 16. Restrictions were abolished on the transfer abroad of income from Spanish securities acquired after July 27, 1959 and already issued and circulating at the date of acquisition. Restrictions on the repatriation of the total proceeds from sales of such securities, including sales of subscription rights, were also abolished. These provisions applied to securities purchased by Spanish citizens residing permanently abroad, and by foreigners and foreign companies, with convertible pesetas or pesetas resulting from the conversion of foreign currencies negotiable in the Spanish exchange market. The special register for nonresident ownership of securities was abolished. Previously, proceeds derived from the sale of such shares could only be transferred abroad up to the amount of the original purchase price; capital gains from the liquidation of such securities could not be transferred, but could be used to purchase additional shares of the same or other companies, the proceeds from the sales of such shares being, however, nontransferable.

April 24. Spanish banks were authorized to open and keep deposit accounts in convertible pesetas in favor of their correspondent banks abroad.

May 18. By virtue of Decree No. 1054, restrictions were abolished on transfers abroad of income from, and of proceeds from the liquidation of, direct foreign investments made after July 27, 1959 for the purpose of establishing, modernizing, or expanding Spanish enterprises. Previously, remittance of the proceeds from the liquidation of such investments could be effected within a period of two years, starting two years after the investment, in the case of enterprises of recognized economic and social priority; and within a period of four years, starting two years after “the enterprise has started normal operation,” in the case of nonpriority investment. Capital gains from nonpriority investments could not be transferred at all.

June 1. The bilateral payments agreement with Ecuador was terminated, and all trade and financial operations were to be settled in freely convertible currencies. Ecuador was included in the list of countries to which the import free list applies.

June 13. A new decree-law on the nationalization and reorganization of the Bank of Spain was issued. The Bank became a public institution under the jurisdiction of the Minister of Finance, and the responsibility for foreign payments and the holding of gold and foreign exchange reserves were to be transferred to it. The Spanish Foreign Exchange Institute would, however, continue temporarily under the Ministry of Commerce.

June 29. A seventh list of goods to be added to the import free list was published. Some items in the list were to be freed of restrictions on July 16, 1962, and the remaining items on September 1 and October 1, 1962, and January 1 and April 1, 1963.

July 1. Imports of different kinds of woven fabric were liberalized.

August 27. Imports of certain commodities additional to the seventh list (see June 29, above) were liberalized.

September 15. The limit up to which new foreign (as well as Spanish) investments for the establishment, expansion, and modernization of Spanish enterprises could be undertaken without the prior authorization of the competent ministry was increased from Pts 2 million to Pts 30 million. However, proposed investments had to be reported to the competent ministry (usually the Ministry of Industry), which would then have 15 days within which to object or to require additional information. The raising of the limit did not apply to industries producing foodstuffs, vehicles, or petroleum products, or to firms with foreign capital participation exceeding 50 per cent of the total capital.

September 15. Several iron and steel products were added to the import free list.

September 17. Peanuts and peanut oil were added to the import free list.

November 23. Foreign participation in Spanish enterprises in certain sectors of the economy would be permitted beyond the maximum of 50 per cent of the total capital of the enterprise, without the special authorization of the Council of Ministers.

Sudan

Exchange Rate System

The par value is Sudanese Pound 1 = US$2.87156. Official rates for transactions in sterling are fixed by the Bank of Sudan, whose rates for transactions with authorized banks and the Government are LSd 0.974 buying, and LSd 0.976 selling, per £ stg. 1. The banks deal with the public at rates between LSd 0.9715 buying, and LSd 0.9785 selling, per £ stg. 1. Official rates for the U.S. dollar are fixed daily by the Bank of Sudan and are based on London market rates. The authorized banks quote their own rates for other currencies, based on market quotations in London.

Administration of Control

Exchange control is administered by the Bank of Sudan, much of the detail being carried out by authorized banks. Licensing of imports and exports is the responsibility of the Ministry of Commerce, Industry, and Supply, but all licenses must be validated by the exchange control authorities or by the authorized banks under the powers delegated to them.

Prescription of Currency

Transactions with bilateral countries1 are normally settled in Sudanese pounds through the relevant Bilateral Account; however, except for transactions with the United Arab Republic, some non-commercial invisibles have to be settled outside these accounts. Payments to all other countries and monetary areas (the “convertible area”) may be made in Sudanese pounds to the credit of any nonresident account or in any foreign currency; receipts from the “convertible area” may be accepted in Sudanese pounds from any Convertible Account or in U.S. dollars, External Account sterling, or any other convertible or externally convertible currency.

Nonresident Accounts

The accounts in Sudanese pounds of residents of all countries other than bilateral countries are designated Convertible Accounts and are exchangeable into any foreign currency. Bilateral Accounts are used for most transactions with countries with which the Sudan has bilateral payments agreements.1

Imports and Import Payments

A wide range of goods, including such essential items as tea, grey cloth and other textiles, and raw materials for domestic industries, may be imported under an open general license, which is designed to permit imports of these goods freely from any source. However, before entering into firm contracts with foreign suppliers, importers must register such imports with the Ministry of Commerce, stating the quality, quantity, and value of the goods, and there are a few limitations, e.g., a reduction in the amount endorsed for registration in order to avoid unnecessary overstocking, or rejection of endorsement when the price of the import is considered unduly high. Goods not covered by the open general license require individual import licenses. Imports from Israel and from South Africa are prohibited. Exchange appropriate to the country of origin of the goods is granted for all permitted imports.

Payments for Invisibles

Most payments for invisibles require licenses. Remittances within reasonable limits are permitted for family maintenance, education and medical expenses, and assistance to close relatives. Foreign nationals are also permitted to remit reasonable amounts of current savings to their own countries. Shipping charges, insurance premiums, profits, interest, and dividends earned by nonresidents may be remitted freely upon presentation of the required documents. Exchange for travel by tourists and others is authorized up to the equivalent of LSd 100 for each adult, and LSd 25 for each child, annually. Travelers may not take out of the Sudan more than LSd 10 in Sudanese currency.

Export and Export Proceeds

Exports from the Sudan are subject to license, mainly to ensure the surrender of the exchange proceeds, and to certain regulations governing the credit terms that can be extended to foreign buyers. Export licensing is quite liberal, and only products of which the entire supply is needed for local consumption are restricted. The proceeds of exports must be repatriated and surrendered through an authorized bank within six months after export. Exports on credit are limited by the six-month surrender requirement, as well as by specific regulations governing consignment sales. Exports to Israel are prohibited.

Proceeds from Invisibles

Receipts from abroad in respect of invisibles must be surrendered to authorized banks and are subject to the general prescription of currency requirements. Travelers entering the Sudan may bring in LSd 10 in Sudanese currency and any amount in notes and coins of other countries permitted by their regulations to be taken out of those countries.

Capital

Under a law for the encouragement of foreign investment, incoming foreign capital may be registered and thus may receive, among other advantages, a guarantee for repatriation of the original capital and profits thereon. Emigrants of Sudanese nationality may transfer up to the equivalent of LSd 2,000 to their new country. Resident foreigners may transfer on emigration from the Sudan up to the equivalent of LSd 7,000.

Changes during 1962

No significant changes took place during 1962.

Surinam

Exchange Rate System

The par value is Surinam Guilders 1.88585 = US$1. The official rates are Sur. f. 1.87 buying, and Sur. f. 1.90 selling, per US$1. The rates for other currencies are based on the quotations for the U.S. dollar in terms of those currencies.

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 certain current transactions.

Prescription of Currency

Settlements must, in general, be made in convertible currencies;1 payments to and from the Netherlands Antilles may also be made in Netherlands Antilles guilders or Surinam guilders. Payments to and from the U.S.S.R. must be made through bilateral accounts in Netherlands guilders kept with authorized banks in the Netherlands.

Nonresident Accounts

Nonresidents may freely open and hold accounts in foreign currency with domestic banks.

Imports and Import Payments

Import licenses are required for all imports. A few agricultural commodities are subject to import quotas; most other imports are licensed freely. However, except for agricultural and mining machinery and a few other items, an advance deposit of 15 per cent of the licensed value is required for imports valued at Sur. f. 100 or more.2 The import license serves as a payment license, exchange being made available upon presentation of the license and verification of fulfillment of the advance deposit requirement.

Payments for Invisibles

Payments in respect of most invisibles are subject to individual license. The commercial banks have authority to provide foreign exchange up to Sur. f. 100 an item on account of certain services (advertising expenses, bank charges, legal fees, membership dues, copy and patent rights, etc.); up to Sur. f. 300 a year from each remittor in respect of gifts; and up to Sur. f. 375–750 (depending on the destination of the transfer) a month for the support of the remittor’s own family. The basic travel exchange allowance for residents is Sur. f. 500-2,000 a person for each trip, depending on the destination. Travelers may take out a maximum of Sur. f. 100 in Surinam currency.

Payments due as interest on loans and as net income from other investments, and payments of moderate amounts for amortization of loans or depreciation of direct investments, may be made if an application supported by an auditor’s report is duly presented to the Foreign Exchange Control Board for verification.

Exports and Export Proceeds

Except for gold, exports are free of license, provided that the exporter undertakes to surrender the proceeds within six months to an authorized bank. A certain type of local timber used in the manufacture of plywood and particle board may be exported only in special circumstances.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered to an authorized bank. Travelers may bring in foreign currency without limit, but not more than Sur. f. 100 in domestic currency; resident travelers must surrender any foreign currency in excess of the equivalent of Sur. f. 500.

Capital

A declaration of the Foreign Exchange Control Board in 1960 provides for the transfer abroad of capital proceeds from the sale to residents or the liquidation of fully or partly foreign-owned companies or other forms of enterprise. It also provides for the transfer of profits. An Investment Law passed on February 3,1960 provides for additional incentives to private foreign investment in Surinam.

Taxable earnings (dividends) must be transferred within a period of three years; otherwise, they become part of the firm’s working capital and may only be transferred in annual quotas of 20 per cent.

Licenses are granted on application for transfers abroad from a deceased’s estate, up to a maximum of Sur. f. 25,000 annually. The repatriation of personal assets belonging to departing persons, including emigrants, is permitted up to specified amounts.

Transfers for investment in foreign securities by residents are not permitted, although exception may be made for direct investments abroad when it is considered that Surinam interests will benefit.

Changes during 1962

August 17. All imports became subject to import license. Advance deposits amounting to 15 per cent of the licensed value were required to be made within 15 days of the granting of the license, except for imports of agricultural and mining machinery and a few other items.

August 17. The following changes were made in respect of payments for invisibles:

(1) Family remittances to the Netherlands were limited to Sur. f. 200 a month for each member of the remittor’s own family staying in the Netherlands, up to a maximum of Sur. f. 600 a family; additional amounts and family remittances to other destinations were made subject to individual license.

(2) Basic travel allowances for residents for each trip were established at Sur. f. 500 for British Guiana and French Guiana; Sur. f. 1,000 for all other countries in the Caribbean area and Central and South America (except Venezuela); Sur. f. 2,000 for the United States, Canada, and Venezuela; and Sur. f. 1,500 for Europe and the rest of the world. The import and export of Surinam currency by travelers was limited to Sur. f. 100 a person for each trip.

(3) Foreign nationals returning to their country of origin could take out any gold and securities which they had imported and declared upon entry, and the equivalent in foreign currency of Sur. f. 5,000 or as much more as was imported and declared upon entry.

(4) Certain general licenses authorizing transfers in respect of current invisibles were revoked. A new general license permitted transfers up to Sur. f. 100 in respect of advertising, bank charges, legal fees, membership dues, copy and patent rights, and some other invisibles; transfers of larger amounts were made subject to individual license. Gifts to nonresidents were limited to Sur. f. 300 a year from each remittor.

August 27. Monthly remittances by residents to their own families were permitted as follows: up to Sur.f. 125 for each recipient (maximum for a family, Sur. f. 375) to British Guiana and French Guiana; up to Sur. f. 150 for each recipient (maximum for a family, Sur. f. 450) to the rest of the Caribbean area; up to Sur. f. 250 for each recipient (maximum for a family, Sur. f. 750) to the United States, Canada, and Venezuela; and up to Sur. f. 200 for each recipient (maximum for a family, Sur. f. 600) to Central and South America (except Venezuela), Europe, and the rest of the world.

August 31. Imports of cereal flour were exempted from the advance deposit requirement.

October 31. The advance deposit requirement was revoked for imports valued at less than Sur. f. 100.

Sweden

Exchange Rate System

The par value is Swedish Kronor 5.17321 = US$1. The Sveriges Riksbank’s official limits for the U.S. dollar are SKr 5.135 buying, and SKr 5.2125 selling, per US$1, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for certain European currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Sweden and such limits in force in the country of the other currency concerned. Forward market rates are left to the interplay of market forces. Sweden accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Administration of Control

Import and export licenses, when required, are issued by the Board of Trade or, in respect of foodstuffs, the National Agricultural Marketing Board. All payments to and from nonresidents must in principle be made through one of the 15 Swedish authorized banks, which have been given wide powers by the Sveriges Riksbank to approve payments. The Riksbank receives individual reports on receipts from invisibles and a few exports and on payments for imports and invisibles, when they exceed SKr 10,000 for transactions with Denmark, Finland, Iceland, and Norway, or SKr 5,000 for transactions with other countries.

Prescription of Currency

For prescription of currency purposes, countries are divided into two groups: the bilateral countries1 and the convertible area (all other countries). Payments to residents of bilateral countries must be made in the currency of, or by crediting kronor to a Bilateral Account related to, the country concerned. Receipts from bilateral countries may be accepted in any currency of the convertible area or in kronor through a Bilateral Account of the country concerned or any Convertible Account. Payments to residents of the convertible area may be made in any foreign currency or by crediting kronor to any Regular Account (see section on Nonresident Accounts, below). Receipts from countries in the convertible area may be accepted in any currency of that area or in kronor to the debit of any Convertible Account.

Nonresident Accounts

There are two main types of nonresident account held in Swedish kronor with authorized banks in Sweden: Regular (i.e., current) Accounts and Restricted Accounts.

Regular Accounts include Bilateral Accounts, held by residents of countries with which Sweden has bilateral payments arrangements (see footnote 1), and Convertible Accounts, held by residents of all other countries. Convertible Accounts may also be held by residents of bilateral countries, e.g., in cases where the amounts credited to such accounts emanate from other Convertible Accounts or from the sale of currencies of the convertible area. Convertible Accounts may be credited with transfers from other Convertible Accounts, with authorized payments to the convertible area by residents of Sweden, and with sales of currencies of the convertible area. They may be debited for transfers to any other Regular Account and for authorized payments to residents of Sweden, and exchanged into any foreign currency. Bilateral Accounts may be credited with transfers from other Bilateral Accounts of the same country or from any Convertible Account, with authorized payments by residents of Sweden, and with sales of currencies of the convertible area. They may be debited for transfers to other Bilateral Accounts of the same country, exchanged into the currency of that country, and debited for authorized payments to residents of Sweden from residents of the country of the account holder. Replenishment of Regular Accounts with the proceeds from sales of convertible currencies or by transfers from other Regular Accounts may not result in the creation of abnormal balances on the accounts.

Restricted Accounts are held mainly by Swedish emigrants. They may be used freely to cover the living expenses in Sweden of the holder and his family and for investment in Swedish bonds quoted on the Swedish stock exchange. Bonds purchased in this way and proceeds therefrom must be deposited in a “restricted securities” account with an authorized bank or stockbroker.

Imports and Import Payments

Practically all goods may be imported freely, only a marginal fraction being subject to license. Licenses, where required, are generally granted on a nonrestrictive and nondiscriminatory basis.

Technically, the import regime is administered through three liberalization lists, one of which is of only minor importance. The other two refer to agricultural and industrial items, respectively. Excluding a very small number of items on the agricultural list, both lists are applicable to all countries except those in the Sino-Soviet bloc and those having a bilateral quota agreement with Sweden.

Payments for all imports, including normal advance payments (see section on Payments for Invisibles, below), may be made freely through the authorized banks and without the formality of presenting an import license, if such is required, to the bank.

Payments for Invisibles

Payments to nonresidents for all current invisibles may be made freely through the authorized banks, and for payments of less than SKr 500, the banks do not have to verify the purpose of the transfer. For three categories of payment, however, the approval of the Riksbank is necessary when certain limits are exceeded. These are (1) tourist expenses exceeding SKr 6,000 a person for any one journey, (2) payment of insurance premiums exceeding SKr 1,000 a year, under life, pension, or annuity contracts with foreign companies signed after January 1, 1959, and (3) certain advance payments for imports and ship disbursements exceeding SKr 50,000 or, in the case of contractual payment for imports of machinery, exceeding one third of the total value. Applications for amounts in excess of these limits are considered individually by the Sveriges Riksbank.

Each person leaving Sweden may take with him freely Swedish and foreign banknotes and coins up to a maximum of SKr 6,000. Nonresidents leaving Sweden may, in addition, freely export foreign banknotes and other means of payment brought into the country by them.

Exports and Export Proceeds

Most exports to practically all countries in the convertible area and many exports to bilateral countries are exempt from license if payment is to be received in conformity with the general regulations (see section on Prescription of Currency, above). Proceeds from exports of goods (as well as from invisibles) do not have to be surrendered; they may be kept in a foreign currency account with a Swedish authorized bank and used by the holder to make authorized payments abroad, or they may be sold to an authorized bank against Swedish kronor.

Proceeds from Invisibles

Receipts from invisibles need not be surrendered. Each person entering Sweden may bring in a maximum of SKr 6,000 in Swedish banknotes and coins, and other means of payment without limit.

Capital

Investments in Sweden by nonresidents are subject to approval, which normally is granted for direct investments. Transfers from Sweden on account of dividends and other earnings on investments, interest on loans, and contractual amortization of bonds and debentures are permitted freely. Inheritances due to nonresidents may also be transferred. The repatriation of other nonresident-owned capital is subject to approval, which is, however, usually granted. Emigrants may transfer abroad up to the equivalent of SKr 100,000 for each person, on special application.

Requests by residents to transfer capital abroad for direct investment are considered on their merits and are in most cases approved. Residents may, on special application, transfer capital abroad to purchase, for recreational purposes, real estate valued at no more than SKr 75,000.

Capital receipts from abroad in favor of residents on account of inheritances, contractual amortization, and proceeds from the sale of foreign securities and of real estate and personal property located abroad, may be accepted by authorized banks without prior examination by the Riksbank. Capital receipts from abroad of other kinds in favor of residents must be submitted to the Riksbank for examination.

As a rule, the Riksbank is prepared, after examination, to allow residents to purchase abroad Swedish securities expressed in Swedish kronor, provided that an affidavit can be produced showing either (1) that the securities at no time since January 1,1959 have been owned by a person domiciled in Sweden or (2) that the securities have been acquired with the permission of the Swedish exchange authorities from a person domiciled in Sweden. The authorized banks and stockbrokers may handle such purchases to a maximum amount of SKr 5,000 in each case, without prior examination of the Riksbank, if the aforementioned requirements are met. The authorized banks and stockbrokers may also handle the purchase abroad of Swedish securities expressed in Swedish kronor when payment is to be made in the form of other similar securities (switches), provided that (a) the foreign seller and buyer is the same person in each case; (b) the aforementioned requirements are met; (c) foreign holdings of bonds are not exchanged for shares; and (d) not more than two weeks pass between the date of the purchase from, and the date of the sale to, the foreign party.

Securities may be imported into Sweden through the intermediary of an authorized bank; however, their disposal is subject to approval. The export of securities is, in principle/also subject to approval.

Residents of Sweden who own foreign securities—other than those representing a direct investment—are permitted to use within six months the proceeds from the sale of these securities abroad to invest in other foreign securities denominated in a currency of the convertible area or in Swedish kronor; these proceeds may not, however, be transferred to another resident (other than an authorized bank). Residents are permitted to buy from and sell to other residents such foreign securities held in Sweden.

Changes during 1962

February 6. The sale to foreign banks of Swedish banknotes in denominations of SKr 1,000 and SKr 10,000 was made subject to the approval of the Riksbank.

July 1. The bilateral payments agreement with Bulgaria was terminated and Bulgaria was included in the convertible area.

July 1. The Foreign Exchange Ordinance was prolonged, thus continuing exchange control until July 1, 1963.

July 5. Authorized banks were permitted to execute payments abroad on behalf of residents up to SKr 500 (previously SKr 100), without verifying the purpose of the transfer.

September 13. Residents were permitted to transfer funds abroad to purchase, for recreational purposes, real estate valued at no more than SKr 75,000 (previously SKr 50,000).

Syrian Arab Republic

Exchange Rate System

On July 29,1947, a par value for the Syrian Pound was established by Syria with the Fund. However, exchange transactions no longer take place at rates based on that par value. There are two exchange rates, an official rate of LS 3.80 buying, LS 3.82 selling, per US$1, and a free market rate, which is, in practice, close to the official rate. As at December 31, 1962, the rate in the free market was LS 3.815 buying, LS 3.817 selling, per US$1.

The free market rate applies to all imports from certain neighboring countries1 and exports to those countries of items other than the major export products; imports of certain luxury items; all invisibles except those related to imports paid for at the official rate and remittances for study abroad; and capital transactions. The official rate applies to all remaining transactions.

Administration of Control

General policy is determined by the Government through the Minister of Economy, usually on the suggestions of the Exchange Office, which works under the general directives of the Council on Money and Credit. Under an agreement between the Central Bank of Syria and the Administrative Committee of the Exchange Office, all transactions of the Exchange Office are carried out through the Central Bank. Import licenses are issued by the Ministry of Economy. Authorized commercial banks are responsible for recording the exchange proceeds of exports.

Prescription of Currency

The Exchange Office is empowered to prescribe the currencies to be obtained for exports of certain goods. The usual requirement is that proceeds of major exports to all countries except those with which Syria has bilateral payments agreements 2 be obtained in the currency of the country to which the goods are exported, if it is an “acceptable” currency,3 or a stronger currency, at the exporter’s choice. Prescription of currency requirements are not applied to outgoing payments.

Nonresident Accounts

The accounts of residents of Lebanon and other neighboring countries (see footnote 1) are treated as resident accounts. The designation “nonresident” is applied to the accounts of residents of other countries. Nonresident accounts may be credited with the proceeds of foreign currencies sold to authorized banks for the account of the Exchange Office, and with payments for goods imported from countries other than neighboring countries. They may be debited to pay for Syrian exports to the country of the account holder or, with the prior approval of the Exchange Office, to other countries, and for expenses in the Syrian Arab Republic.

Nonresidents may also have temporary “resident” accounts in Syrian pounds, to which may be credited the proceeds of sales of foreign currencies in the free market and payments for goods imported from one of the neighboring countries or, at the request of the account holder, from any other country. Balances on these accounts may be used for all payments except for exports subject to repatriation of the exchange proceeds.

Imports and Import Payments

All imports require licenses; these are granted liberally for almost all goods. There is a tax of 2 per cent on the issue of import licenses, except for government imports and imports of certain essential items, including raw materials, petroleum, and petroleum products. In addition, a statistical fee of 2 per cent is payable on imports. All imports from the neighboring countries (see footnote 1) and imports of certain luxury items from other countries may be financed through the free market. All imports from Israel are prohibited. Advance deposits are required for imports financed through documentary credits: 15 per cent for essential items and 40 per cent for all other commodities.

Payments for Invisibles

Payments for invisibles related to imports effected at the official rate and for study abroad may be made at the official rate. All other payments for invisibles may be made freely through the free market; however, nonresidents may remit abroad not more than 75 per cent of their income. There are no restrictions on the export of foreign or Syrian banknotes.

Exports and Export Proceeds

Exports of a few goods to any country and all exports to Israel are prohibited. Most exports to neighboring countries (see footnote 1) may be made freely; all other exports require licenses. The proceeds of certain major exports4 to countries other than those with which there are bilateral payments agreements must be obtained in “acceptable” currencies (see footnote 3) and surrendered at the official rate. The proceeds of other exports to countries not listed as neighboring countries must also be surrendered at the official rate. All other export proceeds may be sold in the free market or held abroad.

Proceeds from Invisibles

Proceeds from invisibles may be sold in the free market or held abroad. There is no limit on the amount of foreign or Syrian banknotes that may be brought into the country.

Capital

Capital which has been brought in through an authorized bank after July 10, 1962 may be repatriated freely. The repatriation of other capital is subject to the prior approval of the authorities, but such approval is granted liberally.

Changes during 1962

June 4. The import control system was liberalized. Import licenses would be granted and foreign exchange made available at the official rate for a number of commodities whose import had previously been suspended. Also, imports of certain other goods previously prohibited were now permitted, but no official exchange would be granted.

July 10. The official rate was devalued from LS 3.57 buying, LS 3.585 selling, to LS 3.80 buying, LS 3.82 selling, per US$1. At the same time, the free market was reinstated in the form it had prior to its suspension in February 1961. The following transactions were to be settled through the free market: (1) all imports from the neighboring countries, and all exports to them except of the major export products; (2) imports of certain luxury items from other countries; (3) all invisibles except those related to imports paid for at the official rate and remittances for study abroad; and (4) capital transactions. The official rate was to be applied to all remaining transactions.

July 10. All restrictions on the import and export of Syrian and foreign banknotes, other means of payment in foreign currency, and gold and other precious metals were abolished.

July 10. Capital brought into the country through an authorized bank after this date, and interest and profits accruing thereon, could be transferred abroad freely.

November 7. The import control system was further liberalized by permitting the import, with or without official exchange as the case may be, of several items previously prohibited.

Tanganyika 1

Exchange Rate System

No par value for the currency of Tanganyika 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 Tanganyika, Kenya, Uganda, Zanzibar, and the Aden Protectorate. The East African Currency Board stands ready in transactions with commercial banks to issue East African currency in exchange for sterling and to supply sterling in exchange for East African currency at the parity rate, plus a commission not exceeding ½ of 1 per cent. The banks in Tanganyika base their rates for other currencies on the current London market rates.

Administration of Control

Exchange control is administered by the Treasury. Authority for approving normal import payments and providing standard allocations of foreign exchange is delegated to the authorized banks. Import and export trade is administered by the Controller of Imports and Exports in the Ministry of Commerce and Industry. The responsibility for issuing licenses also rests with the Controller, to whom applications to import or export must be submitted before orders are placed abroad or exports are shipped.

Prescription of Currency

Tanganyika 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 Tanganyika to residents of countries outside the Sterling Area may be made in sterling or 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.

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, the movement of goods within East Africa is unrestricted. Goods may be imported from countries outside East Africa either under open general license from specified areas or groups of countries, or under specific license, which permits specific transactions not authorized under open general license. Most commodities from the majority of countries are at present covered by open general license. Specific licenses are required for imports of all goods originating in Iran, Iraq, Japan, French Somaliland, and the Soviet bloc, and for imports from any country of wheat and flour, maize, rice, sugar, knitted rayon in the piece, uncut diamonds, cut but not set diamonds, and gold.

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 to residents of other Sterling Area countries may be made freely. Persons going abroad, i.e., outside the East African currency area, for holidays are permitted to take with them Sh 1,000 in East African currency notes and, on application to a bank, up to the equivalent of £ stg. 250 in other currencies. Banks are also authorized to sell foreign exchange for business travel, for educational purposes up to £ stg. 750 a year, for maintenance of relatives up to £ stg. 360 a year, and for gifts up to £ stg. 250 a year. Sales of exchange for other purposes require the approval of the exchange control authorities.

Exports and Export Proceeds

Exports of wheat and flour, maize, sugar, animal and vegetable oils, beans, meat, jute and raw nylon fibers, copra, and machinery require licenses, and may be subject to restriction. Other goods may be exported without license. With few exceptions, the movement of goods within East Africa is unrestricted.

Export proceeds, other than those in Sterling Area currencies, must be offered to an authorized bank in Tanganyika 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 and domestic currency notes.

Capital

Movements of capital between Tanganyika and other Sterling Area countries are not restricted. There is no restriction on the investment of foreign funds in Tanganyika, but to ensure eventual repatriation it is necessary to obtain “approved status” for the investment, which in normal circumstances is given freely.

Changes during 1962

No significant changes took place during 1962.

Thailand

Exchange Rate System

No par value for the Thai Baht has been established with the Fund. There are fluctuating free market rates at which all authorized transactions take place. All incoming exchange must be sold to an authorized agent at these rates. All outgoing payments are subject to approval (given automatically for bona fide commercial transactions) and take place also at the fluctuating free market rates. As at December 28,1962, the free rate for the U.S. dollar was B 20.65 buying, and B 20.84 selling, per US$1.

Administration of Control

Exchange control is administered by the Bank of Thailand on behalf of the Ministry of Finance; the Bank delegates responsibility for most transactions to authorized agents, i.e., authorized banks and authorized companies. Certain imports and a few exports are subject to licensing by the Ministry of Economic Affairs.

Prescription of Currency

There are no special requirements concerning the currency to be used for settlements with foreign countries; however, payments are made largely in sterling and related currencies or in U.S. dollars.

Nonresident Accounts

There are two types of nonresident account, Transferable Accounts and Blocked Accounts. Transferable Accounts may be credited with the proceeds of sales of foreign currency and with funds eligible for remittance abroad in foreign currency. Balances on Transferable Accounts are convertible into foreign currency at any time and may be debited to pay for exports. Transfers of baht to and from Blocked Accounts require approval, which is granted automatically for certain current payments; approval is not, however, required when the account is held for foreign diplomatic entities, international organizations stationed in Thailand, or Thai nationals temporarily abroad.

Imports and Import Payments

Most commodities may be imported freely; but import licenses are required for some 75 listed commodities, and for most of these items licenses are not usually granted. All imports of goods originating in Mainland China are prohibited. Imports of tea leaf, tea dust, and coffee are subject to a requirement that the importer purchase a proportionate quantity of the same type of goods produced in Thailand.

Payments for imports must be made by letter of credit, unless approval to do otherwise is given. Importers must obtain, in addition to the usual documents, a “certificate of payment” from an authorized agent before imported goods exceeding B 3,000 in value can be cleared through the Bangkok customs or goods exceeding B 5,000 in value can be cleared through other customs stations.

Payments for Invisibles

Payments for invisibles require authorization. In general, exchange is provided freely for transactions in invisibles when the applications are supported by the documentary evidence specified in the regulations.1 For foreign travel and family remittances, however, the amounts of exchange that the authorized agent may sell are subject to certain maximum limits.

The authorized agents may approve exchange allowances for persons traveling abroad of £ stg. 225 or US$630, or £ stg. 14/5/9 or US$40 a day for not more than 90 days, whichever is the greater. For business travel, additional foreign exchange may be obtained in certain cases for entertainment expenses. No person may take out local currency exceeding B 500 without the prior approval of the exchange control authorities.

Exports and Export Proceeds

Certain categories of exports are subject to a licensing procedure;2 all others may be exported freely. The exporter is required to obtain a “certificate of exportation” from an authorized agent in order to clear the shipment through customs, as follows: for shipments of rice, rice flour, tin, or rubber exceeding B 1,000 in value through any customs station; for shipments of charcoal or wood exceeding B 10,000 in value through certain provincial customs stations; and for other goods exceeding B 3,000 in value through the Bangkok customs or B 5,000 in value through other customs stations. This certificate assures repatriation of the export proceeds. Export proceeds must be sold to authorized agents within seven days of receipt but not later than three months after the date of export.

Proceeds from Invisibles

All receipts from invisibles must be sold to an authorized agent. No person may bring into Thailand local currency exceeding B 500 without a permit, and a family traveling under the same passport may not bring in more than B 1,000 without a permit. Travelers may bring in foreign currency not exceeding the equivalent of US$500 or £ stg. 180 or, for a family traveling under the same passport, the equivalent of US$1,000 or £ stg. 360.

Capital

All outward transfers of capital, including premiums on life insurance policies, by residents or nonresidents are subject to approval. Foreign exchange from inward capital movements must be sold to an authorized agent. Foreign investments in Thailand can be accorded preferential treatment under the Industrial Investment Act of February 10, 1962; this treatment can include a guarantee of the transfer abroad of current net earnings. The repatriation of capital is considered on the merits of each case.

Changes during 1962

January 31. Atap and other similar leaves used for rolling cigarettes were removed from the list of goods under import control.

February 10. An Industrial Investment Act was enacted into law, superseding the Act of October 17, 1960 bearing the same title. Under the new Act, industries enjoying tax concessions were regrouped and a more precise scale of benefits was laid down.

March 19. Rice exporters were required to sell to the Rice Stock Committee an amount of rice equal to 15 per cent of their permitted exports.

March 28. Revised import and export control lists were issued by the Ministry of Economic Affairs. Various kinds of timber brought into the country through certain ports and coffee were added to the list of goods under import control and the kinds of wild animals under export control were increased from 6 to 36.

April 24. It was announced that rice export permits would be granted only on condition that exporters sold to the Government a quantity of rice equal to that which they wished to export.

May 15. It was announced that applications to export rice would be approved by the Ministry of Economic Affairs only upon evidence that letters of credit had already been opened.

June 6. Salt exported by sea was added to the export control list.

July 1. The percentage of rice exports required to be sold to the Rice Stock Committee was lowered from 15 per cent to 10 per cent. The ratio between rice exports and sales to the Government, imposed on April 24 as a condition for the issuance of export permits, was changed from 1:1 to 3:1.

August 14. Control over the import of used gunny bags was reimposed.

September 1. The percentage of rice exports required to be sold to the Rice Stock Committee was lowered from 10 per cent to 5 per cent.

September 13. The letter of credit requirement for rice exports (see May 15, above) was withdrawn in respect of small transactions with regular customers.

September 21. Coffee importers were required to buy one unit of domestically grown coffee for every ten units of coffee imported.

December 12. Rice exporters were no longer required to sell rice to the Rice Stock Committee.

Togo 1

Exchange Rate System

No par value for the currency of Togo 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. 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. Practically all settlements between Togo and countries outside the French Franc Area are made through the Paris exchange market. The CFA franc is freely exchangeable for any other currency of the French Franc Area.

Exchange Control Territory

Togo is a member of the French Franc Area. It is one of seven West African countries (Dahomey, Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta) having a common currency issued by the Banque Centrale des Etats de l’Afrique de l’Ouest. This central bank holds its exchange reserves exclusively in French francs, and settlements with other than the participating countries are made through the central bank’s operations account with the French Treasury. The account reflects not only the transactions of the participating West African countries in currencies of the French Franc Area, but also their transactions in other currencies; the latter are settled through the Paris exchange market.

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. Global annual programs for imports from countries outside the French Franc Area are coordinated by the Department of Economic Affairs. Import licenses are issued by the Ministry of Commerce with the consent of the Exchange Office.

Prescription of Currency

Settlements between Togo and other countries of the French Franc Area may be made in any of the currencies of the French Franc Area. Settlements with countries outside the French Franc Area are usually made in French francs through banks in France, although prescription of currency regulations similar to those of France are, in principle, applicable.

Nonresident Accounts

The regulations pertaining to nonresident accounts in Togo are based on those applied in France, but in Togo these accounts have only limited importance.

Imports and Import Payments

Imports from countries in the French Franc Area are generally free of license and quantitative restriction. Imports from all other countries are subject to import license and are admitted in accordance with an annual program, under which 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 established for imports from Soviet bloc countries.

Three fourths of the total import allocation foreseen in the annual import program is placed at the disposal of the Lomé Chamber of Commerce, which distributes two fifths of the allocation among its members; the remaining three fifths is distributed in accordance with such criteria as imports by, and taxes paid by, importers in the preceding year. One fourth of the total import allocation foreseen is specifically reserved for firms authorized as new importers by the Ministry of Commerce.

Importers obtain licenses from the Ministry of Commerce up to the amount of foreign exchange allocated to them. Such licenses, if confirmed by the Exchange Office, are submitted to the Ministry of Commerce for the purpose of verifying that the order for which the license was issued has actually been placed. The import license entitles the importer to acquire the amount and kind of foreign exchange specified in the license. 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 (see section on Exports and Export Proceeds, below).

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely. In general, all payments for invisibles to other countries are subject to the approval of the Exchange Office. Payments for invisibles related to trade are permitted when the basic trade transaction has been approved. Income accruing to nonresidents in the form of profits, dividends, and royalties may be remitted abroad subject to supervision. Control over payments in respect of many other categories of invisibles is also supervisory, to ensure that other aspects of the control are not being circumvented.

Travelers may take out banknotes in French francs, in CFA or CFP francs, and in other currencies, up to certain limits. Nonresident travelers may take out foreign notes and coins up to the amount declared when they entered the country.

Exports and Export Proceeds

Exports to countries in the French Franc Area are free of license; exports to other countries require licenses, mainly to ensure repatriation of the proceeds.

Export proceeds in foreign currencies must be surrendered within one month from the date of their receipt. Exporters may, however, retain 10 per cent of their proceeds in foreign currencies in special, nontransferable, EFAC (Exportations-Frais Accessoires) 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

Residents are obliged to collect from nonresidents, and if obtained in foreign currencies to surrender within a month from the date of receipt, amounts exceeding F 100 or the equivalent in CFA francs in respect of services and of income from foreign securities. Travelers may bring in any amount of banknotes or coins (except gold coins).

Capital

Capital movements between Togo and other French Franc Area countries are free of control. Capital movements between Togo and all other countries are subject to approval. Foreign investment in Togo is subject to the prior approval of the Exchange Office; approval depends on the nature and purpose of the proposed investment.

Changes during 1962

No significant changes took place during 1962.

Tunisia

Exchange Rate System

No par value for the Tunisian Dinar has been established with the Fund. The official value of the dinar is 2.115880 grams of fine gold, corresponding to 0.420 dinar = 1 U.S. dollar and 1 dinar = 11.7549 French francs. Exchange rates for currencies other than the French franc are fixed by the Central Bank of Tunisia, through which all exchange transactions in these other currencies take place.

Administration of Control

Exchange control is administered by the Central Bank of Tunisia, but some authority is delegated to the authorized banks. Import quotas are determined by the Office of the Secretary of State for the Plan and for Finance, which issues import licenses and export licenses after they have been approved by the Central Bank.

Prescription of Currency

Tunisia is one of the territories of the French Franc Area. For payment purposes, countries are classified in four groups: (1) the French Franc Area; (2) the bilateral group of the French Franc Area, comprising countries with which France has concluded payments agreements that apply also to transactions with Tunisia (Hungary and Rumania); (3) the bilateral group of Tunisia, comprising countries with which Tunisia has concluded bilateral payments agreements directly (Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Iraq, Poland, the U.S.S.R., the United Arab Republic, and Yugoslavia); and (4) the area of convertibility (all other countries).

Settlements with countries in the French Franc Area are made in any currency of that area; with countries in the bilateral group of the French Franc Area, through the nonresident accounts maintained in accordance with the payments agreement concerned; with countries in the bilateral group of Tunisia, in clearing dollars with Bulgaria, Czechoslovakia, Eastern Germany, Poland, the United Arab Republic, and Yugoslavia, in Iraqi dinars with Iraq, in Tunisian dinars with the U.S.S.R., and in Swiss agreement francs with Mainland China; and with countries in the area of convertibility, generally in convertible currencies,1 or in Tunisian dinars through the accounts of residents of those countries. Exceptionally, certain commercial transactions with India must be settled in Indian rupees.

Nonresident Accounts

Accounts may be opened for residents of other parts of the French Franc Area, but all credits to these accounts require the prior approval of the Central Bank. For residents of other countries, the following types of account are applicable:

Foreign Accounts in Convertible Dinars may be held by residents of the area of convertibility. They may be credited freely with proceeds from sales to the Central Bank of convertible currencies (see footnote 1), and debited freely for payments to residents of Tunisia and for the purchase of foreign exchange from the Central Bank. Transfers between these accounts may also be made freely.

Foreign Accounts in Bilateral Dinars may be held by residents of countries in the bilateral groups. They may be credited freely with proceeds from sales to the Central Bank of convertible currencies and with transfers from Foreign Accounts in Convertible Dinars, and debited freely for payments to residents of Tunisia due from the country of the account holder. Transfers between Foreign Accounts in Bilateral Dinars related to the same country may also be made freely.

Foreign Accounts in Foreign Currencies are used mainly by foreign embassies and by certain nonresident business enterprises in anticipation of investment in Tunisia; funds on these accounts may at any time be transferred to the country of origin.

Capital Accounts, which may be held by residents of any country outside the French Franc Area, are credited with the proceeds of liquidation of foreign investments not covered by a retransfer guarantee. Transfers may be made freely between Capital Accounts of countries in the area of convertibility and between those related to the same country in the bilateral groups, or from the former to the latter.

Internal Accounts of Nonresidents are intended mainly for foreign persons staying temporarily in Tunisia and gainfully employed there; the opening of these accounts requires the approval of the Central Bank.

Imports and Import Payments

The import of certain goods from any country (including France and other countries of the French Franc Area) is “prohibited,” but may be authorized by individual license.

Apart from the “prohibited” imports, imports originating in France or other countries of the French Franc Area do not in principle require an import license, except that some imports from France are subject to quantitative restriction and to individual license. Payments for imports from France or other countries of the French Franc Area are subject to prior authorization from the Central Bank, which limits itself to checking the bona fide character of the application. When applying for permission to make these payments, importers must declare that they do not have in the French Franc Area financial resources which could be used for this purpose.

Excluding “prohibited” imports, the import licensing system as applied to countries outside the French Franc Area with which Tunisia does not have bilateral payments arrangements distinguishes between (1) liberalized goods, for which licenses are granted automatically; (2) goods subject to global quotas, which may be imported from any country; (3) goods admitted under quotas established in bilateral trade agreements; and (4) goods for which quotas are announced in import programs. Liberalized goods valued at less than D 200 and certain spare parts valued at less than D 50 are free of license. All imports from countries with which there are bilateral payments agreements are limited by quotas. To obtain an import license, importers must be listed in the commercial register and must have received a code number.

All import documents involving payment must be recorded with an authorized bank. Advance deposit requirements apply to imports of most consumer goods (25, 50, or 100 per cent, according to the luxury character of the goods concerned). These deposits must be made at the time the import transaction is domiciled with an authorized bank, and be held in a blocked account for two months.

Payments for Invisibles

All payments for invisibles require the approval of the Central Bank. Provided that the appropriate documentation is submitted, this approval is given for payments for most current transactions, including remittances of profits, dividends, and interest due to nonresidents. Payments in respect of such items as business travel and family maintenance are approved up to certain limits. Residents of Tunisia traveling abroad as tourists are entitled once a year to an exchange allocation equivalent to D 30. The allocation may be taken in the form of foreign banknotes to the extent that their importation is permitted by the regulations of the country to be visited. The export of foreign banknotes is subject to license. The export of Tunisian banknotes is prohibited.

Exports and Export Proceeds

Exports to other parts of the French Franc Area and exports to other countries not exceeding D 50 may be made freely; all other exports require an export license or an exchange commitment. For all exports, the exporter must give an undertaking to repatriate the exchange proceeds; this repatriation must ordinarily take place within 30 days from the date payment is due, and in any event, within 100 days from the date of shipment, unless otherwise allowed by the Central Bank.

Proceeds from Invisibles

Residents must repatriate all amounts derived from services rendered to persons resident abroad, including residents of the French Franc Area, and also all other income or proceeds from invisibles received from countries outside the French Franc Area. Foreign banknotes and coins (except gold coins) may be brought in freely. The import of Tunisian banknotes is prohibited.

Capital

Foreign investments in Tunisia do not in principle require authorization, but those approved in advance by the Tunisian authorities may be given a guarantee for the transfer of current earnings and the retransfer at any time of the full proceeds upon liquidation. The retransfer of investments made by residents of the French Franc Area, and of income derived therefrom, is in practice also authorized.

Other outward transfers of capital require the approval of the Central Bank. However, residents may, through the intermediacy of a Tunisian authorized bank, freely purchase Tunisian securities on the official stock exchanges of other countries of the French Franc Area.

Changes during 1962

March 1. A bilateral payments agreement was concluded with the United Arab Republic requiring all payments to and from that country to be made through an account in clearing dollars.

November 17. The Tunisian and French Governments agreed that Tunisia would introduce quantitative restrictions on a specific list of imports from France, notably motor vehicles, petroleum products, domestic appliances, textiles, and perfumes.

Turkey 1

Exchange Rate System

The par value is Turkish Liras 9.00 = US$1. The official rates are LT 9.00 buying, and LT 9.045 selling, per US$1. Official rates for other currencies are established by the Central Bank on the basis of the par value of the other currency concerned. A tax of 50 per cent (minimum LT 500) is levied on foreign exchange purchased for most travel purposes, including the cost of transportation.

Administration of Control

Exchange control is administered by the Ministry of Finance. Import programs are prepared by the Ministry of Commerce in conjunction with the Ministry of Finance and in consultation with the Central Bank of Turkey. The selection of permitted imports and the determination as to whether they should be admitted free of restriction or under quantitative limitation is the responsibility of the Ministry of Commerce. Foreign exchange is allocated by the Central Bank or the Ministry of Finance, or, for some categories of imports under quotas, by the Union Chambers of Commerce and Industry and the Ministry of Industry. The Central Bank issues import licenses. Certain imports require the permission of the relevant ministry or department, primarily for public security, agricultural, or health reasons.

Prescription of Currency

Settlements on account of merchandise and invisibles with countries with which Turkey has bilateral payments agreements2 are made in accordance with the terms of the relevant agreement. Settlements with other countries are made in convertible currencies.

Imports and Import Payments

Most imports are subject to import license; the exceptions are goods on the liberalization list imported by industrialists exclusively for their own requirements, by exporters, and by operators of mining and tourist establishments. Import licenses are valid for six months and goods must be cleared through the customs within this period; in certain circumstances, the period may be extended. Import licenses are issued to registered importers (import merchants), industrialists (manufacturers importing for their own needs), and government departments. Private individuals and corporate bodies are required to secure an “importer’s certificate” before submitting through the authorized banks applications for licenses to import goods for commercial purposes.

Goods may be imported only in accordance with the provisions of import programs, which are planned for a year and announced for six-month periods, in January and July. The import programs classify imports in three categories: (1) a list of liberalized goods for which import licenses are issued freely; (2) a list of goods subject to global quotas; and (3) goods that can be imported within the quotas established under bilateral agreements. The list of liberalized goods and the list of global quotas in principle apply to imports from countries other than those with which Turkey has bilateral agreements. Goods not included in either of these two import lists may not be imported under the bilateral quotas. For some goods on the liberalization and global quota lists, importers have the possibility of applying for exchange allocations out of U.S. aid funds, while other goods on these lists may be imported only with U.S. aid funds and only from specified countries.3

(1) An over-all foreign exchange allocation is set aside by the authorities for imports of goods on the liberalization list. Applications for import licenses for goods on this list may be submitted at any time through authorized banks, who prepare the import licenses and forward them to the Central Bank for approval. The liberalization list for the first half of 1963 comprises such commodities as investment goods, raw materials, spare parts, medical appliances, and books and newspapers.

(2) Applications to import under the global quotas must be made through an authorized bank within one month of the date of publication of the quotas. The global quota list distinguishes between quotas for registered importers and quotas for industrialists. Quotas for importers are allocated by the Central Bank on a pro rata basis. Any one importer may not receive more than 20 per cent of the quota set for any particular commodity, and he must apply for a license within two months of receiving an allocation. Quotas for industrialists are allocated on the basis of such criteria as capacity, output, and previous performance; after the applicant has secured an allocation (i.e., has been issued a “certificate of need”), he has to obtain an import license from the Central Bank within two or three months, depending on the method of payment.

(3) Imports from bilateral agreement countries are subject to separate quotas. The import licensing procedure for goods from these countries is the same as for imports under global quotas, except that individual allocations are not limited to 20 per cent of a specific commodity quota.

The import license permits the necessary foreign exchange payment to be made. Payments for imports may be made against a letter of credit, documents, or the goods (i.e., suppliers’ credits up to six months may be utilized). However, for imports financed from U.S. aid funds, payment may be made only against a letter of credit. Registered importers are required, when the foreign payment is to be made against a letter of credit, to prepay in local currency the equivalent of the foreign exchange applied for.

Guarantee deposits are payable in advance as follows: for goods on the liberalization list, 10 per cent of the value of the merchandise is payable by industrialists and 20 per cent by registered importers; for imports under global quotas or bilateral quotas, 10 per cent of the value of the import application is payable by registered importers (but not by industrialists or government agencies), at the time application to import is made. When the value of applications under the global quotas for registered importers exceeds the amount of an individual commodity quota, the deposit is increased (see section on Changes during 1962, July 4, below). The deposit remains blocked until the goods have been imported and the foreign supplier paid; it is then refunded to the importer.

Imports of luxury goods and of automobiles (including station wagons and panel trucks) are not permitted, but foreign cars may be sold in Turkey by diplomats. Such sales are subject to payment of a share of participation in the Stabilization Fund for the amount of LT 6.00 per US$1 of the calculated sales value, the minimum share being LT 6,600. This payment is not related to the price paid by the buyer and is due even if no payment is involved.

Payments for Invisibles

Payments for invisbles require exchange licenses. These are granted liberally for the following, provided that applications are accompanied by specified documents: subscriptions to newspapers, periodicals, and international organizations, books, registration fees, advertising expenses, consulate income, payments by the Government, payments by the Post Office Administration and similar state institutions, banks’ commissions and expenses, a proportion of insurance companies’ payments, specified technical assistance, repair and assembly expenses, and legal fees on account of commercial transactions. The transfer of income related to approved foreign investments is permitted freely. Interest on long-term loans and credits extended by nonresidents to enterprises in Turkey (including those of an agricultural character) may be granted transferability between foreign nationals both in Turkey and abroad.

Turkish citizens are not allowed to leave the country without having obtained an allocation of exchange for travel, but this does not apply to foreign nationals residing in Turkey. The allowance of exchange for tourist travel by residents (irrespective of nationality) is the equivalent of US$200 a calendar year (US$50 for persons under 18 years of age). Exchange for business travel is granted within the limits of annual quotas, which vary according to the amount of income of, or income tax paid by, the applicant firm. Exchange for travel abroad for other purposes (e.g., education, participation in international meetings, fairs, athletic meets, etc., and personal business) is sold up to specified limits. In addition, persons who can certify that it is necessary for them to travel abroad for medical treatment may purchase the necessary foreign exchange.

With the exception of travel for reasons of health, a tax of 50 per cent (minimum LT 500) is payable on all exchange purchased for travel abroad, on the purchase of tickets for foreign travel, and on baggage charges.

Travelers are permitted to take out LT 200 in Turkish banknotes and coins. Nonresidents may take out the unspent portion of the foreign exchange recorded in their passports on entry.

Exports and Export Proceeds

Most exports are free of license, but a few commodities require an export license, either in order to prevent re-export or to assure adequate supplies for the domestic market. Exports not payable in convertible currencies are subject to licenses and to export quotas. Exporters are required to sell to a bank in Turkey the foreign exchange proceeds of goods exported, within three months from the date of export or within ten days from the date on which the foreign exchange is placed at their disposal.

Proceeds from Invisibles

Foreign exchange accruing to residents for services rendered by them to nonresidents must be surrendered to an authorized exchange dealer within three months from the date on which the service was rendered or within ten days from the date of acquisition of the exchange. Firms and individuals who have purchased foreign banknotes and travelers checks from, or received them as payment from, foreign travelers are required to surrender them to an authorized exchange dealer within one month. Foreign travelers wishing to take out articles of a value exceeding LT 5,000 must show proof that they have converted foreign exchange to cover the portion exceeding this limit.

The import of Turkish banknotes and coins by travelers (whether of Turkish or foreign nationality) is limited to LT 500.

Capital

Capital transfers abroad by residents and capital transactions between residents and nonresidents are subject to the approval of the exchange control authorities.

Foreign investments in Turkey require approval. Foreign companies and contractors who wish to do business in Turkey must import the required capital and operating funds in the form of foreign exchange, although under certain conditions blocked funds may be used for investment in the tourist trade. Apart from approved investments, assets and balances owned by, and earnings accruing to, nonresidents may not be converted into foreign currency, and if they exceed LT 5,000 a year they are blocked. These constitute one type of blocked funds. A second type comprises funds blocked in accordance with the Paris Agreement on Commercial Debts Owed by Residents of Turkey (1959). Subject to individual permission, blocked assets and balances may be utilized within Turkey, e.g., for the benefit of third parties to be used for tourist trips on a collective basis in Turkey. They may not, however, be utilized as business capital except under the provisions of Article 9 of the Paris Agreement and for investment in the tourist industry. The investment of blocked funds in the tourist industry is subject to the following conditions: (1) there must be a contribution in new foreign exchange or imported equipment equal to at least 50 per cent of the blocked funds to be used,4 and (2) the investor must undertake not to request transfer for at least five years of that part of the capital financed by means of the blocked funds. Blocked funds used in this manner are considered as foreign capital imported under the Law to Encourage Foreign Investments. Normally, such blocked funds may not be transferred to others except by legal succession and subject to a quantitative limit of LT 2,000 per beneficiary each month.

Foreign capital invested in Turkey under the terms of the Law to Encourage Foreign Investments is accorded preferential treatment, provided that the enterprise in which the investment is to be made is deemed to contribute to the economic development of the country, will operate in a field of activity open to Turkish private enterprise, and will not entail monopoly or special privilege. Under this law, as amended, all or part of the invested capital or foreign loans may be remitted abroad in the original currency of the capital. Registered shares or stock certificates issued under this law are freely transferable between foreign nationals both in Turkey and abroad. The capital and interest on long-term loans and credits extended by nonresidents to enterprises in Turkey (including those of an agricultural character) may be accorded the same transfer benefits. Foreign capital imported under the Petroleum Law is accorded additional preferential treatment.

Transactions in securities, including their export and import, require approval where nonresident interests are involved.

Changes during 1962

January 4. The eighth import program, covering the first half of 1962, was announced. Only minor changes from the seventh program were made: Cellophane and some other kinds of paper and cartons of special quality, machinery for making insecticides, and chassis for buses fitted with engines with a capacity of 6 tons and over were transferred from the global quota to the liberalization list. On the other hand, a few items were removed from the liberalization list.

January 20. Travel for reasons of health was exempted from the special tax of LT 4.50 per US$1.

February 26. The travel exchange allowance (equivalent to US$200 a year) was extended to residents of foreign nationality.

July 4. The ninth import program, covering the second half of 1962, was announced. Eleven commodities or groups of commodities were added to the liberalization list and two were removed. Nineteen commodities or groups of commodities were added to the global quota list. Goods on both of these lists had to be cleared through customs within the six-month period for which the import licenses were valid; previously, goods on the liberalization list merely had to arrive at the customs within this period. Provision was made for increasing the guarantee deposit required from registered importers for goods on the global quota list, when the total value of applications to import a commodity exceeds the individual quota for that commodity as set forth in the import program. The increases would range from an additional 10 per cent (i.e., a total of 20 per cent) of the value of the importer’s application (when the total value of the applications exceeds five times the amount of the original quota), to a maximum of 40 per cent (when the value of the applications exceeds twenty times the original quota). Importers were no longer required to make a down-payment of 50 per cent of the value of the import for goods on the liberalization list paid against documents or merchandise.

August 8. The clearing account arrangements with Switzerland were terminated.

August 11. The following changes in the exchange control system became effective:

(1) The requirement that travelers must declare the value of foreign exchange in their possession when entering the country was abolished. Foreign travelers were allowed to sell foreign exchange and to make payments for goods and services in foreign exchange to anyone in Turkey (and not, as previously, only to authorized exchange dealers). Receivers of such exchange must surrender it to an authorized exchange dealer within one month. However, to reconvert any Turkish liras into foreign currency on leaving the country, nonresident travelers must present a document showing that the foreign exchange had been sold directly to an authorized dealer.

(2) The limit of LT 500 on the import of Turkish banknotes and coins by foreigners was extended to Turkish nationals (who were previously permitted to bring in only LT 200).

(3) Foreign visitors were permitted to open bank accounts in foreign currency in Turkey without the prior approval of the Ministry of Finance. Also, blocked funds owned by nonresidents in Turkey could henceforth be used for investment in the tourist trade under the following conditions: (a) the investor must supply new foreign exchange equal to at least half of the blocked funds to be used (but see footnote 4), and (b) the investor must undertake not to request transfer for at least five years of that part of the capital financed by means of the blocked funds. The blocked funds used for these investment operations would be considered as foreign capital imported under the Law to Encourage Foreign Investments.

December 20. Decree No. 6/1189 was promulgated, by virtue of which sales of foreign cars in Turkey by diplomats were made subject to payment of a share of participation in the Stabilization Fund for the amount of LT 6.00 per US$1 of the calculated sales value, the minimum share being LT 6,600. Previously, such sales had been subject to a tax of LT 4.50 per US$1 of the calculated sales value.

Note.—The following changes became effective early in 1963:

January 4. The tenth import program, covering the first half of 1963, was announced: (1) A number of items, mainly raw materials, were added to the liberalization list; heavy trucks, tires and tubes, and petroleum and fuel oil were deleted. (2) The 10 per cent guarantee deposit scheme was modified in several respects. It was extended to industrialists’ imports of goods on the liberalization list and was increased from 10 per cent to 20 per cent for imports by registered importers of goods on that list. The deposits must be transferred by the commercial banks to the Central Bank. (3) Industrialists importing exclusively for their own requirements, exporters, and operators of mining and tourist establishments no longer needed an import license for goods on the liberalization list. (4) “Reconditioned” goods were added to the list of prohibited imports.

March 1. By virtue of Law No. 196 of February 18, 1963, a tax of 50 per cent (minimum LT 500) was made payable on all exchange purchased for travel abroad (unless for health reasons), on the purchase of tickets for foreign travel, and on baggage charges. The tax of LT 4.50 per US$1 on such payments was abolished.

United Arab Republic 1

Exchange Rate System

On September 18, 1949, a par value for the Egyptian Pound was established by the United Arab Republic with the Fund. However, exchange transactions no longer take place at rates based on that par value. All exchange transactions take place at rates based on LE 1 = US$2.30. The official rates of the Central Bank at the end of December 1962 were LE 0.434782 buying, and LE 0.437390 selling, per US$1. Under an arrangement with Lebanon, Egyptian travelers to that country benefit from a special rate of LL 8.00 = LE 1 up to the amount of an exchange allocation of LE 100 a year.

Administration of Control

Exchange control is supervised by a Supreme Committee for Foreign Exchange, which is set up by the Minister of Economy. The exchange control laws, ministerial arrêts, decree-laws, and instructions of the Minister of Economy and of the Supreme Committee are carried out by a Director of Exchange Operations appointed by the Minister of Economy. The technical work of exchange control is performed, under the supervision and instructions of the Director of Exchange Operations, by the Central Exchange Control attached to the Central Bank of Egypt. An Export Board controls exports. An Import Control Office is responsible for issuing import licenses.

Prescription of Currency

Payments to residents of countries with which the United Arab Republic does not have bilateral payments agreements may be made in the currency of the payee’s country when that currency is available; in a convertible currency;2 in Egyptian pounds to the credit of the appropriate nonresident account; or in any other manner permitted by the Central Exchange Control. Receipts may be accepted in the currency of the payor’s country, if it is a currency acceptable to the Central Bank; in any convertible currency; in Egyptian pounds to the debit of an appropriate nonresident account; or in any other manner permitted by the Central Exchange Control.

Payments to countries with which the United Arab Republic has payments agreements are made according to the terms of those agreements.3

Suez Canal dues must be paid in Egyptian pounds by debiting a Shipping Account No. 1. Balances on this type of account may be created by selling a convertible currency to an authorized bank in the United Arab Republic, or by debiting a Free Nonresident Account.

Nonresident Accounts

In addition to the special accounts related to the bilateral payments agreements of the United Arab Republic, there are three main types of nonresident account: Free Nonresident Accounts, Nonresident C Accounts, and Nonresident D Accounts.

Free Nonresident Accounts may be opened in the name of any nonresident, irrespective of his country of residence. They may be credited with proceeds from the sale of any convertible currency that has been transferred from abroad; with transfers from other Free Nonresident Accounts; with interest on the account; and with the Egyptian pound equivalent of any transfer authorized in convertible currency by the Central Exchange Control. They may be debited for payments due to residents; for transfers to other Free Nonresident Accounts or Nonresident C or D Accounts; and for payments abroad in any convertible currency.

Nonresident C Accounts may also be opened in the name of any nonresident, irrespective of his country of residence. They may be credited with proceeds from the sale of any convertible currency that has been transferred from abroad; with transfers from Free Nonresident Accounts or other Nonresident C Accounts; and with any amounts authorized to be credited to these accounts by the Central Exchange Control. They may be debited for payments due to residents, except for exports, Suez Canal dues, and ships’ disbursements; for transfers to other Nonresident C Accounts; and—provided that Central Exchange Control authorization is obtained—for transfers to Nonresident D Accounts and payments abroad in convertible currencies.

Nonresident D Accounts may be opened in the name of any resident of a payments agreement country (see footnote 3). The account must be designated by the name of the partner country concerned, and transfers from the account of one country to any other country may not be made without Central Exchange Control authorization. These accounts may be credited with the proceeds from the sale of any convertible currency that has been transferred from abroad; with transfers from a Free Nonresident Account and—provided that Central Exchange Control authorization is obtained—with transfers from a Nonresident C Account; with transfers from other Nonresident D Accounts of the same nationality; and with any sum authorized to be credited to the account by the Central Exchange Control. They may be debited for payments due to residents, except for exports, Suez Canal dues, and ships’ disbursements; and—provided that Central Exchange Control authorization is obtained—for transfers to other Nonresident D Accounts and for payments to the country in whose name the account is designated.

There are also blocked accounts, to which may be credited any payment to a nonresident not remittable under the exchange control regulations. Transfers may be made between blocked accounts of the same nationality. These accounts may be debited for amounts up to LE 1,000 a year for living expenses of the account holder in the United Arab Republic. They may also be debited for investments in U.A.R. Government loans and in registered shares in nominative form of companies established in the United Arab Republic, and for subscriptions to increases in capital of U.A.R. companies in which the account holder is already a shareholder. Income derived from such investments may be remitted to the nonresident beneficiary.

Imports and Import Payments

Imports of a fairly large number of goods from any source, and all imports from Israel, are prohibited. Almost all other imports require individual licenses, the issuance of which is dependent on the currency required for payment, the method of settlement, and the category of goods. Import licenses are issued by the Import Control Office within the framework of an import budget. In the allocation of exchange for imports, a distinction is made between convertible currencies and bilateral currencies; the amount available is indicated separately for each bilateral currency. A statistical tax of 5 per cent is payable on imports. Advance payments exceeding LE 100 for imports require the prior approval of the Central Exchange Control.

Import trade is concentrated largely in state-owned importing agencies, which must submit their applications for import licenses to the appropriate ministry for scrutiny in the light of the import budget and for forwarding to the Import Control Office. Government departments may import directly, and industrial firms may apply through the ministry concerned for permission to import raw materials, spare parts, and equipment needed by them.

Payments for Invisibles

Banks are authorized to effect payments for certain invisibles; for others the prior approval of the Central Exchange Control is required. Exchange is normally made available for expenses associated with approved trade transactions and other current payments. Expenses for permitted travel, family maintenance, film royalties, and subscriptions and fees of professional organizations usually are approved within specified quotas. For travel to Lebanon, the allowance is LE 100 a year at a special rate agreed upon with the Lebanese authorities.

Travelers may not export Egyptian pound notes. Foreign tourists leaving the United Arab Republic may take with them any remaining foreign banknotes which they had brought in and declared, but residents may not take out foreign banknotes in excess of LE 20 without specific permission.