Chapter

“Article VIII Countries”

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1958
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Canada

Exchange Rate System

The exchange value of the Canadian Dollar is allowed to fluctuate. The noon market rate on December 31, 1957 was Can$0.985 per US$1. Canada has no exchange restrictions on foreign payments. On March 26, 1952, Canada notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

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

Imports and Import Payments

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

Exports and Export Proceeds

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

Payments for and Proceeds from Invisibles

There are no requirements attached to exchange receipts from, or exchange payments for, invisibles.

Capital

There are no exchange control obligations attached to capital receipts or payments by either residents or nonresidents.

Changes during 1957

May 28. Cheddar cheese was placed under import control.

July 17. Turkeys and other fowl were placed under import control.

September 23. Dried skim milk was placed under import control.

November 6. Using existing authority, the Canadian Wheat Board placed under import control a number of minor items, including pearled barley, oatmeal, oat and barley feed, and barley malt.

November 13. Butter oil and any other form of butterfat were placed under import control.

Cuba

Exchange Rate System

The par value is Cuban Peso 1.00 = US$1. The official rates are 1.00 peso buying (and selling for certain capital transfers), 1.02 pesos selling (including a 2 per cent tax on the export of funds, securities, and merchandise), per US$1. With the exception of the 2 per cent tax, there are no exchange restrictions on foreign payments. Special requirements, however, are attached to payments to Spain, Mainland China, and North Korea. On December 18, 1953, Cuba notified the Fund that it assumed fully the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

The Cuban Monetary Stabilization Fund, the administration of which is entrusted to a committee consisting of the Minister of Finance, the President of the National Bank of Cuba, and the Director of the Stabilization Fund, has power to operate exchange control directly or through the National Bank.

Prescription of Currency

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

Nonresident Accounts

There are no restrictions with respect to the accounts in local currency of nonresidents. Such accounts may be opened and operated freely, with the exception of accounts of residents of Spain. Withdrawals from nonresident accounts are subject to a 2 per cent exchange tax if the funds are sent or used abroad or are payable in U.S. dollars or any other foreign currency.

Imports and Import Payments

A few imports are subject to licensing for registration and statistical purposes. Imports from Spain (with which Cuba has a payments agreement) can be cleared only upon the presentation of an authorization from the Stabilization Fund. Apart from special requirements attached to payments to Mainland China and North Korea, all other payments may be made freely. There is an exchange tax of 2 per cent on exchange payments and transfers on account of imports.

Payments for Invisibles

A 2 per cent exchange tax is charged on all payments on account of invisibles. Otherwise, payments for invisibles are permitted freely, 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 foreign residents may take out of the country. Foreign travelers are exempt from the 2 per cent tax on personal funds they carry when leaving the country.

Exports and Export Proceeds

In general, exports do not require licenses. The proceeds of exports not credited to a bank account in Cuba within a certain period after the date of shipment are subject to the 2 per cent exchange tax on transfers abroad. Thirty per cent of the dollar exchange proceeds of sugar and syrup exports must be surrendered at the official rate. There are no other exchange control requirements attached to the proceeds of exports.

Proceeds from Invisibles

Exchange earnings from invisibles are freely disposable.

Capital

There are no exchange control requirements on incoming or outgoing capital payments by either residents or nonresidents.

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

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

Changes during 1957

March 6. A decree (No. 468) of February 27, 1957 was published. By its terms, the period in which export proceeds must be returned to Cuba in order to avoid paying the 2 per cent exchange tax was shortened from 180 days to 45 days for exports to the United States and from 240 days to 60 days for exports to countries other than the United States.

April 10. A decree (No. 838) of March 30, 1957 was published, amending the decree (No. 468) of February 27, 1957 (see March 6, above). The new decree allowed longer periods for exports of refined sugar, tobacco, fresh fruit and vegetables, preserved fruit, and metallic minerals, and for 10 per cent of the proceeds of exports of raw sugar to countries other than the United States.

September 13. Further changes were made in the period required for the return of export proceeds (see March 6 and April 10, above). Under the new regulations, proceeds of exports to the United States must be repatriated within the following periods: 60 days for raw sugar, 180 days for refined sugar, and 120 days for other products. The following periods were specified for proceeds of exports to other countries: 60 days for raw sugar, 180 days for refined sugar, 240 days for leaf tobacco going to Europe, and 180 days for other products.

Dominican Republic

Exchange Rate System

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

Administration of Control

Exchange licenses are issued by the Ministry of Industry, Commerce, and Banking, and the commercial banks have the obligation to submit daily applications for exchange to the Ministry.

Prescription of Currency

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

Imports and Import Payments

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

Payments for Invisibles

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

Exports and Export Proceeds

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

Proceeds from Invisibles

No exchange control requirements are attached to proceeds from invisibles.

Capital

There are no restrictions on the movement of capital by either residents or nonresidents. Applications for exchange for capital remittances must be submitted daily by the banks for formal approval by the Ministry of Industry, Commerce, and Banking.

Changes during 1957

No significant changes took place during 1957.

El Salvador

Exchange Rate System

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

Prescription of Currency

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

Imports and Import Payments

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

Payments for Invisibles

Payments for invisibles are not restricted.

Exports and Export Proceeds

There are no exchange control requirements attached to the proceeds of exports, except that receipts from exports to Spain, with which El Salvador has a payments agreement, must be obtained through special accounts (see section on Prescription of Currency, above).

Proceeds from Invisibles

No exchange control requirements are attached to proceeds from invisibles.

Capital

There are no exchange control requirements attached to incoming or outgoing capital transfers by residents or nonresidents.

Changes during 1957

No significant changes took place during 1957.

Guatemala

Exchange Rate System

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

Prescription of Currency

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

Imports and Import Payments

Payments and transfers abroad may be made freely through banks. A few imports are prohibited. A surcharge of 100 per cent is applied to products originating in or imported from countries on a special list prepared by the Government on the basis of an analytical study of foreign trade for the preceding year. As at December 31, 1957, this surcharge applied to imports from Czechoslovakia, Hong Kong, India, Japan, Poland, and Uruguay. (The possibility of repealing the agreement of May 5, 1955 under which this surcharge is applied is being studied by the Guatemalan authorities.)

Exports and Export Proceeds

There are no exchange control requirements attached to the proceeds of exports, but the sale of foreign exchange must take place through a bank. Export licenses are required for a few items.

Payments for and Proceeds from Invisibles

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

Capital

There are no exchange control requirements attached to incoming or outgoing capital payments by residents or nonresidents.

Changes during 1957

January 18. Imports of butter were prohibited for a six-month period.

July 3. The prohibition on imports of leather shoes, slippers, and footwear in general, was removed.

September 3. A regulation of January 1954, requiring importers of woolen textiles, or cotton textiles containing a mixture of wool, to purchase first a given quantity of locally produced cloth, was revoked.

Haiti

Exchange Rate System

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

Prescription of Currency

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

Imports and Import Payments

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

Exports and Export Proceeds

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

Payments for and Proceeds from Invisibles

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

Capital

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

Changes during 1957

With the exception of the new provisions governing the domestic investment of bank assets (see section on Capital, above), no significant changes took place during 1957.

Honduras

Exchange Rate System

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

Prescription of Currency

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

Imports and Import Payments

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

Exports and Export Proceeds

There are no exchange control requirements attached to the proceeds of exports. Earners of foreign exchange may retain their export proceeds or use them for international transactions. Those wishing to negotiate their exchange in Honduras may do so only with the Central Bank or through the banking system for account of the Central Bank. There is a prohibition on all exports, re-exports, and transshipments to countries of the Soviet bloc.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

There are no exchange control requirements attached to capital payments by residents or nonresidents.

Changes during 1957

No significant changes took place during 1957.

Mexico

Exchange Rate System

The par value is Mexican Pesos 12.50 = US$1. The official rates are Mex$12.49 buying, Mex$12.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at market rates fluctuating within these limits. The closing market rate on December 30, 1957 was Mex$12.49125 per US$1. Mexico has no exchange restrictions on foreign payments, except that payments to certain countries with which Mexico has payments agreements may be made through special accounts. The granting of some import licenses is subject to quantitative restriction. On November 12, 1946, Mexico notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

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

Imports and Import Payments

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

Payments for Invisibles

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

Exports and Export Proceeds

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

Proceeds from Invisibles

No exchange control requirements apply to proceeds from invisibles.

Capital

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

Changes during 1957

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

October 9. The payments agreement with Argentina expired.

Panama

Exchange Rate System

The par value is Panamanian Balboa 1.00 = US$1. U.S. currency notes circulate freely in Panama, and local currency is represented only by the silver balboa and subsidiary coins. Exchange transactions by commercial banks are based on New York market quotations. Panama has no exchange restrictions on foreign payments. On November 26,1946, Panama notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

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

Imports and Import Payments

Payments abroad may be made freely. Import licensing is in effect for a few items and a few imports are subject to quantitative restriction.

Exports and Export Proceeds

There are no exchange control requirements attached to the proceeds of exports. Export permits are required for a few items and a few exports are prohibited.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

There are no exchange control requirements attached to incoming or outgoing capital payments by residents or nonresidents.

Changes during 1957

No significant changes took place during 1957.

United States

Exchange Rate System

The par value of the United States Dollar is 15521 grains of gold 910 fine, which is equivalent to US$35 per fine ounce, at which price (with allowance for handling charges and expenses) the Treasury buys and sells gold from and to governments, central banks, and other official institutions of other countries. There are no restrictions on foreign payments, with the exception of transactions involving the authorities or nationals of Mainland China and North Korea or involving certain assets of the Government of Egypt or the Suez Canal Company. The United States notified the Fund on December 10, 1946 that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Controls

The Treasury Department deals with license applications for transactions involving the authorities or nationals of Mainland China and North Korea or involving certain assets of the Government of Egypt or the Suez Canal Company. Licenses required for agricultural and dairy products placed under import quota are issued by the Department of Agriculture. For items subject to export control (see section on Exports and Export Proceeds, below), the Department of Commerce is, in general, the responsible authority.

Imports and Import Payments

Payments and transfers abroad may be made freely, with the exception of payments to or for the account of the authorities or, nationals of Mainland China and North Korea and payments from certain assets of the Government of Egypt or the Suez Canal Company, which are prohibited except under license. Imports of merchandise known or believed to be of Chinese Communist or North Korean origin are subject to license. There are import quotas established for certain dairy and agricultural products. Special import quotas apply to cordage and sugar from the Philippine Republic under the Philippine Trade Act of 1946 as revised.

Exports and Export Proceeds

There are no exchange control requirements attached to the proceeds of exports. Exports to the European Soviet bloc, with the exception of designated nonstrategic goods, and all exports to Mainland China and North Korea are subject to license. In general, exports to other countries of strategic materials and of the relatively few materials remaining in short supply also require licenses.

Payments for and Proceeds from Invisibles

These are not restricted, except where they involve Mainland China or North Korea or payments from certain assets of the Government of Egypt or the Suez Canal Company.

Capital

There are no exchange control requirements attached to incoming or outgoing capital payments by residents or nonresidents, except to the extent that the provisions referred to above regarding Mainland China and North Korea, and the Government of Egypt and the Suez Canal Company, are involved.

Changes during 1957

No significant changes took place during 1957, except for a liberalization of the export controls with respect to Poland.

Venezuela1

Exchange Rate System

The par value is Venezuelan Bolívares 3.35 = US$1. An official selling rate of Bs 3.35 per US$1 applies to all sales of exchange except those for government payments. The corresponding buying rate fluctuates around Bs 3.33 per US$1 and applies to all purchases of exchange except those from the petroleum companies and, under certain conditions, from exporters of cacao and coffee. A multiple exchange rate system operates, comprising preferential rates for both government imports and the proceeds of coffee and cacao exports and special buying rates applied to purchases of exchange from the petroleum companies. (See Table of Exchange Rates, below.) There is no system of payment licenses, and only a few import restrictions are maintained, principally for protective purposes.

Administration of Control

Most of the few required import and export licenses are issued by the Office of Foreign Commerce of the Ministry of Development; the Ministry of Agriculture licenses some imports. Under the terms of a contract with the Government, the Central Bank of Venezuela has the responsibility for ensuring that the special exchange rates are applied to the appropriate transactions.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

Some items are subject to import license and import quotas are applied to a few commodities for protective purposes. Licenses for some products are issued on the condition that the importer has purchased domestic products equal to a prescribed percentage of the amount imported. No restrictions are imposed on payments for imports.

Exports and Export Proceeds

There are no limitations on exports, but the export of strategic materials to certain countries is prohibited and export licenses for a few products essential to the domestic economy must be obtained from the Ministry of Development. The export of gold requires an export license issued by the Ministry of Finance. The petroleum companies must surrender export proceeds to the extent of their local currency requirements at a rate of Bs 3.09 per US$1; a rate of Bs 3.046259 per US$1 is applied to exchange surrendered by them in excess of the Central Bank’s sales of exchange to domestic buyers during any one year. The proceeds of exports other than petroleum are sold at the Bs 3.33 rate, but if the world prices for cacao and coffee are below certain levels, a proportion of the proceeds of exports of cacao and unwashed coffee may be sold at a rate of Bs 4.25, and of exports of washed coffee at a rate of Bs 4.80, per US$1.

Payments for and Proceeds from Invisibles

Payments for invisibles may. be made freely at the Bs 3.35 rate. Exchange receipts from invisibles are freely disposable or may be sold at the Bs 3.33 rate.

Capital

Payments for transfers of capital may be made freely at the Bs 3.35 rate. Exchange receipts from capital are freely disposable or may be sold at the Bs 3.33 rate.

Table of Exchange Rates (as at December 31, 1957)(bolívares per U.S. dollar)
BuyingSelling
3.046259

Local currency requirements of petroleum companies in excess of the Central Bank’s foreign exchange sales during the given year.
3.09

Local currency requirements of petroleum companies up to the limits of the Central Bank’s foreign exchange sales during the given year.
3.09

Government payments.
3.33

Exports of coffee and cacao in a proportion depending on world prices. All other exports except petroleum. Invisibles. Capital.
3.35

All other payments.
4.25

Exports of cacao and unwashed coffee in a proportion depending on world prices.
4.80

Exports of washed coffee in a proportion depending on world prices.
Note: The rates shown above for exports of coffee and cacao need not be effective rates, since the exchange rates at which the proceeds of these exports are purchased are varied in accordance with the world prices for these commodities. The special rates for coffee have not been applied in recent years, as international prices have been higher than the maximum level below which the special rates would apply. Taxes of Bs 2 and Bs 1½ per 46 kilograms are levied on exports, of washed and unwashed coffee, respectively, when the foreign exchange proceeds are converted at premium rates.
Note: The rates shown above for exports of coffee and cacao need not be effective rates, since the exchange rates at which the proceeds of these exports are purchased are varied in accordance with the world prices for these commodities. The special rates for coffee have not been applied in recent years, as international prices have been higher than the maximum level below which the special rates would apply. Taxes of Bs 2 and Bs 1½ per 46 kilograms are levied on exports, of washed and unwashed coffee, respectively, when the foreign exchange proceeds are converted at premium rates.

Changes during 1957

October 20. All imports of shoes and other footwear into Venezuela were prohibited.

Venezuela has not notified the Fund that it is prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement. This survey is included in this group since the Fund does not consider that Venezuela applies exchange measures under Article XIV.

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