Chapter

“Article VIII Countries”

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1956
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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 30,1955 was Can$0.9991 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, and all exports to the U.S.S.R. and certain other destinations are subject to control by 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 1955

No significant changes took place during 1955.

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. There are no exchange restrictions on foreign payments except the 2 per cent tax. Special requirements, however, are attached to payments to France, 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, whose administration 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 in respect of the method of payment are as follows:

  • In accordance with an agreement with France, settlements between Cuba and the French Franc Area are made through agreement accounts in French francs at the Bank of France in the name of the National Bank of Cuba and/or in U.S. dollars at the National Bank of Cuba in the name of the Bank of France. Payments on account of Cuban sugar sold to French purchasers are settled 50 per cent in French francs and 50 per cent in U.S. dollars through these accounts ; payments due to French residents for imports into Cuba or due to French shipping companies for ocean freight are made through the agreement accounts in U.S. dollars. Payments for Cuban imports of French goods in compensation for sales of Cuban cigars and tobacco up to a limit of US$1 million per year are outside these arrangements.

  • Under the terms of a payments agreement with Spain, payments between Spanish and Cuban residents are effected through clearing accounts expressed in Cuban pesos.

  • 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 the 2 per cent exchange tax if the funds are sent or used abroad.

Imports and Import Payments

A few imports are subject to licensing for registration and statistical purposes. Imports from France and Spain (countries with which Cuba has concluded payments agreements) can be cleared only upon the presentation of an authorization from the Stabilization Fund. Apart from special requirements attached to payments to certain countries (see section on Prescription of Currency, above), 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

The 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 tourists, may take out of the country without payment of the 2 per cent tax. Tourists 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 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 attached to incoming or outgoing capital payments by either residents or nonresidents.

The 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 of the sale of the securities have been returned to Cuba.

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 in the event that such capital is re-exported.

Changes during 1955

No significant changes took place during 1955.

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.1 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 the filing of applications.

Payments for Invisibles

Payments for invisibles require exchange licenses, which are issued within 24 hours after the filing of applications. 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 requirements attached to export proceeds and these may be disposed of freely.

Proceeds from Invisibles

No exchange 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 1955

March 9

Official Decree No. 689 abolished controls over imports of rice.

October 10

Official Decree No. 1218 established the requirement of import permits for iron reinforcing rods.

El Salvador

Exchange Rate System

The par value is Salvadoran Colones 2.50 = US$1. The official rates are ₵ 2.49 buying, ₵ 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 certain countries with which El Salvador has payments agreements must 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 countries with which El Salvador has special payments agreements, i.e., Italy and Spain, must be made through special accounts in accordance with the terms of those agreements.1 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 through 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 and all imports from Italy require the prior authorization of the Central Reserve Bank of El Salvador. Payments and transfers abroad may be made freely, but payments for imports from Italy and 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 countries with which El Salvador has payments agreements must be obtained through special accounts (see section on Prescription of Currency, above).

Proceeds from Invisibles

There are no exchange control requirements attached to proceeds from invisibles.

Capital

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

Changes during 1955

January 25

Imports of sacks or bags of jute or similar coarse fibers were made subject to prior approval of the Ministry of Economy.

June 21

A decree was issued making all imports from Italy subject to prior authorization of the Central Reserve Bank.

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. Import regulations cover a few specified items. A customs surcharge of 100 per cent is charged on nonessential imports from countries with which Guatemala has an unfavorable trade balance of more than 75 per cent. As of December 31, 1955, this surcharge applied to imports, with certain exceptions, from Austria, Czechoslovakia, Hong Kong, India, Japan, Poland, and Uruguay.

Exports and Export Proceeds

There are no exchange 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 invisible transactions are not restricted, except that sales and purchases of foreign exchange must be made through banks. Minor exchange transactions by tourists and 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 1955

No significant changes took place during 1955.

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

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 are no quantitative restrictions on imports, but a few imports are controlled. Payments abroad may be made freely.

Payments for 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. Under a law of September 12, 1951, 20 per cent of the net profits realized each year by insurance companies operating in Haiti has to be invested in nonnegotiable obligations of the Institut Haïtien de Crédit Agricole et Industriel, reimbursable in two years. There exists a regulation, which is seldom applied, prohibiting the export and import of U.S. banknotes in denominations of over $20.

Exports and Export Proceeds

There are no exchange requirements attached to the proceeds of exports. 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.

Proceeds from Invisibles

There are no exchange control requirements attached to proceeds from invisibles.

Capital

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

Changes during 1955

No significant changes took place during 1955.

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 or with 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

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. Import licenses are required for a few items.

Exports and Export Proceeds

There are no exchange 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 with 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 1955

No significant changes took place during 1955.

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 31,1955 was Mex$12.49 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

There are no obligations imposed on importers, exporters, or others prescribing the method or currency for payments to or from persons resident abroad. Payments for transactions with Spain, Czechoslovakia, and Indonesia, as well as for imports and exports of books and periodicals from or to Argentina, may be recorded by the Bank of Mexico through special accounts. (Mexico has payments agreements with Argentina and Czechoslovakia; the agreement with Indonesia is between the central banks of the two countries; and 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 Argentina, Czechoslovakia, Indonesia, 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 ; the issuance of such licenses is subject to quantitative restriction.

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

There are no exchange requirements attached to the proceeds of exports. Certain exports require export licenses.

Proceeds from Invisibles

There are no exchange requirements attached to proceeds from invisibles.

Capital

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

Changes during 1955

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

February 15

A payments agreement was signed by the Bank of Mexico and the Bank Indonesia by which payments between the two countries would be channeled through centralized accounts in the two institutions.

October 31

The bilateral payments agreement with France was terminated.

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 controls are in effect for a few items.

Exports and Export Proceeds

There are no exchange requirements attached to the proceeds of exports.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

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

Changes during 1955

No significant changes took place during 1955.

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 Mainland China and North Korea and their nationals, which are subject to license as an economic defense measure. 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 Control

The Treasury Department deals with license applications for transactions involving the Mainland Chinese or North Korean authorities or their nationals, or involving imports of merchandise known or believed to be of Chinese Communist or North Korean origin. Licenses required for agricultural and dairy products placed under import quota are issued by the Department of Agriculture. For most other items subject to licensing requirements, the Department of Commerce is 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, 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 requirements attached to the proceeds of exports. All exports to countries in the Soviet bloc are subject to license. In general, exports to other countries of strategic materials and of materials 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.

Capital

There are no exchange requirements attached to incoming or outgoing capital payments by residents or nonresidents, except for transactions involving Mainland China or North Korea.

Changes during 1955

May 16

It was announced that the import quota on shelled peanuts was suspended until July 31 and unlimited quantities could be imported.

September 6

The trade agreement with the Philippine Republic was revised, effective January 1, 1956. Included in the provisions was the abolition of absolute quotas on imports of cigars, tobacco, coconut oil, pearl buttons, and rice from the Philippines. Absolute quotas remained applicable only to imports of cordage and sugar.

Venezuela1

Exchange Rate System

The par value is Venezuelan Bolívares 3.35 = US$1. There is an official selling rate of Bs 3.35 per US$1. The corresponding buying rate fluctuates around Bs 3.33 per US$1 and applies to all purchases of exchange except those from the petroleum companies and, under certain conditions, from cacao and coffee exporters. The official selling rate applies to all sales of exchange except for government imports. There is a multiple exchange rate system 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

Prior import licenses, which are required for certain imports, are issued by the government department concerned. 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

There are no currency prescription requirements in force.

Imports and Import Payments

Some items are subject to import licensing by various government departments, 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.

Payments for Invisibles

Payments for invisibles may be made freely at the Bs 3.35 rate.

Exports and Export Proceeds

There are no limitations 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 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.

Proceeds from Invisibles

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, 1955)(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

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

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 not been applied in recent years and the special rate for cacao has not been applied since January 1954, as the international prices for these commodities 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 1955

No significant changes took place during 1955.

Effective February 1, 1956, the commercial banks decided not to subject their purchases of travelers checks to commissions or discounts of any kind.

The Official Gazette of El Salvador, dated January 18, 1956, recorded the signing on December 21, 1955 of a protocol to the agreement with Italy which provided that payments between the two countries would no longer have to be made through special accounts.

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 as the Fund does not consider that Venezuela applies exchange measures under Article XIV.

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