Chapter

Nonmember Countries

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

Exchange Rate System

The Cambodian Riel is defined as having a weight of 25.3905 milligrams of fine gold. Transactions in foreign currency are made on the basis of the rates published by the National Bank of Cambodia. These basic rates are 35 riels = 1 U.S. dollar, 98 riels = 1 pound sterling, and 10 riels = 100 French francs.

Administration of Control

Exchange control is administered by the National Exchange Office in conjunction with the National Bank of Cambodia. Details of the application of the exchange control are carried out by authorized banks. Import and export control is the responsibility of the Minister of National Economy, who delegates this authority to the Director of Foreign Trade. Import licenses are granted by the National Import Committee.

Prescription of Currency

The method of payment or receipt for settlements with other countries is laid down in each individual license. There are, however, payments agreements with Mainland China, Czechoslovakia, Laos, the U.S.S.R., and Viet-Nam that provide for settlements with those countries through special accounts.

Nonresident Accounts

There are four types of accounts that may be maintained by foreigners or nonresidents with authorized banks: Foreigners’ Accounts in Riels, Capital Accounts, Interior Accounts of Nonresidents, and Nonresident Accounts.

Imports and Import Payments

Practically all imports require import licenses. Only imports of listed commodities are authorized, including imports paid for with freely available EFAC funds (see section on Exports and Export Proceeds, below). Licenses for imports of certain goods that are also produced locally are granted only for goods of Viet-Namese origin. Applications to import are considered only from licensed importers. Imports must be recorded with an authorized bank. Various commodities may be imported with balances on EFAC accounts or under licenses benefiting from the “10 Per Cent Equipment and Raw Materials” procedure, with the exception of prohibited goods and goods that might compete with local production. Nonprohibited goods may also be imported under a simple customs declaration without an import license or the allocation of official exchange.

Certain listed goods may be imported from Bangkok, Hong Kong, or Singapore under private compensation arrangements without payment, provided that double the amount of goods has been exported and the difference is repatriated. In such cases, an import license is not required, but the necessary exchange control documents must be provided and the transaction recorded with an authorized bank.

Payments for Invisibles

All payments for invisibles require the prior approval of the National Exchange Office. Travelers going abroad as tourists receive an allocation of exchange varying with the country or countries of destination. Resident travelers may buy freely one-way or return tickets for foreign travel starting from Cambodia; tickets for other journeys require licenses. Travelers may take out no more than 400 riels per person in domestic banknotes. The export of foreign banknotes is subject to license but nonresident travelers may take out the amount they imported less any exchange sold.

Exports and Export Proceeds

In general, exports require export licenses, but certain listed items may be exported against an export certificate showing how the exchange proceeds will be settled and repatriated and supported by a banker’s guarantee. Exports must be recorded with an authorized bank and the exchange proceeds surrendered. However, 13 per cent of the proceeds of exports payable in U.S. dollars or another currency of the dollar area and 10 per cent of the proceeds of exports payable in other currencies may be retained in special EFAC (Exportations-Frais Accessoires) accounts and used by the exporter or supplier of the goods either to pay certain commercial expenses or to pay for imports of any nonprohibited merchandise. U.S. dollars and other currencies of the dollar area in EFAC accounts may be exchanged for any other EFAC currency, and the currencies of the EPU area may be exchanged for one another.

Certain listed goods may be exported to Bangkok, Hong Kong, or Singapore under private compensation arrangements, provided that half the value of the goods is imported and that the other half is repatriated in foreign exchange. In such cases, exchange control documents must be provided and the transaction recorded with an authorized bank.

Proceeds from Invisibles

All residents of Cambodia, other than foreigners, must surrender foreign exchange received to an authorized bank. Travelers may bring in not more than 400 riels per person in domestic banknotes. Foreign banknotes may be brought in freely, subject to declaration, but residents have an obligation to surrender such notes within seven days.

Capital

There is a distinct difference in the exchange treatment given to foreign investments, according to whether they were made before or after May 31, 1956.

All new (i.e., made after May 31, 1956) foreign investments in Cambodia require prior authorization from the Ministry of Finance; authorization depends, among other things, on a minimum participation of domestic capital. New foreign capital invested in Cambodia must be in foreign exchange acceptable to the National Bank. Profits up to 20 per cent on new foreign investments may be transferred and, in case of liquidation, capital up to 20 per cent per year may be repatriated, in the currency of the original investment.

For foreign investments made before May 31, 1956, profits may be remitted abroad after payment of an Exceptional Equipment Tax, as follows: On profits relating to the year 1955, the tax rates are 40 per cent on profits of rubber plantations, 55 per cent on profits of companies whose activities are vital for the Cambodian economy, and 60 per cent on profits of other companies recognized as useful for the economic development of Cambodia. The tax rates on profits relating to the year 1956 are 5 per cent lower than the rates for 1955. The tax rates on profits of foreign companies with head offices in Cambodia are further reduced by 10 per cent for companies whose capital is more than 40 per cent Cambodian and by 5 per cent for companies whose capital is between 30 and 40 per cent Cambodian. In the event of liquidation of such investments, 10 per cent of the original capital may be remitted each year.

Changes during 1957

January 21. Importers, in order to qualify for 1957 import licenses, had to deposit for each category of imports handled varying amounts depending on the import category, the number of categories handled, and the nationality of the firm. There were 23 categories of imports, but importers were not permitted to specialize in more than 7 categories. Importers must have been resident in Cambodia for at least three years and, if a foreign firm, must have obtained authorization from the Ministry of Finance. Deposits ranged from 200,000 riels to 250,000 riels for each category; for foreign firms the deposits were doubled. Deposits were larger for importers dealing in more than 5 categories.

February 27. A decree established an Exceptional Equipment Tax to be imposed on remittances of profits on foreign investments made before May 31, 1956.

April 9. The regulations of January 21 concerning deposits by importers were abolished.

April 22. The Government decided to authorize, on a trial basis, imports “without foreign exchange.”

April 24. Under Instruction No. 49 from the National Exchange Office, a “10 Per Cent Equipment and Raw Materials” procedure was established for imports.

May 22. Under Notice No. 33 from the National Exchange Office, the operation of the Phnom Penh exchange market was reorganized under the authority of the National Bank of Cambodia and the control of the National Exchange Office, with the participation of the authorized banks.

September 13. Two laws prescribing the conditions that would be applied to foreign investments made before and after May 31, 1956, respectively, were promulgated.

September 17. In application of the decree of February 27, 1957, the Exceptional Equipment Tax on remittances of profits on foreign investments made before May 31, 1956 was announced. The tax ranges between 25 per cent and 60 per cent, according to the nature of the activity concerned, the year to which the profit relates, the vital character of the investment activity, and the proportion of domestic capital in the company.

October 10. The payments agreement with the U.S.S.R. of May 31, 1957 became effective.

Laos

Exchange Rate System

The official rate is Laotian Kips 35 = US$1. Exchange rates are orderly.

Administration of Control

Exchange control regulations are issued by the Ministry of Finance (Directorate of External Finance) and are administered by the Exchange Department of the National Bank of Laos. Details of the exchange control are carried out by authorized banks. Import and export licenses are issued by the National Committee for Imports and Exports (CNIE) under the authority of the Minister of National Economy (Director of Foreign Trade). Policy on foreign investment in Laos is determined by the Directorate of External Finance.

Prescription of Currency

The method of payment or receipt for settlements with other countries is specified in each license. There are, however, payments agreements with Cambodia and Viet-Nam that provide for settlements with those countries through special accounts.

Imports and Import Payments

Most imports require licenses, and all imports must be recorded with an authorized bank. Applications only from licensed importers are considered. Imports paid for with foreign exchange are authorized only for listed commodities, and some goods may be imported only if no foreign exchange is used. Certain listed goods may be imported under private compensation arrangements, provided goods of an equivalent value have been exported.

Payments for Invisibles

All payments require the prior approval of the Exchange Department of the National Bank. Exchange is granted for salaries and other remuneration of foreign technicians or other foreign employees whose work is useful to the Laotian economy; for costs incurred abroad for the transformation, repair, assembly, freight, or rental of goods useful to the economy; for the costs of students or trainees abroad; and for payments abroad for copyrights, licenses, trademarks, and rights of artistic reproduction. Residents may buy freely one-way or return tickets for foreign travel starting from Laos; tickets for journeys not starting from Laos require licenses. Travelers may take out no more than K 400 per person in domestic banknotes. The export of foreign banknotes is subject to license, but nonresident travelers may take out the amount they imported less any exchange sold.

Exports and Export Proceeds

Some exports require export licenses. Exports must be recorded with an authorized bank. Exporters may retain 40 per cent of their export proceeds under a scheme which developed from the French system of EFAC accounts (see section on Exports and Export Proceeds in the survey on France); the remainder of export proceeds must be surrendered. Certain listed goods may be exported under private compensation arrangements, provided goods of an equivalent value are imported; in such cases, exchange control documents must be provided and the transaction recorded with an authorized bank. There is also a list of certain goods that may be exported without surrender of foreign exchange, in which case no exchange documents are required and the transactions are not recorded with an authorized bank.

Proceeds from Invisibles

All residents of Laos, other than foreigners, must surrender to an authorized bank foreign exchange which they receive. Travelers may bring in not more than K 400 per person in domestic banknotes. Foreign banknotes may be brought in freely, subject to declaration, but residents have an obligation to surrender such notes within seven days.

Capital

All foreign investments in Laos require prior authorization. Foreign capital invested in Laos after September 30, 1955 may be in foreign exchange or in the form of capital goods imported without allocation of exchange.

For the purpose of remitting profits, new foreign investments in Laos are divided into three categories: for those in the first category (industrial development, mining, electrical, agricultural, constructional, and professional undertakings, etc.), 70 per cent of net profits may be remitted; in the second category (transport and mechanical repair, etc.), 60 per cent of net profits; in the third category (hotels, banks, general trading companies, etc.), 50 per cent of net profits. The amount of profits that may be remitted annually during the first five years may not exceed 10 per cent of the foreign investment and in subsequent years it may not exceed 8 per cent. The capital may be repatriated in annual payments—in the original currency or in kind—of up to 10 per cent of the initial investment, but the total amount remitted annually may not exceed K 5 million. On old foreign investments a certain percentage of net profits may be remitted.

Changes during 1957

No significant changes took place during 1957.

Liberia

Exchange Rate System

The Liberian Dollar is at par with the U.S. dollar. U.S. currency is in circulation along with Liberian coinage in silver and copper. Official accounts are kept in dollars and cents. There are no restrictions on foreign exchange transactions.

Prescription of Currency

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

Imports and Import Payments

There is no general system of import control. A few items require prior licenses. A permit is required from the Secretary of the Treasury for the import of currency into Liberia.

Exports and Export Proceeds

Export licenses are not required, except for precious metals and precious stones. The surrender of the proceeds from exports is not required and exchange receipts are freely disposable.

Payments for and Proceeds from Invisibles

There are no limitations on payments for or receipts from invisibles. There are, however, restrictions on the circulation of U.S. banknotes in denominations over $20.

Capital

No exchange control obligations are imposed on capital receipts or payments.

Changes during 1957

No significant changes took place during 1957.

Libya

Exchange Rate System

The Libyan Pound is officially at par with the pound sterling. Exchange rates for other currencies are based on the London quotations.

Administration of Control

Import and export licenses and permits for payments abroad are issued by the Administrations of the three provinces of the United Kingdom of Libya, namely, Tripolitania, Cyrenaica, and the Fezzan.1

Prescription of Currency

The United Kingdom of Libya, as one of the territories of the Sterling Area, conforms to the prescription of currency arrangements and the sterling payments system of the United Kingdom (see section on Prescription of Currency in the survey on the United Kingdom).

Imports and Import Payments

Imports from all countries require individual licenses. Imports from dollar countries are authorized on the basis of quotas fixed twice a year by a Federal Dollar Committee. Imports from Israel are prohibited. Exchange permits are required for all remittances abroad.

Payments for Invisibles

All payments for invisibles require licenses. These are granted for expenses incidental to trade transactions. Remittances in respect of other invisibles are considered on their merits.

Exports and Export Proceeds

All exports require licenses, to ensure that the proceeds will be received in conformity with the prescription of currency requirements. Goods imported against payment in dollars may not be re-exported. Exports to Israel are prohibited.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Subject to declaration upon entry, any amount of Libyan or foreign currency may be imported by travelers.

Capital

Transfers of capital abroad require licenses. In accordance with the Foreign Investment Law, the repatriation of capital and the remittance of profits from Libya normally are allowed.

Changes during 1957

No significant changes took place during 1957.

New Zealand1

Exchange Rate System

The official rates for the New Zealand Pound in terms of non-sterling currencies are based on the fixed rate for sterling-N.Z. pounds and the rate for the currency concerned in the London market, maintained between the official limits. As at December 31, 1957, the trading banks’ rates for telegraphic transfers on London were £NZ 100/7/6 buying, £NZ 101/-/- selling, per £100, and for U.S. dollars they were $2.8032 buying, $2.7715 selling, per £NZ 1.

Administration of Control

Exchange control authority is given to the Minister of Finance, who, in accordance with the terms of the regulations, has delegated it to the Reserve Bank of New Zealand; however, much of the routine supervision is done by the trading (commercial) banks. Import licensing is handled by the Customs Department.

Prescription of Currency

New Zealand, as one of the territories in the Sterling Area, conforms to the prescription of currency arrangements and the payments system of the United Kingdom (see section on Prescription of Currency in the survey on the United Kingdom).

Imports and Import Payments

All imports are subject to license. An import licensing program is published for each calendar year. The program for 1958 makes all imports from scheduled countries2 subject to individual import license. The policy regarding imports from other countries does not distinguish between those countries, but it makes a distinction between the following categories: (1) goods that may be imported up to the amount applied for, provided the amount is within the importer’s normal pattern of business; (2) goods for which licenses will be issued up to the total amount, or a percentage, of the value of licenses granted for 1958, less imports shipped in 1957 under these licenses; (3) goods for which license applications will be considered individually; (4) goods for which licenses will be granted for a percentage of the value of the imports of consumer goods from nonscheduled countries made by the importer in 1956; (5) goods for which licenses will be granted up to a percentage of the value of licenses granted for similar imports during the 1957 licensing period; (6) goods for which licenses will be granted only in exceptional circumstances. Exchange appropriate to the exporting country is made available for all authorized imports.

Payments for Invisibles

Payments for invisibles require the approval of the Reserve Bank. Payments to the Sterling Area are not restricted, except for travel and a few minor items. An exchange allowance of £NZ 200 per adult for the period ending October 31 each year is granted for nonbusiness travel in non-sterling, non-dollar countries, and of £NZ 7 per day for up to 20 days with an additional £NZ 3 per day for the first 5 days, up to a maximum of £NZ 150, for nonbusiness travel in dollar countries. The remittance of profits, interest, and dividends earned by nonresidents is permitted freely, subject to formal approval by the Reserve Bank. Other remittances to countries outside the Sterling Area are treated on their merits, strict scrutiny being given to remittances to hard currency areas.

Exports and Export Proceeds

All exports require export licenses. These are issued by the Customs Department, provided that the transaction is being cleared through a trading bank through which the net export proceeds will be received in accordance with the regulations (see section on Prescription of Currency, above) and that the foreign exchange will be surrendered to the banking system.

Proceeds from Invisibles

All receipts of currencies other than those of the Sterling Area must be offered to the Reserve Bank; they may be sold to a trading bank in New Zealand, but they may not otherwise be sold or dealt in without permission. No control is exercised over the disposal of receipts of Sterling Area currencies other than from exports.

Capital

Transactions in non-sterling securities owned by New Zealand residents require the prior permission of the Reserve Bank. All outward capital remittances require prior approval. Capital receipts in currencies other than those of the Sterling Area must be offered to or declared to the Reserve Bank. No control is exercised over the disposal by New Zealand residents of capital receipts in Sterling Area currencies.

Changes during 1957

At various times in 1957 items were added to the list of goods exempt from import license if imported from nonscheduled countries.

April 15. An increase of £NZ 2 million in the value of import licenses to be granted for the import in 1957 of motor vehicles from non-dollar countries was announced.

June 28. The exchange allowance for travel by New Zealand residents in the dollar area was increased from £NZ 5 per day for 20 days to £NZ 7 per day for up to 20 days, with an additional £NZ 3 per day for the first 5 days up to an over-all maximum of £NZ 150. It was also announced that allocation of exchange for business travel would receive more liberal treatment.

August 2. The Import Licensing Schedule for 1958 was announced. The number of items free from license and importable from any source was increased from 159 to 170. Four additional items were made free from license if imported from sources other than the dollar area, Japan, or Korea. Also, the controlled range of a number of other items was varied to free further portions of the items from license. Licensing was, however, reimposed on 3 other items. It was also announced that a more liberal policy would be applied to imports from the dollar countries and Japan.

August 16. It was announced that the exchange allocation for imports of cars and commercial vehicles in 1958 would be slightly more than in 1956 or 1957. Commercial vehicles in unassembled condition were freed from licensing when imported from nonscheduled countries.

Note. Effective January 1, 1958, all previous import licensing exemptions and the 1958 Import Licensing Schedule, published August 2,1957, were canceled. All imports were made subject to license and a new Import Licensing Schedule was issued for 1958. The new program made all imports from scheduled countries (see footnote 2) subject to individual import license, and it revised the categories of imports from other countries and the policy applied thereto, with the objective of reducing New Zealand’s foreign exchange expenditure on imports during 1958.

Portugal

Exchange Rate System

The parity of the Portuguese Escudo in terms of the U.S. dollar is Esc 28.75 = US$1. The official rates are Esc 28.60 buying, Esc 28.95 selling, per US$1. Exchange rates are uniform.

Exchange Control Territory

Portugal and Portuguese overseas territories1 constitute a single exchange control territory, the Portuguese Monetary Area. The exchange control regulations of Portugal are applied almost uniformly throughout the Portuguese Monetary Area, and current payments between its various territories are effected freely through controlled accounts.

Administration of Control

Exchange controls are administered by the Ministry of Finance and the Bank of Portugal, with the assistance of commercial banks authorized for this purpose. Trade control policy is the responsibility of the Commission of Economic Coordination in the Ministry of Economy and of the Council of Ministers; a Directorate-General of Commerce in the Ministry of Economy administers trade controls. Import and export licenses are issued by the Department for Licensing Foreign Trade, operating within the Directorate-General’s office.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles are effected in the currency and manner prescribed in the regulations, largely on the basis of the provisions of Portugal’s bilateral trade and payments agreements. For imports from Belgium-Luxembourg, Denmark, Finland, France, the Federal Republic of Germany, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and their monetary areas, payment may be made in the currency of the selling area; from Austria, Brazil, Greece, Italy, and Turkey, in “agreement” dollars; from Chile, Egypt, and Spain, in escudos; from Czechoslovakia, East Germany, Hungary, and Poland, in the related clearing account currency; and for all other imports, in U.S. dollars. The regulations governing the method of payment for exports are similar, except that for exports to most Western European countries the proceeds may, alternatively, be received in escudos. Any deviation from the general regulations in this matter requires the approval of the Bank of Portugal.

Imports and Import Payments

All imports are subject to registration, mainly in order to enforce the prescription of currency regulations. The presentation of the registration form to the customs enables the import to be cleared. Some imports from EPU countries and their overseas territories, imports from other than EPU countries payable in a currency of any EPU country, and most imports from other countries require individual licenses, which are issued with the registration forms. For certain listed goods from the dollar area, import licenses are issued automatically. Most goods valued at less than Esc 2,500 may be imported freely from EPU countries, their associated territories, and Spain. Appropriate exchange is granted automatically for authorized imports.

Payments for Invisibles

All payments on account of invisibles that are made in foreign currency or by crediting a nonresident account, and that exceed Esc 2,500, require individual licenses. For lesser amounts, such payments are made if the applicant undertakes to supply documentary evidence of the obligation, should proof be required later. Payments to countries with which Portugal has payments agreements are permitted freely within the terms of the related agreements. Payments in favor of residents of any EPU country are permitted freely, without any limitation on the amount, on account of costs incidental to exports and imports, and up to Esc 100,000 on account of various other categories of current payments. Travelers may take out any amount in Portuguese and foreign banknotes.

Exports and Export Proceeds

All exports are subject to registration, mainly in order to secure the enforcement of the prescription of currency and surrender regulations. Certain exports to any country and all exports to other than EPU countries payable in an EPU currency are subject to individual license. Export proceeds must be surrendered. The issue of licenses for the export of carob beans is conditional on the sale of an equal quantity of. carob beans to the domestic industry at prices fixed by the National Fruit Board.

Proceeds from Invisibles

Payments from residents of EPU countries may be received freely by Portuguese residents on account of costs incidental to exports and imports, without any limitation on the amount, and on account of a variety of other categories of invisibles, up to Esc 100,000. The individual permit of the Bank of Portugal is required in all other cases. Exchange receipts from invisibles must be surrendered. Travelers may bring in any amount in Portuguese and foreign banknotes.

Capital

Transfers of capital to countries with which Portugal has payments agreements are permitted freely within the terms of the related agreements. Other capital transfers require specific approval. Exchange receipts from capital transactions must be surrendered.

Changes during 1957

July 11. Under Ministerial Order No. 16344, licenses for the export of carob beans would be granted only if the exporter could show that an equal quantity of carob beans had been supplied to the domestic industry at prices fixed by the National Fruit Board.

Spain

Exchange Rate System

The official basic rates for the Spanish Peseta are Pts 10.95 buying, Pts 11.22 selling,1 per US$1. Their use is limited to government transactions. All commercial and private transactions are effected at official rates of Pts 42.00 buying, and Pts 42.27 selling,1 per US$1. Other effective rates arise from the application of premiums and taxes to the proceeds of certain exports (see Table of Exchange Rates, below). A preferential rate of Pts 46.00 per US$1 is granted to all noncommercial dollar remittances from the United States to beneficiaries in the Spanish Monetary Area.

Authorized banks are permitted to operate in the exchange market, acting as intermediaries between buyers (who must have permits from the Spanish Foreign Exchange Institute) and sellers for the following: checks and transfers in Danish kroner, deutsche mark, French francs, Moroccan francs, “free” Portuguese escudos, pounds sterling, Swedish kronor, “free” Swiss francs, and U.S. dollars; and banknotes in deutsche mark, French francs, Moroccan francs, Portuguese escudos, Swiss francs, and U.S. dollars. Rates for other currencies, including those of clearing agreements, are quoted by the Spanish Foreign Exchange Institute.

Exchange Control Territory

The Peninsular Territories of the Spanish State, the Canary Islands, the Balearic Islands, Ceuta, Melilla, and the Spanish colonies constitute a single exchange control territory, the Spanish Monetary Area.

Administration of Control

On a policy level, controls are administered by the Ministry of Finance, the Ministry of Commerce, and the Spanish Foreign Exchange Institute, and on a technical administrative level, by the Spanish Foreign Exchange Institute, the General Department of Foreign Trade in the Ministry of Commerce, and authorized banks.

Prescription of Currency

Prescription of currency requirements are applied to all categories of exchange payments through individual licenses. Settlements on account of merchandise transactions and invisibles are effected in the currency and in the manner prescribed in the provisions of bilateral trade and payments agreements,2 or are determined on the basis of the country of origin or destination of the goods and services involved. Settlements with Egypt, Portugal, and Switzerland are made through agreement accounts expressed in the currencies of those countries; settlements with Iceland are made through agreement accounts in sterling; settlements with Austria, Bolivia, Brazil, Chile, China (Taiwan), Colombia, Cuba, Ecuador, El Salvador, Finland, Greece, Italy, Mexico, Morocco, Paraguay, Poland, Turkey, and Uruguay are made through agreement accounts in U.S. dollars.

Imports and Import Payments

All imports require import and exchange licenses, which are issued in combined form by the Spanish Foreign Exchange Institute after consultation with the General Department of Foreign Trade. Foreign exchange is made available for authorized imports through official allocations at the official rate. Subject to the approval of the Spanish Foreign Exchange Institute and the Ministry of Commerce, nonresidents may import essential materials and use the proceeds accruing from their sale for specifically determined expenses and investments in Spain. Specified industries grouped on a national or regional basis are permitted to make imports needed for production of their export goods out of their own retained exchange (see section on Exports and Export Proceeds, below).

Payments for Invisibles

All transfers abroad and payments by residents in favor of nonresidents on account of invisibles are subject to individual license, and practically all of them are effected at the official rate. Persons traveling abroad may take with them a maximum of Pts 2,000 in notes of the Bank of Spain.

Exports and Export Proceeds

All exports are subject to individual licenses issued by the General Department of Foreign Trade. This requirement is established mainly to enforce currency prescription and surrender regulations and to determine the premium or tax applicable to the export proceeds (see Table of Exchange Rates, below). Proceeds accruing from exports must be surrendered to the Spanish Foreign Exchange Institute through authorized banks or sold through them in the exchange market. However, in accordance with the arrangements called “Special Operations,” specified industries grouped on a national or regional basis are permitted to retain a percentage of their export proceeds to pay for imported raw materials or other goods needed by them for their own production; in certain cases, special rates for specified exports are determined. There are altogether 12 “Special Operations” arrangements in existence, 7 of which are regional.

Proceeds from Invisibles

All exchange proceeds from invisibles must be sold on the exchange market or to the Spanish Foreign Exchange Institute through authorized banks. Persons may bring in a maximum of Pts 10,000 in notes of the Bank of Spain.

Capital

All outward capital transfers are subject to individual approval. All incoming capital representing foreign investment in Spanish enterprises requires the approval of the Spanish Foreign Exchange Institute. Special facilities are accorded to investments effected in Spain by nonresidents through the importation of essential goods (see section on Imports and Import Payments, above).

Table of Exchange Rates (as at December 31, 1957)(pesetas per U.S. dollar)
BuyingSelling
10.95(Official Basic Rate)11.22(Official Basic Rate plus Com-mission)
31.00(Official Rate less Pts 11 Tax)

Exports of raw cork,3 olive oil in large tins, and mercury.
Government payments.
36.00(Official Rate less Pts 6 Tax)

Exports of olive oil in small tins, fresh, frozen, or salted fish, herbs, raw skins, and pyrites.
42.00(Official Rate)

All transactions not subject to other rates.
42.27(Official Rate plus Commission)

All other transactions.
45.00(Official Rate plus Pts 3 Premium)
Exports of preserved vegetables, preserved peppers, meats and fish, leather goods, handicrafts, chemical and pharmaceutical products, pottery, glassware, locust bean gum, juices, and concentrates.
46.00(Special Rate)

Noncommercial dollar remittances from the United States.

Changes during 1957

January 10. Exports of citrus fruits were moved from Group 3 to Group 4 (see Eighth Annual Report on Exchange Restrictions, pages 365-66).

February 11. The special rate for noncommercial dollar remittances from the United States was changed from Pts 42.50 to Pts 46.00 per US$1.

March 20. Imports of motor vehicles under the “family gift” and “sale of securities” schemes were suspended for applications submitted after February 25, 1957. Under these arrangements, exchange to finance such imports had been provided by the importer himself or by members of his family.

April 12. A decree of the Ministry of Commerce (dated April 5), announcing a revision of the exchange system, was published. The multiple exchange rate system was simplified by the establishment of a single official rate in place of several special and “mixing” rates that had applied previously. The single official rate in the revised exchange system was set at Pts 42.00 per US$1 or the equivalents in other currencies.

May 6. Taxes of Pts 6 or Pts 11 per US$1 (or equivalents) on the proceeds of certain exports, and a premium of Pts 3 per US$1 (or equivalent) on the proceeds of certain other exports, became effective.

July. The premium of Pts 3 per US$1 (or equivalent) was applied to exports under Special Operation M-l (metal manufactures from the Basque Provinces) covered by licenses issued after April 5, 1957. The tax of Pts 6 per US$1 (or equivalent) on the proceeds of certain exports was applied to exports of blendes.

July 5. A payments agreement was signed by the Spanish Foreign Exchange Institute and the National Bank of Poland which provided for the settlement of payments between the two countries through agreement accounts with the U.S. dollar as the unit of account.

July 7. A trade agreement and a payments agreement with Morocco were signed. The payments agreement provided for the settlement of current payments between the two countries through an agreement account with the U.S. dollar as the unit of account. The agreements would come into effect upon the monetary unification of the North and South Zones of Morocco.

November 21. The tax of Pts 6 per US$1 (or equivalent) on the proceeds of exports of green olives was abolished. The premium of Pts 3 per US$1 was made applicable to the proceeds of exports of juices and concentrates.

Switzerland

Exchange Rate System

The gold content of the Swiss Franc is established at 63/310 (= 0.20322 . . .) grams of fine gold.

The Swiss National Bank maintains the U.S. dollar rate in a free market between limits of Sw F 4.285 buying, and Sw F 4.46 selling, per US$1. The rate on December 31, 1957 was Sw F 4.285 per US$1. Exchange is controlled in respect of most transactions with countries with which Switzerland has bilateral agreements or in respect of which Switzerland has enacted autonomous regulations. Bilateral agreements cover Switzerland’s trade and/or payments with 22 countries or monetary areas,1 and Switzerland controls its payments with 4 others.2 In accordance with the provisions of several of these payments agreements, official rates are applied to transactions covered by the agreements. This domain of regulated settlements is known as the sector of controlled payments. All settlements outside this sector (including those with all other countries) may be made freely at free market rates.

Switzerland participates with Argentina, Austria, Belgium-Luxembourg, Denmark, France, the Federal Republic of Germany, Italy, the Netherlands, Norway, Sweden, and the United Kingdom in a multilateral foreign exchange arbitrage arrangement, under which authorized banks in these territories may conclude spot transactions, and forward transactions for up to six months’ delivery (three months’ delivery for transactions in French francs or with banks in France), with other authorized banks in any of these territories. The spot exchange rates fluctuate between the official limits agreed by the exchange authorities of the countries concerned, while the forward premiums and discounts are left to the interplay of market forces.

Exchange Control Territory

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

Administration of Control

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

Prescription of Currency

The currency and manner of settlement on account of merchandise transactions and invisibles in the sector of controlled payments are prescribed in accordance with the provisions of the relevant payments agreements and/or by the Swiss regulations. Settlements with countries in this sector may be made in Swiss francs or, for transactions with Austria, Belgium-Luxembourg, Denmark, Egypt, France, the Federal Republic of Germany, Italy, the Netherlands, Norway, Portugal, the Sterling Area, and Sweden, in the currency of the country concerned. In all other cases, settlements are not subject to regulations involving prescription of currency.

Nonresident Accounts

Nonresident accounts related to the sector of controlled payments may be grouped as follows: (1) Accounts related to Bulgaria, Czechoslovakia, Greece, Hungary, Poland, Rumania, the Spanish Monetary Area, Turkey, Uruguay, and Yugoslavia are centralized with the Swiss National Bank. (2) Accounts that may be held with the Swiss National Bank and also with authorized banks in Switzerland are of three kinds: (a) accounts of Argentina, Austria, the Belgian Monetary Area, Denmark, the French Monetary Area, the Federal Republic of Germany, Italy, the Netherlands, Norway, the Sterling Area, and Sweden, which are transferable to any country in this group; (b) accounts of Egypt, East Germany, and Iran, which are transferable only to other accounts of the same nationality; and (c) accounts of Finland and the Portuguese Monetary Area, which are subject to special treatment.

Nonresident accounts concerned with transactions outside the sector of controlled payments, including mainly those related to countries not listed above, may be transferred freely among themselves.

Imports and Import Payments

Certain goods are admitted into Switzerland on the basis of import licenses only; but in accordance with Switzerland’s present liberal import policy, licenses are, generally speaking, granted without quantitative limitation. However, quotas are established for certain agricultural products and, in the category of industrial products, for heavy motor vehicles and agricultural tractors. Imports from EPU countries are liberalized in accordance with the OEEC code of liberalization; imports from dollar area countries are subject to the same regime.

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

Payments for Invisibles

Payments for invisibles may be made freely insofar as the application of bilateral agreements does not necessitate control over such payments. The export of Swiss and foreign banknotes is free.

Exports and Export Proceeds

The export (including re-export) of many goods is subject to export control through individual licenses. This export licensing system is operated in part with the assistance of appropriate trade organizations. In dealing with applications to export to countries with which Switzerland has payments agreements, the availability of sufficient funds under the relevant agreement is taken into consideration. Proceeds accruing from exports to countries in the sector of controlled payments are converted into Swiss currency in observance of the existing regulations. Other export proceeds are freely disposable.

Proceeds from Invisibles

Proceeds from invisibles originating in countries in the sector of controlled payments are converted into Swiss francs in observance of the existing regulations. Proceeds from other countries are freely disposable. Hotels and boarding houses are authorized to cash travelers’ credit documents issued in certain countries in the sector of controlled payments up to Sw F 2,000 per person per journey to Switzerland. The import of Swiss and foreign banknotes is free.

Capital

Transfers of capital from countries in the sector of controlled payments require licenses if they are made through the sector of controlled payments; transfers of capital to such countries do not require licenses. Transfers of capital to or from other countries may be made freely.

Banknotes

Foreign banknotes are negotiated freely in Switzerland at rates determined by the interplay of supply and demand.

Changes during 1957

January1. A Federal Decree of September 28, 1956 on measures of economic defense in relation to other countries, an Ordinance of the Swiss Compensation Office of December 17, 1956, and a Decree of the Federal Council of December 17, 1956 on controlled payments with other countries, came into effect. These measures represented a revision and recodification of the previous regulations and enabled many separate orders to be canceled, without, however, introducing any materially new features.

January 2. Banks in Austria and Austrian schillings were included in the multilateral exchange arbitrage arrangement in operation among most Western European countries.

The National Bank of Libya took over the administration of exchange control on January 18, 1958.

In view of changes in the New Zealand import licensing arrangements that became effective on January 1, 1958 (see note at the end of this survey), this survey represents the position as at that date.

Scheduled countries are listed in the New Zealand regulations as follows: Bolivia, Canada, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Japan, Korea, Liberia, Mexico, Nicaragua, Panama, Philippine Republic, United States, and Venezuela.

The Azores, Madeira, the Cape Verde Islands, Portuguese Guinea, São João Baptista de Adjuda, the Islands of São Tomé and Principe, Angola, Mozambique, Portuguese Indies (Goa, Damão, Diu), Macao, and Portuguese Timor.

The buying rate plus Pts 0.27 (banking commission of the Spanish Foreign Exchange Institute).

Spain has bilateral payments arrangements with Argentina, Austria, Belgium-Luxembourg, Bolivia, Brazil, Chile, China (Taiwan), Colombia, Cuba, Denmark, Ecuador, Egypt, El Salvador, Finland, France, Greece, Iceland, Italy, Japan, Mexico, Morocco, Netherlands, Norway, Paraguay, Poland, Portugal, Sweden, Switzerland, Tunisia, Turkey, and Uruguay.

Effective March 1, 1958, the tax on exports of raw cork was reduced from Pts 11 to Pts 6.

These are listed as Argentina, Austria, Belgian Monetary Area, Bulgaria, Czechoslovakia, Denmark, Egypt, Finland, French Monetary Area, Federal Republic of Germany and West Berlin, Greece, Hungary, Italy and Italian Somaliland, Netherlands, Netherlands overseas territories, and Indonesia, Norway, Poland, Rumania, Spanish Monetary Area, Sweden, Turkey, United Kingdom and other territories of the Sterling Area, and Yugoslavia.

These are East Germany and East Berlin, Iran, Portuguese Monetary Area, and Uruguay.

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