Chapter

C. Country Surveys

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1953
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Explanatory Note on Terminology

In the descriptions of exchange controls and restrictions in this section, a standardized framework has been employed as far as practicable. For this purpose, each system is described under the following headings (where applicable) : Origin and Essential Features, Exchange Rate System, Exchange Control Territory, Administration of Control, Prescription of Currency, Nonresident Accounts, Imports and Import Payments, Payments for Invisibles, Exports and Export Proceeds, Proceeds from Invisibles, Capital, Banknotes, Table of Exchange Rates, and Changes during 1952. In some of the country surveys, the sections on Exchange Control Territory, Nonresident Accounts, Banknotes, and Table of Exchange Rates have been omitted where they either do not apply or appear to have no particular significance to the country concerned. The present arrangement, which differs from those in previous years’ Reports, has been adopted with a view toward facilitating the understanding of the various exchange systems. As in previous years, an attempt has been made to employ as far as possible a consistent terminology for describing similar documents or practices, but this has not been pressed beyond the point where the use of an expression would conflict with the term used by the country concerned, so that expressions such as “exchange license” and “import license” used in these country surveys do not reflect any interpretation of the actual function of such documents. The word “license” is, however, used to cover all granting of permits or permissions, either general or individual, whether or not they are conveyed in any actual document or merely consist in conforming to certain requirements under the supervision of some authority, in circumstances where, without that conformity, the transaction or payment could not take place. The subject matter included under each of the above headings is indicated below.

Under Origin and Essential Features, a brief survey of developments in each country’s system and a short summary of the main features are provided. The summary is, however, not to be taken as indicating that the Fund necessarily regards all the features of the system as desirable or has given specific approval to them, or as implying that all the practices described are necessarily under the Fund’s jurisdiction.

Under Exchange Rate System, the par value, where one has been agreed with the Fund, and/or the official rates are given, usually in terms of the U.S. dollar, together with a reference to any other rates which may be essential parts of the country’s exchange rate system.

In the majority of cases where there is a multiple exchange rate system, further details are given in the later section, Table of Exchange Rates (see below). All rates quoted are those effective as at December 31, 1952, unless stated otherwise.

Under Exchange Control Territory, the extent of applicability of a given system of exchange controls and restrictions is explained when it covers two or more sovereign or autonomous territories and when a resident of one country is treated as a resident of another country for the purposes of exchange control.

Under Administration of Control, some indication is given of the authorities responsible for policy and administration of the controls and of the extent to which their powers are delegated for practical working purposes.

Under Prescription of Currency, the requirements affecting the selection of the currency and method of settlement for transactions with other countries are described. It will be seen that the degree to which these are significant and effective varies considerably with different countries. Where a country has concluded payments agreements with other countries or monetary areas, the terms of these agreements will usually lead to prescription of currency arrangements being applied to specified categories of payments to and from the countries concerned. For a country whose currency has international importance, the prescription of currency arrangements involve the use of its currency where it is derived from current international transactions and is held by nonresidents, whose accounts in that currency are designated geographically according to the country or monetary area of the account holder. Payments to and from such nonresident accounts are then regarded as equivalent to settlements in the currency of the country or monetary area of the nonresident whose account is concerned.

Under Nonresident Accounts, an indication is given of the manner in which the country concerned regards the accounts in its currency of persons not regarded as resident in that country, and the facilities and limitations attached to such persons’ accounts.

Under Imports and Import Payments, import licensing requirements are briefly described, and details are given of the additional requirements attached to the making of payments in respect of imports. The term “under open general license” which is applied in some countries is to be understood to indicate arrangements whereby certain imports or other international transactions are exempt from a restrictive application of licensing requirements, in contrast to an “individual license” which may, according to circumstances, be either freely given or restricted in its issue.

Under Payments for Invisibles, action in the matter of permitting payments abroad in respect of invisible transactions is briefly described. In most cases, the limitations placed on the export of foreign and domestic banknotes are given.

Under Exports and Export Proceeds, the application of export licensing, where this is operative, is indicated, together with a brief outline of the requirements attaching to the proceeds derived from exports from the country concerned. The expression “exchange receipts must be surrendered” is used to indicate that the recipient is required by the regulations to sell his foreign exchange against local currency, usually at the official rate, to the central bank or to a commercial bank or exchange dealer authorized for this purpose. In some countries there is a requirement that the proceeds be sold in a free market, but in such cases the expression “surrendered” is not used.

Under Proceeds from Invisibles, any conditions attaching to exchange derived from invisible transactions are given. For some countries, the limitations placed on the import of foreign and domestic banknotes are described.

Under Capital, a general indication of the special arrangements or limitations attaching to international receipts and payments in respect of capital items is given. Where the special arrangements attaching to foreign capital also cover the income thereon, they are dealt with under this heading rather than under the previous heading, Proceeds from Invisibles.

Under Banknotes, a heading included in only a few of the country surveys, special arrangements concerning the negotiation of foreign banknotes within the country are described briefly.

Under Table of Exchange Rates, which is provided for most countries having a multiple exchange rate structure, the exchange rates effective as at December 31, 1952 are given. For convenience, most of these tables are given in terms of local currency units per U.S. dollar. The tables include effective “mixing” rates arising from the negotiation of percentages of the total exchange at different rates, which occurs in those countries employing “mixing” systems.

Under Changes during 1952, the more significant changes taking place in a country’s restrictive system during 1952 are presented in chronological order. Where it is known that some significant event has taken place since then, this is indicated either at the end of the section or in a footnote against the item affected by the change.

Australia

Origin and Essential Features

Australia introduced import and exchange controls late in 1939. At the outset, the controls applied restrictively to imports from and payments to all countries, although with discrimination in favor of transactions with other parts of the Sterling Area. In 1946-47, imports from Sterling Area countries were exempted generally from import licensing. In March 1952, import licensing was again extended to cover imports from all countries. The Australian system of exchange control in respect of procedure, currency prescription, and policy applicable to non-Sterling Area transactions is essentially of the pattern of the United Kingdom and other Sterling Area controls. All export proceeds must be received in prescribed currencies and surrendered at official rates within a specified time, and all payments in foreign currency (including sterling) must be made through authorized banks in prescribed currencies with general or specific approval.

Exchange Rate System

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

Administration of Control

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

Prescription of Currency

The Commonwealth Bank, by notices in the Commonwealth Gazette, prescribes the types of currency which may be accepted for exports to each foreign country or monetary area. Conformity to this prescription is one of the conditions on which the Department of Trade and Customs issues the export license. For payments for imports and other outward payments, the same type of currency prescription operates through central bank directions to the authorized banks. The form of prescription in both cases follows closely that of the United Kingdom and other Sterling Area countries. All payments to and from Sterling Area countries must be made in sterling or a Sterling Area currency. Payments for imports from countries outside the Sterling Area may be made in the currency of the country of origin of the goods, in sterling through a sterling account appropriate for that country, or in Australian currency through an account with a bank in Australia of a bank in the country of origin of the goods. For exports, sterling or Australian currency through appropriate accounts (as for imports) is always acceptable, but provisions regarding the acceptance of foreign currencies vary.

Nonresident Accounts

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

Payment in sterling to an appropriate nonresident account in the United Kingdom is always an alternative method of payment open to a payee, and this would, in terms of the United Kingdom’s payments arrangements, ensure the payee’s ability to acquire his own currency if desired. Where, however, amounts are left indefinitely in Australia on nonresident account, they may be regarded as capital if transfer should be sought.

Imports and Import Payments

Apart from minor exemptions, the importation of all goods is prohibited except under import license issued by the Department of Trade and Customs. All import licenses are specific in respect of country of origin of the goods. Import licenses issued for imports from the dollar area and Japan are confined to items regarded as essential, especially raw materials, industrial supplies, and capital equipment. Licenses for imports from all other countries are issued mainly on percentage quotas based on imports in the fiscal year 1950-51.1

In respect of imports subject to license, the provision of foreign exchange or the crediting of Australian currency to a nonresident account is automatically permitted following the issue of the import license, provided the prescription of currency requirements (see above) are observed.

Payments for Invisibles

All payments in respect of invisibles come under exchange control, but approval is freely given for most items and the control operates largely to prevent unauthorized capital transfers. Restrictions apply, however, to allocations of foreign exchange for travel expenditure, to earnings of U.S. film companies and of visiting U.S. entertainers, and to dollar expenditure for such items as advertising, insurance of local risks, and newspaper representation abroad. For royalties and service charges due in dollars, approval for transfer is given provided the contract giving rise to the commitment was entered into prior to control or subsequently with exchange control permission. Limits are placed on noncontractual transfers, such as donations, remittances for family maintenance, and movements of emigrants’ funds. The treatment of such applications is, however, relatively liberal, and any limitations may be regarded as complementary to the control over capital movements.

Exports and Export Proceeds

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

Proceeds from Invisibles

For U.S. dollar accruals from invisible items, offers to sell must be made within specified periods. Currency holdings and securities in foreign currencies (except Sterling Area currencies) must be reported and may be disposed of only with permission, but their surrender is not compulsory.

Capital

All transfers of capital from Australia require specific exchange control approval. Approval is freely granted for the repatriation of nonspeculative funds owned by Sterling Area residents. However, no advance commitments are given in such cases.

Transfers of capital to countries outside the Sterling Area are not allowed other than in very exceptional cases; nonresident transfers are treated on their individual merits, sympathetic consideration being given to cases of personal hardship, special cases of business liquidation, etc.

There are no restrictions on the receipt of capital funds from abroad, except that residents borrowing foreign currency must obtain prior exchange control approval.

Changes during 1952

March 6

The authority of authorized banks to approve applications for foreign exchange for travel was reduced, and their authority relative to the transfer of emigrants’ funds was withdrawn.

March 8

Import licensing was extended to cover imports from all countries. Import licenses would be issued on percentage quotas based on previous imports in the base year 1950-51 for imports not previously covered by licensing requirements. The basis for issuing licenses for imports from hard currency countries remained unchanged.

Austria1

Origin and Essential Features

An exchange control system was established in Austria on October 9, 1931. It was reintroduced after the war, on July 25, 1946. The exchange rate structure was revised November 25, 1949, and modified October 6, 1950.

Restrictions are exercised through import licensing and through exchange licensing applied to imports free of import license and to payments for invisibles and capital. Most foreign exchange receipts must be surrendered. Some exports require licenses.

Exchange Rate System1

No par value for the schilling has been established with the Fund. There is a multiple exchange rate system consisting of two sets of official rates: (1) S 21.30 buying, S 21.42 selling, per US$1, applicable to merchandise transactions, incidental expenses, and certain invisibles, such as processing and finishing charges, settlements by railways and transport enterprises, film rights and royalties, and payments for films; (2) premium rates of S 25.87 buying, S 26.13 selling, per US$1, applicable to the purchase and sale of exchange in connection with transactions other than those listed above, e.g., travel and capital transfers. Other effective import and export rates arise from “linked” transactions and compensation transactions (see section on Exports and Export Proceeds, below).

Administration of Control

The exchange control administration is operated by the Austrian National Bank with authorized banks acting as agents in the technical execution of the provisions of the exchange control law.

Trade controls are conducted by the Central Export and Import Office, subordinated to the Federal Ministry of Trade and Reconstruction, in accordance with the decisions of the Economic Directorate. Exchange control and trade control authorities closely cooperate with each other to coordinate control policies in the field of international economic transactions.

Prescription of Currency

The method of settlement for exchange transactions is prescribed for practically all receipts or payments by means of exchange licenses issued by the exchange control authorities, and by the terms of bilateral payments agreements and arrangements.

Two types of methods for settling international payments arise from bilateral payments agreements:

  • Bilateral payments are effected through an account of the National Bank with a corresponding foreign central bank and, in certain cases, through an account of a foreign central bank with the National Bank, in U.S. dollars as the currency of account. This method is applicable to Austria’s settlements with Argentina, Brazil, Bulgaria, Czechoslovakia, Greece, Hungary, Iceland, Italy, Poland, Portugal, Rumania, Turkey, Uruguay, and Yugoslavia.

  • Bilateral settlements are effected through the account of the National Bank with a corresponding foreign central bank in the currency of the latter. This method is applicable to Austria’s settlements with Belgium, Canada, Denmark, France, Federal Republic of Germany, Netherlands, Norway, Sweden, Switzerland, and United Kingdom (including all other territories of the Sterling Area).

Payments can also be effected through nonresident accounts which have a limited significance in the Austrian exchange control system.

Imports and Import Payments

Specified goods included in a published list and goods imported through “linked” and compensation transactions (see section on Exports and Export Proceeds, below) are subject to individual import licenses. Some 310 tariff numbers (out of a total of 558) are listed as goods subject to control, the remaining numbers being partly or entirely free of import license.

The issuance of import licenses is governed, among other factors, by the following considerations: (1) the provisions of bilateral trade agreements and the efforts to fulfill quotas established in accordance with such agreements; (2) needs of the Austrian economy; and (3) available exchange reserves.

Deposits can be required up to 15 per cent of the invoice value of goods to be imported.

The import license constitutes a basis for granting the exchange license within two business days after the issuance of an import license. The exchange is made available immediately upon the presentation of an exchange license.

Payments on account of imports free of import licenses can be effected only upon the presentation of an exchange license which is issued by the National Bank according to exchange availability.

Payments for Invisibles

Most payments arising from invisible transactions are subject to individual licensing by the National Bank. Treatment accorded to such payments under bilateral payments agreements is based on reciprocity. For payments connected with the international transportation of goods, travel, facilitation of trade and services, registration of patents, subscriptions to newspapers, etc., licenses are granted according to the merits of the case, with other considerations, such as available exchange and reciprocal equal treatment on the part of other countries, being taken into account. In other cases, the approval is given only if a license to conclude the transaction which gave rise to the payment (e.g., repayment of commercial credit) has been granted, or a license is issued only exceptionally (e.g., life insurance premiums, investment income, emigrants’ funds for own use, legacies, repatriation of investment capital).

Persons traveling abroad may take with them Austrian banknotes and coins up to S 1,000. A maximum of S 30 in those currencies whose rates are quoted by the National Bank may also be taken, but residents must deduct this from the maximum of S 1,000.

Exports and Export Proceeds

Specified goods and goods exported through “linked”: and compensation transactions (see below) are subject to individual licensing. There are some 300 tariff numbers (out of a total of 558) which are partly or entirely included in the list of exports subject to individual licensing.

The issuance of export licenses is governed also by the considerations indicated in the second paragraph, points (1) and (2), of the section on Imports and Import Payments, above.

Export proceeds have to be surrendered within eight days from the date of their collection. A number of Austrian exports must be sold against letters of credit.

Foreign exchange proceeds accruing to residents through a clearing mechanism are normally paid to them without delay.

There are two noteworthy exceptions to the general obligation to surrender export proceeds:

  • “Linked” transactions,2 under which the exporter receives on an ad hoc basis an individual license so that a part of his export proceeds (within limits of 25-90 per cent of the total), after having been surrendered to the National Bank, can be repurchased for individually licensed imports effected by the exporter himself or by another resident for the licensed importation of specified commodities. “Linked” transactions are limited to 10 per cent of the total export value, and the effective export rate is not to exceed S 26 per US$1.

  • Compensation transactions which consist of bartering an export commodity against an import commodity. Such transactions are subject to individual licensing.

Proceeds from Invisibles

All exchange receipts from invisibles have to be surrendered within eight days from the date of their collection. Certain institutions, such as insurance companies, patent offices, etc., are granted open licenses to dispose of their proceeds. Persons coming from abroad can bring in Austrian banknotes and coins up to S 1,000.

Capital

New investments by nonresidents are subject to individual licensing. Applications for the transfer of capital and proceeds arising from new investments are dealt with on conditions determined for each case. The transfer of income and capital in respect of “old” investments is not permitted; proceeds accruing from “old” investments in any form are usually credited to blocked accounts, balances on which may be used within limits for specified personal expenses in Austria of an account holder and his family and for certain other specified transactions within Austria.

Table of Exchange Rates

(as at December 31, 1952)3

(schillings per U.S. dollar)
BuyingSelling
21.3021.42
Exports and specified commercial invisibles.Imports and specified commercial invisibles.
25.8726.13
Other invisibles and capital.Other invisibles and capital.

Changes during 1952

No significant changes took place during 1952.

Belgium-Luxembourg

Origin and Essential Features

Exchange restrictions were introduced in Belgium on May 10, 1940. During the war, restrictions were applied separately in Belgium and Luxembourg. Under the present system, established in 1944-45, the Belgium-Luxembourg Economic Union constitutes a single exchange control authority, since Luxembourg, in agreement with Belgium, introduces and applies in Luxembourg the same control legislation applied in Belgium; Belgian and Luxembourg residents have the same exchange rights and obligations in both countries. Beginning in September 1951, several new restrictive measures were introduced. Prior to that date, the exchange control system was regarded as liberal.

All incoming and outgoing payments must be made through authorized banks, or in certain cases through authorized stockbrokers. Restrictions are exercised through authorization requirements for imports and for nontrade payments. Exchange is granted for such payments only after authorization has been obtained from authorized banks or, where required, from the central exchange control authority. Most exports require licenses. Foreign exchange in certain currencies from commercial transactions must be surrendered; proceeds in these currencies from other transactions may be retained, but the disposal of such exchange requires a license. Foreign currencies which need not be surrendered can be utilized only on the basis of a general or special authorization; the surrender of such currencies to authorized banks is likewise subject to authorization.

Special conditions exist with respect to payments to EPU countries,1 their monetary areas, Bulgaria, Finland, Hungary, Poland, Rumania, U.S.S.R., and Yugoslavia. Residents are authorized to make payments to these countries without limitations. The prescription of currency is an integral part of the restrictive system of the Belgium-Luxembourg Economic Union, seeking to limit payments in hard currencies to imports and services which require payment in such currencies and to facilitate the reduction of soft currency surpluses.

Exchange Rate System

The par values are Belgian Francs and Luxembourg Francs 50 = US$1. Buying and selling rates for Canadian dollars, French francs, Portuguese escudos, pounds sterling, Swiss francs, and U.S. dollars 2 are determined through the exchange market in which the banks may operate to effect authorized transactions; these rates are operative within official limits corresponding to Bfr 49.50 and Bfr 50.50 per US$1. Fixed buying and selling rates are established for other officially quoted currencies. The currencies of EPU countries may be negotiated in a free market at fluctuating rates, but the use of exchange thus acquired is limited to a few invisible transactions.

Exchange Control Territory

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

Administration of Control

The ultimate responsibility for the administration of exchange control in the Belgium-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, or in certain cases to authorized stockbrokers, but in special cases authorized banks must submit requests for authorization to the central authority.

Certain imports and exports require licenses issued by the trade authorities, but licenses must be stamped by an authorized bank in order to ensure that regulations are complied with before import or export can be effected and the payment made. With regard to certain dollar imports which are not subject-to import licensing, the central exchange control authority will seek the advice of the trade authorities before authorizing a bank to permit payment (but see also footnote 5).

Prescription of Currency

The regulations detail the currency which is appropriate for payment of imports and invisible transactions. In the main, payment must be made by transferring Belgian or Luxembourg francs to a nonresident account related to the country of residence of the beneficiary; or (1) in the currency of the country of residence of the beneficiary, if he resides in Czechoslovakia or an EPU country (except Austria, Greece, and Turkey); (2) in U.S. or Canadian dollars, if he resides in the “dollar area”;3 or (3) in sterling, if he resides in the Anglo-Egyptian Sudan, Egypt, Eritrea, Ethiopia, Iran, Lebanon, Syria, or Thailand.

Similar principles covering the prescription of currency apply to inward payments. In addition, payment can always be received in U.S. or Canadian dollars. When imported goods are re-exported from Belgium or Luxembourg, the currency received for the export must be as “hard” as that paid out for the importation of the goods; and when Belgian or Luxembourg exports are to be subsequently re-exported from the country of original destination, the currency received must be as “hard” as the currency received by the re-exporting country or appropriate to the country of ultimate destination. Exceptions to these general principles require individual licenses.

Nonresident Accounts

Belgian or Luxembourg franc accounts of nonresidents may be classified into three groups:

1. Nonresident accounts kept with authorized banks for account holders residing in countries other than Germany, Italy, Japan, and Spain are called foreign B-accounts and are designated according to the country or monetary area appropriate to the residence of the account holder.

Credits to foreign B-accounts require general or special authorization from the exchange control authority; the accounts cannot be credited with banknotes or coin. Only the foreign B-accounts of banks located in EPU countries may be credited for payments for goods and services from those countries.

Foreign B-accounts can be debited, without authorization from the exchange control authority, for all payments to residents of the Belgian Monetary Area, except for those related to EPU countries and for payments related to the purchase from residents of domestic or foreign securities. The latter do not require authorization if the foreign B-account relates to a resident of Canada or the United States. Authorized banks must conform with special requirements in order to be able to make a payment in Belgian or Luxembourg francs to the debit of a foreign B-account related to one of the EPU countries. Foreign B-accounts can always be utilized for payments of subscriptions to new shares issued by Belgian, Luxembourg, or Congolese companies in Belgian, Luxembourg, or Congolese francs.

Foreign B-accounts can be debited for payments to other foreign B-accounts of account holders who reside in the same country or monetary area. Foreign B-accounts of account holders resident in Canada and the United States can be debited without special authorization for payments to foreign B-accounts of account holders residing in any other country except Switzerland. Foreign B-accounts of account holders residing in countries (or monetary areas) other than Argentina, Austria, Brazil, Bulgaria, Chile, Czechoslovakia, Denmark, Egypt, Finland, French Monetary Area, Greece, Hungary, Lebanon, Netherlands Monetary Area, Norway, Poland, Portuguese Monetary Area, Rumania, Sweden, Switzerland, Syria, Turkey, U.S.S.R., Uruguay, Yugoslavia, and the Sterling Area can be debited without special authorization for payments to foreign B-accounts of account holders residing in Andorra, Canada, Tangier, United States, or in one of the countries or monetary areas mentioned above, except Brazil. Foreign B-accounts can be debited for payments to nonresidents who are traveling in Belgium-Luxembourg to a maximum of Bfr 10,000 per day. This limit is reduced to a maximum of Bfr 2,000 per day4 if the accounts to be debited are in the names of banks established in EPU countries. There is no limit to the amount per day that can be made available for this purpose from foreign B-accounts of account holders residing in Canada and the United States.

Convertibility of balances on foreign B-accounts into the currency of the account holder is provided for account holders who reside in Canada, Czechoslovakia, Denmark, France, Netherlands, Norway, Portugal, Sweden, Switzerland, United States, and the Sterling Area.

2. Nonresident accounts which are kept with authorized banks for account holders residing in Germany, Italy, Japan, and Spain are subject to special authorization for all entries, unless the account holder is a Belgian or Luxembourg national or a bank established in the Federal Republic of Germany or in Italy.

3. Emigrants’ nonresident accounts are those of former residents in Belgium-Luxembourg who established their principal residence abroad after September 1, 1949. These accounts can be debited or credited only on special authorization.

Imports and Import Payments

Most imports are free of import license, but an import declaration must be filled out for them. Certain imports, however, from any country require import licenses which are issued by the trade control authorities. The goods which need a license are listed by an intergovernmental Belgium-Luxembourg commission.

Both import licenses and import declarations must be stamped by an authorized bank before exchange can be made available and before importation can take place. The authorized bank is required to make certain that payment will be made by one of the methods laid down in the regulations (see section on Prescription of Currency, above). Various other requirements of the regulations must also be fulfilled before the documents can be stamped. In cases where these requirements are not fulfilled, the authorized bank may request the central exchange control authority for special permission to stamp the document. For a number of imports subject to the import declaration procedure and payable in Canadian or U.S. dollars or in Belgian or Luxembourg francs to the credit of a nonresident account related to Canada or the United States, approval of the central exchange control authority is required before the bank can affix its stamp,5 and the central exchange control authority may consult the trade control authorities before giving its approval.

Payments for Invisibles

Many payments for invisible transactions require licenses, but there is general allowance for normal invisible payments, subject to limitations as to maximum amounts for payments to certain countries. Invisible payments to EPU countries, Bulgaria, Hungary, Poland, Rumania, U.S.S.R., and Yugoslavia may be made without limitation as to amount. The export of domestic and foreign banknotes by travelers is allowed up to Bfr 25,000, but nonresident travelers may export more than Bfr 25,000 in foreign banknotes if they can show that they brought in an amount equal to or higher than the amount which they want to export.

Exports and Export Proceeds

Except for minor cases where the goods have a limited value, all exports require either an export license issued by the trade control authorities or an export declaration which is filled out by the exporter. An intergovernmental Belgium-Luxembourg commission lists the goods which need an export license. Before the export can take place, the license or the declaration must be stamped by an authorized bank, in order to ensure that the proceeds will be received in accordance with the regulations (see section on Prescription of Currency, above).

Export proceeds in other than EPU currencies have to be surrendered to an authorized bank. The recipient of export proceeds of more than Bfr 20,000 in EPU currencies sold to authorized banks or debited to a nonresident account related to an EPU country must pay 4, 6, 8, 12, 16, or 20 per cent (according to the nature of the merchandise) of the proceeds into a special account to be opened in his name at an authorized bank which will not release the funds for six months. The holder of such an account may discount it with an authorized bank during the six-month period or use it as collateral for a loan. That part of the export proceeds in an EPU currency which is not sold to an authorized bank may be retained by the exporter, and he may sell it in a free market to other residents who may use it for a few specified invisible payments (e.g., tourism and certain capital items), or may use it himself for similar payments.

Proceeds from Invisibles

Only exchange proceeds from commercial transactions in the currencies of non-EPU countries must be surrendered. All other exchange proceeds may be retained, but, with the exception of some payments in EPU currencies, their disposal requires a license. There is no restriction on the amount of foreign or domestic banknotes which travelers may bring into Belgium or Luxembourg.

Capital

Residents desiring to import foreign capital must consult the exchange control authority for authorization. As a general rule, the inflow of foreign capital for investment purposes is authorized. Capital transfers from EPU countries are, as a general rule, allowed only when they are effected outside the channels instituted by payments agreements, e.g., through the utilization of the proceeds of the sale of Belgian, Luxembourg, or colonial securities or through a transfer of convertible currencies. When, by exception, such transfers are allowed through current channels, an amount equal to 32 per cent of the total must be held for six months in a special account, provided that the amount received is not less than Bfr 1,000. The same rule applies to transfers of capital incomes.

If a resident has complied with certain formalities, he may use for current payments and for investments abroad his foreign exchange receipts derived from capital. However, such receipts in EPU currencies may be used only for investments and a few specified invisible payments.

Capital transfers to EPU countries, Bulgaria, Hungary, Poland, Rumania, U.S.S.R., and Yugoslavia can be made without restrictions. Capital transfers to other countries require individual authorization. Such authorization is usually granted when an economic interest is the basis for the transfer, or if the transfer is aimed at maintaining the percentage of the investment in companies abroad when these companies increase their capital. The exchange control authority may guarantee the repatriation of foreign capital invested in Belgium-Luxembourg.

Banknotes

Authorized banks and other exchange dealers are permitted to buy and sell foreign banknotes at free market rates to and from residents and travelers. Residents holding foreign exchange assets, other than those which have to be surrendered to an authorized bank, are authorized to repatriate these assets through authorized banks in the form of foreign banknotes. Banknotes cannot be used to settle trade transactions or be paid into nonresident accounts. Authorized dealers are not allowed to obtain foreign banknotes by crediting customers in foreign currencies or by debiting their foreign correspondents in domestic or foreign currencies.

Changes during 1952

January 9

The Deutsche Mark was added to the list of currencies in which capital could be transferred through authorized banks without special authorization from the exchange control authority.

January 14

The limit of negotiation by authorized banks, without authorization from the exchange control authority, of travelers’ checks in EPU currencies or checks drawn on foreign B-accounts of EPU countries was reduced from Bfr 10,000 per day to a maximum of Bfr 2,000 per day.

January 16

The validity of export declarations related to exports for which payment is made in Belgian or Luxembourg francs by debiting a foreign B-account related to one of the EPU countries, or in one of the EPU currencies, was reduced from 180 days to 30 days.

January 21

The authorized banks were allowed to effect permitted spot and forward operations in pounds sterling, French francs, Italian lire, and Swiss francs with authorized banks in the country of the currency concerned.

January 23

The percentage of exchange receipts exceeding Bfr 20,000 derived from exports to EPU countries which must be held for six months in special blocked accounts was altered from 5 per cent for all exports to 5, 7.5, or 10 per cent, according to the classification of the goods exported.

January 24

The National Bank of Belgium ceased to intervene in the forward market for U.S. and Canadian dollars.

February 23

Authorized banks were permitted to deal with payments derived from export and transit transactions with EPU countries without reference to the central exchange control authority.

March 22

The percentages of exchange receipts exceeding Bfr 20,000 derived from exports to EPU countries which must be held for six months in special blocked accounts were altered to 5, 7.5, 10, 15, 20, or 25 per cent, according to the classification of the goods exported (see January 23, above). In addition, 40 per cent of exchange receipts exceeding Bfr 1,000 derived from transfers of capital or capital income in Belgian or Luxembourg francs debited to a foreign B-account of a resident of an EPU country or received in the currency of an EPU country had likewise to be held for six months in special blocked accounts. However, holders of such blocked accounts were permitted to discount them with an authorized bank or to use the deposit in the account as collateral for a loan from an authorized bank or other lender.

June 3

Authorized banks were allowed to make all payments, without limitation as to amount, to EPU countries, Bulgaria, Finland, Hungary, Poland, Rumania, U.S.S.R., and Yugoslavia.

July 1

Exchange dealers and brokers authorized to effect certain transactions in securities and coupons could participate in the making of payments to EPU countries, Bulgaria, Finland, Hungary, Poland, Rumania, U.S.S.R., and Yugoslavia under the same conditions as authorized banks, and they were permitted to effect operations in U.S. and Canadian dollars within the limits of their professional activities.

The authority to exercise exchange control in the Belgian Congo and Ruanda-Urundi was transferred from the Bank of the Belgian Congo to the newly created Central Bank of the Belgian Congo and Ruanda-Urundi.

July 3

The rate of interest on advances on Belgian Treasury certificates which can be obtained by authorized banks for the mobilization of the funds in special blocked accounts (see March 22, above) was lowered from 5.5 per cent to 3.0 per cent.

July 4

The limit of negotiation by authorized banks, without authorization from the exchange control authority, of travel funds drawn on foreign B-accounts of EPU countries (see January 14, above) was extended from Bfr 2,000 per day to a maximum of Bfr 10,000 per day, provided the account is opened in the name of a nonresident who does not have the status of a bank.

July 29

The percentages of exchange receipts exceeding Bfr 20,000 derived from exports to EPU countries which must be held for six months in special blocked accounts were altered to 4, 6, 8, 12, 16, or 20 per cent, according to the classification of the goods exported (see March 22, above); and the percentage of exchange receipts derived from transfers of capital or capital income subject to the same provision was reduced from 40 to 32 per cent.

November 18

Residents holding foreign currency assets, other than those which have to be surrendered to an authorized bank, were authorized to repatriate their assets through authorized banks in the form of foreign banknotes.

December 29

Authorized banks were permitted to utilize for banking operations foreign exchange balances held on behalf of their* customers insofar as such operations were compatible with their obligations to their customers.

Bolivia1

Origin and Essential Features

Control over exchange transactions was introduced in Bolivia in 1932 and has been amended at various times. In June 1937, the compulsory surrender of exchange from exports was introduced by a decree which also gave a priority criterion for the sale of exchange by the Banco Central de Bolivia and contained a list of prohibited exports. The last major revision, introduced on April 8, 1950, produced a new set of exchange rates for the various specified types of transactions.

The restrictive system is based on a multiple exchange practice and quantitative restrictions on imports. Various exchange rates and taxes are established for different categories of transactions. The quantitative restrictions are applied through individual licenses which are granted on the basis of exchange “availabilities” as indicated in the annual exchange budget prepared by the Central Bank and the Ministry of Finance.

Private exports are Subject to license. Exports of several minerals are effected by the Banco Minero de Bolivia which, by law, buys them from private companies. All export receipts must be surrendered at the established rates.

Exchange Rate System1

The par value is Bolivianos 60 = US$1. There are four buying rates of Bs 60, Bs 100, Bs 130, and Bs 245, per US$1, each of which applies to a specified category of transactions. The rates of Bs 60 and Bs 100 per US$1 are also “mixed” in given proportions for the exchange deriving from the exports of some mineral products.

There-are five selling rates of Bs 60.60, Bs 101, Bs 130, Bs 190, and Bs 247 per US$1, which are applied to specified transactions. In addition, a tax of Bs 3 per US$1 is added to the rates of Bs 60.60 and Bs 101, giving two “effective” rates which apply to certain transactions indicated in the Table of Exchange Rates, below; essential foodstuffs are excluded from this extra charge.

Administration of Control

The control system is administered by the Central Bank in conjunction with the Central Committee on Foreign Trade. The former, together with the Ministry of Finance, prepares annually an exchange budget for various categories of import commodities, which is taken by the latter as the basis for granting import licenses. The Ministry of Finance grants export licenses.

All sales of exchange are made through the Central Bank or the authorized banks.

Foreign transactions involving the export of minerals are effected only by the Banco Minero or by the Bolivian Mining Corporation.

Prescription of Currency

Payments with payments agreement countries are made in the currencies and according to the methods laid down in the exchange control regulations for each of the countries involved. Payments for transactions with other countries are usually made in U.S. dollars.

Imports and Import Payments

Within the limits of the exchange available, as indicated by the exchange budget, the Central Committee on Foreign Trade grants import licenses for various categories of commodities and for various currencies. Global quotas are established for categories of commodities and for individual commodities, and are distributed among the various importers on the basis of the characteristics of the transactions for which the license is applied.

For imports to be paid for with an importer’s own exchange (divisas propias), the application for an import license presented to the Central Committee must be accompanied by a corresponding foreign exchange draft drawn to the order of the Central Bank. When an import license approved with official exchange is presented, the Banking Department of the Central Bank and the authorized banks grant the exchange in the currency and amount therein specified, after the merchandise has arrived in the Bolivian customs.

Payments for imports of certain nonessential items can be effected against the surrender to the Central Bank of freely negotiable dollar certificates issued to domestic gold producers against the surrender of gold to the Banco Minero.

Payments for Invisibles

Payments on account of invisibles are subject to an exchange permit. Payments for invisibles incidental to import transactions are treated in the same way as the corresponding imports. Purchases of exchange for government payments and repayments of registered capital are effected at the rate of Bs 60.60 per US$1. The expenses of students abroad are effected at the rate of Bs 101 per US$1; other travel expenses are effected at the free rate of Bs 247 per US$1, except travel because of cancer or other illnesses requiring treatment abroad, for which payments are effected at the differential rate of Bs 100 per US$1.

Exports and Export Proceeds

The exportation of a number of specified commodities which are considered necessary to the national economy is prohibited. All other exports are subject to license. The export of minerals produced by small and medium-sized mining firms is effected through the Banco Minero. The Bolivian Mining Corporation is responsible for exports of the large mining companies; the Banco Minero, for exports of medium-sized and small mining companies.

All exchange receipts from exports except those made by the Banco Minero must be surrendered through the authorized banks within 90 days from the issuance of the export license. The Banco Minero surrenders the exchange derived from exports of minerals to the Central Bank 30 days after the exportation of the materials.

Proceeds from Invisibles

Exchange from current invisibles must be surrendered at the Bs 245 rate.

Capital

Residents are required to surrender exchange receipts on account of capital at the Bs 245 rate. Payments abroad by residents may be authorized at the discretion of the Central Bank at the Bs 247 rate.

Investment of foreign capital must be registered and surrendered at the Bs 60 rate in order to obtain a transfer guarantee. Under such guarantee, earnings up to 15 per cent of the capital per annum can be remitted abroad at the Bs 60.60 rate, and amortization quotas up to 30 per cent of the capital can be remitted abroad at that rate.

Nonregistered capital transactions are effected at the Bs 245 (incoming) and Bs 247 (outgoing) rates and are subject to administrative approval by the Central Bank.

Table of Exchange Rates

(as at December 31, 1952)2

(bolivianos per U.S. dollar)
BuyingSelling
60.0060.60
Tin export proceeds. Percentages of other exports. Registered capital.Government payments. Essential foodstuffs imported by the Ministry of Economy. Registered capital.
63.60(Bs 60.60 Rate plus Bs 3 Taxes)
Essential imports other than essential foodstuffs.
100.00(Differential Rate)101.00(Differential Rate)
Required percentages of non-tin exports.Other authorized invisibles.
104.00(Bs 101 Rate plus Bs 3 Taxes)
Other authorized imports.
130.00130.00
Exports of certain minerals effected through the Banco Minero.Certain specified imports effected through the Banco Minero.
190.00190.00
Variable percentages of exports of small mining companies of certain minerals necessitating a subsidy.Imports of specified luxury items effected through the Banco Minero.
245,00 (“Free” Market Rate)3247.00(“Free” Market Rate)3
Invisibles. Nonregistered capital.Certain authorized invisibles, Nonregistered capital.
Note: The above rates for non-tin exports are not usually effective buying rates. The effective buying rates for these export proceeds are determined by the percentages at which particular proceeds are surrendered at the above rates.
Note: The above rates for non-tin exports are not usually effective buying rates. The effective buying rates for these export proceeds are determined by the percentages at which particular proceeds are surrendered at the above rates.

Changes during 1952

May 26

Imports were divided into four categories to which the exchange rates of Bs 60, Bs 100, Bs 130, and Bs 190 applied. This change implied, among other things, that many items formerly prohibited could be imported by using so-called “personal exchange” (divisas propias).

June 2

It was decreed (Decree No. 03072) that all mineral production of large and medium-sized mining companies should be sold to the Banco Minero, which would take care of their exportation and surrender the corresponding exchange to the Central Bank.

August 19

The Central Bank began quoting a “free” market rate for invisibles and nonregistered capital. The rate was originally fixed at Bs 67, and later raised to Bs 245 per US$1.

October 31

The Bolivian Mining Corporation was authorized (Decree No. 3059) to export the minerals produced in the nationalized mining properties. The Corporation must surrender 100 per cent of its export proceeds to the Central Bank, which in turn grants the Corporation the exchange necessary for its operations, conforming to the decrees regulating the surrender of the exchange proceeds of exports.

December 9

A gold certificate system was established under which the Banco Minero purchases gold from producers and issues the seller a dollar certificate which he can sell freely to an importer of a list of nonessential imports, the Central Bank redeeming the certificate.

Brazil1

Origin and Essential Features

Control over exchange transactions was introduced in Brazil in 1931 and has been amended at various times. In October 1949 practically all imports and exports were made subject to official authorization.

The exchange system depends on the application of quantitative restrictions to trade and exchange transactions and an exchange tax of 8 per cent applied to most payments.* Both imports and payments for imports and invisibles are subject to license.* The import licenses and the exchange licenses are granted according to different classifications of transactions which establish their priority.* There are some delays in making exchange in certain currencies available to holders of exchange licenses. Specified exports are subject to license and all export proceeds must be surrendered.* For the purpose of checking the declared price and of assuring the surrender of exchange, all exports are subject to a shipping permit.*

Exchange Rate System

The par value is Cruzeiros 18.50 = US$1. The official buying rate is Cr$18.38 per US$1, while for specified transactions an official selling rate of Cr$18.72 per US$1 is applied. For all other transactions an 8 per cent exchange tax applies, making an effective rate of Cr$20.2176 per US$1 (see Table of Exchange Rates, below).*

Administration of Control

The control system is operated by the Bank of Brazil. The Export-Import Department of the Bank issues import and export licenses. The Advisory Commission on Foreign Trade (COCIE) establishes the general criteria for licensing specific products. Imports of fuel, wheat, and newsprint are subject to specific treatment by specialized agencies for the determination of over-all quotas and the currency of payment. Government imports are authorized directly by the President of the Republic. The Exchange Department of the Bank has authority over most incoming and all outgoing payments and issues exchange licenses.* Government payments are subject to authorization, but the Exchange Department has no authority to restrict them. All sales and purchases of exchange pass through banks authorized for this purpose.

Prescription of Currency

Prescription of currency is enforced in relation to the currency of the country of origin (not of embarkation) of the imports, and of the country of final destination of the exports. There is, however, a specific agreement for re-exportation by Germany of certain Brazilian exports. Payments with payments agreement countries are effected through the respective accounts, which usually are maintained in “accounting” dollars or in Brazilian cruzeiros; payments with the Sterling Area are effected through Brazilian sterling accounts. Payments with countries with which Brazil has no payments agreements are usually made in U.S. dollars or other freely convertible currencies.

Imports and Import Payments

Except for a few specified items, all private imports into Brazil require an import license which is a prerequisite for obtaining an exchange license. Those exempted from prior import license require a prior “exchange quota” permit. An additional exchange license is necessary for all private import payments.* However, the presentation of an import license or of an “exchange quota” permit does not guarantee that the exchange license will be issued. The Export-Import and the Exchange Departments of the Bank of Brazil follow different priority schedules and use different over-all limits for the issuance of the various types of import and exchange licenses.*

For the purpose of licensing, imports can be divided into the following categories:

  • Specified commodities for which a prior import license is not required: government imports; imports of foreign diplomats; tools, capital goods, and luggage belonging to immigrants and tourists; and commodities classified as “superessential”, which, however, are subject to exchange licensing (quota de cambio).

  • Imports of wheat, fuel, and newsprint, which are subject to a special system of licensing.

  • Commodities or groups of commodities subject to prior import licensing and for which it is deemed desirable to secure a regular supply; a high priority is attached to the granting of import licenses for these commodities.

  • All remaining commodities, for which import licenses are granted with the lowest priority.

  • Imports licensed “without use of exchange”, which include imports of automobiles by citizens who have remained abroad more than six months; imports of capital goods, and sometimes of consumers’ goods, by foreign firms as investments; and imports of machinery and parts in substitution of imports previously authorized with use of exchange.

  • “Vinculadas” (private compensation) operations: The foreign exchange proceeds of certain exports which encounter marketing difficulties abroad may be used, either in whole or in part, for the importation of goods, without their being, in effect, surrendered or subject to the allocation procedure of the Exchange Department.*

The Export-Import Department, in considering import license applications, also takes into account whether convertible 2 or inconvertible currencies will be required, according to their current availability to Brazil. For this purpose a semiannual import budget was prepared by the Export-Import Department in June 1952, which took into account the availabilities provided for the payment of imports in the foreign exchange budget prepared by the Exchange Department for the same period.

For the purpose of licensing import payments as well as other payments, several categories exist. Hard currency exchange availabilities are allocated to the different categories in different percentages, according to the priority. For soft currency payments, there is no fixed percentage distribution among the different categories. The categories are as follows:

(a)Government payments
Wheat
Release of exchange licenses according to schedules established by specialized bodies dealing with the licensing of these products.
Fuel
Newsprint
(b) PreferentialEssential imports
(c) FirstAll other authorized imports plus certain commissions on trade transactions not included in the preferential categories.*
(d) SecondFinancial remittances only, including service of private debts, remittances of profits and dividends, amortization, royalties, etc.*
(e) ThirdAll other permissible remittances.*

The system of allocating exchange availabilities has resulted in the accumulation of a large volume of pending exchange license applications. The period of delay in releasing exchange licenses varies according to the currency required and the category of payment. During 1952, the delays for most categories were of several months’ duration for nearly all currencies.

Payments for Invisibles

All payments and remittances for invisible transactions require an exchange license.* The priority for payments of expenses incidental to trade transactions is determined by the corresponding import. Among other payments and remittances, a priority is granted to transfers of profits, interest, and dividends on registered investment (see section on Capital, below). The granting of exchange at the official rate for remittances abroad for personal debts, pensions, travel, charity, noncommercial services, and medical treatment is temporarily suspended.* Remittances for maintenance are limited to a specific monthly amount.* The exportation of Brazilian banknotes is prohibited. The re-export of foreign banknotes brought in by travelers requires a license.*

Exports and Export Proceeds

Exports of the following commodities (representing the bulk of Brazil’s export trade), when made against the receipt of convertible currencies, are exempt from licensing: coffee, cotton, tobacco, waxes, tea, cocoa, hides and skins, fresh fruits, cotton, woolen and silk yarns, other agricultural products, precious stones, and some specified industrial products. Other exports require export licenses, which are granted without limitation, except when the goods are declared in short domestic supply or when obligations arising from international agreements must be fulfilled.

Export proceeds must be surrendered through an authorized bank with the exception of those arising from “vinculadas” transactions.* Shipping permits are issued by the Exchange Department of the Bank of Brazil after the declared export price and conformity to the exchange surrender requirements have been checked.

Exporters are required to invest the cruzeiro equivalent of 20 per cent of their export proceeds in negotiable Treasury bills which pay 3 per cent interest per annum and mature in 120 days.

Proceeds from Invisibles

Exchange proceeds from invisibles must be surrendered, but exchange earnings from freight, insurance, and commissions may be kept in moderate amounts with authorized banks for payments on similar transactions. The importation of Brazilian banknotes is prohibited. Foreign banknotes may be imported subject to declaration.*

Capital*

Foreign investments in Brazil, including loans, must be registered with the Special Registry of the Exchange Department of the Bank of Brazil in order to acquire the right of transfer of capital, amortization, and earnings on such investments, and with the Superintendency of Currency and Credit in order to obtain exchange priority in the remittance of amortization and earnings.*

Interest, dividends, and profits on registered capital may be transferred, up to a maximum of 8 per cent annually, but this percentage may be increased by the authorities for particular investments; transfers above the 8 per cent limit are treated as capital transfers for exchange allocation purposes.*

Transfers of registered capital and amortization are limited to a maximum of 20 per cent annually, but this percentage may be increased by the authorities for particular investments. Registered foreign capital invested in government securities or in other fixed income securities may be transferred abroad in full, after two years in the country.*

Payments on account of interest, dividends, and profits and on account of capital, within the mentioned limits, are exempt from the remittance tax.

Table of Exchange Rates(as at December 31, 1952)
(cruzeiros per U.S. dollar)
BuyingSelling
18.3818.72
All incoming exchange.Foreign public debt service. Imports of specified essential foodstuffs, fuels, petroleum, lubricants, newsprint, and book paper. Registered capital up to 20% per annum and interest, dividends, and profits thereon up to 8% per annum.
20.2176(Cr$18.72 plus 8% Tax)
All other payments.
Note: Twenty per cent of export proceeds must be invested in negotiable Treasury bills which pay 3% interest per annum and mature in 120 days.
Note: Twenty per cent of export proceeds must be invested in negotiable Treasury bills which pay 3% interest per annum and mature in 120 days.

Changes during 1952

January 1

The increase of the remittance tax from 5 per cent to 8 per cent went into effect (see June 13, Third Annual Report on Exchange Restrictions, page 54).

January 25

A new list of commodities exempt from import licenses was issued (machinery and equipment for agricultural, mining, and metallurgical industries).

February 21

All materials considered as strategic were made subject to export license.

December 5

A bill was passed by the Brazilian Congress by which a free market for certain transactions was to be established. The bill was signed on January 7, 1953 and went into effect February 21, 1953.

Note: The provisions of the law signed on January 7, 1953 which affect the system previously in operation, particularly in respect to the points marked above with an asterisk, may be summarized as follows:

  • Exchange receipts from the exportation of products which satisfy certain requirements may be wholly or partly exempted by the Council of the Superintendency of Currency and Credit from the surrender obligation and may be sold on the free market, where rates freely determined by supply and demand prevail.

  • Exchange transactions in the free market are not subject to the 8 per cent exchange tax. The 20 per cent compulsory investment of export proceeds in Treasury bills is applicable to exports negotiated at the free market rate.

  • All free exchange market transactions are exempted from licensing. Moreover, exports and imports continue to be subject to licensing even though their proceeds are negotiated through the free market.

  • All payments incidental to exports and imports transacted through the free market, most incoming and outgoing capital, interest, dividends, as well as all other invisibles and personal remittances, are transacted on the free market. Such payments are exempted from the surrender requirement and from exchange licensing.

  • The inflow and outflow of national and foreign currency notes carried by tourists or travelers are free.

  • Receipts corresponding to certain registered foreign loans and credits considered of economic importance to Brazil are to be surrendered in the official market. The remittance abroad of income thereon may be transacted at the official rate. Capital may be brought into the country at the free market rate and, if granted registration according to established criteria, profits, dividends, and interest up to 10 per cent annually may be remitted at the official rate. The extent to which the above transactions are authorized at the official rate depends on the “balance of payments possibilities.”

  • Barter (private compensation) transactions are no longer permitted.

  • The law establishes coordination of the licensing operations of the Exchange Department and of the Export-Import Department of the Bank of Brazil through the Council of the Superintendency of Currency and Credit. The Exchange Department and the Export-Import Department are requested to prepare for every half-year period the budget of exchange receipts or availabilities and an estimate of exports forecast, respectively. On the basis of the exchange budget, the Council of the Superintendency will indicate (a) to the Export-Import Department the appropriation within which import licenses may be granted; and (b) to the Exchange Department the limits for granting exchange licenses (“exchange quota” licenses) for imports free from import license and for governmental payments.

Burma

Origin and Essential Features

Exchange control was introduced in Burma in February 1940 and followed the pattern of exchange control common throughout most of the Sterling Area. The foreign exchange control regulations were codified in 1947. Burma achieved the status of an independent state on January 4, 1948, and has continued as a member of the Sterling Area. Burma’s restrictive system is based on the complete surrender of foreign exchange which is then allocated by the control authorities for payments for goods, services, capital transfers, and other transactions.

Exchange Rate System

There is no agreed par value for the Burmese kyat. The official parity of the kyat has a fixed relationship to the pound sterling of K 13.333 = £1. Rates for other currencies are determined on the basis of the kyat-sterling rate and the rates for other currencies in London maintained within official limits.

Administration of Control

Exchange control is administered by the Union Bank of Burma with certain powers delegated to commercial banks authorized for this purpose. Import and export controls are managed by the Ministry of Commerce. Export control powers are also exercised by the State Agricultural Marketing Board, the State Timber Board, and the State Mineral Marketing Board according to the commodities concerned.

Prescription of Currency

Since Burma avails itself of the payments mechanism provided by the monetary and payments agreements made by the United Kingdom with foreign countries, Burma has detailed regulations prescribing the currencies in which transactions are to be settled. These prescriptions of currency are similar to those used by the United Kingdom and other Sterling Area countries. Payments to other parts of the Sterling Area must be effected in sterling or in the appropriate Sterling Area currency.

Imports and Import Payments

The importation of all goods is subject to regulations, and certain nonessential and luxury items are prohibited. For certain essential items licenses normally are granted freely, while for certain less essential items licenses are issued on a quota or merit basis. Open general licenses are issued in respect of essential imports from all countries except Canada and the American Account countries.1 If evidence of importation has been or will be produced, the authorized banks automatically provide exchange in the form prescribed in the regulations (see section on Prescription of Currency, above) in payment for all permitted imports.

Payments for Invisibles

All payments for invisibles are subject to licensing, but authorized dealers may sell foreign exchange in accordance with the regulations. In general, payments for items connected with trade are allowed, and payments for other purposes are considered on a case-to-case basis.

Exports and Export Proceeds

The export of certain items considered essential to the domestic economy is prohibited. Nongovernmental exports require licenses which normally are granted if the exporter agrees to surrender the exchange proceeds in a manner satisfactory to the exchange control authorities.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered.

Capital

All outgoing transfers of capital require a license. Incoming exchange receipts of capital must be surrendered.

Changes during 1952

January 8

Burma became a member of the International Monetary Fund.

March 26

A new open general license (No. XVII) was issued covering certain items—such as waxes, oils, essences, manufactured ivory, copra, peanuts, and industrial diamonds—imported from countries other than Canada and American Account countries.

July 1

The Union Bank of Burma was invested with the powers of a central bank. The unit of currency was changed from the Burmese rupee (divided into annas and pies) to the kyat (divided into 100 pyas).

Ceylon

Origin and Essential Features

Ceylon introduced exchange control in September 1939. Since that time it has maintained an exchange control and restrictive system and policies similar, in major respects, to those of other members of the Sterling Area. The last major revision was on June 1, 1948, when exchange control was extended to include transactions with the Sterling Area. Ceylon’s restrictive system is based on the concept of a complete surrender of foreign exchange which is then allocated by the control authorities to payments for goods, services, capital transfers, and other transactions.

Exchange Rate System

On January 17, 1952, the Fund announced the initial par value for the Ceylon Rupee at Cey Rs 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 rates and the sterling-U.S. dollar rates in London maintained between official limits. The market rate as at December 31, 1952 was Cey Rs 4.7375 buying, Cey Rs 4.7625 selling, per US$1.

Administration of Control

All transactions in foreign exchange in Ceylon must be made through authorized dealers, which are banks authorized to transact business in specified currencies in accordance with the exchange control regulations prescribed by the Controller of Exchange. Remittances may also be made through post offices on permits issued by the Controller of Exchange.

Prescription of Currency

Since Ceylon avails itself of the payments mechanism provided by the monetary and payments agreements made by the United Kingdom with foreign countries, Ceylon has detailed regulations prescribing the currencies to be received from abroad in payment for all exports and invisible transactions, and prescribing the currencies to be used for payment for all imports and invisible transactions, depending upon the country or monetary area with which the transactions are conducted. These prescriptions are similar to those used by the United Kingdom and other Sterling Area countries. In general, the regulations governing payments provide that beneficiaries resident in the Sterling Area are to be paid in any currency of the Sterling Area; beneficiaries resident outside the Sterling Area are to be paid only in the currency of the country of origin of the goods, or in sterling or rupees, to the credit of an account in favor of a person in the country of origin or in the same monetary area. Receipts from foreign transactions, in general, can be in local currency, through appropriate nonresident sterling accounts in the United Kingdom, or, in some cases, in specified foreign exchange. Transactions involving deviation from the regulations on prescription of currency require the prior approval of the Controller of Exchange.

Nonresident Accounts

Nonresident accounts consist of accounts of individuals resident outside, and of firms or banks situated outside, Ceylon. The nature and types of nonresident accounts are determined by the payments and monetary agreements made by the United Kingdom (and operative throughout the Sterling Area) with the non-Sterling Area countries. Certain rules apply to the use of these accounts, which differentiate between the accounts of banks and of persons and firms. 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 the corresponding sterling accounts in the United Kingdom are allowed.

Imports and Import Payments

With the exception of a few items, such as firearms for use by the armed forces, imports of goods are subject to regulation. However, many commodities are governed by open general licenses and may be imported freely without an individual license. The most recent set of open general licenses was introduced on June 28, 1951. One open general license authorizes the import without an individual license of a wide range of commodities from all sources except the dollar area, China, Germany, and Japan. A second lists items which may be imported free of license from the dollar area. A third permits the import of a few items from all countries except Australia, China, Germany, and Japan. A fourth, which became effective September 23, 1952, applies to certain goods which previously could be imported without license from all sources except the dollar area and Japan; these goods may now be imported without license from all countries except the dollar area, China, Japan, and certain European countries.1

All other commodities, i.e., those not on an open general license, require specific individual import licenses which are granted on the basis of essentiality with preference for “soft” currency countries.2

No licenses are issued for some products grown or manufactured locally. Some essential items, such as sugar, flour, and rice, are imported only on government account.

An authorized dealer may approve an application for the remittance of foreign exchange or for the transfer of rupees to 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. Regulations also prescribe the currencies to be used for payments to different countries and monetary areas (see section on Prescription of Currency, above).

Payments for Invisibles

All payments for invisibles are also subject to exchange licensing. Authorized dealers may sell foreign exchange in accordance with a detailed set of regulations. Payments for freight and other services in connection with the international transportation of goods are allowed. Payments for international travel fares are permitted, provided certain conditions are met. Payments for business travel are also allowed on application.’ The allocation of exchange for tourist travel is subject to basic rations which vary according to the country to be visited; however, no basic ration is allowed for tourist travel to the dollar area. Other remittances of a personal nature are granted for reasonable requirements for education, travel, health, or family reasons. Business remittances to any country normally are approved, particularly when they are of a recurring or contractual nature, e.g., insurance premiums. Emigrants (Ceylon nationals) are permitted to transfer their entire assets if emigrating to a Sterling Area country or to Denmark, Norway, and Sweden, but up to certain limits if emigrating to any other non-Sterling Area country. Remittances of profits and dividends of nonresidents are freely permitted. Travelers may export foreign exchange which was declared at the time of entry. The exportation of currency notes is subject to a limit of Cey Rs 140 per person per month.

Exports and Export Proceeds

All exports of goods from Ceylon are subject to license issued by the Controller of Exchange. Export of certain manufactured goods and re-export of foreign manufactured articles are not allowed except under special permit. Re-exports of nonmonetary gold, silver, and diamonds are not allowed except in special circumstances. In addition to the export license for exchange control purposes, issued by the Controller of Exchange, export licenses from the Controller of Exports are required for all but a few commodities.

The exchange control export licenses are not issued unless the exporter undertakes to recover payment for the full value of the goods and to deliver to an authorized dealer the export proceeds in a prescribed manner within six months from the date of shipment. The currencies in which payment for exports to different countries or monetary areas must be received are stipulated by the control regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

The surrender of incoming foreign exchange at official rates is also required for invisible transactions. In addition, specified currencies have to be received for invisible transactions, following the prescription of currency applicable to commodity exports.

Travelers are not restricted in the amounts of foreign funds they carry into Ceylon in the form of travel credit instruments, but they are obliged to declare, upon entering, their holdings of currency notes and coin. The import of sterling notes in excess of £10 is allowed only with the permission of the Controller, and the import of Indian and Pakistan currency notes, as well as of Ceylon notes, is restricted to a maximum of Cey Rs 140 in any one month. No restriction on the import of other currency notes and coins is in force.

Capital

Certain capital movements between Ceylon and the rest of the Sterling Area are freely permitted; these are the voluntary repatriation of investments of persons resident in the rest of the Sterling Area, the transfer of savings by persons temporarily resident in Ceylon and returning to another Sterling Area country for permanent residence, and the transfer to Ceylon of capital held in the rest of the Sterling Area by Ceylon nationals. Also, transfers of capital into Ceylon are permitted for direct investment in Ceylon businesses, or for the establishment of branches or agencies of concerns resident in the United Kingdom or in the rest of the Sterling Area, if such transfers are likely to be for desirable trade and commercial business.

Different regulations cover capital movements between Ceylon and non-Sterling Area countries. Generally, inward transfers for investment in approved projects are permitted freely. Remittances of a capital nature—for example, to purchase securities, properties, annuities, etc., abroad—are restricted. Securities owned by residents and on which the principal, interest, or dividends are payable (or the holder has an option to require payment of the principal, interest, or dividends) in U.S. or Canadian dollars or Swiss francs have to be registered with the Controller, and no person is allowed, except with the permission of the Minister of Finance, to sell or transfer such securities. Since the end of 1949, capital invested in Ceylon by a non-Sterling Area resident can be repatriated at his request up to the amount of the original investment, provided the investment has received prior approval.

Changes during 1952

January 17

The initial par value for the Ceylon rupee was established with the International Monetary Fund at Cey Rs 4.76190 = US$1.

August 26

Certain goods, mainly textiles and luxury articles, from “hard” currency countries were removed from open general license.

September 2

Personal remittances to other Sterling Area countries were reduced from Cey Rs 250 to Cey Rs 100 per month for each person, and from Cey Rs 1,000 to Cey Rs 500 per month for those who maintain a current bank account.

Basic travel rations were reduced as follows: (1) for travel to India, Pakistan, Burma, and Malaya, from Cey Rs 2,000 to Cey Rs 1,000 per adult, for each calendar year; (2) for travel to other Sterling Area countries, from £1,000 to £500 per adult, for each three-year period.

September 23

Certain goods, mainly textiles and luxuries, were withdrawn from the open general license permitting certain imports from countries outside the dollar area and Japan and were placed on a new open general license permitting their import from all countries except the dollar area, China, Germany, Japan, and certain European countries (see footnote 1, above).

Margarine and lard were withdrawn from the open general license permitting imports from all countries except Australia (and later, China, Germany, and Japan) and brought under license from all sources.

November 12

Basic rations for travel to India were reduced from Cey Rs 1,000 to Cey Rs 500 per adult per year for persons not citizens of Ceylon, to be set off against the basic ration of Cey Rs 1,000 for Pakistan, Burma, and Malaya (see September 2, above).

November 28 All goods from China were brought under license.

December 1

The permitted exchange allowance for personal remittances from current bank accounts was reduced from Cey Rs 500 to Cey Rs 200 per month (see September 2, above). Personal remittances not exceeding Cey Rs. 100 to other Sterling Area territories continued to be allowed, but required the presentation of an exchange control card instead of a rice ration book. All permits for remittances against rice ration books were canceled.

Chile

Origin and Essential Features

Exchange control was introduced in Chile in 1931 and has since undergone a number of changes. The last major revision took place on November 21, 1950, when a new exchange control law codified the system and made certain administrative changes. Payments and receipts of exchange for nontrade transactions were permitted freely through the free market, although payments by commercial enterprises continued to be subject to license. Provision was made for a transfer guarantee to be extended to registered foreign capital.

The main features of the restrictive system, at present, are multiple exchange rates on both the buying and selling side, two legal “free” markets, where exchange rates fluctuate, and quantitative restrictions on imports. In addition, special compensation arrangements are in effect between gold and wine exports on the one hand, and luxury imports on the other.

Exports are subject to license, except exports of copper, iron, iodine, and nitrates. Export proceeds must be surrendered, with certain exceptions.

Exchange Rate System

The par value is Chilean Pesos 31 = US$1. For exports of goods and services there are five fixed official rates, two free market rates, three effective rates obtained by a “mixing” procedure, and two rates resulting from compensation arrangements for exports of wine and newly mined gold. For imports of goods and services there are four fixed official rates, plus the two free market rates and the two rates resulting from compensation arrangements mentioned above. Each of these rates applies to a specified category of goods and services (see Table of Exchange Rates, below).

Administration of Control

The exchange control system is operated by the National Foreign Trade Council, which is an autonomous public agency. The Council grants export and import licenses, and it must be consulted by the banks before they sell exchange to licensed importers. All exchange transactions, except those made on the “nonbanking free market”, are carried out through the Banco Central de Chile or the authorized banks.

Prescription of Currency

Payments for transactions with Brazil, Ecuador, France, the Federal Republic of Germany, Spain, and the United Kingdom must be made according to the method and in the currency established in the regulations which give effect to the terms of the payments and compensation agreements with the respective countries. This applies also to the payments under special arrangements entered into by the Nitrate and Iodine Sales Corporation (a public agency) for exports of nitrate and iodine to Belgium, Denmark, Italy, Netherlands, Portugal, Spain, and Sweden. Exports of copper and iron must be paid for in U.S. dollars.

Imports and Import Payments

All imports are subject to license. The importation of certain luxury goods and of goods of a type domestically produced is prohibited. Licenses are granted to established importers up to the limit of their individual quotas, which are fixed on the basis of an exchange budget prepared by the National Foreign Trade Council. For listed luxury goods which are allowed to be imported, import licenses are granted up to the limit of the exchange receipts from exports of wine and newly mined domestic gold. Exchange quotas are fixed on the basis of the availabilities of the various types of exchange and, particularly, on the basis of trade and payments agreements.

Payments for licensed imports must be approved by the National Foreign Trade Council. Payments for import transactions with payments agreement countries must be made in the currencies and according to the methods laid down in the exchange control regulations (see section on Prescription of Currency, above).

Payments for Invisibles

Payments abroad at fixed rates in respect of invisibles require a license; other payments may be made through one of the free markets according to the nature of the transaction.

Exports and Export Proceeds

With the exception of copper, iron, nitrate, and iodine, exports require a license. The exportation of certain specified commodities is prohibited by the Government. For exports of agricultural products, the Institute of Agricultural Economy has issued specific regulations that must be followed by the National Foreign Trade Council, which grants the export licenses.

Export proceeds must be surrendered to the Government at the exchange rate established for each transaction. Foreign exchange deriving from exports of copper and iron by foreign-owned mining companies must be surrendered at the rate of P 19.37 per US$1 up to an amount equivalent to the legal cost of production, which is fixed quarterly. All other exchange proceeds from exports must be surrendered entirely. The proceeds of exports of wine and newly mined domestic gold may be used for the importation of designated luxury goods.

Proceeds from Invisibles

Part of the exchange receipts from invisibles may be sold in a fluctuating free market. Other receipts from invisibles are dealt with at the various fixed rates.

Capital

Large mining companies (copper, iron, nitrates, and iodine) may freely remit interest, dividends, and amortization payments on invested capital up to the amount of their exchange receipts that they are not required to surrender or use to pay local taxes. Remittances by other foreign companies of interest, dividends, and amortization payments on investments made after November 21, 1950, and duly registered according to the established rules, may be made through a free market. In certain cases, however, the Council may establish special conditions for these remittances.

Transfers abroad of domestic capital may be made through the free market.

Exchange receipts on account of capital may be sold in the free market. The exchange representing foreign capital newly introduced into the country may be sold in the same market. Copper and iron companies may sell such exchange, however, at the rate of 60 pesos per US$1. In order to remit abroad income and amortization payments on the capital in question, the capital must be registered in accordance with the regulations.

Table of Exchange Rates(as at December 31, 1952)
(pesos per U.S. dollar)
BuyingSelling
19.37
Sales of exchange by the large mining companies (copper and iron) to cover legal cost of production; sale of approximately 2% of the proceeds of exports of nitrate and iodine.
31.0031.10
Liquidation of certain insurance and government receipts.Imports of drugs, sugar, newsprint, tallow, and certain government imports. Certain invisible foreign-trade items.
43.0043.10
Certain invisible foreign-trade items.Imports of raw cotton and a few other articles.
49.85(36% at P 31 and 66% at P 60)
Exports of untanned hides, skins, and wool.
50.0050.10
Exports of nitrate and iodine (first half 1952).Imports of wheat, rice, gasoline, ships, etc. Certain invisible foreign-trade items.
60.0060.10
Exports of certain agricultural products (barley, kidney beans, soapbark, timber) and of copper and bronze scraps. Sales of exchange by large mining companies (copper and iron) to cover local currency expenses for new investments in the country. Exports of nitrate and iodine (second half 1952).General import rate, including crude oil, tea, yerba maté, paraffin, antibiotics, kerosene, rubber, jute, cellulose, industrial and agricultural machinery, etc.
71.60(80% at P 60 and 20% at Free Market Rate)
Exports of beans.
89.00(60% at P 60 and 50% at Free Market Rate)
Exports of lentils.
118.00(Banking Free Market Rate)118.00(Banking Free Market Rate)
Medium and small mining, agricultural, and industrial exports, crude petroleum, and private capital.Machines and tools, chemical products, etc. Profits and dividends of foreign capital.
128.50(Nonbanking Free Market Rate)128.50(Nonbanking Free Market Rate)
Travel receipts.Travel expenses.
138.00(Banking Free Market Rate plus P 20 per US$1)138.00(Banking Free Market Rate plus P 20 per US$1)
Wine exports.Certain specified luxury imports.
155.00(Fluctuating Rate)155.00(Fluctuating Rate)
Exports of newly mined gold.Certain specified luxury imports.

Changes during 1952

March 29

The pegging of the “banking free market rate” at P 90 per US$1 was discontinued.

April 24

New imports of commodities listed in Group A.1 (imports quantitatively uncontrolled at free market rates) were suspended. Imports of commodities listed in Group A.2 (imports quantitatively uncontrolled at fixed rates) were transferred to Group B.2 (imports quantitatively controlled at fixed rates).

May 13

Sales of exchange receipts from exports of certain agricultural, chemical, and mineral products could be made at the free market rate.

June 4

The importation of luxury articles was suspended.

June 26

A new list of prohibited imports was published. Exceptions were provided for imports of products which the domestic industry could not supply in sufficient quantity and for products produced in Chile at a cost 50 per cent higher than the pride of similar foreign products.

The National Foreign Trade Council was given discretional powers to authorize the importation of prohibited goods in specified cases.

July 26

The importation of luxury articles was again permitted. New lists were published of articles which could be imported during the second half of 1952 by using the proceeds from exports of wine and newly produced domestic gold.

China (Taiwan)

Origin and Essential Features

Exchange control was first introduced in Taiwan on June 15, 1949. The present system has operated since April 9, 1951. Control is applied to all foreign trade and exchange transactions and there is no recognized free market. The structure of the restrictive system in Taiwan rests on (1) a restrictive import licensing policy, (2) restrictions on payments for invisibles and capital, and (3) a multiple exchange rate system.

Exchange Rate System

There is no par value for the New Taiwan Dollar. There is a multiple exchange rate system consisting of the Bank of Taiwan rate, a foreign exchange deposit certificate rate, and two mixed rates (see Table of Exchange Rates, below). The Bank of Taiwan rate applies to government payments, private essential imports, exports of government enterprises, 20 per cent of most private exports, and 60 per cent of salt and camphor exports. The remaining percentages and payments for other transactions are effected at the certificate rate. The Bank of Taiwan quotes official (and certificate) rates for U.S. dollars, pounds sterling, Hong Kong dollars, and Straits dollars, but these rates are not related at the par values agreed by the Fund for these currencies.

Administration of Control

The exchange control system in Taiwan is operated by the Bank of Taiwan, through which all sales and purchases of foreign exchange must be effected.

Prescription of Currency

Export receipts must be obtained in U.S. dollars, Hong Kong dollars, sterling convertible into U.S. dollars, or, in a few cases, Straits dollars. There are no legal obligations prescribing the method or channel of payment to persons abroad (except for Japan and the Ryukyus, trade with both of which is conducted through special settlement accounts under the terms of agreements with those areas). Payments must be made in U.S. dollars or pounds sterling according to the currency area involved and generally hard currency is not provided for payments in soft currency countries where the Bank of Taiwan has balances in that currency.

Nonresident Accounts

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

Imports and Import Payments

All imports require individual import licenses. Imports of certain specified luxuries are prohibited, and imports of specified commodities which may be produced locally or of which there are sufficient stocks are temporarily suspended. Private importers must submit applications to a Preliminary Screening Committee and at the same time deposit a margin in new Taiwan dollars with the Bank of Taiwan. This margin was 50 per cent if exchange was required at the Bank of Taiwan rate, and 20 per cent if the application was for exchange at the certificate rate. Since April 21, 1952 it has been 100 per cent for both transactions. Recommendations by the Preliminary Screening Committee for approval are tabulated according to rate and forwarded to a Production Finance Committee (which also handles the applications from government enterprises) for final decision. The Bank of Taiwan rate is accorded to those imports regarded as the more essential.

When the import license is granted, the holder is automatically entitled to obtain the necessary foreign exchange from the Bank of Taiwan at the applicable rate. Payments are effected either in U.S. dollars, pounds sterling, Hong Kong dollars, or Straits dollars, for which currencies there are officially quoted rates.

Payments for Invisibles

Payments to nonresidents in respect of invisibles are restricted by a quota fixed monthly by the authorities (except government payments and trade items, such as freight and insurance, where permission to effect payment is determined by the approval to import the related commodities). Applicants for exchange for invisibles must apply to the Preliminary Screening Committee for Outward Remittances which passes its recommendations to the Production Finance Committee for final decision. In general, reasonable amounts of foreign exchange are granted for transfer of profits on foreign investments, reinsurance premiums, and travel other than pleasure. Payments in respect of invisibles are usually authorized at the certificate rate. Travelers leaving Taiwan may take with them no more than US$200 of foreign currency. There are no limitations on the export of domestic currency.

Exports and Export Proceeds

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

All export proceeds must be obtained in U.S. dollars, Hong Kong dollars, sterling convertible into U.S. dollars, or, in a few cases, Straits dollars. These export proceeds must be surrendered to the Bank of Taiwan. Government enterprises surrender their total export proceeds at the Bank of Taiwan rate, except for camphor and salt exports for which 40 per cent is surrendered at the certificate rate. Private exporters surrender 20 per cent of their export proceeds at the Bank of Taiwan rate in return for local currency and the remaining 80 per cent for foreign exchange deposit certificates or local currency at the prevailing certificate rate. The proceeds of sluggish government exports and some sluggish private exports are surrendered 100 per cent at the certificate rate. The foreign exchange deposit certificates are of two kinds: transferable and nontransferable. The nontransferable certificates can be used only in payment for imports and are valid for four months when they can be sold for local currency only to the Bank of Taiwan. The transferable certificates are issued to any person against payment in U.S. dollar notes or gold and are valid for two months within which time they can be sold to the Bank of Taiwan or exchanged for nontransferable certificates.

Proceeds from Invisibles

All residents of Taiwan receiving foreign exchange are required to surrender their receipts to the Bank of Taiwan and may either take exchange certificates or obtain local currency at the certificate rate. Travelers entering Taiwan may bring in any amount of foreign currency and either hold it or surrender it at the certificate rate. There are no limitations on the import of domestic currency.

Capital

Capital payments due to nonresidents are not normally approved, and the repatriation of foreign capital is allowed only in special circumstances. New capital investments abroad by residents are prohibited. Residents are permitted to hold foreign exchange representing capital receipts but may dispose of this exchange only by surrendering it to the Bank of Taiwan for exchange certificates or local currency at the certificate rate.

Table of Exchange Rates

(as at December 31, 1952)1

(new Taiwan dollars per U.S. dollar)
BuyingSelling
10.25(Bank of Taiwan Rate)10.30(Bank of Taiwan Rate)
Receipts of the Government and government enterprises (except from exports of camphor and salt, sluggish government exports, government shipping companies, and some sluggish private exports).Government payments. Specified essential imports.
12.37(60% at NT$10.25 and 40% at Foreign Exchange Deposit Certificate Rate)
Government exports of camphor and salt.
14.49(20% at NT$10.25 and 80% at Foreign Exchange Deposit Certificate Rate)
Most private exports.
15.55(Foreign Exchange Deposit Certificate Rate)15.65(Foreign Exchange Deposit Certificate Rate)
Sluggish government exports. Some sluggish private exports. Invisibles. Capital.Other authorized imports. Authorized invisibles.

Changes during 1952

April 21

New regulations were introduced, simplifying the procedure for application for foreign exchange deposit certificates by importers and thus considerably reducing the time taken to process such applications. Private importers had to submit applications to a Preliminary Screening Committee and at the same time deposit a 100 per cent margin in new Taiwan dollars with the Bank of Taiwan.

Colombia

Origin and Essential Features

Exchange controls and restrictions were originally introduced in Colombia in September 1931. The last major revision occurred on March 20, 1951, when a complete change in the exchange and import control system took place. Except for a prohibited import list of some 1,200 specified luxury or locally produced items, practically all licensing restrictions on imports were removed, leaving only a prior registration procedure for permitted imports; the basic buying and selling rates of Ps$1.95 and Ps$1.96 per US$1 were depreciated to Ps$2.50 and Ps$2.51, respectively; and the multiple exchange rates were considerably simplified. However, multiple rates still result from the application of exchange taxes, the existence of a mixed effective rate for proceeds of coffee exports, and the use of negotiable “export vouchers” for minor exports and nonessential imports.

Exchange Rate System

The par value is Colombian Pesos 1.94998 = US$1. The official rates are Ps$2.50 buying, Ps$2.51 selling, per US$1. Taxes of 2 per cent, 3 per cent, and 6 per cent yield three additional selling rates of exchange, and a mixing arrangement for coffee exports yields another buying rate. Other effective buying and selling rates arise from an “export voucher” system under which the exchange accruing from certain minor exports may be used to pay for specified imports which otherwise are prohibited. These vouchers are negotiable and command a premium in the free market (see Table of Exchange Rates, below).

Administration of Control

To make imports, exports, or exchange payments to foreign countries, prior application for the registration of the transactions must be made at the Exchange Registration Office which is part of the Banco de la República. Purchases and sales of exchange may be effected either with the Banco de la República or with the commercial banks which act as authorized agents of the Banco de la República.

Prescription of Currency

Payments to and receipts from the Belgian Monetary Area, Denmark, Ecuador, Finland, Federal Republic of Germany, Italy, and Spain, including payments for goods originating in those countries purchased from third countries, must be effected through the clearing account appropriate to the origin of the goods in accordance with the provisions of the respective bilateral payments agreements. Payments to and from the Sterling Area are made in U.S. dollars or “American Account” sterling. Payments in accordance with a commercial arrangement between Colombia and France are made in U.S. dollars.

Nonresident Accounts

Nonresident accounts consist of sight, time, savings, and current account peso deposits held in Colombia in favor of nonresidents. Credits and debits to these accounts require prior registration. Balances on these accounts may be converted into foreign exchange only when they are derived from imported and registered capital, or when the transfers are intended to pay for a transaction of obvious advantage to the country.

Imports and Import Payments

The import of certain luxury goods and goods of a type produced locally is prohibited. All other imports require prior application for registration. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. A stamp tax of 3 per cent is collected on each import registration, except for official items and imports of foreign capital goods. This tax is not refundable. In addition, a cash deposit of 10 per cent of the value in Colombian pesos of the import has to be made as a prerequisite to the registration.

Certain items included in the prohibited list (lightweight automobiles up to 2,728 pounds, wines, chinaware, glass objects, radios, ceramics, and dried fruits) may be imported when they originate in, and are imported from, countries maintaining a balanced trade with Colombia or having trade agreements with Colombia. In this respect, the following countries have been specified to date: Canada, Denmark, Ecuador, Finland, France, Federal Republic of Germany, Italy, Spain, United Kingdom, and United States.

Under the “export voucher” system, other prohibited imports (automobiles weighing up to 3,630 pounds, preserved or canned meats, solid or liquid meat extracts, and preserved or canned fish) may be imported into Colombia with “export vouchers” received upon the surrender of exchange earned from certain minor exports. The vouchers used for this purpose must relate to exports to the country from which the imports are made and the items originate.

Payments for imports require exchange registration. Registration is granted upon submission of the import registration and evidence that the goods have been shipped. Payments are effected at the basic selling rate of Ps$2.51 and must be made in the appropriate currency (see section on Prescription of Currency, above) and, in some cases, require the payment of taxes and for certain nonessential items, the surrender of an “export voucher”.

Payments for Invisibles

Payments and remittances abroad require prior registration. Certain essential payments may be effected at the selling rate of Ps$2.51 without tax. Other authorized payments are effected at this rate plus the stamp tax or both the stamp tax and resident tax. Exchange for travel abroad is granted up to a limit of US$600 per month per person for not more than two months per year at the rate of Ps$2.51 plus taxes totaling 6 per cent. Students meeting the legal requirements are allowed remittances of up to US$250 or US$150 per month, depending on the type of study, at the rate of Ps$2.51, free of tax. For medical treatment outside Colombia, up to US$1,500 is granted at the selling rate of Ps$2.51 plus 6 per cent total taxes. Earnings on registered foreign capital may be transferred at any time at the rate of Ps$2.51 plus 3 per cent stamp tax.

Exports and Export Proceeds

All exports require prior application for registration. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. Exchange proceeds must be surrendered as follows: within 10 days for foreign exchange derived from coffee exports or other exports payable by letter of credit usable upon presentation of the bill of lading; within 6 months for foreign exchange from shipments on consignment or from exports other than coffee, not reimbursable by credit payable upon presentation of the bill of lading; within one year for foreign exchange derived from the export of articles manufactured in the country. Minimum surrender prices are established for exports. The proceeds from coffee exports are purchased partly at the Ps$1.95 rate and the balance at the Ps$2.50 rate. The percentage to be surrendered at the Ps$2.50 rate is increased by 1½ per cent each month until the rate reaches the Ps$2.50 level. All other export proceeds are surrendered entirely at the Ps$2.50 rate. However, exporters of specified minor exports (some agricultural products, salt, tanned hides, leather manufactures, designated textiles, cement, beer, sugar, sulphur, tobacco, nonprecious metals, nonmetallic mineral substances, and gold manufactures) are granted, upon surrender of the exchange, “export vouchers” which give the exporter the right to import, in an amount equivalent to the value of the exchange surrendered, specified goods included in the prohibited list. These vouchers are negotiable and are sold at a premium in the free market. Exchange receipts accruing from exports and services must be in the appropriate currency.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered at the Ps$2.50 rate.

Capital

The importation of foreign capital in the form of foreign currency or in industrial, farming, or mining machinery and equipment is freely permitted. Such capital, however, must be registered and the foreign exchange imported must be surrendered at the Ps$2.50 rate, if the investor wishes to retain the right to re-export the capital or to remit profits. Foreign cash credits granted to persons domiciled in Colombia may, subject to registration, enjoy the same rights provided the time for their reimbursement is not less than one year and the interest does not exceed 8 per cent annually. Transfers of capital abroad require prior approval, which is automatically granted if the capital investment has been properly registered. Transfers of capital are subject to a 3 per cent stamp tax.

Table of Exchange Rates(as at December 31, 1952)
(pesos per U.S. dollar)
BuyingSelling
2.2855(39% at Ps$1.95 and 61%1 at Ps$2.50)
Exports of coffee.
2.502.51
All other exchange proceeds.Official payments, including imports for use or consumption by the organizations concerned. All other permitted imports2 not payable with “export vouchers” (see note, below). Certain invisibles, e.g., students* essential expenses up to specified limits.
2.56(Ps$2.51 plus Reduced Stamp Tax of 2% at Ps$2.50)
Certain foreign banking services and payments of certain organizations.
2.585(Ps$2.51 plus Stamp Tax of 3% at Ps$2.50)
Most commercial invisibles. Registered capital.

2.66(Ps$2.51 plus Stamp Tax of 3% and Resident Tax of 3%, both at Ps$2.50)
Other invisibles, e.g., travel abroad up to certain limits and additional transfers to make up the cost of aviation courses.
Note: Other effective buying and selling rates based on the official rates of Ps$2.50 and Ps$2.51 plus a free market premium arise from the “export voucher” system (see section on Exports and Export Proceeds, above). These rates apply to minor exports and nonessential imports.
Note: Other effective buying and selling rates based on the official rates of Ps$2.50 and Ps$2.51 plus a free market premium arise from the “export voucher” system (see section on Exports and Export Proceeds, above). These rates apply to minor exports and nonessential imports.

Changes during 1952

February 6

Payments for imports coming from or originating in Argentina would be authorized only if charged to the clearing account kept at the Central Bank of Argentina.

February 15

Certain prohibited imports (lightweight automobiles, wines, radios, chinaware, and others) were permitted to be imported from countries with which Colombia has a balanced trade position (Canada and the United States), or with which it has trade agreements (Denmark, Ecuador, Finland, and the Federal Republic of Germany).

February 25

The import of alcoholic beverages (except wines and absinthe) and cigarettes was declared free, without prejudice to existing local arrangements for the import, distribution, and sale of these articles.

May 14

The Banco de la República authorized certain merchants, travel agencies, and hotels as its agents for the purchase of foreign exchange from foreign tourists and visitors.

June 10

The extension of import registrations for obtaining foreign exchange beyond the normal period of validity (approximately five months) was suspended, with certain exceptions.

July 7

Goods of Belgium-Luxembourg, German, Finnish, Danish, or Ecuadoran origin, purchased from third countries, were henceforth to be paid for through the clearing account for the country of origin.

July 18

The National Congress issued Law No. 8 of 1952 concerning the import of capital, repeating the provisions of Extraordinary Decree No. 1625 of 1951, and exempting specific foreign investments from the capital tax for five years.

August 1

The “export voucher” (comprobantes de exportación) system was introduced, under which exporters, upon the surrender to the Banco de la República of exchange accruing from the export of specified minor products at the Ps$2.50 rate, are granted the right to import an amount, equivalent to the value of the exchange surrendered, of specified articles included in the prohibited list. These “export vouchers” were made negotiable.

August 18

The goods on the prohibited list of imports which could be imported under the “export voucher” system (see August 1, above) were specified.

August 17

A trade and payments agreement concluded with Italy entered into force. Current payments concerning merchandise trade and incidental expenses had to be made through the Italian Clearing Account at the Banco de la República, through which all imports of Italian origin, even if shipped from other countries, must be made.

August 19

The United Kingdom was added to the list of countries from which specified imports included in the prohibited list could be imported (see February 15, above).

September 15

The list of freely exportable products and manufactured articles for which “export vouchers” (see August 1, above) could be issued was expanded.

October 22

Nonprecious metals and nonmetallic minerals were added to the list of exports which entitled exporters to negotiable “export vouchers” for the purpose of importing specified imports included in the prohibited list.

October 81

Decree No. 2730 was issued. Under its terms, exchange would not be authorized for the insurance of merchandise, which should be effected in Colombian currency with firms established in Colombia.

November 7

Under Decree No. 2779 a stamp tax on drafts in payment of merchandise was abolished and a 3 per cent national stamp tax was created on the value in Colombian currency of each application for import merchandise. Public law institutions, persons who had been exempt, as well as registrations for the import of machinery and equipment regarded as foreign capital, were exempted from this tax.

November 17

A payments agreement with Spain was signed under which all payments (except consular fees) with Spain were to be effected through a central account in Colombia expressed in U.S. dollars.

Provision was made that merchandise exported under the “export voucher” system must be nationally produced merchandise.

Costa Rica

Origin and Essential Features

Exchange control was introduced in Costa Rica on January 16, 1932, and since then has been subject to various modifications. The last major revision was made on September 29, 1951, when the present International Payments Law was enacted and various exchange surcharges applied to imports were abolished. There are virtually no restrictions applied to transactions eligible for the official exchange market, and the exchange controls are operated principally to ensure that such transactions pass through that market. All other exchange transactions are freely permitted through a free market where a higher exchange rate prevails. Foreign exchange derived from exports and certain invisibles must be surrendered in the official market, but the sale in the free market of a specified percentage of the proceeds of certain exports is permitted.

Exchange Rate System

The par value is Costa Rican Colones 5.615 = US$1. Multiple rates arise from the coexistence of an official and a free market. The official rates are Ȼ 5.60 per US$1 for exports, Ȼ 5.67 for essential imports. The effective selling rate in the free market, covering all other imports and almost all invisibles, is Ȼ 6.65 per US$1, and the use of that market for part of the proceeds of some exports results in an effective rate of Ȼ 6.25 (see Table of Exchange Rates, below).

Administration of Control

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

Prescription of Currency

Most exchange transactions of Costa Rica are effected in U. S. dollars, and very few transactions are effected in other currencies. Costa Rica does not maintain any payments or clearing agreements with other countries.

Imports and Import Payments

An importer may order any goods from abroad and have them entered through the Costa Rican customs without any controls or restrictions. Control over imports arises only in regard to payments for essential imports at the Ȼ 5.67 rate. These imports consist of about 512 items included in a “List of Primary Needs” and represent approximately 40 per cent of total imports.

An exchange license from the Banco Central must be obtained to effect payments for imports at the official market rate. In general, these licenses are issued automatically and without delay. Payments for nonessential and luxury imports must be made through the free market, where the importer can purchase the necessary exchange without limitation. Under contracts signed with the Costa Rican Government, a foreign-owned banana company can apply the value of certain essential imports in payment of exchange commitments arising from the export of its products.

Payments for Invisibles

Invisibles which are permitted at the official selling rate are government payments, earnings of registered foreign capital invested after January 30, 1933 (other than of foreign investments governed by special contracts), up to 10 per cent annually of the investment, and specified expenses of students who are taking specialized courses abroad and are registered with the Banco Central. These transactions require an exchange license, which is obtainable upon presentation to the Banco Central of an application with appropriate substantiating documents. Payments for all other invisibles are not controlled and are effected through the free market.

Exports and Export Proceeds

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

Exchange proceeds of exports must be surrendered at the Ȼ 5.60 rate. However, for certain commodities, the Banco Central, following approval by the Ministry of Economic Affairs and the Ministry of Agriculture, can authorize exporters to retain part of their export exchange for sale in the free market, resulting in an effective rate of about Ȼ 6.25 per US$1.

Independent banana producers can sell in the free market any exchange receipts in excess of US$1.10 per 100 pounds of bananas exported.

Proceeds from Invisibles

The only exchange receipts from invisibles required to be surrendered at the official rate are insurance indemnities covering imports, receipts of the Government and public entities, and sales of exchange by foreign concessionnaires whose contract requires such sales in the official market. Receipts from other invisibles may be sold in the free market.

Capital

Exchange receipts from foreign capital registered with the Banco Central must be surrendered at the official rate. Receipts from non-registered and repatriated capital may be sold in the free market. The granting of official market exchange for amortization of registered foreign capital is subject to exchange license by the Banco Central, which decides on the applications on a case-to-case basis and in the light of availability of exchange for that purpose. Certain foreign-owned investments are dealt with individually under special contracts. Transfers of nonregistered capital may be effected without limitation at the free market rate.

Table of Exchange Rates(as at December 31, 1952)
(colones per U.S. dollar)
BuyingSelling
5.605.67
All exports except those at 0 6.25 rate. Certain invisibles. Registered capital.Government payments. Essential imports. Students’ expenses. Registered capital.
6.25(Approximate Average Rate)
Certain exports by special authorization from the Banco Central.
6.63(Free Market Rate)6.65(Free Market Rate)
All other receipts.All other payments.

Changes during 1952

January

Certain imports were shifted from the official to the free market.

March 27

The Banco Central reduced the selling rate for U.S. dollars in the free market from Ȼ 7.00 to Ȼ 6.90 per US$1.

April 17

The selling rate in the free market was further reduced to Ȼ 6.75 per US$1.

June 21

The Free Export Exchange Law No. 1460 was promulgated, under which the Banco Central, on the basis of a favorable decision by the Ministry of Economic Affairs and the Ministry of Agriculture, can grant special temporary authorizations for the sale of part of the exchange proceeds of certain exports in the free market.

July 23

The selling rate in the free market was further reduced to Ȼ 6.65 per US$1.

Cuba

Origin and Essential Features

A 2 per cent exchange tax on transfers and payments abroad was established in Cuba in July 1925. On December 12, 1941, an additional 2 per cent on transfers and payments was established on remittances to former enemy countries.1 In November 1952, the original 2 per cent tax was waived for the exportation of specified foreign capital invested in Cuba and registered with the authorities. Payments to France and Spain are subject to exchange control under arrangements with these two countries; otherwise payments are not restricted. The proceeds of sugar exports must be partially surrendered.

Exchange Rate System

The par value is Cuban Peso 1 = US$1. The official rates are P 1.00 buying (and selling for certain capital transfers), P 1.02 selling (including the 2 per cent tax on the exportation of funds, securities, and merchandise), per US$1. In addition, 1/64 per cent bank exchange is charged to commercial banks on both the selling and buying of exchange by the National Bank. Commercial banks’ exchange charged to the public is 1/10 per cent both ways.

Administration of Control

The Cuban Monetary Stabilization Fund, whose administration is entrusted to a committee consisting of the Minister of Finance, the President of the National Bank, and the Director of the Fund (designated by the President of the Republic with the advice of the Council of Ministers and approved by the Senate), operates the exchange controls directly or through the National Bank of Cuba.

Prescription of Currency

The following are the only requirements in respect of the prescription of currency:

  • In accordance with an agreement between France and Cuba, French exports to Cuba are settled in French francs through the account of the National Bank of Cuba with the Bank of France; payments on account of Cuban sugar exported to France up to a quota limit of 200,000 tons are effected 70 per cent in French francs and 30 per cent in U.S. dollars.

  • Under the terms of a payments agreement with Spain, payments between Spanish and Cuban residents are effected through a clearing account expressed in U.S. dollars.

  • Payments to residents of China and North Korea must be made by bank transfer through a bank located in the United States.

Nonresident Accounts

There are no restrictions with respect to local currency accounts of nonresidents, which may be freely opened and operated, with the exception of the accounts of residents of Spain, of former enemy countries (see footnote 1), and other countries for which the Stabilization Fund may establish restrictions. Withdrawals from nonresident accounts are subject to the 2 per cent tax if funds are sent or used abroad.

Imports and Import Payments

Specified imports (e.g., wheat and wheat flour, tires, and tubes) are subject to licensing which is maintained essentially for registration and statistical purposes. Imports from France and Spain, in relation to which exchange control is established by Cuban exchange control authorities due to international agreements, can be cleared only upon the presentation of an authorization from the Stabilization Fund. Payments are freely made on account of imports; however, payments on account of imports from former enemy countries, from countries with which Cuba has concluded payments agreements, or in respect to which Cuba maintains exchange controls, are subject to approval by the Stabilization Fund. There is an exchange tax of 2 per cent on exchange payments and transfers on account of imports and an additional 2 per cent on those payments in favor of former enemy countries (see footnote 1), except Austria and Italy.

Payments for Invisibles

The 2 per cent exchange tax is charged on all payments on account of invisibles, and an additional 2 per cent is applied to payments in favor of former enemy countries (see footnote 1). Otherwise, payments for invisibles are freely permitted, but obligations concerning the method of payment apply to certain payments (see section on Prescription of Currency, above). A limit of $50 is placed on foreign or domestic currency notes that travelers, other than tourists, may take out of the country. Tourists are exempt from the 2 per cent tax on personal funds they carry when leaving the country.

Exports and Export Proceeds

Exports do not require licenses except a routine one on tobacco, tobacco products, and by-products, which require a certificate from the Tobacco Control, mainly to guarantee their Cuban origin. Sugar and by-products also require certificates of the corresponding controlling agencies to ensure the international distribution accorded. In addition, proof that the 2 per cent tax has been paid must be submitted for these exports and all other merchandise exported. This tax is recoverable on proof that the exported merchandise was duly landed at the port of destination and that the proceeds were credited to a bank account in Cuba. Through a bond given by the banks, the 2 per cent is not exacted if proof of credit in Cuba is presented within a certain period: 180 days for the United States, 240 days for other destinations, except exports of tobacco and its products to Spain, when up to 720 days are allowed, owing to the system of consignment shipments liquidated by the Spanish tobacco monopoly, when the goods are actually sold. Thirty per cent of the exchange dollar proceeds of sugar and syrup exports must be surrendered for Cuban pesos at par. Certain goods, mainly native hardwoods and scrap iron, are restricted when in short supply.

There are no exchange control requirements attaching to the proceeds of exports.

Proceeds from Invisibles

Exchange earnings from invisibles are freely disposable.

Capital

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

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

Changes during 1952

March 4

Imports of tires and tubes became subject to license from the Ministry of Commerce for statistical reasons (Decree No. 5187).

April 21

Imports of wheat and wheat flour into Cuba became subject to license from the Director General of Supplies at the Ministry of Commerce (Resolution 254 of April 15,1952).

November 20

Repatriations of specified foreign investments, provided they were registered with the authorities, were exempted from the 2 per cent tax (Law Decree No. 548).

December 1

A Law Decree (No. 569) effective January 2, 1953 was published, canceling Law Decree No. 2679 of August 20, 1948, and giving powers to the Monetary Stabilization Fund to put exchange control measures into effect, when circumstances indicated.

December 17

A Law Decree (No. 591) was published, regulating the 2 per cent export tax and establishing the payment of this tax on the purchase of foreign currency and withdrawals from bank accounts in foreign currency, on the assumption that the ultimate destination is a foreign country. (Decree No. 928 of April 10, 1953 regulates this Law Decree No. 591.)

Czechoslovakia

Origin and Essential Features

Exchange control was introduced in Czechoslovakia on October 31, 1931. The last major revision took place on April 11, 1946. Authorizations of imports and exports are determined within the economic plan. Foreign trade is organized on the basis of monopolistic trade organizations dealing in specific commodities. Exchange is granted for all authorized payments. Foreign exchange must be surrendered.

Exchange Rate System

The par value is Czechoslovak Korunas 50 = US$1. The official rates are Kčs 49.85 buying, Kčs 50.15 selling; per US$1.

Imports and Import Payments

Authorizations of imports are determined within the economic plan. Exchange is automatically granted for authorized imports.

Payments for Invisibles

Payments abroad require licenses. Residents traveling abroad may take with them a maximum of Kčs 500 monthly in domestic or foreign currency. Nonresidents traveling abroad may take with them Kčs 500 monthly in Czechoslovak banknotes and coins.

Exports and Export Proceeds

Authorizations of exports are determined within the economic plan. Exchange receipts must be surrendered.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered. Persons may bring in a maximum of Kčs 500 monthly in Czechoslovak banknotes and coins.

Capital

Transfers of capital and the investment of foreign capital require approval. Exchange receipts from capital must be surrendered.

Changes during 1952

No significant changes took place during 1952.

Denmark

Origin and Essential Features

Exchange restrictions were first introduced in Denmark on November 18, 1931. The degree of restrictiveness has varied in accordance with Denmark’s economic position. Early in 1932, Denmark established central foreign exchange offices, whose tasks were not only to limit imports and regulate capital transfers, but also to control the direction of imports in return for concessions under bilateral trade agreements.

At the beginning of World War II, restrictions were extended to cover exports and invisibles, and at the end of the war, a system of tight restrictions was in force. After a short period of relative relaxation, restrictions were intensified on March 19, 1946. This policy was continued throughout 1947 and 1948. Since 1949, exchange restrictions have been relaxed continuously.

Import restrictions are based essentially on balance of payments considerations; they are not applied severely to imports from EPU and some other countries. Some imports require advance deposits. Payments for invisibles are restricted to some extent, but nearly all current payments to EPU countries are unrestricted.

As a general rule, all foreign exchange proceeds must be transferred to Denmark and surrendered. Export licenses are required for the export of the major agricultural products and a range of industrial products. Capital movements are subject to control.

The prescription of currencies for foreign payments and receipts is an integral part of the Danish exchange system. In general, payments must be made either in the currency of the creditor country, or in Danish kroner through a nonresident account related to the country of residence of the foreign creditor.

Exchange Rate System

The par value is Danish Kroner 6.90714 = US$1. The official rates are DKr 6.895 buying, DKr 6.920 selling, per US$1.

Administration of Control

The exchange control is administered by the Danmarks National-bank, which is the central exchange control authority in Denmark. However, administrative powers for most payments and transfers are delegated to the banks and stock exchange brokers which are appointed authorized exchange dealers.

Certain imports and exports require licenses issued by the Directorate for Supply or other authority. When an import license has been obtained from the Directorate for Supply, payment certificates—when certified by the customs authorities or the Directorate for Supply as proof of clearance—enable the authorized exchange dealers automatically to effect payment.

Prescription of Currency

As a general rule, outgoing payments must be made in the currency of the recipient country, or in Danish kroner by crediting a nonresident account of an account holder of the country concerned. Payments to most countries are effected through the authorized exchange dealers, but payments to Bulgaria, Colombia, Greece, Hungary, Israel, Poland, Turkey, U.S.S.R., and Yugoslavia are centralized through the Danmarks Nationalbank.

Payments from abroad must, as a general rule, also be made in the related foreign currency, or in Danish kroner by debiting a nonresident account of an account holder of the country concerned. Payments from countries classified as “Transferable Sterling Account” countries or as “Residual Group Account” countries in the United Kingdom exchange control system (see United Kingdom, section on Nonresident Accounts) may be received in sterling.

Nonresident Accounts

The accounts in Danish kroner of nonresidents are divided into four different types—Krone Accounts I, II, III, and IV—designated by nationality according to the country of residence of the account holder. These various types of accounts are held for the following purposes:

1. Krone Accounts I may be used only for settlement of current transactions between Denmark and the country where the account holder resides. These accounts are held by banks residing in foreign countries, shipping companies in Norway and Sweden, and others who have been given special permission.

2. Krone Accounts II may be used only for making payments in Denmark for the settlement of current transactions with the country in question. New funds may be credited to the account only by transfer from a Krone Account I belonging to a bank with the same designation of nationality.

3. Krone Accounts III are established for insurance companies abroad for use in the settlement of insurance and reinsurance transactions between Denmark and the country where the insurance company is domiciled.

4. Krone Accounts IV comprise all other foreign Krone Accounts. They are generally used for the crediting of amounts that cannot be authorized for transfer abroad because of Denmark’s foreign exchange position. Crediting and debiting of these accounts may, in principle, take place only with special permission of the Danmarks National-bank, except with regard to certain specified transactions.

Balances on Krone Accounts I, II, or III related to most countries can at any time be transferred abroad in the currency of the nationality of the account holder. Where transfers between these three types of accounts are allowed, they can usually be made only between accounts of the same designation of nationality, but transfers to or between Krone Accounts III of different nationality are permitted.

Imports and Import Payments

The control of expenditures for private imports is implemented by making certain goods subject to import licensing. Import licenses are required for a large number of goods if imported from non-EPU countries, but most imports from EPU countries and their associated territories1 are either free of license or licenses are freely issued.

In addition, about 10 per cent of the imports freed from import licensing require advance deposit payments. For a number of goods imported from EPU countries and their associated territories, Finland, the Spanish Monetary Area, or Yugoslavia, advance deposits varying between 90 and 135 per cent of the import value must be made with an authorized exchange dealer, which must transfer these funds to the Danmarks Nationalbank. If these goods are imported from other countries and therefore are subject to import licensing, advance deposits are also required. Three months after the deposit has been made, two thirds of the deposit must be refunded to the importer; the remainder will be refunded twelve months after the deposit is made. Until then, these deposits remain blocked and cannot be used as collateral for loans.

A valid payment authorization is required for all private imports. Payment certificates, when certified by the customs authorities as proof of clearance, are valid as an authority to pay for the corresponding goods and the related shipping expenses. However, for advance payments before clearance of the goods, the authorized dealers may effect payment if the importer submits a statement promising to produce the payment certificate later. Foreign exchange can be made available only by the Danmarks Nationalbank or—insofar as payments agreements do not prevent them from effecting foreign exchange transactions—by authorized exchange dealers. The form or currency for such payments is specified (see section on Prescription of Currency, above).

Payments for Invisibles

Payments which are not for the import of goods require approval. The authorized exchange dealers are permitted to authorize most payments; only in special cases is approval from the Danmarks Nationalbank or from a special authority required. An annual exchange allocation of DKr 7502 per adult is given for tourist travel to EPU countries and their associated territories, the Spanish Monetary Area, and Yugoslavia, and of DKr 2,000 per adult for travel to each of the following: Finland, Norway, the Sterling Area, and Sweden.

Travelers may take out of the country DKr 100 in domestic banknotes without special authorization from the Danmarks Nationalbank. Residents may take out foreign banknotes only if they can prove that the amount was legally purchased from the Danmarks Nationalbank or from an authorized exchange dealer or can produce an export permit issued by the Danmarks Nationalbank. Nonresident travelers may take any amount of foreign banknotes out of the country provided they declare that the amount was brought in by them.

Exports and Export Proceeds

Exports of major agricultural products and of a range of industrial products require export licenses; these are issued by various authorities, depending on the kind of commodity. Certain exports are made subject to restrictive licensing to safeguard the fulfillment of bilateral obligations, to serve strategic purposes, to avoid re-export and transit transactions involving loss of hard currency, and to secure the domestic supply of essential goods.

Foreign exchange proceeds must be transferred to Denmark unless the Danmarks Nationalbank permits otherwise. Transferred foreign exchange must be offered for purchase to the Danmarks Nationalbank or to an authorized exchange dealer within eight days after receipt. If recipients show evidence to the Danmarks Nationalbank that they require foreign exchange in that currency to cover their own obligations due within three months or to maintain their business interests abroad or for other purposes deemed necessary, the Danmarks Nationalbank may exempt them from the general obligation to surrender these exchange proceeds. The type of currency to be received for exports is prescribed (see section on Prescription of Currency, above).

Exporters of most commodities paid for in U.S. or Canadian dollars obtain, against surrender of their dollar receipts, both Danish kroner at the official rate and a “title to import license” which grants the right to import, against payment at the official rate of exchange, otherwise restricted goods from EPU countries and their associated territories, Finland, the Spanish Monetary Area, and Yugoslavia in amounts equivalent to 10 per cent of their export proceeds. These import rights are transferable.

Proceeds from Invisibles

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

Travelers may bring into Denmark up to DKr 100 in domestic banknotes. Foreign banknotes may be freely imported in any amount.

Capital

Capital transfers, both outward and inward, must be authorized by the Danmarks Nationalbank, and applications are considered upon their individual merits. Applications for capital transfers to other European countries are normally allowed to the same extent that the country in question allows capital transfers to Denmark. Transfers to the United States and Canada resulting from inheritance, etc., are normally approved up to DKr 25,000 if the beneficiaries are U.S. or Canadian residents or Danes who have lived abroad for the past seven3 years.

Applications for Danish investments abroad normally are approved when these investments may, with reasonable certainty, lead to an increase in net foreign exchange earnings.

Anyone receiving payment from abroad must, if the amount exceeds DKr 500, submit a report concerning this receipt to an authorized exchange dealer. If the authorized exchange dealer considers that the purpose of the payment reported is not of a current nature, settlement or payment can take place only after the Danmarks Nationalbank has given authorization. Applications for inward capital transfers for productive purposes are given sympathetic consideration.

Danish or foreign securities held in Denmark for the account of nonresidents may not be returned to the owner or custodian and may not be sold without special authorization from the Danmarks Nationalbank. Proceeds of the sale of securities belonging to residents of foreign countries other than Norway, Sweden, and the Sterling Area are normally credited to a blocked nonresident account (see section on Nonresident Accounts, above). Proceeds of the sale in Denmark of Danish securities belonging to residents of Norway, Sweden, and the Sterling Area are normally released upon application to the Danmarks Nationalbank.

Changes during 1952

January 17

The rules, according to which the authorized exchange dealers were permitted without special authorization to transfer to Danish citizens residing abroad (1) pensions, annuities, and similar payments, (2) insurance amounts due, and (3) interest and dividends derived from foreign capital investments in Denmark, were relaxed.

Authorized exchange dealers were permitted to buy and sell Danish kroner against sterling and French francs in spot transactions with their foreign correspondents in the United Kingdom and France. Existing rules for exchange transactions and the exchange rate margins remained unchanged.

January 26

The range of commodities subject to export control was enlarged.

March 1

Authorized exchange dealers were permitted to buy and sell Danish kroner against Swiss francs in spot transactions with their foreign correspondents in Switzerland. Existing rules for exchange transactions and the exchange rate margins remained unchanged.

May 5

Additional commodities were added to the list of goods which could be imported without import license from EPU countries and their associated territories, Finland, the Spanish Monetary Area, and Yugoslavia.

July 12

The annual exchange quota for tourists visiting Finland and Sweden was increased from DKr 750 to DKr 2,000 for each country.

Authorized exchange dealers were permitted to convert for nonresidents (up to a maximum amount equal to DKr 200) one EPU currency into another, and to convert U.S. and Canadian dollars into EPU currencies without special authorization from the Danmarks Nationalbank.

August 6

Exporters of most commodities for which payment is received in U.S. or Canadian dollars could obtain, against surrender of the dollar proceeds, in addition to Danish kroner at the official rate and for an amount equivalent to 10 per cent of their export proceeds, a “title to import license” granting the right to import restricted goods from EPU countries and their associated territories, Finland, the Spanish Monetary Area, and Yugoslavia. These import rights were transferable.

August 11

The centralized purchase of grain was abolished. Grain could be imported without import license from EPU countries and their associated territories, Finland, the Spanish Monetary Area, and Yugoslavia.

September 6

Additional commodities were added to the list of goods which could be imported without import license from EPU countries and their associated territories, Finland, the Spanish Monetary Area, and Yugoslavia.

November 27

The amounts of the advance deposits in respect of certain imports, mainly piece goods and apparel, were reduced from a range of between 120 and 180 per cent of the import value to between 90 and 135 per cent. Watches could be imported without advance deposits (see Third Annual Report on Exchange Restrictions, page 79).

December 19

Additional commodities were added to the list of goods which could be imported without import license from EPU countries and their associated territories, Finland, the Spanish Monetary Area, and Yugoslavia.

Dominican Republic

Origin and Essential Features

Exchange control was introduced in the Dominican Republic on July 29, 1942. In February 1951, a system of import control was introduced, by which licenses, which take the form of “Recommendations to Import”, are required for all imports in order to ensure equitable distribution of goods received under quotas allocated to the Dominican Republic by supplying countries. A few special items are also subject to import licensing. There is an exchange licensing system, but this is not exercised in a restrictive manner. Certain exports are subject to export licensing.

Exchange Rate System

The par value is Dominican Peso 1 = US$1. U.S. dollar transactions between the Banco Central and other banks are effected at par. Exchange transactions by commercial banks with the public take place at the par value subject to small banking commissions.

Administration of Control

Exchange licenses are issued by the Ministry of National Economy, and all payments abroad must be made through the authorized banks. “Recommendations to Import” are issued by an Import Control Office, while import licenses required for a few special items are issued by the government department concerned.

Prescription of Currency

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

Imports and Import Payments

Prior approval of a “Recommendation to Import” is required for all imports. These import controls are designed to ensure equitable distribution and appropriate “end-use” of imports under quotas allocated to the Dominican Republic by supplying countries. Prior import licenses are also required from the Ministry of National Economy for imports of wheat and wheat flour, to ensure compliance with the provisions of the International Wheat Agreement. Imports of a few other special items require import licenses issued by the government department concerned. Applications for exchange have to be submitted by the banks daily for approval by the Ministry of National Economy. This control is maintained for statistical purposes and is not exercised restrictively. Licenses are issued within 24 hours of filing applications.

Payments for Invisibles

Payments for invisibles require exchange licenses which are issued within 24 hours of filing the application. There are no restrictions imposed on payments.

Exports and Export Proceeds

The surrender of the proceeds of exports is not required and exchange receipts are freely disposable. Export licenses are required for sugar and a few other special items, the re-export of articles imported, and exports whose composition or structure includes imported articles.

Proceeds from Invisibles

There are no requirements attaching to exchange receipts from invisibles and these are freely disposable.

Capital

There are no exchange control obligations attaching to capital receipts or payments.

Changes during 1952

No significant changes took place during 1952.

Ecuador

Origin and Essential Features

Exchange control was established in Ecuador in 1932. In 1947 exchange surcharges went into effect, and in 1949 a system of compensation for minor exports, matching them against otherwise prohibited luxury imports, was established. The compensation rate was determined in a separate market. On December 1, 1950, the surcharges were eliminated and a new par value established. In February 1952 the compensation system was merged with the free market. Ecuador’s present exchange system comprises a multiple exchange rate structure which arises from the coexistence of an official and a free market. Quantitative restrictions are not relied upon to restrain imports, although some commodities are prohibited.

Exchange Rate System

The par value is Sucres 15.00 = US$1. This rate applies to most exports, essential and semi-essential imports, registered private capital, and certain other specified transactions. Higher rates operate in a free market for exchange transactions related to selected minor exports, luxury imports, unregistered capital, and invisibles. Effective rates between the official and free market rates result from the “mixing” arrangements for exchange proceeds derived from exports of chemical products and the adjustment of the values used for the surrender of exchange derived from rice1 and banana exports (see Table of Exchange Rates, below).

Administration of Control

The authorities of the Central Bank of Ecuador control and supervise the permitted transactions which pass through the official market. All transactions which do not qualify for the official market may enter the free market, and the proceeds of such transactions are free of supervision by the exchange control authorities.

Prescription of Currency

In principle, exchange proceeds must be received in dollars, but bilateral agreements with Chile, Colombia, France, the Federal Republic of Germany, and Italy require payment through special dollar accounts at the central banks of the countries concerned.

Imports and Import Payments

A prior import license is required for substantially all imports other than those representing foreign loans and those of certain foreign companies, but apart from prohibited imports, import licenses are, with a few minor exceptions, issued freely. Import licensing enables specified transactions to obtain the official market rate and ensures that taxes levied on imports are collected and that imports are restricted to permissible goods. Imports are divided into three categories—essential (List A), semi-essential (List B), and luxury (List C)—and goods not included in these three classes are prohibited. Nevertheless, the Central Bank may authorize the importation of goods not included in the three categories.

The granting of an import license, issued by the exchange department of the Central Bank, carries with it the right to the required foreign exchange. Legally, the Bank must act on the application within three days, stating the taxes—33 per cent on semi-essentials (List B) and 44 per cent on luxuries (List C)—and any advance deposits which must be paid before the license is issued. The Central Bank will issue the import permit as soon as the importer has paid the specified taxes and made any advance deposits required. For luxury imports, foreign exchange to cover the import must be deposited with the Central Bank prior to the issuance of the import license.

For imports of essential and semi-essential goods, the Central Bank has the power to impose prior deposits of local currency in certain circumstances, but this authority is not now exercised.

Payments for Invisibles

Most payments for invisibles are made through the free market and are not subject to control by the exchange control authorities. Certain invisibles can be paid for at the official rate but require an exchange license, to be obtained from the Central Bank which grants such licenses for contractual interest payments, amortization of loans, and other obligations abroad which are registered at the Central Bank; payments of dividends, profits, interest, and amortization on registered foreign investments up to a specified amount but not less than 12 per cent annually; indispensable payments and remittances of the Government and official entities; and foreign exchange required by persons taking specialized courses abroad provided that such persons register with the Central Bank and that the amounts do not exceed passenger fares, expense of travel, tuition, and specified amounts for living expenses.

Exports and Export Proceeds

All exports other than those of certain foreign companies are subject to license, issued by the Central Bank to ensure surrender of foreign exchange proceeds or their sale in the free market.

Export licenses are issued after application has been presented by the exporter and arrangements have been made either for the surrender to the Central Bank of freely convertible foreign exchange, or for remittance through a payments agreement account—in both of which cases the official rate is applicable—or for the return of the exchange to Ecuador in cases where it is eligible for sale on the free market. The official rate applies to most exports except petroleum, gold, and certain minor exports. In addition, banana exporters surrender exchange for a fixed amount per stem at the official rate. The balance is sold at the free market rate or transferred abroad. A similar minimum surrender requirement applies to rice. A mixing arrangement also applies to exports of chemical products and medicines (see Table of Exchange Rates, below).

Proceeds from Invisibles

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

Capital

Receipts of foreign capital may enter at the official rate if they are for approved purposes and registered at the Central Bank. Registered capital and earnings may be transferred at the official rate (see section on Payments for Invisibles, above). The Central Bank may refuse to register capital. Capital which is not registered is free to enter through the free market in unlimited quantities. Foreign nonmonetary capital entering in the form of machinery, tools, etc., is treated like foreign monetary capital and does not require a license.

Table of Exchange Rates(as at December 31, 1952)
(sucres per U.S. dollar)
BuyingSelling
15.0015.15
Most exports,2 except petroleum, gold, so-called Panama hats, and certain minor exports. Requirements of foreign companies for actual operating costs. Registered capital.Essential and semi-essential imports. Government payments. Interest, dividends, and amortization on registered foreign capital. Approved expenses of students.
15.92(60% at S/ 15 and 40% at Fluctuating Free Market Rate)
Chemical products and medicines.
17.30(Fluctuating Free Market Rate)17.40(Fluctuating Free Market Rate)
Invisibles. Unregistered capital. Certain minor exports. Gold exports. Exports of so-called Panama hats.Luxury imports. Unregistered capital. Other invisibles.
Note : In December 1950, the Central Bank entered the free market by establishing a buying rate of S/ 17.30 per US$1. In June 1952, the Central Bank started to sell in the free market at S/ 17.40 per US$1. Rates quoted by foreign exchange dealers fluctuate around the rates fixed by the Central Bank.
Note : In December 1950, the Central Bank entered the free market by establishing a buying rate of S/ 17.30 per US$1. In June 1952, the Central Bank started to sell in the free market at S/ 17.40 per US$1. Rates quoted by foreign exchange dealers fluctuate around the rates fixed by the Central Bank.

Changes during 1952

February 28

The compensation system was abolished and mixing rates (applied to certain export proceeds) combining the official and compensation market rates in different proportions were abolished. The minor exports and luxury imports formerly subject to the compensation arrangements were transferred to the existing free market.

April 30

It was announced that the Central Bank would negotiate exchange proceeds from so-called Panama hats exported through Cuenca 50 per cent at the official rate and 50 per cent at the free rate.

May 8

The minimum price per stem which banana exporters are obliged to surrender to the Central Bank at the official exchange rate (except for exports subject to special agreements) was fixed at US$1.20 and US$1.50 for the periods June 1-September 30 and October 1-May 31, respectively, each year.

May 17

A minimum surrender requirement at the official rate of US$3.00 for each quintal of rice (46 kilograms) exported was established for exports up to 500,000 quintals. The balance of the proceeds is sold in the free market.

July 17

Sixty per cent of the proceeds from exports of chemical products and medicines had to be surrendered to the Central Bank at the official rate of exchange. The balance of the proceeds is sold in the free market.

October 22

An additional quota of 300,000 quintals of rice was allocated for export in the period August 1952-September 1953. A minimum of US$3.00 per quintal had to be surrendered to the Central Bank at the official rate, as well as any excess of the f.o.b. price over US$9.00 per quintal. The balance continued to be sold in the free market.3

November 24

The total proceeds from exports of so-called Panama hats from any part of the country were assigned to the free market. The Central Bank was given first priority to buy this exchange at the free market rate.

Egypt

Origin and Essential Features

A system of exchange control was initially introduced in Egypt on September 28, 1939. Restrictions were placed on nonessential goods in 1952, and individual licensing of imports was applied to all imports as from October 7, 1952. In addition, considerable modifications of the prescription of currency and the methods of settlement for international transactions were introduced in December 1952.1

Basically a unitary exchange rate system operates in Egypt. However, a tax of 10 per cent is charged on certain transfers abroad on account of specified invisibles.

Settlements on account of merchandise transactions and invisibles must be effected in the prescribed manner and currency.

A restrictive list was issued on December 15, 1952, and amended on March 3, 1953 ; it included commodities which may be imported from countries other than Sterling Area countries, dollar area countries, or payments agreements countries, if payable in Egyptian pounds through an Export Account. Licenses are issued freely for this purpose.

Banks are authorized to effect certain invisible transactions without prior exchange control approval. Other invisibles need prior approval of the Central Exchange Control. Exchange is generally made available for expenses associated with approved trade transactions and other current payments.

Exchange earnings of Egyptian residents, except a few cases concerning some exports, must be surrendered and sold to authorized banks at the official rate of exchange.

Most capital transactions between residents and nonresidents are subject to individual licensing.

Exchange Rate System

The par value is Egyptian Pound 1 = US$2.87156. Basically, the exchange rate system is unitary and cross rates are orderly. However, a tax of 10 per cent is charged on exchange allocated for travel, maintenance remittances where the beneficiary is either an Egyptian national or a foreigner holding an Egyptian residence visa, and revenue remitted to Egyptian nationals residing permanently abroad.

Exchange Control Territory

There is no exchange control between Egypt and the Anglo-Egyptian Sudan,2 but each of the two territories has its separate exchange control system.

Administration of Control

Exchange control in Egypt is supervised by the Supreme Committee for Foreign Exchange set up by the Minister of Finance and Economy. The exchange control laws, ministerial arrêts, decree-laws, and instructions of the Minister of Finance and Economy and of the Supreme Committee are carried out by a Director of Exchange Operations appointed by the Minister of Finance and Economy. The technical work of the Exchange Control is performed, under the supervision and the instructions of the Director of Exchange Operations, by the Central Exchange Control.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles must be effected in the prescribed manner and currency. They are made, depending upon the country involved and the type of transaction, in one of the following ways: (1) in the currency of the country of the beneficiary, (2) where appropriate, in sterling through an Egyptian Transferable Account, (3) in Egyptian pounds to a nonresident account of the same monetary area, (4) in Egyptian pounds through an Export Account, (5) in any other currency or manner approved by the Central Exchange Control. The exchange control authorities allow the export of certain commodities only against hard currencies. The prescription of currency in respect of export proceeds allows for alternative methods of settlement. As a general rule, transit trade and re-export transactions must be settled on the basis of the same currency being paid and received.

Nonresident Accounts

The main categories of nonresident accounts are as follows:

  • Nonresident (ordinary) accounts named according to the country or monetary area in which the holder resides, except that in the case of the United States, Canada, Switzerland, and Portugal the nonresident status is granted only to nationals of these countries actually residing in their own country: Ordinary nonresident accounts may be freely credited with transfers from nonresident accounts of the same monetary area.

  • Export Accounts: These accounts can be credited with (a) payments in respect of goods imported into Egypt under import permits stipulating settlements in Egyptian pounds through an Export Account; (b) transfers from other Export Accounts; and (c) amounts specifically approved by the Central Exchange Control. Balances on such accounts may be utilized for (a) payments to residents of Egypt in settlement of the value of goods exported from Egypt to countries other than certain specified countries;3 (b) payments to residents for services, etc.; and (c) transfers to other Export Accounts. The “export pound” which is reported to be regularly negotiated outside Egypt was at a discount of about 9 per cent at the end of December 1952.

  • Blocked Accounts: These are credited with any payment to a nonresident which is not remittable under the exchange control regulations and not creditable to Provisionally Blocked Accounts (see below). These accounts may be freely debited (a) with amounts up to LE 1,000 per annum for living expenses of the account holder in Egypt, (b) for investments in Egyptian Government securities and shares of companies established in Egypt (not redeemable on a date earlier than 10 years), (c) for subscription to increases of capital in Egyptian companies in which the account holder is already a shareholder. Income derived from shares mentioned above under (b) can be credited to an appropriate ordinary nonresident account.

  • Provisionally Blocked Accounts: These are opened for residents of certain countries (Argentina, Belgium, Brazil, Canada, Portugal, and United States) when funds due to them in respect of capital or revenue are temporarily nontransferable because of a shortage of the corresponding currencies. Balances on these accounts are used for the same purposes as those indicated above under Blocked Accounts, 3(b) and 3(c), and also for living expenses of an account holder in Egypt and allowances to his relatives in Egypt, for transfers in the form of monthly allowances in cases of justified needs, and for transfers to other provisionally blocked accounts related to the same monetary area.

Imports and Import Payments

All imports are subject to individual licensing. Licenses for imports from countries with which Egypt has payments agreements4 are freely issued. No licenses are issued for nonessential imports from Sterling Area territories. Licenses are granted for importation of essentials from the dollar area. Essentials and semi-essential goods may be imported through an Export Account.

A restrictive list issued on December 15, 1952 (and amended on March 3, 1953) includes commodities which may be imported from countries other than Sterling Area countries, dollar area countries, or payments agreements countries, if payable in Egyptian pounds through an Export Account. Licenses are issued freely for this purpose.

Payments for Invisibles

Banks are authorized to effect certain invisible transactions without prior exchange control approval. Other invisibles require prior approval of the Central Exchange Control. Exchange is generally made available for expenses associated with approved trade transactions and other current payments. Expenses for travel, family maintenance, film royalties, and subscriptions and fees of professional organizations are usually approved by the Central Exchange Control up to specified quotas. Remittances for travel and maintenance on behalf of Egyptian residents, either nationals or foreigners, are subject to a 10 per cent tax. Persons leaving Egypt can take with them Egyptian banknotes in amounts not exceeding LE 20 or the equivalent in foreign banknotes.

Exports and Export Proceeds

A few exports require individual licenses. Export proceeds must be repatriated within six months from the date of dispatch of the goods, and surrendered. Egyptian exporters selling their long-staple cotton of specified categories other than those included in the annual import quota established by the U.S. authorities, or exporting non-dollar commodities for dollars, are given preferential treatment regarding the use of 30 per cent of their dollar earnings accruing from this source for imports of specified goods. However, the total of the export proceeds must first be repatriated and surrendered, after which application may be made for the 30 per cent in import rights.

Proceeds from Invisibles

All persons and legal entities in Egypt are obliged to offer to authorized banks for sale at the official exchange rate all proceeds payable in foreign currencies within one month from the date of their collection abroad or their transfer to Egypt. Persons arriving in Egypt from abroad can bring in Egyptian banknotes in amounts not exceeding LE 20.

Capital

Transfers abroad by residents for the purpose of acquiring capital assets or securities outside Egypt require an individual license which is not normally granted. The import and export of securities and similar items into and from Egypt require licenses.

The import and export of securities and similar items into and from Egypt by or on behalf of nonresidents, and transfers of securities in Egypt from one nonresident to another, require approval of the Central Exchange Control unless such residents belong to the same monetary area. Exchange is not granted for the remittance abroad of funds due to nonresidents from the sale of their securities in Egypt; such proceeds, as well as any payment of a capital nature to a nonresident which is not permitted under the exchange control regulations, must be credited to a Blocked Account (see section on Nonresident Accounts, above).

Transfers abroad are permitted in payment of (1) securities drawn or matured in accordance with the original terms of issue, (2) the proceeds of income items in respect of securities quoted on the Egyptian Bourse on account of customers resident abroad if made to the country of residence of the owner of the securities, and (3) matured mortgages.

An amount not exceeding LE 5,000 per family—irrespective of whether the sum is made up of capital or income—may be released from their assets in Egypt to foreign residents who acquire nonresident status. Any amount above this limit is credited to a Blocked Account, with the exception of Switzerland and the Sterling Area, where capital transfers may exceed LE 5,000.

Changes during 1952

August

A tax of 10 per cent on funds transferred abroad for specified invisibles was introduced.

October 7

The system of individual import licensing was extended to all imports.

December 12

The arrangements for settlements through nonresident transferable Export Accounts were considerably extended.

Note: Several important changes were made in the exchange system in the opening months of 1953. The main changes were as follows:

On January 13, the Ministry of Finance and Economy issued instructions permitting Egyptian manufacturers of textiles and yarn to export their products and use the foreign exchange proceeds provided that the currencies were not those of countries with which Egypt has payments agreements.

As from January 29, Egyptian exports to Canada, the American Monetary Area, and the Sterling Area of cotton and other goods not subject to export restrictions could be paid for 50 per cent in dollars or sterling and the balance in Egyptian “export pounds” or in goods permissible under the “export pound” arrangements, but such goods had to be the product of the exporting country. On February 9, the proportions were changed so that 75 per cent of the total payment could be made in Egyptian “export pounds.”

On February 10, under the terms of an agreement with the Netherlands, it became possible for trade between the two countries to be conducted through the use of Egyptian “export pound” accounts, balances on which could be freely transferred between Netherlands residents in respect of whose exports to Egypt the Egyptian authorities would freely grant import licenses.

Effective February 11, capital transfers between Egypt and the Sudan became subject to limitations, and exchange control was established over payments for current transactions.

On February 28, details of a retention quota arrangement were announced. Under this arrangement, persons who export goods not subject to restriction regarding the currency of payment and who surrender to an authorized bank the full proceeds of the export in Canadian or U.S. dollars or pounds sterling are credited on memorandum accounts, named Import Entitlement Accounts, for 100 per cent of the proceeds of exports of yarn and cloth and 75 per cent of the proceeds of other items. The balances on these accounts, which are transferable, entitle the holder to receive import licenses and to purchase exchange from an authorized bank in payment of such imports. These rights are automatically canceled if not utilized by the end of the third calendar month following that in which the export proceeds were sold to an authorized bank.

Ethiopia

Origin and Essential Features

Exchange control was established in Ethiopia on October 31, 1942. A significant revision occurred on September 11, 1949, when the controls were broadened and various restrictions were introduced. The exchange system is characterized by exchange licensing for all payments, surrender of all foreign exchange receipts, and prescription of currencies for exchange payments and receipts. Restrictions are exercised on payments for nonessential imports and for invisibles and capital transactions.

Exchange Rate System

The par value is Ethiopian Dollars 2.48447 = US$1. The official rates are Eth$2.48 buying, Eth$2.53 selling, per US$1 ; the official selling rate represents a spread of more than 1 per cent from the par value.

Administration of Control

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

Prescription of Currency

Payments outside Ethiopia must be effected in foreign exchange appropriate to the country of the recipient, and foreign exchange from exports must be received in the appropriate currency, usually that of the country of final destination or, for certain commodities, only in hard currency. Ethiopia has payments agreements with two countries (Israel and Norway), and all exchange transactions with these countries are conducted through special accounts.

Imports and Import Payments

There are no import licenses, but payments outside Ethiopia for imports require exchange licenses, which are granted only for specified essential goods and various consumer goods. Exchange licenses for payments in hard currencies 1 are granted, on the whole, only for essential goods which cannot be obtained in soft currency areas; however, there are certain imports to which this criterion is not applied. Application for a license must be made prior to the arrival of the shipping documents or goods.

Exchange licenses for imports are normally issued, on the condition that letters of credit are opened. However, in certain special circumstances, some firms are allowed cash-against-documents treatment. Exchange is made available to the applicant as soon as he receives a license. In accordance with the terms of the exchange license, an importer is permitted to make payments to a country only in the currency of that country (or monetary area).

Payments for Invisibles

Payments for invisibles require exchange licenses. Licenses for invisibles connected with trade transactions are allowed on the same basis as licenses for the goods to which they relate. Persons traveling abroad are granted foreign exchange in the currency of the country of destination on a case-to-case basis. They may take with them a maximum of Eth$150 in Ethiopian banknotes. Exchange for education is granted within reasonable limits in each case. Exchange for such purposes as charity and maintenance is granted in moderate amounts to residents not permanently domiciled in Ethiopia for remittances to their own country. The transfer of “reasonable” amounts of dividends and similar current earnings due to nonresidents is permitted in the currency of the original investment. Family maintenance remittances are usually limited to Eth$105 per month, but higher amounts may be sent by foreign employees in Ethiopia under special contracts.

Exports and Export Proceeds

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

In due time, exporters must surrender at the official rate the promised amount of foreign exchange. The proceeds of exports of coffee and goatskins to any destination must usually be obtained in U.S. dollars, but exports of these goods against the receipt of soft currencies are permitted from time to time.

Proceeds from Invisibles

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

Capital

All foreign exchange receipts from capital must be surrendered. There is no discrimination regarding the currencies in which foreign investments are accepted. All payments abroad on account of capital are subject to individual exchange licenses. Foreign exchange is granted for repayment abroad of matured capital obligations of temporary residents. Other types of capital transfers are handled on a case-to-case basis.

Changes during 1952

During 1952, the proportion of exchange licenses permitting dollar payments was increased.

September 15

Eritrea was federated with Ethiopia, and the exchange control system of Ethiopia was applied to Eritrea.

Finland

Origin and Essential Features

Exchange control was introduced in Finland on October 26, 1939. Among the restrictions on current transactions, the licensing of imports as the basis for exchange allocation is the central factor. Furthermore, through the prescription of the currency of payment, the currency composition of outward payments is adjusted to that of exchange receipts available from exports and other sources. Also, import licensing, like the licensing of exports, serves to ensure that actual trade conforms to Finland’s trade agreements.

Exchange Rate System

The par value is Markkas 230 = US$1. The official rates are Fmk 229 buying, Fmk 231 selling, per US$1. Finland operates basically a single rate structure with the maintenance of parity values and orderly cross rates. However, since June 3, 1952, the commercial banks have been permitted, within the rules approved by the Bank of Finland, to buy and sell travelers’ exchange at higher rates.

Administration of Control

The Bank of Finland operates the exchange control system, with the assistance of exchange dealers (commercial banks) authorized for this purpose. Foreign exchange can be purchased from only the Bank of Finland or the authorized exchange dealers. However, the latter, but not the Bank of Finland, can deal in travelers’ exchange at other than official rates. The current administration of import licensing is handled by an office in the Ministry of Commerce, the Licensing Bureau, which is presided over by a Licensing Committee composed of government officials.

Prescription of Currency

The comprehensive licensing of exports and imports ensures that the methods of payment conform to the provisions of existing payments agreements and serves to protect Finnish exchange reserves. Sterling is a key currency in Finnish trade with western countries, and Finland has the facilities of the Sterling Transferable Account arrangements (see United Kingdom, section on Nonresident Accounts).

Nonresident Accounts

A system of four types of nonresident accounts is operated under the control of the Bank of Finland. (1) For exchange control purposes, exchange markka accounts are equivalent to foreign exchange and may be freely transferred abroad to the country and in the currency of the account holder. (2) Inland markka accounts are not transferable abroad, and the debiting of these accounts cannot substitute for payment in foreign exchange from abroad. Certain expenditures in Finland may, however, be defrayed from inland accounts, and transfers are allowed between nonresidents, irrespective of country or monetary area. These accounts are credited with those current payments whose transfer abroad is not allowed. (3) Blocked accounts are not transferable abroad, nor can they, without the consent of the Bank of Finland, be transferred between nonresidents. Certain expenditures in Finland may, however, be defrayed from blocked accounts. They are credited with noncurrent payments. (4) Travel accounts are transferable between foreign banks but they cannot be transferred abroad. They arise out of the remittance to Finland of Finnish banknotes bought by foreign banks and can only be used by foreign banks for the sale of Finnish travel exchange to foreign travelers.1

Imports and Import Payments

Imports are restricted by subjecting all imports to licensing. Licenses are allocated to individual importers primarily on the basis of past imports, but to some extent the past record of importers with regard to the price and quality of imports is taken into account. Exchange in the form prescribed in the license is normally granted without delay.2 Special import rights were, until December 31, 1952, available to exporters surrendering export* proceeds in U.S. dollars or free Swiss francs (see section on Exports and Export Proceeds, below).

Payments for Invisibles

Payments not arising out of imports are subject to the approval of the Bank of Finland in each case, and all contracts involving payments to nonresidents must be submitted to the Bank for approval. Royalties and interest, dividends, and other income from capital owned by nonresidents must as a rule be paid into an inland markka account and cannot be transferred abroad (see section on Nonresident Accounts, above). However, if the Bank of Finland has approved a contract providing for transfer abroad, exchange is granted automatically for the individual payments.

Residents traveling to European countries are automatically allocated exchange at the official rate up to certain amounts. In addition, a special system was instituted on June 3, 1952, establishing higher rates for travelers’ exchange which can be purchased over and above the allocations at the official rates mentioned above. A traveler may take with him Fmk 30,0003 in banknotes or he may expend part or all of this amount in purchasing foreign exchange from commercial banks at higher rates, as indicated in the following tabulation:

Travel Exchange Rates(as at December 31, 1952)
(markkas per foreign currency unit)
Buying

Rate
Selling

Rate
Buying

Rate
Selling

Rate
New York…………340355Paris………….951
Montreal…………340355Brussels…………6.506.70
London…………910940Amsterdam…………8488
Stockholm…………6265Frankfurt/M…………7780
Copenhagen…………4446Zürich…………7881
Oslo…………4345

Such export of notes or purchase of foreign exchange is limited to one journey per person per month.4 The commercial banks acquire the foreign exchange for such sales by purchasing from foreign travelers in Finland travel exchange at the rates indicated in the above tabulation. The amount that may be bought from a foreign traveler can be no larger than the amount that he has been allowed by the exchange regulations of his own country to take out from that country.

Travel tickets are completely independent of the travel exchange system; they are sold for markkas at the official rate of exchange.

Exports and Export Proceeds

All exports are subject to licensing, and all foreign exchange acquired through exports must be surrendered to the Bank of Finland or an authorized exchange dealer. Through the licensing of exports and the control of the currency of payments, the authorities are able to assure that exports conform to Finnish trade agreements and the fulfillment of exchange surrender requirements. The authorized banks and a few large export and shipping firms, as well as insurance companies, are allowed to maintain their own working balances in foreign exchange under the supervision of the Bank of Finland.

Under a system of preferential import rights, exporters who secured payment in U.S. dollars or in free Swiss francs were entitled to receive licenses for imports against payment in these currencies to the amount of 10 per cent of the exports. This arrangement, which dates back to February 1, 1950, did not involve any exception to the surrender requirement, and licenses for imports had to be applied for in the ordinary way. Normally, a condition for the granting of import licenses was that the commodities in question were intended for use in the applicant’s own business. The importer was, however, allowed to sell the goods imported, subject to the ordinary price control regulations. In addition to exporters, organized import agents of foreign firms were granted similar preferential import rights to the extent of 20 per cent of their earned and surrendered commissions in foreign exchange. However, these special import rights arrangements were abolished December 31, 1952.

Proceeds from Invisibles

All foreign exchange acquired must be surrendered to the Bank of Finland or an authorized exchange dealer. Persons may bring in a maximum of Fmk 30,000 5 per month in Finnish banknotes.

Capital

Each outward payment on capital account is subject to approval by the Bank of Finland. The following capital transfers abroad, however, are provided for by agreement with other countries: (1) Inheritances of Swiss and U.S. citizens may, to a “reasonable extent”, be transferred abroad, and Swiss nationals giving up residence in Finland may be allowed to take out capital from Finland. (2) Agreements with Denmark and Norway provide for capital transfers on a compensation basis, but these agreements are seldom operative owing to the lack of Finnish capital claims on Denmark and Norway.

Banknotes

The special arrangements applying to transactions in travelers’ exchange include arrangements for banknotes (for details see sections on Nonresident Accounts and Payments for Invisibles, above).

Changes during 1952

January 10

The exemption of round timber from export licensing lapsed.

March

The arrangement by which import licenses were freely issued for certain goods, provided payment was to be made in specified “soft” currencies, was discontinued (see Third Annual Report on Exchange Restrictions, p. 92).

May 5

The allowance of exchange at the official rate which could be provided by the authorized banks without reference to the Bank of Finland for travel in Austria, the Sterling Area, Sweden, and the U.S.S.R. was reduced.

June 3

A system of higher exchange rates for travelers’ exchange was introduced.

October 1

The special import rights of import agents were reduced in scope from the equivalent of 40 per cent to 20 per cent of commissions surrendered in foreign exchange.

December 1

The allowance of exchange at the official rate which could be provided by the authorized banks without reference to the Bank of Finland for travel in Belgium, Denmark, France, Federal Republic of Germany, Netherlands, and Norway was reduced.

December 31

The system of special import rights for certain exporters and import agents was abolished.

France

Origin and Essential Features

Exchange control was introduced in France on September 9, 1939. A general overhauling and codification of the system was effected in July 1947. Changes in the system of exchange rates on January 26, 1948 and October 17, 1948 resulted in the establishment of two rates for “convertible” currencies and one rate for other currencies; but on September 20, 1949 a uniform rate system was established. In addition, restrictions have been modified on several occasions in the postwar period.

Almost all imports are subject to individual licensing, which is restrictively applied to “hard” currency imports. Payments for authorized imports are automatically allowed, subject to the presentation of supporting documents and provided the method of payment is in accordance with the regulations. Invisibles relating to trade transactions are allowed freely where the basic trade transaction has been approved. Other invisible payments are either permitted freely or subjected to varying degrees of restriction according to the category of the invisible and the currency involved.

Residents are obliged to collect and surrender amounts due from nonresidents which represent the proceeds of the sale of goods and services. Varying essentially according to whether or not the currency is considered “hard”, certain percentages of export and other specified proceeds are allowed to be retained and utilized for specified purposes.

Exchange Rate System

Since January 1948 France has not maintained any official par value in terms of the Fund’s Articles of Agreement. In practice, however, exchange rates in France are stable and of an essentially unitary character, with orderly cross rates. There are two types of exchange rate:

  • “Free” market rates for authorized transactions in Belgian francs, Canadian dollars, Djibouti francs, Portuguese escudos, Swiss francs, and U.S. dollars. The rate for the U.S. dollar remained between fr 349.50 and fr 350 during 1952. Although exchange rates of currencies dealt in on the “free” market are formed through the interplay of the demand and supply mechanism, only those persons who have a general or individual permit from the Exchange Office can buy exchange through the intermediary of the “free” exchange market and only authorized banks are permitted to operate on the “free” market as intermediaries between the ultimate seller and buyer of specified currencies. As the demand for and supply of “free” currencies are subject to the control exercised by the authorities over exchange transactions, the formation of “free” market rates is affected by the decisions of the French trade and exchange control authorities and the intervention of the latter in the exchange market.

  • “Official” exchange market rates for currencies 1 dealt in by the Exchange Stabilization Fund and the authorized banks have (with the exception of the Italian lira) their rates determined monthly on the basis of the so-called reference rate (i.e., an average of the “free” market dollar rate in France) and the respective parities for the other currency in terms of the U.S. dollar. This monthly rate is altered only if changes of at least 2 per cent occur in the U.S. dollar in the “free” markets in France. Should such changes be 5 per cent or more, the rates in question are correspondingly adjusted the next day. The rate for the Italian lira is fixed monthly in the “official” market on the basis of the current quotation in France and Italy for the U.S. dollar. Adjustments are made on a basis similar to that for the other currencies in this market.

The rates of other currencies are not quoted by the Exchange Stabilization Fund; they are published by the Bank of France on the basis of either their quotations in London and New York and the quotation of the dollar rate in France, or the official quotations of the respective foreign central banks. These rates are published mainly in order to determine the equivalent in French francs of payments expressed in such currencies, since practically all settlements between France and countries whose currencies are not mentioned in the two groups above are, as a general rule, effected through appropriate nonresident accounts in French francs.

Exchange Control Territory

Continental France (including Corsica), the Principality of Monaco, the Territory of Saar, French Overseas Departments,2 the Protectorates of Morocco and Tunisia, French Overseas Territories 3 and the Associated States of Cambodia, Laos, and Vietnam constitute the French Franc Area. Most payments agreements relate to settlements between the French Franc Area as a whole and the other country concerned. Restrictions between the various territories of the French Franc Area are either not applied or are applied only to minor parts of the Area, although such territories are formally independent exchange control units, each with its own local exchange control. The foreign exchange reserves of the French Franc Area are managed centrally and the local currencies of these territories are fixed in relation to the French franc.

Administration of Control

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

Prescription of Currency

General exchange control regulations and, in specific cases, individual decisions of the Exchange Office, prescribe the currency and form in which settlements between residents and nonresidents may be effected, usually payment to or from an appropriate nonresident account in French francs, and/or the currency, of the country of residence of the foreign beneficiary or debtor. For international payments subject to bilateral trade and payments agreements, the provisions of these agreements determine the prescription of currencies. In all other cases, the country of origin or destination of the goods or services constitutes the basis for the determination of specific provisions applicable to the prescription of the currency.

Nonresident Accounts

Nonresident accounts in French francs are classified either as (1) “free franc” accounts, balances on which derive either from franc proceeds of the sale of currencies considered as convertible, from transfers from other nonresident accounts in “free francs,” or from authorized credits; or (2) nonresident accounts in French francs related to a particular country or monetary area. These accounts (other than “blocked” or “capital” accounts) are convertible into the currency of the country of residence of the account holder, provided that the currency in question is one of the currencies dealt in on the “free” or “official” exchange market.4 Balances on all other nonresident accounts 5 are normally not convertible.

All debits and credits to nonresident accounts are subject to control. These accounts can be freely credited or debited in connection with specified transactions, such as the crediting of any account with the proceeds of sale of convertible currencies on the “free” market, or transfers from “free franc” accounts, or the crediting of an appropriate nonresident account with the proceeds of the sale of the currency related to the same country as the account, or transfers between accounts related to the same country or monetary area, or any payments in the French franc area, including payments on account of merchandise transactions. Other credit or debit operations on nonresident accounts are subject to approval.

Imports and Import Payments

Most imports are subject to individual licensing. Those free of individual licensing may be divided into the following groups: (1) goods liberalized up to specified quotas (this group is of limited importance); (2) goods which are reimported, subject to various limitations, and a list of goods which includes such items as commercial samples, items brought in by diplomats, and a few other goods; (3) specified equipment goods, raw materials, and semifinished products for export-producing industries, imported under the so-called “10 per cent Equipment” arrangement; (4) in certain cases, goods imported under the EFAC arrangement (see section on Exports and Export Proceeds, below).

The following groups of imports are restricted through individual licensing but are accorded liberal treatment: (1) specified raw materials and other goods needed for the production of goods to be exported; (2) imports from OEEC countries; (3) imports from other countries with which France maintains bilateral trade and payments arrangements—treated more or less liberally in accordance with quota and other arrangements and fluctuations in bilateral balances. Dollar imports, in general, are characterized by a certain degree of restrictiveness.

The determination of the over-all limits to be imposed upon particular classes of imports is made at a ministerial or cabinet committee level and the more detailed allocation is effected by or with the advice of trade authorities.

The import licenses, which are issued by the Exchange Office, constitute an authorization for effecting payments by authorized banks.

Payments for Invisibles

Control over payments in respect of many categories of invisible items is supervisory, to ensure that other aspects of the control are not being circumvented. Payments for invisibles relating to trade are freely permitted when the basic trade transaction has been approved. Income accruing to nonresidents in the form of profits, dividends, and royalties is remittable, subject to supervision. Quantitative restrictions are applied to the allocation of exchange for travel. Special facilities, however, exist for business travel, particularly for exporters who have been allowed to retain a percentage of export proceeds (see section on Exports and Export Proceeds, below). Foreign exchange is granted on an individual basis in reasonable amounts for travel abroad for education, health, and family reasons. Appropriate foreign exchange is granted for normal insurance commitments (except in a few specified cases), banking commissions, patents and royalties, and specified categories of taxes. Transfers to nonresidents of current earnings in the case of film rentals and royalties are approved on a liberal basis; however, amounts due to U.S. film companies may be partly transferred to the United States and partly credited to blocked accounts. Transfers on account of membership fees, subscriptions, donations, remittances for family maintenance, and movements of emigrants’ funds are permitted up to specified limits.

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

Exports and Export Proceeds

Some exports are subject to individual licensing. Export proceeds must be collected within 90 days from arrival of the goods at destination and in the manner set forth in the regulations (see section on Prescription of Currency, above). Foreign exchange proceeds must be surrendered within a month of the date of their receipt.

The following percentages of export proceeds are exempt from surrender requirements :

  • Fifteen per cent of proceeds from exports

    • To Mexico, payable in Mexican pesos or their equivalent in francs from appropriate nonresident accounts; to Peru, payable only in franca from a Peruvian account; and to Cuba, in accordance with the Franco-Cuban agreement of September 5, 1952;

    • To any country, payable in U.S. dollars, Canadian dollars, Djibouti francs, or francs from a “free franc” account;

  • Ten per cent of the proceeds of exports paid for in any other manner;

  • Six per cent of the proceeds of exports on consignment.

These retained percentages of export proceeds are kept in special separate “EFAC accounts” for each foreign currency and, in the case of export proceeds received in francs, different EFAC accounts are maintained according to the designation of the nonresident franc account debited for the payment.

The proceeds retained in EFAC accounts may be used only by the account holder for a large number of transactions, subject to individual licensing. However, one fifth of the allowance of 15 per cent referred to in (1) above is at the disposal of the exporters for any payment abroad, including payment for any imports except those covered by an absolute prohibition. The Exchange Office can permit exporters on an individual basis to retain a percentage of export proceeds higher than indicated above. Such permits are granted particularly in cases of exports which either include a high labor content or require considerable publicity expenses abroad.

Proceeds from Invisibles

Residents are obliged to collect and surrender within a month from the date of receipt amounts due from nonresidents in respect of services. Residents are obliged to surrender once a year income in excess of fr 10,000 accruing from their foreign securities if these are kept abroad in an account in the name of the owner. Hotels and similar establishments dealing with foreign tourists are permitted to retain a percentage of exchange proceeds under conditions similar to those applicable to exporters.

Travelers, as well as residents and nonresidents living abroad near French frontiers, can take with them out of France banknotes or coins (except gold coins) in metropolitan francs, CFA francs, or CFP francs up to the value of fr 20,000.6

Capital

All outward transfers of capital require approval and are generally not allowed for residents. Capital assets abroad belonging to or acquired by residents are not subject to repatriation or surrender requirements, and their holders are permitted to reinvest them either in quoted securities in accordance with a general authorization or in other investments under an individual permit.

New investments by nonresidents in France or the French Franc Area are accorded special treatment:

  • The “particular procedure” treatment. Nonresidents who have made specified investments in the French Franc Area financed through the sale of U.S. dollars, Canadian dollars, or free Swiss francs, or through the utilization of balances on a nonresident “free franc” account, are permitted, when such investments have been appropriately registered with the Exchange Office, to liquidate them and repatriate proceeds accruing from such a liquidation. The “particular procedure” treatment can, under a special authorization of the Exchange Office, be accorded to new foreign investments effected by a resident of an EPU country, through the sale of currency, or French francs in a nonresident account, related to the country of his residence. Remittances on account of investments covered by the “particular procedure” have to be effected in accordance with the regulations governing financial relations between France and the country of the investor. Investments effected under the “particular procedure” can be brought under the “general procedure” (see below) at the request of the nonresident concerned, if the category of investments is permitted under the latter procedure.

  • The “general procedure” treatment. Nonresidents are freely permitted to make other specified investments in the French Franc Area if financed as described above, or through the utilization of balances on nonresident accounts in French francs related to, or through the sale of the currency of, the country of a person who makes an investment. The proceeds accruing from the liquidation of investments effected under this procedure may be credited to a “capital” account.

The proceeds accruing from the liquidation of specified capital assets belonging to nonresidents prior to December 21, 1949 may be freely credited to “capital” accounts. Transfers between “capital” accounts of the same nationality are freely permitted. Balances on these accounts can be utilized freely for specified investments (the same as those mentioned under (2) above) and costs of the stay in France of the account holder or his family, limited to fr 10,000 per person per day, with a maximum of fr 500,000 for a month’s stay of the family in France.

Banknotes

1. Banknotes in a currency dealt in on the “free” market can be purchased by the authorized banks without any limitation of amount at the rates of the “free” market prior to the day of transaction.

2. Banknotes in Italian lire of denominations not higher than 1,000 lire may be purchased by authorized banks at the rates of the “official” market.

In both these cases, authorized banks which hold an amount of banknotes higher than that needed for their transactions can sell them to other authorized banks or to the Bank of France.

3. Other foreign banknotes may be purchased by authorized banks from their customers at any agreed rate and sold to other authorized banks.

Authorized banks may sell banknotes to residents traveling abroad under conditions established by an open or individual license of the Exchange Office, up to the maximum amounts which other foreign exchange control authorities permit nonresident travelers to import.

Changes during 1952

February 4

The list of imports free of license from OEEC countries was considerably reduced.

February 8

Instead of fr 50,000 in French banknotes, only fr 20,000 were permitted to be exported freely by tourists. The exchange allocations for tourists were reduced.

February 11

Balances on “capital” accounts were no longer permitted to be transferred to related nonresident accounts.

February 19

All imports from OEEC countries again became subject to individual licensing.

March 11

Importers of goods brought in from countries 7 with which France settles its accounts exclusively in French francs, in accordance with agreements, could, in exceptional cases, be permitted to buy forward exchange independently of the currency of the contract, for the purpose of a guarantee.

March 28

Residents traveling to Canada, Central American countries, Colombia, Ecuador, Liberia, Peru, United States, or Venezuela, and allowed exchange at the rate of US$20 per day for a maximum of 15 days in each country, were limited to a maximum of US$600 in all.

April 8

The nontransferable part of receipts collected by U.S. film companies in France was to be blocked and not, as previously, freely credited to “capital” accounts.

October 31

The discretionary power of authorized banks to approve transfers was specified as being accorded to the following types of invisibles: fines, specified insurance payments, membership fees, various banking charges, foreign registration dues for patents and payment of annual fees, dues collected by the International Patents Office at the Hague, subscriptions to periodicals and reviews edited abroad, and a few minor items.

December 3

Fifteen per cent of proceeds accruing from French exports to Cuba in accordance with the Franco-Cuban agreement of September 5, 1952 could be retained on EFAC account, with 3 per cent available for free utilization.

December 17

The “particular procedure” treatment applicable to new foreign investments in the French Franc Area was modified as follows: Earnings accruing from the liquidation of new investments could be transferred abroad only in accordance with regulations concerning financial relations between France and the country of the investor and not necessarily in the currency in which the original investment may have been made.

December 26

The “particular procedure” treatment applicable to new foreign investments in the French Franc Area could be granted, subject to an individual decision of the Exchange Office, to new investments effected in the French Franc Area by persons residing in an EPU country through the sale of the currency of, or through the utilization of the balances on the nonresident account in francs related to, the country of the foreign investor.

December 31

Residents going abroad for tourist purposes to countries other than those indicated above (March 28) could receive an exchange allocation for only two trips during a year up to the limit determined for one specific country even if travel to more than one country were intended. If the additional visited country were Egypt, Lebanon, Syria, or the United Kingdom, an extra allocation was authorized.

Germany, Federal Republic

Origin and Essential Features

Exchange control was introduced in Germany on July 15, 1931. After World War II, exchange control was operated in the Western Occupation Zones under Military Government Law No. 53 of May 28, 1945, and in Berlin through Ordinance No. 337 of the Allied Command of August 21, 1946. Foreign exchange holdings and earnings must be reported and surrendered upon request to the Land Central Banks on the basis of Article 2 of Military Government Law No. 53 (revised). Restrictions on invisible transactions are basically regulated by Instruction No. 31 of the Joint Export-Import Agency, which became effective August 20, 1949, and Foreign Trade Circular No. 6/50 of April 28, 1950. Certain exports require licenses according to the pro-visions of Foreign Trade Circular No. 28/51 of September 20, 1951. The present licensing procedure for the importation of goods against payment in foreign currency is carried out according to the basic provisions of Foreign Trade Circular No. 56/51 of December 15, 1951.

The restrictive system is operated through prior import and payment licensing in the form of purchase authorizations required to conclude contracts abroad and through exchange licensing applied restrictively, mainly against certain invisibles, chiefly those not related to trade and capital transactions. There are also special arrangements giving advantages to exporters obtaining proceeds in convertible currencies.

Exchange Rate System

In principle, Germany operates a unitary rate system based on the par value of Deutsche Marks 4.20 = US$1. The official rates are DM 4.195 buying, DM 4.205 selling, per US$1. In general, exchange rates are determined on the basis of the par values established with the Fund. Two practices, however, entail different exchange rates. Under the import rights system, 40 per cent of all export receipts in freely convertible currencies (U.S. dollars and free Swiss francs) is retained in the form of import rights. In April 1952, when the system was introduced, the premium on import rights was approximately 20 per cent; subsequently, the premium steadily declined, to 5 per cent in early December 1952. Thus in December 1952, the effective exchange rate for exports to the dollar area represented a premium of 2 per cent over the official rate,1 while imports from the dollar area carried out with import rights took place at an effective rate of DM 4.41 per US$1 (official selling rate plus the premium of 5 per cent).

Under a payments agreement with Brazil, special arrangements for exchange transactions between Brazil and Germany came into effect September 4, 1952. These arrangements provide for a free market for “Brazilian accounting dollars”, in which the cruzeiro, in effect, is at a discount (amounting to approximately 10 per cent) in relation to the Deutsche Mark. All proceeds of exports contracted after the date of the agreement may be sold in this free market, while 80 per cent of foreign exchange payments for imports from, and invisible transactions with, Brazil are made through this market.

Administration of Control

The authorities dealing with the various aspects of trade and exchange control are indicated in the other sections of this survey.

Prescription of Currency

The prescription of currency is an integral part of the German exchange system. If Germany has a payments agreement with a country, settlements must be effected through the channel and in the currency specified in the conditions of the agreement. Germany is a Transferable Account country in the United Kingdom’s exchange control payments system, and payments to other Transferable Account countries may be made in sterling, even when bilateral agreements provide for payments in another currency. If no payments agreement is in force, payment may be received in the currency of the recipient country or in a third currency permitted or prescribed for export transactions.

All foreign exchange proceeds from exports to the United States, Canada, and certain other countries 2 must be received in U.S. dollars.

For exports to Argentina, Brazil, Chile, Colombia, Ecuador, Japan, Mexico, Paraguay, and Uruguay, payments are in principle permitted only through the agreement accounts established with those countries.

For exports to payments agreement countries in EPU or the Sterling Transferable Account Area, payments may be received in the currency specified in the agreement, or in sterling, which may be accepted if permission for the transfer has been obtained from the central bank or foreign exchange authorities of the paying country.

Nonresident Accounts

The various types of nonresident accounts include accounts related to the execution of transactions under payments agreements, accounts related to the settlement of navigation expenses, and accounts related to settlements in transit trade.

There are also representatives’ DM accounts, which may be maintained by foreign representatives with German authorized banks. Commission fees may be credited to these accounts if prevailing regulations permit them to be transferred abroad to the foreign representative. The foreign representative may make certain payments in Germany from these accounts, as well as payments for his own merchandise imports into his country of residence. The balance in such accounts may be transferred to the country of residence of the account holder.

Accounts carried at authorized banks by professional persons, e.g., notaries and attorneys, who act as administrators or trustees for nonresidents, require a license and must be expressed in Deutsche Marks.

Air transportation DM accounts may be maintained for the branches of foreign air transportation companies located in Germany, and may be carried at authorized banks with the approval of the Bank deutscher Länder; they serve to record the DM equivalent of air fares and freight expenses which have been paid. These accounts are generally transferable.

Blocked accounts for nonresidents may be maintained in financial institutions in Germany. The crediting of these accounts is restricted within certain limits, indicated below, and conversion to the account holder’s own currency is in principle prohibited. Some of the chief sources of blocked accounts are sale of German real property by foreign owners; sale of securities held in Germany by nonresidents; receipts of interest and dividends due to nonresidents; restitution and compensation claims due to nonresidents for confiscation or war damage. In addition, certain foreign debts may be repaid in Deutsche Marks from blocked accounts.

Since March 3, 1951, transfers of blocked accounts from one nonresident to another have been permitted if these accounts are kept with financial institutions within the federal area. Funds which are thus transferred are held on deposit in Germany in “acquired” blocked accounts. All accounts receive the same treatment, irrespective of the origin of the payment and/or the nationality of the holder. The use of originally blocked balances is possible to a greater extent than the use of “acquired” blocked balances. Funds in originally blocked accounts may be used for investment in Germany, travel in Germany, remittances to the holder’s family in Germany, payments of taxes and insurance premiums in Germany, etc. Holders of “acquired” blocked accounts may not use such funds except for investment in Germany or for transfer to another nonresident. Possibilities for investment open to holders of both “acquired” and originally blocked accounts include real property, securities, participation in a German enterprise, setting up of an enterprise in Germany, and loans or credits to companies or private persons. Investment in real property, paid for out of originally blocked accounts, and in securities quoted on the stock exchange and paid for out of originally blocked accounts may be made under a general license, while other transactions call for a special license. In addition, holders of originally blocked accounts may, by special license, purchase—but in general not export—movable property to replace articles lost during or after the war.

Imports and Import Payments

All goods imported into Germany against payment in foreign exchange require licenses. Before the importer concludes a purchase contract, he must receive a “purchase authorization”. This authorization, which generally expires after four weeks, is a binding promise for * an import-and-payment license, provided the purchase contract has been concluded according to the general import regulations and the terms of the purchase authorization.

Purchase authorizations may be applied for, and are granted, on the basis of the publication of “import possibilities” and on the basis of lists concerning quantitatively unrestricted imports (i.e., “free lists”) from OEEC countries and associated territories. They are also granted for certain imports for which exchange allocations are made under special procedures (see below).

The agencies which allocate purchase authorizations are either the Land Central Banks (under the “bank procedure”) or a federal agency (under the “federal authorities procedure” and under the “LV procedure” for the rapid handling of perishable food products). Under the bank procedure, the purchase authorizations are issued by the Land Central Banks on an automatic basis. The importer applies for an authorization to an authorized bank which checks his application for reliability and completeness. Notification of the total amount of the application, for the period specified for the import in the allocation announcement, is passed on to the Bank deutscher Länder by the authorized bank, through a Land Central Bank. If the amount applied for exceeds the amount released for imports, an allotment of the exchange made available takes place on a pro rata basis. Imports of consumers’ goods are generally carried out through the bank procedure.

Under the federal authorities procedure, the applications are selected by designated federal agencies on a basis designed to ensure that purchases are made under the most favorable conditions, viz., price, delivery period, and payment conditions. Importation of commodities, for which the amount of exchange made available is so small that allotment of this exchange under the bank procedure would be impractical, is usually carried out under the federal authorities procedure.

Under the LV procedure, the federal agency concerned issues the purchase authorization together with the import license, in accordance with the amount and criteria published regularly in the allocation announcements concerning imports of perishable food products.

Import-and-payment licenses are issued exclusively by the Land Central Banks. Application for such a license must be made immediately after a purchase contract is concluded. The license is usually valid for a period of up to 30 days beyond the specified delivery date. Immediately on receipt of the license, the exchange payment authorized may be made by an authorized bank. Licenses for goods on the “free list” applying to imports from OEEC countries are issued if the importer produces a certificate of origin to show that the goods are derived from an OEEC country.

Under the import rights and foreign exchange working fund procedures, exporters are credited with pro memoria DM accounts which entitle the holders to exchange allocations for specified commodity imports.

Import rights accounts are granted for 40 per cent of gross proceeds in freely convertible currencies (U.S. dollars and free Swiss francs) from domestically produced exports. They are transferable and may be used for specified imports from the dollar area;3 10 per cent of these accounts may also be transferred to foreign exchange working fund accounts (see below). When the import rights system was introduced in April 1952, the list of commodities which could be imported against import rights included some 90 items. In July 1952, this list was expanded to include 400 items which are classified into two groups; imports in one group may be imported against import rights only, while imports in the other group may be obtained with import rights as well as with exchange under the official allocation procedure.

Four per cent of all receipts from domestically produced exports, in currencies which are not freely convertible, are credited to foreign exchange working fund accounts. Four per cent of freely convertible currency receipts may also be retained under this procedure, namely, by transferring 10 per cent of import rights accounts to foreign exchange working fund accounts. Foreign exchange working fund accounts are, in principle, not transferable and may be used for the importation of raw materials and other commodities essential to export production. Commodities thus imported may be used only in the firm carrying the foreign exchange working fund account.

In addition, raw materials may be imported under the procedure for raw material credit transactions, whereby the proceeds of certain exports are used to repay foreign credits applied toward financing the importation of raw materials for the manufacture of the export concerned.

Payments for Invisibles

Provisions for the various categories of invisibles are made in special circular letters, issued by the Federal Ministry of Economy in agreement with the Bank deutscher Länder. Of the total volume of payments for invisibles in 1952, over 50 per cent represented payments which did not require a specific license but were subject to subsequent checking. The authorized banks check to see that the conditions for carrying out the payments have been met. Where a license is required, the licensing offices—mostly the chief economic authorities of the Länder—make this check.

For payments for services to OEEC countries, the principles laid down by that organization are applied. For most other countries, there are reciprocity agreements, and payments for services are permitted to the extent that reciprocity is assured by the other country participating in the agreement.

Services directly connected with trade, such as freight and insurance, are normally transferable in transactions with any country. Payments for tourist travel, however, are permitted only to OEEC countries and are subject to individual quotas, which amounted to DM 500 per adult for the period April 1-December 31, 1952.4 No license is required for payments made for the promotion of trade and services, for trade information and advertising expenses, and for the payment of commissions to foreign representatives on the sale of exports, up to 5 per cent of incoming export proceeds.

Restrictions on payments for invisibles, which are neither directly related to merchandise transactions nor considered to be in the capital sphere, such as remittances of pensions and transfers of wages and salaries, are subject to separate regulations. Wage transfers, up to DM 1,000, of foreign resident workers to OEEC countries are generally approved. Wages and salaries of border and migrant workers may be transferred to OEEC countries, after taxes and living expenses are deducted; only migrant workers need a license. Transfers of emigrants’ funds for their own use are limited to cases of hardship. Residents, on leaving Germany, are permitted to take only the amount of foreign currency approved for individual cases. In small traffic over international borders, border residents may import (and export) foreign currencies in an amount equivalent to DM 20 per day; other residents, except in small border traffic, may take with them up to DM 40 in German banknotes and coin and use them to cover their traveling expenses abroad. Nonresident travelers may take out no more than DM 200 in German banknotes and coin.

Exports and Export Proceeds

All foreign exchange proceeds from exports must be reported and surrendered within the period permitted by the terms of the export regulations. In order that the surrender of exchange proceeds may be controlled, an export declaration is required for all exports. By signing the export declaration, the exporter becomes responsible for obtaining the proceeds of the export. Foreign exchange proceeds must be received in specified currencies.

Certain exports—mostly strategic commodities—require a license which is granted by the Federal Office for Merchandise Trade.

The customs authorities exercise control over export declarations, and also check to see whether a license is required. Control over the receipts of export proceeds is undertaken by the Land Central Banks and the authorized banks, according to the instructions of the Bank deutscher Länder. The Bank deutscher Länder undertakes the evaluation of the returns. Control over export claims and receipts is carried out on the basis of the data given in the export declaration.

Exporters are permitted to use without a license up to 5 per cent of their export proceeds to pay the customary commissions to their agents abroad and, in individual cases, they may draw up to US$500 for payments in settlement of claims arising from defects or to cover such usual discounts or other reductions in price as may have been subsequently agreed upon. No higher amounts may be used for this purpose, except as authorized by specific or general licenses. In addition, under the import rights and the foreign exchange working fund procedures, exporters are credited with pro memoria DM accounts which constitute claims for an exchange allocation (see section on Imports and Import Payments, above).

Proceeds from Invisibles

All foreign exchange proceeds from invisible transactions are controlled by the Land Central Banks and the authorized banks. As for merchandise imports, the final returns are evaluated by the Bank deutscher Länder. Control is based on the reports of claims and receipts by the firms concerned to the authorized banks.

Nonresidents, on their entry into Germany, may, in principle, import banknotes in foreign currencies in unlimited amounts. These banknotes are registered in an exchange control declaration which the nonresident receives on crossing the border into Germany. Nonresidents may also reconvert Deutsche Marks, obtained on their entry into Germany with an exchange control declaration, into banknotes of the originally imported currency. Travelers may bring in no more than DM 200 in German banknotes and coins.

Capital

The transfer to Germany of capital assets belonging to nonresidents is permitted for investment purposes, provided the accounts are held at a financial institution in the Federal Territory. Foreigners are authorized to purchase real estate, securities issued by public bodies, and securities which are dealt with on German stock exchanges; there are no registration requirements for these investments.

In general, the transfer of capital assets or earnings on capital assets from Germany to foreign countries is not permitted under present regulations. However, legacies accrued after December 31, 1946 and payable to persons resident in the United States may be transferred.

Securities payable in German currency may be transferred by nonresidents for sale or deposit to a financial institution in Germany. The proceeds of such sales must be credited to a blocked DM account (see section on Nonresident Accounts, above).

Residents have no power to dispose of prewar German assets abroad. New foreign investments by residents have been regulated since January 30, 1952. New investments abroad require a license granted by the Federal Ministry of Economy in cooperation with the Bank deutscher Länder. The regulations specify that new foreign investments should be carried out in the most favorable way from the point of view of foreign exchange. Capital paid in property or in services is preferred, and only in exceptional cases can the transfer of foreign currency for investment purposes be considered.

Changes during 1952

January 1

A new import and payment licensing procedure came into force, in accordance with Foreign Trade Circular No. 56/51 of December 15, 1951. The new procedure introduced the requirement of a “purchase authorization” which normally assures the automatic issuance of an import-and-payment permit. It also transferred the licensing authority from the authorized banks to the Land Central Banks.

Imports from OEEC countries, for which the liberalization procedure had been temporarily suspended on February 22, 1951, were reliberalized. The new “free list” included 57 per cent of the commodities constituting the private imports into Germany from OEEC countries in 1949.

April 1

The import rights system was introduced. Under this system, exporters receiving foreign exchange proceeds in U.S. dollars or free Swiss francs were credited with transferable pro memoria DM accounts amounting to 40 per cent of their proceeds. These accounts entitled them to import from the dollar area commodities specified on the so-called “positive list”, which contained approximately 90 items.

The “free list” for liberalized imports from OEEC countries was expanded from 57 per cent to 75 per cent of such imports in 1949.

July 17

A new liberalization list was published for imports from the Anglo-Egyptian Sudan, Australia, Burma, Ceylon, India, New Zealand, Pakistan, and the Union of South Africa.

July 25

The provisions for the foreign exchange working fund procedure were revised. The percentage of the foreign exchange working fund accounts, which may be used for the importation of machinery or materials for increasing productive capacity but which are not directly used for the processing of export goods, was increased from 10 to 20. No “purchase authorization” was required, provided a permit was obtained from the Land authorities, for imports below DM 2,000, or from the federal authorities, for imports exceeding DM 2,000.

July 30

The “positive list” for commodities eligible under the import rights system was expanded from 90 to 400 items. The import commodities on the new list were specified in two groups: Group A, for which foreign exchange (U.S. dollars and free Swiss francs) is made available on the basis of import rights only, and Group B, for which additional foreign exchange outside the framework of the import rights system may be made available.

August 12

The free list for liberalized OEEC imports was expanded from 75 per cent to 81 per cent of similar imports in 1949.

September 4

A free market was introduced for “Brazilian accounting dollars”, used in payments transactions under the payments agreements between Germany and Brazil.

December 11

The amount of foreign currencies which border residents could import or export under the small border traffic arrangements was increased from the equivalent of DM 10 to the equivalent of DM 20 per day. In travel other than small border traffic, persons with permanent residence in the federal area were permitted to export up to DM 40 in German banknotes and coins and to use these for traveling expenses abroad.

December 15

The amount of German banknotes which could be taken out of Germany by nonresident travelers was raised from DM 100 to DM 200.

Greece 1

Origin and Essential Features

A system of controls was introduced in Greece on September 28, 1931. The most recent major revision took place in October 1952 when a system of compensation import rights was largely replaced by a system of export subsidies and taxes on exchange in connection with imports, called “contributions”.* All imports are subject to licensing; exchange is automatically granted for authorized imports. Contributions at various rates are charged in connection with certain imports.* All invisible payments require individual licenses, which are granted freely for expenses incidental to authorized trade transactions. All exports are subject to individual licensing, mainly for currency prescription purposes. Export proceeds as well as all other proceeds must be surrendered, but barter transactions with certain countries are permitted, subject to license. All capital transfers are subject to individual approval. Prescription of currency requirements are applied to exchange receipts and payments.

Exchange Rate System*

There is no established par value for the drachma. The parity rate is Dr 15,000 = US$1. The official rates are Dr 14,910 buying, Dr 15,060 selling, per US$1. Official rates for other currencies are related to the established par values of those currencies.

Administration of Control

Controls are administered on the policy level by the Ministry of Trade, the Ministry of Finance, and a Currency Committee, and are carried out by an Exchange Control Committee, the Bank of Greece, and authorized commercial banks.

Prescription of Currency

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

Imports and Import Payments

All imports are subject to individual licenses issued by the Bank of Greece under directives and regulations issued by the Minister of Trade. The total value of import licenses, other than those issued in respect of three categories of imports indicated below, is determined in accordance with an annual import program drawn up by the Ministry of Trade on the basis of the country’s exchange availabilities and economic needs. This program includes five groups: (1) most commodities, for which import licenses are issued up to a certain limit on a first come, first served basis (List C-l) ; (2) commodities for which the approval of the Ministry of Trade is required (List C-2) ; (3) commodities for which quotas up to 90 per cent of the total value of such imports are allocated by the Chamber of Commerce in accordance with the historical pattern of the distribution of imports, the remaining percentage of programmed imports of the group being reserved for other importers; (4) specified imports (e.g., fresh meat, live animals, eggs, certain essential foodstuffs, chemicals, pharmaceuticals) in respect of which licenses are issued to persons declaring the lowest import price in terms of foreign currency; and (5) imports directly effected by the Director of Purchase of the Greek Government (e.g., wheat, dry skins, milk, tea, coarse grains, soya flour).

Imports outside the annual program are (a) capital goods needed for reconstruction programs, (b) goods brought in through compensation transactions, and (c) imports paid out of privately held foreign exchange. In connection with certain imports, contributions are levied ranging from 25 to 200 per cent of their c.i.f. value.* One half of the tax is collected upon the opening of the related documentary credit and the other half when the transaction is finally settled.

Exchange is automatically granted for authorized imports. In most cases payments for imports have to be effected through confirmed credits opened by authorized banks.

Payments for Invisibles

Payments on account of invisibles require individual licenses, but these are granted freely for expenses incidental to authorized trade transactions. Transfers abroad on account of specified categories of insurance (e.g., ships and airplanes, merchandise transportation, fire, accident, and life insurance) are authorized by the Bank of Greece up to specified percentages of the amounts owed. Persons traveling abroad may take with them a maximum of Dr 50,000 in Greek banknotes.

Exports and Export Proceeds

All exports are subject to individual licensing, which serves principally the purpose of ensuring the surrender of proceeds in the appropriate currency. Most exports are directly subsidized. The export subsidies have been fixed according to commodity at 12, 15, 20, 30, 40, or 50 per cent, calculated on the exchange value of the export goods.* Exports on a total barter basis are permitted only to countries with which there is no clearing agreement or from which foreign exchange cannot be obtained. In such cases, the countervalue of the Greek export has to be received entirely in the form of certain goods specified according to essentiality in various lists. The regulations indicate in percentage terms the import rights applying to different classes of imports that may be entered as counterpart to the exports. Where an exporter does not himself effect a part or all of the counter-part imports, the import rights may be negotiated.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered. Foreign exchange proceeds from shipping are exempted from the surrender requirement; however, shipowners have to pay taxes, fees, etc., and have to cover their disbursements and expenses in Greece in local currency obtained through the sale of foreign exchange to the Bank of Greece at the official rate. Individuals may bring in a maximum of Dr 50,000 in Greek banknotes.

Capital

Transfers of capital abroad require approval. Interest and amortization service on Greek securities is suspended. The investment of foreign capital requires approval whenever service thereon and/or future repatriation is intended. All drachma assets of nonresidents are required to be declared and held in blocked accounts: Subject to the approval of the exchange control authorities, however, balances on such accounts may be utilized for the purchase by a nonresident of real estate in Greece; the sale of such real estate is permitted provided that sale proceeds are credited to a blocked account opened in the name of the nonresident seller.

Exchange receipts from capital invested abroad must, in principle, be surrendered. Funds held in the United States by Greek residents must be registered with the Bank of Greece. Twenty per cent of any amount exceeding US$10,000 has to be repatriated in the form either of exchange or of imports. Banks are permitted to purchase abroad, on their own account or on behalf of their customers, Greek or foreign securities provided they use for such purchases foreign exchange legally held abroad.

Changes during 1952

January

Effective December 31, 1951, a special tax on nonessential imports, ranging from 25 to 100 percent of their c.i.f. value, was introduced.

January 20

An importer could be granted a credit equal to 100, 50, or 25 per cent of the value of the imported commodity according to the essentiality classification of the import involved. Importers of nonessentials could not be granted any credit.

February

Persons entering Greece no longer were required to declare the amount of foreign exchange or foreign banknotes brought in, unless they intended to re-export them. The obligation of persons entering Greece to declare the amount of gold, gold coins, or securities brought in was maintained.

September

A restricted number of raw materials (raw and washed wool, top wool, jute and its substitutes, chemical and mechanical wood pulp) coming from EPU countries and other countries which have concluded trade agreements with Greece could be imported on presentation of the bills of lading, on condition, however, that the importer arranged a guarantee with the Bank of Greece covering 30 per cent of the value of the order. Prior to this change, the importation of foreign goods had been authorized only on the opening of a banker’s credit, made out in favor of the supplier at the time the order was given and covering the total amount of the invoice.

October

Merchandise transactions under the system of compensation import rights were abolished and export subsidies, which were fixed according to the commodity at 15, 20, 30, 40, or 50 per cent of the exchange value of exported goods, were substituted.* The percentages were fixed to yield effective exchange rates corresponding approximately to the effective rates that exporters were receiving before October 8, 1952 under the system of compensation import rights. At the same time, a substantial part of imports was made subject to contributions of 25, 50, 100, 150, or 200 per cent of the exchange value, depending on the essentiality of the commodities concerned.* Half of the contribution was payable upon the opening of the confirmed credit, and the rest upon the arrival of the goods in Greece. The revenues from these contributions would be used for payment of the export subsidies while the remainder would be transferred to the government budget account.

Hong Kong

Origin and Essential Features

Exchange control was introduced in Hong Kong on September 8, 1939. Since then various measures have been taken to secure control over most non-dollar transactions. Control is applied to most trade and exchange transactions. As an exception, certain exchange transactions and trade with nearby territories are effected without control or restrictions; and other transactions, mainly in U.S. dollars against Hong Kong dollars, are freely effected through a free market. Since the former are dealt with at official rates and the latter at free market rates, a multiple exchange rate practice results.

Exchange Rate System

The par value is Hong Kong Dollars 5.71429 = US$1, but there is a multiple exchange rate system comprising the official rates, free market rates, and four mixed rates (see Table of Exchange Rates, below). The official rates are those of the authorized banks based on the sterling/Hong Kong dollar rates (established by agreement between the three note-issuing banks and the Hong Kong Official Exchange Fund) and the sterling/foreign currency rate in the London foreign exchange market. The official rates apply to all transactions in Hong Kong dollars against sterling, to the U.S. dollar proceeds of exports not of local origin (exceptionally, in the case of seven local commodities, a percentage of the proceeds must be surrendered at the official rate), and to most authorized non-dollar transactions. The free market rate applies to all other transactions.

Exchange Control Territory

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

Administration of Control

The exchange control system in Hong Kong is operated by 25 banks authorized to conduct exchange transactions within the framework of the local regulations and subject to specific or general approval of the local control. These authorized banks are not permitted to conclude exchange transactions at other than the official rates.

Prescription of Currency

All payments and receipts except those effected through the free market must be made by the method and in the currency prescribed in the United Kingdom’s Exchange Control Regulations. (For details, see United Kingdom, section on Prescription of Currency.) In addition, payments and receipts may be made in Hong Kong dollars through the account of a bank established in the other country concerned.

Nonresident Accounts

Credits to the accounts of banks situated outside the Sterling Area, Mainland China, the Republic of Korea, Macao, and Taiwan require licenses. Payments from these accounts, including payments for exports to the respective countries invoiced in Hong Kong dollars, may be made to residents of Hong Kong. Credits to the accounts of persons and firms resident in the the North American continent and the Philippine Republic require licenses; but credits to accounts of persons and firms in other countries do not require licenses. All transfers between Hong Kong and other Sterling Area territories require licenses, but authorized exchange banks may make or receive such payments without a license if the transaction is in respect of (1) bona fide trade between Hong Kong and other Sterling Area territories, (2) dividends and interest payments, or (3) small bank charges.

Imports and Import Payments

Except for certain strategic materials and for some other items from specified countries, imports are free of import licensing. Exchange licenses are required, even if the importer provides his own exchange, for imports from all countries except other parts of the Sterling Area, North America, Mainland China, Indo-China, Indonesia, the Republic of Korea, the Philippine Republic, Taiwan, and Thailand. The exchange licenses are freely granted provided payment is made in accordance with the regulations laid down in the United Kingdom (see section on Prescription of Currency, above). Foreign exchange, other than U.S. dollars, in payment for authorized imports may be obtained at the rate corresponding to the official rate, but U.S. dollar exchange at this rate is normally authorized only for a few imports regarded as strictly essential. For other authorized imports payable in U.S. dollars, foreign exchange can be obtained in the free market.

Payments for Invisibles

To obtain exchange at the official rate, an exchange license is required. These are granted to local residents for most invisible transactions on criteria similar to those applied in the United Kingdom, e.g., exchange at the official rate for travel, personal remittances, and similar purposes is limited. If exchange at the official rate is not authorized, exchange licenses can be issued upon evidence of the prior sale to an authorized exchange bank of the equivalent in U.S. dollars (which can be purchased on the free market). In any event, payments may be freely effected through the free market by holders of Hong Kong dollars. All transfers to other parts of the Sterling Area require licenses, except for dividends and interest payments, for which authorized exchange banks may make remittances without a license.

Exports and Export Proceeds

Exports of certain strategic articles and of a few commodities in short supply to any destination require a license.1 For exports to all countries other than the Sterling Area, Mainland China, the Republic of Korea, Macao, and Taiwan, a declaration by the exporter, showing how the export proceeds will be collected, must be approved by the Department of Commerce and Industry.

Payment for exports to countries other than Mainland China, the Republic of Korea, Macao, Taiwan, and the Sterling Area must be collected by one of the methods prescribed in the exchange control regulations of the United Kingdom as being appropriate to the country of destination of the goods, or in Hong Kong dollars from the account of a bank established in the country of destination of the goods. The U.S. dollar f.o.b. proceeds of most Hong Kong exports originating in Mainland China, Hong Kong, the Republic of Korea, Macao, and Taiwan are freely disposable. The U.S. dollar proceeds from exports originating in other countries must be entirely surrendered. The U.S. dollar f.o.b. proceeds of exports originating in Mainland China, Hong Kong; the Republic of Korea, and Macao must be surrendered to the extent of 50 per cent for cotton yarn, 25 per cent for lead, silver (subject to prior permission), and tin, 20 per cent for copper and feathers, and 15 per cent for wood oil. The remaining percentage may be sold in the free market. Exchange proceeds in other currencies from exports to countries other than Mainland China, the Republic of Korea, Macao, and the Sterling Area must be received in foreign exchange appropriate to the country of destination (see section on Prescription of Currency, above) and surrendered.

Proceeds from Invisibles

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

Capital

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

Table of Exchange Rates(as at December 31, 1952)
(sterling per Hong Kong dollar or Hong Kong dollars per U.S. dollar)
BuyingSelling
1s. 3 1/32d.1s. 2 15/16d.
All transactions in sterling against Hong Kong dollars. (Rates for non-dollar currencies are based on sterling rate.)All transactions in Hong Kong dollars against sterling.

or
HK$5.714HK$5.797 as appropriate
Exports not originating in Mainland China, Hong Kong, Republic of Korea, and Macao payable in U.S. dollars.A few essential imports payable in U.S. dollars. Authorized invisibles and capital. All non-dollar imports.
HK$5.866(50% at HK$5.7U and 50% at Free Market Rate)
Cotton yarn exports.2
HK$5.942(25% at HK$5.714 and 75% at Free Market Rate)
Lead, silver, and tin exports.2
HK$5.957(20% at HK$5.714 and 80% at Free Market Rate)
Copper and feather exports.2
HK$5.972(15% at HK$5.714 and 85% at Free Market Rate)
Wood oil exports.2
HK$6.0175(Fluctuating Free Market (approx.) Rate)HK$6.0175(Fluctuating Free Market (approx.) Rate)
All other exports. Invisibles and capital.All other imports payable in U.S. dollars. Other invisibles and capital.

Changes during 1952

April 4

The re-export of goods of Japanese origin to other parts of the Sterling Area was suspended.

May 15

The establishment of credits in sterling in favor of a Hong Kong intermediary covering shipments of Chinese goods from Mainland China or Hong Kong to Japan was made subject to exchange control approval.

July 15

Twenty per cent of U.S. dollar proceeds derived from exports of feathers originating in Mainland China, Hong Kong, the Republic of Korea, and Macao had to be surrendered at the official rate.

September 26

The list of goods subject to export licensing was enlarged.

Iceland

Origin and Essential Features

Exchange control was introduced in Iceland on October 2, 1931. The exchange and import regulations now in force date from an Act of June 5, 1947. The system has been subject to several important changes, the latest being on March 8, 1951, when import certificates were introduced, and on April 6, 1951, when designated goods could be freely imported from any source. The restrictive system in Iceland is comprised of (1) restrictions on imports, (2) restrictions on all exchange payments (including those in respect of imports), (3) import certificates applied to certain exports and imports, and (4) license fees.

Exchange Rate System

The par value is Icelandic Krónur 16.2857 = US$1. The official rates are IKr 16.26 buying, IKr 16.32 selling, per US$1. Exports of most products of the small fishing boat industry benefit from the distribution of additional local currency in a pool derived from the surcharge payable by certain importers.

Exchange Control Territory

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

Administration of Control

The granting of import licenses, where required for goods not on the free lists, is in the hands of the Import and Exchange Division of the Economic Board, which is also responsible for the over-all administration of exchange control. The two largest Icelandic banks have the exclusive right to buy and sell foreign exchange and determine from time to time the extent to which exchange is available to pay for imports.

Prescription of Currency

Payments to and receipts from certain countries in respect of specified transactions must be effected in the currency and by method laid down in the payments agreements concluded with those countries.

Imports and Import Payments

Regardless of other requirements, prior certification is required from an Icelandic bank that exchange is available to make payment for an import before the import can be effected.

Certain imports require import and exchange licenses, which are issued in combined form. These licenses are granted on a consideration of the essentiality of the goods and the availability of exchange to pay for them. Specified goods can be imported from any source without such licenses. Certain goods may also be imported without such licenses with certificates derived from the proceeds of certain exports—products of the small fishing boat industry, except cod-liver oil, herring, and herring products. Such certificates are acquired through the payment of a premium according to the country from which the import is to be obtained: 60 per cent of the nominal value for imports from EPU and dollar area countries and 25 per cent for imports from “clearing” countries.1 When import licenses for passenger automobiles are issued, a fee amounting to 35 per cent of the amount licensed must be paid in Icelandic currency.

Exchange is available for all goods actually imported, since certification by an Icelandic bank to that effect is required as a prior condition of importation.

Payments for Invisibles

All outgoing payments require a license. These licenses are granted only on a basis of essentiality and the availability of the required foreign exchange. At the time of issuance of exchange licenses for travel purposes a fee of 25 per cent of the amount involved is payable.

Residents traveling abroad may take with them foreign banknotes and coins to a maximum of IKr 150. The exportation of Icelandic banknotes and coins is prohibited. Nonresidents may re-export unexpended amounts of foreign banknotes and coins which were declared on entry.

Exports and Export Proceeds

All exports require licenses.

Exchange receipts must be surrendered, and exporters of products of the small fishing boat industry, except cod-liver oil, herring, and herring products, obtain, in addition, a certificate nominally equivalent to 50 per cent of the f.o.b. value of the goods exported. These certificates can be exchanged for other certificates which may be sold at a fixed premium to importers through a pool of exporters or used by the Federation of Cooperative Societies to import designated less essential goods, which, when imported, are not subject to domestic price control. The surcharge payable on these certificates is 60 per cent for exports to EPU and dollar area countries and 25 per cent for exports to “clearing” countries; the proceeds derived from their sale are collected in a central pool, from which a distribution is made periodically to exporters.

Proceeds from Invisibles

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

Capital

Outgoing transfers of capital require approval, which is granted only in exceptional circumstances. Exchange receipts from capital must be surrendered.

Changes during 1952

January 5

Import certificates derived from exports paid in EPU or dollar area currencies could be used for imports from any country. The lists of goods which could be imported from all countries and from the “clearing” countries were extended.

January 18

The list of goods which could be imported from any country without an import and exchange certificate was extended.

January 30

Revised import control regulations provided that the local customs authorities should return goods within two months of receipt to the country of origin, if it is determined that they have not been paid for in advance, or that the necessary foreign exchange for this payment had not been previously allocated by an Icelandic bank.

August 29

Severe restrictions were placed on imports from EPU countries of certain goods which could still be imported from the “clearing” countries. No exchange would be granted for foreign travel other than in exceptional circumstances.

India

Origin and Essential Features

Exchange control was introduced in India in September 1939, at the outbreak of World War II. The Foreign Exchange Regulation Act, 1947, extended in 1952 with some modification, empowers the central Government and the Reserve Bank of India to control and regulate dealings in foreign exchange and foreign securities in India, receipts from and payments to nonresidents, the export and import of currency and bullion, and transfers of securities to nonresidents. The Indian restrictive system is based on the principal of surrender of foreign exchange receipts and their allocation by the control authorities to payments for goods, services, and other transactions on the basis of priority of needs and the “hardness” of the currency involved.

Exchange Rate System

The par value is Indian Rupees 4.76190 = US$1. Exchange transactions are effected at uniform rates. All transactions in foreign exchange must be conducted through the medium of authorized dealers, whose dealings with the general public must be effected at rates arrived at on the basis of par values established by the Fund and its members. Authorized dealers in India are permitted to cover their requirements of certain specified foreign exchange in the London market. They can also cover their permitted transactions in the specified currencies, either spot or forward, with their agents in the respective countries against sterling or rupees.

Administration of Control

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

Prescription of Currency

Transactions with nonresidents are subject to the prescription of currency requirement; that is, payments to or from foreign countries must be effected in the appropriate currency prescribed by the exchange control authority. Transactions with a large number of countries are governed by sterling payments and monetary agreements entered into with them by the United Kingdom and available to the whole Sterling Area. In a number of cases, payments may be made either in the currency of the country concerned or by the transfer of sterling or rupees to the account of a resident therein, while in others, the transfer of sterling or rupees to or from the appropriate accounts for the country concerned constitute the only methods of settlement allowed.

India’s transactions with Sterling Area countries other than Pakistan are governed by the multilateral settlement principle among Sterling Area countries under which payments may be made in the currency of either the Sterling Area country involved or in the currency of any other country or territory in the Sterling Area. Payments between India and Pakistan, however, can be effected in only Indian or Pakistan rupees according to special arrangements between the two countries.

Nonresident Accounts

Nonresident accounts consist of rupee accounts belonging to persons, firms, or banks resident outside India. Payments to the accounts of nonresident banks for imports, interest, dividends, or allowances can be made by authorized dealers without prior approval. Other payments from residents to such accounts must be approved by the Reserve Bank. On the payment side, the nonresident accounts of foreign banks can be drawn on to pay for Indian exports and other payments if the amount of an individual transaction does not exceed Rs 20,000. In all other cases, prior approval of the Reserve Bank must be obtained.

Rupee balances of banks in other Sterling Area territories can be transferred freely from one to another. Those of non-Sterling Area Hanks can also be transferred freely to nonresident rupee accounts in banks within the Sterling Area. Transfers between rupee accounts of banks belonging to the same country or monetary area are also allowed. All other interbank transfers require the prior approval of the Reserve Bank.

Payments of dividends and interest on securities and proceeds of small checks up to certain limits can be credited, without prior approval, to nonresident accounts of private individuals and firms. The same applies to such debit items as payments for insurance premiums, income taxes, and remittances to relatives, subject to the limit of Rs 500 for each transaction. All other credits and debits require the prior approval of the Reserve Bank. Transfers are not normally permitted from these accounts to nonresident accounts of banks belonging to the same country or monetary area as the account holder, unless the items originally credited to such accounts were “currently remittable” in nature.

Proceeds from capital assets belonging to residents retiring or emigrating to other countries and which cannot be transferred are deposited in blocked accounts. This applies also to the proceeds from the liquidation of certain nonresident-owned investments which cannot be repatriated. Balances in blocked accounts may be placed on fixed deposit or invested in approved Indian rupee securities. The income derived from such investments may be remitted to the owner’s country with the approval of the Reserve Bank.

Imports and Import Payments

In allocating exchange among different imports, the import control authority has three principal considerations: essentiality, the domestic supply situation, and the “hardness” of the currency involved. Only highly essential goods unobtainable in sufficient quantities in “soft” currency areas are permitted to be imported from dollar area countries. Nevertheless, if certain goods available in “soft” currency areas are too high in price or their delivery date is too slow, their import may be permitted from a “hard” currency country.

Goods can be imported into India under either an open general license or an individual license. An open general license permits an individual or firm to import the goods listed therein without quantitative limitations from the respective country or monetary area specified. Individual licensing can be by quotas allocated to established importers and actual users or by ad hoc licensing. Currency-wise, there are two kinds of licenses: world-wide, applicable to imports from all countries, and “soft” currency, for imports from “soft” currency countries only.

Before the start of each half-yearly licensing period, the import control authority makes an announcement concerning goods which are to be admitted under the quota procedure: for established importers, the quota is based on the percentage of goods imported by them during a basic period; and for actual users (factories and enterprises employing a minimum of 50 factory workers), the quota is sufficient to meet the requirements in each commodity over a certain number of months. There are also special procedures applicable to capital goods, heavy electrical plant, and goods imported to fulfill government contracts and irrigation projects.

The payment procedure for imports requires the presentation of a valid import license or, for goods covered by an open general license, reference to the open general license number. Authorized dealers can effect payments for clients by opening letters of credit or making remittances or transfers when the above requirements are met and when both the currency and method of payment are appropriate (see section on Prescription of Currency, above). In principle, advance remittances for payment of imports before shipping documents are received are not normally permitted. But for 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

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

Foreign exchange facilities are granted for business travel and education abroad according to a scale of allowances fixed for each country. Foreign exchange is not normally granted for travel, other than for purposes of business, health, and education, to the Philippine Republic and countries on the American continent except Brazil, Chile, Paraguay, Peru, and Uruguay. A basic ration of £600 per adult available during a period of two years, plus allowances for return fares, is allowed to all persons resident in India for making personal trips to “soft” currency areas; in addition, a special allowance of Rs 2,000 per adult once in two years, plus return fares, is granted for travel to neighboring countries. Special provisions govern the granting of exchange for travel connected with medical treatment, visits to “hard” currency countries being subject to severe restrictions.

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

There are no restrictions on the remittance of profits, dividends, and interest to beneficiary owners permanently resident in any country outside India.

Foreign employees are permitted to make reasonable remittances to their own countries in payment of insurance premiums or other expenses and for the support of their families. Authorized dealers can allow to Sterling Area nationals, other than nationals of Pakistan, such remittances by the principal member of a family, up to a maximum of £150 per month in the currency of any Sterling Area country. Each application of non-Sterling Area nationals is considered on its own merits, and facilities are given for the remittance of savings which the applicant may be reasonably expected to make.

Persons leaving India, except those going to Pakistan and Afghanistan, may take out Indian and foreign currency notes or coins not exceeding a total value of Rs 270 per month. Persons leaving for Pakistan may take out not more than Rs 50 per day in Indian notes and coins and another Rs 50 in Pakistan notes and coins. Persons leaving for Afghanistan may take out Afghan currency without limit and Indian currency in notes and coins up to Rs 50 per day.

Exports and Export Proceeds

The export of certain commodities is controlled by the Chief Controller of Imports and Exports of the Ministry of Commerce and Industry and can be effected only under an open general license or special license. Goods on open general license are not subject to quantitative restrictions, but destinations may be prescribed. Controlled exports not under open general license may be licensed either freely or under global or destinational quotas. Since June 1951, a policy of progressively withdrawing global and destinational quotas has been followed.

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

Proceeds from Invisibles

Exchange receipts from invisibles in U.S. dollars and Philippine pesos must be surrendered. All other receipts may be retained, but their disposal is subject to license.

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

Capital

The inward movement of capital is practically free except when it forms part of an investment which requires the prior approval of the Indian Government; in such cases, applications have to be made to the Reserve Bank which refers them to the Indian Government. Exchange receipts from approved foreign capital investment and from capital in Philippine pesos and U.S. dollars have to be surrendered; all other exchange may be retained but its disposal requires a license. Foreign investments once admitted are eligible for the same treatment as Indian enterprises. Outward movements are subject to control. Repatriation of capital owned by persons residing in Sterling Area countries other than Pakistan, and of capital invested in India by residents of Denmark, Norway, and Sweden, is freely authorized. Capital invested in approved projects after January 1, 1950 by residents of other countries may be repatriated at any time. The proceeds from liquidated foreign investments not eligible for repatriation are blocked and may only be placed on deposit or be invested in approved Indian securities.

Transfers of capital for purposes other than investment, such as retirement, emigration, and legacies, are also subject to control. More favorable treatment is given to Sterling Area nationals and transfers to other Sterling Area territories.

The export and transfer of securities to nonresidents are under control. There are no restrictions on the bringing or sending into India of securities.

Changes during 1952

February 25

The Foreign Exchange Regulation Act, 1947, was extended with some modification up to December 31, 1957.

February 26

In addition to the usual method of covering specified currencies from British banks, authorized dealers in India were allowed to cover their permitted transactions in U.S. dollars, Canadian dollars, Belgian francs, French francs, and Swiss francs, either spot or forward, with their correspondents or branches in the respective countries. (Similar regulations were issued in respect of Netherlands guilders and Swedish kronor on July 7 and November 24, respectively.) The separate prescription of currency for payments to and from the United States and Canada was abolished, payments in U.S. dollars for goods of Canadian origin being permitted, and vice versa. Authorized dealers were also allowed to cover spot or forward U.S. dollars with banks in Canada and Canadian dollars with banks in the United States.

March 22

Quota restrictions on the export of jute manufactures were removed.

April 5

The export of sugar was permitted.

May 15

Quota restrictions on the export of niger seed were removed.

May 18

The export of coarse and medium textiles was freely permitted to all destinations.

June 15

The import policy for July-December 1952 was announced. O.G.L. No. XXIII would expire June 30, 1952, and most of the items thereon were transferred to O.G.L. Nos. XXIV and XXV, valid to the end of March 1953, for “hard” and “soft” currency countries, respectively. Some cuts in import quotas were made, and a number of commodities, namely butter, cheese, fish, handsewing needles, etc., were removed from open general license. Nearly 50 items were removed from the world O.G.L. list and retained only on the “soft” currency license. The system of freely licensing certain imports was abolished.

June 19

The export of mustard oil, which was subject to quota restrictions, was placed on the free licensing list.

August 5

A new Indo-Pakistan trade agreement was signed, on the basis of which O.G.L. No. XXVI to cover imports from Pakistan, and O.G.L. No. 5 to cover exports to Pakistan, were later issued.

October 15

The import policy in respect of 61 items, on which the policy decision had been reserved, was announced. Imports of a number of commodities, such as radio sets, cycles and cycle spare parts, safety razor blades, porcelain, etc., were prohibited, while those of machine screws, canned or bottled vegetable products and fruit juices, writing and printing paper, etc., were curtailed. The policy for the remaining 30 items was announced on November 15.

December 1

Quota restrictions on the export of linseed oil were removed.

December 31

The import policy for the period January-June 1953 was announced. Quotas for more than 70 per cent of the items remained unchanged, while most cuts in import quotas made during the previous half-year period were either partially or fully restored.

Iran

Origin and Essential Features

Exchange restrictions were originally introduced in Iran in February 1930. Recent major revisions were those of December 27, 1951, when restrictions were sharply intensified, and April 4, 1952, when a dual certificate rate system was reintroduced.

Restrictions are exercised through import prohibitions, exchange licenses for certain nonprohibited imports and nontrade payments, and a multiple currency practice consisting of two fixed official rates and two fluctuating exchange certificate rates. Exchange receipts in general must be surrendered, but exporters to countries whose currencies are not accepted for the settlement of their foreign exchange undertakings may utilize their export proceeds to make authorized imports. Negotiable exchange certificates are granted in respect of 95 per cent of exchange surrendered and are required by importers 100 per cent to effect payments for authorized imports.

Exchange Rate System

The par value is Rials 32.25 = US$1. The official rates are Rls 32.00 buying, Rls 32.50 selling, per US$1; they are applied to 5 per cent of export proceeds and to a few specified invisible transactions. The purchase and sale of two categories of exchange certificates in a free market give rise to fluctuating rates which apply to 95 per cent of export proceeds surrendered and to all payments for imports (see Table of Exchange Rates, below). There is also a special buying rate of Rls 41.00 for dollar invisibles and capital earnings.

Administration of Control

Exchange control is vested in the Exchange Control Committee, composed of representatives from the Ministry of National Economy, the Ministry of Finance, and the Bank Melli Iran. Exchange licenses are issued by the Exchange Control Committee. All foreign exchange transactions must be effected through authorized banks, but exchange certificates are negotiated in a free market for such certificates. The Ministry of National Economy determines the classification of commodities imported and exported.

Prescription of Currency

Payments for imports and invisibles must be made in specified currencies. Most payments to France, the Federal Republic of Germany, Hungary, and Italy are made through clearing accounts.

Exchange receipts must be obtained in a currency appropriate to the creditor country and offered for sale to an authorized bank.

Nonresident Accounts

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

Imports and Import Payments

The Ministry of National Economy has prohibited the import of a large number of goods. Goods on the prohibited list may, however, appear on special lists enabling their importation from countries with which Iran has special commercial agreements. Goods classified in Category 1 (essential) and Category 2 (less essential) may be imported freely. In order to obtain the exchange required for the payment of these imports, the importer must pay the local currency equivalent at the official rate and, in addition, provide an appropriate exchange certificate. Importers of Category 2 goods must provide an exchange certificate in the corresponding currency derived from Category 2 exports, and importers of Category 1 goods must provide an exchange certificate in the corresponding currency derived from exports in Category 1 or 2, or from the surrender of exchange derived from invisibles other than exchange sold by foreign embassies, legations, tourists, and other similar parties. The list of prohibited imports and the classification of freely allowed imports are subject to alteration according to prevailing conditions.

Imports of precious metals, such as silver, gold, and platinum, are permitted provided no exchange is transferred therefor; in such cases, an import license is not required.

Certain other requirements must be met with regard to specific imports even when they are included in the categories of permissible imports. The importation of equipment for new factories or for the development of existing factories requires the approval of the Technical Committee of the Ministry of National Economy. Import permits for sugar, silkworm eggs, tobacco, paper for cigarettes, explosives, railway equipment, guns, and ammunition are normally issued to only the state monopolies dealing in these items.

Payments for Invisibles

Exchange licenses may be issued by the Exchange Control Committee for the purchase of exchange for certain invisible transactions not associated with trade. These include the expenses of Iranian students at universities abroad, for which exchange is authorized according to its availability, and the retransfer, within one year of the original transaction, of 50 per cent of exchange transferred to Iran in favor of foreign diplomats in Iran and sold to an authorized bank at the* official rate. These authorized payments are made at the official rate of Rls 32.50.

Travelers may take Rls 2,000 in Iranian banknotes with them when going abroad. Travelers of Iranian nationality may export foreign currency as authorized by the Exchange Control Committee. Alien travelers may not export foreign currency in excess of the amount which they imported minus the amounts they have sold to authorized banks.

Exports and Export Proceeds

The export of some commodities is prohibited. Nonprohibited exports are classified in Category 1 (nonpriority exports) and Category 2 (exports which are being encouraged). The list of prohibited exports and the classifications of nonprohibited exports are subject to alterations according to prevailing conditions. Exporters must surrender the exchange proceeds of their exports to an authorized bank; they receive the local currency equivalent at the official rate and an exchange certificate for the face value of 95 per cent of the surrendered exchange. Exporters of Category 1 commodities can sell this certificate to importers of Category 1 (essential) commodities for payments in the same currency. Exporters of Category 2 commodities can sell this certificate to importers of either Category 1 or Category 2 commodities. The exporter may, within the one-month validity period of the exchange certificate, use it to obtain exchange for an authorized import, or he may sell the certificate in the certificate market at the prevailing rate. Exchange certificates may be transferred only once. An exchange certificate resulting from an export to a country with which Iran has concluded a payments agreement can be utilized only for imports from that country.

Export receipts must be offered for sale to an authorized bank within 12 months of the original export. The authorized banks buy sterling, U.S. dollars, Swiss francs and, from time to time, other currencies, such as Indian rupees. When exports are sold for currencies which the banks will not buy, the exporters may use the earned exchange to make purchases in the country of destination of the exports or in countries to which the currency concerned is transferable.

Proceeds from Invisibles

Exchange receipts derived from invisible commercial transactions must be surrendered to an authorized bank at the official rate, and exchange certificates are issued for such exchange. These certificates may be utilized for the importation of Category 1 goods. Noncommercial exchange sold to authorized banks by foreign embassies, legations, tourists, and other similar parties is purchased only at official rates and does not qualify for exchange certificates.

Travelers entering Iran may carry with them up to Rls 2,000 in Iranian banknotes and any amount in foreign currencies. Travelers of Iranian nationality must surrender their foreign exchange holdings to an authorized bank within 15 days after their arrival in the country. Other travelers, during their stay in Iran, may sell their exchange only to an authorized bank at the official rate.

Capital

Transfers of capital abroad require the approval of the Exchange Control Committee, which is given only in exceptional circumstances. Incoming capital must be registered and offered for sale to an authorized bank at the official rate within three days of receipt.

Table of Exchange Rates(as at December 31, 1952)
(rials per U.S. dollar)
BuyingSelling
32.00(Official Rate)32.50(Official Rate)
Registered capital; certain non-dollar invisible earnings, including receipts from tourists and diplomats.Government payments; diplomatic transfers; approved expenses of Iranian students.
41.001
Dollar invisibles and capital earnings.
83.5375(Official Rate plus 95% at Fluctuating Certificate Rate)
Category 1 exports.
84.0125(Official Rate plus 95% at Fluctuating Second Certificate Rate)
Category 2 exports.86.75(Official Rate plus Fluctuating Certificate Rate)

Category 1 imports.
87.25(Official Rate plus Fluctuating Second Certificate Rate)
Category 2 imports.
Note : The actual certificate rates as at December 31, 1952 were Rls 54.25 and Rls 54.75 per US$1 for Categories 1 and 2, respectively.
Note : The actual certificate rates as at December 31, 1952 were Rls 54.25 and Rls 54.75 per US$1 for Categories 1 and 2, respectively.

Changes during 1952

January 8

The Ministry of National Economy was permitted to grant authorization for the import of lump and granulated sugar by utilizing free foreign exchange or through barter agreements.

January 29

The conclusion of private barter agreements with nonresidents was approved. The Bank Melli Iran was authorized, with the consent of the Minister of National Economy, to open an account in rials in the name of account holders in countries that have not concluded payments agreements with Iran or with which agreements providing for private barter agreements have been concluded.

April 4

Under new trade and exchange regulations introduced for the twelve months March 21, 1952-March 20, 1953, exports and imports permitted for regular trade were each classified in two categories. Exporters would receive on surrender of their export proceeds, in addition to the rials equivalent at the official rate, an exchange certificate which could be used to obtain exchange for an authorized import or sold, through an authorized bank or in the certificate market, to importers at the prevailing rate. Exporters of Category 1 exports would receive an exchange certificate which could be sold to importers of Category 1 imports. Similarly, exporters of Category 2 exports would receive an exchange certificate which could be sold to importers of Category 1 or 2 imports. Recipients of exchange from invisibles could use such exchange for payment of imports of essential goods.

August 28

The amount of Iranian banknotes which could be taken in or out of the country by travelers was raised from Rls 1,000 to Rls 2,000.

November 11

It was announced that the Bank Melli Iran would issue exchange certificates (see April 4, above) to exporters and others for only 95 per cent of their surrendered exchange.

Iraq

Origin and Essential Features

Exchange control was introduced in Iraq on November 24, 1941 by Exchange Control Law No. 71 of 1941, which was superseded in 1950 by Exchange Control Law No. 18 of 1950. As in other Sterling Area countries, the Iraqi exchange control system is modeled after the U.K. system, modified to suit local requirements. It is based on the principle of surrender of foreign exchange receipts (with a few minor exceptions) and their allocation by the control authorities to payments for goods, services, and other transactions on the basis of priority of need and the “hardness” of the currency involved. However, the oil companies, under special arrangements, have complete autonomy in their exchange transactions, provided they are effected at official rates. Imports from hard currency countries are restricted on the basis of annual quotas; but imports from soft currency countries are, with few exceptions, freely permitted.

Certain exports to neighboring countries are exempt from exchange surrender requirements, and import licenses are granted for certain goods from soft currency areas provided the importer makes his own arrangements for the amount of foreign exchange necessary to order the goods from abroad.

Exchange Rate System

The par value is Iraqi Dinar 1 = US$2.80. In the official market, most transactions are effected in sterling. For certain specified currencies, licensed dealers are authorized to deal on the basis of London rates. For the U.S. dollar, the National Bank of Iraq quotes an official rate at which it will sell exchange to licensed dealers to cover the excess of their dollar requirements over their purchases from customers or other banks. An additional exchange rate arises from the sale of the exchange proceeds of certain exports to neighboring countries (which do not have to be surrendered) to importers of certain goods from soft currency countries.

Administration of Control

Exchange Control Law No. 18 of 1950 entrusts the Board of Administration of the National Bank with all powers and responsibility in connection with exchange control. However, in practice, the Board has delegated most of its administrative authority to the Directorate of Foreign Exchange of the Bank. All foreign exchange transactions must be effected through licensed dealers unless especially authorized by the Bank. Import and export licenses, where required, are issued by the Director General of Imports.

Prescription of Currency

All transactions with nonresidents are subject to prescription of currency requirements. Transactions with most non-Sterling Area countries are governed by the terms of sterling payments agreements and monetary agreements entered into between those countries and the United Kingdom and available to the whole Sterling Area. Payments must be effected either in acceptable foreign currency appropriate to the country concerned or in sterling through an appropriate account an London or through an appropriate dinar account of a nonresident.

Nonresident Accounts

The exchange control system designates nonresident accounts according to the foreign residence of the account holder. The regulations governing the operation of these accounts are similar to those of the United Kingdom and other Sterling Area countries.

Imports and Import Payments

The import control policy aims at allowing adequate importation of all essential goods for domestic consumption and development purposes and permitting the import of nonessentials as far as exchange is available. However, certain imports are prohibited partly for protective reasons. They include a variety of agricultural products, such as sesame seed, cotton seed, and their oils, and the products of certain newly established industries, such as beer, cement, aluminum ware, alcohol, and hides.

All imports from hard currency countries require licenses which are granted in accordance with an annual program specifying both the category of the goods and their respective amounts or quantities.

For imports from soft currency areas, both the control policy and the licensing procedure are more liberal. The licensing procedure does not apply to imports from soft currency countries except certain goods specially listed and goods admitted only with self-provided exchange.

All payments are subject to prescription of currency requirements. For goods subject to license, the licensed dealer can make the exchange available upon presentation of the exchange control copy of the import license; for goods not subject to license, exchange is provided on application. The licensed dealers do not, of course, provide exchange for the importation of goods licensed under the condition that the importer provide his own exchange.

Payments for Invisibles

All payments for invisibles require permission. Exchange granted for payments for invisibles is normally restricted to traveling, educational and medical expenses abroad, insurance premiums, arid freight on exports if carried on a c. & f. or c.i.f. basis. Exchange is also provided for the transfer of interest and profits if the amounts applied for are considered reasonable.

Foreign exchange is allocated within certain limits to foreign nationals resident in Iraq, for family maintenance in their home countries and foreign travel. The allocation of foreign exchange to nationals of Iraq for these purposes is subject to administrative decision on individual applications. For residents traveling abroad, there is a basic allowance of ID 100 per person per month for not more than three months in any one year. Travelers may take out only ID 15 in Iraqi currency notes. Iraqis traveling abroad may take with them the equivalent of ID 15 in foreign currency.

Exports and Export Proceeds

Certain exports are prohibited, and exports of essential goods in short supply require licenses. Commodities which may not be exported from Iraq are livestock; certain foodstuffs in short supply, including dairy produce, cereals, and fruit; raw materials in short supply, including cement and scrap metals. Generally, goods imported into Iraq may not be re-exported. Commodities on the prohibited list, however, may be exported if specially authorized by the High Supply Committee.

Exporters of all commodities must declare their exports in order to ensure that foreign exchange proceeds are received. Prescription of currency requirements are applied to the surrender of export proceeds, but not in respect of certain commodities exported to neighboring countries.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered.

Foreign currency, including notes, may be brought into Iraq by travelers in unlimited amounts provided they are declared to the Iraqi customs, and the unused amount may be re-exported. Travelers may bring in only ID 15 in Iraqi currency notes.

Capital

In general, all transfers of capital abroad require special exchange control approval. Incoming capital funds must be deposited with licensed dealers. The National Bank may authorize the deposit of incoming capital funds in their original currency which may be converted later into dinars at the official rate of exchange. The repatriation of foreign capital invested in Iraq is subject to the approval of the National Bank.

Changes during 1952

January 3

The National Bank notified licensed dealers that it would quote an official rate for U.S. dollars at which they could obtain their dollar requirements over and above purchases from their customers or other banks. The commissions which the banks might charge their customers in respect of various transactions were specified.

January 15

Exports of wheat, rice, sesame grain, and flour were forbidden (owing, it was stated, to sharp increases in certain food prices), and export licenses already granted but unused were withdrawn.

May

Certain changes were announced in the list of commodities subject to export restrictions.

August 18

The licensing procedure and quota limitations were abolished for all imports (except certain luxury goods) from soft currency countries.

The allocation of foreign exchange to importers according to the category in which they were classified and registered was also discontinued.

September

The procedure for obtaining export licenses was simplified; licensed dealers were permitted to approve certain types of licensing applications without reference to the National Bank as previously required.

Italy

Origin and Essential Features

Controls on international transactions were introduced in Italy on September 29, 1931. They were established on a more systematic basis in 1934, when the compulsory surrender of all foreign exchange and foreign assets was introduced ; in 1939, with the prohibition of imports without a license; and in 1940, with the prohibition of exports without a license. The introduction in 1946 of a “free” market for receipts in U.S. dollars, Swiss francs, and pounds sterling resulted in a dual rate system for these currencies and in broken cross rates. Subsequent changes led to the elimination of the broken cross rate for pounds sterling and other currencies and in the actual unification of the exchange rate system. In connection with participation in EPU, Italy has gradually enlarged the number of commodities which can be imported without a license from OEEC countries.

The general regulation that the import of commodities and services must be authorized is waived for a short list of commodities whatever their origin, and for the great majority of commodities originating in EPU countries and associated territories.

The general regulation that the export of commodities must be authorized is waived except for those commodities included in a list which differentiates to a certain degree between exports paid for in U.S. dollars, Canadian dollars, or freely transferable Swiss francs and other exports.

All foreign exchange must be surrendered, but 50 per cent of receipts in U.S. or Canadian dollars can be retained by the recipient and either sold or used for authorized transactions during a period of 60 days. Payments abroad for authorized current transactions are approved provided they are effected in accordance with the methods laid down in the Italian Exchange Control instructions.

Payments abroad for capital transactions must be authorized by the monetary authorities except in a few cases.

Exchange Rate System

No par value for the Italian lira has been established with the Fund. The exchange rates between the lira and other currencies are related to the exchange rate for the U.S. dollar, which is determined on the basis of daily “free” market quotations. These quotations result from the negotiation of 50 per cent of dollar proceeds from current account transactions which can be retained by the recipient for a period of 60 days. During such a period the recipient, among other things, can sell the exchange so retained to importers, who can use it for authorized import transactions. The average of the closing market rates for the U.S. dollar on the Rome and Milan “free” markets is recognized as the official rate of the day. The daily official rate for the Canadian dollar is established in the same way. To establish the official rate for other currencies the lira-U.S. dollar official rate is related to the gold parity of the other currency with respect to the U.S. dollar. Where no gold content is fixed for the other currency, the official rate is sometimes established in a payments agreement.

During 1952, the rate for the U.S. dollar remained between Lit 624 and Lit 625 per U.S. dollar. This steadiness in the U.S. dollar rate results from the limitation of the demand for dollars in the “free” market achieved through the licensing policy, and the readiness of the official Italian Exchange Office to buy dollars at the official rate from holders of the retained 50 per cent of exchange proceeds.

Exchange Control Territory

Exchange control is not exercised over payments from the Italian Republic to the Republic of San Marino, the territory of Somaliland under Italian administration, and Zone “A” of the Free Territory of Trieste.

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, including those negotiated on the “free” market, pass through banks authorized for this purpose.

Prescription of Currency

Incoming and outgoing payments for transactions with countries of the dollar area or with countries with which there is no payments agreement must be made in U.S. dollars or Canadian dollars.

Incoming and outgoing payments for transactions with countries with which there is a payments agreement must be made according to the methods and in the currency established by the agreement.

Imports and Import Payments

Most imports from EPU countries and their associated territories1 do not require import licenses. Most imports from other countries—in respect of which payment has to be made through the accounts established by payments agreements or, in the absence of such an agreement, in U.S. dollars—require import licenses. In the case of countries with which no payments agreement exists, and which are not prepared to make payments in U.S. dollars, imports are privately arranged on a barter basis (“private compensations” and “transactions on a reciprocal basis”) and these must be individually authorized.

Private importers of goods and services are authorized to acquire U.S. or Canadian dollars needed for payment of such items either on the “free” market at the market rate or from the Exchange Office at the official rate. Owing to the achieved steadiness of the market rate, in 1952 importers bought exchange at virtually the same rate, irrespective of its source. Foreign exchange in other currencies is always acquired at the official rate.

For all authorized imports the exchange control authorities grant exchange or approve import payment forthwith for the necessary amount and in accordance with the established methods of payment (see section on Prescription of Currency, above).

Payments for Invisibles

Payments abroad for invisibles require licenses which are issued by the exchange control authorities. Foreign exchange is freely granted for expenses incidental to trade transactions. Holders of “50 per cent accounts” (see section on Exports and Export Proceeds, below) are entitled to use freely U.S. and Canadian dollars available in these accounts for such expenses. For various other types of expenditures, such as travel for business and tourism, health and education, patents and trademarks, the authorized banks are permitted to approve payments abroad up to various specified limits. Tourists traveling to EPU countries may obtain from the banks exchange to the value of Lit 200,000 per person per year. Remittances to cover health and education expenses in EPU countries can be authorized by the banks up to the value of Lit 150,000 per person per year.

Persons traveling abroad may take with them a maximum of Lit 30,000 in banknotes of denominations not exceeding Lit 1,000.

Favorable treatment is accorded to earnings on investments in Italy made in freely transferable Swiss francs or in U.S. dollars or Canadian dollars (see section on Capital, below). Favorable treatment is also accorded to earnings on investments of residents of EPU countries. Shipping and insurance companies and travel and forwarding agencies may maintain operating accounts in U.S. and Canadian dollars, freely transferable Swiss francs, and pounds sterling.

Exports and Export Proceeds

Certain commodities listed in a special table (Tabella Esport) require export licenses. This requirement is waived for a few commodities if they are paid for in U.S. or Canadian dollars or freely transferable Swiss francs. Special credit facilities are provided to promote exports to be paid for in U.S. or Canadian dollars, and certain specified tax rebates are granted on a few commodities when they are exported for payment in U.S. or Canadian dollars.

Exchange receipts in all foreign currencies must be surrendered entirely. Fifty per cent of exchange receipts in U.S. or Canadian dollars are credited by the banks to the recipient in a “50 per cent account” and can be retained for a period of 60 days. During such a period the sums in such accounts can be disposed of by the recipient in one of the following ways: (1) they can be used for authorized payments; (2) they can be sold on the free market (the buyer must use them for an import or an authorized payment abroad) ; or (3) they can be sold to the Exchange Office.

Proceeds from Invisibles

Receipts from invisibles are subject to the same surrender requirements as receipts from exports, except that shipping and insurance companies and travel and forwarding agencies can keep operating accounts in U.S. and Canadian dollars, freely transferable Swiss francs, and pounds sterling.

Persons may bring in Italian banknotes in any amount, but not in denominations exceeding Lit 1,000.

Capital

As a general rule, inward and outward capital movements require approval. Special regulations are in effect for transfers of foreign capital and income therefrom derived from investments made with freely transferable Swiss francs, U.S. dollars, or Canadian dollars since April 7, 1948. Transfer abroad in the currency originally surrendered is freely granted for (1) earnings from such investments up to one per cent in excess of the legal rate of interest (currently 5 per cent) ; (2) sums deriving from the disinvestment of capital, with the limit of the exchange originally transferred from abroad, and provided that the transfer is not requested earlier than two years after the time of the investment and does not exceed 50 per cent of the capital for each succeeding period of two years; and (3) sums corresponding to the exchange invested in machinery for industrial plants, provided that the transfer is not requested earlier than five years after the time of investment.

Special favorable treatment is accorded for the transfer of lire balances held in “special accounts” by residents of France, Switzerland, and the United Kingdom.

Banknotes

Banks are authorized to buy banknotes in U.S. dollars, Canadian dollars, and Swiss francs at the official rates, and banknotes in other currencies at a price corresponding to the rate of exchange for such notes in foreign markets.

Changes during 1952

January 15

Changes were made in the list of items the export of which is subject to license.

March S

The authorized banks were instructed by the Exchange Office to cease buying French franc notes at the official rate, and were allowed to buy such notes on the basis of the Zürich free market quotation converted into lire at the official Swiss franc rate of exchange in Italy.

April 1

The “liberalization” measures of November 1, 1951 and the reduction of 10 per cent in import duties with regard to commodities originating in EPU countries were extended until December 31, 1952.

April 8

The list of items subject to export license was divided into two parts, thus establishing some difference in treatment between exports paid for in freely transferable Swiss francs, U.S. dollars, or Canadian dollars and other exports.

April 24

The regulation according to which Italian importers could be provided with loans in EPU currencies at specially reduced interest rates in order to encourage imports from EPU countries was extended to October 31, 1952, and the upper limit for these facilities was raised.

May 16

Certain commodities were added to the list of items that could be imported without an import license when paid for in U.S. or Canadian dollars.

August 25

A few commodities were excluded from the list of those requiring an export license; other commodities were added to the list.

October 22

Some rebates of the turnover tax were accorded for exports of commodities paid for in U.S. dollars, Canadian dollars, or freely transferable Swiss francs.

Japan

Origin and Essential Features

Exchange controls, mainly intended to prevent a flight of capital, were initially introduced in Japan on July 1, 1932. They were rendered more stringent on January 8, 1937, and gradually increased later. After the war, Japan’s trade and exchange transactions were subject to the strict control of the Supreme Commander for the Allied Powers (SCAP). The exchange rates established in the immediate postwar years were of limited use and settlements for trade abroad gave rise to multiple rates. A unitary exchange rate was established in April 1949. An entirely revised foreign trade and exchange control law was put into effect December 1, 1949. The Japanese Government took over the administration of control from SCAP—the control of export trade from December 1, 1949 and the control of import trade and invisibles from January 1, 1950.

Settlements on account of merchandise transactions and invisibles are effected, according to the territory related to the transaction, in pounds sterling, U.S. dollars, or “accounting” dollars through prescribed channels. Practically all imports are subject to individual licensing and registration, and almost all payments on account of invisibles require individual licenses. All exports are subject to registration requirement, and certain exports are subject to individual licensing. Export proceeds as well as exchange proceeds from invisibles must be surrendered, but certain percentages of proceeds in U.S. dollars accruing from specified exports can be used for specific purposes.

All capital transactions and transfers having an exchange control aspect are in principle subject to individual licensing. However, foreign investments within the terms of a foreign investment law are accorded preferential treatment as to the repatriation of capital and income.

Exchange Rate System

Japan does not have an agreed par value.1 The official parity is Yen 360 = US$1, and the official rates are ¥ 358.95 buying, ¥ 361.05 selling, per US$1.2 Exchange rates are uniform.

Administration of Control

A Ministerial Council whose main function is the drafting of exchange budgets is the highest control authority on the policy level. The Ministry of International Trade and Industry carries out exchange and trade control policy in respect of merchandise transactions, while the Ministry of Finance—through its Foreign Exchange Bureau and the Foreign Exchange Council—does so in respect of prescription of currency and method of settlement, payments for nonmerchandise transactions, and capital transactions and transfers. The Ministry of Finance also has the right to determine exchange rates. The Bank of Japan and authorized banks carry out the controls on the technical administrative level.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles are effected in (1) sterling in respect of the Sterling Area; (2) U.S. “accounting” dollars through accounts established in accordance with payments agreements with Argentina, Brazil, Federal Republic of Germany, Finland, French Monetary Area, French Indo-China, Indonesia, Republic of Korea, Netherlands Monetary Area, Philippine Republic, Sweden, Taiwan, and Thailand (the “open account” countries) ; and (3) U.S. dollars in respect to all other countries and monetary areas. In addition, payments are effected in a prescribed technical and banking form and channel which differ according to various characteristic features and the category of transactions involved. Deviations from these prescription requirements are subject to an individual license from the control authorities.

Nonresident Accounts

1. Nonresident Yen Deposit Accounts. Nonresidents may be authorized individually to keep nonresident yen deposit accounts designated according to the residence of the account holder. Debits to these accounts for the personal needs of the account holder or for payments in yen without compensation to a resident or to a nonresident of the same country as the account holder are freely authorized, but debits to these accounts for conversion into foreign currency require an individual license.

2. Foreign Currency Deposit Accounts. As a measure to facilitate the application of exchange control, specified residents and nonresidents are authorized to keep deposit accounts with banks in U.S. dollars or pounds sterling. In the case of residents, these facilities are confined to shipping companies, airlines, tourist services, and insurance companies.

Imports and Import Payments

Practically all imports are subject to individual import licensing and, where payment is to be made, to registration with an authorized bank (“bank certification”) for prescription of currency purposes. Import licenses are granted rather freely for specific types of goods, e.g., foodstuffs, basic raw materials, and specified machinery and equipment. Many of the authorized imports are planned in the exchange budget and communicated through “Import Announcements.” These include (1) imports for which licenses are issued up to exchange quota limits for specified commodities from certain areas (“automatic approval” procedure) ; (2) import licenses which are distributed through drawing if the value of applications exceeds the established import quota (“first come, first served” procedure) ; (3) specified imports for which an exchange allocation must be obtained prior to the issuance of an import license. Authorized imports, not listed in the “Import Announcements”, are such items as operating supplies and maintenance materials required for export or essential domestic production, imports considered necessary for the fulfillment of trade agreements, and imports through compensation arrangements or under the “Export Promotion Foreign Exchange Allocation System”.

Other imports authorized outside the above arrangements include imports not requiring payment and those imported for processing and re-exportation.

Licenses are issued by authorized banks for imports covered by “Import Announcements,” while the Ministry of International Trade and Industry issues licenses for other imports or when the proposed payment is not in accordance with the prescribed method of settlement.

Applicants for import licenses issued within the framework of “Import Announcements” must make a deposit, the amount of which is calculated by multiplying the value of the intended import by a coefficient that differs for various categories of goods. The deposit is returned after the goods have been imported or if the import transaction is canceled for a reason acceptable to the control authorities.

Exchange is automatically available for authorized imports requiring an exchange allocation.

Payments for Invisibles

Contracts for specified services are subject to individual licensing, e.g., services between residents giving rise to foreign claimable assets, services between residents and nonresidents when payment is to be effected by a nonstandard method of payment or over a longer period than three months. Payments are subject to individual licensing; however, payments considered as part of a transaction which has been authorized can be freely effected. Payments on account of incidental costs in respect of authorized imports and exports and specified categories of transfers—e.g., those in connection with insurance, shipping, etc.—are freely permitted. Residents can take out of Japan ¥ 2,000 in Japanese currency to be spent only on Japanese vessels. Applications to take larger amounts are considered on a case-to-case basis.

Exports and Export Proceeds

All exports are subject to registration with an authorized bank (“bank certification”) in order to enforce the requirements concerning the prescription of currency and the surrender of proceeds. The exportation of 32 groups of commodities, precious metals, goods exported for consignment or under processing or compensation contracts are subject to individual licensing. Export proceeds have to be surrendered within ten days from the date of their acquisition or repatriation. However, exporters are permitted to use through simplified procedures for specific purposes 5 per cent, 10 per cent, or 15 per cent of their proceeds in U.S. dollars (other than “accounting” dollars) accruing from specified exports according to commodity. These purposes are listed as follows: traveling and living expenses abroad related to the promotion of foreign trade, expenses of overseas branch offices, imports (including related incidental costs) needed for the promotion of exports and/or economic recovery, imports of bona fide samples, catalogues, financial directories, and other similar trade publications.

Proceeds from Invisibles

Receipts by the standard, methods of settlement may be accepted without a license. However, contracts for specified services are subject to individual licensing, e.g., services between residents giving rise to foreign claimable assets, services when payment is to be received by a nonstandard method. Exchange receipts from invisibles must be surrendered. Residents can bring into Japan in Japanese currency any unspent balance of the amount which they legally took out.

Capital

All purchases of stocks, debentures, or investment trust certificates are subject to an individual license if remittance of income or principal is desired. However, stocks in the form of stock dividends on earned surplus or revaluation of assets may be freely acquired; but application for remittance rights must be made within three months from the date of acquisition. Such purchases can be effected against the yen proceeds arising from the sale of foreign exchange. Proceeds from the sale of debentures before maturity may not be reinvested.

The principal and capital gain from shares of stock, whether purchased or received as stock dividends, may be withdrawn in five equal installments, two years after the original acquisition. For stocks purchased with proceeds from the sale of other stocks, the two-year period runs from the date of the last purchase. In the event of capital loss, only the actual proceeds may be remitted.

For debentures, the principal may be entirely remitted at maturity only. The principal in respect of investment trust certificates may be remitted at the time of their redemption in five equal annual installments.

Purchase rights on stocks may be sold if the issuing company gives its consent, or the value of the rights can be realized by selling the stocks with rights and purchasing the same stocks without rights or other stocks. This arrangement constitutes a preferential treatment of foreign investors, as under the Japanese commercial code stock purchase rights may not be sold.

All other capital transactions and transfers having an exchange control aspect are subject to individual license.

Changes during 1952

February

Rates for forward exchange transactions were fixed: selling U.S. dollars and sterling—¥ 0.10 and ¥ 0.28, respectively, over spot, and buying ¥ 0.10 and ¥ 0.56, respectively, under spot, for each ten days forward.

July 10

The “Export Promotion Foreign Exchange Allocation System” by which exporters were permitted to use through simplified procedures a certain proportion of exchange for specific purposes was amended to be applicable to the proceeds in U.S. dollars (other than “accounting” dollars) accruing from specified exports. The percentages were 5 per cent, 10 per cent, and 15 per cent, according to commodity. The arrangements in respect of export proceeds in other currencies were suspended.

July

Importers were forbidden to bring in coal and raw cotton from the dollar area unless they also imported a certain percentage of these products from the Sterling Area and/or “Open Account Areas” (“the linked system”).

July 31

The Foreign Exchange Bureau in the Ministry of Finance was established and took over the functions of the liquidated Foreign Exchange Control Board and the Foreign Investment Commission. A Foreign Exchange Council was created as a subordinate of the Ministry of Finance.

The law concerning foreign investment underwent considerable revision, by which foreign investors received additional benefits, e.g., the way was opened for guaranteeing the remittance of principal of stocks and for switching between stocks.

Jordan, Hashemite Kingdom

Origin and Essential Features

Transjordan as part of the Mandated Territory of Palestine became a member of the Sterling Area on September 21, 1939 and exchange restrictions were introduced. On February 22, 1948, owing to the impending termination of the British Mandate for Palestine, this area ceased to be a territory within the Sterling Area. On July 1, 1950, the Hashemite Kingdom of the Jordan was included in the Sterling Area.

As a member of the Sterling Area, Jordan imposes a system of exchange control similar to that imposed by other members of the Sterling Area. There exists, however, local control over payments to and from territories both inside and outside the Sterling Area.

Restrictions are exercised through import licensing and exchange permit requirements to obtain exchange at the official rate. Fees are payable on these import licenses. A tax is applied to payments for invisible transactions together with an Air Force Tax calculated at 100 per cent on the original tax. Export proceeds must normally be repatriated within six months of export.

Exchange Rate System

No par value for the Jordan dinar has been established with the Fund. Official rates are US$2.82 buying, US$2,78 selling, per JD 1. The official rates are applicable to most trade transactions, but taxes applicable to payments for invisibles yield effective selling rates (see Table of Exchange Rates, below). Unofficial exchange transactions take place, but efforts are being directed toward suppressing them.

Administration of Control

The administration of exchange control is exercised by the Exchange Control Department of the Ministry of Finance under the responsibility of the Controller of Currency. Exchange is automatically granted for payment of almost all imports authorized by the Director of Imports and Exports.

Prescription of Currency

Prescription of currency requirements are observed on the individual import licenses and, in general, follow the pattern of the United Kingdom’s exchange control system. The same principles apply to export proceeds as a condition of export.

Nonresident Accounts

Authorized banks may open nonresident accounts subject to prior approval of the Controller of Currency when they are satisfied that the accounts are acquired for legitimate business purposes and provided they are fed by the appropriate funds. Transfers between nonresident accounts of different countries or monetary areas, and transfers from resident accounts to nonresident accounts, require the approval of the Controller of Currency.

Imports and Import Payments

Imports may be carried out only by registered importers. Registered importers receive foreign exchange allocations in hard and in soft currencies 1 on the basis of the Government’s import program for each commodity group. The Director of Imports and Exports issues licenses for individual imports on the basis of these allocations. An importer who has been granted a license to import goods may arrange with his bank to apply on his behalf to the Controller of Currency for permission to open an irrevocable documentary credit within two months after issuance of the import license, or he may order the goods and arrange with his bank to apply for exchange after the shipping documents arrive in Amman, or he may clear the goods on arrival in Amman on the presentation of the relevant import license and arrange for his bank to submit the customs declaration to the Controller of Currency and apply for exchange. In all cases an exchange permit must be issued by the Controller of Currency in order to obtain foreign exchange at the official rate. Import licenses without exchange are issued for vegetables, fruits, and locally made clothing imported in small quantities from Lebanon and Syria ; otherwise exchange permits are always granted when an import license has been obtained.

License fees amounting to 2 per cent for soft currency imports and 6 per cent for hard currency imports (this includes an Air Force Tax of 100 per cent on the basic license fees) are collected on import licenses.

Payments for Invisibles

A tax of 2 per cent for soft currency payments and 6 per cent for hard currency payments (including an Air Force Tax of 100 per cent on this tax) is applied on all payments for invisibles.

Exchange is made available for payments of the following types of invisibles: income of nonresidents; savings up to JD 5,000 of foreign nationals who intend to return to their own country; remittances to refugee dependents outside Lebanon and Syria, the living expenses of Jordan nationals abroad, travel expenses of Jordan residents abroad (except to Syria and Lebanon), education expenditures, and medical treatment up to certain limits ; business expenses abroad, insurance and insurance premiums in accordance with special regulations.

Persons leaving Jordan for Lebanon or Syria may take out up to JD 100, and persons leaving for any other country, JD 20. Persons leaving Jordan may take out the equivalent of JD 10 in banknotes, other than those of the Jordan Currency Board, and any amount of notes previously brought into the country. Remittances to neighboring Arab countries may be made by postal or money order up to JD 5 per month per person.

Exports and Export Proceeds

Exports are not allowed to be shipped unless the exporter has satisfied the Controller of Currency as to the manner in which payment for the goods will be received. Exporters are normally required to repatriate the value of exports within six months of export. Exemption from this repatriation requirement is granted only for commercial samples or for charitable purposes or for gifts not exceeding JD 10 in value.

Proceeds from Invisibles

Persons entering Jordan from Lebanon or Syria may bring in a maximum of JD 100—those entering from other countries, JD 20—in domestic currency. All persons may bring in any amount in foreign currencies.

Capital

Capital may be imported freely. Capital exports require approval.

Table of Exchange Rates(as at December 31, 1952)
(U.S. dollars per dinar)
BuyingSelling
2.822.782
All incoming payments.Government payments and imports authorized at the official rate.
2.7244($2.78 with 2% Tax)
Invisibles authorized at the official rate to soft currency countries.
2.6132($2.78 with 6% Tax)
Invisibles authorized at the official rate to hard currency countries.
Note: This table does not include rates of the unofficial market, through which certain imports may be paid, subject to the payment of customs fines based on the currency area from which the goods originate—but see footnote 3.
Note: This table does not include rates of the unofficial market, through which certain imports may be paid, subject to the payment of customs fines based on the currency area from which the goods originate—but see footnote 3.

Changes during 1952

January 9

From this date, foreign exchange was made available to individual importers in semiannual allotments on the basis of exchange quotas allocated in hard and soft currencies to each commodity group in the Government’s import program. The system of classifying importers into grades and classes on the basis of their records of importations during a base period was dropped.

July 1

A list of nonessential commodities was published for which import licenses would no longer be issued and official exchange would not be made available. Exchange for the importation of these commodities was to be obtained from the unofficial market and a customs fine paid on arrival of these commodities; this fine was 25 per cent for commodities originating from hard currency countries and 15 per cent for commodities originating from soft currency countries.3

Lebanon

Origin and Essential Features

Exchange control was first introduced in Lebanon on December 3, 1939. Significant changes were made in 1944, 1945, and 1948. Subsequently, exchange controls were gradually relaxed, and on May 24, 1952 the last remaining exchange control requirement was officially abolished. There is a complete absence of controls and restrictions on payments and of government interference in the free market. There is a multiple exchange rate structure since official exchange is reserved for government purposes, while nongovernmental transactions are effected in the free market in which rates remote from the par value rates are in effect and in which there are broken cross rates.

Exchange Rate System

The par value is Lebanese Pounds 2.19148 = US$1. The official rates are LL 2.19 buying, LL 2.21 selling, per US$1. These rates apply only to government payments, and all other transactions take place at free market rates (see Table of Exchange Rates, below).

Prescription of Currency

In general, no requirements are attached to exchange payments or receipts in Lebanon, but payments for imports from certain countries with which Lebanon has concluded payments agreements specifying the method or channel of payment1 should be made through authorized dealers or specific accounts.

Imports and Import Payments

Import licenses are required for all commodities, but licenses are issued freely (often after the arrival of the goods) except for a few commodities of a type produced locally.

Exchange may be obtained freely through the free market. Payments for imports from certain countries are expected to be made in a specified manner (see section on Prescription of Currency, above).

Payments for Invisibles

Exchange may be obtained freely through the free market or payment may be made freely in local currency to any account.

Exports and Export Proceeds

Export licensing is applied to only a few items such as livestock, wheat, barley, jute goods, cement, caustic soda, and certain metals.

There are no surrender requirements attached to exchange receipts, which may be retained, used, or freely sold in the free market.

Proceeds from Invisibles

There are no surrender requirements attached to exchange receipts, which may be retained, used, or freely sold in the free market.

Capital

There are no limitations on capital payments or receipts, and exchange in respect of capital movements may be freely obtained or sold through the free market.

Table of Exchange Rates(as at December 31, 1952)
(Lebanese pounds per U.S. dollar)
BuyingSelling
2.192.21
….Government payments.
3.57(Fluctuating Free Market Rate)3.57(Fluctuating Free Market Rate)
All exchange receipts not retained.All other payments.

Changes during 1952

January 8

Legal limitations on the export and import of Lebanese currency were formally removed.

January 26

The requirement that, if exchange receipts from invisibles in specified currencies were sold, 10 percent must be surrendered at the official rate, was abolished; such sales of foreign exchange could in future be made entirely in the free market.

May 17

The requirement that companies operating under special contract and selling specified currencies in order to obtain Lebanese pounds should surrender 80 per cent at the official rate was revoked ; such sales of foreign exchange could in future be made entirely in the free market.

Netherlands

Origin and Essential Features

Exchange control was introduced in the Netherlands on May 10, 1940. The present exchange control system has its legal basis in a decree of October 10, 1945 (Foreign Exchange Decree 1945), which became effective on October 20, 1945. The basic structure of the system has remained unchanged since then, although there has been considerable relaxation in detail. The restrictive system is implemented through licensing of all imports, exports, and payments to and receipts from nonresidents, but many transactions are covered by general licenses. The prescription of currencies for foreign payments and receipts is an integral part of the exchange control system. Import restrictions and restrictions on payments on invisibles and capital account are applied less severely to soft currency countries. Since 1949, restrictions on payments in connection with intra-European trade and services have been relaxed considerably.

Exchange Rate System

The par value is Netherlands Guilders 3.80 = US$1. The official rates are f 3.795 buying, f 3.805 selling, per US$1.1 Basically, exchange transactions are effected at uniform rates based on the above par value.

For sterling, French francs, Swiss “agreement” francs, and Swedish kronor, free spot and forward exchange markets have been established.2 Authorized banks are allowed to cover both spot and forward permitted transactions in these currencies in the Amsterdam exchange market and with banks in the country of the currency concerned against guilders at rates within a fixed spread within one per cent either side of parity. Forward transactions must be based on permitted merchandise or service transactions.

Special arrangements apply to exchange proceeds from exports to certain countries or in certain currencies, as follows:

Exporters are permitted to retain in foreign currency accounts held by authorized banks 10 per cent of most export proceeds obtained in U.S. and Canadian dollars. The retained proceeds, known as Export Bonus dollars (EB dollars), are not legally transferable other than to the exporter’s direct supplier and at the official rate.

Most importers from Argentina are granted negotiable “import payment certificates” for the amount of their imports, and most exporters to Argentina are required to submit such certificates to an amount of 1.67 times the value of their proposed exports in order to qualify for an export license.

Brazilian cruzeiro receipts may be surrendered, provided certain conditions are fulfilled; a free forward market for cruzeiros operates while, at the same time, residents are permitted to negotiate spot cruzeiros with other residents (including authorized banks) at a fixed rate corresponding to the official par values, provision being made for the “mixing” of official and retained exchange (in any proportion) for payments in respect of imports and purchases for transit trade transactions. In actual practice, no mixing ratios have ever been established. All imports, as well as purchases for transit, can be paid for with cruzeiros bought in the free forward market, with the exception of purchases of coffee which have to be paid for in cruzeiros bought at the official spot rate from the Netherlands Bank. Retained cruzeiros can also be used in payment for invisibles.

Exporters are permitted to sell their balances on nontransferable “Egyptian nonresident accounts” to importers at or below the rate corresponding to the official par values of the Netherlands guilder and the Egyptian pound.3

Exchange Control Territory

All transactions with the Netherlands overseas territories (the Netherlands Antilles, Surinam, and New Guinea) are subject to exchange control. However, vis-à-vis third countries with which payments agreements are in force, the Netherlands and its overseas territories constitute the Netherlands Monetary Area. The Republic of Indonesia participates in several of the Netherlands7 payments agreements, and in those cases it also constitutes a part of the Netherlands Monetary Area.

Administration of Control

The administration of exchange control is conducted by the Netherlands Bank on behalf of the Ministers of Foreign Affairs, Affairs of the Realm, Finance, Economic Affairs, and Agriculture. Import licensing and export licensing are handled by the Central Import-Export Agency (CDIU) and its delegated offices, under directives from the Directorate-General for Foreign Economic Relations. Invisible and capital transactions are licensed by the Netherlands Bank, as are all transit trade transactions. Sixty-seven authorized banks have been permitted to handle foreign exchange transactions within the scope of general and special licenses granted by the licensing authorities.

Prescription of Currency

Payments to nonresidents, if eligible for transfer abroad, must always be made through an authorized bank, either to the credit of a transferable nonresident guilder account held by a foreign bank with an authorized bank in the Netherlands or to the debit of the authorized bank’s holdings abroad of the currency concerned. Such payments to nonresidents must be made in the currency specified in the exchange license, viz., (1) where a two-account payments agreement is in force, optionally in guilders held in a nonresident account related to the partner country or in the the partner country’s currency; (2) for a single-account agreement, in the currency of the agreement; (3) in cases (1) and (2), in sterling if ad hoc approval is given; (4) in transactions with the United States and Canada, either by debiting an authorized bank’s holdings of the respective currencies in the United States or Canada, or by crediting an appropriate transferable guilder account (American or Canadian Account) held by a U.S. or Canadian bank with an authorized bank; (5) in all other cases, on the basis of individual authorization, usually in U.S. dollars or sterling.

The prescription of currencies for exchange receipts is similar to that for exchange payments.

Nonresident Accounts

There are three types of nonresident accounts held in guilders with Netherlands authorized banks: “guilder agreement accounts”, other “transferable accounts” (T and TN accounts), and “capital accounts” (N, K, and Z accounts). All are designated by nationality according to the country of residence of the account holder.

“Guilder agreement accounts” are transferable accounts in the names of foreign banks; they are used for payments and receipts mainly on account of current transactions. Balances on T accounts may at any time be freely transferred to the holder’s country of residence, and to T, K, or N accounts related to that country. Balances on T accounts may be utilized in payment of Netherlands exports. They may be credited freely for coupons, dividends, and contractual amortization if a payments agreement provides for such transfers, or the account relates to Canada or the United States. TN accounts are accounts in the names of nonresident Netherlands nationals who have been residents of the same foreign country since at least May 5, 1945. To these are credited, for transfer to the holder’s country of residence, his capital earnings, contractual amortization, and pensions accruing in the Netherlands on or after April 1, 1952.4

K accounts are held by foreign nonresidents. N accounts are in the names of nonresidents having Netherlands nationality or domiciled in Indonesia or one of the Netherlands overseas territories. Except in the cases noted above, capital earnings, amortization, and pensions must be credited to K or N accounts. Likewise, proceeds of the sale of real estate, domestically held securities, and other capital assets held in the Netherlands must be credited to K or N accounts ; such proceeds are subject to a reinvestment obligation unless accruing to nonresidents domiciled in Indonesia or one of the overseas territories. Balances on K and N accounts may be used mainly to cover the holder’s and his family’s living expenses in the Netherlands, for payment of his taxes, and for certain locally traded guilder securities. N accounts may, moreover, be debited for the purchase on a Netherlands stock exchange of guilder securities which are internationally traded. Greater freedom exists with regard to the use of N accounts than of K accounts, and, among the N accounts, those related to Indonesia or the Netherlands overseas territories may be debited more freely than those related to other countries. Indonesian N accounts, in turn, are treated more liberally than are N accounts related to the Netherlands overseas territories. Z accounts are those containing sums of uncertain origin; they may not be debited or credited without special license.

Imports and Import Payments

A few commodities (mainly grains and feeding stuffs) are imported on government account, but most imports are carried out by private dealers.

A large number of listed goods imported from OEEC countries in consignments of f 400 or less do not require licenses. All other imports require a combined import and exchange license. For most goods from OEEC countries and their associated areas,5 licenses are issued automatically upon application; the relative liberalization list also applies to Indonesia, New Guinea, Surinam, and the Netherlands Antilles. For nearly all imports from the Belgian Monetary Area also, licenses are issued upon application. Imports from the dollar area in accordance with an annual dollar import program are confined mainly to essentials. Licenses for imports financed with EB dollars (see section on Exports and Export Proceeds, below) are, with few exceptions, issued automatically upon application.

Import, export, and transit licenses are combined with exchange licenses. In principle, whenever an import and exchange* license is obtained, or if no license is required, payment may be effected without delay, provided that the method of payment is in conformity with the general rules (see section on Prescription of Currency, above). Payment prior to the dispatch of the goods to the Netherlands is prohibited if settlement is to be made in U.S. dollars, Canadian dollars, or free Swiss francs, or to the credit of any U.S. or Canadian nonresident guilder account.

Payments for Invisibles

All payments for invisibles are subject to exchange licensing. Many categories of invisibles, however, particularly if payable to OEEC countries or their associated territories and to certain other payments agreement countries, are covered by general licenses. In those cases the supervision of payments rests with the authorized banks. Restrictions on invisibles payable in hard currencies are more severe than those on payments in soft currencies. Tourist exchange, exclusive of the payment of fares, is provided up to the countervalue in the appropriate currency of f 600 annually per adult for travel to any OEEC country, Finland, Spain, Yugoslavia, and certain French, Portuguese, and Spanish nonmetropolitan areas. The relative general license also extends to nonresidents domiciled in Indonesia or New Guinea but staying in the Netherlands temporarily.

Residents may export all foreign notes acquired in accordance with a general or special license, and a maximum of f 50 in domestic notes which must be reimported. Nonresidents may, when leaving the Netherlands, export the unused portion of any foreign exchange they declared at the time of entry as well as f 100 in Netherlands banknotes. Nonresidents leaving for Indonesia are not permitted to export Netherlands banknotes.

Exports and Export Proceeds

All exports are subject to a combined export and exchange license. No special license, however, is required for a large number of goods exported to certain destinations in consignments not exceeding f 400 in value and provided that payment is received from the country of destination. The method of payment must be in conformity with the regulations (see section on Prescription of Currency, above).

The prohibition of certain exports to most Eastern European destinations is based on NATO agreements. The exportation of some goods is prohibited regardless of destination in order to conserve domestic supplies.

Most export proceeds must be surrendered at the official rate. However, 10 per cent of all receipts of U.S. and Canadian dollars from exports of domestic products to countries with which no payments agreement is in force, and 10 per cent of all such receipts from sales of domestic goods to international organizations and U.S. Government agencies effected without the direct intermediary of the Netherlands Government may be retained by the exporter on an EB dollar account maintained in U.S. or Canadian dollars with an authorized bank. EB dollars, are not transferable other than to the exporter’s direct supplier, and payment in respect of such transfers must be made at the official rate. EB dollars may be used for any import from the United States or Canada, for any services payable in the United States or Canada, and for payments in respect of any imports or services from any other country, provided that they are exchanged for appropriate currency at the official rate. The relative import and exchange licenses are automatically granted on application, unless, exceptionally, they are refused for commercial policy reasons.

For most exports to Argentina, licenses are not issued unless the exporter submits “import payment certificates” (see section on Exchange Rate System, above) to an amount 1.67 times that of his proposed export. The export proceeds must be surrendered at the official rate. Most receipts of Brazilian cruzeiros other than those from exports contracted before October 11, 19526 or of “export pounds” from exports to Egypt are not eligible for surrender (see section on Exchange Rate System, above).

Proceeds from Invisibles

Most exchange receipts from invisibles, other than in Brazilian cruzeiros, must be surrendered. For incoming exchange from invisibles or capital, the recipient must submit to an authorized bank a form “B” indicating the nature of the underlying transaction as well as the amount and currency received.7 Permission is given for foreign exchange to be retained in controlled accounts at home or abroad where it is required for operating purposes.

Nonresidents may bring into the Netherlands f 100 in Netherlands banknotes and unlimited amounts of foreign banknotes and negotiable instruments. They may be sold only to an authorized bank or an authorized exchange office.

Capital

Inward and outward capital transfers, and also the shifting of foreign-owned capital within the Netherlands from one asset into another, are subject to control. Payments for contractual amortization are permitted freely to nonresidents of foreign nationality to the country of their residence if a payments agreement with that country provides for such transfers. They are also permitted in favor of residents of the United States or Canada. Transfers of contractual amortization to residents of countries with which no payments agreement is in force usually are, subject to administrative discretion, credited to nontransferable guilder accounts. Nonresident Netherlands nationals are permitted the transfer to their country of residence (if unchanged since at least May 5, 1945) of contractual amortization accruing to them in the Netherlands after April 1, 1952.8 Netherlands or foreign securities held in the Netherlands for the account of nonresidents may be returned to the owner or be sold with special or general license from the Netherlands Bank, provided certain conditions are fulfilled. Sales proceeds of capital assets (including securities) accruing in the Netherlands to nonresidents of any nationality must be credited to nontransferable nonresident guilder accounts, and usually are subject to a specific reinvestment obligation. In cases of hardship, the export of moderate amounts of nonresident-owned capital is permitted. Industrial investment capital supplied from free exchange or transferable guilder accounts after November 1, 1950 is covered by a retransfer guarantee effective three years after the date on which final payment was received.

Emigrants leaving after October 1, 1952 are permitted to export foreign exchange to the countervalue of f 1,500 to non-dollar area countries or f 900 to dollar area countries, in addition to personal effects, goods required in their trade or profession, and a prefabricated house.9

Changes during 1952

January 1

The liberalization of imports from OEEC countries was raised to 71 per cent. Effective liberalization of imports from the Belgium-Luxembourg Economic Union was restored to 95 per cent. The facilities for payment in guilders in respect of train, ship, and plane fares for travel in Europe were broadened substantially.

January 9

A general license was issued permitting residents to transfer to 32 soft currency destinations up to f 50 in respect of specified invisibles.

February 11

The right of exporters to retain 10 percent of their U.S. and Canadian dollar proceeds on a domestic dollar account was extended to cover 10 per cent of the proceeds in those currencies of all sales to countries with which no payments agreement is in force and of sales, regardless of destination, for the account of a U.S. Government agency or of an international organization, unless such sales were effected “through the direct intervention of the Netherlands Government within the framework of international cooperation in the field of the defense effort.” The crediting of such proceeds to domestic “special account dollar accounts” was discontinued.

March 1

The percentage of liberalized imports from OEEC countries was raised to 75.10

March 15

Individual import and export licensing with respect to specified goods and specified countries, for shipments up to f 400, was removed.

March 25

The general license permitting residents an annual exchange allocation of f 400 for tourist travel in 18 European countries was extended to include Yugoslavia.

April 17

The exchange allocation for business travel was raised to f 700 per person per trip for travel in 17 soft currency countries; for each firm, such purchases were limited for each country to the amount used in that country by that firm for travel started in 1951.

April 26

It was announced that imports of nylon stockings paid for with EB dollars would not be permitted to exceed those in 1951.

April 29

Capital earnings, contractual amortization, and pensions accruing in the Netherlands on or after April 1, 1952 to Netherlands nonresidents living abroad since at least May 5, 1945 were made transferable to the recipient’s country of residence. Twenty per cent of the balances as of January 1, 1952 on K accounts (f 1,000 for balances below f 5,000) was declared eligible for transfer to the holder if domiciled in a payments agreement country, the United States, or Canada.

May 2

The allocation of exchange for business and tourist travel by automobile was increased.

May 15

Most exporters to Argentina, in order to obtain an export license, were required to submit “import payment certificates” to an amount of 1.67 times the value of their proposed exports. Such certificates were issued to most importers effecting imports from Argentina against import licenses granted on or after May 15, 1952, for amounts corresponding to their purchases.

June 5

The transfer of capital earnings and contractual amortization between the Netherlands and Italy was authorized.

June 18

A general license was issued permitting residents to buy goods abroad (other than goods payable in U.S. or Canadian dollars) and resell these to nonresidents established in Indonesia, the only specific approval required being that of the Central Import-Export Agency.

June 80

A free forward market was created for sterling and French francs, and the spread between the spot buying and selling rates for these currencies was widened. The authorized banks were permitted to cover their spot and forward positions in sterling and French francs with their correspondents in the United Kingdom and France, respectively, and could no longer cover their forward positions with the Netherlands Bank. They were also permitted to settle spot transactions in the two currencies with their clients at market rates (within the widened spread) arising in transactions among the banks rather than, as previously, at the official buying and selling rates only. Forward transactions still had to be based on approved commodity or service transactions. The authorized banks were permitted to purchase sterling and French franc Treasury Bills and commercial paper for investment of cash balances held against forward contracts in the respective currency (up to 25 per cent of the amount of the forward contracts) and to sell this paper. Permission was granted to cover only one side of a transit transaction by a forward contract.

August 5

Payments to 17 soft currency countries in respect of advertisements (up to f 200 per advertisement) and various other specified invisibles (up to f 200 for each category) were freely permitted. (Some of these invisibles had been included in the list of January 9.)

August 13

The authorized banks were permitted to sell and export to their correspondents in EPU countries domestic banknotes in denominations not exceeding f 50, for travel of residents of those countries to the Netherlands. The banks were also permitted to repurchase and import these banknotes from their correspondents up to f 10,000.

September 26

The obligation to offer precious metals for surrender was ended, except for gold. The obligation for residents returning from abroad to offer remaining travel exchange for sale was restricted to U.S. and Canadian dollar notes and coin, which still had to be surrendered.

October 1

The allocation of exchange to emigrants to both dollar area and non-dollar area countries was increased.

October 2

The prohibition of prepayment for imports was rescinded except for payments in U.S. dollars, Canadian dollars, free Swiss francs, or guilders to the credit of any guilder account in the name of a nonresident established or domiciled in the United States or Canada.

October 6

The amount made available for tourist travel in EPU countries and certain other European countries in 1952 was raised from f 400 for persons of 14 and over to f 600 for persons of 12 and over. The amount which might be spent per day was raised from f 50 to f 75.

October 7

A general license was issued, effective from October 8, freeing until January 1, 1953 the balances on capital accounts as at June 30, 1952 of nonresidents of foreign nationality (other than residents of Indonesia or Netherlands overseas territories) domiciled in the United States, Austria, Brazil, Greece, Turkey, and countries with which payments agreements provide for the transfer of capital earnings and/or contractual amortization.

October 11

The Netherlands Bank discontinued purchasing cruzeiros other than in exceptional cases. The spot buying rate for cruzeiros was reduced from f 20.54 to f 20.34 per Cr$100. Most receipts of cruzeiros had to be credited to private cruzeiro accounts with authorized banks. A free forward market for cruzeiros was created. In that market, residents were free to sell and buy cruzeiros with the authorized banks only, on the basis of approved underlying transactions, while the banks could no longer cover their forward contracts with the Netherlands Bank. For service transactions, forward deals were permitted only in the case of receipts from Brazil. Residents were allowed to negotiate spot cruzeiros with each other at the “rate for internal settlements” of f 20.54 per Cr$100 and to transfer them to authorized banks to close forward contracts concluded after October 10, 1952.

October 18

The transfer of capital earnings between the Netherlands and Hungary was permitted.

October 81

Payments to 17 soft currency countries were freely permitted in respect of advertisements up to f 1,000 per advertisement, and for various other specified invisibles up to f 1,000 per transaction. (Most of these items had been included in the list of August 5.)

November 24

The allocation of business travel exchange per person per trip in respect of 18 soft currency countries was raised. Also, the quota per firm was raised by 50 per cent and made a global quota.

December 1

Swiss “agreement” francs were traded in a free spot and forward market. The spread for spot transactions was widened. The authorized banks were granted facilities for investing their spot holdings of Swiss “agreement” francs.

December 2

Imports and transit trade purchases of coffee payable in cruzeiros had to be settled in cruzeiros obtained at the official selling rate (f 20.67 per Cr$100). The possibility was created of using (subject to special or general license) nonsurrendered cruzeiros for invisibles. For service transactions requiring payment to Brazil, forward exchange deals could be concluded.

December 6

Swedish kronor were traded in free spot and forward markets. The spread for spot transactions was widened. The authorized banks were granted facilities for investing their spot holdings of Swedish kronor.

December 10

A general license was issued permitting the U.K., French, Swedish, and Swiss correspondents of Netherlands authorized banks to invest their balances on transferable guilder accounts in Netherlands Treasury Bills and guilder bank acceptances, and to resell these bills and acceptances for credit to those accounts.

December 12

A general license was issued to residents and to nonresidents domiciled in Indonesia or New Guinea to obtain travel exchange equivalent to f 600 a year per adult in the currencies of 19 European countries.

December 15

The Netherlands Bank indicated its willingness, in principle, to resume buying cruzeiros whenever and insofar as its cruzeiro balance in Brazil should fall below the level of December 15, 1952. Purchases at the official buying rate would provisionally be confined to cruzeiros resulting from commercial contracts concluded before October 11,1952, for amounts not covered before December 15, 1952 by a forward sale or by exchange rate or transfer insurance. Facilities were provided to transfer such amounts—if already held in nonsurrendered cruzeiros not covered by a forward sale—to a special cruzeiro account with the Netherlands Bank to be liquidated on a first come, first served basis.

December 17

Resident exporters were granted a general license permitting them to dispose of their balances held in Egypt on “Egyptian nonresident accounts” by selling these to resident importers, either directly or through an authorized bank, at a rate equal to or below the “rate for internal settlements” fixed by the Netherlands Bank.

Nicaragua

Origin and Essential Features

Control over exchange transactions was introduced in Nicaragua on November’13, 1931. Subsequently, at various times, exports and imports have been made subject to government control. Certain changes were introduced later, affecting trade and payments transactions. The last major revision became effective November 9, 1950, when the exchange rate system was simplified by the elimination of compensation and certificate practices and of a system of individual import quotas.

The exchange system comprises a multiple exchange rate structure consisting of two official rates with, in addition, various surcharges. All exchange receipts must be surrendered at a fixed rate. There are no quantitative restrictions or prohibitions to restrain imports. There is a fluctuating free market in foreign notes and coins for transactions of minor importance.

Exchange Rate System

The par value is Córdobas 5 = US$1. The rate system is based on two official rates of C$5 and C$7 per US$1. By mixing these rates in different proportions and by adding surcharges of C$1 and C$3 per US$1 to certain types of payments, other effective rates are obtained for the various categories of incoming and outgoing payments (see Table of Exchange Rates, below).

A fluctuating free market for foreign notes and coins is used mainly for travel exchange transactions.

Administration of Control

The control system is administered by the Issue Department of the National Bank of Nicaragua, which issues import and export permits and allocates import commodities to the established categories of “essential,” “semi-essential,” and “nonessential” goods. All sales of exchange pass through the Issue Department and the Banking Department of the National Bank or through authorized banks.

Prescription of Currency

There is no prescription of currency, but incoming and outgoing payments normally are made in U.S. dollars.

Imports and Import Payments

For the purpose of applying the established exchange rates and surcharges, private imports are classified into three categories to which the rate of C$7.05 applies: Category I (essential imports), Category II (semi-essential imports), and Category III (nonessential imports). Surcharges of C$1 and C$3 per US$1 apply to payments for imports in Categories II and III, respectively. Government payments abroad are made at the rate of C$5.03 per US$1. All imports are subject to license to assure that the corresponding exchange transaction takes place at the applicable rate and that the relevant surcharge has been paid in advance.

Before making an application to import, the importer must deposit in domestic currency 100 per cent of the calculated value of the proposed import.1

Payments for Invisibles

All invisibles are subject to authorization, in order to apply the appropriate rate of exchange. Invisible payments incidental to import transactions are subject to the same rate and procedure as the corresponding import.

Most other invisibles are treated like Category III imports and are, therefore, subject to the C$3 per US$1 surcharge, added to the C$7.05 per US$1 rate. Students’ expenditures, payments of insurance premiums, and remittances on account of foreign investments are made at the rate of C$7.05 per US$1.

Sales of exchange for most invisibles are subject to a 5 per cent tax which is collected by the National Bank of Nicaragua.2

Domestic currency notes can be exported freely.

Exports and Export Proceeds

Exports are subject to a licensing procedure similar to that for imports, which serves to assure that all exchange receipts are surrendered at the effective rate of C$6.60 per US$1 (20 per cent at C$5 per US$1 and 80 per cent at C$7 per US$1).

All exchange receipts from exports must be surrendered, with the exception of receipts of foreign concessionaires which, according to the terms of their contracts, usually surrender foreign exchange only to the extent corresponding to their local expenses.

Proceeds from Invisibles

Proceeds from invisibles are subject to the same regulations as proceeds from exports. Domestic currency notes can be imported freely.

Capital

Remittances abroad of income and amortization of registered foreign capital require the authorization of the National Bank. Remittances for amortization may not exceed 10 per cent per annum of the capital. The rate which applies to these remittances is C$7.05 per US$1.

No official exchange is sold to residents for transfers of capital abroad.

Banknotes

Foreign currency notes may be negotiated in a free market.

Table of Exchange Rates(as at December 31, 1952)
(córdobas per U.S. dollar)
BuyingSelling
5.005.0375
….Specified government payments.
6.586(20% at C$5 and 80% at C$6.9825)
All receipts not effected at other rates.
6.60(20% at C$5 and 80% at C$7)
Exports of farm products and products derived therefrom, and of certain forest products.
7.007.0525
….Essential imports (Category I). Students’ expenses. Insurance premiums. Registered capital.
7.30(Fluctuating Free Market Rate)7.30(Fluctuating Free Market Rate)
Foreign notes and coins (travel receipts).Foreign notes and coins (travel expenses).
8.0525(C$7.0525 plus C$1 Surcharge)

Semi-essential imports (Category II). Medical expenses.
10.0525(C$7.0525 plus C$3 Surcharge)
Nonessential imports (Category III). Other invisibles.
Note: Sales of exchange for most invisibles are subject to a 5% tax which is collected by the National Bank of Nicaragua.
Note: Sales of exchange for most invisibles are subject to a 5% tax which is collected by the National Bank of Nicaragua.

Changes during 1952

No significant changes took place during 1952.

Norway

Origin and Essential Features

An exchange control law was introduced in Norway on May 18, 1940 and revised on November 10, 1944 and July 19, 1946. A new law, embodying previous regulations, was issued on July 14, 1950, but it has not yet been implemented. Severe restrictions on all foreign payments were applied up to the end of 1949. During the period 1950-52, restrictions were relaxed, especially in connection with intra-European trade and services.

Exchange Rate System

The par value is Norwegian Kroner 7.14286 = US$1. The official rates are NKr 7.135 buying, NKr 7.150 selling, per US$1.

All exchange transactions are effected at uniform rates, based on the par value for the U.S. dollar.

Administration of Control

In principle, all imports and exports require licenses granted by the Ministry of Commerce. However, goods listed on the so-called “free list” may be imported against a “declaration”. All payments to a nonresident, and vice versa, must be made through one of the Norwegian authorized banks or through the Norges Bank. Generally, all payments require approval from either the Ministry of Commerce (in respect of goods) or the Norges Bank (in respect of invisibles). However, the authorized banks may effect payments to nonresidents in settlement of goods on the “free list”. To a certain extent, payments to nonresidents in respect of invisibles may be effected without prior permission from the Norges Bank.

Prescription of Currency

The prescription of the methods in which payments to and receipts from nonresidents are to be made is set out in the payments agreements which have been concluded with other countries. Usually, inward and outward payments must be made in either Norwegian kroner or the currency of the country of the nonresident (double-account payments agreements), or a single currency (single-account payments agreements). Payments effected in Norwegian kroner are made into and out of free accounts held in Norwegian kroner with the authorized banks (see section on Nonresident Accounts, below).

Nonresident Accounts

There are two types of nonresident accounts held in Norwegian kroner with the authorized banks: free accounts and blocked accounts. Free accounts may be used for all payments to and from the country of the nonresident holder in all cases where the payments agreement with the country concerned allows payment to be made in Norwegian kroner. Any balance in a free account may be converted at any time into the currency of the country of the holder.

Nonresident-owned capital which cannot normally be transferred abroad is deposited in blocked accounts. These accounts may be used by the holder to cover various expenses in Norway, such as personal taxes, insurance premiums, traveling expenses, etc., and for investment in bonds quoted on the Norwegian Stock Exchange. Bonds purchased in this way must be deposited in a “blocked securities” account with an authorized bank.

Imports and Import Payments

All goods on the so-called “free list” can be imported freely from OEEC countries and their associated areas 1 and from Czechoslovakia, Finland, Hungary, Israel, Poland, Spain and its associated areas, and Yugoslavia. All other imports require import licenses. Imports which must be paid for in U.S. dollars or other “hard” currencies are limited to goods considered essential to the Norwegian economy.

Whenever an import license is obtained, or if no license is required, payment may be effected without delay, subject to presentation of a copy of the import license or of adequate documentation to prove the validity of the transaction, and provided that the method of payment is in conformity with the general rules (see section on Prescription of Currency, above).

Payments for Invisibles

Exchange for payments to nonresidents for most current invisible transactions is granted freely. Norwegian tourists to OEEC countries are granted the equivalent of NKr 500 per year 2 for each adult.

Each person leaving Norway may export Norwegian banknotes up to a total amount of NKr 50. Nonresidents may, when leaving Norway, export foreign banknotes to the extent that they can prove that they brought the notes into the country.

Exports and Export Proceeds

With the exception of a few commodities which can be exported freely to certain countries, all exports are subject to license. Payment must be received in conformity with the regulations (see section on Prescription of Currency, above). All exchange resulting from exports as well as from invisible payments must be surrendered.

Proceeds from Invisibles

Incoming receipts from invisibles have to be reported to the Norges Bank. Each person entering Norway may import NKr 50 in Norwegian banknotes, and any amount of foreign banknotes.

Capital

Inward and outward capital transfers are subject to approval by the Norges Bank. Payments for contractual amortization are permitted freely. Proceeds from the redemption of securities are transferable. Capital transfers to Denmark, Sweden, and the United Kingdom are normally permitted. Transfers to the United States and Canada may take place within certain limits, depending upon the merits of the case. Furthermore, inherited capital assets owned by residents in the United States and Canada may be transferred. Repatriation of moderate amounts of other nonresident-owned capital is permitted in cases of hardship.

Changes during 1952

January 25

February 1

May 1

Additional commodities were added to the list of goods not subject to restrictions when imported from OEEC countries and their associated areas, and from Finland, Israel, and Spain and its associated areas.

May 8

The allocation of foreign exchange for tourists to OEEC countries was raised from the equivalent of NKr 300 to the equivalent of NKr 500 per year.

August 1

Some commodities were put on an export “free list”, and they can be exported to certain specified countries without license.

December 3

Czechoslovakia, Hungary, Poland, and Yugoslavia were added to the list of countries from which the goods on the so-called “free list” may be imported without restrictions.

Pakistan

Origin and Essential Features

Exchange controls similar to those which were in effect in undivided India from September 1939 were continued by Pakistan in August 1947. On February 27, 1951, remittances to and from India also became subject to exchange control. Pakistan’s restrictive system is similar to that of other members of the Sterling Area. In general, Pakistan exercises control over exchange receipts, and requires the surrender within prescribed periods of time of most incoming foreign exchange and the approval of the control authorities for payments to nonresidents. Pakistan also avails itself of the Sterling Area payments arrangements made by the United Kingdom. These arrangements are reflected in Pakistan’s exchange control system through the prescription of currencies for payments and receipts.

Exchange Rate System

The par value is Pakistan Rupees 3.30852=US$1. Exchange transactions are effected at uniform rates. All transactions in foreign exchange must be conducted through authorized dealers, whose transactions with the general public must be effected at rates authorized by the State Bank on the basis of par values established by the Fund and its members. Authorized dealers in Pakistan are permitted to cover in the London market their requirements of certain specified foreign exchange. They can 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 respective countries.

Administration of Control

All transactions in foreign exchange must be effected through authorized dealers. The State Bank of Pakistan has delegated authority to 21 commercial banks to deal in all foreign currencies, to supervise surrender requirements, and to sell exchange for specified purposes within limits prescribed by the State Bank.

Prescription of Currency

Regulations prescribe the currencies to be used for both trade and nontrade payments with different countries and monetary areas. The prescribed methods are similar to those of the United Kingdom and most other Sterling Area territories. Foreign exchange transactions have to be settled in local currency through the account of a bank in the foreign country concerned or through an appropriate nonresident sterling account in the United Kingdom and, in some cases, in specified foreign exchange. Receipts from Sterling Area countries (other than India) must be received in Pakistan rupees or sterling from the account of a resident in the Sterling Area other than a resident of India or Pakistan. Payments abroad by residents of Pakistan to countries within the Sterling Area are made by the transfer of sterling or any Sterling Area currency to the appropriate account of the nonresident; payments to countries outside the Sterling Area are made by the transfer of sterling or Pakistan rupees to accounts related to the country or monetary area of the nonresident or, in some cases, in the currency of the country concerned. Exchange transactions with India are made only in Indian or Pakistan rupees; transactions with Afghanistan are made in Pakistan rupees.

Nonresident Accounts

Different rules apply to the use of Pakistan rupee accounts of individuals, firms, or companies, on the one hand, and to the accounts of banks outside Pakistan, on the other. Accounts of residents of India are governed by separate regulations. Authorized dealers may open Pakistan rupee accounts for foreign banks without reference to the State Bank, but approval is required for opening other nonresident accounts. Nonresident account holders must obtain permission from the control for transfers from their credit balances; transfers from nonresident banks’ rupee accounts in Pakistan to the corresponding sterling accounts in the United Kingdom are allowed.

Imports and Import Payments

All imports are subject to license, except goods imported by the Central Government for defense purposes and any goods for which orders are placed directly by the departments of the Central Government, goods imported by the land routes from Iran and Afghanistan, and certain other items permitted under a Ministry of Commerce Notification (No. 335/260/24, June 12, 1951). Individual import licenses are of four types: (1) those for the dollar area, which may be used for purchases in all other countries except Japan; (2) those for all countries outside the dollar area and Japan; (3) those valid for Japan only; and (4) those valid for imports from a particular country only, in terms of the trade agreement with that country.

Imports of machinery, chemicals, and drugs and medicines are permitted without the opening of a letter of credit. In all other cases, it is required that letters of credit be opened against a deposit of a 50 per cent margin.1

Foreign exchange under the regulations (see section on Prescription of Currency, above) is made available by an authorized dealer upon receipt of an import license from the applicant.

Payments for Invisibles

Payments for invisibles are controlled by the State Bank and require licenses. Authorized dealers may sell exchange or make remittances in accordance with detailed regulations. Although remittances for business and commercial purposes are normally permitted, remittances of a personal nature are either subject to annual quotas or decided on individual merit. Separate regulations govern payments for invisibles to India, including limitations on travel and similar personal remittances. Remittances by Pakistan nationals to their families abroad require special authority. Foreign exchange is granted for expenses incidental to trade transactions and for transfers abroad of dividends and other earnings due nonresidents. Payment for inter-national travel fares is permitted if certain conditions are met. The allocation of exchange for tourist travel is subject to basic annual rations which vary according to the country to be visited. However, there is no basic ration for tourist travel to North, Central, and South America, or the Philippine Republic. Nonresident travelers may take out foreign currency not exceeding the amounts they brought in. Residents of Pakistan leaving for Afghanistan may take with them Afghan currency without limit; for India, Indian currency notes up to PRs 50 per person at any one time; for other countries, foreign currency notes up to the equivalent of PRs 50 per person at any one time, or sterling notes not exceeding £10.

Exports and Export Proceeds

The State Bank exercises control over exchange receipts and requires a declaration by the exporter to ensure the surrender of export proceeds. In addition to the exporter’s declaration for exchange control purposes, there is an export licensing system. Some commodities are not subject to individual export license but can be exported under open general license.

An authorized dealer is empowered to certify the export shipment after ensuring that the exporter’s declaration meets specified conditions. The exporter declares that, when payment in accordance with the prescribed method (see section on Prescription of Currency, above) is received, he will surrender the specified foreign currency within a certain period of time.

Proceeds from Invisibles

Incoming foreign exchange, with the exception of certain currencies,2 must be surrendered at the official rate within one month. Travelers entering Pakistan are permitted to bring with them Pakistan currency notes up to PRs 50 per person; sterling notes up to £10 per person ; and coins which are legal tender in India up to Rs 5 per person. There is no limitation on the import of other currency notes, subject to customs declaration.

Capital

Regulations cover both inward and outward transfers of capital by residents and nonresidents. Detailed rules govern the transfer of capital by persons emigrating or retiring from Pakistan, depending upon the nationality of the person concerned and the country or monetary area to which transfers are to be made. Preferential treatment is given to transfers by U. K. nationals to the United Kingdom only. Other foreign nationals resident in Pakistan may be permitted to transfer capital assets up to £5,000. Residents are permitted to buy and sell foreign securities upon approval by the State Bank, and provided the foreign exchange proceeds resulting from sales are surrendered.

Changes during 1952

February 18

The Government announced that all foreign exchange (with certain exceptions—see section on Proceeds from Invisibles, above) held by residents must be surrendered within one month. Formerly, this requirement had, in respect of invisibles and capital, applied only to holdings and receipts in U.S. dollars and Philippine pesos.

April 9

The State Bank withdrew the basic travel allowance for visits to India. Exchange would be issued on individual applications to the control.

May 12

Authorized dealers were permitted to sell up to Rs 20 in Indian currency notes to each traveler to India out of the exchange authorized by the control, the balance being issued in the form of travelers’ checks, etc.

June 14

The Government issued an order superseding its order of February 18 (see above), extending the period for the surrender of foreign exchange already specified and giving certain exemptions from the original order.

June 28

Authorized dealers were directed not to release foreign exchange for imports unless a letter of credit was established, which would not be done unless a margin of 75 per cent for goods under open general license, or 50 per cent for goods under individual license, was deposited with an authorized dealer. The requirements did not apply to imports of machinery, chemicals, and medicines.

July 12

Authorized dealers permitted to maintain accounts in the following currencies were allowed to purchase such currencies against sterling directly from their correspondents in the related country: Belgian francs, Canadian dollars, French francs, Netherlands guilders, Swedish kronor, Swiss francs, and U.S. dollars.

August 11

Open General License No. XIII was superseded by Open General License No. XIV, removing approximately 96 items from open general license.

August 27

The opening of assignable or transferable letters of credit in cover of imports was made subject to the prior approval of the State Bank.

September 10

The basic travel quota of PRs 200 available for travel to the Persian Gulf Sheikdoms was withdrawn.

October 22

Twenty-two commodities were added to the open general license for exports.

October 29

The basic travel quota for some soft currency countries, mainly in Europe, was reduced from £250 to £150 per adult per twelve months. The special scale of exchange allowances up to PRs 1,000 to first class or air passengers to Iran and Iraq was withdrawn.

November 23

The open general license system for imports was suspended, except for imports by country crafts.

December 12

The Government issued Registration (Importers, and Exporters) Order 1952, requiring registration of all importers and exporters unless exempted. Until further orders, all exporters were exempted from this requirement.

Paraguay

Origin and Essential Features

Exchange control was introduced in Paraguay on June 28, 1932, and numerous significant revisions of the exchange system have occurred since then.1 Restrictions are exercised through import prohibitions, through exchange licensing applied to nonprohibited imports and most nontrade payments, through exchange taxes for certain imports, and through a controlled free market rate. Foreign exchange from exports and certain invisibles must be surrendered, but other receipts may be negotiated in a controlled free market.

Exchange Rate System

The par value is Guaraníes 6 = US$1. Both the basic buying and the basic selling rates are ₲ 15 per US$1. An exchange surcharge of ₲ 6 per US$1 is applied to payments for semi-essential imports, and of ₲ 15 per US$1 for nonessential imports. Temporary subsidies are applied to some minor exports, to a few essential imports, and to government nontrade payments. A controlled free market is used for most invisibles and nonregistered capital transactions (see Table of Exchange Rates, below).

Administration of Control

Exchange controls are operated by the Central Bank of Paraguay, which issues all exchange licenses required in the official and free markets. All exchange transactions must be effected through the Central Bank or through authorized banks which act as agents for the Central Bank. The operations and exchange rates in the free market are at present controlled by the Central Bank.

Prescription of Currency

Paraguay maintains payments agreements with several countries, according to which exchange payments and receipts must be effected through clearing accounts in specified currencies. Most other exchange receipts and payments are effected in terms of U.S. dollars, with some payments in sterling.

Imports and Import Payments

Imports may enter Paraguay only if an exchange contract having the effect of an import and exchange license has been concluded with the Central Bank. The import of nonessential items is restricted. A prohibited list of luxury imports is in effect. An advance deposit in local currency of 15 per cent of the import value is required when licenses for Group II (semi-essential) and Group III (nonessential) imports are issued.

In concluding exchange contracts, there is some discrimination between currencies of payment, based on the limited availability of convertible currencies to Paraguay. Also, prescription of currencies is applied to payments for imports from countries with which Paraguay has payments agreements. Exchange is automatically granted at the rate of ₲ 15 per US$1 for licensed imports, after their arrival in Paraguay. A temporary exchange subsidy of 40 per cent is in effect for payments of imports of wheat, flour, antibiotics, and petroleum products, resulting in an effective rate of ₲ 9 per US$1. The application of exchange taxes of ₲ 6 and ₲ 15 per US$1 for Group I (essential) and Group II imports, respectively, results in effective exchange rates of ₲ 21 and ₲ 30 per US$1.

Payments for Invisibles

Payments for certain essential invisibles are permitted at the ₲ 15 rate; these payments are subject to individual exchange licenses. Government payments are effected at the ₲ 6 rate. All other invisibles must be transacted through the controlled free market; some types of invisibles are freely allowed in this market within certain limits, while all others must be individually licensed and may be subject to restrictions.

Exports and Export Proceeds

An exchange contract must be concluded with the Central Bank for all exports, to ensure that exchange proceeds are returned to Paraguay. A few goods in short supply also require export licenses from the Ministry of Commerce and Industry. The export of strategic materials to Mainland China, North Korea, and certain other countries is prohibited.

Exchange proceeds of exports must be surrendered to the Central Bank at the ₲ 15 rate, in accordance with the exchange contract. Export taxes ranging up to 35 per cent are applied to most exports, and certain minor exports receive exchange subsidies up to 60 per cent under a temporary arrangement. The surrender requirement is waived in respect of the proceeds of certain minor exports which may be used to import freely specified imports; however, each transaction may not exceed the equivalent of US$133, and only one transaction a week may be effected. The foreign currencies to be received for exports are specified as the currencies of the clearing account for exports to countries with which Paraguay has payments agreements, and as U.S. dollars for most other exports.

Proceeds from Invisibles

Registered insurance and government receipts are the only invisibles for which exchange proceeds must be surrendered at the official rate. Receipts from all other invisibles may be freely negotiated in the free market.

Capital

Foreign capital to be registered with the Central Bank must be surrendered at the ₲ 15 rate, and transfers from Paraguay of such capital, through the official market, are subject to exchange license. Nonregistered foreign capital may enter freely through the free market, but any capital payments through the free market are subject to exchange license.

Table of Exchange Rates(as at December 31, 1952)
(guaraníes per U.S. dollar)
BuyingSelling
6.00 (₲ 15 Rate less 60% Subsidy)
Government nontrade payments.
15.0015.00
All exports.2 Registered capital.Essential imports (Group I)3. Essential services. Registered capital.
21.00 (₲ 15 Rate plus6 Surcharge)
Semi-essential imports (Group II).
30.00 (₲ 15 Rate plus16 Surcharge)
Nonessential imports (Group III).
49.00(Controlled Free Market)49.00(Controlled Free Market)
Invisibles. Nonregistered capital.Other authorized invisibles. Nonregistered capital.

Changes during 1952

January 15

The exchange budget for 1952, estimating total purchases and sales of exchange at US$39.5 million each, was approved.

March

The importation of about US$1 million worth of automobiles and truck chassis, with privately held exchange (divisas propias), was licensed.

April

Restrictions were established in the free market, and the free rate was pegged at 30.

June 21

As an emergency change in the exchange system, the basic import rate was devalued from ₲ 6 to ₲ 15, and an exchange surcharge of ₲ 6, yielding an effective ₲ 21 rate, was established for imports formerly effected at the ₲ 9 rate.

August 1

The exchange reform of June 21 (see above) was completed, the ₲ 15 rate being established as the basic buying and selling rate in the official market, applicable to all exports and to essential imports. In addition to the ₲ 15 rate, exchange surcharges of ₲ 6 and ₲ 15 were applied to semi-essential and nonessential imports, respectively. Temporary subsidies were established for a few essential imports, for government nontrade payments, and for certain minor exports. The following features of the prior exchange system were continued: export taxes for most exports, a prohibited list of luxury imports, and the free exchange market for invisibles and capital.

September 1

Importers were required to deposit in advance, in guaraníes, 15 per cent of their import values for Group II and Group III imports.

October 30

The exchange surrender requirement was lifted for certain minor exports, and import permits were not required for specified imports, provided that the exports and imports did not exceed the equivalent of US$133 for each shipment. No individual or firm could effect more than one such transaction per week.

November 4

The controlled free rate was increased from ₲ 30 to ₲ 49.

Note: On December 30, 1952 Paraguay’s exchange program for 1953 was announced; it involved certain significant changes in the system outlined above. The objective of the new arrangements was stated to be the stimulation of exports by means of higher effective rates of exchange, allocation of exchange for imports and other payments in accordance with the exchange budget, gradual reduction and elimination of import subsidies, limitations of preferential import rates to essential goods, reintroduction of the exchange auction system for the payment of nonessential imports, normal operation of the free exchange market with fluctuating rates, encouragement of the inflow of foreign capital by guaranteeing the free withdrawal and remittance of income on foreign capital, and encouragement of the repatriation of Paraguayan capital through the free market by authorizing the import of capital goods without limitation if paid for with funds held abroad.

The new arrangements provide for import categories with corresponding rates of exchange as follows: Group I—government and other official imports and very essential commercial imports—₲ 15 per US$1; Group II—other essential imports—₲ 21 per US$1; Group III—semi-essential imports—₲ 30 per US$1; Group IV (hitherto not provided for)—nonessential or luxury imports—₲ 30 per US$1 plus the fluctuating auction premium. However, for trade with Argentina, other arrangements are applicable: Group I imports were moved from ₲ 1.40 to ₲ 2.50 per Argentine peso; Groups II and III imports are subject to the free market rate; Group IV imports are effected at the ₲ 2.50 rate plus the fluctuating auction premium.

It was also announced that the Central Bank would continue to operate in the free market and that holders of free market exchange would be permitted to maintain bank accounts in such funds locally or abroad.

Peru

Origin and Essential Features

Exchange controls were introduced in Peru on November 23, 1945, and the most recent important revision of the exchange system occurred on November 11, 1949, when the present rate structure was introduced. Peru has two fluctuating exchange rates: an exchange certificate rate applying to most trade transactions, and a free (draft) market rate for other trade and for most nontrade transactions. Imports and other payments are freely permitted, but there is prescription of currencies for trade transactions. Foreign exchange from exports must be converted either totally or partially into exchange certificates.

Exchange Rate System

The initial par value of Peruvian Soles 6.50 = US$1, established on December 18, 1946, is not applied to any transactions under the present exchange system. No new par value has been proposed. Exchange certificates are issued for 100 per cent of U.S. dollar, pound sterling, and French franc export proceeds, arid 10 per cent of export proceeds in Argentine pesos. These certificates are negotiable in a certificate market and may be used for imports and for certain non-trade transactions. All exchange transactions which do not qualify for the certificate market are freely permitted in the free market. The exchange rates fluctuate and broken cross rates exist in both markets (see Table of Exchange Rates, below).

Administration of Control

Permits for exports and exchange licenses for nontrade transactions at the certificate rate are issued by the Ministry of Finance. The exchange certificates are issued by the Central Reserve Bank of Peru, which has conducted stabilization operations, from time to time, in the two exchange markets. Exchange certificate transactions must take place through the commercial banks, while free market transactions are conducted through banks and various other dealers.

Prescription of Currency

The issuance of exchange certificates in only certain currencies—at present, U.S. dollars, pounds sterling, French francs, and Argentine pesos—results in prescription of currencies for all transactions effected through that market. Transactions through the free market can be made in any currency.

Imports and Import Payments

Imports are freely permitted. Control over imports exists only in that commercial banks must ensure that certificate exchange is used to pay for an actual import and not for unauthorized purposes.

There are no licenses or other controls applying to payments for imports. Importers, at their option, may use either exchange market to pay for imports. However, in the certificate market, through which most imports are paid, certificates are denominated only in U.S. dollars, pounds sterling, French francs, or Argentine pesos; therefore, payments in other currencies can be effected only through the free market. Importers opening documentary import letters of credit through commercial banks must make advance deposits as follows: 100 per cent of the value of nonessential imports and 50 per. cent of raw material imports.

Payments for Invisibles

An exchange license is required to pay for invisibles with certificates. The types of invisibles which are eligible for and usually allowed in the certificate market include freight and transit expenses, interest payments and dividends, rents on property, royalties, agents’ commissions, remuneration of foreign technicians, repayments of commercial debts, insurance and reinsurance payments, pensions, and certain types of business travel. Exchange for all other invisibles, and for all invisibles in currencies other than the four in which certificates are denominated, is obtained in the free market.

Exports and Export Proceeds

All exports are subject to license to assure the necessary supply of export proceeds to the certificate market. Export licenses are denied for goods in short supply domestically. The exportation of strategic materials to Mainland China and North Korea is prohibited.

Exports are authorized generally only against payment in the four currencies in which certificates are issued. The surrender requirements in respect of these currencies have been varied from time to time, and certificates in other currencies can be issued if considered necessary. The portions of export proceeds not subject to surrender against exchange certificates, and the proceeds of exports authorized in currencies for which no certificates are issued, may be sold in the free market.

Proceeds from Invisibles

All receipts from invisibles are free of controls and are sold in the free market.

Capital

Inward and outward capital movements may be effected without control in the free market. Capital remittances, representing contractual amortization and depreciation of foreign capital and depletion of mineral investment, effected through the certificate market, require an exchange license and are allowed within certain limits.

Table of Exchange Rates(as at December 31, 1952)
(soles per U.S. dollar)
BuyingSelling
15.60(Fluctuating Exchange Certificate Rate)15.60(Fluctuating Exchange Certificate Rate)
Exports (100% in French francs, pounds sterling, and U.S. dollars; 10% in Argentine pesos).Most imports. Certain invisibles and capital transfers.
15.72(Fluctuating Free Market Rate)15.72(Fluctuating Free Market Rate)
All other export proceeds. Invisibles and capital.Occasional imports. Other invisibles and capital.

Changes during 1952

April 7

The percentage of export proceeds in pounds sterling required to be converted into certificates was increased from 10 to 100 per cent.

May 13

The re-exportation of merchandise imported through the certificate market was prohibited.

Philippine Republic

Origin and Essential Features

Import restrictions in the Philippine Republic were first imposed in January 1949 on certain luxury and nonessential commodities, and in May 1950 they were expanded to include all goods. Exchange controls and restrictions were introduced on December 9, 1949. On March 28, 1951, a 17 per cent exchange tax was levied on sales of foreign exchange for a two-year period. On July 14, 1952, a new exchange tax law extended the tax at the 17 per cent rate to June 30, 1953.1

Exchange Rate System

The par value is Philippine Pesos 2 = US$1. The official rates are ₱ 2.00375 buying, ₱ 2.015 selling, per US$1. These rates represent the official minimum buying and maximum selling rates for commercial banks applied to demand drafts and telegraphic transfers of US$500 and over. A tax of 17 per cent imposed on most remittances yields an effective selling rate of ₱ 2.35755 per US$1 (see Table of Exchange Rates, below).

Administration of Control

The exchange control system is operated by the Central Bank of the Philippines. All sales and purchases of exchange must pass through authorized agents (the commercial banks, and the American Express Company for transactions connected with travel). Post offices are also authorized to sell U.S. dollar money orders payable in the United States and its territories and possessions for certain specific purposes subject to certain conditions and restrictions. The authorized agents are permitted without prior approval of the Central Bank to issue exchange licenses and sell exchange for specified transactions and in specified amounts. Applications for exchange licenses outside the scope of authority of the authorized agents are referred to the Central Bank.

Prescription of Currency

On the payments side, there is no prescription of currency other than that payments to Japan must be effected through a clearing account maintained at the Central Bank. On the receipts side, it is required that all proceeds of exports be obtained in U.S. dollars, except exports to Japan which must be settled through the clearing account.

Nonresident Accounts

Nonresident accounts are composed primarily of nonresident peso funds which were in the Philippines prior to exchange controls, savings of former residents, unremitted portions of income or other earnings of nonresidents, and other items of a similar nature. These balances are not ordinarily convertible into foreign exchange. They may be used for local investments or expenses.

Imports and Import Payments

Imports are divided into three groups, as follows:

  • Unrestricted imports. This group represents very essential commodities which are specifically allowed to be imported without quantitative limitation. Licenses to import these commodities are automatically issued to bona fide importers.

  • Imports subject to quantitative quota restrictions. Import licenses are issued for items in this group up to the limits of individual quotas computed on the basis of previous imports during 1949, the essentiality of the goods, and according to such other criteria as new or old importers.

  • Prohibited imports. The commodities included in this group are foodstuffs and other items which are domestically produced in adequate supply and various nonessential consumer items.

The presentation of a valid import license entitles the importer to open a letter of credit and to purchase without delay the exchange necessary to pay for imports. There is no prescription of currency other than that payments to Japan must be effected through a clearing account maintained at the Central Bank. U.S. dollar exchange is provided for import payments to all other countries.

Payments for Invisibles

All payments and remittances abroad require exchange licenses. Such licenses are generally granted to effect full payment abroad for freight, insurance, cable and telephone services, interest and amortization, professional services, medical treatment, pensions, and similar items. Exchange licenses to effect payments for the following transactions are granted on a limited basis: travel, education expenses, maintenance, profits and dividends, income, royalties, salaries, etc. Travelers may take out with them a maximum of ₱ 100 in Philippine currency but the coins shall not exceed ₱ 5.

Exports and Export Proceeds

Generally, exports are not restricted but they are controlled to ensure that the foreign exchange proceeds accruing from exports are returned to the Philippines. Exports of certain strategic materials are prohibited.

The proceeds of all exports except those to Japan must be obtained in U.S. dollars and surrendered to an authorized agent. No commodity may be exported from the Philippines unless covered by drafts drawn in U.S. dollars and unless collection of the proceeds is to be undertaken by an authorized agent. Exports to Japan are negotiated through the clearing account maintained at the Central Bank of the Philippines.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered. Travelers may bring in a maximum of ₱ 100 in Philippine currency but the coins shall not exceed ₱ 50 for first class passengers, ₱ 20 for second class passengers, and ₱ 10 for third class passengers.

Capital

All exchange receipts from capital must be surrendered. The transfer abroad of capital invested prior to December 9, 1949 will not ordinarily be allowed, even if the transfer is to be made to the owner’s country of residence. The amount of exchange granted to transfer profits (40 per cent of capital invested or more) is considered as providing for a reasonable return of capital. Capital invested after December 9, 1949 by nonresidents with the prior approval of the Central Banks eligible for transfer abroad, but all transfers of capital require approval of the Central Bank.

Table of Exchange Rates(as at December 31, 1952)
(pesos per U.S. dollar)
BuyingSelling
2.003752.015
All incoming exchange.Government payments. Imports of machinery, raw materials for new and necessary industries, basic foodstuffs, fertilizers, etc. Certain specified invisibles.
2.35755 (₱ 2.015 Rate plus 17% Exchange Tax)
Other imports. Other invisibles and capital.

Changes during 1952

February 8

Importations by the Metropolitan Water District exclusively of aluminum sulphate, chlorine, steel pipes, and cast iron fittings were exempted from any kind of license which directly or indirectly limits or controls importation and foreign exchange. On October 24, 1952, this exemption was made effective as of July 1, 1951.

April 1

Import quotas for a new importers could be utilized 50 per cent for controlled essential items and 50 per cent for nonessential items.

May 9

The amount of foreign exchange granted for foreign travel, studies, and educational purposes was reduced as follows: (1) from US$1,200 to US$1,000 for trips to North America or South America; (2) from US$600 to US$500 for trips to Europe or Japan; (3) from US$300 to US$250 for monthly allowance to cover costs of living and stay of Philippine residents attending U.S. educational institutions; (4) from US$200 to US$150 for monthly allowance to cover costs of living and stay of Philippine residents attending European educational institutions.

July

The Import Control Commission announced that import quotas for the second half of 1952 would be 20-50 per cent below those in the first half of the year. The heaviest cut would be applied to quotas of new importers which would be reduced to 50 per cent of their import quotas for the first half of the year. These allocations would be distributed in the ratio of 75 per cent for controlled essential items and 25 per cent for nonessential.

July 14

A new exchange tax law extended the 17 per cent tax on sales of foreign exchange to June 30, 1953 and reduced the tax to 12% per cent for the period from July 1, 1953 to December 31, 1953.2

August 7

Imports of slide fasteners, mounted zipper chains, and cotton weaving yarns were prohibited.

August 14

Export control (control over export of strategic materials) was extended by law to December 31, 1954.

September 12

Imports of incandescent bulbs and fluorescent tubes of specified voltage and wattage, grey cloth, foreign lining and sheepskin lining and splits, and pure tomato catsup were prohibited.

Sweden

Origin and Essential Features

In 1939 a law was passed in Sweden providing for the introduction of foreign exchange control. On February 25, 1940, exchange restrictions, based on this law, were introduced. The restrictions were more or less discontinued at the end of the war. In March 1947, however, a comprehensive system of controls on foreign payments was reintroduced, as a result of the deterioration in the Swedish balance of payments position. Since 1949, restrictions on payments in connection with intra-European trade and services have been relaxed considerably.

Exchange Rate System

The par value is Swedish Kronor 5.17321 = US$1. The official rates are SKr 5.17 buying, SKr 5.18 selling, per US$1.

Basically, exchange transactions are effected at uniform rates, based on the above par value for the U.S. dollar.

Administration of Control

In principle, all imports and exports require licenses granted by the State Trade and Industrial Commission (the State Fuel Commission for imports of fuel, and the State Commission of Agriculture for imports and exports of foodstuffs).

All payments to a nonresident, and vice versa, must be made through the Sveriges Riksbank or through one of the sixteen authorized banks, and require approval by the Exchange Control Office, which has, however, delegated wide powers to the authorized banks to approve payments.

Prescription of Currency

The prescription of the methods in which payments to and receipts from nonresidents are to be made is set out in the payments agreements which have been concluded with other countries. Usually, inward and outward payments must be made in either Swedish kronor or the currency of the country of the nonresident (double-account payments agreements), or in a single currency (single-account payments agreements). Payments effected in Swedish kronor are made into and out of nonresident-owned “regular” (i.e., current) accounts held in Swedish kronor with the authorized banks (see section on Nonresident Accounts, below).

Nonresident Accounts

Broadly speaking, there are two types of nonresident accounts held in Swedish kronor with authorized banks in Sweden: regular (i.e., current) accounts and restricted accounts. Regular accounts may be used for all payments to and from the country of the nonresident holder in all cases where the payments agreement with the country concerned allows payment to be made in Swedish kronor. All balances in a regular account may, as a rule, be converted at any time into the currency of the country of the holder.

Nonresident-owned capital which cannot be transferred abroad is usually allowed to be deposited in restricted accounts. These accounts may be used to cover the holder’s and his family’s living expenses in Sweden up to a certain limit, for payment of the holder’s own taxes in Sweden, and for investment in bonds quoted on the Swedish stock exchange. Bonds purchased in this way must be deposited in a “restricted securities” account with an authorized bank.

Imports and Import Payments

Most goods from OEEC countries, their associated areas,1 and Finland, and also printed matter from all countries, can be imported freely. All imports from other countries require import licenses. Imports which must be paid for in U.S. dollars or other hard currencies are limited to goods considered essential to the Swedish economy. Whenever an import license is obtained, or if no license is required, payment may be effected without delay, subject to production of evidence of the dispatch of the goods to Sweden, and provided that the method of payment is in conformity with the general rules (see section on Prescription of Currency, above).

Payments for Invisibles

Payments to nonresidents for most current invisible transactions are freely allowed through the authorized banks. Restrictions are applied to a few items, particularly for payments in U.S. dollars. Tourists traveling abroad are granted the equivalent of SKr 750 yearly for each person for travel to OEEC countries, and the equivalent of SKr 500 yearly for travel to the dollar area. For travel to Denmark, Finland, Norway, and the Sterling Area countries, any reasonable amount of exchange can be obtained.

Each person leaving Sweden may export Swedish and/or foreign banknotes up to a total amount of SKr 100, in denominations not exceeding SKr 50. Nonresidents may, when leaving Sweden, export foreign banknotes brought into the country by them. For this purpose, a certificate of “Means of Payment Imported and Intended for Re-Export” is issued on entry.

Exports and Export Proceeds

Most exports to North, Central, and South America (except Argentina) and to all OEEC countries are exempted from licensing requirements. However, payment must be made within six months after the dispatch of the commodity and must be in conformity with the regulations (see section on Prescription of Currency, above). All exchange resulting from exports, as well as from invisible payments in hard currency, mainly U.S. dollars, must be surrendered. For other currencies, there is no surrender obligation, and the currency may be kept in a currency account with a Swedish authorized bank. These currency accounts may, however, be used only by the holder to make payments abroad if authorized, or they may be sold against Swedish kronor at the official rate.

Proceeds from Invisibles

Incoming receipts from invisibles have to be reported to the Exchange Control Office. Each person entering Sweden may import SKr 100 in Swedish banknotes, in denominations not exceeding SKr 50, and foreign banknotes without any limitation.

Capital

Inward and outward capital transfers are subject to control. Payments for contractual amortization are permitted freely. Also, capital transfers between Sweden and Denmark, Finland, Norway, and the United Kingdom are generally permitted. Furthermore, inheritances may be transferred. In cases of hardship, repatriation of moderate amounts of other nonresident-owned capital is permitted.

Changes during 1952

July 1

Additional commodities were added to the list of goods which can be imported without license from OEEC countries, their associated areas, and Finland.

November 1

Additional commodities were added to the list of goods which can be imported without license from OEEC countries, their associated areas, and Finland.

Additional commodities were added to the list of goods which can be exported without license.

Syria

Origin and Essential Features

Exchange control was first introduced in Syria on December 3, 1939. Subsequently, the controls were relaxed gradually, but as from April 26, 1952 the exchange control legislation was recodified and made more effective. The restrictive system in Syria comprises a multiple exchange rate structure consisting of two fluctuating free markets, distinguished by means of exchange licenses, in both of which rates remote from the par value rates are in effect and in which there are broken cross rates. Certain imports are entirely prohibited; and prescription of currency requirements apply to certain outgoing payments and to most export proceeds.

Exchange Rate System

The par value is Syrian Pounds 2.19148 = US$1. The official rates are LS 2.19 buying, LS 2.21 selling, per US$1. These rates apply solely to specified government payments and to purchases of local currency by concessionnaire companies operating in Syria. Most transactions take place at the higher free and exportation exchange market rates (see Table of Exchange Rates, below). The authorized banks are permitted to arbitrage between these two markets so that, in present conditions, the two market rates are closely related.1

Administration of Control

Decree Law of April 1952 established an Exchange Board which is now the final authority on all matters pertaining to exchange policy and control. Import licenses are issued by the Ministry of National Economy, which also issues exchange licenses on behalf of the Exchange Board. Authorized commercial banks have the responsibility of recording the exchange proceeds of most exports and seeing that such exchange is dealt with in accordance with the regulations.

Prescription of Currency

On the payments side, prescription of currency is applied only to payments made with exportation exchange. Payment for imports from the Sterling Area must be made in sterling; from the French Franc Area in French francs; from the Belgian Monetary Area in sterling, French francs, or Belgian francs; and from other countries in U.S. dollars, pounds sterling, Belgian, French or Swiss francs, or Egyptian pounds. On the receipts side, exporters of certain major commodities are required to obtain the proceeds as follows: exports to the dollar area or Switzerland in IBS. dollars, Belgian or Swiss francs; to the Sterling Area in U.S. dollars, pounds sterling, Belgian or Swiss francs; to the French Franc Area in U.S. dollars, Belgian, French or Swiss francs; to Egypt in Egyptian pounds. Other receipts and payments are free from such requirements.

Imports and Import Payments

All imports require a prior license. Except for a short list of prohibited items, these licenses are freely issued. Licensed importers who wish to use exportation exchange must obtain an exchange license which is issued freely to all licensed importers. Whether or not an exchange license has been obtained, the importer is free to buy his exchange in the free market.

Payments for Invisibles

The use of exportation exchange to pay for invisibles requires an exchange license which is granted only for certain items. Whether or not such a license has been obtained, a potential remitter is free to buy his exchange in the free market.

Exports and Export Proceeds

A few exports essential to the domestic economy are prohibited. Most other exports are free of license. The proceeds of major exports2 to countries other than Bahrein, Iraq, Jordan, Kuwait, and Saudi Arabia have to be obtained in specified currencies (see section on Prescription of Currency, above) according to destination, and recorded with authorized banks as exportation exchange. The exporter has a choice of retaining this in foreign currency, selling it to an authorized bank or to the Exchange Board, or using the exchange in payment of licensed imports or for any other purpose authorized by the Exchange Board. The proceeds of other exports are not subject to control.

Proceeds from Invisibles

There are no requirements attached to the proceeds from invisibles and such exchange may be freely held, sold in the free market, or otherwise disposed of.

Capital

Imports and exports of capital are free of all restrictions and may be dealt with in the free market without limitation.

Table of Exchange Rates(as at December 31, 1952)
(Syrian pounds per U.S. dollar)
BuyingSelling
2.192.21
Local currency purchases by concessionnaire companies.Specified government payments.
3.70(Fluctuating “Exportation Exchange” Rate)3.71(Fluctuating “Exportation Exchange” Rate)
Exports requiring repatriation of proceeds.Some imports and authorized payments.
3.71(Fluctuating Free Market Rate)3.72(Fluctuating Free Market Rate)
All other receipts.All other payments.

Changes during 1952

April 26

A new exchange control law came into force establishing a Supreme Control Commission and abolishing the Office for Exchange and Exchange Control. The decree recognized the creation of a free exchange market in which imports and exports of capital were free of all restrictions; persons entering and leaving the country could take in or out foreign and domestic currency without limitation; and merchandise exports had to be made in scarce currencies.

June 20

A decree was issued by which the import of gold bullion and coin was no longer subject to prior licensing.

July 1

The Government of Syria authorized the export of wheat provided the exporters delivered to the Wheat Office at fixed prices a quantity equal to the amount to be exported.

July and August

A number of additions were made to the list of prohibited imports, and certain commodities were added to the list of exports subject to export license.

Thailand

Origin and Essential Features

Exchange control in Thailand is based on the Foreign Exchange Control Act of January 27,1942. A free market for sterling has existed since the end of World War II, but in March 1948 the Bank of Thailand began selling sterling to commercial banks for approved import payments. The latest modification was on March 19, 1952, when limited controls on capital transactions became effective. The restrictive system comprises multiple rates for both exchange receipts and payments, capital controls, import licenses for a few commodities from any source, and import licensing and limitations on payments for invisibles under a trade and payments agreement with Japan. Otherwise, payments can be made freely to any country through the free market.

Exchange Rate System

There is no agreed par value for the Baht. The official rates are B 12.45 buying, B 12.55 selling, per US$1, and there is a fluctuating free market rate. All transactions except those with Japan and with the oil companies are carried out in these two markets. The official rates apply only to government transactions, both expenditures and receipts, to certain educational expenses, to expenditures for hospital equipment and drugs, and, on the receipts side, to 20 per cent of the proceeds of rubber and tin exports and to private rice exports. The Bank of Thailand supplies sterling exchange in payment of approved imports at a rate slightly preferable to that obtainable in the free market. In transactions with Japan, the Bank of Thailand fixes fortnightly a rate of exchange on the basis of the average free market rate for U.S. dollars in the previous period. The Bank also provides exchange for oil companies: sterling at the Bank of Thailand free rate for sterling, and U.S. dollars at an equivalent rate calculated on the basis of the official sterling-dollar cross rate (see Table of Exchange Rates, below). The amount in either currency is limited to annual allocations agreed between the Ministry of Finance and the oil companies.

Administration of Control

Authorized banks and exchange dealers approved by the Minister of Finance are responsible for certain specified transactions, primarily in the free market, while most transactions at the official rate are conducted through the Bank of Thailand. Some imports and many exports are subject to licensing by the Ministry of Commerce.

Nonresident Accounts

In principle, no distinction is made between the accounts of residents and of nonresidents. There are no restrictions on nonresidents regarding the maintenance of accounts in baht or the use of such funds locally. The use of such accounts for making international payments or the conversion of amounts held into other currencies is subject to the recent capital control regulations.

Imports and Import Payments

Motorcars, paint oils, sugar, and ammunition from any country and all goods imported from Japan are subject to import license.

Payments for imports which are effected through the free market follow normal banking practice while, in general, payments at the official rate are conducted through the Bank of Thailand. In the case of oil companies, payments are effected with exchange purchased under special arrangements with the Bank of Thailand. Payment for imports from Japan must be effected by letter of credit. An import license permits a bank authorized to finance trade with Japan to arrange a letter of credit, after obtaining the approval of the Bank of Thailand. In trade with Japan, the importer generally pays in baht at the special exchange rate for transactions with that country, but for certain luxury items he must pay in U.S. dollars to the Bank of Thailand.

Payments for Invisibles

Educational expenses of certain Thai students abroad may be remitted at the official rate. Other invisible transactions (except those with Japan) are at the free rate. Authorized exchange dealers may, without reference to the Bank of Thailand, sell exchange for invisible payments associated with trade transactions. For certain other payments—foreign travel and family remittances—the authorized exchange dealer may sell limited amounts of exchange, but if additional amounts are desired, approval must be obtained from the Bank of Thailand for the total sum to be exported or remitted. In most other instances, applications must be made to the Bank of Thailand, which provides exchange after receiving proof that the request covers bona fide payments for such items as film royalties, salaries of foreigners, life insurance premiums, etc. The general rule has been that exchange will also be available for remittance of earnings on foreign investment. Under the bilateral arrangement with Japan, payments for invisibles that can be made through the “open account” are limited to certain specified services. No person may take out foreign exchange exceeding B 3,500 in value (calculated at the official rate of exchange) without prior approval of the exchange control authorities. The corresponding maximum for families is B 7,000. There is no restriction on the export of local currency. Persons in transit may take out any exchange they imported upon entry.

Exports and Export Proceeds

Rice exports are handled mainly by the Ministry of Economic Affairs. Exports of rice by private exporters must be licensed by, and made in the name of, the Ministry of Economic Affairs, to which the exchange proceeds corresponding to the standard price must be surrendered. Private exporters of rice as well as exporters of rubber and tin must obtain an export certificate to ensure the surrender of specified currencies. In addition, certain commodities require export licenses.1

Exporters of tin and rubber must surrender at the official rate 20 per cent of their export proceeds; exporters of rice must surrender at the official rate 100 per cent of fixed standard prices. Other export proceeds, including that portion not surrendered of rice, rubber, and tin, must be accounted for either by sales to authorized dealers at the free market rate or by deposit with authorized dealers.

Proceeds from Invisibles

Receipts from invisibles, except for transactions with Japan, are disposed of in the free market. The Bank of Thailand’s “open account” arrangement for transactions with Japan can be used only for certain specified services. No person may bring into Thailand foreign currency notes exceeding B 3,500 in value without a permit. Imports of local currency are prohibited, but a person who arrives from a foreign country or a person in transit may bring with him local currency not exceeding B 200.

Capital

Regulations on invisibles as well as on capital transfers are designed to ensure that capital movements are subject to control. The Bank of Thailand has been entrusted with the general operation of capital controls. Only specific cases not provided for in the regulations of March 19, 1952 have to be referred to the Ministry of Finance. The approval of the Ministry of Finance is required to obtain exchange for the repatriation of investment capital. For transfer of funds of emigrants, charitable remittances, and legacies, the Bank of Thailand’s approval depends upon the amount involved and the destination of the funds.

Table of Exchange Rates(as at December 31, 1952)
(baht per U.S. dollar)2
BuyingSelling
12.4512.55
Rice exports. Government receipts.Government payments. Student remittances.
15.70(20% at B 12.45 and 80% at Free Market Rate)
Rubber and tin exports.
16.07
Official sales of exchange to oil companies.
16.51(Fluctuating Free Market Rate)
All other exports. Invisibles and capital.
16.69(Fluctuating Free Market Rate)
All other imports. Other invisibles and capital.
16.90316.903
Exports to Japan except rice, tin, and rubber.Imports from Japan except government imports and a few luxury items.

Changes during 1952

February 28

The Bank of Thailand reduced its selling rate for sterling for approved imports from B 51 to B 45 per £1.

March 19

Limited controls on exchange transactions became effective. Remittances abroad in the form of foreign currencies, foreign exchange, letters of credit, or securities required the approval of the Bank of Thailand, acting as agent of the Ministry of Finance.

April 1

Payments for imports of petroleum products up to agreed limits were made at the Bank of Thailand free rate for sterling, or if in U.S. dollars, at a rate calculated on the basis of the official sterling-dollar cross rate. Previously, payment for oil imports had been made at the official rate.

The customs would in future appraise goods invoiced in foreign currency by using rates of B 16.07 per US$1 (B 45 per £1) instead of the official rates.

April 10

The Assembly passed a bill extending the Temporary Currency Act which fixes the value of the baht at the present official rate.

April 12

It was announced that the Ministry of Economic Affairs would give a one-ton export quota of rice for every 4.5 tons of rice sold to the Rice Bureau.

April 22

The import of sugar was made subject to license.

May 19

A regulation was issued by the Ministry of Finance requiring all foreign exchange acquired from exports to be returned to Thailand through specified banks or authorized firms.

September 1

New trade and payments arrangements between Japan and Thailand were signed.

September 15

The percentage of foreign exchange proceeds which exporters of tin have to surrender to the Bank of Thailand at the official rate was reduced from 40 per cent to 20 per cent.

November 17

A regulation was issued permitting gold to be imported upon application to, and under a procedure prescribed by, the Ministry of Finance.

Turkey

Origin and Essential Features

A system of controls was initially introduced in Turkey on February 20, 1930. It was essentially revised by a Decree of May 26, 1947, to which several modifications have since been made.

Settlements in respect of merchandise transactions and invisibles are effected in accordance with the provisions of payments agreements when applicable, and in other cases, in U.S. dollars, free Swiss francs, sterling through a Turkish account, other EPU currencies, or in any other manner approved by the exchange control authorities.

The degree and character of restrictions applied to imports are differentiated according to the origin and category of goods and the currency of payment. All imports are subject to approval or registration, which is automatically given by the exchange control authorities for goods of primary necessity and specified categories of “liberalized” goods imported from OEEC countries. For other goods, import permits are issued up to global quota limits; a small group of commodities can be imported only if paid for out of proceeds accruing from the exportation of specified goods. Payments on account of invisibles are in most cases restricted and subject to individual exchange licenses.

Most exports are free of license. Export proceeds have to be surrendered, except in the case of proceeds accruing from the exportation of a limited number of specified goods which may be used for payment of any import. Exchange receipts from invisibles have to be surrendered.

Capital transactions are subject to individual licenses. Foreign investments in projects considered useful for the Turkish economy may be given an official guarantee covering the repatriation of the capital and earnings up to certain limits.

Exchange Rate System

The exchange rate system is basically uniform, based on the par value of Turkish Liras 2.80 = US$1. The official rates are LT 2.80 buying, LT 2.8252 selling, per US$1.

Administration of Control

The administration of exchange control is carried out by the Ministry of Finance; exchange allocation for imports is effected by the Ministry of Economy and Commerce. A Technical Committee, including the representatives of various economic ministries and the Central Bank, makes policy decisions, which are subject to approval by the Ministerial Committee consisting of the Ministers of Finance, Economy and Commerce, and Exploitation. The Central Bank of the Republic of Turkey and the authorized banks operate the details of the exchange control.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles must be effected in U.S. dollars, in free Swiss francs, in sterling through an account of the Central Bank, in other EPU currencies, or in any other currency or manner acceptable to the Central Bank, or in accordance with payments agreements which provide for the following methods of settlement: (1) in U.S. dollars (as the currency of account in most cases) in respect to Austria, Denmark, Finland, Federal Republic of Germany, Greece, Hungary, Israel, Italy, Netherlands, Norway, Poland, Spain, Sweden, and Yugoslavia; (2) in the currency of the partner country in respect to Belgium, Czechoslovakia, France, Sweden, Switzerland, and the United Kingdom (and other territories of the Sterling Area); (3) in Turkish liras in respect to Bulgaria and Spain; and (4) in sterling in respect to Sweden and the U.S.S.R. An agreement with Switzerland provides for settlement in free Swiss francs of 20 per cent of payments by Switzerland in favor of Turkey.

Imports and Import Payments

All imports are subject to approval which is automatically given for goods of primary necessity and specified categories of goods imported from OEEC countries and included in the “liberalized sector”. For other items, however, permits are issued up to quota limits established by the exchange and trade control authorities. Specified commodities can be imported (1) if paid for out of proceeds accruing from the exportation of specified goods; (2) if exchanged against specified commodities; or (3) if, under individual permit, paid for out of assets held abroad. Imports on government account financed through intergovernmental loans and grants, which represent a considerable portion of the country’s imports, are not subject to these limitations. The Ministry of Economy and Commerce reserves the right to restrict imports from any particular country within the limits of exchange proceeds accruing from that country.

The Central Bank requires that applications for the allocation of foreign exchange for merchandise payments be accompanied by a deposit of 4 per cent of the value of the applications. If the allocation is not made within one month, the applicant is entitled to withdraw his deposit.

Payments for Invisibles

In principle, payments by residents to nonresidents on account of invisibles are restricted and subject to individual licensing. Payments incidental to merchandise transactions are automatically permitted. Exchange permits are usually given for payments on account of (1) interest, commissions, and similar payments connected with bank operations; (2) export commissions, registration fees, patent fees, etc.; and (3) advertisements and other expenses connected with trade. Exchange for business travel is granted within limits varying according to the country of destination. Payments to be effected by insurance companies also are subject to a permit, which is usually given.

Travelers are permitted to export Turkish banknotes and coins up to LT 100. Nonresident travelers may take out, without permission, the unspent portion of the foreign exchange recorded in their passports on entry. Foreign tourists can freely export foreign coins up to the equivalent of LT 15.

Exports and Export Proceeds

Most goods may be freely exported, but specified goods require an individual license, mainly in order to prevent triangular trade in such goods resulting in payment of a soft currency to Turkey for goods finally sold for hard currency. Exporters are, in general, required to sell to a bank in Turkey the foreign exchange proceeds of goods exported, within 3 months from the date of exportation and within 15 days from the date on which the foreign exchange in question has been placed at their disposal. However, proceeds accruing from specified exports (less than 3 per cent of the value of total exports) may be used within 6 months by exporters for the payment and importation of any goods including those whose importation is not otherwise permitted.

Proceeds from Invisibles

Foreign exchange accruing to residents on account of services rendered by them to nonresidents must be surrendered within 15 days from the date of acquisition.

Travelers are permitted to import Turkish banknotes and metallic currency up to LT 100.

Capital

Residents. Capital transfers abroad by residents and capital transactions between a resident and a nonresident are subject to the approval of the exchange control authorities. The repatriation of foreign assets held by residents may, in cases specifically approved by the Ministry of Finance, be effected through the importation of specified commodities.

Nonresidents. Foreign companies and contractors established abroad who wish to do business in Turkey must import in the form of foreign exchange the capital and operating funds required by the business. In principle, assets and balances owned by, and earnings accruing to, nonresidents cannot be converted into foreign currency, and if they exceed LT 500 they are blocked. Subject to individual permit, blocked assets and balances may be utilized within Turkey, except as capital for business, or transferred abroad through the exportation of specified goods.

Foreign capital invested in Turkey within the terms of a Law to Encourage Foreign Investments is accorded preferential treatment. The investment may be made in the form of (1) capital brought into Turkey in the form of foreign exchange; (2) installations, machinery, tools and instruments or their spare parts, and such special construction materials as may be needed; (3) nonphysical assets such as concessions, trademarks, patents, etc.

The following transfers abroad on account of such foreign investments are permitted in the original currency of capital : annual profits, interest, and dividends not exceeding 10 per cent; and all or part of the invested capital, unless individually permitted otherwise, after three years from the date of making the investment, if effected in the form of cash, or after five years from the date of making investments in any other form. Subject to an individual permit, the proceeds arising from the liquidation of foreign investments or of profits, etc., exceeding 10 per cent, may be transferred at the time the capital is repatriated, or through the exportation of specified goods.

The capital and interest of long-term loans and credits made by nonresidents to enterprises in Turkey (including those of an agricultural character) may be accorded the same transfer benefits as those described above for foreign investment. Up to a total of LT 300 million, a guarantee to such loans can be accorded by the Ministry of Finance, subject to the approval of the Council of Ministries.

Changes during 1952

No significant changes took place during 1952.

Union of South Africa

Origin and Essential Features

Exchange controls and restrictions were introduced in the Union of South Africa on September 9, 1939. Under these controls and restrictions all payments to residents of countries outside the Sterling Area require an exchange license, and all exchange receipts in currencies other than Sterling Area currencies must be offered for surrender. In November 1948, restrictions were introduced through a system of exchange quotas for imports from outside the Sterling Area and the implementation of a prohibited import list. On July 1, 1949, this system was replaced by an import licensing system which also restricted imports from the Sterling Area other than in respect of goods produced in Southern and Northern Rhodesia. In January 1950, two types of import license (for all countries and for soft currency countries, respectively) were introduced.

Exchange Rate System

The par value is South African Pound 1 = US$2.80. Exchange rates are uniform and are based on the fixed rates for sterling/South African pounds and the London market rates for sterling against other currencies maintained between official limits.

Exchange Control Territory

There are no exchange or trade restrictions between the Union of South Africa, South West Africa, Basutoland, Swaziland, and the Bechuanaland Protectorate. These territories may be regarded as forming with the Union of South Africa a single exchange control territory.

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 Reserve Bank, which, in turn, has delegated to the commercial banks some of its licensing power. Appropriate exchange for licensed imports is made available by the authorized dealers upon production of suitable documentary evidence.

Prescription of Currency

All approved payments to and receipts from residents outside the Sterling Area must be made in the manner prescribed by the South African Treasury. For most transactions, the prescribed method is in sterling to or from an account related to the country or monetary area of the nonresident following the nomenclature of the United Kingdom’s exchange control system; in several cases, payments or receipts may alternatively be in the appropriate local currency; for Canada and American account countries, they may be in U.S. dollars. As an exception, there are special currency prescriptions for exports of diamonds.

Nonresident Accounts

There are nonresident accounts for beneficiaries resident outside the Sterling Area, and Sterling Area accounts for beneficiaries in territories of the Sterling Area. Credits to the former are subject to control, and each deposit requires approval. Withdrawals from the account may be used to pay for exports to the country of the account holder, local payments, transfers to the country of the account holder or to other Sterling Area territories, and payments to a nonresident account of the same country or monetary area. Balances held in Sterling Area accounts may be used freely for local payments or transferred to any other territory of the Sterling Area.

Imports and Import Payments

Most imports require either a general import license which is valid for imports from any country or a restricted import license which is valid only for imports from soft currency countries.1 The general licenses are issued for all classes of permissible imports according to the relative essentiality and availability of particular classes of commodities, and the total amount of foreign exchange available for such licenses. General licenses are liberally granted for certain essential commodities. Restricted licenses are issued for raw materials, consumable stores and maintenance spares, and consumer goods, to supplement the volume of such imports obtained under general license. For raw materials, consumable stores and maintenance spares, licenses (general and restricted) are granted to importers on the basis of quotas fixed in accordance with previous consumption and estimated requirements. For consumer goods, licenses are granted to importers up to the limit of individual quotas based on previous imports; 75 per cent of such quotas are covered by restricted licenses and the balance by general licenses. In a few cases, importers—provided they import certain essential consumer goods—can double part of their quota up to 150 per cent of their 1948 imports of the same item. Import licenses for textile piece goods below certain ceiling prices from both hard and soft currency countries are freely issued on presentation of proof that firm orders have been placed.

The import of specified luxury and semiluxury consumer goods, as well as goods produced locally in adequate supply, is prohibited. However, under a prohibited list token import scheme, special import licenses may be obtained for the importation of prohibited items through a conversion of consumer goods import licenses. Consumer goods licenses (both general and restricted) may be converted into special licenses for prohibited list items at a conversion rate of £5 in regular licenses for each £1 in prohibited list licenses.

Imports of gasoline and oil do not require import licenses; nor do imports of items included in a “free list” (mainly threads, yarns, needles, sewing machines, books, and other articles of a similar nature), when such imports are from soft currency areas.

A holder of a valid import license is granted exchange to pay for his imports upon presentation of satisfactory evidence that the transaction will be properly effected and payment made in the prescribed manner (see section on Prescription of Currency, above).

Payments for Invisibles

There are no restrictions on payments to residents of the Sterling Area, nor is any license required. All payments to residents of countries outside the Sterling Area require exchange licenses which are freely granted for most invisibles. Non-sterling exchange for payment of film royalties, travel expenses, membership fees, maintenance, etc., is granted in limited amounts.

Exports and Export Proceeds

Export licenses, issued by the Secretary for Commerce and Industries, are required for exports to any destination (other than Basutoland, Swaziland, and the Bechuanaland Protectorate) of certain specific raw materials in short supply and manufactures therefrom. They are also required, for strategic reasons, for certain other goods exported to destinations other than the United Kingdom, any British Dominion, Colony, Possession, Protectorate, or Mandated Territory, or the United States.

All foreign exchange other than Sterling Area currencies accruing from exports must be received in the prescribed manner and be surrendered (see section on Prescription of Currency, above). Export control procedures operate to assure this. Special conditions apply to the export of diamonds and the manner in which payment shall be received.

Proceeds from Invisibles

Non-sterling exchange receipts from invisibles must be received in the appropriate manner and surrendered.

Capital

Non-sterling exchange receipts of capital must be received in the appropriate manner and be surrendered. Transfers of capital to countries outside the Sterling Area require approval. This is granted to emigrants up to certain limits; otherwise residents are not normally allowed to export capital to countries outside the Sterling Area. Capital transferred directly to the Union from a country outside the Sterling Area may normally be retransferred to the country of origin and in the currency in which the original transfer was received.

Changes during 1952

January 30

Import licenses for imports of textile piece goods from hard currency countries were no longer to be issued freely, and became subject to the regular quotas.

March 12

Import licenses for 1952 in respect of consumer goods were to be issued up to 40 per cent of 1948 imports, compared with 60 per cent for 1951; this percentage was increased on May 21 to 45 per cent of the 1948 figure. Of this amount, approximately 20 per cent of the licenses would be issued for imports from hard currency countries and the balance for purchases from soft currency countries.

June 6

Import licenses for consumer goods could be doubled in amount (up to 150 per cent of a holder’s 1948 imports) in respect of a few essential consumer goods.

United Kingdom

Origin and Essential Features

Exchange control was introduced in the United Kingdom on September 3, 1939. Since then there have been a considerable number of developments in details, but the essentials of the system have, in principle, remained unchanged. Exchange control is not imposed on transfers to other countries in the Sterling Area, but all payments to non-Sterling Area countries require exchange control approval which, upon verification of the amount and provided the method of payment is in accordance with the general prescription of currency requirements, is granted automatically for licensed imports, contractual payments (except films), and many types of noncontractual payments. Some types of noncontractual payments are subject to monetary limitations and, in some instances, to discrimination according to the country of receipt. Export proceeds must be received in the manner prescribed in the regulations, and certain currencies must be sold to an authorized bank.

Exchange Rate System

The par value is United Kingdom Pound 1 = US$2.80. Market rates for most currencies dealt with in the United Kingdom are maintained between official limits1 corresponding to US$2.82 buying, US$2.78 selling, per £1. In general, authorized banks are allowed to cover transactions against sterling in the London exchange market or with banks in the country of the currency concerned, where the authorities of that country have given their approval. The United Kingdom operates a single rate system based on the Fund par values or, where countries have not an agreed parity, on official rates.

Exchange Control Territory

Exchange control is not imposed on transactions with other parts of the Sterling Area (Scheduled Territories in the nomenclature of the U.K. exchange control) ; in addition to the United Kingdom, the Sterling Area comprises Australia, Burma, Ceylon, Iceland, India, Iraq, Irish Republic, Hashemite Kingdom of the Jordan, Libya, New Zealand, Pakistan, Southern Rhodesia, Union of South Africa, together with all British Colonies, Protectorates, Protected States, and Trust Territories. Exceptionally, sterling payments to Hong Kong are screened to ensure that residents in other parts of the Sterling Area do not have access to Hong Kong’s free market.

Administration of Control

The administration of exchange control in the United Kingdom is conducted by the Bank of England on behalf of the U.K. Treasury. However, much of the authority for approving normal payments is delegated to the commercial banks, practically all of which are authorized for this purpose. Import and export licensing is handled by the Board of Trade.2

Prescription of Currency

The prescription of the methods of making payments to and receiving payments from countries outside the Sterling Area is an integral part of the U.K. exchange control system and provides a mechanism for payments between all Sterling Area territories and the rest of the world. Payments to and receipts from countries with which the United Kingdom has negotiated Monetary Agreements,3 the American Account Area, and Canada may be made either in sterling or in the currency of the paying/receiving country or monetary area. Payments to and from all other countries are predominantly effected in sterling—in most cases in conformity with Sterling Payments Agreements negotiated by the United Kingdom, under the terms of which the nonresident recipient is enabled to obtain his own local currency. These arrangements are facilitated and controlled by designating all nonresident sterling accounts geographically according to the residence of the account holder, and by publishing general regulations showing those transfers permitted between the various sterling accounts without reference to the exchange control authorities (see section on Nonresident Accounts, below).

Nonresident Accounts

The sterling accounts (other than blocked accounts) of nonresidents, i.e., those resident outside the Sterling Area, are available for payments in the Sterling Area and for transfers to residents in the same country or monetary area as the account holder. The extent of transferability of these accounts to other nonresidents varies according to the four groups described below. However, considerable (“administrative”) transferability is achieved by granting licenses to effect payments outside the prescribed arrangements.

  • American Accounts (Bolivia, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Liberia, Mexico, Nicaragua, Panama, Philippine Republic, United States and possessions, and Venezuela) and Canadian Accounts: Payments from these accounts may be freely made to any account related to countries in this group, the Transferable Account Area, and the Residual Group. Balances on American Accounts and Canadian Accounts may be freely converted into Canadian or U.S. dollars.

  • Transferable Accounts (Anglo-Egyptian Sudan, Austria, Chile, Czechoslovakia, Denmark, including the Faroe Islands and Greenland, Egypt, Ethiopia, Finland, Federal Republic of Germany, Greece, Italian Monetary Area, Netherlands Monetary Area, Norway, Poland, Spanish Monetary Area, Sweden, Thailand, and U.S.S.R.) : In addition to Transferable Accounts, there are other accounts related to countries in this area. Payments from Transferable Accounts (mostly held by banks) may be made freely to any account related to the Transferable Account Area or Residual Group in respect of direct current transactions. Payments from other accounts of residents in the Transferable Account Area may be freely made to any account, including a Transferable Account, related to the same country or monetary area as the account holder.

  • Bilateral Accounts (Argentina, Belgian Monetary Area, Brazil, Bulgaria, Mainland China, French Franc Area, French Somali-land, Hungary, Iran, Israel, Japan, Lebanon, Paraguay, Peru, Portuguese Monetary Area, Rumania, Switzerland, Syria, Taiwan, Tangier, Turkey, Uruguay, Vatican City, and Yugoslavia) : Payments from these accounts (excluding Mainland China, Iran, and Taiwan, to which certain restrictions apply) may be freely made to any account related to the same country or monetary area as the account holder.

  • Residual Group (unclassified countries not in the above groups, for example, Afghanistan, Albania, Andorra, Nepal, Saudi Arabia, and Yemen) : Payments from these accounts may be freely made to any account related to any country in this group.

Imports and Import Payments

Imports on government account are not subject to import licensing, but imports on private account are subject to one of the following types of import license: World Open General License, Open General License, Open Individual License, Individual Import License.

Subject to the submission of evidence of importation, or, where this has not yet taken place, the relevant import license, foreign exchange, or permission to credit a nonresident sterling account appropriate to the country of export (see section on Prescription of Currency, above) is automatically granted for imports. For imports from other parts of the Sterling Area, payment can be freely made in sterling or in any other Sterling Area currency.

Payments for Invisibles

An exchange license is required for all payments to countries outside the Sterling Area. These licenses are normally granted without discrimination as to recipient countries in respect of payments under contracts entered into up to September 3, 1939 and under contracts entered into with approval since that date. Films, however, are covered by special agreement. Applications for licenses for noncontractual payments are considered on their merits and are often subject to certain monetary limitations, and in a few instances are subject also to discrimination according to the recipient country, as, for example, in the case of tourists’ expenses, which are limited to £25 per adult4 per twelve months for use in certain countries,5 exclusive of the payment of fares, which is not limited in respect of direct journeys to and from the United Kingdom and paid for in the United Kingdom. Not more than £5 in British banknotes may be taken out of the United Kingdom except by persons traveling directly to the Irish Republic or the Channel Islands. Certain freedom in exchange operations is granted to specified commodity markets, e.g., rubber, cocoa, coffee, grain, and certain metals, and to the insurance market.

Exports and Export Proceeds

Certain exports, mostly of a strategic character, and all exports to China and Hong Kong require export licenses.6

The proceeds of all exports to countries outside the Sterling Area must be received in the manner prescribed in the regulations (see section on Prescription of Currency, above), and this is a condition on which the export is permitted without specific exchange control approval. Exchange receipts in specified currencies 7 must be sold to an authorized bank.

Proceeds from Invisibles

Exchange receipts from invisibles in specified currencies 7 must be surrendered. Permission is given for foreign exchange to be retained on controlled accounts where it is required for operating purposes. Not more than £10 in British banknotes may be brought into the United Kingdom except by persons traveling directly from the Irish Republic or the Channel Islands.

Capital

Transfers of capital to countries outside the Sterling Area require approval, and capital receipts in specified currencies 7 must be surrendered. For nonresidents, foreign exchange or permission to credit sterling to a nonresident account related to the country or monetary area is freely granted for repayments abroad in respect of matured capital obligations; otherwise the proceeds of nonresident-owned capital may be credited only to Blocked Sterling Accounts, which may be used only for reinvestment in sterling securities not maturing earlier than ten years from date of purchase. However, special facilities permit residents of Denmark (including the Faroe Islands and Greenland), France, Norway, and Sweden to have their capital transferred to their respective countries. Persons residing outside the Sterling Area and making investments in the United Kingdom must provide appropriate foreign exchange or sterling from a nonresident account related to their country or monetary area. Capital directly invested, after January 1, 1950, in projects approved by the exchange control authorities may be repatriated at any time, together with capital profits.

Banknotes

The authorized banks may buy and sell foreign notes and coin within certain limitations at free rates of exchange. Purchases of foreign notes and coin from residents of the Sterling Area can be made without limitation, but purchases from persons resident outside the Sterling Area are limited to reasonable amounts for their current maintenance expenses while in the United Kingdom. The authorized banks may purchase Canadian and U.S. dollar notes from anyone, but other currencies only from sellers resident in the same country or monetary area as the currency being sold. Authorized banks may, in certain conditions, sell foreign notes and coin for the purpose of travel outside the Sterling Area but only up to a limit of the equivalent of £10 per traveler.

Changes during 1952

January 3

Libya (comprising the provinces of Cyrenaica, Tripolitania, and the Fezzan) was included in the Sterling Area.

January 14

Authorized banks were permitted to deal in foreign currencies, for which rates are not quoted by the Bank of England,8 with other authorized banks in the Sterling Area and, provided the monetary authorities in the respective countries permit, with a bank in the country or monetary area appropriate to the currency concerned against sterling paid to or from a sterling account similarly related. Authorized banks could cover permitted spot transactions in French francs (also forward transactions), Danish kroner, Norwegian kroner, or Swedish kronor with a bank in the country or monetary area related to the currency concerned against sterling similarly related.

January 16

Authorized banks could cover permitted spot and forward transactions in Swiss francs with a bank in Switzerland or Liechtenstein against sterling paid to or from a Swiss Account.

January 22

Authorized banks could cover permitted spot and forward transactions in Belgian francs with a bank in the Belgian Monetary Area against sterling paid to or from a Belgian Account.

January 30

The basic exchange allowance for tourists traveling to certain countries was reduced from £50 to £25 per person for the twelve-month period ending October 31, 1952, and this reduced figure was also applied in respect of tourists’ expenses in Denmark, Norway, and Sweden, for which previously any reasonable amount of exchange had been granted.

The amount of sterling notes which travelers could take out of the United Kingdom was reduced from £10 to £5 per person. The amount of sterling notes which travelers could bring into the United Kingdom remained unchanged at £10 per person. These regulations do not cover persons proceeding to or from the Irish Republic or the Channel Islands, where these limits do not apply.

June 30

Authorized banks could cover permitted transactions in Netherlands guilders by a spot or forward transaction in that currency with a bank in the Netherlands against sterling paid to or from a Netherlands Transferable Account or Netherlands Account.

August 5

The Bank of England announced that the exchange control was prepared for the time being to consider applications from U.K. residents acting as principals to purchase raw materials from residents of the American Account Area and Canada for resale to EPU countries against sterling or acceptable local currency appropriate to the country of destination of the goods.

August 12

The facilities for making dollar raw material purchases against sterling sales to EPU countries as outlined in the announcement of August 5 (see above) were suspended for one month.

September 11

The facilities for making dollar raw material purchases against sterling sales to EPU countries as outlined in the announcement of August 5 (see above) were withdrawn.

October 1

The scheme by which a certain degree of freedom in exchange operations is available to participants in specified commodity markets was extended to transactions in lead.9

October 15

Liberia was added to the group of American Account countries.

October 21

It was announced that the basic exchange allowance for tourists traveling to certain countries (see January 30, above) would be continued at £25 per adult for the twelve months commencing November 1, 1952.

November 17

Special facilities giving a certain freedom in exchange operations were made available for recognized dealers in raw sugar.

November 24

Authorized banks could cover permitted forward transactions in Swedish kronor with a bank in Sweden against sterling to be paid to or from a Swedish Transferable Account or a Swedish Account.

December 4

It was announced that approval would be given up to an agreed limit to applications for the release of French-owned blocked sterling to the French Accounts of French authorized banks.

Uruguay

Origin and Essential Features

Exchange control was introduced in Uruguay in May 1931. On January 10, 1941, the Office of Export and Import Control was established under the jurisdiction of the Ministry of Finance and was charged with the task of controlling the declared values and origin of imported merchandise, and of intervening in the distribution of foreign exchange and of granting import permits. On October 6, 1949, new multiple rates for imports and exports were established, together with lists of commodities to which the various rates applied.

The restrictive system comprises a multiple exchange rate structure with various fixed rates for imports and exports, exchange quotas established for various currencies and categories of imports, and a fluctuating free market for invisibles and capital transactions. However, invisible expenditures incidental to imports and invisible items involving accounts established by the terms of payments agreements are transacted at the official rates.

All exports require licenses, and foreign exchange derived from exports must be surrendered.

Exchange Rate System

No par value for the Uruguayan peso has been established with the Fund. There are three official buying rates for exports and three official selling rates for imports. One exchange premium is temporarily established for the proceeds of exports of shoes. In addition, free market rates apply to certain invisibles and capital transactions (see above). These rates fluctuate and give rise to broken cross rates (see Table of Exchange Rates, below).

Administration of Control

The exchange control system is operated by the Bank of the Republic. Exchange transactions relative to imports, exports, and some invisibles pass through the authorized banks. Import licenses are issued by the Office of Export and Import Control.

Prescription of Currency

Payments with payments agreements countries are made through established compensation accounts, most of which are kept in U.S. dollars. Payments to, and receipts from, other countries are made in U.S. dollars.

Imports and Import Payments

Imports, with only minor exceptions, require licenses. The granting of these licenses is effected up to the global exchange quotas established by the Bank of the Republic for various currencies according to their availability. The global quotas are distributed by fixing individual exchange quotas for each importer and by issuing them import licenses up to the limit of their individual quota.

Payments for Invisibles

Payments for invisible items covered by a payments agreement require a license. Expenditures in foreign exchange incidental to imports are authorized together with the payment for the corresponding import. All other invisible payments can be made freely through the free market. There are no limitations on the exportation of foreign or domestic banknotes.

Exports and Export Proceeds

All exports require licenses, which are granted if the exchange proceeds have been contractually sold to an authorized bank. However, the export of essential goods in short supply may be prohibited.

Export proceeds must be entirely surrendered at the established rates.

Proceeds from Invisibles

Proceeds from invisible items covered by a payments agreement require a license. All other invisible proceeds can be held, utilized, or sold in the free market. There are no limitations on the importation of foreign or domestic banknotes.

Capital

Inward and outward capital investments are free. The corresponding transactions can take place freely in the free market.

Table of Exchange Rates(as at December 31, 1952)
(pesos per U.S. dollar)
BuyingSelling
1.5191.519
Basic exports (meat, wool, oilseeds, wheat, flour, cattle hides, sheepskins).Government payments. Imports of newsprint, inks, cardboard matrix, and seed potatoes.
1.781.90
Exports of nonedible oils, packing house products, bristles, other animal skins.Essential imports.
2.352.45
Exports of woolen manufactures, pork, bricks, and other manufactured products.Nonessential and luxury imports.
2.60(P 2.35 plus P 0.25 Premium)
Exports of shoes, tanned and semi-tanned leather (until December 31, 1952).
2.80(Fluctuating Free Market Rate)2.80(Fluctuating Free Market Rate)
Invisibles and capital.Invisibles and capital.
Note: An exchange tax of 1% is applied to the purchase of export proceeds.

Changes during 1952

January 14

The requirement of a prior permit for imports of specified essential and semi-essential goods payable in inconvertible currencies and for imports of a few commodities payable in any currency was abolished.

April 14

The requirement of prior permit for all imports was reinstated.

September 15

Banks and banking agencies were allowed to operate freely in invisible and capital transactions other than those required to be made through payments agreements accounts.

Venezuela

Origin and Essential Features

Exchange control regulations were introduced in Venezuela in August 1934, but there was a major revision in July 1941. There is no system of payment licenses, and only a few import restrictions are maintained, principally for protection purposes. There is a multiple exchange rate system comprising preferential rates for both government imports and the proceeds of coffee and cacao exports, and penalty buying rates applied to purchases of exchange from the petroleum companies. A few exports require licenses.

Exchange Rate System

The par value is Bolivares 3.35 = US$1. There is an official selling rate of Bs 3.35 per US$1. The corresponding buying rate fluctuates around Bs 3.325 per US$1, and applies to all purchases of exchange except those from the petroleum companies and from cacao and coffee exporters. The official selling rate applies to all sales of exchange except for government imports, for which a favorable rate of Bs 3.09 per US$1 exists. Penalty buying rates of Bs 3.046259 and Bs 3.09 per US$1 apply to sales of exchange by the petroleum companies. Various rates between Bs 3.32 and Bs 4.25 per US$1, in a proportion depending upon world prices, are applied to cacao and unwashed coffee exports, and between Bs 3.32 and Bs 4.80 per US$1 to washed coffee exports (see Table of Exchange Rates, below).

Administration of Control

Certain imports require prior import licenses which are issued by the government department concerned. Under the terms of a contract with the Government, the Central Bank has the responsibility for ensuring that the special exchange rates are applied to the appropriate transactions.

Prescription of Currency

There are no currency prescription requirements in force.

Imports and Import Payments

A few items are subject to import licensing by various government departments. Licenses for some products are issued on the condition that the importer has purchased domestic products equal to a prescribed percentage of the amount imported. No restrictions are imposed on payments for imports.

Payments for Invisibles

Payments for invisibles may be made freely at the Bs 3.35 rate.

Exports and Export Proceeds

There is no limitation on exports, but the export of strategic materials to certain countries is prohibited, and export licenses are required for a few products essential to the domestic economy. The oil companies must surrender export proceeds to the extent of their local currency requirements at the Bs 3.09 rate. A rate of Bs 3.046259 is applied to exchange surrendered by them in excess of the Central Bank’s sales of exchange to domestic buyers during any one year. The proceeds of exports other than petroleum are sold at the Bs 3.32 rate, but if the world prices for cacao and coffee are below certain levels, a proportion of the proceeds of cacao and unwashed coffee exports can be sold at the Bs 4.25 rate, and of washed coffee exports at the Bs 4.80 rate.

Proceeds from Invisibles

Exchange receipts from invisibles are freely disposable or can be sold at the Bs 3.32 rate.

Capital

Payments for transfers of capital may be made freely at the Bs 3.35 rate. Exchange receipts from capital are freely disposable or can be sold at the Bs 3.32 rate.

Table of Exchange Rates(as at December 31, 1952)
(bolivares per U.S. dollar)
BuyingSelling
3.046259
Local currency requirements of petroleum companies in excess of the Central Bank’s foreign exchange sales during the given year.
3.093.09
Local currency requirements of petroleum companies up to the limits of the Central Bank’s foreign exchange sales.Government payments.
3.323.35
Coffee and cacao exports in a proportion depending on world prices. All other exports except petroleum. Invisibles and capital.All other payments.
4.25
Cacao and unwashed coffee exports in a proportion depending on world prices.
4.80
Washed coffee exports in a proportion depending on world prices.
Note: The above rates for coffee and cacao need not be effective rates since sales at these rates are varied in accordance with the world prices for these commodities. The special rates for coffee have, however, not applied in recent years as the international price for coffee has been above the maximum level, below which the special rates would apply. Taxes of Bs 2 and Bs 1½ per 46 kilograms are levied on washed and unwashed coffee, respectively.

Changes during 1952

No significant changes took place during 1952.

Yugoslavia

Origin and Essential Features

Exchange control was introduced in Yugoslavia on October 7, 1931. It has been subject to considerable change, and by 1948 the exchange system was determined almost entirely by a comprehensive economic plan. During 1950, however, individual enterprises were allowed to use freely any exchange receipts realized in excess of the planned targets.

In the last two years, essential changes have been made in the economic system; instead of being based on administrative planning and management of the economy, the system is now based on the management of enterprises by workers’ collectives and the operation of market principles. For this reason, changes also had to be made in the exchange system to lessen the restrictions which, up to that time as part of the comprehensive economic plan, had been very severe. The present system is a transitory system; its purpose is the gradual elimination of restrictions, and it is based on the fact that the pattern of domestic prices differs from the foreign pattern. However, instead of the earlier practice of full adjustment of domestic and foreign prices through an equalization mechanism, a new system of export and import surcharges and premiums was introduced at the beginning of 1952. These were reduced in range and number as from July 1, 1952. However, export premiums varying for different commodities and different countries were introduced, and a free exchange market was established for retained exchange. In these markets, mutual settlements and the redistribution of exchange between economic organizations take place, instead of the previous administrative allocation. At the same time, the system of export and import licenses was eliminated. As a result of a severe drought, the range of surcharges and premiums was increased in September 1952, when both certain imports and exports were temporarily prohibited and a smaller range of export commodities was made subject to licensing.

Exchange Rate System

The par value is Yugoslav Dinars 300 = US$1. A system of coefficients, varying for different export and import commodities and applied to the basic exchange rate, together with a system of negotiable retention credits applicable to a percentage of surrendered export proceeds, produces a multiple exchange rate structure. The coefficients are multiplying factors applied to the exchange rate for various commodities. In July 1952, 18 coefficients were introduced, ranging for both exports and imports between 0.8 and 4. In September 1952, as a temporary measure, the number of coefficients was implicitly increased to 27 for imports and to 26 for exports; they ranged from 0.8 to 10 for the former and from 0.8 to 6 for the latter.

The exchange representing the negotiable retention credit (see section on Exports and Export Proceeds, below), if not used by the exporter for his own payments abroad in connection with merchandise operations, can either be sold by the exporter in a fluctuating free market, direct access to which is limited to registered dealers and the National Bank, or be sold to the latter at the official rate. Such resources must be used in one of these ways within one month. The purchaser must pay to the National Bank the local currency equivalent of the transaction for which the exchange has been acquired, calculated at the basic rate multiplied by the coefficient.

Administration of Control

All foreign exchange transactions have to be effected through the National Bank, which manages a Central Exchange Fund. Markets for the exchange representing the negotiable retention quotas are established at the central offices of the National Bank in the six Yugoslav republics.

Prescription of Currency

Payments are made according to the method or channel of payment as provided for in the payments agreement with the country concerned. If no agreement exists, payment is usually made in U.S. dollars or Swiss francs. The internal restriction system in no way affects the method of payment as provided for in the payments agreement.

Imports and Import Proceeds

Importing institutions must be authorized to conduct foreign trade transactions in order to be able to import merchandise. No import licenses are issued, but a responsible government agency can prohibit the import of any goods; on October 2, 1952, the importation of approximately 100 items was temporarily prohibited for balance of payments reasons. If payment is not made with retained currency, exchange is provided from the Central Exchange Fund. The allocation of this exchange is made in advance in the government plan, and currency is obtained from the National Bank at the official rate multiplied by the coefficient appropriate to the merchandise concerned.

Payments for Invisibles

Exchange up to a maximum amount of Din 3,000 per person is allocated for travel expenditures. Institutions authorized to retain part of the exchange derived from export proceeds can use freely such currency for payments for invisibles. The Secretariat for the Budget allocates annual exchange quotas to the republics for educational, health, and other purposes. Applicants for such exchange must obtain authorization from the authorities of the republics. For these transactions, exchange is sold at the official rate.

Exports and Export Proceeds

The export of certain goods in short supply in Yugoslavia is at present prohibited. The export of certain other goods requires a license. If Yugoslavia has a payments agreement with a country, payment must be obtained in accordance with the terms of that agreement. Export proceeds are divided into two parts: 80 per cent goes to the Central Exchange Fund and 20 per cent is retained by exporters for their free use. Coefficients appropriate to the export commodity concerned (including export premiums for certain commodities varying according to country of destination) are applied to 100 per cent of the exchange; but for the 20 per cent representing the retention quota, no payment of the equivalent in domestic currency is made to the exporter at the official rate, since the exporter retains the quota for his own use. The exchange representing these retained credits is held separately and does not enter the Central Exchange Fund.’ This retained exchange may be used for the exporter’s own payments or sold in one of the exchange markets established at the central offices of the National Bank. Access to this market is limited to socialist economic organizations admitted as members and to the National Bank operating on behalf of others or for itself.

Proceeds from Invisibles

All exchange proceeds from invisibles must be surrendered to the National Bank against local currency at the official rate.

Capital

All outward and inward capital transfers require special authorization. Residents are required to surrender all foreign exchange held abroad.

Changes during 1952

January-June

A system of export and import surcharges and export subsidies applied by multiplying the official rate by fixed coefficients was gradually introduced. This system superseded the former practice, based on all-embracing administrative planning, according to which full equalization of the differences between domestic and foreign prices was made for each particular commodity transaction.

July 1

The following major changes in the exchange control system were introduced:

1. Institutions authorized to conduct foreign trade transactions were permitted to retain 45 per cent of exchange receipts derived from exports and from certain services, regardless of the currency involved. The retained exchange had to be kept in special accounts with the National Bank. The exchange could be used for specified payments or disposed of in a newly established foreign exchange market.

2. The number of coefficients was reduced to 17 and 18 for exports and imports, respectively, ranging from 0.8 to 4.

3. The import and exchange licensing system was formally abolished. However, the importation of specific goods could be prohibited and, if payments were not made with retained exchange, it was required that applications for exchange allotment be sent for consideration to the Secretariat for National Economy.

August 15

The export of cereals, legumes, potatoes, all forms of livestock feed, seeds, and scrap iron and other metals was prohibited, and the export of copper and copper alloy products was made subject to licensing.

September

The system of coefficients was expanded by the introduction of temporary export subsidies and import surcharges in consequence of the drought. In this way, the number of coefficients for imports was implicitly increased to 27, ranging from 0.8 to 10; and for exports, the number was increased to 26, ranging from 0.8 to 6.

October 1

The importation of approximately 100 items was prohibited for a six-month period; these items included different kinds of chemicals, pig iron, steel, rails, construction equipment, mining and agricultural tools, hospital supplies, electrical and household appliances, and automobiles.

October 15

The percentage of foreign exchange receipts, derived from exports and from certain other transactions, which could be retained by the recipients in special accounts with the National Bank was decreased from 45 per cent to 20 per cent.

Modifications in the severity of these import restrictions occurred in the second half of 1952 and early 1953, and some substantial relaxation became effective as from April 1, 1953.

Effective May 4, 1953, the exchange rate system in Austria was unified and an initial par value for the Austrian schilling of S 26 per US$1 was established. The corresponding alterations in the exchange system have not been taken into account in the present description, but the main aspects affected are indicated by references to this footnote.

As from May 4, 1953, “linked” transactions were abolished, except for those already initiated and completed by June 30, 1953. See footnote 1.

Effective May 4,1953, all exchange transactions are effected at S 25.92 buying, or S 26.08 selling, per US$1. See footnote 1.

These are listed as follows: Austria, Denmark, France, Federal Republic of Germany, Great Britain (Sterling Area), Greece, Italy, Netherlands, Norway, Portugal, Sweden, Switzerland, and Turkey.

Netherlands guilders, Swedish kronor, Deutsche Marks, and: Danish; kroner were added to this list on January 26, 195.3, February; 23, 1953, May 4, 1953, and May 18, 1953, respectively.

The following countries and territories are included in the “dollar area”: Canada, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Philippine Republic, United States, Venezuela, and territories under the sovereignty of Canada and the United States.

Effective May 4, 1953, this amount was raised to Bfr 5,000 per day.

Effective February 1, 1953, the list of goods whose import is subject to the approval of the central exchange control authority was considerably reduced.

Effective May 14, 1953, a new par value was established for the boliviano at Bs 190 per US$1, and the exchange system was simplified. All previously existing exchange taxes, multiple import and export rates, retention quotas, and compensation and divisas propias arrangements were eliminated. According to the new arrangements the exchange system consists of an official market, where the rates are fixed on the basis of the new parity, and a free market, where the rates fluctuate. The official market is for all trade transactions, government payments, registered; capital, and certain specified invisibles; the free market is for all other items. A tax equivalent to Bs 35 per US$1 was levied on sales of exchange at the official rate arising from exports of the Bolivian Mining Corporation. Ad valorem taxes of 50 per cent and 100 per cent were imposed by the customs on the c.i.f. value of less essential imports.

See footnote 1 for subsequent changes.

Quoted by the Central Bank only.

On February 21, 1953, a new law establishing a free exchange market for most capital and invisible transactions as well as for some trade items went into effect, which changed in various ways the restrictive system as it existed during 1952. The main aspects of that system which have been affected by the new law are marked with an asterisk in the text. The changes are summarized in the note at the end of this survey.

These are listed as U.S. dollars and Swiss francs. Portuguese escudos were also considered to be in this group prior to the enforcement of the Brazilian-Portuguese payments agreement in mid-1952.

These are listed as follows: Bolivia, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Liberia, Mexico, Nicaragua, Panama, Philippine Republic, United States and possessions, and Venezuela.

These countries are listed as follows : Austria, Belgium, Denmark, France, Germany, Greece, Iceland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, and Turkey.

In the Ceylon regulations, “soft” currency countries are all countries other than Canada and the American Account Area, which together are referred to as the “dollar area” or “hard currency” area.

Effective January 5, 1953, certain changes were made in the exchange system whereby the use of the NTS10.25 rate and the NT$12.37 rate applicable to government exports of camphor and salt were abolished and the NT$14.49 rate was limited to sugar and rice exports only, while all other receipts and payments were settled at the certificate rates of NT$15.55 buying, and NT$15.65 selling, per US$1.

As at December 31, 1952. The percentage at the Ps$2.50 rate is raised by 1½ per cent each month.

These imports are subject to a 3 per cent stamp tax collected on the value in Colombian currency of each application for registration, at the rate of Ps$2.50.

Effective January 13, 1953, Decree No. 173 abolished the former enemy property control and its fiscal charges, thus ending this additional 2 per cent tax.

These countries are listed as follows : Austria, Belgium, France, Federal Republic of Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal Sweden, Switzerland, Trieste, Turkey, their overseas territories, and all territories of the Sterling Area.

Increased to DKr 2,000 for 1953.

As from January 24, 1953, only six years.

After January 30, 1953, the proceeds of rice exports had to be surrendered to the Central Bank at the official rate.

Minimum fixed surrender prices have been set for banana and rice exports. The exchange corresponding to these minima must be sold at the official rate. The balance of the proceeds is sold in the free market, thus making additional “mixing” rates. However, any proceeds from exports of rice in excess of US$9.00 per quintal must be surrendered to the Central Bank at the official rate.

This special arrangement for rice exports was changed after January 30, 1953. See footnote 1.

There were also important changes in January and February 1953. These are outlined in the note at the end of this survey.

This was changed in 1953; see note at the end of this survey.

These specified countries are Bulgaria, Canada, Czechoslovakia, French Monetary Area, Federal Republic of Germany, Hungary, Italian Monetary Area, Lebanon, Poland, Saudi Arabia, Sterling Area, Switzerland, United States and American Monetary Area, and Yugoslavia.

Bulgaria, Czechoslovakia, France, Federal Republic of Germany, Hungary, Italy, Lebanon, Poland, Saudi Arabia, Switzerland, and Yugoslavia.

The hard currencies for this purpose are mainly U.S. dollars, Swiss francs, and Djibouti francs.

Effective February 1, 1953, the remittance to Finland of Finnish banknotes was prohibited. Instead, foreign banks were entitled to deal, through the Finnish commercial banks, in Finnish travel exchange at rates higher than the official rates.

However, as of January 1953, the Licensing Bureau is also entitled to issue “terminal licenses” which enable immediate importation of licensed goods on condition that payment is made only at a later date.

Effective February 1, 1953, the amount of Finnish banknotes which could be taken out was reduced to Fmk 10,000 per trip. On the other hand, the traveler was entitled to purchase foreign exchange at higher rates up to an amount equivalent to Fmk 50,000 per trip.

See footnote 3.

Effective February 1, 1953, this amount was reduced to Fmk 20,000.

These are the currencies of Czechoslovakia, Denmark, Egypt, Federal Republic of Germany, Italy, Mexico, Netherlands, Norway, Sweden, and Yugoslavia, as well as sterling and leading Sterling Area currencies.

Algeria, Guadeloupe, Martinique, Guiana, Réunion.

French West Africa, French Equatorial Africa, Trust Territories of Cameroon and Togo, Madagascar and its dependencies, Comoro Islands, St. Pierre and Miquelon, French Establishments in India, New Caledonia and dependencies, French Establishments in Oceania, and the Condominium of New Hebrides.

At present, this applies to balances on nonresident accounts related to the following countries or monetary areas: Belgium-Luxembourg, Czechoslovakia, Denmark, Egypt, Italy, Mexico, Netherlands Monetary Area, Norway, Portuguese Monetary Area, Sterling Area, Sweden, Switzerland, and Yugoslavia.

These are accounts related to Argentina, Austria, Bolivia, Brazil, Bulgaria, Chile, Ecuador, Finland, Greece, Hungary, Paraguay, Poland, Spanish Monetary Area, Syria, Tangier, U.S.S.R., and Uruguay.

As from January 11, 1953, the permissible amount was reduced to fr 10,000.

Argentina, Austria, Brazil, Bulgaria, Finland, Greece, Hungary, Iceland, Lebanon, Peru, Poland, Spain, Syria, Turkey, and Eastern Germany.

The premium on import rights declined still further in the first months of 1953, to about 1 per cent, thus lowering the premium on export proceeds to 0.4 per cent.

These are Afghanistan, Albania, Bolivia, Costa Rica, Cuba, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Republic of Korea, Liberia, Mexico, Nicaragua, Panama, Philippine Republic, Rumania, Taiwan, Venezuela, and Yemen.

This includes Afghanistan, Albania, Bolivia, Canada, Mainland China, Costa Rica, Cuba, Dominican Republic, El Salvador, Ethiopia, French Somaliland, Guatemala, Haiti, Honduras, Israel, Republic of Korea, Lebanon, Liberia, Mexico, Nepal, Nicaragua, Panama, Peru, Philippine Republic, Puerto Rico, Rumania, Saudi Arabia, Syria, Taiwan, Thailand, U.S.S.R., United States and possessions, Venezuela, and Yemen.

Effective April 1,1953, this exchange allowance was raised to DM 800 per year.

After consultation with the Fund, Greece, on April 9,1953, eliminated multiple currency practices which had existed, and adjusted the official exchange rate to 30,000 drachmas per US$1. The alterations in the exchange system made at that time have not been taken into account in the present description, but the main aspects affected are indicated by an asterisk in the text.

Export licensing in Hong Kong, as in some other areas, is not related to exchange control.

Originating in Mainland China, Hong Kong, the Republic of Korea, and Macao, and received in U.S. dollars.

These are listed as Austria, Czechoslovakia, Finland, Hungary, Israel, Poland, and Spain.

This special rate was introduced on December 3, 1951.

These are listed as Austria, Belgium, Denmark, France, Federal Republic of Germany, Greece, Iceland, Ireland, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, Trieste, Turkey, United Kingdom, and their overseas territories.

Effective May 11, 1953, an initial par value for the Japanese Yen was established at Yen 360 per US$1.

These rates were revised January 12, 1953 to Yen 359.20 buying, Yen 360.80 selling, per US$1.

Canadian and U.S. dollars are considered hard currencies ; all others are considered soft.

The $2.78 selling rate does not include the license fee (and incorporated Air Force Tax) amounting to 2 per cent for imports from soft currency countries and 6 per cent for imports from hard currency countries (see section on Imports and Import Payments, above).

Effective April 17, 1953, the import of goods without a license was prohibited, any such imports being subject to confiscation, the fines, accordingly, being abolished.

Lebanon has payments agreements with such requirements with Egypt, France, and the Federal Republic of Germany.

Effective January 2, 1953, these rates were replaced by f 3.77 buying and f 3.83 selling, and authorized banks were allowed to cover permitted transactions at rates between these limits.

The U.S. dollar and the Belgian franc were added, effective January 2, 1953 and January 24, 1953, respectively.

The relative general license was canceled on January 14, 1953 when the permission to negotiate Egyptian export pounds was extended, on both the selling and the buying side, to resident transit traders.

On January 27, 1953 these transfer facilities were extended to all Netherlands nonresidents living abroad since January 1, 1948 who at present are domiciled in a country with which a payments agreement is in force.

These are listed as follows : Austria, Belgium, Denmark, France, Federal Republic of Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Norway, Portugal, Sweden, Switzerland, Trieste, Turkey, United Kingdom, and their overseas territories.

On February 11, 1953, cruzeiro receipts from exports contracted after that date were declared eligible for surrender at the official rate.

Effective January 1, 1953, the authorized banks must also verify that the underlying transaction comes within the scope of the categories of transactions for which the Netherlands Bank permits payments to be received from the remitting country by the method chosen, if payment in that case would have to pass through a transferable account held by a Netherlands or foreign central or private bank. This verification is not required in the case of currency received from Canada, the United States, the EPU countries, Indonesia, Japan, the Netherlands Antilles, New Guinea, and Surinam. The Netherlands Bank may prescribe the submission of evidence as to the origin of each claim and give other directives to the authorized banks as to such exchange receipts.

On January 27, 1953 these transfer facilities were extended to all Netherlands nonresidents living abroad since January 1, 1948 and now domiciled in a country with which a payments agreement is in force.

Effective January 1, 1953, the export of capital permitted to persons emigrating or having emigrated after December 31, 1949 was increased. Persons having an independent trade or profession were permitted to export to non-dollar area countries either f 25,000 worth of goods plus f 4,000 in cash, or f 15,000 in cash only. For other emigrants, the amount of goods was fixed at f 15,000. The cash amounts granted for dollar area countries were established at 60 per cent of those mentioned, i.e., f 2,400 and f 9,000, respectively.

Since January 1, 1953, licenses for imports of additional listed goods from OEEC countries have been issued upon application. The additional list is not considered to represent an increase in the Netherlands liberalization percentage under the OEEC rules.

Effective February 16, 1953, certain specified imports have been exempted from the deposit obligation.

A 5 per cent tax is levied also on the invoice value of all imports other than listed pharmaceutical products. This tax is collected by the Office of the Collector General of Customs.

These are listed as follows : Austria, Belgium, Denmark, France, Federal Republic of Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, Sweden, Switzerland, Trieste, Turkey, their overseas territories, and the Sterling Area.

Effective March 16, 1953, this amount was increased to NKr 700.

Effective March 2, 1953, the order requiring letters of credit and advance deposit margins was withdrawn.

Currencies of India, Nepal, Tibet, Afghanistan, Burma, Ceylon, Malaya, Aden, Belgian Congo, Madagascar, Mauritius, French and Portuguese territories in India, the Persian Gulf Sheikdoms, French Africa, South Africa, and East Africa.

In the exchange program for 1953, approved December 30, 1952, certain changes are contemplated in the system as it operated in 1952. These changes are outlined in the note at the end of this survey.

Various exports are subject to export taxes of up to 35 per cent, and certain minor exports receive exchange subsidies up to 60 per cent.

A temporary exchange subsidy of 40 per cent is accorded to imports of wheat, flour, antibiotics, and petroleum products, resulting in an effective rate of ₲ 9.

On June 16, 1953, the Philippine Government passed Republic Act No. 871, further extending this tax at 17 per cent until June 30, 1954.

See also footnote 1.

These are listed as follows : Austria, Belgium, Denmark, France, Federal Republic of Germany, Greece, Indonesia, Italy, Luxembourg, Netherlands, Norway, Portugal, Switzerland, Trieste, Turkey, their overseas territories, and the Sterling Area.

Since January 1953, the two rates have been equal.

The commodities affected represent some 80 per cent of all exports and are listed as follows: living animals, eggs, animal casings, vegetables, apricot paste, barley, wheat, maize, cottonseed, raw cotton, cotton textiles, licorice, silk textiles, raw wool, hemp, olive oil, fruit, tobacco, soap, leather and hides, and footwear.

These commodities include timber (except teak), antimony, castor oil, castor seeds, iron, kapok, lead, rubber, tin, wolfram, zinc, gold, platinum, precious stones, certain chemical fertilizers, livestock, wild animals, meat, eggs, lard, sugar, river fish, rice, cotton textiles, machine-made gunny bags, machinery, cement, oils, coconuts, copra, cow and buffalo hides, and all imported goods.

This table, being expressed in terms of U.S. dollars, does not take account of rates for sterling, which is at a discount in the free market when compared at the sterling-U.S. dollar parity rate. In addition, the Bank of Thailand sells sterling exchange to commercial banks for approved imports at a rate of B 45 per £1, representing a slight advantage to importers over the sterling rate in the free market.

Rate established for transactions during the second half of December 1952.

These are defined as follows: all countries other than Bolivia, Canada, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Liberia, Mexico, Nicaragua, Panama, Philippine Republic, United States and possessions, and Venezuela.

Official rates are quoted for the following currencies: Belgian francs, French francs, Danish kroner, Netherlands guilders, Netherlands West Indies guilders, Norwegian kroner, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars.

Export licensing in the United Kingdom, as in some other countries, is not related to exchange control.

Countries (monetary areas) covered by these Monetary Agreements are as follows: Belgian Monetary Area, Denmark (with the Faroe Islands and Greenland), French Franc Area, Netherlands Monetary Area, Norway, Portuguese Monetary Area, Sweden, and Switzerland (and Liechtenstein).

Effective March 24, 1953, this allowance was raised to £40 for the twelve months ending October 31, 1953.

The countries in which this basic exchange allocation for tourists is available are listed as follows: Argentina, Austria, Belgian Monetary Area, Brazil, Chile, Czechoslovakia, Denmark and the Faroe Islands, Egypt, Ethiopia, Finland, French Franc Area, Federal Republic of Germany, Greece, Iran, Israel, Italian Monetary Area, Netherlands Monetary Area, Norway, Paraguay, Peru, Portuguese Monetary Area, Saudi Arabia, Spanish Monetary Area, Sudan, Sweden, Switzerland and Liechtenstein, Free Territory of Trieste, Turkey, Uruguay, Vatican City, and Yugoslavia.

Export licensing in the United Kingdom, as in some other countries, is not related to exchange control.

These specified currencies are listed as follows: Argentine pesos, Belgian francs, Brazilian cruzeiros, Canadian dollars, Congolese francs, francs of the French Franc Area, French Somali Coast (Djibouti) francs, Indo-Chinese piastres, Lebanese pounds, Luxembourg francs, Netherlands, Surinam and Netherlands Antilles guilders, Panamanian dollars, Philippine pesos, Pondicherry rupees, Portuguese escudos, Swiss francs, Syrian pounds, U.S. dollars, Uruguayan pesos.

That is to say, currencies other than those listed in footnote 1. Freedom to deal in Canadian dollars at market rates had already been granted to the authorized banks (see Second Annual Report on Exchange Restrictions, change on October 16, p. 147).

Effective January 1, 1953, these arrangements were extended also to transactions in zinc.

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