Chapter

Nonmember Countries

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

Exchange Rate System

The Cambodian Riel is defined as having a weight of 25.3905 milligrams of fine gold. Transactions in foreign currency are carried out on the basis of the rates published by the National Bank of Cambodia. These basic rates are 35 riels = 1 U.S. dollar, 98 riels = 1 pound sterling, and 10 riels = 1 French new franc. Foreign tourists staying at hotels of the Société Khmère des Auberges Royales at Siemréap receive, in addition to 35 riels per U.S. dollar, tourist coupons for 25 riels for each U.S. dollar sold.

Administration of Control

Exchange control is administered by the National Exchange Office in conjunction with the National Bank of Cambodia; the details are carried out by authorized banks. Import and export control is the responsibility of the Minister of National Economy, who delegates this authority to the Director of Foreign Trade. Import licenses are issued by the Foreign Trade Department and are then submitted to the National Exchange Office for certification.

Prescription of Currency

Imports from the French Franc Area must be paid for in French francs through special accounts. The method of payment or receipt for settlements with other countries is specified in each license; payments for imports are normally made in the currency of the supplying country. However, there are bilateral clearing accounts in sterling for settlements with Mainland China, Czechoslovakia, Eastern Germany, Poland, the U.S.S.R., and North Viet-Nam; in riels for settlements with the Republic of Viet-Nam; and in U.S. dollars for settlements with Yugoslavia.

Nonresident Accounts

Four types of account may be maintained by foreigners or nonresidents with authorized banks: Foreigners’ Accounts in Riels, Capital Accounts, Internal Accounts of Nonresidents, and Nonresident Accounts.

Imports and Import Payments

Practically all imports require import licenses. Only imports of listed commodities are authorized, including imports paid for with freely available EFAC funds (see section on Exports and Export Proceeds, below). Only registered importers may submit applications to import. Pro forma invoices must be submitted at the time the application is made, and for certain imports must be accompanied by a catalog and/or samples of the goods to be imported. The granting of exchange from Cambodia’s own resources distinguishes between imports from the French Franc Area, which must be paid for in French francs, and imports from other countries, which are settled in the currency of the supplying country. For imports in both these groups, quotas are announced separately for individual commodities. Various essential commodities may be imported against balances on EFAC accounts or under licenses benefiting from the “10 Per Cent Equipment and Raw Materials” procedure; exceptions are prohibited goods and goods that might compete with local production. Imports must be recorded with an authorized bank.

Certain goods may be imported from Bangkok, Hong Kong, or Singapore under a system of compensation, which necessitates either a compensatory import equal to the amount of the export or an import amounting to 50 per cent of the export and the repatriation of foreign exchange for the remaining amount. No import license is necessary for such a transaction, but an import certificate issued by an authorized bank and certified by the National Exchange Office is required.

Payments for Invisibles

The approval of the National Exchange Office is required for all payments for invisibles. Foreigners residing temporarily in Cambodia, or working under contract for public authorities or private enterprises, are permitted to transfer a maximum of 30 per cent of their monthly income, plus an additional 15 per cent if the applicant’s wife is in his own country and an additional 10 per cent if he has children in his own country for whose support he is responsible. Applications for transfer of income by a worker employed in the private sector must be accompanied by a labor contract certified by the Department of Labor and Social Affairs. Incomes not subject to the tax on salaries and wages are not transferable. Moreover, remittances from persons earning less than 5,000 riels monthly in Phnôm-Penh or less than 3,500 riels monthly in the provinces are prohibited. Travelers going abroad as tourists receive an allocation of exchange varying with the country or countries of destination. Resident travelers may buy freely one-way or return tickets for foreign travel starting from Cambodia; tickets for other journeys require licenses.

The export of Cambodian banknotes is prohibited. The export of foreign banknotes is subject to license, but nonresident travelers may take out the amount they imported less any exchange sold.

Exports and Export Proceeds

In general, exports require export licenses, but certain listed items may be exported against an export certificate showing how the exchange proceeds will be received and repatriated and supported by a banker’s guarantee. Exports must be recorded with an authorized bank, and the exchange proceeds must be surrendered within one month from the date of payment specified in the export license or certificate.

The following percentages may, however, be retained in special EFAC (Exportations-Frais Accessoires) accounts: 30 per cent of the proceeds of exports of maize received in U.S. dollars or sterling; 15 per cent of the proceeds of exports of maize received in bilateral clearing currencies or in inconvertible French francs; 40 per cent of the proceeds of exports of kapok payable in convertible currencies; 13 per cent of the proceeds of other exports received in convertible currencies; and 10 per cent of the proceeds of other exports received in other currencies, including inconvertible French francs and bilateral clearing currencies. Balances on EFAC accounts may be used by the exporter or supplier of the goods either to pay certain commercial expenses or to pay for imports of certain essential commodities. These balances may be sold freely at any exchange rate which may be obtained. Convertible currencies in EFAC accounts may be exchanged for other currencies, with the prior approval of the National Exchange Office.

Certain listed goods may be exported to Bangkok, Hong Kong, or Singapore under private compensation arrangements, provided that at least half the value of the goods is imported and that the other half is repatriated in foreign exchange (see section on Imports and Import Payments, above).

Proceeds from Invisibles

All residents of Cambodia, other than foreigners, must surrender to an authorized bank foreign exchange received by them. Certain hotels that act as agents of the authorized banks in purchasing foreign exchange from nonresident travelers, or that are paid in foreign exchange by travel agencies abroad, may keep 15 per cent of such foreign exchange in an EFAC account. Certain hotels are authorized to pay their guests a premium of 25 riels per US$1 on their foreign exchange encashments.

The import of Cambodian banknotes is prohibited. Foreign banknotes may be brought in freely, subject to declaration, but residents have an obligation to surrender such notes within seven days.

Capital

For foreign investments made before May 31, 1956, profits may be remitted abroad after payment of an Exceptional Equipment Tax. The tax rates on profits relating to the year 1961 were 28 per cent on profits of rubber plantations, 43 per cent on profits of companies whose activities were considered vital for the Cambodian economy, and 48 per cent on profits of other companies recognized as useful for the economic development of Cambodia. The tax rates on profits of foreign companies with head offices in Cambodia are reduced by 10 per cent for companies whose capital is more than 40 per cent Cambodian and by 5 per cent for companies whose capital is between 30 per cent and 40 per cent Cambodian. In the event of liquidation of such investments, the original capital may be repatriated in ten equal annual installments.

All new foreign investments in Cambodia require prior authorization from the Ministry of Finance; authorization depends, among other things, on a minimum participation of domestic capital. New foreign capital invested in Cambodia must be in foreign exchange acceptable to the National Bank. Profits of up to 20 per cent on approved foreign investments made since May 31, 1956 may be transferred, and, in the event of liquidation, the capital may be repatriated in five equal annual installments in the currency of the original investment.

Changes during 1962

January 1. New regulations governing the grouping of imports and the registration of new importers came into effect. For importers already registered, the number of import groups was reduced on the basis of the arithmetic mean of the groups held by the importer in 1960 and 1961. Importers who exported in 1961 were entitled to an increase in the number of groups of products to be imported, on the basis of one group for each 8 million riels’ worth of goods exported. For new importers, authorization for registration for groups of imports was also based on their exports in 1961, at the rate of 8 million riels’ worth of exports for each group of import products.

June 1. The export and import of Cambodian banknotes was prohibited.

July 1. Women of foreign nationality married to Cambodian nationals and working in the private sector could no longer transfer their savings and incomes to their country of origin.

Switzerland

Exchange Rate System

The gold content of the Swiss Franc is established at 63310 (=0.20322 …) gram of fine gold. The Swiss National Bank maintains the U.S. dollar rate in a free market between limits of Sw F 4.295 buying, and Sw F 4.45 selling, per US$1. The free market rate on December 29, 1962 was Sw F 4.3190 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 Switzerland and such limits in force in the country of the other currency concerned. Exchange is controlled in respect of most transactions with countries with which Switzerland has bilateral agreements or in respect of which Switzerland has enacted autonomous regulations. Bilateral agreements cover Switzerland’s trade and/or payments with seven countries or monetary areas,1 and Switzerland controls its payments with two others.2 In accordance with the provisions of several of these agreements, official rates are applied to transactions covered by the agreements. This domain of regulated settlements is known as the sector of controlled payments. All settlements outside this sector (including those with all other countries) may be made freely at free market rates. Foreign banknotes are negotiated freely in Switzerland at rates determined by the interplay of supply and demand.

Exchange Control Territory

For all purposes of import, export, and payments control, the Principality of Liechtenstein is included in the Swiss customs territory for the duration of the treaty of March 29, 1923 between Switzerland and the Principality of Liechtenstein concerning the union of the Principality of Liechtenstein with the Swiss customs territory.

Administration of Control

The authority to impose measures for the control of imports, exports, and payments is vested in the Swiss Federal Council acting, as a rule, on the proposals of the Federal Department of Public Economy or the Federal Political Department. The Swiss National Bank is the executive authority in matters of currency, and the Swiss Compensation Office, together with the authorized banks, is entrusted with the operative part of payments control.

Prescription of Currency

The currency and manner of settlement on account of merchandise transactions and invisibles in the sector of controlled payments (see section on Exchange Rate System, above) are prescribed in accordance with the provisions of the relevant payments agreements and/or by the Swiss regulations. Settlements with countries in this sector are made in Swiss francs; however, settlements with the United Arab Republic may be made in Egyptian pounds. In all other cases, settlements are not subject to regulations involving prescription of currency.

Nonresident Accounts

Nonresident accounts related to the sector of controlled payments may be grouped as follows: (1) accounts related to Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, and Yugoslavia, which are centralized with the Swiss National Bank, and (2) the “decentralized” group, comprising accounts that may be held with the Swiss National Bank and with authorized banks in Switzerland. The accounts of the second group are of two kinds: the accounts of Eastern Germany and Iran, which are transferable only to other accounts of the same nationality, and the accounts of the United Arab Republic, which are subject to special treatment.

Nonresident accounts concerned with transactions outside the sector of controlled payments—mainly those related to countries not listed above—may be transferred freely among themselves. A gentlemen’s agreement between the Swiss National Bank and the commercial banks provides, among other things, that new foreign funds will not be accepted by the banks as sight deposits, but will be subject instead to at least three months’ notice; no interest is paid on such accounts, and those held for a term of less than six months are subject to a commission of 1 per cent per annum. The agreement, which became effective on August 18, 1960, has been renewed at intervals, the latest renewal being for the six months ending August 17, 1963.

Imports and Import Payments

Certain goods are admitted into Switzerland on the basis of import licenses only; but in accordance with Switzerland’s present liberal import policy, licenses are, generally speaking, granted without quantitative limitation. Quotas are established for certain agricultural products and, in the category of industrial products, for heavy motor vehicles. As a temporary measure, however, import licenses are issued above the global quota, without quantitative limitation, for heavy trucks and public passenger cars needed for use in Switzerland. Imports from OECD countries are liberalized in accordance with the former OEEC code of liberalization; imports from dollar area countries are subject to the same regime.

Settlements are made automatically for authorized imports from countries to which the Swiss control regulations are applicable, i.e., the sector of controlled payments. Payments for imports from all other countries may be made freely through the free market.

Payments for Invisibles

Payments for invisibles may be made freely; however, payments to Eastern Germany (including East Berlin), Iran, and countries with which Switzerland has bilateral payments agreements are controlled. The export of Swiss and foreign banknotes is free.

Exports and Export Proceeds

The export (including re-export) of some goods is subject to export control through individual licenses. This export licensing system is operated in part with the assistance of appropriate trade organizations. Export proceeds received through the sector of controlled payments are converted into Swiss currency in observance of the existing regulations. Other export proceeds are freely disposable.

Proceeds from Invisibles

Proceeds from invisibles received through the sector of controlled payments are converted into Swiss francs in observance of the existing regulations. Proceeds received in convertible currencies are freely disposable. The import of Swiss and foreign banknotes is free.

Capital

Transfers of capital from countries in the sector of controlled payments require licenses if they are made through the sector of controlled payments; transfers of capital to such countries do not require licenses. Transfers of capital to and from other countries may be made freely, except that certain outgoing transfers exceeding Sw F 10 million each require permission.

Changes during 1962

May 1. The Government decided, as a temporary measure, to issue import licenses for heavy trucks and public passenger cars over and above the global quota and without quantitative limitation to any buyer who could prove that a real need existed, i.e., that the vehicle would be used in Swiss inland traffic.

August 8. The bilateral payments agreement with Turkey was terminated.

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

Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, United Arab Republic, and Yugoslavia.

Eastern Germany and East Berlin, and Iran.

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