Chapter

Country Surveys

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1965
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Afghanistan

Exchange Rate System

The par value is Afghanis 45.00 = US$1. The Afghanistan Bank (Da Afghanistan Bank, the central bank) charges a commission of 0.67 per cent of parity for buying or selling. The official buying rate applies to the proceeds of exports of karakul, wool, and cotton, and to foreign exchange receipts of the Government for the financing of the salaries in afghanis of foreign experts. Exchange taxes of 15.56, 24.44, and 28.89 per cent are payable on the proceeds from exports of karakul, wool, and cotton, respectively. Under certain conditions (see section on Exports and Export Proceeds, below), a rebate of Af 4 per US$1 is allowed on the exchange tax on the proceeds from exports of cotton. The official selling rate applies to foreign exchange payments by the Government and certain government agencies for imports and other purposes. All other transactions take place at free market rates through either the banks or the bazaar. On December 31, 1964, the free market rate of the Afghanistan Bank was Af 65 buying, Af 65.50 selling, per US$1, and the free market buying rate in the bazaar was about Af 68 per US$1.

Administration of Control

Foreign exchange is controlled by the Government through the Afghanistan Bank. The control is facilitated by the existence of relatively large companies specializing in the export of such commodities as karakul, cotton, wool, and carpets. However, these companies do not exercise a monopoly over such commodities.

Prescription of Currency

Settlements with countries with which Afghanistan has bilateral trade and payments agreements must be made in the foreign currencies specified in the agreements.1 The proceeds from exports of karakul, wool, and cotton to other countries must be obtained in convertible currencies. There are no other prescription of currency requirements.

Imports and Import Payments

Imports of a few items (e.g., some drugs, liquor, arms, and ammunition) are prohibited for social or security reasons; in some instances, however, special permission to import these goods may be granted. The importation of certain other goods (e.g., a few textiles, agricultural and food products, and selected nonessential consumer goods) also is prohibited. In general, there are no quantitative restrictions on other imports. Some of the bilateral agreements, however, specify quotas for commodities to be traded, and the Government exercises control to ensure that trade conforms with the commitments undertaken in the agreements. On the whole, trade with these countries is carried out on a compensation basis, and usually both imports and exports are arranged by the same trader; imports against exports of cotton and wool are carried out by the Government or government agencies, or the proceeds of exports are allocated for repayment of government loans.

Exchange is provided at the official rate for imports of approved industrial requirements and some minor items and for all imports by the Government and certain government agencies, such as the Monopolies Administration, which imports the entire requirements of sugar and petroleum. Other imports take place at free market rates.

Payments for imports through the banking system may be made only under letters of credit, against which a local currency deposit of 100 per cent of the value of the imports is required upon establishment of the letter of credit. The Afghanistan Bank is authorized to refuse to sell foreign exchange for the importation of a group of consumer goods that are regarded as nonessential. However, exchange for these items may be purchased either from the commercial banks or in the bazaar.

Payments for Invisibles

Government payments for invisibles and payments to foreigners on government contract in Afghanistan are made at the official rate. All other payments are settled at free market rates. Travelers leaving Afghanistan may take out not more than Af 500 in Afghan banknotes.

Exports and Export Proceeds

In general, control is exercised only over exports to bilateral agreement countries (see section on Imports and Import Payments, above). However, exporters of cotton are required to sell at least 20 per cent of their total exports to countries from which payment will be received in convertible currencies.

Exchange receipts from exports of karakul, wool, and cotton must be surrendered at the official rate and are subject to taxes of 15.56, 24.44, and 28.89 per cent, respectively. A rebate of Af 4 per U.S. dollar is allowed on the exchange tax on the proceeds from exports of cotton in excess of the requirement that at least 20 per cent of total exports of cotton should be made to countries from which payment will be received in convertible currencies. Surrender requirements are also maintained for the proceeds of some other exports to bilateral agreement countries. With this exception, the proceeds of all exports other than karakul, wool, and cotton, irrespective of the currency in which they accrue, may be sold at free market rates or be used by the exporter to pay for imports.

Proceeds from Invisibles

Foreign exchange receipts of the Government for the financing of the salaries in afghanis of foreign experts must be surrendered at the official rate. Receipts from foreign embassies, legations, and other foreign official agencies must be surrendered to the Afghanistan Bank at its free market buying rate. All other receipts from invisibles are sold at free market rates through either the banks or the bazaar. Travelers entering Afghanistan may bring in Afghan banknotes not exceeding Af 500.

Capital

All foreign investment in Afghanistan requires prior approval, which is granted readily if the investment is deemed conducive to the prosperity and economic and technical advancement of the country. The Law Encouraging the Investment of Private Foreign Capital in Afghanistan (November 18, 1958) provides that, beginning five years after the date of the investment, registered capital may be repatriated through an authorized bank at a free rate in annual installments not exceeding one fifth of the amount invested. It also provides that ten years after the date of the investment the entire registered capital may be repatriated at a free rate at any time. The annual repatriation of profits up to 15 per cent of registered capital (under the 1958 law or an earlier one) is guaranteed and may take place through an authorized bank at its free rate.

Changes during 1964

May 25. Exporters of cotton were required to direct at least 20 per cent of their total exports to areas from which payment would be received in convertible currencies. A rebate of Af 4 per US$1 was allowed on the exchange tax on the proceeds from exports of cotton over and above this requirement.

June 15. The importation of certain goods (e.g., various textiles, agricultural and food products, and selected nonessential consumer goods) was prohibited. Furthermore, the Afghanistan Bank was authorized to refuse to sell foreign exchange for the importation of a group of consumer goods that were regarded as nonessential.

June 23. Payments for imports through the banking system were restricted to payments under letters of credit; a deposit in local currency of 100 per cent of the value of the imports was required upon establishment of the credit.

June 23. Receipts from foreign embassies, legations, and other foreign official agencies no longer had to be sold at the official rate; they had to be surrendered to the Afghanistan Bank at its free market buying rate.

December 14. Certain textiles were deleted from the list of prohibited imports.

Algeria 1

Exchange Rate System

No par value for the currency of Algeria has been established with the Fund. The official unit of currency is the Algerian Dinar, which is at par with the French franc, giving the relationship Algerian dinar 4.93706 = US$1. There are fixed buying and selling rates for the French franc as well as for currencies of other countries in the French Franc Area. Buying and selling rates for currencies of countries outside the French Franc Area are fixed by the Central Bank of Algeria on the basis of the average rates quoted on the Paris exchange market for the other currency concerned.

Administration of Control

The Office of the Director-General of Finance, attached to the Office of the President of the Republic, has general jurisdiction over exchange control. The Central Bank of Algeria assists in the formulation of the exchange legislation and regulations and is responsible for their execution. In large part, this execution takes place through the Exchange Control Office, which is part of the Central Bank. In addition, a number of banks have been given authority to carry out much of the detail of exchange control matters. Import and export licenses are issued by the Ministry of Commerce. The Office National de Commercialisation (ONACO) and certain professional associations (groupements professionnels) have a monopoly over the import of certain commodities.

Prescription of Currency

Algeria is a member of the French Franc Area, and settlements with other countries in the French Franc Area are generally made in any currency of that Area. Settlements with countries outside the French Franc Area are usually made in French francs through banks in France. Settlements with countries, except Mainland China, Cuba, and Mali, with which Algeria has concluded bilateral payments agreements 2 are made through accounts denominated in U.S. dollars under the terms of the agreements; for Mali, the account is in Algerian dinars.

Nonresident Accounts

For residents of countries outside the French Franc Area, the regulations pertaining to nonresident accounts are similar to those applied in France. For residents of other French Franc Area countries, there are three types of accounts: Individual Suspense Accounts, Franc Area Accounts, and Final Departure Accounts. Except as described below, all operations through these accounts are subject to authorization.

Individual Suspense Accounts may be opened without authorization and may be credited with payments from any country.

Franc Area Accounts may be opened only with prior authorization from the Central Bank of Algeria. They may be credited freely with proceeds from the surrender of convertible currency; with proceeds from the surrender of freely disposable funds (other than notes and coins) in the currencies of other countries of the French Franc Area; with interest on the balances of French Franc Area Accounts; and with payments for imports from countries in the French Franc Area. They may be debited freely for any payment in Algeria to a resident of any country in the French Franc Area (including Algeria); for any transfer to the credit of an account of a person residing in a country in the French Franc Area other than Algeria; and for any amount due to the bank with which the account is kept, for interest, commissions, or repayment of capital claims. Transfers between these accounts are free.

Final Departure Accounts may be opened without authorization in the name of any person residing in Algeria, but not of Algerian nationality, who intends to leave Algeria for another country in the French Franc Area. These accounts may be credited freely with an amount equivalent to the holdings at October 20, 1963 in the account of the person concerned; with proceeds from sales of real estate of the account holder, provided that the sales are made through the intermediary of a notary public; with proceeds accruing from the sale of stocks and other securities and from any income, amortization, and redemption in respect of securities, provided that the transactions are made through the intermediary of a bank; and with any other payments, up to DA 1,000. These accounts may be debited freely for all payments in Algeria on behalf of the account holder; balances of less than DA 5,000 may, subject to certain conditions, be transferred to other parts of the French Franc Area.

The Central Bank of Algeria maintains special accounts for central banks of the countries with which Algeria has concluded payments agreements (see footnote 2).

Imports and Import Payments

All imports from bilateral payments agreement countries (see footnote 2) require a license. A number of specified imports, listed under some 150 tariff headings, subheadings, or their parts, from all other countries are prohibited or are subject to either quantitative restriction or a special import procedure; the items include such commodities as butter, cattle, cement, cereals, clothing, coffee, fish, matches, meat, melons, milk, phosphates, sheep, soap, sugar, tea, tobacco, tomatoes, vegetables, wine, and passenger cars and other motor vehicles.

The Government has the monopoly over the importation of some of these items (e.g., coffee, tea, sugar) through its Office National de Commercialisation; while some of the other items (certain milk products, specified wood, shoes, and certain textiles) may as a rule be imported only by professional associations (groupement professionnel des produits laitiers or GAIRLAC, groupement professionnel des bois or BOIMEX, groupement professionnel de la chaussure or GIAC, and groupement professionnel de textiles or GITEXAL). Imports of firearms, ammunition, and explosives require an import license from the Ministry of the Interior (for civil and military firearms) or the Ministry of National Defense (for munitions and explosives). Import quotas for restricted imports are published in the official gazette. All other imports from countries with which Algeria does not maintain bilateral payments agreements may be made freely.

Liberalized imports not exceeding DA 10,000 in value require only the submission of an invoice to the customs. Most liberalized imports whose value exceeds this figure are admitted on the basis of a declaration completed by the importer, but some require an administrative visa, which is stamped on an import attestation. Imports exceeding DA 10,000 in value, and all imports for which payment has to be made before the goods reach Algeria, must be registered (domiciled) with an authorized bank, to which the necessary import documents must be presented and through which all payments related to the transaction must be made.

Imports “without payment” (sans paiement), i.e., imports which do not involve compensation of any kind, from the French Franc Area require an authorization by the Ministry of National Economy if their c.i.f. value exceeds DA 500.

For goods imported under the import declaration procedure or with an import license, importers may, as soon as the import has been registered with an authorized bank, purchase the required foreign exchange from the bank. Unless earlier payment is to be made in accordance with the provisions of the import license or of a commercial contract approved by the authorities, payment to the foreign exporter may be made only after the shipping documents have been presented to the bank. The importer may also, after having domiciled (registered) the import, open a documentary import credit upon presentation of the shipping documents.

A production tax and an additional tax are levied on all imports, their combined incidence is as follows:

For Imports Valued

at up to DA 50,000
For Imports Valued

at over DA 50,000
In per cent
Normal rates20.420.48
Reduced rates11.111.11
Special rates7.57.52
Increased rates37.937.93

Imports of capital equipment for oil companies and certain imports of raw materials are exempt from the production tax. Importers subject to this tax who act as fiscal agents (producteurs fiscaux) are entitled to deduct the amount of the production tax paid on their imports each month from the domestic tax on their total volume of business.

Special import taxes apply on imports of specified rugs and textiles and on leather. A compensatory surcharge ranging from the equivalent of DA 15.25 to DA 646.80 a hectoliter is applied to imports of alcoholic beverages and products containing alcohol. A temporary import surcharge of 3 per cent is levied on imports from all countries, with the exception of certain specified products, e.g., staple foodstuffs, minerals, antibiotics, books, and spare parts.

Payments for Invisibles

Payments for invisibles require the approval of the Central Bank. However, when supporting documents are presented, approval may be granted by authorized banks either freely or up to specified limits for such payments as (1) approved trade transactions and maritime contracts, (2) income accruing to nonresidents in the form of profits, dividends, etc., from approved investments, (3) banking commissions, patent fees, and specified categories of taxes, (4) fees to lawyers, medical doctors, etc. For other invisibles, the granting of exchange must be authorized by the Central Bank.

Residents of other French Franc Area countries working in Algeria under the program for technical cooperation may transfer abroad a certain percentage of their net salaries: 45 per cent for single or married persons having their families in Algeria; 65 per cent for persons having their families abroad; and 100 per cent for employees who spend their vacations abroad (the transfer being limited to the duration of their absence from Algeria). For other workers from French Franc Area countries who have contracts with employers and hold the necessary employment documents, the amounts that may be transferred are 25 per cent, 45 per cent, and 100 per cent, respectively, for the groups enumerated above. The payments must be transferred once a month on the basis of the remuneration for the previous month.

For residents traveling to other countries, including the French Franc Area, the foreign exchange allocation is equivalent to DA 1,500 a person a year and is issued on presentation of a valid passport and travel documents. Furthermore, residents traveling by air or sea to a country within the French Franc Area are entitled to an allocation, in the currency of the country of destination, equivalent to DA 500 a person for each journey, on presentation of travel documents certified by the authorized intermediary; children under 15 are entitled to DA 250. If travel is by means other than air or sea, a single allocation of DA 500 (DA 250 for children under 15) a calendar quarter may be obtained upon presentation of passport and travel documents. Foreign exchange for business travel is subject to authorization by the Central Bank of Algeria. Funds in EFAC accounts (see section on Exports and Export Proceeds, below) may be used for business travel.

Pilgrims traveling to Saudi Arabia can obtain a check in Saudi Arabian riyals drawn on a bank in Jidda, up to the equivalent of DA 1,200 a person for 1964. Travelers may take out Algerian dinar banknotes up to DA 50 a person.

Exports and Export Proceeds

Exports of specified used machinery and of equipment used in industrial production, exploitation of mines, etc., are prohibited. All exports to countries with which Algeria has bilateral payments agreements and some exports to all other countries require licenses.

With certain exceptions, exports must be domiciled (registered) with an authorized bank. Prior registration is not required for exports that are made on a firm sale basis, which do not exceed DA 5,000 in value, and which are payable in not more than 90 days. After customs clearance, such exports must be registered, if they were not registered earlier. If the payment period is more than 90 days, the exports may be registered only after authorization is given by the Central Bank. Sales on consignment are expressly subject to authorization by the Central Bank, and registration must always take place prior to customs clearance.

The proceeds of exports, including those to the French Franc Area, may be the object of a 90-day credit and must thereafter be collected within 30 days. Foreign exchange proceeds may be used to make authorized payments abroad within three months from the date of their receipt. Companies holding mineral rights must deposit in Algeria 50 per cent of the proceeds from their exports of hydrocarbons. Certain percentages of export proceeds may be kept in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts which may be used by the account holder for all authorized payments; however, amounts accruing from exports to the French Franc Area may be used only for settlements with countries in that Area. All other export proceeds must be surrendered.

Proceeds from Invisibles

Amounts exceeding DA 500 that are due from nonresidents in payment for services must be collected and, if not used to make authorized payments abroad, must be surrendered within one month from the date of receipt.

There are no restrictions on the import of foreign banknotes, coins (except gold coins), checks, and letters of credit, but foreigners must declare such holdings when they enter Algeria. Travelers may bring in Algerian dinar banknotes up to DA 50 a person.

Capital

Decree-Law 63-277 of July 26, 1963 establishes a code for foreign investments in Algeria that were made after July 1, 1962. Such investments can be undertaken to establish new, or to extend existing, enterprises, provided that such enterprises (1) are recognized by the authorities as having economic priority in accordance with programs prepared by the Government, (2) constitute a program of investment of at least DA 5 million, to be carried out in three years, and (3) give rise to the permanent employment of a specified minimum number of Algerian nationals. Such approved enterprises benefit from certain advantages in respect of fiscal charges and other taxes. Moreover, subject to the fulfillment of certain other conditions (such as the effect that the investment would have on related economic activities and the volume of production intended for export), additional privileges relating to certain taxes are accorded to the approved enterprises. The transfer abroad of part of the profits from, as well as part of the proceeds from the liquidation of, such investments is authorized by the Central Bank in accordance with the guarantees provided for in the decree. Similar transfers (including those to countries in the French Franc Area) related to other investments are also subject to authorization by the Central Bank.

Changes during 1964

During the period under review a number of imports were added to, and a few more removed from, the list of those that were subject to either quantitative restriction or a special import procedure. Only the more important measures of this nature are listed below.

March 6. The import and export of Algerian dinar banknotes was limited to DA 50 a person.

March 7. French farmers whose holdings had been nationalized by a decree of October 10, 1963 were permitted to transfer the sales proceeds of their wine and cereal crops, net of any operating losses.

March 20. Holders of Final Departure Accounts could transfer to other parts of the French Franc Area 20 per cent of their balances, up to a maximum transfer of DA 20,000.

April 10. By Law No. 64-111 the monetary unit of Algeria was changed from the Algerian franc to the Algerian dinar (DA). The unit was defined as having a weight of 0.180 gram of fine gold; like the previous unit it was at par with the French franc.

April 17. Certain radio transmitting and receiving equipment was added to the list of goods requiring an individual import license.

April 24. Imports of firearms, ammunition, and explosives were made subject to special import licenses from the Ministry of the Interior (for civil and military firearms) or the Ministry of National Defense (for munitions and explosives).

May 10. Imports of tomatoes were prohibited.

June 18. Passenger cars and other motor vehicles were added to the list of goods requiring an individual import license.

June 30. Imports of melons were prohibited.

July 29. Residents were required to surrender all foreign banknotes and other foreign exchange.

August 1. Companies holding mineral rights were required to deposit in Algeria 50 per cent of the proceeds from their exports of hydrocarbons.

August 10. Decree 64-233 (published in the official gazette of August 21) empowered the Minister of Economy to establish professional associations (groupements professionnels); affiliation in such associations would be obligatory for all persons performing any activity falling within the framework of the tasks to be fulfilled by these associations. A refusal of admission by a professional group would entail a prohibition to exercise the particular profession or trade covered by that group. Each association must draw up an annual import program; it was required to allocate corresponding quotas to its members in accordance with instructions that would be given by the Minister of National Economy.

August 14. Furniture was added to the list of goods requiring an individual import license.

September 11. By Decree 64-233 of August 10 (see above), three professional associations were established—one for milk producers (GAIRLAC), one for wood (BOIMEX), and a third for shoes (GIAC). They were given the monopoly of domestic purchases and imports of (1) certain dairy products, (2) specified types of lumber, and (3) specified types of footwear, respectively. Payment for imports made by the professional associations for the account of their members had to be made in the following manner: 5 per cent of the c.i.f. value of the merchandise to be imported had to be paid to the association at the time a partial import contract was made. For the balance, an irrevocable credit had to be established which was transferable to the association, upon presentation of the pro forma invoice of the supplier, at least five days prior to the date on which the association had to open a letter of credit in favor of the supplier.

September 19. A bilateral payments agreement was concluded with Mainland China.

October 5. New regulations were issued concerning payments with Mali.

October 23. A bilateral payments agreement was concluded with North Korea.

November 11. A bilateral payments agreement was concluded with Guinea.

December 17. Agreement was reached on the import treatment which Algeria and France would accord each other during 1965. Algeria would reserve 60 per cent of its 1965 import quotas for products of French origin and provenance.

Note.—The following changes took place early in 1965:

January 1. A professional association for textiles—groupement professionnel de textiles (GITEXAL)—was established. It was given the monopoly over the importation of certain textiles and the responsibility of drawing up an annual import program for the textiles concerned and of allocating corresponding quotas to its members.

January 11. Balances up to DA 5,000 in Final Departure Accounts could, subject to certain conditions, be transferred to other parts of the French Franc Area.

Argentina

Exchange Rate System

On January 9, 1957, a par value for the Argentine Peso was established by Argentina with the Fund. However, exchange transactions no longer take place at rates based on that par value. All exchange transactions take place in a free exchange market, in which the rate on December 30, 1964 was M$N 150.90 per US$1. Forward exchange transactions may be concluded between individuals and authorized banks or among authorized banks at freely negotiated exchange rates. Forward exchange purchases by the public, however, require a 50 per cent deposit in local currency, except forward contracts concluded by banks in connection with imports and contracts concluded as part of a swap transaction. Forward transactions among authorized banks are exempt from the 50 per cent deposit. The deposit may not be financed by borrowing locally and is returned upon the liquidation of the transaction.

Administration of Control

Exchange transactions must be carried out through banks and institutions authorized expressly for this purpose. The Central Bank of Argentina may intervene in the exchange market to avoid excessive variations resulting from temporary factors.

Prescription of Currency

Under a bilateral payments agreement with Uruguay, merchandise transactions and certain transactions in invisibles are settled in agreement dollars. Transactions with other countries must be settled in convertible currencies or externally convertible European currencies.

Nonresident Accounts

Authorized banks may open accounts in pesos in the name of nonresidents. The accounts may be credited with the counterpart of convertible foreign exchange negotiated in the exchange market and with peso amounts that are transferable abroad. Balances in these accounts may be used to make payments in Argentina. They may also be reconverted into foreign exchange for payments abroad or for repatriation, up to the amount of foreign exchange previously sold by the account holder in the exchange market. Transfers between accounts may be effected freely.

Imports and Import Payments

Imports are generally free of import and exchange licensing; exchange to pay for them may be purchased in the free market. Some import payments, however, require the specific approval of the Central Bank. Goods imported by official agencies require approval by the Central Bank and the Ministry of Economy if payment is extended over a period of more than 180 days. Imports of tractors of less than 85 horsepower must be authorized by the Tractor Industry Council. Imports of a number of nonessential or luxury goods are temporarily prohibited; these include certain foodstuffs, beverages, and industrial consumer goods. All imports are subject to a tax of 4 per cent on the freight charges. Practically all imports are also subject to special taxes and surcharges, besides the applicable import duties. Import taxes include the following: a special 5 per cent tax on almost all imports except when originating in LAFTA countries; a consular fee of 1½ per cent, payable in U.S. dollars on most import invoices; statistical taxes of 1½ per cent or 310 per cent applicable to all imports; taxes ranging from 4 per cent to 10 per cent on imports of paper products, certain types of timber and timber products, and forest products (the taxes on logs and sawmill products amount to M$N 2 and M$N 8, respectively, per square meter by one inch, for imports from LAFTA countries); and taxes ranging from M$N 200 to M$N 2,000 a ton on imports of iron and steel.

For import purposes, commodities are grouped in lists according to their essentiality and domestic production. Surcharges are established for these lists, independently of the customs duties payable in accordance with the Schedule of Valuations. Except for goods in List 1 (fuels, some metals, rubber, newsprint, etc.), surcharges on the c. & f. value of the invoice, on the index price established for the commodity concerned, or on its normal import value,1 are payable before initiation of customs clearance, as follows: 2

  • 20 per cent on numerous raw materials, drugs, iron and steel bars, tinplate, woodpulp, etc. (List 2)

  • 46 per cent on semiprocessed articles, timber, chemical products, etc. (List 3)

  • 69 per cent on industrial machinery the local production of which is very limited or for which this surcharge represents sufficient protection (List 6C); and on industrial machinery and motors not included in Lists 6A or 6B (List 6)

  • 92 per cent on semiprocessed products or raw materials produced locally (List 8)

  • 115 per cent on spare parts, tires, tools, etc. (List 4) and on industrial machinery the local production of which does not fully meet domestic demand or for which this surcharge represents sufficient protection (List 6A)

  • 172 per cent on processed articles manufactured locally and imports of which are not essential (List 5); on industrial machinery manufactured locally (List 6B); and on all goods, other than machinery, not included in any list

  • 230 per cent on nonessential and luxury items, e.g., whisky, bicycle chains, transistor radios, starters, fluorescent tubes, textiles and ready-made clothing of cotton, wool, artificial silk, etc. (List 7)

There are, in addition, special regulations governing certain imports, as follows: (1) Imports of automobiles are subject to special surcharges according to weight and value. (2) Imports of parts used in the domestic manufacture of automobiles are subject to a fixed surcharge up to certain percentages of the c. & f. value of the automobile; these percentages are being decreased annually according to a previously approved production plan. (3) Certain imports from the other members of LAFTA (Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, and Uruguay) enjoy special tax exemptions outside the general system, by virtue of the mutual agreements reached with these countries. (4) Certain imports from Bolivia enjoy special tax exemptions. (5) Machinery and materials for vital industries (petroleum, coal, steel, power, railroads, etc.), machinery for the establishment of industries in developing areas, capital goods related to foreign investment, and personal effects brought in by foreign diplomats and, in small quantities, by immigrants and travelers are exempt from payment of surcharges.

To prevent unauthorized capital movements all import payments require documentary evidence of the bona fide nature of the transaction. Some import payments require the specific approval of the Central Bank; these include payments by automobile manufacturers for imports of raw materials and equipment, and payments for most imports of capital goods. Payments for capital goods valued at over US$5,000, with the exception mainly of those imported from LAFTA countries, must be made in installments over a period ranging from at least two and a half years to at least nine years after the date of shipment, depending on the total value of the goods. Advance payments for imports require a prior deposit in local currency equivalent to 50 per cent of the foreign currency being transferred. Foreign exchange for import payments may be purchased in the free market, subject in a few cases noted above to prior approval of the Central Bank.

Payments for Invisibles

The banks and institutions authorized to deal in foreign exchange are permitted to sell exchange for many categories of invisibles up to established limits, subject in appropriate cases to the submission of documentary evidence or sworn declarations of the bona fide nature of the transaction. Transfers in excess of the established limits require the authorization of the Central Bank. Exchange is granted up to US$100 a person a trip for travel to Chile, Bolivia, Paraguay, Brazil, and Peru; up to US$1,000 a month for a person 18 years of age or older (US$500 a month for a person under 18) for travel for a 30-day period to Uruguay; and up to US$1,000 a person a trip for travel to other countries (US$500 for a person under 18). Exchange for medical treatment abroad is granted up to US$1,000 a person; this amount cannot be taken up more than once. Remittances for students abroad are allowed up to US$300 for each student a month; in addition, up to US$200 may be transferred as a one-time installation allowance and up to US$50 every month for a student’s wife and each of his children. Family remittances are allowed up to M$N 10,000 a quarter for each beneficiary. Payments for purchases of books and medicines and for subscriptions to newspapers and magazines by private individuals are permitted up to M$N 5,000 a person a quarter. Remittances for purchases of books and subscriptions to newspapers and magazines by Chambers of Commerce and Industry and cultural organizations, other than public libraries, are limited to M$N 20,000 a purchaser a quarter; books and magazines of a scientific or technical nature are exempt from this limitation. Remittances of trade commissions are limited to 6 per cent of the c. & f. value of imports and 6 per cent of the f.o.b. value of exports. Transfers of profits, payments for current invisibles not listed above, and payments in excess of the limits listed above require the prior authorization of the Central Bank.

The export of gold coins or bullion and of domestic and foreign banknotes requires the prior approval of the Central Bank; travelers, however, may take out freely in the form of foreign banknotes 10 per cent of their travel allowance.

Exports and Export Proceeds

Exports are free of direct controls but, in general, exporters are required to repatriate and sell in the exchange market the foreign exchange proceeds of their exports within 10 working days after shipment. Foreign exchange proceeds from exports of chilled meat to the United Kingdom, and proceeds from exports of newspapers, magazines, pamphlets, printed music, and books printed and published in Argentina must be surrendered within 10 days after collection. For exports of meat to countries other than the United Kingdom, the exchange proceeds must be negotiated within 90 days after shipment. Proceeds from nontraditional exports for which payment is received within 180 days after loading, and which are covered by an irrevocable documentary credit or by drafts of similar duration, must be surrendered within 10 working days after the due date. The proceeds of exports to Chile for which payment is made within 120 days from either the date of the bill of lading in the case of sea transport, or the date of arrival at a Chilean Government warehouse in other instances, must be surrendered within 10 working days after the due date. Exporters of malted barley and brewers’ malt must surrender the export proceeds within 45 days after shipment.

Some products are subject to retention taxes calculated on the basis of the f.o.b. sales value or on the index values fixed by the Advisory Commission on Export Values, on which the National Grain Board and the National Meat Board are represented. The retention tax is 10 per cent for exports of pickled hides, certain oilseeds (linseed, sunflower seed, cottonseed, peanuts, rapeseed, and tung nuts), and linseed oil; and 20 per cent for horses, unprocessed hides, and some forestry products. The tax must be paid before shipment of the merchandise or within the following 30 days when there is a bank guarantee of payment. All exports are subject to a 2 per cent tax on the freight charges.

Other taxes on exports are levied as follows: a 10 per cent sales tax on exports of linseed oil, oilseeds, logs, coal, certain wood extracts, rawhide, and wool; a 1.5 per cent tax, the proceeds of which are destined for the National Agriculture and Livestock Fund, on exports of agricultural and livestock products; a 1 per cent tax, the proceeds of which are destined for the financing of road construction in connection with agricultural development, on exports subject to retention taxes; a 1 per cent tax, the proceeds of which are destined for the National Grain Board, on certain agricultural products; a 1.5 per cent tax, the proceeds of which are destined for the Secretariat of Public Works, on the export of certain other agricultural products; a 0.3 per cent statistical tax on exports subject to retention taxes; and a 5 per cent tax, the proceeds of which are destined for the Forestry Fund, on exports of tanning extracts.

Surcharges, customs and additional duties, and other charges paid on imports of raw materials or other products incorporated in exported articles are returned to exporters. Moreover, when the domestic indirect taxes have been paid, a refund is made of 12 per cent of the value of exports of manufactured products not traditionally exported.

The Central Bank has established a system of financial support for products not traditionally exported, based on the purchase of bills in foreign currency with periods of up to five years for capital goods, up to two and a half years for durable and semidurable goods, and up to one year for other goods.

Proceeds from Invisibles

Exchange derived from invisibles must be sold in the free market within 30 days of receipt. The import of domestic banknotes is prohibited. Travelers may bring in freely any amount in foreign banknotes.

Capital

There are no limitations on inward capital transfers by nonresidents. Argentine industrial or commercial firms, however, require the authorization of the Central Bank to enter into swap operations under which loans may be accepted in a convertible currency.

Remittances to repay foreign loans or to transfer the liquidation proceeds of foreign investments in Argentina are authorized without restriction provided that no transfer of domestic capital is involved.

Outward capital movements by residents are restricted. The export of Argentine and foreign securities (shares and bonds) is subject to the authorization of the Central Bank, except in the following cases. Authorized banks may export domestic and foreign securities freely, provided that they have been purchased by a nonresident with funds that entered Argentina after April 13, 1964. Authorized banks may export resident-owned securities, provided that the sales proceeds are repatriated in the form of foreign exchange, or that the securities are exchanged abroad for other securities which are subsequently imported into Argentina.

Changes during 1964

January 1. Further tariff reductions were applied to imports from LAFTA countries of goods on Argentina’s National List.

January 20. It was announced that, henceforth, all foreign exchange transactions exceeding M$N 100,000 must be reported to the Central Bank. Transactions exceeding M$N 500,000 were not allowed unless detailed information about the transaction was submitted.

January 21. A new list of prohibited imports was published. As a result a large number of previously prohibited items in List 5 and a few of those in List 7 could again be imported. Goods not specifically prohibited and not appearing in any of the official import lists could only be imported if a surcharge of 150 per cent and any applicable additional charges were paid.

April 13. The following measures were introduced to prevent unauthorized capital movements. (1) Exporters were required to surrender, on the basis of the index value of the merchandise, the foreign exchange proceeds of their exports within 5 working days from the shipment of their merchandise. Where no index value existed, the surrender would be based on the f.o.b. value of the exported goods. Exchange proceeds from other transactions were required to be surrendered within 30 days from the date they were received or credited abroad. (2) Payments for imports required documentary evidence of the bona fide nature of the transaction. (3) Except for foreign diplomatic missions, purchases of foreign exchange in excess of US$50 or its equivalent a person a month required a sworn declaration attesting the bona fide nature of the transaction. Limitations were imposed on specified payments, as follows: (a) M$N 5,000 a person a quarter for family remittances, purchases of books and medicines, and subscriptions to newspapers and magazines; (b) US$100 a trip a person for travel to contiguous countries, and US$750 a trip a person for travel to other countries; (c) US$100 a month for each scholarship holder for tuition and school fees; (d) 4 per cent of the f.o.b. value for export commission and 6 per cent of the c. & f. value for import commission. (4) Outward remittances of foreign-owned capital, as well as transfers of income from such capital, required the approval of the Central Bank for amounts in excess of M$N 5 million and M$N 2 million, respectively, a company a year. (5) The repayment of loans taken up in foreign exchange and not secured by a bank guarantee required the approval of the Central Bank. (6) The export of gold coins and bullion, domestic and foreign currency notes, and domestic and foreign bearer securities was prohibited. (7) With the exception of forward sales in connection with imports, those resulting from swap transactions, and those between authorized institutions, all forward exchange sales contracts required an advance deposit of 50 per cent which must not be financed by local borrowing. (8) Financial institutions were forbidden to accept deposits in foreign currency on behalf of firms or individuals resident or domiciled in Argentina. Existing deposits had to be liquidated within 90 days.

April 16. The proceeds of nontraditional exports for which payment is made within 180 days after shipment and which are covered by an irrevocable documentary credit or by drafts of similar duration were required to be surrendered within 5 working days after expiry of the payment period. The proceeds of exports to Chile for which payment is made within 120 days from either the date of the bill of lading in the case of sea transport, or the date on which the goods arrive at a Chilean Government warehouse, also were required to be surrendered within 5 working days after expiry of the payments period.

April 27. The import prohibition for items in Lists 6, 6A, 6B, and 6C (i.e., industrial machinery and equipment) was lifted. The surcharge on items in Lists 6 and 6C was raised from 40 per cent to 60 per cent and the additional surcharge from 6 per cent to 9 per cent. Items in Lists 6A and 6B continued to be subject to surcharges of 100 per cent and 150 per cent, respectively, with additional surcharges of 15 per cent and 22 per cent. The validity of the additional surcharges was extended until October 31, 1964.

May 8. The exchange control regulations of April 13 were modified as follows. (1) The time limit on the surrender of the foreign exchange proceeds of exports was extended from 5 to 10 working days after shipment or, in appropriate cases, to 10 days after collection. The latter requirement was applied to all exports of newspapers, magazines, pamphlets, printed music, and books printed and published in Argentina, and to exports of chilled meat to the United Kingdom. (2) The proceeds from exports of meat and offal to any destination other than the United Kingdom had to be surrendered within 90 days of shipment. (3) Instead of the index value or the f.o.b. value of the exports, the actual sales price was adopted as the basis of the surrender required; however, the amount to be surrendered could not be less than the index value or, if no index value was established, the f.o.b. value. (4) The limit on transfers of export commission was raised from 4 per cent to 6 per cent of the f.o.b. value. (5) The exchange allowance for residents traveling to other than neighboring countries was increased from US$750 to US$1,000 a person a trip. (6) Remittances for purchases of books and subscriptions to newspapers and magazines by Chambers of Commerce and Industry and cultural organizations other than public libraries were limited to M$N 20,000 a purchaser a quarter; books and magazines of a scientific or technical nature, however, were not affected. (7) Payments for expenses of sojourn and medical treatment abroad were limited to a one-time remittance of US$1,000 a person. (8) The limit on remittances for study abroad was raised from US$100 to US$300 a student a month. In addition, US$50 a month could be transferred for a student’s wife and each of his children, and US$200 could be transferred as an installation allowance. (9) The limit on family remittances was increased from M$N 5,000 to M$N 10,000 a quarter for each beneficiary. (10) Authorized institutions were empowered to export Argentine bearer securities against others received from abroad for exchange or against coupons received for collection. Also, authorized institutions were permitted to export securities purchased in Argentina with funds imported after April 13, 1964 and sold in the single exchange market. (11) Authorized institutions were permitted to import gold coins, gold bars, and foreign banknotes on their own behalf. (12) Forward purchases of foreign exchange as part of swap operations to facilitate foreign loans to Argentine commercial and industrial organizations were exempted from the 50 per cent advance deposit requirement.

May 15. By virtue of a LAFTA “complementarity agreement,” imports of specified electronic valves and components from LAFTA countries were exempted from customs duties and surcharges.

June 11. Private individuals could no longer purchase foreign exchange up to US$50 a month without submitting a sworn declaration indicating the purpose of the purchase.

June 12. Advance payments for imports required an advance deposit of 50 per cent of the amount being transferred.

June 15. Private individuals could no longer purchase foreign exchange up to US$50 a month (see June 11, above). Trading in gold coins and bars was suspended.

June 22. Sales of foreign exchange for travel to neighboring countries had to be effected by postal or telegraphic transfer. However, up to 5 per cent of the allowance of US$100 could be bought in the form of foreign banknotes.

June 29. Sales of foreign exchange for travel to countries not contiguous to Argentina had to be effected by postal or telegraphic transfer. However, up to 10 per cent of the allowance of US$1,000 could be bought in the form of foreign banknotes.

July 1. All remittances of foreign diplomatic establishments and their mission heads had to be effected by postal or telegraphic transfer. Remittances of members, other than mission heads, of such establishments required prior approval.

July 7. Authorized institutions could, subject to prior approval by the Central Bank, export foreign currency notes, gold coins, and gold bullion. They were also permitted to export Argentine or foreign bearer securities as follows: (1) foreign securities for the purpose of conversion, collection, or repayment, in which cases the authorized institutions must guarantee the return of the securities or the proceeds in foreign currency; (2) Argentine securities which must be sent abroad in exchange for other securities or for coupons. Foreign securities exported must have been acquired on an Argentine stock exchange and paid for with foreign exchange received from abroad and surrendered after April 13, 1964, or paid for with pesos debited after this date from the peso account of a foreign banking institution.

July 7. Authorized institutions were permitted to open or maintain foreign currency accounts for governments, Argentine public agencies, international agencies, foreign diplomatic missions and their officials, cultural or scientific institutions, and insurance companies domiciled in Argentina.

July 8. Authorized institutions were permitted to sell foreign exchange for premia of insurance contracts entered into prior to April 13, 1964 or of insurance contracts covering goods exported from or imported into Argentina. The sale of foreign exchange for premia of insurance contracts covering capital goods situated in Argentina but partially or totally owned abroad was permitted, subject to the prior approval of the Central Bank.

July 10. Payments for imports cleared through customs prior to December 31, 1963 required the prior approval of the Central Bank.

July 17. The operations of authorized exchange houses were restricted. Their sales of foreign exchange (including banknotes) to authorized banks and their purchases of foreign exchange and gold from authorized banks required the prior approval of the Central Bank.

July 23. Payments for the following imports cleared through customs on or before December 31, 1963 were exempted from the requirement of prior approval by the Central Bank: imports by government agencies, imports guaranteed by bank avals, and imports covered by the deferred payments agreement of June 6, 1963 concerning Argentina’s foreign commercial debts.

July 24. Sales of foreign exchange for travel to Peru were limited to US$100 a person a trip. Up to 5 per cent of this amount could be bought in the form of banknotes; the remainder had to be remitted by postal or telegraphic transfer. Sales of foreign exchange for travel to Uruguay were limited to US$25 a person a month, to be remitted entirely by postal or telegraphic transfer.

August 27. The payment in Argentine currency for tickets for foreign travel was restricted to residents embarking and commencing their journey in Argentina. Freight payments in Argentine currency were only permitted when related to direct foreign trade transactions.

September 14. All purchases of foreign exchange for imports not covered by letters of credit, except those by “acknowledged solvent enterprises” required the prior approval of the Central Bank.

October 5. Provided that certain conditions were fulfilled, several categories of travel fares were exempted from the requirement that they be paid for in foreign currency; the exemptions included (1) return fares of Argentine holders of foreign scholarships; (2) fares for outward or return travel of students holding a scholarship in Argentina; (3) return fares of Argentine nationals or residents who return to Argentina no later than 12 months after they left Argentina; (4) outward fares for crew members of foreign vessels or aircraft; (5) fares for immigrants joining their families in Argentina; (6) single-trip or round-trip fares for foreign technicians, scientists, or other persons under contract to Argentine firms; (7) tickets for foreign travel for officials of foreign diplomatic missions and international agencies and for their families; and (8) tickets for foreign travel paid for by the National Government or a Provincial Government.

October 9. All outward remittances of capital and profits required the prior authorization of the Central Bank.

October 16. It was announced that the temporary 5 per cent import tax introduced on November 1, 1962 as an emergency measure would continue in force until October 31, 1965; the temporary additional surcharges were also extended until that date.

November 17. Travelers to Uruguay were allowed to remit to Uruguay up to the equivalent of US$1,000 for a 30-day period for each traveler; the allowance for persons under 18 was set at US$500 for each 30-day period.

November 20. Payments for imports of capital goods valued at over US$5,000 were required to be made in installments over a period ranging from at least two and a half years to at least nine years after the date of shipment, depending on the total value of the goods. Imports from LAFTA countries were exempt from these requirements.

November 20. The exchange allocation for travel to countries not contiguous to Argentina was reduced from the equivalent of US$1,000 to that of US$500 a person a trip for persons under 18.

December 2. It was announced that in future import taxes would be calculated on the invoice amount when the latter was higher than the index value.

December 27. The period within which the proceeds of exports of malted barley and brewers’ malt were required to be surrendered was extended to 45 days after shipment.

Australia

Exchange Rate System

The par value is Australian Pound 1 = US$2.24. Official rates are fixed for spot transactions in sterling: £A 125 buying, and £A 125/10/-selling, per £ stg. 100. The rates for spot transactions in other currencies quoted by the authorized banks are based on the closing buying and selling rates of the previous day in London and New York. The rate for the U.S. dollar on December 31, 1964 was US$2.2348 buying, and US$2.2219 selling, per £A 1.

Administration of Control

The Reserve Bank of Australia administers the exchange control on behalf of the Commonwealth Treasurer, but considerable discretionary powers are delegated to the trading banks authorized to handle foreign exchange transactions. Import and export licensing is administered by the Department of Trade and Industry and the Department of Customs and Excise.

Prescription of Currency

Australia is a member of the Sterling Area, and settlements between residents of Australia and residents of other Sterling Area countries may be made in sterling, in another Sterling Area currency, or in Australian currency through the account of a bank domiciled in any other country in the Sterling Area with a bank in Australia. Payments for imports from countries outside the Sterling Area may be made by crediting sterling to an External Account in the United Kingdom, in Australian currency through the account of a bank in the country or area of origin of the goods with a bank in Australia, or in any foreign currency. Proceeds from exports to countries outside the Sterling Area may be accepted in sterling from an External Account in the United Kingdom, in Australian currency from an appropriate nonresident account, or in any foreign currency which is freely exchangeable for External Account sterling.

Nonresident Accounts

All credits to the accounts of residents of countries outside the Sterling Area are subject to approval, which is granted in the same circumstances and subject to the same conditions as if a transfer to the country of residence of the account holder were involved. Transfers are allowed freely, on application, between accounts of nonresidents. Under current policy, the balance on a nonresident account may be withdrawn’ in convertible currency.

Imports and Import Payments

Import licenses are required for unwrought aluminum and aluminum alloy, waste and scrap of aluminum and aluminum alloy, and used earth-moving, excavating, or materials-handling equipment and parts. All other goods may be imported freely without import licenses. No restrictions are imposed on payments for imports, provided that the prescription of currency requirements are observed.

Payments for Invisibles

All payments for invisibles are subject to exchange control, but they are not restricted; the control operates solely to prevent unauthorized capital transfers. There is a basic exchange allowance of £A 2,000 in any 12 months for any kind of travel in any country; additional amounts may be obtained on application, provided that the exchange control is satisfied that the exchange is to be used for bona fide travel expenses and not for an unauthorized capital transfer. Limits are placed on remittances for family maintenance and gifts; however, applications for such transfers are treated liberally, and amounts beyond the normal limit for family maintenance are approved on application. A traveler may take out up to £A 50 in Australian currency, without special authorization; of this amount, up to £A 2 may be coins.

Exports and Export Proceeds

With minor exceptions, exports require licenses issued by the Department of Customs and Excise, to ensure that the full proceeds are received in a currency and within a period approved by the Reserve Bank. To assist supervision, there is a further condition that all shipping documents, bills of lading, etc., must be drawn to the order of and delivered to the Reserve Bank or a trading bank acting as its agent.

Proceeds from Invisibles

Proceeds from invisibles received in Sterling Area currencies may be disposed of freely. Proceeds from invisibles in other currencies do not have to be surrendered, but they must be reported and may be disposed of only with permission.

Capital

All transfers of capital from Australia require approval. Transfers abroad of resident capital are allowed for certain types of direct investment overseas. Approval is normally granted for the repatriation of capital by nonresidents, but no advance commitments are given.

No restrictions are placed on the receipt of capital funds from abroad, but residents must obtain prior approval before borrowing foreign currency or incurring a liability to a resident of a country outside the Sterling Area.

Foreign securities owned by Australian residents need not be surrendered, but they must be reported. This obligation does not cover securities whose principal and interest are payable in a currency of the Sterling Area or certain securities expressed in Canadian dollars and registered in Australia, provided that the securities are held within the Sterling Area. The export of securities and practically all transactions in foreign securities are subject to approval.

Changes during 1964

January 11. Licensing control was removed from imports of certain types of timber.

May 14. Licensing control was removed from imports of ball bearings.

May 27. Australia ceased invoking the provisions of Article XXXV of the GATT with regard to Japan.

Austria

Exchange Rate System

The par value is Austrian Schillings 26.00 = US$1. The official limits for the U.S. dollar are S 25.80 buying, and S 26.20 selling, per US$1—rates at which the Austrian National Bank will buy or sell. The rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Austria and such limits in force in the country of the other currency concerned.

“Agreement dollars” (see section on Prescription of Currency, below) are quoted at par with the U.S. dollar.

Forward premiums and discounts are left to the interplay of market forces.

Austria accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from August 1, 1962.

Administration of Control

The Austrian National Bank administers the exchange control and issues exchange licenses where required. Most exchange transactions pass through those Austrian banks that have been authorized to implement exchange control regulations.

The customs issue freely and without delay licenses required for imports of liberalized goods. Licenses, if required, for other imports and for exports have to be obtained from the competent ministry, viz., the Federal Ministry of Trade and Reconstruction (Licensing Office) or the Federal Ministry of Agriculture and Forestry.

Prescription of Currency

Settlements with the countries with which Austria maintains bilateral payments arrangements1 are made through clearing accounts expressed in U.S. dollars. Settlements with the United Arab Republic are, in practice, made in convertible currencies, although under the agreement with that country Austrian traders may make payments in agreement Egyptian pounds.

Settlements with all other countries may be made either in convertible currencies or through Free Schilling Accounts.

Nonresident Accounts

There are two categories of nonresident accounts in schillings: Free Schilling Accounts and Blocked Accounts.

Free Schilling Accounts may be freely credited with proceeds from the sale of gold, gold coins, or convertible currencies by a nonresident to the Austrian National Bank, or to an authorized bank, as well as with payments permitted by the National Bank on the basis of a general or individual authorization. Transfers between these accounts are free. The accounts may be freely debited for payments to Austrian residents, with the exception of loans granted by nonresidents to residents, which require individual licenses. Balances on these accounts may be freely converted into any foreign currency.

Blocked Accounts consist of funds that are due to nonresidents. A general license permits their use for many payments for current and capital invisibles. The transfer abroad of funds in Blocked Accounts is subject to an individual license. In most cases the licenses are granted freely if the funds belong to residents of countries with which Austria makes settlements in convertible currencies. As a result, Blocked Accounts largely represent funds due to residents of countries with which Austria settles payments through bilateral accounts.

Nonresidents may also maintain Nonresident Accounts in convertible foreign currencies. These accounts may be debited for the same purposes as Free Schilling Accounts.

Imports and Import Payments

All commodities not included in the Annex to the Foreign Trade Law are free of import licensing and may be imported from any country without quantitative restriction. All goods included in the Annex require licenses. Most of these goods are free of quantitative restriction. The liberalization depends on the group of countries from which they are imported; for such liberalized goods, licenses are issued by the customs at the time of clearance.2 Liberalized imports from European OECD countries, their associated territories, and many other countries3 include goods covered by more than 1,700 tariff numbers (or parts thereof). Imports from Canada and the United States and its territories are liberalized to the same degree as those from the European OECD countries, except that slaughtered poultry is subject to quantitative restriction when imported from Canada or the United States. Imports from 3 other countries 4 are treated in practically the same way as imports from European OECD countries.

Nonliberalized imports may be obtained under various procedures, namely, state trading, global quotas, bilateral quotas, discretionary licensing, and compensation (barter).

State trading covers tobacco in any form, salt, spirits, and various bread and feedgrains. Global quotas apply to specified imports from OECD countries and all other GATT countries, except Cuba, Czechoslovakia, and Japan. Discretionary individual licensing is applicable to all other private imports not covered by the procedures listed above. Licenses are usually granted if the imports concerned do not adversely affect domestic industries. Licenses may be granted for goods imported under compensation transactions, if there is no other way of settling payments; at present, trade under such arrangements is negligible.

Grains and other specified goods are imported in accordance with a special system of controls and regulations maintained under so-called Marketing Laws. In addition to grains, the following groups of products are covered by Marketing Laws: milk and butter; cattle, pigs, and horses for slaughter; products from these animals for human consumption; and certain fertilizers.

In principle, import licenses are issued only to importers who have received trade licenses. For new importers there is a newcomers’ quota, which is up to a maximum of 20 per cent of the corresponding global quota. Import licenses are not transferable and are valid for six months, but this period may be extended.

Payments for imports from, and originating in, countries with which Austria makes settlements in convertible currencies do not require exchange licenses.5 Payments for imports from, and originating in, countries with which Austria maintains bilateral payments agreements require exchange licenses, which are granted without restriction if the payments are made in the appropriate bilateral currencies.

Payments for Invisibles

With few exceptions, residents are permitted to conclude transactions involving current invisibles with residents of countries with which Austria makes settlements in convertible currencies. Exceptions comprise transactions concerning transport, films, and insurance. For transactions in current invisibles that involve payments to residents of all other countries, individual licenses are required. The licenses are granted after account is taken of the terms of existing bilateral payments arrangements and other considerations, such as the principle of reciprocity and hardship cases; certain liabilities (e.g., freight payments, handling charges, commissions, etc.) are covered by general licenses.

Payments on account of authorized invisibles to residents of countries with which Austria makes settlements in convertible currencies may be made freely, provided that no capital transfer is involved. All payments to bilateral payments agreement countries for invisibles require licenses.

Residents traveling to countries with which Austria makes settlements in convertible currencies may buy exchange from authorized banks up to the equivalent of S 26,000 for each trip. There is, in addition, a convertible currency quota for business trips of S 3,000 a person for each trip to such countries. Should a resident traveler require more foreign exchange, the increase may be authorized by the National Bank. In addition, Austrian residents may arrange for trips abroad through travel agents and pay in schillings to cover expenditures for hotels and food as well as transportation. Persons leaving Austria may take with them S 15,000 in Austrian notes and coins and any amount in foreign notes and coins.

Exports and Export Proceeds

Licenses for exports regulated under the Foreign Trade Law have to be obtained from the competent ministry. Goods exported under compensation (barter) arrangements are subject to licensing by the Federal Ministry of Trade and Reconstruction. For most other exports, licenses are not required. Export licenses are issued with due consideration of the provisions of relevant bilateral trade agreements and the fulfillment of quotas established in accordance with such agreements, and of the needs of the Austrian economy.

Export claims must be declared. Export proceeds may either be surrendered or be deposited in accounts with authorized banks. Such deposits in convertible currencies may be used freely for authorized payments. Deposits in bilateral clearing currencies may be used in accordance with the terms of an individual payments license.

Proceeds from Invisibles

Exchange receipts from invisibles, if not surrendered or deposited in an account with an authorized bank, have to be declared within eight days from the date of collection. They may either be surrendered or be deposited with an authorized bank and subsequently used in the same way as proceeds accruing from exports. Persons entering Austria may bring in Austrian or foreign banknotes and coins without limit.

Capital

Direct investments by nonresidents are generally permitted, if made with convertible currencies or from free or originally owned blocked schilling balances. For investments financed in other ways (imported Austrian currency, inconvertible currencies, investment loans, goods), authorization is granted on the merits of each case.

Residents are permitted to obtain from nonresidents loans and credits as follows: (1) commercial credits for a period of up to one year; (2) loans with maturities of five years or more, to be used for investment purposes (e.g., for expansion of production equipment); (3) loans to be used by enterprises in Austria in which the nonresidents participate; (4) loans secured by export claims; and (5) loans for a period of up to five years, to be used abroad for definite merchandise transactions.

The Austrian National Bank permits the transfer abroad of (1) proceeds from the liquidation of various foreign investments in Austria (shares or participation in Austrian enterprises, Austrian securities, real estate in Austria) and (2) repayments by residents of foreign loans and credits.

The transfer of funds owned by emigrants, and payments due to nonresidents on account of dowries, inheritances, and settlements under certain agreements between heirs, are permitted.

Residents are allowed to acquire participation rights in foreign companies, associations, and other enterprises, and to establish, acquire, or extend foreign agencies or individually owned firms; earnings accruing from such investment may be reinvested. Residents also are permitted to acquire real estate abroad, to grant commercial or investment credits, and to grant credits secured by mortgages in Austria or abroad. Domestic insurance companies may conclude with nonresidents life insurance contracts in Austria.

Transactions and operations mentioned in the four preceding paragraphs are licensed upon documentation, provided that they are concluded with the residents of countries with which Austria makes settlements in convertible currencies. A number of authorized banks are permitted to accept and to employ abroad foreign funds in convertible currencies for a period of up to five years.

Residents are allowed to purchase from nonresidents, without restriction, foreign securities quoted on foreign stock exchanges and Austrian securities; in the case of foreign securities and Austrian external bonds, the transactions must be carried out on a spot basis through authorized banks and, with certain exceptions in the case of Austrian external bonds, the securities purchased must be kept with such banks. Payments for these purchases to residents of countries with which Austria makes settlements in convertible currencies may be made in those currencies, whereas payments to residents of countries with which Austria has bilateral payments agreements may be made only by crediting a Blocked Account. Residents may sell securities deposited with Austrian authorized banks, in accordance with the aforementioned provision to nonresidents only on a spot basis against payment in convertible currencies and through authorized banks. The proceeds of the sale, as well as the foreign exchange obtained as a result of redemption of the foreign securities by the debtor, may be kept on account with an authorized bank.

Changes during 1964

January 1. Imports from GATT countries (except Cuba, Czechoslovakia, and Japan) of 82 additional tariff items were freed from quantitative restriction.

March 27. Imports from Yugoslavia of 210 additional tariff items were freed from quantitative restriction.

May 21. The exchange allocation for residents traveling to countries with which Austria makes settlements in convertible currencies was raised from S 15,000 to S 26,000 for each trip.

June 1. Imports from GATT countries (except Cuba, Czechoslovakia, and Japan) of 71 additional tariff items were freed from quantitative restriction.

July 1. Existing global import quotas were increased by 20 per cent.

October 1. Imports from GATT countries (except Cuba, Czechoslovakia, and Japan) of 80 additional tariff items were freed from quantitative restriction. A negative list contained the 52 tariff items which continued to require a license when imported from these countries; 40 of these items were agricultural products, mostly subject to Marketing Laws. Some of the industrial imports remaining subject to restriction would be liberalized at the end of 1965 and at the end of 1966.

October 24. The bilateral payments agreement with Yugoslavia was terminated, and Yugoslavia was included in the group of countries with which settlements were made in convertible currencies.

December 1. Imports from Yugoslavia of 153 additional tariff items were freed from quantitative restriction.

Belgium-Luxembourg

Exchange Rate System

The par values are Belgian Francs 50.00 = US$1 and Luxembourg Francs 50.00 = US$1. There are two exchange markets—the official and the free.

In the official exchange market, only authorized banks may carry out exchange transactions permitted in that market.1 The spot exchange rate for the U.S. dollar fluctuates within official limits of BF 49.625 buying, and BF 50.375 selling, per US$1; the rates for the other convertible currencies fluctuate between limits which result from combining the official limits for the U.S. dollar maintained by Belgium-Luxembourg and such limits in force in the country of the other currency concerned. Most exchange transactions are settled through the official market.

In the free exchange market, all currencies (including banknotes) may be bought and sold at freely fluctuating rates. Convertible currencies acquired through the free market may be sold in the official market, but no other direct connection between the two markets exists. On December 31, 1964, the free market rates for the U.S. dollar were approximately BF 49.67¾ buying, BF 49.68¾ selling, per US$1.

Depending on the category of payments and receipts, either one or both of the exchange markets may be used for settlements with so-called convertible area countries, which include all countries except those in the bilateral group.2 If receipts from bilateral group countries are obtained in convertible currencies, they are to be ceded on the official market.

Forward rates are left to the interplay of market forces. In the official market, authorized banks in Belgium-Luxembourg may deal with other authorized banks and with nonresidents in any of the convertible currencies. Any resident or nonresident, banks included, may deal freely in any currency in the free market.

Belgium and Luxembourg accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Exchange Control Territory

There is no exchange control between Belgium and Luxembourg (the Belgian-Luxembourg Economic Union); the two countries constitute a single exchange control territory in relation to other countries.

Administration of Control

The ultimate responsibility for the administration of exchange control in the Belgian-Luxembourg Economic Union (BLEU) is exercised by the Institut Belgo-Luxembourgeois du Change. Exchange control powers for most payments and transfers are delegated to authorized banks. The BLEU Convention of May 23, 1935 conferred on the Joint Belgo-Luxembourg Administrative Commission the authority to license trade transactions; this Commission determines import and export policy, but has delegated the issuance of import and export licenses to the Licensing Offices of the BLEU, one of which is located in each country.

Prescription of Currency

The prescription of currency requirements operate mainly to ensure that settlements with foreign countries are made, according to their nature, through the appropriate exchange market or, where payments in Belgian or Luxembourg francs are involved, through the appropriate category of nonresident account.

All inward and outward transactions are classified in four groups, which may be summarized as follows: List A covers merchandise, transport expenses, industrial expenses (e.g., costs of processing), and other commercial expenses including insurance; List B covers settlements of travel firms, salaries, pensions, fees, subscriptions, taxes, and public administration payments; List C covers administration expenses, income on securities, loans, etc., rents, exploitation rights, repatriation of certain foreign long-term investments, and transfers by emigrants of foreign nationality; List D covers gifts, life insurance payments, family maintenance payments, capital investments, liquidation of investments, dealings in gold, transfers by emigrants of Belgian or Luxembourg nationality, transfers by immigrants, inheritances, forward covering of merchandise, private travel expenses, and all transactions not in any of the other three lists.

Foreign countries are divided into two groups: the bilateral countries (see footnote 2) and the convertible area (all other countries).

The permissible methods of settlement for foreign payments are summarized in the accompanying table. In dealing with countries in the convertible area, there is a choice between the official and the free market for convertible currencies received from transactions in Lists C and D or paid for transactions in Lists A, B, and C; such settlements with the convertible area if made in Belgian or Luxembourg francs can also be settled through a Financial or a Convertible Account.

In addition to the general methods of settlement described above, individual licenses are granted in order to allow transfers through the official market for some of the transactions mentioned in List D. These cover essentially direct investment by enterprises and some capital transfers by individuals.

Summary of Permissible Methods of Settlement for Foreign Payments
Transaction ListCountry GroupForeign CurrencyExchange MarketNonresident Account in Francs
Outward Payments
A, B, and CConvertibleAnyOfficial or freeAny
DConvertibleAnyFreeFinancial
A, B.C, and DBilateralBilateral 3
Inward Payments
A and BConvertibleConvertibleOfficialConvertible
C and DConvertibleConvertible OtherOfficial or free Free
Convertible or Financial
A, B, C, and DBilateralConvertibleOfficialConvertible or Bilateral 3

Nonresident Accounts

Belgian or Luxembourg franc accounts of nonresidents are classified as follows:

1. Convertible Accounts. Balances on these accounts are equivalent to currencies negotiated on the official market, and these accounts may be opened in the name of any nonresident. They are not related to any country or monetary area. They may be used for settlements which either must or may be made through the official market, and may be credited with proceeds from the sale by a nonresident of convertible currencies in the official market to authorized banks in Belgium-Luxembourg. Balances on Convertible Accounts may be transferred freely to any nonresident account or be converted into any currency in the official or the free market.

2. Financial Accounts. These accounts may be opened only for residents in convertible area countries,4 and they are not related to any country or monetary area. They may be used for settlements which either must or may be made through the free market, and may be credited with proceeds from the sale by a nonresident of gold or any currency in the free market and of convertible currencies in the official market. Domestic banknotes and proceeds from the sale in the free market of foreign banknotes deposited with authorized banks by foreign travelers in Belgium-Luxembourg or by persons residing abroad may be credited freely to Financial Accounts. Transfers between Financial Accounts are free. Balances on these accounts may be used to purchase gold or any currency negotiated on the free market.

3. Bilateral Accounts. These accounts may be opened for residents of bilateral countries (see footnote 2), and they are related to the country of residence of the account holder. They are used for settlements with bilateral countries, and may be credited with proceeds from the sale by a nonresident of convertible currencies in the official market. Balances on Bilateral Accounts may be transferred to other Bilateral Accounts related to the same country. Transfers may be made freely between Bilateral Accounts related to Burundi, the Democratic Republic of Congo, and Rwanda. In practice, the authorities permit the conversion of balances on Bilateral Accounts of the central banks of these three countries into foreign currencies.

Imports and Import Payments

Individual licenses are required for (1) all imports from Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hong Kong, Hungary, Japan, North Korea, Outer Mongolia, Poland, Rumania, the U.S.S.R., and North Viet-Nam, (2) a few imports from Luxembourg into Belgium and vice versa, and (3) a number of imports from all other countries. The imports for which individual licenses are required include mostly agricultural products, foodstuffs, coal, and kerosene. All other imports, which constitute about four fifths of total imports, are free of license and quantitative restriction. Only a simple form completed by the importer giving notification of the import is required. Many imports subject to individual licensing are also admitted without quantitative restriction.

No exchange control documentation is required for imports not exceeding BF 10,000 in value. The authorized bank is required to make certain that payment is made by one of the methods laid down in the regulations (see section on Prescription of Currency, above). If the requirements are not fulfilled, the authorized bank submits a request to the central exchange control authority for special permission. Exchange control approval is also required to make payments for imports more than three months before or after the date of customs clearance.

Payments for Invisibles

If payments for invisibles are to be made through the official exchange market or by crediting Belgian or Luxembourg francs to a Convertible Account, supporting documents must be presented to an authorized bank, and in exceptional cases the approval of the central exchange control authority is required. Payments for other invisibles may be made through the free market or by crediting Belgian or Luxembourg francs to a Financial Account. Foreign and domestic banknotes may be exported freely.

Exports and Export Proceeds

Individual licenses are required for (1) all exports to Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Outer Mongolia, Poland, Rumania, the U.S.S.R., and North Viet-Nam, (2) a few exports from Belgium to Luxembourg and vice versa, and (3) specified exports to other countries. All other exports are free of license; only a simple form completed by the exporter giving notification of the export is required.

No exchange control documentation is required for exports not exceeding BF 10,000 in value. The authorized bank is required to make sure that export proceeds are received in accordance with the regulations (see section on Prescription of Currency, above). Special authorization is required to collect export proceeds more than six months after the date of exportation. Export proceeds in convertible currencies must, within eight days of receipt, be surrendered to an authorized bank, or, alternatively, they may be deposited in a Controlled Resident Account in Foreign Currency with an authorized bank if they are to be used later for current payments authorized to be made in these currencies.

Proceeds from Invisibles

Receipts in convertible currencies from invisibles connected with certain commercial transactions (Lists A and B—see section on Prescription of Currency, above) must, within eight days of receipt, be surrendered (i.e., sold in the official exchange market), or, alternatively, be credited to a Controlled Resident Account in Foreign Currency with an authorized bank if they are to be used later for current payments authorized to be made in these currencies. Receipts in convertible currencies from other transactions (Lists C and D) may be retained or sold in the official or the free market. Receipts in all other currencies may be retained or sold in the free market. Foreign and domestic banknotes may be imported freely.

Capital

All capital transactions may be carried out freely through the free market or by settlement in Belgian or Luxembourg francs through the Financial Account of a nonresident. Direct investments by enterprises and some capital transfers by individuals, including gifts, family maintenance payments, remittances by emigrants of Belgian or Luxembourg nationality, and inheritances, but not transactions of a financial character, may also be made through the official market, subject to individual license. In addition, incoming capital may be received in convertible currencies through the official market or in Belgian or Luxembourg francs to the debit of a Convertible Account. The exchange control authorities may guarantee the repatriation of approved foreign investments made in Belgium-Luxembourg. In that case, capital brought in through the official market may be repatriated through that market. All transactions in securities by residents or nonresidents are free, but the financial settlement of such transactions must conform to the general regulations.

Changes during 1964

March 3. A ministerial decree eliminated the licensing requirement for nonresidents, who had to produce a license only when this was also required for residents.

July 1. Five, commodities or groups of commodities were removed from the common list of residual import restrictions maintained by the Benelux countries and notified as such to the GATT. These commodities include stearic acid (stearin), oleic acid (olein), and certain other acids.

October 1. A number of exchange control regulations were modified and simplified. The changes include the following: (1) Various categories of resident accounts (Commercial Accounts, Transitory Accounts, Insurance Accounts, and Advance Accounts) were converted into a new category of account, Controlled Resident Account in Foreign Currency. (2) The classification of trade and exchange transactions was modified in accordance with a new statistical codification. (3) The obligation to surrender to the Treasury exchange profits realized on foreign currencies purchased spot or forward and not utilized for making payments abroad was limited to cases of parity changes resulting in a reduction of the value of the Belgian or Luxembourg franc. Previously, surrender was required also in respect of any profit resulting from normal market fluctuations. (4) Insurance payments no longer had to be made in the currency stipulated in the contract.

October 21. The BLEU ceased to invoke Article XXXV of the General Agreement on Tariffs and Trade with regard to Japan.

Bolivia

Exchange Rate System

On May 14, 1953, a par value for the Boliviano was established by Bolivia with the Fund. However, exchange transactions no longer take place at rates based on that par value. A single, freely fluctuating rate was established by virtue of Supreme Decree 4538 of December 15, 1956. All exchange transactions are carried out in a free market, in which the exchange rate has remained stable since January 1959. On January 1, 1963, the boliviano was replaced by the Bolivian peso at a rate of Bs 1,000 = $b 1.00.

For operational purposes, the free market is divided into two sectors: the public sector and the private sector. The Monetary Department of the Central Bank of Bolivia operates in the public sector, buying foreign exchange from the Government and the official enterprises, including the Bolivian Mining Corporation, and selling foreign exchange to the Banking Department of the Central Bank, the banks, the Government, and its official agencies. The exchange rate of the Monetary Department of the Central Bank on December 31, 1964 was $b 11.875 buying, $b 11.885 selling, per US$1. The Banking Department of the Central Bank, the banks, and the foreign exchange dealers operate in the private sector, where the exchange rate on December 31, 1964 was $b 11.865 buying, $b 11.91 selling, per US$1. All sales of foreign exchange in the private sector are subject to a 2 per cent exchange tax and a 2 per mill stamp tax.

Prescription of Currency

There are no prescription of currency requirements. Settlements are usually made in U.S. dollars or other convertible currencies.

Imports and Import Payments

The import of a number of goods listed under some 35 headings in the Bolivian customs tariff requires the prior authorization of the Ministry of National Economy. The goods include such items as live cattle, dairy produce and other foods, vegetable fats and oils, petroleum products, rubber tires, and motor vehicles. Goods not listed under the 35 headings may be imported freely. Exchange to pay for imports may be purchased in the free market, subject to the requirement that the commercial documents involved in the transaction are submitted.

Payments for Invisibles

Payments for invisibles and capital transfers may be made freely through the free market.

Exports and Export Proceeds

Exports are not subject to licensing. Exchange receipts from exports by official agencies are surrendered to the Central Bank at the free market rate, with the exception of the portion retained by the Bolivian Mining Corporation for its own use. Proceeds from other exports may be sold to commercial banks or to authorized exchange houses at the free market rate, or they may be retained by the exporter.

Proceeds from Invisibles

Exchange derived from invisibles may be sold in the free market.

Capital

Inward and outward capital transfers by residents or nonresidents are free of control and may be made through the free market. Foreign investments in Bolivia, except those involving petroleum and mining, are governed by the provisions of the Investment Law of December 16, 1960, which guarantees the free convertibility and repatriation of profits and amortized capital. Companies established before the passage of this law may also benefit from its provisions. Investments in petroleum and mining are governed by the Petroleum Code and the Mining Code.

Changes during 1964

May 7. Restrictions were removed on the import of certain commodities; these included malt, synthetic plastic materials, cellulose ethers and esters, artificial resins, natural or synthetic rubber, and raw or rendered fat of beef, mutton, and goat.

May 7. The import of additional types of motor vehicles required prior authorization.

Brazil 1

Exchange System

On July 14, 1948, a par value for the Brazilian Cruzeiro was established by Brazil with the Fund. However, exchange transactions no longer take place at rates based on that par value.

All transactions other than those in foreign banknotes and in travelers checks take place in a free market operated by the Bank of Brazil and the authorized banks. On January 31, 1965, the free market rates quoted by the Bank of Brazil and by the authorized banks were Cr$l,825 buying, and Cr$l,850 selling, per US$1; these are net rates, since certain small taxes and all charges are for the account of the customer of the bank. In its transactions, the Bank of Brazil applies exchange rates which, in principle, follow those of the authorized banks; however, the Bank of Brazil has from time to time maintained its buying and selling rates unchanged, while those of the authorized banks continued to fluctuate. Rates for convertible currencies are based on the U.S. dollar rates indicated above and the dollar quotations for such currencies in international markets. Exchange rates for “agreement currencies,” used for settlements with bilateral agreement countries, are quoted by the Bank of Brazil 5 per cent below its rates for convertible currencies; exceptions are “agreement dollars” used for settlements with Greece, Israel, Portugal, Rumania, and the U.S.S.R., which are fixed at par with the U.S. dollar, and “agreement sterling” used for settlements with Mainland China, which is fixed at par with the pound sterling.

Foreign banknotes and travelers checks are negotiated freely in a separate “manual market.” At the end of January 1965, the rates in this market fluctuated around Cr$l,830 per US$1.

Other effective rates result from the following: a 15 per cent tax on exchange proceeds from exports of cocoa beans and cocoa paste; a 5 per cent tax on proceeds from large-scale exports of cocoa derivatives; various arrangements applicable to the proceeds of exports of coffee (see section on Exports and Export Proceeds, below); a financial charge of 10 per cent on payments for imports subject to advance deposit; a financial charge of 30 per cent on financial transfers subject to advance deposit; an advance deposit of 50 per cent, and a guarantee deposit of 10 per cent to 100 per cent, of the value of the exchange sold for almost all private imports and private financial transfers; and the practice of selling foreign exchange for payments for imports of petroleum and its products to Petrobras (national petroleum agency) at the Bank of Brazil’s selling rate prevailing at the beginning of the contracting period (usually a calendar quarter) in which the import was purchased. In general, exchange to cover imports is sold on a forward basis, generally at 120 days, while purchases of exchange are on a shorter basis, frequently spot.

Foreign exchange transactions are effected through the Bank of Brazil, the authorized banks, and the exchange houses. The exchange houses may deal only in travelers checks and banknotes. The Bank of Brazil carries out a large proportion of all exchange transactions. It is entitled to receive, directly or indirectly, all exchange proceeds from exports of sugar, petroleum, and iron ore and at least 90 per cent of the proceeds from exports of coffee. It handles almost two thirds of total exchange sales for (1) payments for imports of wheat and petroleum, parts and accessories for the use of Petrobras, newsprint, and, in practice, certain private imports up to specified limits which are set by the Director of the Exchange Department of the Bank of Brazil, and (2) the Bank’s commitments to service government financial obligations and to make other nontrade payments at the free market rate. In addition, all transactions in bilateral currencies are made through the Bank of Brazil, either direct or with an authorized bank acting as an intermediary. Foreign exchange purchased by the Bank is not resold to authorized banks, with the exception of bilateral currencies.

Authorized banks handle most of the free market exchange purchases not specifically reserved for the Bank of Brazil. In practice, they also purchase foreign exchange from most exporters of coffee, but they must resell at least 90 per cent of the coffee exporters’ portion of exchange proceeds to the Bank of Brazil, and also transfer to the Bank of Brazil, for the account of the Superintendency of Money and Credit (SUMOC), the required “contribution” of foreign exchange surrendered by the exporters without cruzeiro compensation. They are not permitted to sell foreign exchange to one another. Subject to certain conditions, exchange held by an authorized bank may be used by its branches in different cities.

Administration of Control

The control system is operated by the Bank of Brazil under the direction of the Council of SUMOC. The Exchange Department of the Bank exercises over-all supervision of the operations of the foreign exchange market. Through a unit within the Department (FIBAN), it enforces controls and restrictions. The Department also organizes the auctions of promessas de licença (which entitle the holder to receive an import license for Special Category imports), and establishes the total value of promessas de licença on the basis of criteria approved by the Council of SUMOC and with the advice of the Foreign Trade Department of the Bank (CACEX).

Government departments and public entities are requested to present to the Exchange Department quarterly or semiannual estimates of their needs for imports and service payments. These are reviewed by the Council of SUMOC before being incorporated in the foreign exchange budget.

CACEX issues export and import licenses and verifies price quotations, weights, measures, classifications, and types in export and import operations that are subject to license. The Customs Policy Council decides on changes in the categories of import commodities.

Prescription of Currency

Prescription of currency is in principle related to the country of origin of imports or the country of final destination of exports, unless otherwise specifically prescribed or authorized. Settlements with payments agreement countries are made through the relevant agreement accounts. These accounts are maintained in clearing dollars with Bulgaria, Czechoslovakia, Eastern Germany, Greece, Hungary, Israel, Poland, Portugal, Rumania, the U.S.S.R., and Yugoslavia; in Danish kroner with Denmark; and in clearing sterling with Iceland and Mainland China.

On the basis of provisions for the settlement with certain non-clearing countries of outstanding balances or transactions under bilateral agreements now terminated, a few payments with these countries are still settled in agreement dollars. All trade with Bolivia, except Brazilian exports of coffee and cocoa, is settled in cruzeiros. Settlements with other countries with which Brazil has no payments agreements or arrangements are usually made in U.S. dollars or other convertible currencies.

Imports and Import Payments

Import procedures depend on whether the goods belong to the General Category or the Special Category. The commodities listed in the General Category are mainly raw materials, equipment goods, spare parts, and some essential goods not produced in Brazil in sufficient quantities. All other commodities are in the Special Category.

Secondhand goods, if included in the General Category when new, may be imported only if they are (1) certified to be in good operating condition, (2) not obsolete, (3) to be used by the importer himself, and (4) considered to contribute directly to domestic productive process. Imports of new automobiles and recreational boats of a value over US$3,500 are prohibited.

General Category imports are free of quantitative restriction. However, to obtain a visa from the Brazilian consular authorities abroad (which is required prior to shipment of the goods) and to clear the goods through customs, the importer must first obtain a “certificate of exchange cover,” which is issued by the Exchange Department of the Bank of Brazil, subject to the following conditions: (1) The importer must have closed an exchange contract with the Bank of Brazil or an authorized bank, for no more than 180 days, for the full value of the import. As a rule, at present, foreign exchange is not sold for less than 120 days. (2) The importer must provide evidence that, within 5 days of the closing of the contract, a deposit in cruzeiros equivalent to 50 per cent and a financial charge equivalent to 10 per cent of the contract have been paid to the Bank of Brazil. Specified imports 2 require neither an advance deposit nor payment of the financial charge. Thirty days after the deposit is made the importer receives, against the deposit, Bank of Brazil notes for an equal amount, maturing in 180 days and carrying no interest. (3) CACEX must be supplied with information on the foreign prices of the goods and any other information which the Department may consider necessary.

At the time the importer closes the exchange contract with the Bank of Brazil or a commercial bank, he is required to place as a guarantee deposit with the respective bank 100 per cent of the value of the foreign exchange, if the contract is concluded in convertible currencies. If the contract is concluded in convertible exchange with the Bank of Brazil, the guarantee deposit is reduced to the following: 10 per cent for contracts covering imports of newsprint and paper stock for books; 20 per cent for fertilizers, insecticides, and seeds; and 50 per cent for petroleum. For payments in agreement currencies, the required guarantee deposit is 20 per cent or, if a letter of credit is opened, 100 per cent. When the contracts are liquidated, deposits may be used for payment for foreign exchange.

Each importer may purchase no more than US$50,000 in convertible currencies, and no more than US$50,000 in bilateral agreement currencies, in any one week. However, to the extent that his purchases of convertible exchange fall short of US$50,000, an importer may acquire bilateral agreement currencies in addition to the US$50,000 limit; thus, the combined limit is US$100,000 weekly. These limits do not apply to imports included in the National List of Brazil from countries of the Latin American Free Trade Association, to imports in the Special Category, to certain imports for the use of Brazilian firms up to a value of 50 per cent of the exports of listed industrial products of such firms, or to imports covered by foreign loans with more than a 20-year repayment period. The limits may be waived by the Bank of Brazil, and a waiver is normally granted to importers who in the past have customarily imported goods in average weekly amounts larger than these limits.

Special Category imports are subject to global quotas. They represent a minor proportion of total imports. Importers are required to obtain an import license from CACEX, and for this purpose they must purchase a promessa de licença on a stock exchange, where promessas are offered in global amounts for auction. Importers must also comply with the requirements established for obtaining a “certificate of exchange cover” for General Category imports, as described above.

The procedure for the auction of the promessas de licença is as follows: Each week the Exchange Department of the Bank of Brazil determines the amount to be offered at auction. The promessas are expressed in only two currencies, “free U.S. dollars” and “agreement dollars,” and are offered in lots of US$100 and US$500. The minimum bids for auctions of promessas are, for those expressed in free U.S. dollars, an amount equal to the current Bank of Brazil selling rate for U.S. dollars, and for those expressed in agreement dollars, an amount equal to the average premium paid in recent auctions for promessas in free U.S. dollars. Within 3 business days, beginning 48 hours after the date of the auction, a successful bidder must pay the price of the promessa to the Bank of Brazil. The promessa is valid for 30 days, and within this period the importer must close an exchange contract for the payment of the import. A promessa entitles the holder to obtain import licenses for a total value equal to the amount of the promessa. Promessas in agreement dollars are valid for imports from any bilateral payments agreement country, while promessas in free U.S. dollars are valid for imports from any other country.

Special procedures are applicable to certain imports (petroleum, wheat, newsprint, maps, books, magazines, and newspapers) and imports with foreign financing. Foreign exchange to pay for these imports is purchased, as a rule, from the Bank of Brazil.

Payments for Invisibles

All payments for current invisibles are made at freely negotiated rates and are subject to the approval of FIB AN. In addition, repatriation of capital and remittances on account of income from foreign capital, royalties, and technical, scientific, and administrative assistance are normally allowed only where the foreign capital concerned, and the contracts for patents, trademarks, and technical, scientific, and administrative assistance, are registered in accordance with established rules; in no circumstances may such payments be afforded more favorable conditions than are granted for General Category imports. Remittances of profits and dividends in excess of 12 per cent of registered capital and reinvestments are subject to supplementary income tax at rates ranging from 40 per cent to 60 per cent. The transfer of income from foreign investment employed in the production of goods or services for luxury consumption is allowed up to 8 per cent annually of registered foreign capital. When serious disequilibrium in the balance of payments exists, or is anticipated, the Council of SUMOC is required to prohibit repatriation of foreign capital, and may limit the remittance of profits and dividends to 10 per cent annually of the registered capital and reinvestments (5 per cent for investment in production for luxury consumption), and may limit total annual transfers of royalties and fees for technical, scientific, and administrative assistance to 5 per cent of the company’s gross receipts. Remittances on the basis of contracts for technical, scientific, or administrative assistance may be made only for the first 5 years of the operation of the enterprise in Brazil or for 5 years from the date of the application of the special production process; this period may be extended for 5 years by the Council of SUMOC.

The Bank of Brazil, in practice, sells foreign exchange only for current invisibles related to those trade transactions for which it has closed an exchange contract, and for nontrade transactions which have been given exemption from the normal requirements for advance deposits and financial charges. The authorized banks, through which all other payments for current invisibles are made, are obliged to keep weekly sales of exchange for payments within any periodic limits set by SUMOC and to require proof of payment of any applicable income tax. In addition, payments for invisibles not related to contractual obligations require specific justification for amounts in excess of normal allowances fixed for various purposes (ranging from US$250 a trip up to US$500 a month for foreign travel, and US$100 a month for remittances by immigrants). Banks sell exchange for travel expenses only to travelers, upon presentation of valid passports with an exit visa and tickets marked valid for no more than 15 days.

Payments for current invisibles other than those specifically exempted 3 are subject to an advance deposit equal to 50 per cent, and to a financial charge of 30 per cent, of the amounts of the exchange contracts. Payments for invisibles are covered by the same procedure as that applicable to import payments (see section on Imports and Import Payments, above) and are subject to guarantee deposit requirements amounting to 100 per cent when contracts are in convertible currencies and 20 per cent when they are in agreement currencies (100 per cent if a letter of credit is opened).

Letters of credit opened for payment in inconvertible or “agreement” currencies for imports contracted on an f.o.b. basis must contain a clause requiring that the goods be transported on a ship under the flag of Brazil or the exporting country.

Travelers may take out domestic and foreign banknotes freely.

Exports and Export Proceeds

All exports require licenses, with the exception of exports of coffee, which require authorization by the Brazilian Coffee Institute. Export licenses are granted without limitation except when (1) the export is contrary to the national security or to obligations arising from international agreements, (2) payment is to be received in an inconvertible currency, the acceptance of which is considered by FIBAN to be undesirable, or (3) it is considered necessary to guarantee adequate domestic supplies of the goods concerned. Restrictions on account of the last-mentioned reason are limited to a few products.

All exports are subject to shipping permits issued by FIBAN. To obtain this permit it is necessary to present the export license (for coffee, the authorization of the Brazilian Coffee Institute) and evidence that the exchange proceeds have been negotiated through an authorized bank or the Bank of Brazil.

The Brazilian Coffee Institute does not grant the authorization to export coffee unless the sale contract is based on a price per pound that is at least equal to the minimum registration price in foreign currency fixed by the Institute.4 Exporters of coffee are required to surrender without compensation a portion (“contribution” or quota de contribuiçāo) of their foreign exchange receipts;5 the cruzeiro equivalent of this portion is transferred to a Coffee Defense Fund. For the export proceeds in excess of the contribution quota, exporters receive (1) payment of a fixed cruzeiro amount per bag6 and (2) payment of the full cruzeiro equivalent at the free market rate of any foreign exchange received in excess of the minimum registration price.

All other exports are sold at freely negotiated exchange rates, but exporters of cocoa beans and cocoa paste are required to surrender without compensation 15 per cent of their exchange proceeds; and large-scale exporters of cocoa derivatives are required to surrender without compensation 5 per cent of exchange proceeds. The cruzeiro equivalent of these deductions is used to finance a program of price support and plantation improvement for cocoa.

Industrial firms exporting designated products of their own manufacture may use up to 50 per cent of the foreign exchange proceeds, without making an advance deposit or paying the financial charge, to cover their own import requirements or to pay their own financial obligations abroad that have been registered with SUMOC, subject to certain conditions.

Exports of consumer durable goods and capital goods for which payment is to be made in convertible currency on a medium-term or long-term basis may be licensed by CACEX, provided that (1) the financing in foreign currency does not exceed 80 per cent of the invoice value and (2) information is furnished about the transaction and, in particular, about guarantees given by the importer.

For transactions with payment terms in excess of 360 days, CACEX may refinance the full amount payable in the first 360 days and 75 per cent of the remainder. A refinancing by the Exchange Department of the whole of the credit granted by the exporter is also provided for, but only for transactions with payment terms not exceeding 360 days.

The Exchange Department of the Bank of Brazil is authorized, in connection with the refinancing by CACEX mentioned above, to place in foreign financial markets securities in foreign currencies not exceeding US$50 million, with a maturity not exceeding 7 years.

Proceeds from Invisibles

Exchange proceeds from current invisibles are sold through the Bank of Brazil or the authorized banks at freely negotiated rates. Travelers checks and foreign banknotes are sold in a separate free market, the “manual market.” Travelers may bring in domestic and foreign currency notes freely.

Capital

For the purpose of repatriation and the remittance of income, foreign capital and the reinvestment of profits on foreign capital must be registered with SUMOC. Foreign capital is defined as (1) goods, machinery, and equipment which have entered the country without a corresponding expenditure of foreign exchange and which are to be used to produce goods or to render services, and (2) financial and monetary resources brought into the country for investment in economic pursuits, provided that, in either case, the owner is a resident domiciled or with headquarters abroad.

Foreign capital is classified as investments, loans, and financing. Investment is defined as that foreign capital which constitutes part of corporate capital and participates directly in the risk inherent in an economic undertaking. Loans are considered to be foreign capital that is not part of the corporate capital of any enterprise and which does not participate directly in capital risk. Any loan obtained to purchase capital goods abroad, whether conceded by the manufacturer himself or a third party, is considered to be financing.

To register foreign capital, it is necessary to prove that the capital has entered Brazil. To register loans and financing that are made in foreign currency, it is necessary to certify that the interest rate corresponds to that prevailing in the country of the lender, and that the prices of the imported goods correspond to the prices of comparable goods in the country of origin. The registration of financing (usually known as suppliers’ credits) requires the prior authorization of SUMOC, on advice from CACEX and the Exchange Department of the Bank of Brazil.

The registration of direct investment is subject to the following rules: The capital that enters or has entered Brazil is registered in foreign currency. Reinvestments, defined as the unremitted portion of remittable earnings, are registered simultaneously in cruzeiros and in the currency of the country to which the profits could have been remitted, calculated at the rate of exchange during the period of reinvestment. The reimportation into Brazil of remitted earnings of foreign capital is registered in foreign currency. Remittances for the repatriation of foreign investment are allowed when the foreign capital concerned is registered and when SUMOC neither has found nor anticipates a serious disequilibrium in the balance of payments.

To provide a more normal basis for the supply of working capital in Brazil by foreign investors, the Bank of Brazil enters into repurchase arrangements which provide that the seller of foreign exchange may subsequently repurchase equivalent foreign exchange, free of the financial charge and free of requirements of advance or guarantee deposits, and that the procedure for registration with SUMOC to satisfy the requirements of the Profit Remittance Law will be both immediate and automatic. The repurchase must be a spot or forward transaction in the free market with any authorized bank (or with the Bank of Brazil if it so elects) and does not involve an exchange rate guarantee; the repurchase rights may be exercised in whole or in part after 90 days but will expire after 360 days.

All capital transfers abroad are subject to the approval of FIBAN. Exchange transactions concerning private capital are effected through an authorized bank or the Bank of Brazil at freely negotiated rates; outward transfers, unless made under the terms of a repurchase contract, are subject to payment of a 30 per cent financial charge and a 50 per cent advance deposit.

Table of Exchange Rates (as at January 31, 1965)7

(cruzeiros per U.S. dollar)
BuyingSelling
1,551 (Free Market Rate less 15%)8 Exports of cocoa beans and cocoa paste.
1,734 (Free Market Rate less 5%)8 Large-scale exports of cocoa derivatives.
1,820 (“Manual Market” Rate) Foreign banknotes and incoming travelers checks.1,840 (“Manual Market” Rate) Foreign banknotes.
1,825 (Free Market Rate)89 Proceeds from exports of coffee in excess of the contribution quota. Other exports except cocoa beans, cocoa paste, and cocoa derivatives. Other receipts not negotiated in the “manual market.”1,850 (Free Market Rate)810 Imports and invisibles exempt from advance deposit requirements.
2,035 (Free Market Rate plus 10% Financial Charge)8 Imports subject to advance deposit.
2,405 (Free Market Rate plus 30% Financial Charge)8 Financial transfers subject to advance deposit.

Changes during 1964

January 21. Decree 53451 put into effect detailed regulations for the implementation of the Profit Remittance Law.

February 19. By SUMOC Instruction 263, a new exchange system was introduced based on two markets: (1) a “special” market with fixed rates applicable to proceeds from exports of coffee, sugar, and petroleum, and to payments for imports of petroleum, wheat, and (temporarily) newsprint, as well as for specified financial obligations and (2) a free market with a fluctuating rate for all other duly authorized transactions. The exemption from the advance deposit requirement for remittances for invisibles of up to US$100 was abolished. A system of bonuses for exports of designated manufactured products was also discontinued, under implementing regulations.

February 20. By SUMOC Instruction 264, the export by travelers of foreign and domestic banknotes in excess of US$2,000 or its equivalent and of valuables not for personal use was, in accordance with Decree 53451, made subject to registration with SUMOC and prior authorization by the Bank of Brazil.

May 9. By SUMOC Instruction 270, the special rates of Cr$600 buying, and Cr$620 selling, per US$1 were discontinued for imports of wheat, newsprint, and petroleum and other imports of Petrobras, for financial remittances for the servicing of the Brazilian foreign debt and of official debts to the International Monetary Fund, U.S. agencies, and the like, and for exports of sugar and petroleum; henceforth, these transactions would take place at the free market rate, except for imports of petroleum and most of its by-products. For imports of petroleum and its by-products other than fuel oil and liquid gas, exchange requirements could be covered at a rate fixed for quarterly periods by the Exchange Department of the Bank of Brazil. Fuel oil and liquid gas became subject to a separate, less depreciated selling rate set by the Bank of Brazil that would apply until the end of the calendar quarter.

June 2. By SUMOC Instruction 272 and accompanying regulations, the free market buying rate was made applicable, in principle, to receipts from coffee exports. The exchange proceeds could be sold to the Bank of Brazil or to a commercial bank at the respective free market rates quoted by them, subject to the following conditions. Coffee exports would continue to be subject to minimum registration prices set from time to time by the Brazilian Coffee Institute and to contributions (retentions) without cruzeiro payment fixed at US$22.50 per 60-kilogram bag on the new crop and at US$28.00 on old crops. The contributions would be subject to upward adjustment to preclude exporters from receiving larger cruzeiro proceeds per bag on exports at minimum registration prices if the free market rate quoted by the Bank of Brazil should depreciate beyond Cr$l,210 per US$1. Previously, coffee exporters received a fixed cruzeiro amount per bag corresponding to a pre-established price in U.S. dollars and a bonus added to the special market exchange rate for any foreign exchange surrendered in excess of this price.

June 25. By Decree 53982, the exclusive right of Petrobras to import crude oil and major petroleum products was confirmed. Petrobras would require its major foreign suppliers to guarantee the exportation of listed manufactured products equivalent in value to at least 20 per cent of the petroleum imports to be made. All exchange contracts under this guarantee system had to be concluded with the Bank of Brazil; payment of the designated portion of the invoice value of the petroleum imports was made dependent not only upon completion of the import shipment and of the cruzeiro payment required for it, but also upon actual receipt of payment in foreign currency for the designated Brazilian exports with an f.o.b. value equal to the exchange released.

August 3. By SUMOC Instruction 275, the advance deposit requirements of 100 per cent and 200 per cent for imports, of 200 per cent for film rental payments, and of 100 per cent for other financial transfers were revised. Advance deposits of 60 per cent were required for all commodity imports and of 100 per cent for film rental payments, while the 100 per cent requirement for other financial transfers was maintained. Payment of a 20 per cent financial charge was required on all exchange purchases subject to an advance deposit requirement.

August 29. By Law No. 4390, amending Law No. 4131 of September 3, 1962 (the Profit Remittance Law) and revoking Decree 53451, more favorable treatment of foreign capital was provided. (1) Registration of reinvestments would be made, not only in cruzeiros, but also in the currency of the country to which remittance could have been made, at the exchange rate prevailing for the period in which the reinvestment was made. (2) Provisional transfers relating to certain profits and certain debts, in cases of registration applied for but not yet granted or refused, would be authorized ad hoc. (3) When SUMOC found or anticipated serious disequilibrium in the balance of payments, the repatriation of foreign capital would be prohibited, and the annual remittance of profits restricted, normally to 10 per cent of registered capital and reinvestments; under the same circumstances, remittance of royalties and fees for technical and other assistance could be limited to 5 per cent of gross receipts annually. (4) Remittances of profits and dividends in excess of 12 per cent of registered capital and reinvestments were made subject to supplementary income tax on a scale rising from 40 per cent to 60 per cent. (5) Exports of foreign and domestic banknotes by travelers were no longer limited to US$2,000 or its equivalent.

September 6. Settlements relating to frontier trade with Paraguay could no longer be effected in cruzeiros.

September 9. By SUMOC Instruction 276, the Foreign Trade Department of the Bank of Brazil was authorized to license the import of used machinery meeting specified requirements under the procedure provided for General Category imports, rather than under the Special Category procedure otherwise applicable.

September 9. By SUMOC Instruction 277, the advance deposit percentages established on August 3 were reduced, effective October 1, 1964, from 60 per cent to 50 per cent for imports, and from 100 per cent to 90 per cent for financial transfers (including film rental payments).

September 10. By SUMOC Instruction 279, enterprises that exported designated manufactured products were given the right to use up to 50 per cent of the foreign exchange proceeds, without making an advance deposit or paying the financial charge, to cover their own import requirements or to pay their own foreign financial obligations, subject to a number of conditions provided for in the Instruction and implementing regulations.

September 10. Upon authorization of the SUMOC Council, the Bank of Brazil, by FIBAN Circular 585, instructed banks to collect guarantee deposits of 100 per cent of the value of exchange contracts, in addition to any advance deposit and financial charge required from all purchasers of convertible foreign exchange.

September 22. The financial charge on all exchange contracts subject to advance deposit requirements was increased from 20 per cent to 30 per cent.

November 30. Law No. 4505 exempted from the 1 per cent stamp tax all operations in the “manual market,” including the purchase of travelers checks.

December 1. SUMOC Instruction 283 introduced the following new regulations for proceeds from coffee exports, which, together with other determinations made at the same time, resulted in a depreciation of the effective rates for various grades. The Brazilian Coffee Institute established a minimum cruzeiro payment per bag payable by banks to exporters and varying according to grade and port of shipment. Exchange proceeds in excess of the minimum registration price could be sold at the free market buying rate. The balance of the export proceeds—total exchange proceeds minus exchange received in excess of the minimum surrender price minus an amount (calculated at the free market rate) corresponding to the minimum cruzeiro payment to the exporter—was to be surrendered as a “contribution,” without compensation, with its equivalent in cruzeiros to be transferred to the Coffee Defense Fund. Up to 10 per cent of the difference between total export proceeds and the “contribution” could be retained by the intermediary bank, which was required to resell at least 90 per cent to the Bank of Brazil.

December 24. By SUMOC Instruction 285, the advance deposit requirement for financial transfers (including film rentals) was reduced to 50 per cent. The financial charge on purchases of exchange for import payments was reduced to 10 per cent.

December 26. By SUMOC Instruction 286, free market buying and selling rates were required to be quoted on a net basis, the applicable stamp tax and expenses to be charged separately to the purchasers or sellers concerned. Previously, the tax and expenses had been absorbed in the quoted buying and selling rates.

Note.—The following changes took place in 1965:

January 14. By SUMOC Instruction 287, the limit on weekly purchases by any one firm of convertible foreign exchange for import payments was increased from US$30,000 to US$50,000. Implementing regulations increased the corresponding weekly limit for bilateral agreement currencies from US$20,000 to US$50,000, and for convertible and agreement currencies combined from US$50,000 to US$100,000. Excluded from these limits were imports financed with foreign loans for periods of more than 20 years.

January 14. By SUMOC Instruction 289, the Foreign Exchange Department of the Bank of Brazil was authorized, upon effecting purchases of foreign currency, to guarantee to the seller the right to repurchase foreign exchange up to the same amount. The repurchase could be made from any authorized bank or the Bank of Brazil at the free market rate prevailing at the moment of the repurchase. Registration of the transaction for purposes of the Profit Remittance Law would be automatic. Repurchases were exempt from advance deposit and guarantee deposit requirements and from the financial charge. The Bank of Brazil issued regulations providing that the right of repurchase might be exercised at any time after 90 days and up to 360 days. Permitted use of the procedure included transactions related to repatriation under the terms of a temporary amnesty of undeclared resident-owned capital held abroad. The terms on which the Bank of Brazil offered swap loans were tightened; in particular, new or renewed swap loans were required to be accompanied by a repurchase contract at least equal in value.

British Guiana

Exchange Rate System

The par value is West Indian Dollars 1.71429 = US$1. The West Indian dollar is issued by the British Caribbean Currency Board and has a fixed relationship to sterling of BWI$4.80 = £1.1 The banks in British Guiana base the rates for other currencies on the current London market rates.

Administration of Control

Exchange control authority is vested in the Governor and the Minister of Finance. Authority for approving normal import payments and providing allocations of foreign exchange for other current payments is delegated to the two banks authorized for this purpose. Import licensing is the responsibility of the Ministry of Trade and Industry.

Prescription of Currency

British Guiana is a member of the Sterling Area and maintains prescription of currency requirements similar to those of the United Kingdom. Authorized settlements with residents of other parts of the Sterling Area may be made in any Sterling Area currency. Authorized payments, including payments for imports, by residents of British Guiana to residents of countries outside the Sterling Area may be made in any foreign currency or by crediting West Indian dollars or sterling to an External Account. Receipts from countries outside the Sterling Area may be obtained in any foreign currency or in sterling or West Indian dollars from an External Account.

Nonresident Accounts

There are three categories of accounts for persons who are not residents of British Guiana: External (Sterling Area) Accounts, External (Non-Sterling Area) Accounts, and Blocked Accounts.

External (Sterling Area) Accounts are held by residents of Sterling Area countries other than British Guiana. They may be credited with all authorized payments by residents of British Guiana to other Sterling Area countries and with transfers from other External (Sterling Area) Accounts; other credits require approval. They may be debited for payments for any purpose due from residents of other countries in the Sterling Area to residents of British Guiana, for transfers to other External (Sterling Area) Accounts in British Guiana, and for withdrawals by the account holder while he is in British Guiana; other debits require approval.

External (Non-Sterling Area) Accounts are held by residents of countries outside the Sterling Area. They may be credited with all authorized payments by residents of British Guiana to the residents of countries outside the Sterling Area and with transfers from other External (Non-Sterling Area) Accounts; other credits require approval. They may be debited for any payments due from residents of countries outside the Sterling Area to residents of British Guiana, for transfers to other External (Non-Sterling Area) Accounts in British Guiana, and for withdrawals by the account holder while he is in British Guiana; other debits require approval.

Blocked Accounts are credited with funds that are not placed at the free disposal of nonresidents (e.g., capital proceeds). These accounts may be debited for authorized payments, including the purchase of approved securities.

Imports and Import Payments

Imports subject to individual licensing cover a wide range; they include coffee, sugar, vegetables, cereals, meat, poultry, dairy products, fats, copra, vegetable and animal oils, petroleum products and other fuels, building materials, gold, diamonds and jewelry, and firearms. The granting of individual licenses and the conditions attached thereto depend on current policy; at the end of 1964, licenses were not being issued for some of the categories mentioned above. Other goods may be imported under an open general license.

Payments for authorized imports are permitted upon application and submission of the necessary documentary evidence. Exchange control forms have to be completed only for transactions exceeding BWI$240.

Payments for Invisibles

All payments for invisibles require approval, which is given freely. As a working rule, limits are usually applied to certain payments on an annual basis, e.g., for travel abroad (BWI$666), for education at schools abroad (BWI$3,360 for each child), for education at universities and comparable institutions (BWI$4,800 for each student), and for family maintenance (BWI$4,800).

Travelers going abroad may take with them West Indian currency notes not exceeding BWI$100; these notes do not form part of any allotment of exchange for travel. In addition, notes to the value of BWI$50 may be taken out in the form of foreign currency notes as part of any travel exchange allowance.

Exports and Export Proceeds

Most exports are free of export license, but are supervised by the authorized banks and the Customs and Excise Department to ensure that the exchange proceeds are repatriated and, if obtained in specified currencies,2 surrendered. Exchange control forms have to be completed only for exports exceeding BWI$2,000 in value.

Proceeds from Invisibles

Receipts in the specified currencies on account of invisibles must be sold to an authorized bank. Travelers may bring in any currency notes freely.

Capital

New investments by nonresidents require the approval of the exchange control. Such approval is normally given for direct investments in new projects that would benefit British Guiana; it carries with it an assurance that profits may be remitted and that upon liquidation of the investment the proceeds, including any capital increments, may be repatriated in full.

Finance institutions (other than banks) and life insurance companies, both local and foreign, are required to invest locally 75 per cent of their newly acquired resources. These companies are also required over a period of ten years from December 1961 to bring their existing local investments to 75 per cent of their total resources.

The export of capital by residents is not normally permitted. Specified currencies obtained by residents through capital transactions must be surrendered to an authorized bank.

Changes during 1964

During the course of the year, some imports were freed from, and others were made subject to, individual licensing.

Burma

Exchange Rate System

The par value is Burmese Kyats 4.76190 = US$1. The kyat has a fixed relationship to the pound sterling of K 13.333 = £1. Rates for other currencies are determined on the basis of the kyat-sterling rate and the rates for other currencies in the London exchange market.

Administration of Control

Exchange control is administered by the Exchange Control Board. All imports and exports are handled by various government agencies under the Ministry of Supply and Cooperative and the Ministry of Trade Development.

Prescription of Currency

Burma is a member of the Sterling Area and has prescription of currency requirements similar to those of the United Kingdom and other Sterling Area countries. Payments to other parts of the Sterling Area are made in a Sterling Area currency. Payments to Mainland China, with which Burma has a bilateral payments agreement, are made through a clearing account denominated in sterling. Payments to other countries may be made in sterling through an External Account, in any non-Sterling Area currency, or by crediting kyats to the account of a resident of a country outside the Sterling Area. Prescription of currency requirements for receipts are the same as those for payments, except that if foreign currency is obtained it must be one of the specified currencies.

Imports and Import Payments

All imports are made by the Government and government agencies. Most consumer goods are imported by the Peoples Stores Corporation. Imports from South Africa are prohibited. Also prohibited are imports of a few commodities—principally opium and similar narcotics, monkeys, playing cards, and gold and silver bullion.

Authorized banks will automatically provide exchange (see section on Prescription of Currency, above) to pay for permitted imports.

Payments for Invisibles

All payments for invisibles are subject to licensing. In general, payments for items connected with foreign trade that is handled solely by state agencies are allowed automatically, and payments for other purposes are considered on a case-to-case basis. Remittances of income resulting from investment have been temporarily suspended. Most personal money order remittances to neighboring countries through post offices are not permitted.

Foreign exchange for tourist travel by residents requires individual licenses; allocations for this purpose are, however, temporarily suspended. However, residents granted an official permit to go abroad for any purpose may take out freely the equivalent of K 50 in the currency of the country of destination (except India) or, if that currency is not available, in sterling notes. On leaving, nonresident travelers who have stayed in the country for less than six months may take out any foreign currency they still hold and may also reconvert one fourth of the amount of foreign currency which they had converted into kyats. The export of Burmese currency notes is prohibited.

Exports and Export Proceeds

All exports are effected by government agencies. There is a list of prohibited exports: iron and steel, brass, copper and aluminum and scraps thereof, foreign manufactures, and commodities of domestic origin which it is desired to conserve for domestic requirements. All exports to South Africa are prohibited. Export proceeds must be obtained in a manner satisfactory to the exchange control authorities, and the exchange must be surrendered to an authorized exchange dealer.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered. Travelers may bring in, subject to declaration, any amount in foreign currency. The import of Burmese currency notes is prohibited.

Capital

Foreign investments in Burma are governed by the provisions of the Union of Burma Investment Act, 1959, and the Investment Rules of February 25, 1960 issued under authority of the Act. Investment proposals are considered by an Investment Committee, to ascertain whether the proposed enterprise will utilize domestic raw materials, increase domestic employment, conserve foreign exchange, and generally conform to the economic plans of the Government. However, since February 15, 1963 when the Government announced a new policy of nationalization, permission has not been granted for setting up new private industries.

The investment law provides for the transfer abroad of profits after taxes and for the withdrawal of imported capital at any time after five years from the time of entry, in annual quotas not exceeding 25 per cent of its original value. Proceeds from the liquidation or sale of an enterprise may also be transferred abroad. All such transfers may be made at the official rate of exchange prevailing at the time of the transaction.

The repatriation of personal assets and family remittances has been temporarily suspended for foreign nationals employed in the private sector.

When the transfer abroad of payments in favor of nonresidents is not permitted, the authorities can allow such payments to be credited to blocked accounts. The use of balances on blocked accounts is subject to individual permit.

Residents are not usually permitted to remit funds abroad for investment.

The import, export, and transfer of securities involving nonresident interests require individual licenses.

Changes during 1964

February 1. Foreign insurance companies were no longer allowed to undertake general insurance business.

April 11. The Government announced the complete nationalization of the export trade and took over all sectors of that trade still in private hands.

Burundi1

Exchange Rate System

The par value is Burundi Francs 87.50 = US$1. This rate is applicable to all transactions. The official rates on February 11, 1965 were FBu 86.50 buying, and FBu 87.20 selling, per US$1. Authorized banks must carry out permitted exchange transactions at rates between the buying and selling rates fixed by the Bank of the Kingdom of Burundi for currencies quoted by that bank2 and at rates fixed freely with their customers for certain other currencies.3

Administration of Control

Control over foreign exchange transactions and foreign trade is vested in the Bank of the Kingdom of Burundi; authority to carry out some of these transactions is delegated to the commercial banks.

Prescription of Currency

Outgoing payments may be made in any currency; receipts must be obtained in one of the currencies quoted by the Bank of the Kingdom of Burundi.

Imports and Import Payments

All imports except trade samples and merchandise not intended for sale and valued up to FBu 20,000 require licenses; these are issued freely. Applications for licenses in amounts of FBu 100,000 or more must be submitted to the Bank of the Kingdom of Burundi, through an authorized bank, on a form entitled Import License and Payment Authorization. The approval of such an application constitutes an authorization also to obtain foreign exchange. Applications for amounts under FBu 100,000 are approved by the authorized banks. Import licenses must be presented to the customs officials when the goods are cleared through customs. The number and date of expiration must be entered on the customs clearance form, called the Consumption Declaration, a copy of which is then sent to the central bank by the customs office.

Advance deposits calculated on the c.i.f. value are required from importers obtaining in a calendar year import licenses valued at FBu 100,000 or over. The required deposit is 20 per cent for specified essential producer and consumer goods, 50 per cent for other specified essential goods, and 100 per cent for all other commodities. The deposit must be made at the time the import license application is approved; it is released when the import payment is made.

Payments for Invisibles

All payments for invisibles require approval. Transfers of up to two thirds of salaries and emoluments of foreign nationals are freely permitted upon proof of payment of taxes. For unincorporated businesses and professional persons, transfers are freely permitted of two thirds of income earned after the introduction in February 1965 of the new exchange system. Companies may freely transfer their net income after taxes for the period beginning January 1, 1965. Transfers of accumulated earnings accrued prior to 1965 by persons leaving Burundi permanently are authorized on an ad hoc basis. Transfer of income from rental properties to nonresident owners is permitted after payment of taxes and deduction of normal maintenance expenses; resident owners may remit two thirds of such income. Residents may purchase reasonable amounts of exchange for foreign travel.

Exports and Export Proceeds

All exports are subject to a prior declaration entitled Declaration of Collection of Foreign Exchange. The Declaration must be presented for certification by the central bank through an authorized bank. It is valid for a period of six months, but extensions may be granted by the central bank. Payments must be collected not later than 90 days after the goods have left the country. All exchange proceeds from exports must be surrendered to an authorized bank within 8 days from their collection.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered to authorized dealers.

Capital

The Investment Code of August 6, 1963 stipulates the rules under which domestic and foreign private investments may be made in Burundi. Investments of foreign capital are permitted in the form of participation through the acquisition of shares and loans granted for a period exceeding five years and constituting a determining financial element in a firm established in Burundi.

Investments in specified existing economic activities (e.g., industrial development, farming, fisheries, tourist industries), as well as new investments in activities that fulfill certain conditions relating to the realization of the economic development plan, may be accorded specified priority rights. Such rights consist mainly of exemptions from import duties and from taxes on income from investments. Moreover, certain of the above enterprises, when expanding their activities, may be granted additional concessions. Applications for priority status must be submitted to the Minister of Economy, who forwards them to an Investment Commission. Recognition of priority status is granted by a royal decree. Foreign capital, as defined above, which is invested in a priority enterprise, may be repatriated after five years. The transfer of profits and interest of up to 5 per cent per annum of the invested capital is permitted.

Capital transfers by residents require individual authorization, which is rarely given.

Changes during 1964

January 28. Imports of used and new clothing, meat, butter, soap, matches, and spare parts were shifted from List A to List B.

February 17. A 5 per cent tax was introduced on exchange purchases for all imports. The exchange taxes levied according to a law of May 31, 1963 on specified financial transfers and amounting to 6, 8, and 10 per cent were abolished; an exchange tax levied at a flat rate of 20 per cent on the same categories of transfers was substituted.

May 11. The allocation of official exchange for transfers of salaries of foreign nationals was resumed, subject to a maximum of FBu 10,000 a month a person.

May 19. The newly established central bank, the Bank of the Kingdom of Burundi, started issuing the Burundi franc.

October 27. Transfers of salaries of foreign nationals were permitted up to FBu 14,000 a month a person.

Note.—The following changes took place in 1965:

January 26. An initial par value of FBu 87.5000 per US$1 was agreed with the International Monetary Fund.

February 11. All exchange transactions were henceforth to take place within prescribed margins of the par value in replacement of the system of multiple currency practices previously in force. The free market, in which the rate was about FBu 117.00 per US$1 in December 1964, was abolished, as were the 5 per cent and 20 per cent exchange taxes, which had resulted in effective selling rates of about FBu 52.50, FBu 60.00, and FBu 122.85 per US$1 in addition to the official rate of FBu 50.00 per US$1.

February 11. Restrictions on payments for certain current invisibles were relaxed.

February 11. Quantitative restrictions on imports were abolished; advance deposits of 20 per cent, 50 per cent, or 100 per cent of the c.i.f. value were henceforth required for all imports. Customs duties were increased on goods formerly imported with free market exchange

Cambodia 1,2

Exchange Rate System

The Cambodian Riel is defined as a monetary unit containing 0.0253905 gram of fine gold. Exchange transactions in U.S. dollars and pounds sterling are carried out at parity rates based on the gold content of the riel and the respective currencies; these rates are Riels 35 = US$1 and Riels 98 = £1. The official parity for the French franc, however, is fixed at Riels 10 = F 1.

Sales and purchases of foreign banknotes quoted on the Phnôm-Penh official market are made at the selling rate plus 3 per cent and at the buying rate minus 1 per cent, respectively. Rates for foreign banknotes quoted “indicatively” on that market are determined by the authorized banks on the basis of the average rates announced by the National Bank of Cambodia plus a commission of 1 per cent for purchases and of 4 per cent for sales. Authorized banks are empowered to negotiate for their own account, and at a rate mutually agreed with their customers, foreign banknotes other than those quoted officially or “indicatively” by the National Bank of Cambodia.

Arbitrage operations involving convertible currencies may be authorized by the National Exchange Office. If the operations take place in Cambodia, they are carried out at the rate of the day on the Phnôm-Penh exchange market.

Administration of Control

Exchange control is administered by the National Exchange Office in cooperation with the National Bank of Cambodia; this office is empowered to authorize all operations related to settlements with foreign countries, to foreign investments, and to nonresident accounts. Authorized banks are permitted to carry out specified exchange control operations.

All import and export transactions are effected by the National Import-Export Corporation (Société Nationale d’Exportation et d’Importation or SONEXIM). The Ministry of National Economy is in charge of import and export controls, but it has delegated this authority to SONEXIM. Import and export licenses are issued by SONEXIM and must be domiciled with an authorized bank; the bank’s visa is required before licenses are presented to the customs.

Prescription of Currency

Settlements with ten countries with which Cambodia has bilateral payments arrangements are made through bilateral accounts. Those maintained for Mainland China, Czechoslovakia, Eastern Germany, Poland, the U.S.S.R., and North Viet-Nam are denominated in pounds sterling, and those for Bulgaria, North Korea, the Republic of Viet-Nam, and Yugoslavia in U.S. dollars.

Currencies prescribed for settlements with other countries are usually specified in the licenses. Payments for imports from the French Franc Area must be made in French francs. Payments for imports from other countries are ordinarily made in the currency of the country of the exporter.

Foreign investments must be made in a currency acceptable to the National Bank. Profits on, and proceeds from the liquidation of, foreign investments may be transferred abroad in the currency in which the investment was made.

Nonresident Accounts

The following categories of account may be maintained for nonresidents: Foreigners’ Accounts in Riels, Capital Accounts, Nonresident Accounts, and Foreign Currency Accounts. In addition, Cambodian nationals staying abroad temporarily but not recognized as nonresidents, and foreigners staying in Cambodia but not recognized as residents, may maintain special Internal Accounts of Nonresidents.

ForeignersAccounts in Riels may be opened, without permission, for foreigners residing abroad. They are related to the country of residence of the account holder. They may be freely credited with (1) proceeds from the sale on the Phnôm-Penh market of the currency (but not banknotes) of the country of the account holder; (2) payments for authorized imports (including incidental expenses) from the country of the account holder; (3) earnings on investments in Cambodia and receipts from repayments on Cambodian stocks and bonds and on other investments made in Cambodia after May 1956; and (4) interest paid by the banks on funds kept in the accounts. These accounts may be freely debited on account of normal expenses in Cambodia and purchases on the Phnôm-Penh market of banknotes of the country of the account holder. Transfers between Foreigners’ Accounts in Riels related to the same country may be made freely.

Capital Accounts may be opened without permission. Subject to authorization, these accounts may be credited with (1) proceeds from the sale in Cambodia of Cambodian stocks and bonds imported from abroad or kept with an authorized bank in a dossier related to the country of the account holder; (2) proceeds from the sale in Cambodia of participations in corporations other than by purchases of stocks and bonds; (3) contractual or advance repayments of Cambodian stocks and bonds; (4) proceeds from the sale through an authorized notary of real estate or businesses located in Cambodia and in the possession of a nonresident account holder since January 1, 1955 or acquired by him either through inheritance or with the permission of the National Exchange Office; (5) repayment of loans granted to residents prior to January 1, 1955, or after that date with the approval of the National Exchange Office; and (6) transfers from another capital account related to the country of the account holder. Capital Accounts may be freely debited for (1) living expenses of the account holder or his family up to 1,000 riels a person a day, and up to a maximum of 50,000 riels monthly, and (2) expenses connected with the administration of foreign assets in Cambodia (stocks and bonds, buildings, land, etc.). Subject to authorization from the National Exchange Office, these accounts may be debited for (1) purchases in Cambodia of Cambodian stocks and bonds; (2) subscriptions to, or increases in capital of, a Cambodian firm; (3) purchases through an authorized notary of title to real estate or businesses located in Cambodia; (4) loans in riels to residents; (5) transfers to another capital account related to the country of the account holder; (6) living expenses in Cambodia of the account holder’s employees if the account is held by a firm (corporation, bank, etc.); and (7) gifts to individuals and to social, cultural, and religious associations.

Nonresident Accounts may be opened only upon authorization. They may be freely debited for (1) taxes in Cambodia, (2) miscellaneous accounting, correspondence expenses, etc., and (3) living expenses in Cambodia of the account holder and his family, up to 2,000 riels a day. All other operations through these accounts are subject to individual licensing.

Foreign Currency Accounts may be opened only upon authorization. They may be freely credited with foreign exchange transferred from abroad. Account holders may use balances on these accounts (1) to cover expenses abroad, such as those related to travel, missions, and the purchase of foreign merchandise, and (2) to cover expenses of any kind in Cambodia by converting balances on these accounts into riels on the Phnôm-Penh exchange market.

Internal Accounts of Nonresidents may be opened only upon authorization. Balances on these accounts may not be used for transfers abroad. The accounts may be freely credited with (1) proceeds from the sale of foreign exchange on the Phnôm-Penh market; (2) transfers from Foreigners’ Accounts in Riels; (3) wages, salaries, allowances, and payments for expenses of Cambodian nationals employed by Cambodian firms and temporarily residing abroad; (4) income earned in Cambodia by account holders; (5) redeposits of previous withdrawals; and (6) repayment of loans granted to residents out of balances in such accounts. The accounts may be freely debited for (1) living expenses in Cambodia of the account holder or his family, (2) administrative expenses related to the account holder’s property in Cambodia, and (3) loans to residents. All other operations through these accounts require authorization.

Imports and Import Payments

An annual import program is prepared by the Ministry of Commerce. Twice a year, the National Bank of Cambodia places at the disposal of the Ministry a specific amount of foreign exchange to pay for the programed imports.

All imports are effected by a state-trading agency, the National Import-Export Corporation (SONEXIM). Applications for goods to be imported may be submitted by industries and traders to SONEXIM, which transmits them to a Special Board in the Ministry of Commerce for consideration. The Special Board allocates appropriate foreign exchange to SONEXIM for those applications it approves.

Payments for Invisibles

All payments for invisibles require individual licenses.

A foreigner working in Cambodia and receiving a salary exceeding 5,000 riels in Phnôm-Penh, or 3,500 riels in the provinces, may transfer up to 30 per cent of his net monthly salary—after payment of taxes—plus 15 per cent of his monthly salary if a dependent wife stays abroad, plus an additional 10 per cent if dependent children, parents, or grandparents stay abroad. (The additional percentage of transferable income is 2 per cent for each legitimate child or dependent parent or grandparent, with a maximum of 10 per cent of the net monthly income for each family.) Such transfers may not exceed the equivalent of 20,000 riels a month. Transfer facilities are not granted for salaries and wages exempted from income tax. Overtime pay is considered transferable income only when it is received in payment for courses given in public educational institutions. Women of foreign nationality married to Cambodian nationals and working in the private sector are not permitted to transfer savings from salaries or wages to their country of origin.

Foreign landlords domiciled in Cambodia may transfer up to 30 per cent of the taxable portion of their income from rent, provided that the rent exceeds 5,000 riels for landlords living in Phnôm-Penh or 3,500 riels for landlords living in the provinces. Foreign landlords living abroad may transfer up to 20 per cent of the taxable portion of rent.

Foreigners residing in Cambodia, when leaving the country temporarily or permanently, are permitted to transfer abroad, up to prescribed limits, savings out of their salaries earned in Cambodia.

The transfer of up to 80 per cent of net profits from nonresident investments made prior to May 31, 1956 may be authorized, provided that the investment is recognized by the Ministry of Finance as useful to the economic development of Cambodia.

Net profits that do not exceed 20 per cent of foreign investments made after May 31, 1956 may be transferred.

Cambodians studying abroad may receive monthly exchange allocations equivalent to 6,000 riels for France; 4,500 riels for Belgium and Japan; 5,000 riels for Switzerland; 5,500 riels for the United States and the United Kingdom; and 4,000 riels for any other country. A Cambodian student granted a scholarship may receive a monthly allocation to cover the difference between the scholarship and the permissible exchange allocation. A married student may, in addition, receive 2,000 riels a month plus 1,000 riels for each child. Exchange allocations to cover expenses for summer vacations and New Year gifts are 10,000 riels and 2,500 riels, respectively.

The export of Cambodian currency is prohibited.

Exports and Export Proceeds

All exports are effected by the National Import-Export Corporation (SONEXIM), in accordance with an annual export program prepared by the Ministry of Commerce.

Proceeds from Invisibles

Proceeds from invisibles must be surrendered.

The import of Cambodian currency is prohibited. Foreign banknotes must be declared by travelers when entering Cambodia; if imported by residents, they must be surrendered within seven days from the day of entry into Cambodia.

Capital

All capital transfers require individual licenses.

No transfer abroad of proceeds from the sale of property by a foreigner to a foreigner is permitted. Foreigners who sell their property to Cambodians and leave Cambodia permanently may transfer initially up to 20 per cent of the proceeds of the sale; up to 20 per cent of the remainder may be authorized for transfer annually, when the total amount involved is small. Funds representing the repayment of loans originally granted in foreign currency may be considered transferable income.

Since May 31, 1956, all foreign investments have been subject to authorization from the Ministry of Finance, which requires that a certain percentage of the capital of an enterprise should be reserved for Cambodian participation and that its employees should be Cambodians. Only investments for the creation of activities recognized as useful to the economic development of the country and not involving monopoly or special privilege may be authorized. Proceeds from the liquidation of authorized investments made after May 31, 1956 may be transferred in yearly installments not exceeding 20 per cent of the total investment. Up to 10 per cent of the proceeds from the liquidation of investments made prior to May 31, 1956 may be authorized for transfer every year.

Foreign capital invested after May 31, 1956 is guaranteed the same tax treatment that is applied to resident investments; in addition, special incentives (partial exemption from duties and taxes on reinvested profits, and on equipment goods or raw materials imported during the first year of operation) may be accorded to foreign investment considered as exceptionally useful to the Cambodian economy. There is a guarantee of 10–30 years against risks of nationalization or expropriation, and for a just and equitable indemnity in the event of nationalization or expropriation of investments.

Changes during 1964

January 1. Cambodia’s foreign trade was transferred to a state-trading basis. All imports and exports would be made by the National Import-Export Corporation (Société Nationale d’Exportation et d’Importation or SONEXIM), in accordance with annual import and export programs.

January 1. All special exchange facilities, such as the EFAC accounts for exporters and the 10 per cent EMP arrangement for imports of equipment and raw materials, were abolished. Existing balances on EFAC accounts could be utilized until July 1, 1964 for imports of specified commodities.

January 1. A bilateral payments agreement with North Korea entered into force.

June 15. The issue of import and export licenses was transferred from the Department of Foreign Trade to the National Import-Export Corporation.

July 1. The Cambodian Insurance Corporation (Société Khmère d’Assurances) was transformed into a public agency, the National Insurance Corporation (Société Nationale d’Assurances or ASNA), and was accorded the monopoly of all types of insurance and reinsurance.

July 10. The number of banks permitted to carry out foreign exchange operations was reduced to three, i.e., the National Bank of Cambodia and two commercial banks.

Note.—The following changes took place early in 1965:

January 1. Foreign tourists staying at hotels of the Société Khmère des Auberges Royales at Siemréap were no longer given coupons for 25 riels over and above the rate of 35 riels for each U.S. dollar sold.

January 1. The allocation of foreign exchange for tourist travel and business travel was discontinued.

Cameroon

Exchange Rate System

No par value for the currency of Cameroon has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Department of Exchange and International Settlements (Exchange Office) of the Ministry of National Economy.

An annual import program is established by the Minister of National Economy. Import licenses are issued by the Department of Foreign Economic Relations and approved by the Department of Exchange and International Settlements, which checks the financing and other particulars.

The distribution of foreign exchange to importers is carried out by the Technical Committee for Import Distribution (Comité Technique de Repartition des Importateurs—CTRI), composed of nine importers, one representative of industry, and one alternate. It is headed by the Director of Foreign Economic Relations, who is responsible to the Minister of National Economy. The Director of Customs, the Director of Exchange and International Settlements, and the President of the Chamber of Commerce attend CTRI meetings in a consultative capacity.

Prescription of Currency

Cameroon is a member of the French Franc Area, and settlements with other countries of the French Franc Area are made in any currency of that Area. Settlements with countries with which Cameroon maintains bilateral payments agreements 2 are made through special accounts under the terms of the agreements. Settlements with all other countries are usually made through banks in France: those with Rumania—with which France maintains a payments agreement that applies also to transactions with Cameroon—through Rumanian Foreign Accounts in Bilateral Francs; those with all remaining countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely, except for certain goods (liqueurs and wines) which are subject to quota. Imports from all other countries are subject to licensing in accordance with an annual import program. This program, established by the Minister of National Economy, is communicated to the joint French-Cameroonian Committee; however, this Committee does not determine the country’s requirements in non-Franc Area currencies.

Import licenses are not issued until the importer has received his allotment of foreign exchange from the Technical Committee for Import Distribution in accordance with his exchange needs as determined by the Committee. For purposes of this distribution, registered importers are classified according to the value of their annual imports, although exchange may also be made available, under certain conditions, to newly established importers and industrial enterprises that are not registered importers.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the Sino-Soviet bloc. Under quotas established for imports from EEC countries, only goods originating in those countries may be imported. Under the quotas for other countries, goods originating in any country outside the French Franc Area and outside the Sino-Soviet bloc may be imported.

To encourage the economic development of the northern part of Cameroon, a priority quota of exchange is reserved for the exclusive use of importers doing business in that region. To qualify for this quota, importers must prove that the goods they import will be sold exclusively in the north. Usually, this priority quota averages 30 per cent of total allotments. The authorities also have power (1) to set aside foreign exchange for imports by a government service or public utility enterprise of goods considered essential to the public interest, before the regular distribution is made to private importers; (2) to instruct the Technical Committee for Import Distribution to earmark foreign exchange in any amount for the importation by private importers of goods considered essential to the economy; and (3) to grant priority to imports to be used by processing industries located in Cameroon.

Import licenses which do not involve a request for foreign exchange e.g., gifts, items sent as guarantees, publicity articles, and supplies for foreign religious missions, may be approved by the Exchange Office in special cases, provided that justification of the need for the goods in question and evidence of the means of payment are submitted. Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. The transfer of profits from foreign investments is permitted freely. Travelers to other countries in the French Franc Area may take out any amount of CFA banknotes. Travelers to other destinations may take out F 750 in French banknotes, or the equivalent of F 75,000 in legal tender CFA or CFP franc notes and coins, or the equivalent of F 750 in other currencies.

Exports and Export Proceeds

Exporters must sign an exchange obligation for all exports. Certain exports require prior authorization, which is issued by the Department of Foreign Economic Relations. Certain items classified as “natural resources” require special authorization for export to any destination. These include coffee (green or roasted), unshelled cocoa beans, ores, mineral products, and common metals and their alloys.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be surrendered within three months from the date of their receipt. Exporters may, however, retain 12 per cent of their U.S. dollar proceeds, and 8 per cent of their proceeds in other non-Franc Area currencies, in special EFAC (Exportations-Frais Accessoires) accounts. These percentages may be increased by 3 per cent with the approval of the Exchange Office. Balances on these accounts, which are not transferable, may be used by the exporters to pay for imports of raw materials or equipment needed in their own business, for representation and advertising expenses, and for business travel abroad.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding CFAF 50,000 earned in those countries from foreign securities, must be collected and surrendered within a month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

The import and export of capital is subject to regulations similar to those applied in France.

An Investment Code of June 27, 1960 establishes four categories of fiscal and other benefits which can be accorded to both foreign and domestic firms undertaking approved new industrial or agricultural projects in Cameroon. The scope and duration of benefits to be accorded vary depending on the significance of the project. These benefits are as follows: (1) Exemption until January 1, 1981 from duties and taxes on imported equipment and material and on exported products, and exemption during the first 5 years of the firm’s operation from the 5 per cent consumption tax. (2) In addition to the benefits under (1) above, exemption until January 1, 1981 from the tax on industrial and commercial profits and from business license fees, while normal amortization during the first 5 years of operation may be offset against taxation during the next 3 years. (3) Firms of particular importance that assist in the execution of the Economic and Social Development Plan and are engaged in priority production may conclude an “establishment agreement” with the Government for at least 20 years. Such an agreement may prescribe conditions with respect to the operation of the enterprise, minimum equipment and production plans, and training programs. The Government may give general guarantees concerning the transfer of funds abroad, sales of the firm’s products, freedom of movement and employment of its workers, choice of the source of supply of materials and services, and renewal of forestry and mining permits. Facilities may also be provided for the use of hydraulic, electric, and other facilities needed for the production process and for the transportation of products to the place of shipment. The agreement may furthermore provide for the granting, in full or in part, of the tax benefits listed under (1) and (2) above. (4) “Establishment agreements” may also include the privilege of tax stabilization during a period not exceeding 30 years (including 5 years required for installation, unless a longer period is required for this purpose) for firms that make large investments and are considered of prime importance to the national economy.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to transactions with Cameroon, was terminated.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to transactions with Cameroon, was terminated.

April 6. Law No. 64-LF-6 modified the Investment Code of 1960 to permit more flexible adaptation to the requirements of individual projects, and made the revised Code applicable also to West Cameroon.

December 8. The treaty establishing the Central African Customs and Economic Union (UDEAC) was signed by Cameroon and the members of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). It would enter into effect on January 1, 1966.

Canada

Exchange Rate System

The par value is Canadian Dollars 1.08108 = US$1. Canada has no exchange restrictions on foreign payments. On March 25, 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

No prescription of currency requirements are in force.

Imports and Import Payments

Payments and transfers abroad may be made freely. The only import licenses required are those 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, the export of a few commodities to all destinations is under export control. For security reasons, the export of certain specified commodities to all destinations except the United States is under export control. All exports to the U.S.S.R. and some other destinations are subject to control, but certain nonstrategic goods, when of Canadian origin, may be exported to these destinations under general permit.

Payments for and Proceeds from Invisibles

No requirements are imposed on exchange receipts from, or exchange payments for, invisibles.

Capital

No exchange control requirements are imposed on capital receipts or payments by residents or nonresidents.

Changes during 1964

No significant changes took place during 1964.

Central African Republic

Exchange Rate System

No par value for the currency of the Central African Republic has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by commercial banks under the direction of the Exchange Office. The Ministry of National Economy makes allocations of exchange to each importer for goods included in the annual import program; it also issues import licenses with the consent of the Exchange Office and export licenses.

Prescription of Currency

The Central African Republic is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with Mainland China are made through accounts established under a bilateral payments agreement with that country. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs; those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from all other countries are subject to licensing in accordance with an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Central African Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the French Franc Area and outside the Sino-Soviet bloc. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for other countries may be used to import goods originating in any country outside the French Franc Area except those in the Sino-Soviet bloc, to which special quotas apply.

For goods included in the annual import program, the Ministry of National Economy publishes each year a list of the exchange allocations granted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Ministry an application for a license within the limits of the quotas that have been assigned to him. When the license is issued, the Exchange Office makes the exchange available to the importer through his bank. Import licenses are valid for 9 months and may be extended twice for 3 months, i.e., the maximum period of validity is 15 months.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used by the exporter himself, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. The transfer of profits from registered foreign investment is permitted freely. Travelers to other countries in the French Franc Area may take out any amount of CFA banknotes. When traveling to other countries, they may take out banknotes up to a maximum of F 1,000 in metropolitan francs or francs issued by the Institute of Issue of the Overseas Departments, or CFAF 75,000 or CFPF 75,000 in legal tender CFA or CFP franc notes and coins. Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses, which are issued freely.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be surrendered within one month from the date of their receipt. Exporters may, however, retain 12 per cent of their proceeds from exports to Canada and the United States, or 8 per cent of their proceeds from exports to other countries, in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts, which may be used by the exporters themselves to pay for export promotion expenses and for modernization and expansion needs of their industries.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 5,000 earned in those countries from foreign securities, must be collected and surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

Under Law No. 62.355 of February 19, 1963, industrial, tourist, agricultural, and mining enterprises (both foreign and domestic) established in the Central African Republic are granted, under certain conditions, reduced duties and taxes on the import of specified equipment; in addition, certain enterprises receive exemption from direct taxes on specified income.

The Law also provides for three categories of preferential treatment, in accordance with which fiscal and other privileges may be accorded to firms investing in new enterprises or in the expansion of existing ones in most sectors of the economy, except the commercial sector. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of the Central African Republic; it is granted for a period of up to 10 years. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatment C, which contains the most favorable provisions, is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for up to 25 years.

Requests for approval for preferential treatment must be submitted to the Minister of National Economy, who is the Chairman of the Investment Commission which considers the application. If a positive decision has been given by the Commission, the proposed authorization is submitted to the Council of Ministers. Preferential treatments A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Board of Directors of the Equatorial Customs Union upon the recommendation of the Council of Ministers.

The transfer of proceeds from the liquidation of registered foreign investment is permitted freely.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to transactions with the Central African Republic, was terminated.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to transactions with the Central African Republic, was terminated.

September 29. A bilateral payments agreement was signed with Mainland China.

December 8. The treaty establishing the Central African Customs and Economic Union (UDEAC) was signed by Cameroon and the members of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). It would enter into effect on January 1, 1966.

Ceylon

Exchange Rate System

The par value is Ceylon Rupees 4.76190 = US$1. Exchange rates are based on the fixed sterling-Ceylon rupee rate (Cey Rs 13.33 = £1) and the rates for other currencies against sterling in London. Exchange taxes of 10 and 20 per cent in respect of certain current remittances and capital transfers are applied for revenue purposes.

Administration of Control

Exchange control is administered by the Department of Exchange Control of the Central Bank of Ceylon, as agent of the Government. All transactions in foreign exchange in Ceylon must be made through banks authorized to carry out operations in foreign currencies in accordance with the exchange control regulations prescribed by the Controller of Exchange. Remittances may also be made through post offices, under permits issued by the Controller of Exchange. Import and export licensing is handled by the Controller of Imports and Exports.

Prescription of Currency

Ceylon is a member of the Sterling Area, and the regulations prescribing the currencies for settlements with other countries are similar to the regulations of other Sterling Area countries. Payments to the Sterling Area may be made in any Sterling Area currency; and receipts from the Sterling Area may be accepted in any Sterling Area currency.

Settlements with 12 countries with which Ceylon has bilateral payments agreements1 must be made through the relevant clearing accounts. Payments to all other countries may be made by crediting sterling or Ceylon rupees to a sterling External Account or an External Rupee Account, or in the currency of the creditor country. Receipts from all other countries may be accepted in sterling or Ceylon rupees from a sterling External Account or an External Rupee Account, in any specified currency 2 other than a Sterling Area currency, or in any nonspecified, non-Sterling Area currency marketable in the United Kingdom, i.e., freely exchangeable for sterling. Transactions involving deviations from the general regulations require the prior approval of the Controller of Exchange.

Nonresident Accounts

Nonresident accounts may be held in Ceylon by banks, corporations, or persons residing abroad. Transfers of balances in these accounts to Sterling Area Accounts or External Accounts require approval.

Blocked Accounts are used for holding funds that may not be transferred abroad and that are owned by nonresidents, repatriates, and emigrants. Such funds, unless they originate from payments for imports, may be used for investment in Ceylon in prescribed securities. Proceeds from the liquidation of such investments must be credited to Blocked Accounts.

Imports and Import Payments

The value and composition of imports are established by an annual import program. Except for imports of rice, flour, and sugar by the Food Commissioner’s Department and direct imports by other government departments, all imports require individual licenses3 and are divided into three groups—essential goods, less essential goods, and nonessential goods. Licenses to import goods in the first and second groups are issued up to the limits of quotas based on past imports. Imports of many nonessential goods are either prohibited or considerably restricted.

The right to import is restricted to registered importers and government-sponsored corporations. All imports from countries in the “Ceylonized” area 4 and a few imports from any source are restricted to registered Ceylonese traders—a special group of registered importers. Imports of specified commodities 5 are restricted to government or state corporations or the Cooperative Wholesale Establishment. In order to allocate quotas, applicants for import licenses are divided into three groups: (1) actual users of industrial raw materials, machinery, etc., (2) those who import other goods for their own use and not for resale, and (3) established importers who import goods for trading purposes.

An authorized dealer may approve an application to remit foreign exchange or to credit a nonresident account when the applicant furnishes, or undertakes to furnish, evidence of importation and of the cost of goods together with a valid importer’s and exchange control copy of the import license.

Payments for Invisibles

All payments for invisibles require individual licenses. A foreign exchange tax (subject to several specified exemptions) is payable on certain remittances. The tax is 10 per cent on any sale of foreign exchange to a noncitizen for the maintenance of his dependents abroad (Ceylonese citizens are not eligible for any foreign exchange for this purpose) and 20 per cent on any sale of foreign exchange to a noncitizen for the transfer abroad of assets other than funds representing approved pension fund or provident fund balances and reasonable retirement gratuities, which are exempt from exchange tax. (Ceylonese citizens are not provided foreign exchange to transfer capital abroad.) The remittance of profits, dividends, and other investment income was, until July 31, 1964, freely permitted, but since then a moratorium, for one year in the first instance, has been applied to such remittances.6

The remittance of life insurance premiums on policies in foreign currencies that are purchased by nonnationals residing temporarily in Ceylon is permitted.

Foreign exchange for tourist travel abroad is not granted. Business travel is limited to travel for the promotion of industrial exports, and exchange up to a maximum of £ stg. 6 a day for a maximum period of 30 days is allowed in such cases.

Exchange for educational expenses is made available only for certain courses of study that will be of positive value to the country and that are not available in Ceylon. For study in educational institutions in “Indian group” countries,7 exchange up to a maximum of Cey Rs 350 a month is allowed; for study in educational institutions in other countries, exchange is made available at £ stg. 60 a month for postgraduate studies and £ stg. 45 a month for undergraduate studies, plus actual fees and costs of books.

For travel and other expenses for medical reasons, exchange is authorized if a certificate is produced from a medical specialist in Ceylon that equally effective treatment cannot be obtained in Ceylon; the amount authorized will depend on the estimated cost, as certified by the specialist.

Indian and Pakistani nationals are permitted to remit for family maintenance a maximum of Rs 750 a month or one third of their gross monthly income, whichever is less. Other foreign nationals are permitted to remit £ stg. 85 a month for a wife and £ stg. 55 for a child, provided that, when the amount claimed on this basis exceeds one third of the gross monthly income, the excess will be treated as an anticipatory transfer to be set off against the amount the repatriate is entitled to remit upon departure. Temporary residents on short-term contracts are allowed to remit up to two thirds of their gross monthly income.

Nonresident travelers may take out foreign exchange declared to the customs at the time of entry; they may not take out Ceylon currency. notes and coins. Residents may take out Ceylon or foreign currency notes and coins not exceeding the equivalent of Cey Rs 50 a person (Cey Rs 25 for children under 12), once in 12 months, provided that they are entitled to travel exchange.

Exports and Export Proceeds

For purposes of exchange control, licenses issued by the Controller of Exchange are required for all commercial exports; in addition, export licenses issued by the Controller of Imports and Exports are required for all other commodities except 36 items, mostly minor agricultural products or handicrafts. Licenses for exports to Albania, Austria, Bulgaria, Mainland China, the Republic of China, Czechoslovakia, Hungary, North Korea, the Republic of Korea, Poland, Rumania, North Viet-Nam, the Republic of Viet-Nam, and the U.S.S.R. are issued only to registered Ceylonese traders. Exports of certain manufactured goods and re-exports of foreign manufactured articles are allowed only under special permit. Re-exports of nonmonetary gold, silver, and diamonds are allowed only in special circumstances.

The Controller of Exchange issues the license for a commercial export when he is satisfied that payment representing fair value for the goods will be received in Ceylon under prescribed regulations, and, usually, within four months from the date of shipment. Foreign exchange proceeds from exports must be surrendered.

Proceeds from Invisibles

Foreign exchange proceeds from invisibles must be surrendered.

A traveler entering Ceylon must declare his holdings, including currency notes and coins. The amount of foreign funds that may be carried into Ceylon in the form of travel credit instruments is not restricted. The import of Indian and Pakistan notes is not permitted. Ceylon notes may be imported up to Cey Rs 50, in denominations of Cey Rs 10 or less, provided that evidence of prior export of such notes by the same traveler is produced. Other currency notes and coins may be taken in without restriction.

Capital

Investments of foreign capital are permitted in projects which are specifically approved by the Government, or in shares of public companies incorporated in Ceylon. Proceeds from the sale or liquidation of investments in approved projects may be repatriated, along with capital appreciation. Proceeds from the sale or liquidation of investments not approved by the Government may not be transferred abroad, but they may be reinvested in Ceylonese securities; the current income thereon is subject to the transfer moratorium. Investments abroad by residents are not normally permitted.

Resident-owned securities on which the principal, interest, or dividends are payable (either contractually or at the option of the holder) in specified currencies must be registered with the Controller of Exchange, and the sale or transfer of such securities is allowed only with the permission of the Minister of Finance.

Emigrants are not permitted capital remittances except on grounds of dire hardship. Subject to prescribed limits, the transfer of their net income, other than investment income, is allowed for one year from the date of emigration if the emigrant is under 55 years of age. If the emigrant is over 55 years of age or has acquired foreign citizenship, net income, other than investment income, may be transferred, within certain limits, even after one year.

Repatriates leaving Ceylon for residence in the country of their permanent domicile are permitted, at the time of their departure, to transfer assets representing their retirement funds and a reasonable amount of savings up to a maximum of Rs 75,000 for the “Indian group” and Rs 150,000 for other countries. For persons who have been in business in Ceylon, the capital they originally brought into the country plus a reasonable amount of savings are allowed to be transferred, subject to the above limits. A foreign exchange tax of 20 per cent is applied to repatriation of assets, but retirement funds are exempt from this tax.

Changes during 1964

January 1. Imports of cement were brought under state trading.

January 11. Exchange taxes of 10 per cent and 20 per cent were introduced on certain current and capital remittances.

February 5. The granting of exchange for holiday travel was suspended, and that for business travel was limited to travel for the promotion of industrial exports.

February 14. A bilateral payments agreement covering certain transactions with Yugoslavia was concluded.

February 18. The bilateral payments agreement with Iran was terminated.

March 14. The Indian rupee was deleted from the list of specified currencies; all other Sterling Area currencies were designated as specified currencies.

March 14. The import of Ceylon currency notes was restricted to Cey Rs 50 (in denominations of Cey Rs 10 or less); evidence of prior export of such notes by the same traveler was required. The import of Indian and Pakistan notes was prohibited, but the restriction on the import of sterling notes was removed. Previously, the import of sterling notes was restricted to £50, and the import of Indian, Pakistan, and Ceylon notes was restricted to a maximum of Rs 75 in the aggregate, of which Pakistan notes could not exceed Rs 20.

July 30. Nonnationals employed in Ceylon were permitted to transfer at the time of departure their net assets representing their retirement funds and savings, up to maxima of Rs 75,000 for the “Indian group” of countries and Rs 150,000 for other countries. For those who had been in business in Ceylon, the transfer of the capital they had originally brought into Ceylon plus a reasonable amount of savings would be allowed. Subsequent remittances representing unremitted assets over the above limits were suspended. Previously, net assets could be transferred up to Rs 250,000 for all countries, with subsequent transfers permitted up to Rs 25,000 a year.

July 30. Allocations for travel abroad for education were reduced, except for graduate and specialized studies of a technical and scientific nature. Facilities to nonnationals for travel abroad on furlough were suspended.

July 31. The foreign exchange tax on the transfer abroad of assets was increased from 10 to 20 per cent.

July 31. A moratorium was imposed for one year on most remittances of profits, dividends, and other investment income.

November 25. Imports of certain subsidiary foodstuffs, the only items still under open general license, were made subject to individual licensing.

Chad 1

Exchange Rate System

No par value for the currency of Chad has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.2 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Department of the Ministry of Finance. Exchange transactions are handled by authorized banks under the direction of the Exchange Department, which has delegated to the banks considerable authority in these matters. The Ministry of Economic Affairs and the Exchange Department allocate exchange for imports from countries outside the French Franc Area.

Prescription of Currency

Chad is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through the authorized banks’ correspondents in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs; those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from all other countries are subject to licensing in accordance with an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Chadian Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the French Franc Area except the U.S.S.R., to which special quotas apply. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for the other countries may be used to import goods originating in any country except the U.S.S.R.

For goods included in the annual import program, the Ministry of Economic Affairs publishes each year an announcement of the exchange allotted to each registered importer based on, principally, his import business in the previous year. The importer submits to the Ministry an application for a license within the limits of the quota that has been assigned to him. When the license is issued, the Exchange Department authorizes the importer’s bank to make available to him the foreign exchange required for the purchase of the commodity and for incidental expenses. Import licenses are valid for six months and are automatically extended for another six months. Further extensions are not granted except, in unusual circumstances, for manufactured goods when evidence is presented concerning the time needed for their production.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses over and above the quotas of the import program are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Department, which, however, has delegated authority to authorized banks to approve many transactions. Residents traveling abroad are granted a tourist allocation equivalent to CFAF 250,000 for each passport for each trip. Foreign exchange may also be obtained for bona fide business trips. The transfer of profits from registered foreign investment is permitted freely.

Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country. There is no limit on the means of payment denominated in CFA francs or metropolitan francs that travelers to other countries in the French Franc Area may take out. Resident and nonresident travelers to other destinations may take out up to CFAF 75,000 or up to F 1,000 in banknotes and coins; however, prior to their departure, nonresidents may exchange into foreign currencies means of payment denominated in CFA francs and purchased against payment in foreign exchange.

Exports and Export Proceeds

Exports to countries in the French Franc Area may, with a few exceptions, be made freely; exports to all other countries require licenses.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be repatriated and surrendered within three months from the date of their receipt. Exporters may, however, retain from 6 per cent to 15 per cent of their export proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts, which may be used by the exporters themselves to pay for any expenses outside the French Franc Area.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due from residents of other countries must be repatriated and surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins; however, travelers from other countries in the French Franc Area must surrender, within one month, amounts in non-Franc Area currencies exceeding the equivalent of F 1,000.

Capital

Investments by residents of countries in the French Franc Area may be made without authorization. Investments by residents of countries outside the French Franc Area are subject to the authorization of the Exchange Department; however, authorized banks and notaries have been granted the authority to approve certain types of investments.

Residents may take up loans from persons resident outside the French Franc Area up to an amount equivalent to F 1 million, with interest up to 4 per cent per annum and for a period not exceeding 2 years.

Under the Investment Code of August 26, 1963, any enterprise established in Chad, whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports, as well as exemption from direct taxes on specified income.

The Code also provides for three categories of preferential treatment, in accordance with which certain fiscal and other privileges may be accorded to firms investing in specified new industries or in the expansion of existing ones. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of Chad. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatments A and B are granted for a period of up to 15 years. Preferential treatment C is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for up to 25 years.

Requests for approval for preferential treatment must be submitted to the Minister of Economy, who, after examining the documents, transmits them to the Investment Commission. After an opinion has been given by that Commission, the project is. submitted to the Council of Ministers. Preferential treatments A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by a decision of the Board of Directors of the Equatorial Customs Union upon the recommendation of the Council of Ministers.

The transfer of proceeds from the liquidation of registered foreign investment is permitted freely.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to transactions with Chad, was terminated.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to transactions with Chad, was terminated.

December 8. The treaty establishing the Central African Customs and Economic Union (UDEAC) was signed by Cameroon and the members of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). It would enter into effect on January 1, 1966.

Note.—The following change took place early in 1965:

January 1. The Exchange Office became part of the Ministry of Finance under the name of Exchange Department.

Chile

Exchange Rate System

No par value for the Chilean Escudo (which was introduced on January 1, 1960) has been established with the Fund. The par value for the Chilean peso established with the Fund on October 5, 1953 is not applied to any transactions under the present exchange system.

There are two exchange markets: the official market (known as the banking market) and the brokers’ market, in both of which only commercial banks are allowed to operate. The rates of exchange in both markets are fluctuating rates. Through the banking market pass government transactions, proceeds from exports, sales of exchange by the large mining companies, receipts from a few invisibles, and payments for imports and for some commercial invisibles. In general, capital transactions are entitled to the same exchange market treatment on exit as on entry. However, the servicing and withdrawal of some capital received through the brokers’ market may be effected through the banking market. Importers are permitted to purchase foreign exchange from exporters through commercial banks in a so-called futures market; commercial banks are also authorized to contract export proceeds in advance of receipt from all registered exporters except the large copper companies.

On December 31, 1964, the spot exchange rate in the banking market was E° 2.70 buying, E° 2.71 selling, per US$1. On the same date, the effective exchange rates in the banking market for “futures” were E° 3.10 buying, and E° 3.11 selling, per US$1. Transactions not permitted in the banking market may be settled in the brokers’ market, but in some cases the approval of the Central Bank must first be obtained. The exchange rate in the brokers’ market on December 31, 1964 was E° 3.25 buying, E° 3.26 selling, per US$1. All purchases of exchange in the brokers’ market, except those for which the Central Bank has approved a transfer application, are subject to a 4 per cent exchange tax.

Administration of Control

The Foreign Trade Department of the Central Bank of Chile is in charge of the operation of the exchange control system. Some functions of the Department have been delegated to local commissions in important cities. Only authorized banks operate in the banking market and in the brokers’ market.

Prescription of Currency

The proceeds of exports by the large copper companies must be received in U.S. dollars or other currencies specifically authorized by the Copper Department. Large copper and iron ore mining enterprises must pay their income taxes in U.S. dollars. All other transactions, including exports of iron ore by small and medium-sized companies, may be settled in any currency, irrespective of the country of origin or destination of the payment.

Imports and Import Payments

Imports are classified as generally permitted, conditionally permitted, or prohibited. Goods in the generally and conditionally permitted categories must be registered with the Central Bank but may be imported in any volume. All imports are entitled to exchange in the banking market, but this cannot be obtained until 120 days after the date of the bill of lading covering the goods. Imports of goods in the conditionally permitted category are only permitted in “free port” zones, such as Arica, Magallanes, and Aysén, and may not be shipped to other parts of the country unless they are first processed or assembled in the “free port” zone. Prohibited imports (including automobiles and most trucks) may only be imported into a “free port” zone for use in that zone.

Almost all imports are subject to customs surcharges. The following items are exempt: imports by large companies concerned with mining iron, copper, nitrates, or iodine; crude petroleum and diesel oil destined for the nitrate, subnitrate, and iodine industries; imports by the Univeristy of Chile; imports under loans or credits from the Export-Import Bank of Washington or the International Bank for Reconstruction and Development; imports under the Surplus Agricultural Commodities Agreement with the United States; spare parts for agricultural machinery; planes and parts for Chilean airlines; jute sacks, magnetic enamels, etc.; certain capital goods; and goods in the conditionally permitted category imported into the “free port” zones of Arica and Magallanes. The surcharges range from nil to 400 per cent of the c.i.f. value and are paid in escudos at a rate of exchange that is periodically established by the Central Bank. On December 31, 1964 this rate was E° 3.06 per US$1.

Most imports in the generally permitted category are subject to advance deposit requirements, which must be discharged in escudos at the time of registration. The importer’s deposit obligation generally is equal to the amount of the import surcharges. Thus, the maximum advance deposit generally is 400 per cent of the c.i.f. value. For protective reasons, however, certain imports continue to be subject to an advance import deposit expressed as a percentage of the c.i.f. value and higher than the import surcharge; the rate for these items is 10,000 per cent.

The following imports are exempt from advance deposit requirements: imports by the Government, the municipalities, the ‘universities, certain specified state enterprises, the large mining companies, and the fishing industry; imports financed by international organizations or under agreements for U.S. agricultural surpluses; imports on a deferred payments basis; imports into the “free port” zones; imports of foodstuffs into the principal mining area; imports to replace machinery and equipment damaged or destroyed in the 1960 earthquake; household effects and personal effects of travelers; personal effects of certain immigrants; imports not of a commercial character and valued at less than US$100; and imports that originate in other member countries of LAFTA and are included either in Chile’s National List for LAFTA countries or in Chile’s List of Privileges extended to Paraguay and Ecuador. These exemptions do not apply to items subject to the 10,000 per cent deposit, except for imports from LAFTA countries of goods on the Chilean National List.

Payments for Invisibles

Payments for invisibles may be made through the brokers’ market in accordance with the regulations applicable to those items in that market. Payment at the rate of exchange in the banking market is permitted for a few commercial invisibles; all other transactions take place in the brokers’ market. All purchases of exchange in the brokers’ market, except those for which the Central Bank has approved a transfer application, are subject to a tax of 4 per cent, which is applicable not only to purchases of notes and checks but also to payments in respect of bills of exchange and letters of credit.

Exports and Export Proceeds

Most goods may be exported freely, but exports of some items are prohibited or are subject to quota. In order to enforce these requirements and to ensure the repatriation of export proceeds, all exports, except those of the large copper mines and the Nitrate and Iodine Sales Corporation (COVENSA) must be registered with the Foreign Trade Department of the Central Bank. The Central Bank also certifies the f.o.b. value of the exports for the purpose of restitution of duties and taxes to exporters of certain agricultural and industrial products either imported earlier for processing or produced locally.

The proceeds of exports of copper by the large mining companies must be received in a prescribed currency (see section on Prescription of Currency, above). For all exports except those by the large copper and iron mines and COVENSA, exporters must repatriate within 90 days from the date of shipment the total value of their exports and must sell the exchange within 10 days from its repatriation through an authorized bank at the exchange rate in the banking market. The Executive Committee of the Central Bank, however, may allow exporters to repatriate export proceeds at a later date. The large copper companies sell exchange to the Central Bank only to the extent needed to meet their local requirements. Payments for exports on a cash, collection, or consignment basis must be arranged through an authorized bank, which must specifically contract with the exporter to buy the exchange proceeds. The bank issues a certificate that payment has been made or arranged in an approved manner, to enable clearance of the export through customs.

Proceeds from Invisibles

Receipts of exchange from news and communications agency fees, from specified transactions by national insurance companies, from commissions, from reimbursements of insurance claims, and from credit granted in foreign currency by the commercial banks must be sold in the banking market. Exchange derived from other invisibles, including tourism, may be sold in the brokers’ market or retained.

Capital

Large mining companies (copper, iron, nitrates, and iodine) may freely remit interest, dividends, and amortization on invested capital up to the amount of their exchange receipts that they are not required to surrender or use to pay local taxes.

Capital may be brought into Chile through either exchange market. Normally, capital is subject to the same exchange market treatment on exit as on entry; this policy applies also to remittances of dividends and profits on the capital.

Foreign capital may enter Chile under one of three different arrangements, depending on the purpose and the type of the investment. (1) Article 14 of Decree 1272 (September 7, 1962) stipulates that capital brought into the country in the form of foreign exchange may be freely sold in the brokers’ market through authorized banks when the investor (individual or corporation, national or foreign) has registered with the Central Bank. To this end, the Central Bank issues a nontransferable certificate which also permits the free outward transfer of the capital through the brokers’ market. The remittance of profits or interest on this capital requires the authorization of the Central Bank. (2) According to Article 16 of the above Decree, the investor may enter into a loan agreement with a Chilean individual or corporation, or into an agreement with a national enterprise with a view to capital participation. In these cases, the investor has an option between the banking market and the brokers’ market; the Central Bank guarantees access to the exchange market chosen for the entry of the capital, both for the servicing of loans and the re-export of capital, and for the remittance of interests and profits. The guarantee is given subject to certain conditions, one of which is a minimum investment period of 3 years. As an application and extension of Article 16, the Executive Committee of the Central Bank on November 3, 1963 took a decision to create an additional regime to further foreign investment in Chilean export industries. Under this regime, capital brought in for the promotion of exports of agricultural, industrial, and mining products may be sold in the brokers’ market, while its repatriation may take place in the banking market, provided that the amount repatriated is financed from the increase in the volume of exports resulting from the investment. The regime is implemented through individual investment agreements in accordance with Article 16. Repatriation of the invested capital may start 2 years after entry and may amount to 12½ per cent annually of the invested capital. In addition, the remittance of interest or profits is permitted annually up to 7 per cent of the invested capital. The repayment of capital, and the transfer of interest or profits thereon, may be effected through the banking market, provided that the amount does not exceed 50 per cent of the amount of exchange resulting from the volume increase in exports. If this criterion prevents the transfer of the full amount of amortization, interest, and profits through the banking market, the transfers may be completed through the brokers’ market. The above privileges are only granted to firms that will not purchase foreign exchange in the banking market to acquire abroad any machinery, equipment, or capital goods on a cash payment basis. (3) The most important law governing foreign investment is Decree-Law 258 of 1960, which establishes a regime both for foreign exchange transfers and long-term capital investment. A Foreign Investment Committee approves by decree the particular investment; it establishes both guarantees regarding withdrawal of capital and remittances of interest and profits and may also give special guarantees regarding exemption from payment of certain import surcharges, customs duties, and taxes. Such privileges may be granted for a period of 10 years, with extension to 20 years in special cases. Remittances are effected in the same market (normally the banking market) through which the capital was brought in, and the investor has the right to use the exchange resulting from the export proceeds of his investment.

Changes during 1964

February 1. All purchases of exchange in the brokers’ market, except those for which the Central Bank approved a transfer application, became subject to a tax of 4 per cent, which was applicable to transactions in banknotes and checks and to payments against bills of exchange and letters of credit. The tax would be payable when the transaction took place.

February 4. The Central Bank announced that certain import deposits lodged would be refunded within 60 days.

April 30. Imports authorized under the U.S. AID program could be covered in the “futures market,” irrespective of the percentage of the advance deposit requirements.

May 27. Commercial banks were authorized by the Central Bank to supply foreign exchange for all imports which before June 30, 1963 had complied with the compulsory payments deferment of 120 days, irrespective of the percentage of the advance deposit requirements. The Central Bank would sell foreign exchange in the “futures market” to cover these payments.

June 5. Commercial banks were authorized by the Central Bank to supply foreign exchange for all imports which before July 31, 1963 had complied with the compulsory payments deferment of 120 days, irrespective of the percentage of the advance deposit requirements. The Central Bank would sell foreign exchange in the “futures market” to cover these payments.

June 11. The commercial banks were notified by the Central Bank that a supplier’s certificate would be required for all imports taking place under credits granted by foreign governments or by international institutions.

June 25. Commercial banks were authorized by the Central Bank to supply foreign exchange for all imports which before August 31 1963 had complied with the compulsory deferment period of 120 days, irrespective of the percentage of the advance deposit requirements. The Central Bank would sell foreign exchange in the “futures market” to cover these payments.

July 10. The customs surcharge was abolished for spare parts included in the list of generally permitted imports and intended for automobiles to be modified or assembled in Chile, provided that these parts were imported from LAFTA countries and that exports to LAFTA countries of spare parts manufactured in Chile were guaranteed.

July 14. Commercial banks were authorized by the Central Bank to supply foreign exchange for all imports which before October 15, 1963 had complied with the compulsory deferment period of 120 days, irrespective of the percentage of the advance deposit requirements. The Central Bank would sell foreign exchange in the “futures market” to cover these payments.

July 29. Commercial banks were authorized by the Central Bank to supply foreign exchange for all imports which before November 30, 1963 had complied with the compulsory deferment period of 120 days, irrespective of the percentage of the advance deposit requirements. The Central Bank would sell foreign exchange in the “futures market” to cover these payments.

July 31. The commercial banks were authorized to purchase and sell in the “futures market” all foreign currencies defined as convertible by the International Monetary Fund.

August 6. Commercial banks were authorized by the Central Bank to supply foreign exchange for all imports which before December 31, 1963 had complied with the compulsory deferment period of 120 days, irrespective of the percentage of the advance deposit requirements. The Central Bank would sell foreign exchange in the “futures market” to cover these payments.

August 7. New promissory notes (pagarés) were permitted to serve as a guarantee for advance import deposits.

August 13. A procedure was established for the use of bonds and pagarés that were subscribed by the Spanish Foreign Exchange Institute and transferred to the Central Bank for use by those importing from Spain.

August 14. Authorization was given to insure merchandise in the country of origin at internationally prevailing rates.

September 24. The purchase of foreign exchange in the “futures market” was permitted for all imports of goods subject to a 50 per cent advance deposit requirement, provided that the importer held an import permit valid on the date of the announcement.

September 30. The Central Bank notified the commercial banks that it would not make foreign exchange available for payment of interest in excess of 7 per cent on import letters of credit or collections.

September 30. The Central Bank authorized the commercial banks to supply foreign exchange in the “futures market” for all imports which before January 31, 1964 had complied with the compulsory payments deferment of 120 days, irrespective of the percentage of the advance deposit requirements.

October 22. The purchase of foreign exchange in the “futures market” was permitted for all imports of goods subject to a 100 per cent advance deposit requirement, provided that the importer held an import permit valid on the date of the announcement.

October 29. The Central Bank authorized the commercial banks to supply foreign exchange in the “futures market” for all imports which before February 29, 1964 had complied with the compulsory payments deferment of 120 days, irrespective of the percentage of the advance deposit requirements.

November 13. The advance deposit regime for imports was modified. The U.S. dollar bond deposit in most cases was replaced by the deposit of an amount in escudos equivalent to the customs surcharge plus an additional surcharge that was intended to reflect the cost of renting the dollar-denominated securities which had had to be lodged with the Central Bank under the previous advance deposit regime. The new combined surcharges ranged from zero to 400 per cent of the c.i.f. value. For certain commodities not covered by the new regime, the advance import deposit requirement was raised to 10,000 per cent of the c.i.f. value. Previously, almost all imports required advance deposits ranging from 5 per cent to 10,000 per cent of the c.i.f. value, which had to be discharged by lodging dollar-denominated securities with the Central Bank at the time of registration.

November 13. A new list of permitted imports was published, as well as a new list of imports with access to the “futures market.”

November 13. The conversion rate for the calculation of import surcharges and advance deposits was established at E° 2.93 per US$1.

November 18. Commercial banks were no longer permitted to provide direct or indirect financing for advance deposits.

December 1. The conversion rate for the calculation of import surcharges and advance deposits was established at E° 3.06 per US$1.

December 23. Commercial banks were authorized by the Central Bank to supply foreign exchange in the “futures market” for all imports which before March 31, 1964 had complied with the compulsory payments deferment of 120 days, irrespective of the percentage of the advance deposit requirements.

December 28. Commercial banks were authorized by the Central Bank to supply foreign exchange in the “futures market” for imports subject to a 100 per cent advance deposit which before April 30, 1964 had complied with the compulsory payments deferment of 120 days, and for imports subject to a higher advance deposit which had complied with that requirement before August 31, 1964.

Republic of China

Exchange Rate System

No par value for the New Taiwan Dollar has been established with the Fund. The official buying and selling rates for the U.S. dollar are NT$40 and NT$40.10, respectively. Buying and selling rates for certain other currencies are also officially fixed.1 Currencies for which rates are not officially fixed are accepted by appointed banks, and the rates are calculated in accordance with the foreign market quotations. With certain exceptions, earners of foreign exchange must sell it at these rates to banks appointed by the Central Bank of China.

Administration of Control

The Executive Yuan is responsible for policies concerning foreign exchange and trade controls. The Foreign Exchange and Trade Commission (FETC) is the executive agency concerned with foreign exchange and trade matters. The functions of the FETC are to formulate policies and plans on foreign exchange and foreign trade; to screen and approve the use of foreign exchange (including the issuance of exchange and trade licenses); to coordinate the use of U.S. aid; to determine the official buying and selling rates of exchange; to act as a coordinating agency among various authorities in connection with foreign exchange and trade transactions; and to deal with other relevant matters pursuant to orders of the Executive Yuan. Decisions of the FETC are implemented through the appropriate organizations and authorized banks. Exchange and trade licensing is administered by several committees in accordance with the nature of the applications. These committees refer applications for import licenses to the FETC only in exceptional cases.

The Central Bank of China is responsible for the over-all management of foreign exchange and the supervision of the appointed banks, of which the Bank of Taiwan is the most important. The Bank of Taiwan issues import and export licenses on instructions from the FETC; however, licenses for imports under U.S. Aid Commercial Procurements are issued by the Central Bank of China.

Prescription of Currency

Export receipts must be obtained in deutsche mark, French francs, Hong Kong dollars, Italian lire, Malayan dollars, pounds sterling, or U.S. dollars. Also, these are the foreign currencies that may be used by residents of other countries to finance investments in the Republic of China. Settlements with Spain are made in U.S. dollars through a bilateral account.

The currency and method for making payments to residents of foreign countries other than Spain are not prescribed.

Nonresident Accounts

China’s exchange control regulations do not provide for a clear distinction between residents and nonresidents. As a consequence, persons who would be considered nonresident under many other exchange control systems are not granted treatment essentially different from that accorded to residents of the Republic of China in exchange control matters.

Accounts in new Taiwan dollars of persons who are residents of other countries are treated in the same way and are subject to the same regulations as other accounts in new Taiwan dollars. The exchange control regulations do not provide for blocked balances and blocked accounts held in the name of residents of foreign countries.

Subject to permit, residents may maintain accounts in foreign currencies. These accounts—designated Foreign Currency Deposits—may be used for making authorized payments abroad. They are of two categories: (1) Foreign Currency Deposits maintained by government organizations, insurance and transportation companies, and private productive enterprises. These cover exchange either earned by account holders or directly allocated by the exchange authorities on the basis of individual permits. (2) Foreign Currency Deposits maintained by individuals. These are subdivided into interest-bearing time deposits and personal passbook accounts (which do not bear interest). Balances on these accounts originate from exchange obtained by account holders prior to their arrival in the Republic of China or from earnings and other receipts from their private resources outside the Republic.

Imports and Import Payments

All imports require individual licenses. Imports from communist countries are prohibited. The Chinese authorities license and check imports from Hong Kong in such a way as to induce importers to obtain certain imports direct from the country of production and to control effectively imports from Mainland China.

Imports are divided into three groups: (1) prohibited, (2) controlled, and (3) permissible. The prohibited imports comprise not only narcotics and some other goods usually excluded by most countries from importation but also a number of luxury goods and less essential items, such as certain luxury Chinese foods, cigarettes, cigars and liquors, jewelry, certain medicines, tea, sugar (and its substitutes), and molasses. Liquor and cigarettes are imported from time to time by the government monopoly organizations responsible for selling these commodities. The controlled list contains three types of goods: some luxury items; certain goods that are also produced locally of good quality and in an amount satisfying domestic demand and whose factory prices are not more than 15 per cent higher than the c.i.f. prices of comparable imported goods; and goods subject to regulation and allocation. The first two types are licensed restrictively; goods of the third type are often imported by government agencies, which offer them for sale either by allocation or by auction. Imports on the permissible list are licensed liberally.

According to the intended utilization, goods may be imported by one of four main groups of importers: government trading agencies, registered private traders, registered private traders on a commission basis, and end-users and manufacturers. The Central Trust of China is the main government trading agency. It handles imports financed with U.S. aid funds, and imports for government and military organizations, public enterprises, and other customers. Another government trading agency is the Taiwan Supply Bureau, which is in charge of imports for the Taiwan Provincial Government, cooperatives, teachers’ organizations, etc.

Firms that wish to operate as authorized (“registered”) importers must obtain approval (“registration”) from the FETC; the firms must be operating in accordance with certain laws and have a minimum capital of NT$200,000. Traders registered as operating on a commission basis may act only as agents for traders or foreign suppliers.

End-users and manufacturers are permitted to import raw materials, machinery, and replacement equipment needed for their factories. In granting licenses to this category of importer, the licensing authorities take into account such criteria as production capacity and equipment. In processing applications for licenses to import capital equipment for the construction of new plants, the licensing authorities consider the feasibility of the project and its priority from the point of view of the economic needs of the country. Imports to be used for processing or producing goods for export are automatically licensed (e.g., raw cotton, wool, wood for the production of plywood).

Private importers (i.e., importers other than government agencies and public enterprises) handle about two thirds of the imports paid for with currencies provided from official exchange reserves.

According to the methods of financing, imports may be divided into two broad categories: (1) imports for which exchange is allocated directly out of official exchange reserves, and (2) imports which are made without recourse to official exchange reserves, and which comprise (a) those made under the U.S. aid program and (b) those paid for with self-provided exchange or exchange supplied by foreign investors and foreign lenders. Imports obtained with self-provided exchange are those financed by importers out of their own foreign exchange obtained by them prior to their coming to the Republic of China or originating from exchange receipts exempted from the surrender requirement.

Payments for Invisibles

All payments for invisibles require approval. Payments for invisibles directly related to trade are permitted freely when the basic trade transaction has been approved. The transfer of interest, profits, and earnings on authorized foreign investments in the Republic of China may be made without restriction.

Foreign exchange for payments for certain other invisibles is allocated only up to established limits or on a percentage basis. Foreign technicians are allowed to remit to their dependents abroad up to 70 per cent of their basic monthly salary (year-end bonus, profit sharing, overtime pay, and insurance payments are excluded), but the maximum amount permitted for family maintenance is the equivalent of US$250 a month to Japan, US$400 to Europe, and US$500 to the United States; remittances of larger amounts require special approval. Employees of the Government or of educational institutions may remit to their dependents in Hong Kong or Macao up to HK$150 a month. Membership fees to foreign institutions and certain payments for news services, books, and magazines (personal subscriptions for reference purposes) are approved upon application. Receipts from local subscriptions to, and sales of, imported newspapers and periodicals are remittable up to certain limits. Up to 70 per cent of the net amount of motion-picture film rental may be transferred abroad; the remainder is to be used for local expenses and investment in the Republic of China. A maximum of US$2,400 a year is provided for tuition and living expenses of students studying abroad; for their first academic year, they are granted their total requirements for tuition and expenses, irrespective of the US$2,400 limit. Foreign exchange is made available for business travel.

Applications for exchange to pay for certain other types of invisibles are approved as liberally as possible, account being taken of the merits of submitted applications and of exchange reserves; for instance, persons who wish to go abroad for health reasons are allocated exchange if the exchange control authorities feel that such a trip is justified. Applications for exchange to pay for some other invisibles, e.g., pleasure trips, are not approved. For all types of permissible travel, irrespective of destination, exchange equivalent to US$500 a month is granted for incidental expenses.

Persons leaving the Republic of China may take with them no more than NT$1,000 in domestic banknotes and coins, and the equivalent of US$200 in foreign currencies. Travelers from abroad are allowed, upon their departure, to repurchase against new Taiwan dollars the foreign currency which they have sold to appointed banks during their stay in the Republic of China. Those travelers who have stayed in the Republic less than six months may take with them any unspent portion of the foreign currency which they registered upon entry.

Exports and Export Proceeds

All exports require licenses, mainly in order to ensure the surrender of foreign exchange. Licenses may be issued only for exports to non-communist countries. The re-exportation of imported goods is permitted after they have been processed.

Quota limitations are maintained on the export of canned mushrooms. The export of a few foodstuffs is restricted. Minimum prices are established for exports in order to prevent underinvoicing by exporters.

Manufacturers who use imported raw materials to produce goods for export are refunded various charges imposed on such raw materials, namely, import duties, defense surtax on import duties, harbor dues, and commodity tax. Some preferential treatment is accorded to payers of income tax related to the production of goods for export, provided that the taxpayers submit satisfactory proof of such exports; complete exemption from the tax is not granted, however.

Exporters are required to surrender exchange earnings accruing from exports immediately after their collection. Subject to approval, bona fide gifts and commodity samples up to the value of US$100 may be sent abroad. When leaving the Republic of China, tourists are allowed to take out domestic products valued up to US$100.

Proceeds from Invisibles

Exchange surrender requirements applicable to proceeds from invisibles are the same as those applicable to export proceeds. Interest, earnings, and profits on investments made by Chinese investors outside the country, and originally approved by the FETC, must be surrendered to the banks.

Travelers may bring in any amount of foreign currency and either hold or surrender it. The import of domestic banknotes expressed in new Taiwan dollars is limited to NT$1,000 for each traveler; a license from the Ministry of Finance is required for importing a larger amount.

Capital

Investments by foreigners may be made in capital equipment or raw materials, or through the transfer of foreign currencies to the Republic of China. In accordance with the Foreign Investment Law of July 14, 1954, liberally revised in 1959, and the Statute for Encouragement of Investment, enacted in 1960, new foreign investments approved by the authorities are guaranteed (1) unrestricted transfer of net annual profits or earned interest; (2) repatriation of capital, including reinvested earnings, two years after completion of the investment plan, at an annual rate not exceeding 15 per cent, calculated in relation to the originally invested funds; (3) the right to re-export invested capital in its original form; (4) favorable treatment in respect of rezoning and requisition of agricultural land for industrial use; and (5) compensation for expropriation where the foreign investment constitutes less than 51 per cent, and immunity from expropriation for 20 years where the foreign investment constitutes at least 51 per cent, of the total investment. In addition, foreign investments are granted the same treatment accorded to new domestic investments. Laws for the encouragement of foreign investments provide for the minimum of preferential treatment which might be granted on more favorable terms in specific cases.

To obtain the benefits of the investment laws, investments by foreign nationals must be made in enterprises conducive to the economic and social development of the country, such as mining, communications, and manufacturing for domestic needs. Preference is given to foreign investors who intend to produce goods for export or for replacing imports.

Foreign investors who intend to make investments in Taiwan stocks and wish to take advantage of privileges provided under foreign investment laws, as described above, must obtain approval from the Ministry of Economic Affairs. Purchases and sales of stocks by foreign investors must be made through the intermediary of registered brokers, such as the Trust Department of the Bank of Taiwan and the Trust Division of the Central Trust of China.

Subject to approval, investments may be made outside the Republic of China only in the form of technical know-how, semifinished products, and locally manufactured equipment.

Chinese nationals who wish to emigrate, and persons who had settled in the Republic of China and wish to return to their native countries, are not accorded any special transfer facilities in respect of proceeds from the liquidation of their assets in the Republic. Persons outside the Republic of China who acquired in the Republic assets or balances in new Taiwan dollars on account of dowries, inheritances, gifts, and the like are not normally granted the right of transferring them from the Republic.

Changes during 1964

April 18. Desiccated coconut was transferred from the controlled to the permissible import list.

May 8. Coffee and coffee products were transferred from the prohibited to the permissible import list.

May 15. The amount of foreign exchange granted for daily expenses during all types of permitted travel (i.e., excluding pleasure travel) was raised to the equivalent of US$500 a month for all destinations. Previously, the amounts granted for such expenses were US$400 for North America, US$300 for Europe and Central and South America, and US$250 for Japan and South Asian countries.

June 5. The allocation of exchange for study abroad was liberalized. Students could apply for foreign exchange to cover tuition and all other expenses during their first academic year, even if the total should exceed the maximum set previously for the country where the college or university is located. In addition, each student was granted US$300 or its equivalent to cover his incidental expenses during the journey to his destination.

July 28. To promote tourism, permission was given to travel agencies, tourist hotels, and taxi companies to import station wagons and sedans. A travel agency could import one vehicle for every US$30,000 worth of business that it did in 1963, a tourist hotel could import one vehicle for every 50 rooms, and taxi companies could import sedans to replace old vehicles. Importation must take place before July 15, 1965.

September 4. Synthetic and composite fibers were transferred from the controlled to the permissible import list.

September 11. It was announced that in future any local industry requesting that its product be put on the controlled import list must show that the domestic ex-factory price did not exceed the c.i.f. price of similar imported goods by more than 15 per cent (previously, 25 per cent). No item would be put on the controlled list unless imports in 1963 had amounted to at least US$30,000. Furthermore, no item would be kept on the controlled list for more than three years; previously, items could remain on the list indefinitely. The existing controlled import list would be reviewed; those commodities receiving protection under the previous 25 per cent price differential criterion would be transferred to the permissible import list, if the new standard could not be met within one year.

October 12. Certain types of cement were transferred from the controlled to the permissible import list.

October 16. Photographic film and unfinished frames for motorcycles were transferred from the controlled to the permissible import list.

Colombia

Exchange Rate System

On December 17, 1948, a par value for the Colombian Peso was established by Colombia with the Fund. However, exchange transactions no longer take place at rates based on that par value. There is a buying rate, which is fixed by the Monetary Board, of Col$7.30 per US$1 for the foreign exchange proceeds of exports of coffee and certain manufactured products, and for foreign exchange sales by petroleum companies. A fixed rate of Col$9.00 per US$1 is applied to proceeds from official foreign loans to the National Government for local currency expenditures. A rate equal to the average free market rate of the preceding week is applied to all other export proceeds and to exchange sold by the Bank of the Republic for certain freight payments. Holders of exchange certificates may purchase foreign exchange from the Bank of the Republic to pay for imports, certain freight expenses, government expenses abroad, and certain students’ remittances. These certificates are sold by the Bank of the Republic at public auction; at the end of 1964, this “auction” or certificate rate was Col$9.00 per US$1. There is a remittance tax of 10 per cent (which has to be paid with U.S. dollars from the free market) on payments of interest on, and repayments of, capital registered before June 17, 1957, if such payments are made through the official market. All other transactions take place in a free market; at the end of 1964 the selling rate in the free market was Col$12.80 buying, and Col$12.82 selling, per US$1. (See Table of Exchange Rates, below.)

Administration of Control

To import from, export to, or make payments to foreign countries, prior application for registration of the transaction must be made at the Exchange Registration Office, which is responsible to the Bank of the Republic. Exchange certificates for payments entitled to be made at the “auction” rate must be purchased at the auctions of the Bank of the Republic and may be acquired through the commercial banks, which act as authorized agents of the Bank of the Republic. Applications for such certificates require the prior approval of the Exchange Registration Office. An Exchange Regulation Fund, operated by the Monetary Board, regulates operations in the “auction” market. Overall import and export policy is determined by the Board of Foreign Trade. The Superintendency of Foreign Trade controls imports that are subject to prior licensing.

Prescription of Currency

Payments and receipts related to international transactions are normally effected in U.S. dollars. Settlements with Denmark, Finland, and Spain for commercial transactions must be made through a clearing account in accordance with the provisions of the relevant bilateral payments agreement. Under the agreement with Denmark, goods originating in third countries and purchased in one of the agreement countries may be settled through the agreement account by mutual consent of the partners. The National Federation of Coffee Growers has concluded trade and payments agreements with Czechoslovakia, Eastern Germany, Hungary, Poland, Rumania, the U.S.S.R., and Yugoslavia.

Nonresident Accounts

Nonresidents are permitted to hold accounts in Colombia. There are no special nonresident accounts.

Imports and Import Payments

There are three lists of imports: goods whose import is prohibited; goods whose import is subject to prior licensing by the Superintendency of Foreign Trade; and goods that may be imported freely. The free list, however, was suspended for a period of 90 days on December 1, 1964; during this suspension, all imports would require a prior license unless the goods were imported from LAFTA countries.

Prior registration of the import transaction at the Exchange Registration Office is required for all imports; the charge for import registration forms is Col$5.00 for imports valued at less than US$20.00 and Col$100.00 for other imports. Advance import deposits are required for all commodities. Imports by the National Government and by regional or municipal governments are subject to a nominal advance deposit of Col$1.00. An advance deposit of 1 per cent is required for registration of the following: imports of capital goods and spare parts not destined for resale; imports of capital goods intended for the establishment of die-forging works; imports of raw materials and basic foodstuffs brought into the country by the National Institute of Health for the preparation of pharmaceutical products; raw materials for tires; imports under clearing agreements concluded for the foreign marketing of coal and products of Acerias Paz del Río S.A., subject to the exchange and trade regulations; foodstuffs imported by the National Institute of Supply, with the approval of the competent ministry, for Colombia’s normal needs; imports exempt from advance deposits under laws, decrees, or resolutions in effect before the coming into force of Law No. 1 of 1959, provided that they comply with the regulations and are authorized by the Ministry of Finance and Public Credit; sacramental wine imported by the dioceses in quantities considered reasonable by the Bank of the Republic; and imports of books, newspapers, and magazines of a scientific or literary nature which will contribute to the culture or entertainment of the Colombian people. Other advance deposits required as a prerequisite to import registration are as follows: 5 per cent for machinery and equipment under tariff items assigned to basic industries; 10 per cent for capital goods of considerable value payable in installments, and for tractors and jeeps; 30 per cent for certain essential goods, such as drugs, newsprint, machinery, appliances, spare parts, cereals, fertilizers, tires, iron and steel sheets, buses, taxis, aircraft, and helicopters; 65 per cent for certain metals, some chemicals, paper pulp, certain paper products, aviation fuel, and lubrication oil; and 120 per cent for all other goods. These advance deposits are not required on imports from LAFTA countries of goods included in Colombia’s National List or in the special concession lists for Paraguay and Ecuador. The advance deposit must be placed with the Bank of the Republic before the application for registration of the import transaction is submitted to the Exchange Registration Office; it is returned 90 days after the merchandise is cleared through customs.

Prior exchange registration is required for all payments for imports through the “auction” market; registration is granted in f.o.b. terms upon approval by the Exchange Registration Office of the importer’s application for the corresponding exchange certificates. Applications are not approved unless an import registration is submitted as well as evidence that the goods have been cleared through customs and that payment is due. At least 20 days prior to filing an application for exchange certificates, the importer must provide a peso advance deposit equivalent to at least 95 per cent of the exchange requested, calculated at the average exchange rate of the last auction preceding the date of the deposit. Import payments before the maturity date of the exporter’s claim are not authorized, except for official imports. Official imports are exempt from the 95 per cent deposit requirement. Importers, or commercial banks acting for them, may buy exchange certificates covering the value of their imports at auctions held by the Bank of the Republic.

Potatoes, wheat, spelt, maslin, and flours made thereof, rice, barley, corn, wheat groats, and some legumes and vegetables may be imported only by the National Institute of Supply.

Payments for Invisibles

Payments by the National Government for services are made at the “auction” rate. Installments of principal and interest on all official external medium-term and long-term debts registered before June 17, 1957 and owed by semiofficial or private entities, and repatriation of and service on foreign capital registered before June 17, 1957, may be made with exchange certificates obtained at the “auction” rate but are subject to the 10 per cent remittance tax. Exchange certificates are also granted for remittances to students engaged in postgraduate or special studies abroad, or in technical or vocational studies at the university level not available in Colombia, or in studies on behalf of official or semiofficial institutions, etc., and for 80 per cent of freights on imports financed with official exchange and carried by national or foreign ships belonging to a shipping conference. Foreign exchange is made available by the Bank of the Republic, at a rate equivalent to the average free market rate of the preceding week, for the payment of all freight costs which prior to November 5, 1964 were paid through the free market. Payments for other invisibles must be made through the free market.

Exports and Export Proceeds

Prior application for registration is required for all exports except crude oil. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. When registering an export transaction, the exporter must give a personal guarantee that the proceeds will be surrendered in an appropriate currency (see Prescription of Currency, above) and within any time limit that may be applicable for the commodity concerned. For coffee, the proceeds must be surrendered within 10 days after registration, except for exports made by the National Coffee Federation, which may keep stocks abroad for sale and make deposits in banks abroad in the interim before sale. Exporters of bananas must surrender 60 per cent of their proceeds within 10 days of the issuance of the export license and the remaining 40 per cent within 60 days. Receipts from minor exports have to be surrendered within 180 days after export, but exporters may receive a 90-day extension of this period.

Exchange proceeds from all exports, except crude oil, must be surrendered. The exchange proceeds from exports of coffee must be surrendered to the Bank of the Republic at the buying rate of Col$7.30 per US$1 fixed by the Monetary Board. The proceeds of all other exports are negotiated at the average buying rate in the free market for the preceding week. Manufactured export products in which imported materials or elements are used are, however, subject to the following system: when the value of the imported raw material component is less than 50 per cent of the export value, the buying rate for the foreign exchange proceeds of the export is the average free market rate of the preceding week; when it exceeds 50 per cent, the foreign exchange proceeds of the export must be sold to the Bank of the Republic at the buying rate fixed by the Monetary Board, i.e., Col$7.30 per US$1.

Exports of coffee are subject to a minimum surrender price presently fixed at US$73.00 per 70-kilogram bag; the surrender price for bananas and other products varies according to the quantity exported and the price that the exporter may obtain in accordance with world market conditions. When the surrender price is higher than the f.o.b. export price, exporters have to purchase foreign exchange to fulfill the surrender requirement. This exchange may be purchased in the free market or from the Bank of the Republic at the free market rate for the day. Further, coffee exporters are required, prior to registration, to surrender in kind to the National Coffee Fund the equivalent of approximately 5 per cent of the volume of coffee exported. Whenever the National Federation of Coffee Growers declares the volume of Colombian coffee production to be below average, the exporter may make an equivalent cash payment to the National Coffee Fund in lieu of delivery in kind.

Proceeds from Invisibles

Exchange receipts from invisibles may be retained or negotiated in the free market.

Capital

Capital imported for the activities of the petroleum industry, including activities in the field of petrochemicals, must be registered with the Exchange Registration Office. When such capital is imported for exploration and exploitation of petroleum or to pay for related services, the foreign exchange must be sold to the Bank of the Republic at the rate of Col$7.30 per US$1. Foreign capital invested in the petroleum industry and net profits on such capital are remitted according to special laws and contracts.

For other industries, there is at present a dual system: Those registered before June 17, 1957 may pay amortization and profits on foreign capital with “auction” exchange, covering the remittance tax of 10 per cent with U.S. dollars purchased in the free market, or they may purchase the exchange in the free market, in which case the remittance tax is not payable. Capital imported on or after June 17, 1957 does not have to be registered with the Exchange Registration Office and may enter freely through the free market; amortization and profits on such capital must also be negotiated through the free market.

Table of Exchange Rates (as at December 31, 1964)

(pesos per UJS. dollar)
BuyingSelling
7.301 (Fixed Rate) Exports of coffee and manufactured products with an import component exceeding 50 per cent. Exchange sales by petroleum companies for exploration and exploitation.
9.00 (Fixed Rate) Official foreign loans to National Government for local currency expenditures.9.001 (“Auction” Rate) All imports. Payments by the National Government, certain students’ expenses, and freight payments on merchandise transported by conference ships.
10.281 (“Auction” Rate plus 10% Remittance Tax)2 Principal and interest on official external debt registered before June 17, 1957. Repatriation of and service on foreign capital registered before that date.
12.80 (Average Free Market Rate of Preceding Week) All other exports except crude oil.3 Other foreign exchange sales to Bank of the Republic.12.82 (Average Free Market Rate of Preceding Week) All freight costs which prior to November 5, 1964 were paid through the free market.
12.80 (Free Market Rate) Invisibles. Other private capital.12.82 (Free Market Rate) Other invisibles and capital.

Changes during 1964

During the year various changes in import- deposit requirements were announced.

January 10. The main buying rate of Col$7.10 per US$1 was changed to Col$7.30 per US$1.

January 10. The minimum surrender price for exports of coffee was raised from US$59.00 to US$66.30 per 70-kilogram bag.

January 22. Exporters of bananas were required to surrender 60 per cent of their foreign exchange proceeds within 10 days after the issuance of export licenses, and the remaining 40 per cent within 60 days after their issuance.

January 24. Capital imports of petroleum companies, and transfers of amortization, profits, and interest on such capital, required registration with the Exchange Registration Office.

March 7. The minimum surrender price for exports of coffee was raised from US$66.30 to US$74.00 per 70-kilogram bag.

April 29. Minor exports no longer required a bank guarantee in regard to the surrender of foreign exchange proceeds; instead, the exporter’s personal guarantee sufficed.

July 13. A free trade zone was created at Barranquilla.

July 17. Decree Law No. 1733 abolished the Superintendency of Imports and established two new organizations to control foreign trade: the Board of Foreign Trade and the Superintendency of Foreign Trade.

July 17. Decree Law No. 1734 vested in the Monetary Board the legal authority to change the certificate system and the auction rate; it also provided for the registration of certain imports of capital, permitted the sale in the free market of capital imported for the metal-extracting industries, and discontinued the Col$7.30 rate for gold exports.

September 2. A 5 per cent advance deposit requirement was introduced; it was applied to machinery and equipment under tariff items assigned to basic industries.

October 21. The amount up to which banks and financial institutions could give guarantees in foreign currency was limited to 50 per cent of the sum of paid-up capital and reserves.

October 25. The Bank of the Republic ceased its support operations in the free exchange market.

November 5. Exchange was made available by the Bank of the Republic at a rate equivalent to the average free market rate of the preceding week for the payment of all freight costs which prior to November 5, 1964 were settled through the free market.

November 13. The minimum surrender price for exports of coffee was reduced from US$74.00 to US$73.00 per 70-kilogram bag.

November 18. Commercial banks were permitted to repurchase from the Bank of the Republic 40 per cent of the proceeds of minor exports that they had surrendered.

December 1. A resolution of the Board of Foreign Trade suspended the import free list for a period of 90 days; during the suspension, all commodities would require a prior license unless they were imported from LAFTA countries.

December 21. A new customs tariff under the Brussels nomenclature was introduced.

December 23. The advance deposit requirements applicable to the tariff items of the new customs tariff were announced.

December 28. Prior exchange registration, which was required for all payments for imports, ceased to be automatically accepted upon submission of the import registration and evidence that the goods had entered Colombia. Exchange applications henceforth would require the approval of the Exchange Registration Office prior to purchase of exchange at the “auction” rate. To obtain such approval, a 95 per cent advance deposit in pesos calculated at the “auction” rate was required at least 20 days prior to the application for foreign exchange, and evidence had to be submitted that the foreign obligation had fallen due. Advance import deposits used to buy exchange certificates could no longer be returned after 45 days; henceforth, these also would be returned 90 days after customs clearance.

December 30. Import registrations had to indicate the approximate date on which payment would fall due.

Congo (Brazzaville)

Exchange Rate System

No par value for the currency of Congo (Brazzaville) has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by commercial banks under the direction of the Exchange Office. The Ministry of Economic Affairs allots to each importer exchange for goods included in the annual import program; it also issues import licenses with the consent of the Exchange Office and export licenses.

Prescription of Currency

Congo (Brazzaville) is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs; those with all other countries in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from all other countries are subject to licensing in accordance with an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Congolese Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the French Franc Area except those of the Sino-Soviet bloc. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for the other countries may be used to import goods originating in any country except those in the Sino-Soviet bloc, to which special quotas apply.

For goods included in the annual import program, the Ministry of Economic Affairs publishes each year an announcement of the exchange allotted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Ministry an application for a license within the limits of the quota that has been assigned to him. When the license is issued, the Exchange Office makes the exchange available to the importer through his bank. Import licenses are valid for one year, and no extensions are granted except for specially manufactured goods when evidence is presented concerning the delay in manufacture.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. However, for the following categories, authorized banks may sell foreign exchange without prior authorization from the Exchange Office: (1) for travel, up to the equivalent of CFAF 250,000 a person for each trip; (2) for study and living expenses connected therewith, upon presentation of supporting documents from the educational institution attended by the student; (3) for family maintenance, upon presentation of supporting documents; and (4) for vacation expenses abroad, up to the equivalent of CFAF 12,500 a person a month, with a maximum equivalent to CFAF 50,000. In addition, the Exchange Office authorizes the sale of foreign exchange freely for the following: payments for patent rights, royalties, trademarks, licenses, etc.; the net amount of salaries received by foreigners employed in Congo (Brazzaville); expenditures and earnings of foreign governments; and medical expenses and living expenses abroad for reasons of health.

Travelers to other countries in the French Franc Area may take out any amount of CFA banknotes. Travelers to other destinations may take out up to CFAF 75,000 or CFPF 75,000 in CFA or CFP banknotes, and up to an equivalent amount in banknotes of countries outside the French Franc Area. Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses, which are issued freely.

Proceeds of exports to countries in the French Franc Area may be retained by the exporter. Proceeds of exports to other countries must be surrendered within one month from the date of their receipt. Exporters may, however, retain 10 per cent of their export proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts, which may be used by the exporters themselves to pay for export promotion expenses and for modernization and expansion needs of their industries.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 5,000 earned in those countries from foreign securities, must be collected and must be surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

Under the Investment Code of June 1961, any enterprise established in Congo (Brazzaville), whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports as well as exemption from direct taxes on specified income.

The Code also provides for three categories of preferential treatment, in accordance with which fiscal and other privileges may be accorded to firms investing in specified new industries or in the expansion of existing ones. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of Congo (Brazzaville); it is granted for a period of up to 10 years. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatment C is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for a period of up to 20 years. The granting of any one of the three kinds of preferential treatment automatically includes the application of specified exemptions from direct taxes which are granted under the provisions of the ordinary law (see above).

Requests for approval for preferential treatment must be submitted to the Minister of Finance and Planning, who, after examining the documents, transmits them to the Investment Commission. After an opinion has been given by that Commission, the project is submitted to the Council of Ministers. Preferential treatment A is granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Executive Committee of the Equatorial Customs Union upon the recommendation of the Council of Ministers. Preferential treatment C requires legislation.

Controls over foreign investments in Congo (Brazzaville) are administered along the lines established by exchange control regulations in France.

The transfer of profits from, as well as the proceeds from the liquidation of, registered foreign investment is permitted freely. However, Portuguese nationals and companies controlled by Portuguese nationals require the authorization of the President of Congo (Brazzaville) to make financial transfers abroad; Portuguese nationals are upon request given permission to make such transfers to Portugal.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to transactions with Congo (Brazzaville), was terminated.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to transactions with Congo (Brazzaville), was terminated.

July 13. A National Trading Office (Office National du Commerce or OFNACOM) was established to serve as sole importer of all products destined for the northern regions of the country. The Office would also create and operate wholesale and retail outlets in these regions.

December 8. The treaty establishing the Central African Customs and Economic Union (UDEAC) was signed by Cameroon and the members of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). It would enter into effect on January 1, 1966.

Democratic Republic of Congo

Exchange Rate System

No par value for the currency of the Democratic Republic of Congo has been established with the Fund. The official unit of currency is the Congo franc. The official buying rate is CF 150 = US$1 and applies to all exchange proceeds; the official selling rate is CF 180 = US$1 and applies to all exchange payments. The buying and selling rates for other currencies are fixed on the basis of official cross rates between each of those currencies and the U.S. dollar.

Administration of Control

Exchange control is administered principally by the National Bank of Congo, which is responsible for global allocations of foreign exchange for payments for imports and invisibles. The General Manager of the National Bank acts also as Foreign Exchange Controller and in this capacity is directly responsible to the Prime Minister for the broad formulation and control of exchange programs. The Bureau of Economic Coordination in the Prime Minister’s office, together with the Office of Supply (Office d’Approvisionnement) in the Ministry of Economic Affairs, is responsible for the determination of more detailed priorities for imports and the allocation of import quotas to recognized importers. On the basis of decisions reached by the above-mentioned agencies, combined import licenses and authorizations for payments for imports are issued by the Licensing Office, and authorizations for payments for invisibles are issued by the Exchange Office. Both these offices are an integral part of the National Bank. An Exchange Commission, composed of representatives of the economic ministries and of the National Bank, deals with contraventions of exchange control regulations.

Prescription of Currency

There are no prescription of currency regulations. The Democratic Republic of Congo is not a party to any bilateral payments agreements.

Nonresident Accounts

There are three categories of nonresident accounts: Nonresident Accounts in Congo Francs, Nonresident Foreign Currency Accounts, and Blocked Accounts.

1. Nonresident Accounts in Congo Francs. These accounts may be freely debited for and credited with settlements in the Democratic Republic.

2. Nonresident Foreign Currency Accounts. Nonresident nationals require special authorization from the National Bank to open these accounts with authorized banks; nonresident foreigners may open them freely. All Nonresident Foreign Currency Accounts may be credited freely; they may be debited freely for transfers to other Resident and Nonresident Foreign Currency Accounts, and to accounts abroad.

3. Blocked Accounts. These accounts in Congo francs may be freely credited with funds owned by nonresidents; they may be debited without special authorization for certain specified purposes. Transfers between Blocked Accounts are prohibited except between accounts held by the same individual.

Imports and Import Payments

The National Bank determines the total amount of foreign exchange to be made available for payments for imports in accordance with an exchange budget established for each four-month period; the budget distinguishes between imports financed by the Democratic Republic’s own resources and imports financed by foreign aid. Within these limits, the Office of Supply assigns quotas by commodity categories for imports financed out of the Democratic Republic’s own resources, in accordance with priorities established by this Office and by the Bureau of Economic Coordination. The Office then allocates individual quotas to recognized importers, subject to the approval of the Bureau of Economic Coordination. Importers who have obtained an import quota must apply to the Licensing Office, through an authorized bank, for a combined import license and exchange authorization. Importers do not require individual import quotas for a few specified products, such as petroleum products, salt, yeast, fish, and many types of meat, most of which are liberalized. The commodity categories to be financed by foreign aid are determined in agreement with the donor countries.

In addition, for enterprises deemed essential to the economy, a system of “exchange allocation agreements” is in force, which gives limited but guaranteed access to the Democratic Republic’s currency resources. Under this system, certain proportions of export proceeds (specified for individual exporting companies on the basis of agreements reached between each company and the National Bank), surrendered at the rate of CF 150 per US$1, are credited at the rate of CF 180 per US$1 to so-called Resident Foreign Currency Accounts. These accounts may be debited exclusively for payments for authorized categories of imports and invisibles to be effected directly by the account holder in connection with his own business activity. The imports concerned are not subject to import quota requirements, and the banks in which the Resident Foreign Currency Accounts are held obtain an import license on behalf of the account holder and make payments against the presentation of import documents. The proper use of exchange credited to Resident Foreign Currency Accounts is verified by the National Bank.

Allocations of exchange (for direct imports or for invisibles) may be granted under similar conditions to nonexporting producers and to service enterprises. Imports under this arrangement are not subject to quota requirements, but a combined import license and exchange authorization is required in accordance with the provisions of the respective exchange allocation agreements.

An application for an import license must be accompanied by a specification of the merchandise to be imported, its unit price and country of origin, the transport and insurance charges connected with it, and the currency in which the payment is to be made. The combined import licenses and exchange authorizations that are granted are normally valid for four months. Within that period, importers must complete the importation and make the payment authorized.

Banks are permitted to open letters of credit for importers to whom import licenses have been granted. The importers must forthwith provide to the banks the countervalue in Congo francs, calculated at the rate of exchange for imports; however, by that action they are not relieved of any exchange risk involved. Payment to the foreign exporter may not be made until the bank has received the invoice and the documents evidencing either the shipment to the Democratic Republic of the merchandise described in the import license, or its clearance through Congolese customs. For most consumer goods, a certificate of verification of the quantity, the quality, and the country of origin of the merchandise, issued by a foreign correspondent of the Société Congolaise de Surveillance, must be part of these documents.

A similar licensing procedure applies to imports with “foreign financing,” which are allowed under certain conditions. These imports consist mainly of materials and equipment related to new investments, and of the requirements for institutions such as schools and charitable organizations. An import license is required, but there is no corresponding payment authorization and no foreign exchange is made available.

The quota and licensing procedure, as well as the verification formalities, apply as a rule to all private imports, including those financed by foreign aid. However, for the latter, any provisions connected with the granting of the foreign aid must also be observed.

Payments for Invisibles

Policy related to payments for invisibles is formulated by the National Bank. Normally, exchange is granted for items connected with trade. Transfers abroad of salaries of foreign nationals resident in the Democratic Republic of Congo are authorized, within certain limits. Travel abroad by foreigners must be entirely paid for with foreign exchange supplied by the traveler himself, while fares for authorized travel by Congolese nationals may be paid in Congo francs; airline booking offices and travel agencies may, upon application, obtain foreign exchange cover to the extent that their receipts in Congo francs exceed one third of their total receipts from fares for foreign travel. There are basic allocations for official and business travel and students’ expenses abroad. Transfers for certain administrative expenses abroad by enterprises, interest on private loans, and certain portions of insurance premiums are, as a rule, authorized. No exchange is made available for transfers of investment income.

All payments for invisibles are subject to authorization by the Exchange Office. Provisions covering the invisibles listed above may be included in “exchange allocation agreements.” In these cases, the exchange is made available in accordance with procedures similar to those described in the section on Imports and Import Payments, above.

All travelers may take out Congolese banknotes up to CF 15,000 a trip.

Exports and Export Proceeds

All exports require an export license. Banks are normally authorized to extend such licenses to exporters who submit a declaration of collection of exchange. Such declarations must specify the nature of the merchandise to be exported, the price, and the currency in which payment is to be received. Export licenses are normally valid for three months; within this period, the proceeds must be received and surrendered.

However, under the system of “exchange allocation agreements” (see section on Imports and Import Payments, above), certain proportions of the export proceeds surrendered may be repurchased by the exporters concerned in accordance with the procedures described above. Exporters of agricultural products may use up to 25 per cent of repatriated export proceeds to settle payments for authorized imports and invisibles. “Exchange allocation agreements” with mining companies provide for allocations ranging from 33 per cent to 38 per cent of their export proceeds surrendered.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered. The import of Congolese banknotes is prohibited, except that travelers to the Democratic Republic may import such banknotes up to an amount not exceeding CF 15,000 a trip; additional local currency may be obtained by the sale of foreign currency at the official buying rate.

No one on Congolese territory (whether national or foreigner) is allowed to hold foreign banknotes or other foreign means of payment in amounts in excess of US$300 or its equivalent. Foreigners traveling to the Democratic Republic and carrying amounts in excess of this limit must deposit the excess amounts in an authorized bank within 48 hours of arrival on Congolese territory; they are allowed to recover them on departure. Nationals who leave the Democratic Republic and wish to export foreign banknotes and foreign means of payment in excess of US$300 or its equivalent must submit to the customs authorities an official certificate showing that the banknotes and other means of payment concerned have been acquired legally.

Capital

Capital transfers abroad, except some relating to the Government, are not authorized.

Changes during 1964

February 17. Importers no longer required an individual import quota for imports financed under the U.S. aid program; banks were authorized to validate import licenses relating to these imports.

May 4. Licenses for the import of salt and yeast were granted freely.

June 22. The Monetary Council of the Democratic Republic of Congo, the interim Institute of Issue of the Democratic Republic, was dissolved, and the National Bank of Congo commenced operations. The National Bank took over all the functions previously carried out by the Monetary Council. The Licensing Office was integrated into the National Bank.

July 29. Travelers could bring in or take out CF 15,000 in domestic banknotes.

August 1. The requirement of a certificate of verification of quality, quantity, and country of origin was abolished for the import of petroleum, pharmaceutical products, investment goods, and certain industrial raw materials.

August 1. Nonresident Transferable Accounts in Congo Francs were abolished. Balances in such accounts could be freely transferred to Nonresident Foreign Currency Accounts. Blocked Accounts with a balance not exceeding CF 50,000 were converted into Nonresident Accounts in Congo Francs. The opening of Blocked Accounts was discontinued; nonresidents, who previously were only permitted to open Blocked Accounts, could open Nonresident Accounts in Congo Francs.

September 1. Licenses for the import of fish (dried, salted, or smoked) and many kinds of meat were granted freely.

October 1. Licenses for the import of most petroleum products were granted freely.

Costa Rica

Exchange Rate System

The par value is Costa Rican Colones 6.625 = US$1. The Central Bank buys exchange derived from exports and other exchange tendered to it at a fixed rate of Ȼ 6.62 per US$1. Exchange may be purchased freely by the public in a market in which the Central Bank maintains the rate at Ȼ 6.65 per US$1. Costa Rica has no exchange restrictions on foreign payments. Export proceeds have to be surrendered. Other exchange receipts may be disposed of freely. Costa Rica accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 1, 1965.

Administration of Control

The controls over export receipts are operated by the Central Bank of Costa Rica. Purchases and sales of exchange are made through the Central Bank or through commercial banks authorized for this purpose.

Prescription of Currency

There are no prescription of currency requirements. In practice, nearly all exchange transactions in Costa Rica are expressed in U.S. dollars. Costa Rica does not maintain any payments or clearing agreements with other countries. Payments to El Salvador, Guatemala, Honduras, and Nicaragua in respect of trade and invisibles may be made in Costa Rican colones through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries. Payments to Mexico in respect of trade and invisibles may also be made in Costa Rican colones through the clearing house.

Imports and Import Payments

There is no system of import licensing and all payments may be made freely.

As part of the exchange reform of 1961, certain less essential or luxury items were made subject to either a 15 per cent or a 30 per cent temporary import surcharge. However, as each successive Central American common external tariff agreement enters into force, any surcharges on the agreed items are thereby eliminated. For Costa Rica, such tariff equalization provisions now apply to about 96 per cent of the items listed in the Central American uniform import tariff schedule.

Payments for Invisibles

Payments for invisibles are not controlled, and exchange may be purchased freely.

Exports and Export Proceeds

The Central Bank supervises exports to assure a supply of exchange to the market. Export licenses from the Central Bank are necessary for the physical exportation of merchandise, and the license is granted if the exporter agrees to surrender the exchange proceeds; the Bank may require the exporter to provide a guarantee in this respect. In addition to the export license issued by the Central Bank, other export licenses are required as follows: (1) strategic materials, such as armaments, munitions, scrap iron, and scraps of nonferrous base metals, require export licenses from the Ministry of Economy and Finance; (2) sugar requires an export license from the Ministry of Economy and Finance in order that shipments under the sugar quotas may be controlled; (3) lumber and root of ipecacuanha require export licenses from the Institute for Lands and Colonization; (4) beans, rice, potatoes, onions, cotton, meat, and purebred and other cattle require export licenses from the National Council of Production; (5) airplanes require export licenses from the Civil Aviation Board; (6) Indian art objects made of gold, stone, or clay require export licenses from the National Museum; (7) tobacco requires an export license from the Tobacco Defense Board; and (8) coffee requires a sales contract approved by the Coffee Office, in order to control exports under the coffee quotas, and an approval from a commercial bank stating that there are no liens on the coffee.

The exchange proceeds of all exports must be surrendered. Foreign-owned banana companies that have contracts with the Government must surrender their net export proceeds calculated by deducting from their gross export proceeds (1) profits obtained during the year from their transactions in Costa Rica; (2) a sum equivalent to the depreciation on their investments in Costa Rica that is acceptable to the U.S. Internal Revenue Service; (3) the export tax on bananas payable in foreign currency; and (4) the cost of imports made during the year that were necessary for their normal business in Costa Rica. There are export taxes on sugar and coffee.

Proceeds from Invisibles

Exchange receipts from invisibles may be retained or sold freely.

Capital

Transfers of capital may be made freely by residents and nonresidents. The Organic Law of the Central Bank provides that foreign investments may be registered with the Central Bank and repatriation of the capital and income thereon assured.

Changes during 1964

No significant changes took place during 1964.

Cyprus

Exchange Rate System

The par value is Cyprus Pound 1 = US$2.80. Exchange rates are based on the fixed rate for sterling, with which the Cyprus pound is at par, and London market rates for sterling against other currencies. The rate for the U.S. dollar on December 31, 1964 was US$2.79⅝ buying, US$2.78½ selling, per £C 1.

Administration of Control

Exchange controls are administered by the Central Bank of Cyprus (Exchange Control Department); trade controls, by the Ministry of Commerce and Industry. Certain authority to approve applications for the allocation of foreign exchange within the scope of instructions issued by the Central Bank of Cyprus has been delegated to the commercial banks. Authority to introduce, adapt, and supervise controls on exports of potatoes has been delegated to the Potato Control Board.

Prescription of Currency

Cyprus is a member of the Sterling Area, and settlements between residents of Cyprus and residents of other Sterling Area countries may be made freely in sterling or another Sterling Area currency. Settlements with countries covered by bilateral payments arrangements must be made through the appropriate account.1 Payments to other countries may be made by crediting sterling or Cyprus pounds to an External Account, or in any foreign currency. The proceeds of exports to other countries may be received in sterling or Cyprus pounds from an External Account, in any specified currency,2 or in any other currency freely exchangeable for sterling.

Nonresident Accounts

No distinction is made between the accounts of residents of Cyprus and those of residents of other parts of the Sterling Area, and the funds on all such accounts are freely transferable within the Sterling Area. Residents of countries outside the Sterling Area may maintain with authorized banks nonresident accounts, designated External Accounts. These may be credited with authorized payments from the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currency by nonresidents. External Accounts may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of foreign currency.

Blocked Accounts are maintained in the name of a nonresident for certain payments of a capital nature which, under the existing exchange control regulations, may not be transferred outside Cyprus. These accounts may be in the form of deposits with local banks earning interest which may be freely transferred abroad.

Imports and Import Payments

Most imports may be made freely under an open general license. Individual import licenses are, however, required for 51 items (certain agricultural and textile products, a few metals, and most nonelectrical machinery) and for all goods originating in countries with which Cyprus maintains bilateral payments arrangements (see footnote 1). Individual import licenses are not required for bona fide gifts not exceeding £C 10 in value and not to be sold, for returned goods, or for certain special transactions.

Payments for all authorized imports may be made freely.

Payments for Invisibles

Payments for invisibles to residents of other Sterling Area countries may be made freely. All remittances to countries outside the Sterling Area require the approval of the exchange control authorities. Profits, dividends, and interest from foreign investments may be transferred abroad, after payment of any charges and taxes due. For certain categories of payments, limits are imposed. For study abroad, the lower limit is £C 400 a year, and the upper limit is £C 1,400 a year; the amount allowed depends on the cost of living in the country concerned—e.g., for study in countries in the Middle East, £C 450; in the United States and Canada, £C 1,400; in other countries, £C 850. For tourist travel, the limit is £C 250 a person annually; for business travel, £C 5 to £C 25 a day is granted in addition to the tourist allowance. Travelers may take out Cyprus notes up to £C 10 and foreign currency notes up to the equivalent of £ stg. 50. Nonresident travelers may take out any other foreign currency notes which they brought into Cyprus.

Exports and Export Proceeds

Exports of potatoes are subject to licensing by the Potato Control Board. All other exports to Sterling Area countries are free. All exports to countries outside the Sterling Area require export licenses, which are issued freely, provided that the transaction is being cleared through an authorized bank through which the net export proceeds will be repatriated and those in non-sterling currency surrendered.

Proceeds from Invisibles

Receipts from invisibles in currencies other than those of the Sterling Area must be sold to an authorized bank. Persons entering Cyprus may bring in any amount in foreign currency notes and Cyprus currency notes.

Capital

No control is exercised over capital receipts or payments in Sterling Area currencies. Receipts in other currencies must be offered for sale to an authorized bank; payments of a capital nature in those currencies require prior approval.

Foreign investments in Cyprus by residents of countries outside the Sterling Area require the prior approval of the exchange control authorities. In considering such applications, due regard is given to the purpose of the investment, the extent of possible foreign exchange savings, the number of persons to be employed, the extent of the foreign exchange liability which might arise from the investment, and possible competition with existing industries. Foreign investment involving participation in domestic industries not exceeding 49 per cent of the share capital is normally approved; participation above this limit may be permitted in exceptional circumstances. Proceeds from the liquidation of approved foreign investments may be repatriated after payment of any charges and taxes due.

Foreign nationals who repatriate or take up residence outside the Sterling Area, and Cypriots who emigrate to countries outside the Sterling Area, may have £C 5,000 of their assets transferred abroad. Any excess amount is deposited in a Blocked Account.

Transactions in foreign securities owned by residents require prior permission from the authorities.

Changes during 1964

November 5. Exports of potatoes became subject to control by a newly established Potato Control Board, which was given authority to introduce export quotas for potatoes and to allocate these among importers. The Board was also empowered to act as an importer itself.

November 7. Cyprus concluded a bilateral payments agreement with Eastern Germany, replacing the previous clearing arrangement with that country.

Dahomey

Exchange Rate System

No par value for the currency of Dahomey has been established with the Fund. The unit of currency is the CFA franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at rates resulting from the relation CFAF 1 = 0.02 French franc plus or minus a commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

An exchange tax of 0.5 per cent is levied on all payments to countries outside the French Franc Area, the minimum charge being CFAF 100.

Administration of Control

Exchange control is administered by the Exchange Office. Foreign exchange transactions are handled by authorized banks under the direction of the Exchange Office. Import licenses, certificates of importation, and export licenses are issued by the Department of Economic Affairs and approved by the Exchange Office.

Prescription of Currency

Dahomey is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with Eastern Germany are made through a special account under the terms of the bilateral payments agreement concluded with that country.2 Settlements with all other countries are usually made through banks in France: those with Rumania—with which France maintains a payments agreement that applies also to transactions with Dahomey—through Rumanian Foreign Accounts in Bilateral Francs; with all remaining countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Certain imports from all sources are prohibited.3 Imports from countries in the French Franc Area may be made freely. Most imports from EEC countries other than France may also be made freely. Most imports from other countries are subject to licensing; they are admitted in accordance with an annual import program, which is determined each year in a joint French-Dahomean Committee, as provided for by the Economic Cooperation Agreement with France. Under this program, global quotas are established for imports from all countries outside the French Franc Area except EEC countries. A few specified commodities4 are subject to individual ceilings; for each of these commodities, this amount is made up of a global quota for the EEC countries except France and a global quota for all countries outside the French Franc Area except EEC countries. The quotas determine the limits up to which import licenses are issued for specified commodities to licensed traders and to industrial or agricultural producers. Certain textiles are licensed freely outside the import program. For other goods admitted without quantitative restriction, certificates of importation are issued.

The import license or certificate of importation entitles the importer to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank. Under the EFAC arrangement (see section on Exports and Export Proceeds, below), licenses for the import of goods to be used directly by exporters are approved freely, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely; those to other countries are subject to the approval of the Exchange Office. Payments for invisibles related to trade are authorized freely when the basic trade transaction has been approved. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also approved freely. Foreigners may transfer all their savings from salaries, provided that the transfer is made within three months of receipt of the salary. Payments for other invisibles are subject to administrative decision. Exchange for premiums in respect of bona fide insurance transactions is granted freely. Travelers to countries outside the French Franc Area may obtain an exchange allowance in an amount equivalent to CFAF 120,000 per annum; the allowance is released in four equal installments, each of which may be taken up only if evidence is submitted to show that the preceding installment has been fully utilized for genuine tourist expenditures. Exchange for business travel is granted up to the equivalent of CFAF 50,000 for each trip. Exchange for family support is granted up to the equivalent of CFAF 27,500 a month for each dependent. Exchange for study abroad is granted freely upon submission of documentary evidence of expenses. Representation, advertising expenses, and business travel may be financed with funds from EFAC accounts (see section on Exports and Export Proceeds, below).

Travelers to Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta may take out, without limit, banknotes issued by any bank of issue within the French Franc Area. Travelers going direct to other countries in the French Franc Area may take out, without limit, banknotes issued by any bank of issue in the French Franc Area, with the exception of those issued by the BCEAO, for which the limit is CFAF 75,000. Travelers going to countries outside the French Franc Area may take out in banknotes or coins up to a maximum of F 750 in metropolitan francs, or up to 75,000 in CFA or CFP francs, or the equivalent of F 750 in notes and coins denominated in any French Franc Area currency other than the French franc. Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses but are not subject to quantitative restriction.

Export proceeds in currencies of countries outside the French Franc Area that are not used to make authorized payments abroad must be surrendered within three months from the date of their receipt. Exporters may, however, retain the following percentages of export proceeds in special, nontransferable, EFAC (Exportations-Frais Accessoires) accounts: 12 per cent for proceeds from Canada and the United States, irrespective of the currency used for payment; 8 per cent for proceeds from other countries, irrespective of the currency used for payments; and 6 per cent for proceeds of exports on consignment. Except for proceeds of exports on consignment, these percentages may be increased by 3 per cent by enterprises engaged principally in export business. Balances on these accounts may be used to make any payment outside the French Franc Area, provided that general or special authorization has been obtained within the regulations for their use.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due from residents of countries outside the French Franc Area in respect of services, and income exceeding the equivalent of CFAF 25,000 earned in those countries from foreign securities, must be collected, and they must be surrendered within one month of receipt. Travelers from Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta may bring in any amount of CFA banknotes issued by the BCEAO. Travelers from other countries may bring in up to CFAF 75,000 in banknotes issued by the BCEAO. All travelers may bring in any amount of banknotes and coins issued by a bank of issue of the French Franc Area other than the BCEAO, as well as any amount of banknotes and coins (except gold coins) of countries outside the French Franc Area.

Capital

Capital movements between Dahomey and other French Franc Area countries are free of control; those between Dahomey and all other countries require approval.

The Investment Code of December 31, 1961 provides for preferential status that may be granted to foreign and domestic investments in industry, agriculture, and, in some cases, commerce, when such investments are deemed to be of value to national development. Three preferential regimes are established. Plan A is intended for small and medium-sized investments and provides for exemption, during a period of up to 5 years, from import duties and taxes on materials necessary for the production of the proposed product. Plan B, for larger projects, is granted for a maximum period of 8 years, and provides, in addition to the benefits of Plan A, exemption during the first 5 years of operation from the tax on industrial and commercial earnings as well as certain other taxes. Plan C is intended for very large enterprises and is granted for a period of up to 25 years. In addition to the benefits of Plans A and B, Plan C guarantees marketing stabilization for products, free choice of suppliers, and certain other advantages.

Transfers abroad of proceeds from the liquidation of foreign investments are authorized freely.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to transactions with Dahomey, was terminated.

March 1. The import program for the 12-month period that began on March 1, 1964 entered into effect. Most imports from EEC countries other than France were liberalized. The import program consisted of global quotas applicable to all countries outside the French Franc Area except EEC countries and of ceilings on five groups of commodities. The previous import program contained global quotas for imports from EEC countries other than France, global quotas for imports from most other countries outside the French Franc Area, and bilateral quotas under trade agreements.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to transactions with Dahomey, was terminated.

September 22. A bilateral payments agreement was concluded with Eastern Germany.

Denmark1

Exchange Rate System

The par value is Danish Kroner 6.90714 = US$1. The official limits for the U.S. dollar are DKr 6.8575 buying, and DKr 6.9575 selling, per US$1, at which rates the exchange authorities stand ready to intervene; the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for the Canadian dollar and specified European currencies2 are quoted daily. Authorized exchange dealers may engage in arbitrage with one another and with their foreign correspondents in convertible and externally convertible currencies, including Danish kroner, both spot and forward for up to 12 months. Forward premiums and discounts are left to the interplay of market forces. Forward transactions with residents must have a commercial basis.

Exchange Control Territory

The Danish Monetary Area comprises Denmark, Greenland, and the Faroe Islands.

Administration of Control

Exchange control is administered by the National Bank of Denmark, which is the central exchange control authority. However, administrative powers for most payments and transfers are delegated to the authorized exchange dealers, i.e., banks and the stock exchange brokers who are members of the Copenhagen Stock Exchange. Permission, when required, for foreign direct investments in Denmark has to be obtained from the Ministry of Commerce. Licenses for imports and exports, when required, are issued by the Ministry of Commerce, the Ministry of Agriculture, or the Ministry of Fisheries.

Prescription of Currency

For exchange control purposes, countries are divided into two groups: the bilateral account countries 3 and the convertible area (all other countries).

Payments to countries in the convertible area may be made in any foreign currency or by crediting Danish kroner to any Convertible or Bilateral Krone Account (see section on Nonresident Accounts, below). Payments from countries in the convertible area may be received in any currency of the area or in Danish kroner, except from a Bilateral Krone Account.

Payments to the bilateral account countries must be made in accordance with the payments agreement between Denmark and the country concerned, usually in Danish kroner through a Bilateral Krone Account; noncommercial payments to Brazil may be made in convertible currencies. Payments from bilateral account countries may be received in accordance with the relevant payments agreement or in convertible currency, including Danish kroner.

Nonresident Accounts

Most accounts held in Danish kroner for nonresidents are convertible. Bilateral Krone Accounts are maintained for a few countries (see footnote 3). Both Convertible Krone Accounts and Bilateral Krone Accounts may be opened by authorized banks for foreign banks, insurance companies, and shipping lines. They may also be opened for other nonresidents, if it is agreed with the account holder that amounts in excess of DKr 75,000 are to be transferred abroad automatically at the end of each quarter; this limitation is not applicable to persons who are or have been of Danish nationality.

Convertible Krone Accounts may be credited with transfers from other Convertible Krone Accounts, with the proceeds from sales of currencies of countries in the convertible area, and with authorized payments to countries in the convertible area. They may be debited for transfers to other Convertible Krone Accounts or to Bilateral Krone Accounts, for purchases of any foreign currency, and for authorized payments to residents of Denmark from any foreign country.

Bilateral Krone Accounts may be credited with transfers from any Convertible Krone Account, with transfers from another Bilateral Krone Account of the same country and with the proceeds from sales of the currency of that country or of currencies of countries in the convertible area, and with authorized payments to any foreign country. They may be debited for transfers to other Bilateral Krone Accounts of the same country and for purchases of the currency of that country, and for authorized payments to residents of Denmark from the country of the account holder.

Capital Accounts and Foreign Accounts play only an insignificant part in settlements with foreign countries.

Capital Accounts are kept for nonresidents by authorized exchange dealers for holding capital, income from capital, pensions, and other funds owned by or accruing to Danish emigrants within the first three years after emigration and which are not transferable abroad because they amount to more than the yearly allocation granted for the transfer of such funds. Balances on Capital Accounts may be used for the same private payments in Denmark as those generally allowed from Convertible and Bilateral Krone Accounts, but may be used only within certain limits for commercial payments in excess of DKr 2,000. Within the limits set for transfers of emigrants’ funds, i.e., up to DKr 40,000 a person in each of the three years after emigration, balances may be transferred abroad, used for commercial payments in Denmark, or transferred to other Capital or to Foreign Accounts. After three years, emigrants may transfer remaining balances on Capital Accounts without limitation, and the account is then reclassified either as a Convertible Krone Account or as a Bilateral Krone Account.

Foreign Accounts are nonresident accounts with savings banks, small cooperative banks, and the Public Trustee’s Office. These accounts are kept mainly by private persons and for private purposes. The rules governing such accounts follow broadly the same principles as those established for Convertible Krone Accounts, except that transfers abroad may be made only through an authorized exchange dealer.

Imports and Import Payments

All goods not on a restricted list may be imported without license from the “Free List Area,” which comprises most countries outside the Soviet bloc.4 For imports from the “Free List Area” of commodities on the restricted list, licenses are issued on the basis of global (regional) quotas and may be used for any country in the “Free List Area.”5 Imports from countries outside the “Free List Area” require licenses; these are granted in accordance with bilateral trade agreements and traditional trade relations, and apply to the specific country concerned.

Payments for imports and the related shipping expenses may be made freely within two years from the end of the month in which the goods were cleared through customs, or within five years for imports of ships, aircraft, large machines, and major plants. The authorized exchange dealer may make payment before clearance of the goods, provided that the probable date of clearance lies within a year from the date of payment.

Payments for Invisibles

The National Bank has delegated to authorized exchange dealers the authority to permit payments for most invisibles to be made freely; only in a few cases is approval from the Bank required. Transfers of up to DKr 2,000 for any permitted purpose may be made without delivery of forms. Foreign exchange for travel is allocated liberally and may be obtained in convertible or externally convertible currencies for travel to any country, including the bilateral account countries. Foreign exchange in banknotes and coins may be purchased from agencies or individuals other than the authorized exchange dealers, provided that the amount does not exceed DKr 2,000 for each transaction.

Travelers may take out freely DKr 2,000 in Danish banknotes and coins, and any amount in foreign banknotes or other means of payment. The DKr 2,000 limit may be exceeded by nonresidents who may export any amount of Danish banknotes and coins derived from sales of foreign currency in Denmark or brought in by them when they entered Denmark.

Exports and Export Proceeds

Exports of major agricultural and fishery products require export licenses issued by the Ministry of Agriculture or the Ministry of Fisheries. Exports of a few industrial products to the “Free List Area” and of all products to other countries require licenses issued by the Ministry of Commerce, the primary purposes of the regulations being to safeguard the fulfillment of bilateral obligations, to avoid excessive credits to importing countries, to serve strategic purposes, and to avoid re-export and transit transactions involving loss of convertible or externally convertible currencies.

Export proceeds must be transferred to Denmark without undue delay unless the National Bank permits otherwise. However, this obligation does not apply to amounts which are to be used within three months to settle or to offset the cost of certain commercial expenses. Foreign exchange receipts must be offered for sale to the National Bank or to an authorized exchange dealer without undue delay, except that an individual resident may hold foreign banknotes and coins not exceeding DKr 2,000 in value.

Proceeds from Invisibles

Foreign exchange derived from invisibles must be transferred to Denmark, unless the National Bank permits otherwise, and offered for sale to the Bank or to an authorized exchange dealer without undue delay, with exceptions similar to those which apply to export proceeds (see section on Exports and Export Proceeds, above).

Travelers may bring in any amount in Danish banknotes and coins, foreign banknotes, and other Danish or foreign means of payment.

Capital

Residents have an obligation to repatriate proceeds realized from the sale or liquidation of assets abroad. Transfers abroad may be made by residents to pay interest on, to redeem, or to repurchase the transferor’s own bonds, to lend amounts not exceeding DKr 200,000 in a calendar year to subsidiary companies, etc., or to a member of the resident’s family, and to buy foreign securities that do not represent direct investments in foreign commercial or industrial enterprises, provided that the securities are acquired on the basis of a subscription right to shares or the like owned by the resident concerned or provided that the resident furnishes proof that he has repatriated a corresponding amount within the last 12 months from the sale of foreign securities to a nonresident. Permission from the National Bank is required for most other transfers abroad of a capital nature by residents.

Danish emigrants are granted an exchange allowance of up to DKr 40,000 a year for each person during the first three years after emigration. Funds exceeding this amount must be credited to a Capital Account in the name of the owner and may be transferred abroad after three years.

Direct investment in Denmark by nonresidents may be made without any special license if the transaction concerns industry, commerce, handicrafts, hotel business, or transportation, and if the investment does not increase total direct foreign investment in the enterprise concerned by more than DKr 40,000 in each calendar year. Other direct investment by nonresidents requires permission, which is granted liberally. The purchase by a nonresident of real property in Denmark usually requires a special license from the Ministry of Justice. A nonresident who is or has been a Danish national may freely purchase or subscribe to securities expressed solely in Danish kroner which do not represent direct investment. Other nonresidents may purchase or subscribe to bonds that are quoted daily and are expressed solely in Danish kroner, when the funds have been obtained from the liquidation of investments in Denmark. They may purchase or subscribe to shares that are quoted daily, are expressed solely in Danish kroner, and do not represent direct investment, when the funds have been obtained from the liquidation of Danish shares, or when the acquisition is made on the basis of subscription rights to shares. Nonresidents may grant credits within certain limits to residents to finance purchases of commodities abroad and to finance the granting of credits for exports. They may, further, grant loans up to DKr 200,000 per borrower in a calendar year to commercial and industrial enterprises connected with the lender as subsidiary companies, branches, etc., or to members of their families.

Transfers of proceeds from the sale or liquidation of all types of investments and transfers of all other liquid funds in Denmark owned by nonresidents other than newly emigrated Danish nationals are permitted freely, irrespective of when and how the original investment was acquired. Interest and repayment of principal on authorized loans, credits, and deposits received from persons and firms who were nonresidents at the time of receipt may be paid freely.

Inheritances and gifts to relatives may normally be transferred to any country without limitation. Individual payments above DKr 2,000 as gifts to persons other than relatives require approval from the National Bank. Such approval is normally given for bona fide gifts.

Imports and exports of securities require permission from the National Bank. Bona fide imports of Danish securities payable only in Danish kroner are permitted. Exports of Danish and foreign securities owned by nonresidents are normally permitted also. Danish securities held in Denmark and belonging to nonresidents may be sold freely to residents. Foreign securities held in Denmark and belonging to nonresidents may be sold to residents only with the National Bank’s permission.

Changes during 1964

January 1. Imports of certain vegetables and a number of other items from the “Free List Area” were liberalized.

March 18. Denmark ceased invoking Article XII of the General Agreement on Tariffs and Trade.

April 14. Noncommercial payments to Brazil could be made in convertible currencies.

April 14. Authorized exchange dealers could subscribe to securities newly issued abroad by nonresidents, provided that these securities had either been sold to nonresidents beforehand or would be resold to nonresidents within one year.

June 4. Foreign borrowing by local authorities and concessionary companies was prohibited until further notice; the measure did not affect loans already being negotiated.

July 1. The liberalization of imports from countries within the “Free List Area” was extended to include certain foodstuffs and a number of manufactured goods, including certain utility vehicles, locomotives, and some other railroad equipment.

July 1. The global import quotas for the period July 1, 1964-June 30, 1965 were announced.

December 11. It was announced that some further import liberalization would take place on January 1, 1965, that an over-all plan for the elimination of the remaining import restrictions on industrial goods was being prepared, and that the last restrictions on industrial imports would be abolished by the end of 1966.

December 29. Certain exchange control regulations concerning insurance, reinsurance, and some types of capital transactions were revised; the revisions involved some relaxation of restrictions on outward payments.

Note.—The following change took place early in 1965:

January 1. Yugoslavia was transferred to the “Free List Area.”

Dominican Republic

Exchange Rate System

The par value is Dominican Peso 1.00 = US$1. Exchange transactions in U.S. dollars between the Central Bank of the Dominican Republic and other banks take place at the par value. Exchange transactions by commercial banks with the public also take place at the par value. All payments abroad must be made through banks, and all exchange received must be sold to banks. The commercial banks are required to transfer to the Central Bank all exchange purchased.

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

Foreign exchange control is administered by the Central Bank.

Prescription of Currency

No obligations are imposed on importers, exporters, or other residents in respect of the method to be followed or the currency to be used for payments to or from nonresidents.

Imports and Import Payments

Licenses for imports are not required. With the exception of goods imported from the United States under the program of the Agency for International Development (AID), all payments for imports are subject to scrutiny by the Central Bank. No import prohibitions are in force.

Payments for many imports are settled on a draft for collection basis; when the draft is presented for collection, the importer pays the full amount in pesos to the commercial bank; the bank then transfers this deposit to the Central Bank which releases exchange for the remittance. Other imports are paid for by letter of credit or a direct transfer of exchange: the commercial banks transmit daily to the Central Bank a list of importers’ applications for exchange accompanied by the equivalent in local currency. The Central Bank authorizes the commercial banks to open letters of credit and, when these have been negotiated, it transfers foreign exchange to the banks. Exchange to meet direct transfers is provided promptly.

Payments for Invisibles

All payments for invisibles, except tourism, require the approval of the Central Bank, which in most cases is given freely. There is a limit of US$50 for each application in respect of personal and family remittances. For tourism, the banks may make exchange equivalent to US$100 available to an individual resident once every six months.

Exports and Export Proceeds

Export licenses are required for sugar, in connection with the operation of export quotas established under the International Sugar Agreement. Within 48 hours of receiving payment, exporters of Dominican products must surrender through the commercial banks to the Central Bank foreign exchange equal to 100 per cent of the f.o.b. value of their exports.

Proceeds from Invisibles

The foreign exchange proceeds from invisibles are subject to surrender requirements and must be surrendered to the Central Bank through the commercial banks. The import of Dominican banknotes and coins is prohibited.

Capital

There are no restrictions on the inward movement of capital by either residents or nonresidents. Applications for licenses for outward capital remittances must be submitted through the commercial banks to the Central Bank. Outward remittances of capital are seldom approved.

Changes during 1964

May 11. Law 251 made the surrender of all exchange proceeds obligatory and removed almost all restrictions on current payments.

October 31. A prompt payment system was introduced for current transactions.

Ecuador

Exchange Rate System

The par value is Ecuadoran Sucres 18.00 = US$1. The official rates are S/ 17.82 buying, and S/ 18.18 selling, per US$1. These rates apply to nearly all export receipts, to payments for all imports and related invisibles, to official transactions, to other essential invisibles, to registered capital, and to all contractual registered private foreign debt operations entered into after July 14, 1961. For all other transactions there is a free market, in which the rates as at December 31, 1964 were S/ 18.49 buying, and S/ 18.52 selling, per US$1.

Administration of Control

The Monetary Board classifies transactions according to the exchange market through which they must be settled. Most transactions pass through the official market, which is under the control and supervision of the Central Bank of Ecuador. The Central Bank also issues import and export licenses. Transactions that do not qualify for the official market may enter the free market—conducted mainly by exchange houses and several commercial banks—where such transactions are free of supervision by the exchange control authorities.

Prescription of Currency

Exchange proceeds must be received in convertible currencies, usually U.S. dollars.

Imports and Import Payments

Permitted imports are divided into two categories: List I, consisting of essential and semiessential goods, and List II, consisting of less essential and luxury goods. All goods not included in these two lists are prohibited. Prior import licenses are required for all permitted imports exceeding a value of US$100, except those financed by official foreign loans. However, the licenses are issued freely provided that the required taxes have been paid and the appropriate advance deposits have been made. The licenses automatically entitle the holders to obtain exchange at the official rate to cover the c.i.f. value of the imports. The Monetary Board is authorized to shift items between Lists I and II and to prohibit the import of goods when the economic situation of the country and the balance of payments situation so require.

The advance deposit requirement applies to almost all private imports. The exceptions are imports under the Agricultural Surplus Agreement with the United States, imports of special types of cotton from countries of the Latin American Free Trade Association, all imports from Paraguay, imports of capital goods financed by international organizations or by suppliers’ credit of at least three years, and imports made by the Government and official institutions. The deposit must be made in sucres by the importer before the import license is issued. The rates are currently 15 per cent of the c.i.f. value for imports in List I, 30 per cent for about 100 articles in List II, and 80 per cent for most other imports in List II. In practice the importer uses a part of the advance deposit to settle in advance 90 per cent of the consular fees and 50 per cent of the customs duties; the remaining part is used for payments for imports when such payments are authorized.

A consular fee of 10½ per cent of the f.o.b. value, and import taxes of 3 per cent of the f.o.b. value and 3¼ per cent of the c.i.f. value, are levied on all imports. Moreover, an additional import tax of about 6 per cent is levied on the c.i.f. value of List I goods, and one of about 17 per cent on the c.i.f. value of List II goods; of these, 5 per cent on the List I goods and 15 per cent on the List II goods must be paid at the time the license is issued; the remaining import taxes, as well as the fees, are paid when the goods are cleared through customs.

Payments for Invisibles

Payments for transactions in invisibles that may be made through the official market require an exchange license from the Central Bank; the license is granted freely for all authorized transactions. These transactions include invisibles connected with trade (e.g., freight and insurance); necessary expenses (i.e., travel, tuition, and living expenses up to US$100 a month) of Ecuadoran students abroad who are registered with the Central Bank; most payments of the Government and of official entities; contractual interest (and amortization) payments on loans and other obligations abroad which are registered with the Central Bank; payments of dividends, profits, and amortization on registered private foreign investment up to 15 per cent annually; and contractual private foreign debt operations entered into and registered after July 14, 1961. Other payments for invisibles may be made freely through the free market.

Exports and Export Proceeds

All exports except those of certain foreign mining companies require licenses to ensure, among other things, the full surrender of the exchange proceeds. Minimum surrender prices are established for exports of bananas (according to port of shipment, destination, and season) and for shrimps; exchange corresponding to those prices must be surrendered at the official rate, while any excess receipts may be sold in the free market. Exports of coffee, cacao, and bananas are subject to export taxes of 9.4 per cent, 10 per cent, and 21.4 per cent, respectively.1 Exports of bananas are subject to an additional specific tax of S/ 1.2 a stem. Exports of rice by the National Development Bank receive a subsidy equal to the difference between its cost to the National Development Bank and the f.o.b. price; the average subsidy paid in 1964 was S/ 16.50 per quintal or S/ 3 per US$1.

Proceeds from Invisibles

Receipts from invisibles related to trade and all receipts of the Government and of official entities have to be sold at the official rate. Other receipts from invisibles (including those from tourism) may be sold in the free market.

Capital

Receipts of private foreign capital must be surrendered to the Central Bank at the official buying rate. This also applies to foreign exchange sold by foreign companies for the purpose of obtaining local currency for salaries, taxes, and other local expenses, if this capital is registered with the Central Bank. Foreign capital entering in the form of machinery and equipment may also be registered with the Central Bank. The Central Bank can refuse to register foreign capital if the investment is not considered to be in the interest of the Ecuadoran economy at that particular time. All unregistered private capital may enter without limitation through the free market.

Foreign exchange at the official rate may be obtained for the withdrawal of registered foreign investment from Ecuador up to a total of 15 per cent per annum of the amount registered; this percentage includes dividends, profits, and amortization. Contractual repayments of registered foreign loans may also be made at the official rate. All other capital remittances, either by residents or nonresidents, may be made through the free market.

Capital receipts of the Government and of official entities are converted at the official buying rate, and payments at the official selling rate. However, the proceeds from loans granted to the Government and official entities by foreign financing organizations are converted by the Central Bank at the official selling rate of S/ 18.18, instead of at the official buying rate of S/ 17.82, per US$1. In such instances, the Central Bank receives from the Treasury or the borrower a payment of S/ 0.072 per US$1 as reimbursement for the Central Bank’s share of the normal spread between the official buying and selling rates.

Changes during 1964

On a number of occasions during the year, the Monetary Board included in List II items formerly prohibited, or shifted items from List II to List I.

January 15. Imports of capital goods financed by international organizations or by suppliers’ credit of at least three years were exempted from the advance import deposit requirement.

March 16. All taxes levied on the production, collection, and export of bananas, including the export tax of 5 per cent, were eliminated. A single export tax of 21.4 per cent, calculated on an assumed f.o.b. value, was substituted.

April 18. Exports of some cereals were prohibited.

April 18. Imports of certain foodstuffs were exempted from customs duties and, in several cases, from import taxes.

June 24. Payment for all permitted imports could be made by letter of credit.

June 24. The rates of advance import deposit requirements were reduced as follows: for imports in List I, from 25 per cent to 15 per cent; for imports in List II, from 50 per cent to 30 per cent for about 100 items and from 100 per cent to 80 per cent for most other items.

September 8. All duties and taxes levied on cacao and coffee were eliminated. Export taxes of 10 per cent and 9.4 per cent, respectively, were levied on cacao and coffee.

October 22. Decree No. 2401 made the official selling rate of S/ 18.18 per US$1 applicable to the conversion by the Central Bank of all loans granted by foreign financing organizations to the Ecuadoran Government or official entities.

El Salvador

Exchange Rate System

The par value is Salvadoran Colones 2.50 = US$1. The rates of the Central Reserve Bank for transactions with the public are Ȼ 2.49 buying, and Ȼ 2.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at or within these limits and are subject to a tax of ¼ of 1 per cent. 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.

Administration of Control

Exchange control authority is exercised by the Central Reserve Bank of El Salvador through its Exchange Control Department. Authority to approve certain payments is delegated to the commercial banks. The Central Reserve Bank is also empowered to license imports and exports, but this power has not been exercised.

Prescription of Currency

Payments to Costa Rica, Guatemala, Honduras, Mexico, and Nicaragua in respect of trade and specified invisibles are settled in Salvadoran colones through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries. Otherwise, residents are free to make authorized payments in any currency they choose.

Nonresident Accounts

The accounts of nonresidents may be utilized freely, but the commercial banks must make periodic reports to the Central Reserve Bank of the movements on such accounts. Accredited diplomatic missions and other foreign institutions or persons established in El Salvador may be authorized to hold nonresident accounts in U.S. dollars with authorized banks, provided that such accounts are credited with foreign exchange received from abroad. The maximum balance which may be held on these accounts is fixed by the Exchange Control Department.

Imports and Import Payments

Import licenses are not required. Payments and transfers abroad require exchange licenses, which are granted freely for all imports. The commercial banks are authorized to provide exchange for import payments not exceeding US$6,000 for imports from Central American countries and US$2,000 for imports from all other countries; larger amounts have to be approved by the Central Reserve Bank. When suppliers abroad request payment in advance, a prior deposit calculated on the value of the advance payment is required from the importer as a guarantee. The deposit varies according to the nature of the goods: 10 per cent on raw materials not produced domestically; 20 per cent on other raw materials and machinery; 50 per cent on manufactured goods not classified as luxury items; and 80 per cent on luxury goods. Imports paid for against letters of credit are subject to a prior deposit of 25 per cent (10 per cent for imports of machinery, equipment, and raw materials). When the importer is a manufacturer rather than a merchant, the prior deposit is usually waived. The deposit is refunded upon completion of the import transaction.

Payments for Invisibles

Payments for current invisibles require exchange licenses, which are granted freely for most items, although for certain payments only up to specified limits. Net profits may be remitted up to a limit of 10 per cent a year of the registered capital. The commercial banks provide exchange up to the equivalent of US$200 a person each six months for tourist travel. For larger amounts, authorization by the Exchange Control Department is required; as a general rule, under such authorization, each person is granted up to US$30 a day while traveling abroad, subject to a maximum of US$2,000. Persons who require exchange in excess of US$2,000, for medical treatment abroad or for other special reasons, must deposit 25 per cent of the amount exceeding US$2,000 with the Central Reserve Bank at the time the authorization is issued; the deposit is refunded when the Department receives the required proof. The Department also authorizes transfers of up to US$500 a month plus US$50 for each child to Salvadorans with permanent residence abroad. Students are allowed US$200 a month; those with families are allowed US$250 a month plus US$50 for each child. Foreign exchange in excess of the limits given above is seldom granted.

The exchange control regulations permit travelers to take out up to Ȼ 200 in local currency, but this amount may be increased to facilitate border trade with other Central American countries.

Exports and Export Proceeds

Export licenses are not required, but the proceeds of exports must be received through a bank in El Salvador and the foreign exchange must be surrendered to the Central Reserve Bank or an authorized commercial bank.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered to the Central Reserve Bank or an authorized commercial bank. The exchange control regulations permit travelers to bring in up to Ȼ 200 in local currency, but this amount may be increased to facilitate border trade with other Central American countries.

Capital

All exchange receipts resulting from capital transactions must be surrendered. Payments abroad representing capital movements require exchange licenses; such licenses are not granted for resident-owned capital, except for investments in Costa Rica, Guatemala, Honduras, and Nicaragua. The entry of capital in the form of foreign investment is subject to the advance approval of, and registration by, the Ministry of Economy. Registration ensures (1) the remittance of net profits up to a limit of 10 per cent a year of the registered capital (larger amounts may be authorized in special cases by the Ministry of Economy at the time of registration of the investment) and (2) amortization payments, and repatriation of the proceeds from the sale of the assets of the enterprise, provided that such payments do not exceed the value of the registered investment. Foreign investments made in El Salvador prior to June 1, 1961 must also be registered by the Ministry of Economy or the Exchange Control Department in order to enjoy the same facilities. For long-term foreign loans, the Exchange Control Department authorizes, without restriction, the remittance abroad of foreign currency for the payment of interest and amortization. The same treatment is granted to short-term foreign loans that have been approved by and registered with the Exchange Control Department.

Changes during 1964

February 4. The limit on payments for imports and associated invisibles that could be made to other countries in Central America by commercial banks without the prior authorization of the Exchange Control Department of the Central Bank was increased from US$2,000 to US$6,000.

June 16. Controls were relaxed over capital movements to other members of the Central American common market for the purpose of investment in those countries.

Ethiopia

Exchange Rate System

The par value is Ethiopian Dollars 2.5 = US$1. The official rates are Eth$2.48125 buying, and Eth$2.51875 selling, per US$1.

Administration of Control

All transactions in foreign exchange must be carried out through authorized banks under the control of the National Bank of Ethiopia. All payments abroad and exports are subject to the supervision of the Exchange Controller, whose office is a department of the National Bank.

Prescription of Currency

Outgoing payments are normally made in foreign exchange appropriate to the country of the recipient or in U.S. dollars or sterling. The net proceeds of exports must be received in a foreign currency which is freely convertible, or in any other foreign currency acceptable to the Exchange Controller. Most settlements with the United Arab Republic are made through U.S. dollar accounts established under the bilateral payments agreement with that country; settlements in respect of Suez Canal dues and exports of Ethiopian coffee are effected in convertible currencies.

Nonresident Accounts

Nonresidents may hold nonresident accounts in Ethiopian dollars at authorized banks. Balances in these accounts may be freely transferred abroad. Transfers between nonresident accounts require prior approval.

Imports and Import Payments

No import licenses are required. However, payments abroad for imports require exchange licenses; these licenses are granted freely in the currency appropriate to the country of origin, or in any convertible currency that may be requested. Goods ordered through a third country must be supported by evidence of original cost. Payment is normally authorized by letter of credit, mail transfer, telegraphic transfer, or cash against documents at sight or on an acceptance basis; for goods which were previously subject to advance deposit requirements, however, the usance must not exceed 90 days.

Payments for Invisibles

Payments for invisibles require exchange licenses. Invisibles connected with trade transactions are treated on the same basis as the goods to which they relate. Foreign nationals may remit a maximum of 35 per cent of their salaries or annual taxable income, provided that they have resided in Ethiopia for less than six years; this time limit does not apply to foreign nationals who are in contractual service with the Ethiopian Government or with an autonomous government organization and who have an employment contract specifically entitling them to remit a percentage of their earnings. Ineligible persons may apply for exchange to meet expenses for maintenance of bona fide dependents, education of children, medical care, and premiums on insurance policies taken out before April 2, 1962. Subject to proper provision having been made for local taxation, foreign companies may remit dividends on their invested and reinvested capital in any currency; for approved projects, they may also transfer amortization at the rate of 10 per cent per annum.

Persons traveling abroad are allowed foreign exchange equivalent to Eth$100 a day for a maximum period of six weeks if the journey is made for business purposes, and up to the equivalent of Eth$l,050 a year for persons 16 years of age or over and Eth$735 a year for those under 16, if the journey is made for pleasure and/or vacation. Travelers may take with them a maximum of Eth$100 in Ethiopian banknotes.

Exports and Export Proceeds

All commodities require export licenses. When applying for a license, an exporter must give details of the goods to be exported, the destination, and the value. The granting of the license by the Exchange Controller enables the goods to pass through customs. The licensing system is used to ensure that foreign exchange receipts are surrendered to the National Bank of Ethiopia within three months and that export proceeds are received in an appropriate currency (see section on Prescription of Currency, above).

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Persons may bring in a maximum of Eth$100 in Ethiopian banknotes. Foreign exchange need not be declared by travelers on entry, and its re-export is freely permitted.

Capital

All receipts of capital in the form of foreign exchange must be surrendered. There is no discrimination regarding the currencies in which foreign investments are accepted. Special concessions are made to approved new enterprises financed by foreign capital; these concessions include exemption from taxes for a period of five years, admission of all imports of machinery free of duty, and permission to foreign investors to remit abroad earned profits after taxation (see section on Payments for Invisibles, above). Upon liquidation, transfer of the entire imported capital and reinvested profits is permitted in any currency. Emigrants’ allowances, transfers of legacies, and savings of foreign employees upon retirement are permitted up to the equivalent of Eth$70,000 in foreign currency. Transfers of sums in excess of this amount are authorized up to a total of Eth$70,000 in any subsequent 12-month period.

Changes during 1964

January 1. The National Bank of Ethiopia assumed the functions of a central bank; these functions included the administration of foreign exchange control.

January 20. The commercial banks’ commission on foreign exchange transactions was reduced from 1 per cent to ¾ per cent. The National Bank of Ethiopia established new official rates of Eth$2.48125 buying, and Eth$2.51875 selling, per US$1.

February 1. The amount of Ethiopian currency which travelers could bring into and take out of Ethiopia was reduced from Eth$150 to Eth$100.

February 1. Travelers were no longer required to declare the amount of foreign currency brought in or taken out.

February 14. Authorized banks were permitted to open nonresident accounts in Ethiopian dollars.

Finland1

Exchange Rate System

The par value is Finnish Markkas 3.20 = US$1. The official buying and selling rates for the U.S. dollar vary within ¾ of 1 per cent on either side of the par value. Market rates for certain other currencies 2 vary between limits which result from combining the official limits for the U.S. dollar maintained by Finland and such limits in force in the country of the other currency concerned. Forward premiums and discounts are left to the interplay of market forces. Official, fixed, buying and selling rates are applied to a few currencies, including dollars, when used as a unit of account on bilateral clearing accounts. Authorized banks may deal among themselves, with their Finnish customers, and with foreign authorized banks, in U.S. dollars and certain other currencies.2 Forward transactions may be concluded freely for periods not exceeding 12 months; forward transactions with residents must have a commercial basis.

Administration of Control

The Bank of Finland operates the exchange control system, delegating authority to the authorized exchange dealers (mainly commercial banks). Import and export licensing is administered by an office subordinate to the Ministry of Commerce, the Licensing Office, which is presided over by a Licensing Board composed of government officials, including a representative of the Bank of Finland.

Prescription of Currency

For prescription of currency purposes, countries are divided into two groups: the bilateral countries3 and the convertible currency countries (all others). Settlements with the bilateral countries must be made in the currency of the agreement or in Finnish markkas through Restricted Accounts. Settlements with the convertible currency countries may be made in any convertible currency or through Convertible Accounts. Payments for imports from Brazil may be made only to Brazilian banks.

Nonresident Accounts

There are four categories of nonresident accounts: Foreign Exchange Accounts, Convertible Markka Accounts, Restricted Markka Accounts, and Capital Accounts.

1. Foreign Exchange Accounts are held by nonresidents in convertible or bilateral currencies.4 These accounts may be credited with amounts received in the currency in which the account is kept; with payments authorized to be made in the currency in which the account is kept; and with interest accrued on such accounts. They may be debited for transfers to Capital Accounts; for payments to residents of Finland; and for withdrawals in Finnish currency. If the account is held in a convertible currency, it may also be debited for transfers to other Foreign Exchange Accounts in any convertible currency, and for transfers abroad or withdrawals in any convertible currency. If the account is held in a bilateral currency, it may be debited for transfers to other Foreign Exchange Accounts in the same currency and for transfers to the respective bilateral country.

2. Convertible Markka Accounts may be credited with the equivalent in Finnish markkas of convertible currencies sold to an authorized bank; with authorized remittances from residents of Finland to residents of convertible currency countries; with transfers from other Convertible Markka Accounts; with the value of Finnish banknotes received by an authorized bank from a bank in a convertible currency country; and with interest accrued on the account. They may be debited for authorized payments in Finland, including the purchase of foreign exchange; for remittances abroad; and for transfers to other Convertible Markka, Restricted Markka, or Capital Accounts.

3. Restricted Markka Accounts are held by residents of countries with which Finland has bilateral payments agreements (see footnote 3). They may be credited with proceeds from the sale of U.S. dollars, the currencies listed in footnote 2, or the currency of the country of the account holder; with transfers from another Restricted Markka Account of the same country; with authorized remittances payable to the country of the account holder; with the value of Finnish banknotes received by an authorized bank from a bank in the country of the account holder; and with interest accrued on the account. They may be debited for authorized payments in Finland in accordance with the relevant payments agreement; for transfers to other Restricted Markka Accounts related to the country of the account holder; for transfers to the country of the account holder; and for transfers to Capital Accounts.

4. Capital Accounts comprise all other nonresident accounts. They may be credited with funds available for credit to a Convertible or a Restricted Markka Account; with proceeds from the sale to a resident of any asset held by a nonresident; with interest on the account; with income from nonresident-held assets; and with sums obtained from the redemption of bonds. If the account holder is a bank, the account may also be credited with transfers from a Capital Account of a resident of the same country. Capital Accounts may be debited for the travel and living expenses in Finland of the account holder and nonresident members of his family or, if the holder is a firm, members of its staff traveling at the firm’s expense, up to Fmk 1,000 for each person for each period of ten days; for payments not exceeding Fmk 1,000 for support of a person in distress in Finland; for payments for expenses incurred by a bank in administering the assets of the account holder; for investment in bonds quoted on the stock exchange and issued after August 31, 1939 which are not tied to any foreign currency and are purchased by a bank on behalf of the holder; for acquisitions of shares on the basis of subscription rights to shares belonging to the same account holder and held in the custody of a bank; for the purchase through the Helsinki stock exchange of shares in place of other shares, held in the custody of a bank, that have been sold not more than a month before; for transfers to the Capital Account of a bank located in the same country as that of the account holder; and for monthly transfers abroad up to Fmk 1,000 to an account holder who has resided abroad during the last three years, provided that he is destitute in his country of residence. Other transfers between Capital Accounts and other transfers abroad of funds deposited in Capital Accounts require the specific permission of the Bank of Finland.

There are also special transfer accounts for nonresident funds awaiting repatriation.

Imports and Import Payments

Most goods may be imported free of license from the license-free area (i.e., nearly all countries with which Finland does not have bilateral payments agreements), provided that the goods are purchased from and originate in that area.5 Certain other goods may be imported from the license-free area under the global quota system, by which import licenses are issued up to the limits of certain value quotas for specified commodity groups. Imports from the bilateral countries are admitted under licenses up to quotas provided for under the related trade agreement. All other imports require individual licenses.

Exchange is granted without delay for all permitted imports on presentation of an application form, the import license if required, and the original commercial invoice, provided that the goods are already in the country or there is sufficient evidence to guarantee their importation. Importers of specific consumer durable goods must make payment abroad or deposit cash for their imports before customs clearance can be obtained; otherwise, payment for imports must be made within six months after the arrival of goods in the country. For imports on credit of over six months, the credit must be authorized by the Bank of Finland.

Payments for Invisibles

The authorized banks have general permission to effect payments for most current invisibles, subject in some cases to maximum allowance or other conditions; for other transactions, with few exceptions, exchange licenses are granted liberally by the Bank of Finland. All contracts involving payments to nonresidents for which general permission has not been granted must be submitted to the Bank of Finland for approval.

A Finnish resident going abroad may purchase from commercial banks foreign exchange equivalent to Fmk 400 for each visit to the Scandinavian countries and Fmk 800 for each visit to other countries. Resident and nonresident travelers may take out Fmk 200 in Finnish notes and coins and any reasonable amount in foreign notes and coins.

Exports and Export Proceeds

Export licenses are required only for exports of metal scrap. Exports of other goods require only an export control declaration, which is approved automatically by the Licensing Office except in a few specified cases. All foreign exchange acquired through commodity exports must be surrendered to the Bank of Finland or an authorized exchange dealer.

The authorized exchange dealers and shipping firms are allowed to maintain their own working balances in foreign exchange, under the supervision of the Bank of Finland. Certain export firms are also permitted to keep a part of their export proceeds in foreign exchange accounts with Finnish banks or with banks abroad. The accounts may be used by the exporter to pay for incidental expenses related to exports and for authorized imports of raw materials, equipment, and machinery. The Bank of Finland may at any time claim the accounts against payment at the official rate.

Proceeds from Invisibles

With the exception of freight earnings, foreign exchange receipts derived from current invisibles do not have to be surrendered. The import of Finnish and foreign means of payment by nonresident travelers and returning Finnish residents is unrestricted.

Capital

Most outward transfers of nonresident capital are subject to approval by the Bank of Finland, which is granted in certain circumstances. Inheritances are in most cases transferable without limitation and, subject to certain conditions, are generally transferred automatically, up to Fmk 32,000 for each beneficiary. Nonresidents who have resided outside Finland for three years are permitted to repatriate their blocked assets (1) by annual installments of Fmk 2,500 for amounts not exceeding Fmk 25,000 (to the annual installments may be added interest accrued on the account calculated in conformity with the ordinary rate of bank interest paid on deposits), and (2) by ten equal installments for amounts exceeding Fmk 25,000. During the entire period of transfer, the funds must be held on special transfer accounts. Moreover, persons who have resided abroad since September 1, 1939 are permitted to repatriate freely blocked funds up to Fmk 10,000 if these funds had been deposited with a bank prior to that date.

Nonresident bondholders may repatriate amounts falling due on account of redemption of bonds in markkas issued before September 1, 1939.

Nonresidents may purchase through an authorized bank, against convertible or externally convertible currencies or by debiting a Convertible Markka Account, bonds or shares quoted on the Helsinki stock exchange. When the securities so acquired by a nonresident are deposited in the custody of the authorized bank, the nonresident purchaser is permitted to sell the securities on the stock exchange through the authorized bank and to repatriate the proceeds of the sale in a convertible or an externally convertible, currency. No permission is needed for the acquisition of bonds issued after August 31, 1939 with funds classified as Capital Accounts, but proceeds of the sale of such securities may not be repatriated without the permission of the Bank of Finland. Any other transactions in, and the export of, securities involving nonresident interests require approval. If the securities were acquired with convertible foreign exchange or with markkas from a Convertible Markka Account, approval for their export can be obtained freely. The import of securities by nonresidents and returning Finnish residents is unrestricted.

The regulations concerning foreign investments are as follows. All incoming capital transactions must be approved by the Bank of Finland, which considers the foreign exchange aspect. The Bank grants permission liberally, except where it would be contrary to the national interest. At the time the Bank approves an incoming transaction, it may state the conditions for repatriation of the invested capital. Foreign investments that involve a participation of more than 20 per cent in the capital of the enterprise require, in certain cases, the approval of the State Council. This approval, when required, is usually granted liberally. The primary reason for the 20 per cent limit is concern for the protection of natural resources, mainly forests.

On demand of the Bank of Finland, residents must declare their foreign assets and the yields on their property owned abroad. Proceeds from the sale of securities and real property abroad must be surrendered. Outward transfers of capital by residents require individual approval. For direct investment, approval is granted on the merits of each case.

Finnish residents emigrating are granted an exchange allowance of up to Fmk 2,500 a person.

Changes during 1964

January 1. License-free import treatment was extended to a number of commodities listed under some 190 tariff headings and subheadings. These goods were previously imported under global quota arrangements; they included raw materials for the food industry, raw hides and pelts, leather for soles and pieces of leather, headwear, building bricks, excavating machinery, printing machinery, telephone and telegraph apparatus, locomotives and rolling stock, and bicycles.

January 1. As a result of the liberalization measure of the same date, the list of global quotas for 1964 was revised; it covered fewer goods than the 1963 list. The total value of the quotas was fixed at Fmk 402 million, which compared with an estimated value of Fmk 332 million in the final quota program for 1963 for the same group of commodities, i.e., excluding those liberalized on January 1, 1964.

January 1. Afghanistan, Bhutan, Nepal, Trinidad and Tobago, and Yemen were included in the license-free area.

Note.—The following changes took place early in 1965:

January 1. Albania, Cuba, Malawi, Tanzania, United Arab Republic, and Zambia were included in the license-free area.

February 1. The bilateral payments agreement with Turkey was terminated.

France

Exchange Rate System

The par value is Francs 4.93706 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of F 4.90 buying, and F 4.9740 selling, per US$1. Market rates for Western European currencies and a few other currencies fluctuate between limits which result from combining the official limits for the U.S. dollar maintained by France and such limits in force in the country of the other currency concerned. Forward exchange transactions take place at freely negotiated rates. Authorized banks in continental France (including Corsica) and in the Principality of Monaco, as well as banks established abroad, are permitted to deal spot or forward in the exchange market in France. While authorized banks and banks established abroad may deal spot on this market in any currencies, the latter group of banks may carry out forward operations only in currencies of countries in the area of convertibility. Authorized banks may also deal with their correspondents in foreign markets in all currencies except those of the bilateral group.

France accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Exchange Control Territory

The French Franc Area comprises (1) the territory of the French Republic, i.e., continental France, Corsica, the Overseas Departments (Guadeloupe, Martinique, Guiana, and Réunion), the Overseas Territories, except French Somaliland (Comoro Islands, St. Pierre and Miquelon, New Caledonia, Wallis and Futuna Islands, and French Polynesia); (2) the Condominium of the New Hebrides; and (3) Algeria, Cameroon, Central African Republic, Chad, Congo (Brazzaville), Dahomey, Gabon, Guinea, Ivory Coast, Malagasy Republic, Mali, Mauritania, Monaco, Morocco, Niger, Senegal, Togo, Tunisia, and Upper Volta. Payments from France to other parts of the French Franc Area are free of restriction.

Administration of Control

The Minister of Finance and Economic Affairs is granted extensive authority in trade and exchange control. Various departments of the Ministry are concerned with the issue and supervision of import and export documents, the issue of licenses for payments related to imports and exports, control of import payments and export proceeds, the preparation of decisions concerning, and control over, French investments abroad and foreign investments in France, and the preparation of regulations concerning foreign trade and exchange. The Bank of France is concerned with the issue of licenses for transactions of a financial nature, controls relating to assets held abroad, the repatriation of income, transactions in foreign securities, etc. Much of the detail of exchange control is carried out by authorized banks designated by the Minister of Finance and Economic Affairs.

Prescription of Currency

Settlements with other parts of the French Franc Area may be made in the currency of any part of that Area. Settlements with countries in the area of convertibility, which includes all countries except Rumania,1 may be made in any of the currencies of those countries, or through Nonresident Foreign Accounts in Convertible Francs (see section on Nonresident Accounts, below). Payments to Rumania—the remaining country with which France has a bilateral payments arrangement—are made by crediting a Rumanian Foreign Account in Bilateral Francs. Payments from Rumania may be received through a Rumanian Foreign Account in Bilateral Francs, or in the same way as payments from countries in the area of convertibility. Settlements with Laos and Viet-Nam are subject to special regulations.

Nonresident Accounts

A nonresident account in francs may be opened by an authorized bank for a nonresident foreigner or for a French national who either has been residing abroad for at least two years or, before this two-year period has elapsed, has been accorded the status of a nonresident. Nonresident accounts in francs may not show a debit balance unless specifically permitted. French franc balances maintained by nonresidents are not permitted to bear interest, except balances maintained by foreign central banks and international organizations. Residents of countries in the area of convertibility may maintain Nonresident Foreign Accounts in Convertible Francs; they are not related to a specific country. Residents of Rumania may maintain Rumanian Foreign Accounts in Bilateral Francs.

Foreign Accounts in Convertible Francs may be used for settlements with residents of the French Franc Area (including settlements for imports and exports). They may be credited freely with francs obtained from sales of currencies of countries in the area of convertibility in the exchange market in France or through a French authorized bank in an exchange market abroad; with transfers from other Foreign Accounts in Convertible Francs; with French francs obtained from the sale of foreign banknotes; and with French banknotes and coins received by authorized banks from their correspondents in countries in the area of convertibility. They may be debited freely for purchases in the exchange market in France of any foreign currency negotiated in that market; for purchases of the currency of any country in the area of convertibility through a French authorized bank in an exchange market abroad; for transfers to the credit of another Foreign Account in Convertible or Bilateral Francs; for the purchase of foreign banknotes; and for French banknotes and coins dispatched by authorized banks to their correspondents in countries in the area of convertibility.

Rumanian Foreign Accounts in Bilateral Francs may be used for settlements with residents of the French Franc Area (including settlements for imports and exports), provided that the nonresident concerned resides in Rumania. They may be credited freely with proceeds from sales in the exchange market in France of currencies of countries in the area of convertibility; with transfers from Foreign Accounts in Convertible Francs; with French francs obtained from the sale of foreign banknotes; and with French banknotes and coins received by authorized banks from their correspondents in Rumania. Transfers between Rumanian Foreign Accounts in Bilateral Francs may be made freely.

Other transactions through Foreign Accounts may be made by individual or general authorization. Three other categories of nonresident accounts (Tourist Accounts, Suspense Accounts, and Nonresident Internal Accounts) are of minor significance, in practice.

Imports and Import Payments

Goods originating in and brought from other parts of the French Franc Area are generally admitted free of quantitative restriction and individual license. Imports of goods which originate in countries outside the French Franc Area and are not covered by French import liberalization require individual licenses.

For import control purposes, countries outside the French Franc Area are divided into three groups according to the extent of import liberalization: (1) OECD countries in Europe, their dependent territories and associated countries, Andorra, Canada, Finland, the United States, and Yugoslavia;2 (2) 49 specified countries;3 and (3) all other countries. Imports from all countries of certain agricultural items and certain raw materials are free of quantitative restrictions.

Commodities that may be imported free of quantitative restrictions from one group of countries include all the commodities that may be freely imported from the next group of countries plus some other specified commodities. Goods covered by the import liberalization arrangements applicable to one group may be imported freely from any country in that group, provided that the country of origin and the country of shipment both benefit from the liberalization.

Imports of practically all industrial products from countries in group (1) are free of quantitative restrictions, but such restrictions are applied to a number of agricultural products; there is relatively little difference between the lists of goods which may be imported freely from different countries in this group. Imports of 68 industrial products from countries in group (2) are restricted, and restrictions are applied to these 68 and to certain additional industrial products from group (3) countries. Several agricultural products may be imported without quantitative restrictions from 11 countries,4 on the basis of an import attestation visaed by the Director of External Economic Relations.

For liberalized imports not exceeding F 10,000 in value, only an invoice has to be submitted to the customs; most liberalized imports exceeding this figure are admitted on the basis of a customs declaration completed by the importer. (These two procedures account for more than 75 per cent of imports.) Some liberalized imports (spare parts, etc.) require an administrative visa, which is stamped on an import attestation. But imports of the products of the European Coal and Steel Community require individual licenses, which are issued automatically.

Other imports generally require individual import licenses. However, the application of other procedures is not excluded: (1) imports under quotas determined on an individual commodity basis and applicable to specified countries or areas in accordance with trade agreements or an import plan drawn up for a definite period; (2) special import procedures which provide for the liberal importation under IMEX and EXIM procedures 5 of raw materials or other goods needed to produce goods for export. Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses for imports of goods to be used directly by exporters are granted, provided that such imports are paid for with funds from EFAC accounts. The import facilities under EFAC arrangements, as well as those under IMEX and EXIM procedures, have only limited importance, in view of the high degree of import liberalization. Imports effected through compensation transactions are mainly agricultural items from countries in the Soviet bloc and are a very small proportion of total imports.

Imports exceeding F 10,000 in value, and all imports for which payment is required before the goods reach France, must be domiciled (registered) with an authorized bank, to which the necessary import documents must be presented and through which all payments related to the import must be made. For goods imported under the import declaration or attestation procedure or with an import license, importers may, as soon as the import has been domiciled with an authorized bank, arrange with the bank to purchase spot or forward exchange. As a general rule, payment to the foreign exporter may be made only after documents have been presented to prove that the goods have been shipped. However, special authorization may be given to importers to purchase exchange forward for a period of more than six months and to make total or partial prepayment at a date preceding that of importation by more than six months.

Payments for Invisibles

Payments for current invisibles are controlled, but applications for remittances are approved, provided that no unauthorized capital transfer is involved.

If justifying documents are presented and certain exchange control requirements are met, authorized banks are permitted to approve applications for payments without any limitation for many categories of current invisibles, and up to established limits for many other categories of current invisibles. Applications for other payments for invisibles are referred to the Bank of France to prevent unauthorized capital transfers.

Payments which may be authorized without limitation include those related to approved trade transactions; to maritime contracts of any kind; to income accruing to nonresidents in the form of profits, dividends, and royalties; to banking commissions, patent fees, and specified categories of taxes; to specified insurance payments; to fees to medical doctors, lawyers, etc.; to rents and similar payments due to nonresident owners and administrators of firms in France; to participation in foreign congresses, conferences, etc.; to alimony in accordance with court decisions; to fees for education and cost of maintenance of students abroad; to business travel abroad; and to net salaries of nonresidents employed in France within three months from the date of payment.

Payments up to established limits which may be approved include those by residents traveling abroad for pleasure (up to F 5,000 for each trip), by residents for family maintenance (up to F 1,000 a month for each beneficiary), and by residents on account of rebates, refunds, discounts, etc. (up to F 10,000). Also, authorized banks may approve payments up to F 500 for any purpose; subject to certain conditions, they may approve transfers up to F 2,500 to residents finding themselves abroad without means of payment.

In addition to the exchange allocation for tourist purposes (up to the equivalent of F 5,000 for each trip), authorized banks may grant resident tourists going abroad exchange for renting rooms and villas abroad; these tourists may freely make travel arrangements through licensed travel agencies operating in France or purchase credit cards in France for their traveling expenses abroad, without limitation, and buy tickets in France against French francs for any transportation abroad. Also, they are permitted to take with them up to the equivalent of F 1,000 in foreign exchange (notes, coins, travelers checks, etc.) which they did not spend during previous travel abroad.

Nonresident travelers leaving France may exchange into foreign currency French banknotes and coins up to F 1,000 without any formality, and larger amounts upon presentation of proof that such banknotes and coins were obtained from the sale of foreign currency or from debiting a nonresident account within the two months preceding their departure from France.

Both resident and nonresident travelers crossing the border may take out of France banknotes or coins (except gold coins) up to F 1,000 in metropolitan francs, or up to F 75,000 in CFA francs or CFP francs, or up to the equivalent of F 750 in banknotes issued by any other bank of issue in the French Franc Area. These banknotes and coins may be spent abroad or exchanged for other currencies.

Exports and Export Proceeds

Some exports require individual licenses; but if the total value does not exceed F 500, these exports may be permitted without any formality, subject to certain limitations. Regardless of their value, exports under the IMEX or EXIM procedure, or through compensation transactions with certain countries,6 require licenses if the commodities are those for which export licenses are required; otherwise, they are subject to exchange commitments. Other exports are free of trade or exchange controls; such exports exceeding F 5,000 in value are subject to certain formalities designed to verify the surrender of the exchange proceeds.

Goods that are purchased in France by nonresidents against checks or travelers checks expressed in any currency, or against checks issued by foreign correspondents of French banks to the debit of nonresident accounts, are considered as exports and are exempt from turnover taxes.

Exporters may grant credit for 180 days or, subject to administrative authorization, for a longer period; but thereafter, the proceeds must be collected within 30 days. Exporters are permitted to sell forward their anticipated export proceeds. If payment is received in foreign currencies, these currencies must be ceded on the exchange market within three months, unless they were used for payments for authorized transactions. Certain percentages of export proceeds are exempt from the surrender requirement and are kept in special EFAC (Exportations-Frais Accessoires) accounts. The highest percentage is accorded to holders of exporters’ cards, which are issued to enterprises that export a certain percentage of their production. EFAC accounts are separate for each foreign currency; for proceeds received in francs from nonresident accounts, an account may be credited in convertible or bilateral francs, according to the type of nonresident franc account debited for the payment. EFAC accounts may be used only by the account holder for all authorized transfers abroad.

Proceeds from Invisibles

Residents are obliged to collect within a month from the date that payment is due proceeds accruing from services rendered by them abroad and, in general, all proceeds accruing from any other source abroad. If the settlement is in foreign currencies, these currencies must be ceded on the exchange market within three months, unless they were used for payments for authorized transactions.

Residents are, however, exempted from this requirement in respect of proceeds of up to F 1,000 accruing from the collection of coupons of foreign securities held abroad and from immovable property located abroad. When the limit of F 1,000 is reached, such proceeds must be repatriated prior to March 31 of the year following the year in which the limit was exceeded.

Travelers may bring in any amount of banknotes and coins (except gold coins) in metropolitan francs, CFA francs, CFP francs, or any foreign currency; however, the exchange of banknotes issued by some banks of issue in the French Franc Area is prohibited or limited to certain amounts for each traveler.

Residents returning from abroad may retain foreign exchange (notes, coins, travelers checks, etc.) up to the equivalent of F 1,000 for use during their next trip abroad.

Capital

All capital transactions involving nonresident interests must be carried out through the intermediary of authorized banks.

Most outward transfers by residents for the purpose of making investments abroad require approval; these include direct investments in foreign enterprises as well as the establishment of branches by French firms. Requests for the authorization of direct investments abroad are approved liberally. Residents are permitted to deal in securities abroad, within the limitations described below.

Capital assets abroad of residents are not subject to repatriation. Residents of French nationality may use such assets in accordance with a general or individual license. Residents of foreign nationality may dispose freely of their assets abroad. Residents of French nationality must repatriate within three months the proceeds from the sale of securities abroad, unless these proceeds were used to purchase other securities. This obligation also applies to residents of foreign nationality, to the extent that the securities sold have previously been purchased with funds they held in France.

Transfers abroad are permitted freely in respect of legacies and dowries due to nonresidents and in respect of assets of persons of foreign nationality who, after staying in France as residents, leave to establish residence abroad. Emigrants are allocated F 5,000 in addition to the tourist allowance; they may apply to the Bank of France for permission to transfer larger amounts.

Within the limits described below, nonresidents may freely make direct investments in France and deal in securities in France. They are permitted to repatriate the proceeds accruing from the liquidation of approved investments and from the sale of their securities in France.

The following investments may be made freely in France by nonresidents: (1) subscriptions to an increase in the capital of a French company, provided that its shares are officially quoted on a stock exchange in France; (2) subscriptions, at the time of issuance, to short-term7 or long-term securities and bonds issued by a French public service organization or by a private enterprise having its head office in France, provided that the securities issued by the private enterprise are officially quoted on a stock exchange in France; (3) acquisition on a spot basis through the intermediary of a notary public of immovable property or rights to such property located in France, for which up to 50 per cent of the sales price may be financed with credit; (4) loans to residents of up to F 1 million (or its equivalent in foreign currency) provided that the rate of interest does not exceed 4 per cent and that the maturity is less than two years;8 and (5) purchases of securities in France as described below. Other investments by nonresidents in France require individual licenses. Repatriation of the proceeds from the liquidation of approved investments is permitted.

Dealings in securities are subject to special regulations; all dealings must take place on stock exchanges. Nonresidents are permitted to deal on a stock exchange in France in any security officially quoted on that stock exchange; and residents are permitted to deal in France or abroad in any security officially quoted on a stock exchange. Special conditions are, however, attached to transactions in certain foreign securities listed by the Ministry of Finance and Economic Affairs. Furthermore, purchases of French securities by nonresidents require prior license when they are to be made in any manner other than by purchase on a French stock exchange or at a price different from that officially quoted.

Securities may be imported and exported freely through authorized banks as follows: imported on behalf of residents or nonresidents; exported on behalf of nonresidents (except French securities belonging to residents of Rumania), or exported on behalf of residents for the purpose of selling the securities in accordance with the regulations mentioned in the preceding paragraph. Dealings in securities on a spot basis may be made in France by all nonresidents; dealings on a forward basis may be made only by residents of countries in the area of convertibility. Residents may carry out spot or forward transactions in securities on foreign stock exchanges.

Nonresidents must make payments for securities purchased in France in accordance with prescription of currency regulations applicable to countries in the area of convertibility; they are permitted to transfer abroad the proceeds accruing from the sale of securities in France.

Exchange proceeds from the sale of securities abroad by residents may be disposed of in one of the following ways: (1) repatriated and surrendered, (2) used to acquire securities abroad, or (3) if exchange control regulations in the country where the sale took place do not permit the transfer of proceeds from the sale of securities, ceded to a resident for the subsequent purchase of securities in that country.

The purchase of securities by a resident on a stock exchange abroad can be financed by (1) the purchase of foreign exchange on the exchange market in France, (2) the use within three months of the proceeds from the sale abroad of securities by the seller, (3) the use of funds in foreign currency held by the buyer and not subject to surrender requirements, and (4) the use of funds in foreign currency acquired from any person in the French Franc Area if such funds may not be repatriated because of exchange control regulations abroad.

Changes during 1964

January 10. France ceased to invoke the provisions of Article XXXV of the General Agreement on Tariffs and Trade with regard to Japan.

February 1. Eastern Germany was included in the area of convertibility.

March 1. Czechoslovakia was included in the area of convertibility.

March 19. Certain changes were made in the regulations concerning the assets in the French Franc Area of nationals of countries in that Area who took up residence abroad, and of foreign nationals who took up residence in the French Franc Area. Physical persons of the former category could, upon departure, be accorded nonresident status by the Bank of France; as such, they could open nonresident accounts (Foreign Accounts) and transfer from France their capital holdings in France. With the exception of public employees, such persons would automatically acquire nonresident status after a two-year stay abroad, unless an application to maintain their resident status was approved.

Physical persons of the second category could, upon arrival, be accorded resident status by the Bank of France. With the exception of public employees, such persons would automatically acquire resident status after a two-year stay in a French Franc Area country, unless an application to maintain their nonresident status was approved.

March 19. Holders of Nonresident Internal Accounts and dossiers were permitted, with certain exceptions, to purchase and sell foreign securities in France.

March 31. Authorized banks were permitted to grant guarantees for the benefit of nonresidents for (1) the settlement of any debt contracted by residents, provided that the transfer relating to the settlement was covered by a general or specific authorization; and (2) the repayment of loans up to F 500,000 of any kind extended by nonresidents to branch offices outside France of companies having their head offices in France.

April 10. Resident travelers were no longer obliged to surrender all foreign means of payment other than banknotes which upon their return to France remained from their tourist travel allocation; they could retain unutilized foreign exchange (including travelers checks) up to the equivalent of F 1,000, and take it out on a later trip together with any other foreign exchange covered by a general or specific authorization.

April 29. Foreign investors were permitted to subscribe freely, on the issue date, to long-term and short-term debentures and bonds issued by French collective institutions or agencies, provided that, if the debtor was a private company, it had previously floated one or more loans in France, or the company’s capital stock was quoted on all French stock exchanges (see also footnote 7).

April 30. Authorized banks were allowed to permit transfers abroad to make payments up to any amount justified by proper documentation (1) to workers, technicians, and engineers sent abroad by enterprises established in France for training or for temporary employment, (2) to travel agencies abroad for commission due by French hotels, and (3) in respect of tuition fees for correspondence courses.

May 5. The following were added to the liberalization group of 43 specified countries (see section on Imports and Import Payments, above): Iraq, Jordan, Saudi Arabia, Syrian Arab Republic, United Arab Republic, and Yemen.

June 7. Imports from GATT countries of goods covered by 27 tariff items were freed from quantitative restriction. These items included castor oil, walnuts, chewing gum, frozen fruit, certain fruit juices, carpets and rugs, specified knitted or crocheted fabric, traveling rugs and blankets, specified ferromanganese, specified base metals, scissors, certain parts for motorcycles, and gymnasium and athletic equipment.

July 8. Transfers up to the equivalent of F 2,500 were permitted to residents traveling abroad who ran short of funds because of unusual circumstances, provided that the traveler had maintained a resident account with a French bank for at least six months.

August 14. Imports of the following goods from OECD countries in Europe, their dependent territories and associated countries, Andorra, Canada, Finland, the United States, and Yugoslavia were freed from quantitative restriction: coconuts, pepper and mixtures of spices containing pepper, and palm oil other than for technical or industrial use.

August 29. The import of rice from OECD countries in Europe, their dependent territories and associated countries, Andorra, Canada, Finland, the United States, and Yugoslavia was freed from quantitative restriction.

September 23. Imports of sweetened and other prepared forage were freed from quantitative restriction.

October 1. The 1959 trade and tariff agreement with Tunisia expired. Goods of Tunisian origin and provenance became subject to the minimum tariff of import duties; imports from and exports to Tunisia remained subject to the general trade and exchange control regime applicable to the French Franc Area, which included absence of quantitative import restrictions.

October 12. The purchase and sale of Moroccan banknotes by French banks was suspended.

November 1. Imports of dairy products and specified beef from all countries were freed from quantitative restriction. The import of these products from 11 countries (see footnote 4) could be made on the basis of an import attestation visaed by the Director of External Economic Relations.

November 1. Exports of dairy products and specified beef were freed from quantitative restriction.

Gabon

Exchange Rate System

No par value for the currency of Gabon has been established with the Fund. The official unit of currency is the CFA franc, which is equivalent to 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by commercial banks under the direction of the Exchange Office. The Ministry of National Economy allots to each importer exchange for goods included in the annual import program; it also issues import licenses, which must be approved by the Exchange Office.

Prescription of Currency

Gabon is a member of the French Franc Area, and settlements with other countries of the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs; those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely, provided that they originate in that Area. All imports from countries outside the French Franc Area are subject to import licensing in accordance with an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Gabonese Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the French Franc Area. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for other countries may be used to import goods originating in any country outside the French Franc Area except the U.S.S.R. and Mainland China, for each of which separate quotas are established.

For goods included in the annual import program, the Ministry of National Economy publishes each year an announcement of the exchange allotted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Foreign Trade Department of the Ministry of National Economy an application for a license within the limits of the quota that has been assigned to him. When the license is issued, the Exchange Office makes the exchange available to the importer through his bank. Import licenses are valid for six months; the license may be renewed three times for imports of capital goods and twice, for three months at a time, for imports of supplies, provided that the importer presents valid reasons for requesting the renewal.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of goods to be used directly by exporters, provided that such imports are paid for with funds from EFAC accounts.

A tax of 15 per cent of the c.i.f. value of specified luxury imports is levied in addition to the customs duties; the specified imports include such items as crystal glassware, jewelry, air conditioners, refrigerators, radios, and phonograph records.

Payments for Invisibles

Payments for invisibles may be made freely to residents of countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. Foreigners hired by contract and holding an employment card may transfer to their country of origin their total net salaries. There is a basic tourist allocation up to the equivalent of CFAF 250,000 a person for each trip to countries outside the French Franc Area. Travelers to those countries on business may obtain an amount in excess of the above limit for bona fide living expenses, the amount depending on the destination and the duration of the trip. Persons having the status of residents and traveling to other countries in the French Franc Area may take out any amount of CFA banknotes. When traveling to other countries, they may take out banknotes up to a maximum of F 1,000 in French francs or francs issued by the Institute of Issue of the Overseas Departments or CFAF 75,000 or CFPF 75,000 in legal tender CFA or CFP notes and coins. Nonresident travelers may take out foreign notes and coins up to the amounts declared when they entered the country, minus the amounts of French Franc Area banknotes that are taken out.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely. For exports to all other countries licenses, which are issued freely, are required; exceptions are products whose export is unrestricted (e.g., wood, manganese, cocoa), for which exchange commitments must be registered at the Exchange Office. The exporter undertakes to repatriate the export proceeds within a period of 180 days from the date of arrival of the goods at their destination. When settlement is made in a currency other than a French Franc Area currency, the exporter must surrender it on the Paris exchange market within three months following settlement.

Exporters may retain, however, between 8 per cent and 15 per cent of their export proceeds (depending on the commodity exported) in special, nontransferable EFAC accounts (Exportations-Frais Accessoires), which may be used by the exporters themselves to make payments abroad for export promotion expenses and for modernization and expansion needs of their industries.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 50,000 earned in those countries from foreign securities, must be collected and must be surrendered within one month of receipt. Travelers may bring in any amount of domestic or foreign banknotes or coins (except gold coins).

Capital

Under the Investment Code promulgated on December 4, 1961, any enterprise established in Gabon, whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports, as well as exemption from direct taxes on specific income.

The Code also provides for three categories of preferential treatment, in accordance with which fiscal and other privileges may be accorded to firms investing in specified new industries or in the expansion of existing ones. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of Gabon; it is granted for a period of up to 10 years. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). Preferential treatment C is reserved for enterprises of prime importance to the country’s economic development; it provides for preferential tax treatment for a period of up to 20 years. The granting of any one of the three kinds of preferential treatment automatically includes the application of specified exemptions from direct taxes which are granted under the provisions of the ordinary law (see above).

Requests for approval of preferential treatment must be submitted to the Minister of Economy and Planning, who, after examining the documents, transmits them to the Investment Commission. After an opinion has been given by that Commission, the project is submitted to the Council of Ministers. Preferential treatments A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Executive Committee of the Equatorial Customs Union upon the recommendation of the Council of Ministers.

Controls over foreign investments in Gabon are administered along the lines established by exchange control regulations in France.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to transactions with Gabon, was terminated.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to transactions with Gabon, was terminated.

June 1. Imports of many commodities were freed from quantitative restriction when originating in and shipped from EEC countries other than France.

December 8. The treaty establishing the Central African Customs and Economic Union (UDEAC) was signed by Cameroon and the members of the Equatorial Customs Union (the Central African Republic, Chad, Congo (Brazzaville), and Gabon). It would enter into effect on January 1, 1966.

Federal Republic of Germany

Exchange System

The par value is Deutsche Mark 4.00 = US$1. The official limits established by the Deutsche Bundesbank for its dealings with banks are DM 3.97 buying, and DM 4.03 selling, per US$1. For the banks’ transactions with their customers, these rates are considered as middle rates which can be exceeded by buying or selling margins. The rate for the U.S. dollar fluctuates in the exchange market between these margins. Market rates for certain other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Germany1 and such limits in force in the country of the other currency concerned. All other currencies are also admitted to market quotations in Germany. Premiums and discounts on forward exchange transactions are left to the interplay of market forces. There are no restrictions on foreign exchange dealings by residents or nonresidents.

There are no restrictions on payments and no prescription of currency requirements. Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Germany or abroad at the choice of the holder. Accounts in deutsche mark or in any foreign currency may be held in Germany by any nonresident. Balances on these accounts may be transferred freely to any account and used for any payment in Germany or abroad, including the purchase of any foreign currency; these accounts may be credited freely with any payment. However, credit balances on nonresident accounts, except savings accounts in deutsche mark of individual persons, may not carry interest, although general permission has been granted to all credit institutions to pay interest on customers’ balances held as cover for letters of credit.

The Federal Republic of Germany accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Administration of Control

The administration of control in Germany in respect of imports and exports of goods and services is operated by the Federal Ministry of Economics, the Federal Office for Trade and Industry (Bundesamt für gewerbliche Wirtschaft), the Foreign Trade Agency for Food and Agriculture (Aussenhandelsstelle für Ernahrung und Landwirtschaft), Import and Storage Agencies (Einfuhr- und Vorratsstellen), and the Land Ministries of Economics. The Deutsche Bundesbank is primarily the authority in charge of exchange control for certain capital transactions. All banks in Germany are permitted to carry out foreign exchange transactions.

Imports and Import Payments

Quantitative restrictions are not applied to imports of most commodities purchased from and originating in countries outside the Sino-Soviet bloc; out of a total of some 6,900 items, 6,600 may be imported freely from those countries. In addition, some 150 items are liberalized for imports originating in European OECD countries and their dependent territories. Certain solid fuels are liberalized only when purchased and imported from other member countries of the European Coal and Steel Community.

Imports free of quantitative restriction are not subject to licensing, and no prior control is exercised over such imports; however, an import declaration stamped by the Deutsche Bundesbank, which serves as documentation for customs control and for statistical purposes, is required. For imports still subject to quantitative restriction (with certain exceptions, such as books, maps, etc., and small parcels through the post), an individual import license is required. Import licenses may be allocated to importers either on a first-come, first-served basis, or account may be taken of conditions of price, delivery, quality, etc., or of the total value of applications in relation to the quotas established for specified commodities.

For manufactured goods, the period of validity of the license is usually six months, but it may be extended in certain cases (e.g., heavy machinery) to a period necessary for the production of the goods. For agricultural products the usual period is also six months; however, for seasonal imports, it may be shorter. No fees are charged for licenses to import manufactured goods.

Payments for imports are free, even if the underlying import transaction is still restricted. Commodity futures may be dealt in freely. Transit trade transactions may, in principle, be carried out freely; but when they involve certain countries, they are subject to certain conditions.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. German and foreign notes and coins and other means of payment may be exported freely.

The following transactions—but not the related payments—between residents and nonresidents are subject to restriction: the chartering of foreign ships from residents of specified countries; the use of foreign boats in certain inland waterways traffic; transactions with specified countries (which do not grant reciprocal treatment) for hull and marine liability insurance and aviation insurance, except passenger accident insurance; the production of motion pictures in association with nonresidents; and certain contracts with nonresidents pertaining to motion-picture films.2

Exports and Export Proceeds

With few exceptions, export transactions may be carried out freely. For all goods, only an export notification, for statistical purposes, is required. Certain exports—mostly strategic goods—are subject to individual licensing. The customs authorities exercise control over export declarations and also check to see whether a license is required.

Foreign exchange proceeds from exports do not have to be declared or surrendered, and they may be used for all payments. Claims exceeding DM 3,000 that have been overdue for more than three months must be reported, for statistical purposes.

Proceeds from Invisibles

With few exceptions, services performed for nonresidents do not require licenses. However, licenses are required for transactions related to specific sea services, and for technical assistance through the delivery to residents of Eastern bloc countries of constructional drawings, materials, and instructions for manufacture, insofar as such assistance is for the production of goods whose export requires a license.

There are no restrictions on the receipt of payments for services rendered to nonresidents. However, receipts exceeding DM 500 on account of such services have to be reported.

German and foreign notes and coins and other means of payment may be imported freely.

Capital

Residents and nonresidents may import or export capital freely without a license. However, domestic money market paper (Treasury bills, etc.) and domestic fixed-interest-bearing securities—if in the latter case the contracts contain an obligation to reacquire the securities later at a definitely fixed price—may not be sold to nonresidents without an individual license. Securities of all types may be imported or exported freely. There are no limitations on the disposal of legacies located in Germany and inherited by nonresidents, or on legacies located abroad and inherited by residents.

Changes during 1964

March 19. Banks were no longer permitted to pay interest on time deposits held by nonresidents; there was no change, however, in the banks’ freedom to pay interest on savings accounts in deutsche mark held by individuals. The Bundesbank raised the minimum reserve requirements against banks’ liabilities to nonresidents to the legally prescribed maximum rates.

August 5. As part of a modification of the reporting requirements for certain financial transactions, the limit up to which export claims overdue for more than three months need not be reported was increased from DM 2,000 to DM 3,000.

December 9. Crude oil, diesel oil, and fuel oil were made subject to import licensing.

Ghana

Exchange Rate System

The par value is Ghana Pound 1 = US$2.80. Exchange rates are based on the fixed rate for sterling, with which the Ghana pound is at par. The Bank of Ghana does not quote rates other than for the pound sterling; it deals in sterling at rates within ½ of 1 per cent on either side of parity, the statutory limits being ¾ of 1 per cent on either side of parity. For other currencies, the commercial banks in Accra base their rates on the current London market rates plus the exchange charge of ½ of 1 per cent levied on sterling transactions and a brokerage fee of ⅛ of 1 per cent. The authorized banks may exchange Ghanaian currency for any foreign currency and engage in arbitrage in all currencies, spot or forward.

Administration of Control

A Foreign Exchange. Committee, under the chairmanship of the Governor of the Bank of Ghana, is responsible for drawing up a foreign exchange budget that establishes a maximum amount of foreign exchange to be used in payment for imports during any licensing year. The Ministry of Trade prepares an import and export plan, which is subject to approval by the Cabinet. The over-all import plan must correspond to the import ceiling set by the Foreign Exchange Committee.

Applications for individual import licenses must be channeled through the appropriate ministry or government agency for endorsement as follows: all government departments through the Office of the Planning Commission; State or semi-State industrial enterprises through the State Enterprises Secretariat; State Farms Corporations, the agricultural branch of the Workers Brigade, and the United Ghana Farmers Council Cooperatives through the Ministry of Agriculture; and industrialists in the private sector through the Ministry of Industries. Applications that have been endorsed by the competent ministry or agency are then forwarded to the Controller of Imports and Exports at the Ministry of Trade, who is responsible for the issue of import licenses. An exception is made for applications by the private sector for the import of consumer goods as well as for applications by the National Trading Corporation; such applications are submitted directly to the Ministry of Trade. The Ministry of Trade is also responsible for issuing export licenses.

An Exchange Control Committee, under the chairmanship of the Minister of Finance, administers the allocation of exchange for payments for invisibles and capital. Permitted foreign exchange transactions must be made through authorized banks.

Prescription of Currency

Ghana is a member of the Sterling Area and has prescription of currency requirements similar to those of the United Kingdom. Settlements between residents of Ghana and residents of other Sterling Area countries may be made in Ghana pounds through Sterling Area accounts, in sterling, or in other Sterling Area currencies. Authorized payments, including payments for imports, by residents of Ghana to residents of countries outside the Sterling Area may be made in Ghana pounds to the credit of a Foreign Account, in sterling to the credit of an External Account, or in any foreign currency. Receipts from residents of countries outside the Sterling Area may be obtained in Ghana pounds from a Foreign Account, in sterling from an External Account, or in any non-Sterling Area currency which is freely exchangeable for sterling or Ghana pounds. However, settlements related to transactions covered by bilateral trade and payments agreements are made through clearing accounts maintained by the Bank of Ghana and/or the central or state banks of the countries concerned.1

Nonresident Accounts

Accounts in Ghana pounds held by residents of countries within the Sterling Area are designated Sterling Area Accounts. These accounts may be credited with authorized payments by residents of Ghana, with transfers from Foreign Accounts and from other Sterling Area Accounts, and with the proceeds from sales of foreign currencies. They may be debited for payments to residents of the Sterling Area countries, for transfers to other Sterling Area Accounts, and for purchases of Sterling Area currencies.

Accounts in Ghana pounds held by residents of countries outside the Sterling Area with authorized banks in Ghana are designated Foreign Accounts. The opening of these accounts is subject to approval by the Bank of Ghana. The accounts may be credited with authorized payments by residents of the Sterling Area countries, with transfers from other Foreign Accounts, and with the proceeds from sales of non-Sterling Area currencies. They may be debited for payments to residents of the Sterling Area, for transfers to other Foreign Accounts, and for purchases of foreign currency.

Nonresident accounts maintained under the provisions of bilateral payments agreements are called “Territorial Accounts.” These accounts may be credited with authorized payments by residents of Sterling Area countries, with transfers from Foreign Accounts, with payments received through the Bank of Ghana for settlements with bilateral payments agreement countries, and with proceeds from sales of non-Sterling Area currencies. They may be debited for authorized payments to residents of Ghana, for transfers to other Territorial Accounts related to the same country, and for transfers to the related clearing account at the Bank of Ghana.

Blocked Accounts are nonresident accounts of another category, the purpose of which is to receive funds that are not placed at the free disposal of nonresidents, e.g., certain types of capital proceeds. These may be debited for authorized payments, including the purchase of approved securities.

Imports and Import Payments

A large part of the import trade is carried out through the state-owned Ghanaian National Trading Corporation. Other goods are imported by private importers who must be registered. Certain imports are prohibited. There are two open general licenses which permit the free import of a few commodities (such as trade samples, personal household effects, gifts, and books). All other imports require individual licenses, which are issued within the limits of the foreign exchange budget established for each licensing year. A special foreign exchange allocation is provided within the budget for imports from bilateral payments agreement countries with centrally planned economies, and import licenses for some 35 commodities or groups of commodities contained in a special list are issued only for importation from these countries.

Licenses for imports from bilateral payments agreement countries specify the bilateral partner country from which the commodity has to be imported; licenses to import from countries outside the bilateral account group are valid for any of these countries. Licenses are normally issued on a c.i.f. basis but are endorsed to the effect that insurance must be covered in Ghana.

Imports from South Africa, South West Africa, and the Portuguese Monetary Area are not permitted.

Exchange for payment of approved imports is granted freely by authorized banks. Imports by the private sector under individual licenses have to be financed on the basis of sight or acceptance documentary credits established by the importer with a commercial bank in Ghana. For acceptance documentary credits approval from the exchange control authorities must be obtained by the bank for a credit ceiling for the individual importer before such credits are established; in addition, banks are required to deposit with the Bank of Ghana a minimum of 15 per cent of the value of letters of credit covering imports of consumer durable goods. This advance deposit is charged by the commercial banks to the importer before opening the letter of credit. In practice, however, commercial banks require importers to make downpayments on the opening of letters of credit for all categories of imports.

Payments for Invisibles

All payments for invisibles require specific approval of the Exchange Control Committee, and documentary evidence must support all applications.

The following categories of payment are normally authorized in connection with the importation of goods: (1) the buying commission, this must be duly endorsed on the import license and the amount of the authorized commission is deducted from the value of the import license; (2) the transfer of normal bank charges payable to overseas bankers for import payments, provided that the amount of the bank charges and the buying commission combined do not exceed 4 per cent of the c.i.f. value of the goods, and (3) the transfer of funds to cover interest on bills up to 6½ per cent per annum, provided that the license under which the goods are imported has been authorized by the Ministry of Trade and that this ministry is satisfied with the acceptance terms. Freight charges must be paid to the local shipping agents; the transfer of funds to cover such charges are normally permitted, provided that the applications are properly documented. Insurance on all imports shipped to Ghana on f.o.b. or c. & f. terms must be arranged in Ghanaian currency with local insurance companies.

Remittances of income by non-Ghanaian employees are limited to 50 per cent of their annual earnings, up to a maximum of £G 2,500 a year. Applications for remittances of income by non-Ghanaian self-employed persons are considered on their individual merits by the Exchange Control Committee.

Nonresident companies are permitted to transfer abroad freely their net profits, i.e., profits after payment of the prevailing 45 per cent tax on companies and of a 20 per cent withholding tax.

The maximum annual travel allowance for Ghanaians is £G 50 for each person 12 years of age or over and £G 35 for each person under that age. Foreigners resident in Ghana but domiciled elsewhere in the Sterling Area are allowed up to £G 250 out of their personal remittance quota. All residents may buy round-trip tickets in Ghana to the country of destination.

Persons leaving Ghana may take with them foreign currency notes (including CFA franc notes) equivalent to £G 60, provided that not more than £G 20 is taken in any one currency. Ghanaian banknotes may be taken out up to £G 10, but may be spent only on Ghanaian aircraft and ships.

Exports and Export Proceeds

There are two open general licenses for exports, covering such articles as trade samples, advertising materials, postage stamps, gifts up to £G 10 in value, luggage, and gold coins commemorating the founding of the Republic.2 All other exports require specific licenses from the Controller of Imports and Exports prior to shipment: Most items are exported through the Ghana Agricultural Produce Marketing Board. Exports to South Africa, South West Africa, and the Portuguese Monetary Area are prohibited.

Exporters are required to collect proceeds from their exports within six months of shipment; export proceeds in foreign exchange must be surrendered.

Proceeds from Invisibles

All receipts from invisibles must be sold to an authorized bank. Foreign currency notes may be imported freely, except that CFA franc notes may be imported only with the approval of the Bank of Ghana. Travelers may not bring in Ghanaian currency notes in excess of the amount that may be taken out.

Capital

Foreign investment in Ghana requires prior approval if repatriation is to be guaranteed. The Capital Investments Act, which was promulgated in April 1963, provides for the granting of special benefits to specified existing investments as well as to new investments. Under the Act approval may be granted to investments that contribute to the development and utilization of productive capacity, the reduction of import requirements, the attainment of a high level of employment, or the acquisition of technical skills by citizens of Ghana. Investments granted “approved status” under this Act obtain a guarantee of the right to transfer profits and liquidation proceeds; tax holidays, initial capital allowances, etc., are also available for such investments. The Act also stipulates that the assets of foreign investors may not be expropriated and that, when approved enterprises are nationalized in the public interest, fair compensation is to be determined either by voluntary agreement of the parties or through arbitration by the International Bank for Reconstruction and Development. A Capital Investments Board, whose principal function is to decide which foreign investments qualify for benefits under the Act, has been established.

All outgoing capital movements must be approved; applications for such transfers must be supported by documentary evidence and are considered on their merits. Transfers to beneficiaries under wills and intestacies are approved, provided that all local indebtedness has been paid. Requests for the transfer of funds representing personal assets of foreign residents in Ghana who retire and return to their home country are considered individually on their merits. Applications must be supported by appropriate documentation showing that the savings are genuine and that no illegal transfer of capital is involved. If the amounts involved are very large, their transfer may be authorized over a period of a few months. Proceeds from the liquidation of real assets of foreign nationals leaving Ghana may be directed to reinvestment in registered government stocks, Treasury loans, or Treasury bills; the interest accruing on such investments is transferable. Applications for the transfer abroad of funds by emigrants must be accompanied by appropriate documentation and are also considered on their individual merits.

Transactions in securities are controlled to ensure that capital is not transferred abroad without express permission. In respect of portfolio investments, residents have to obtain approval for any switch in their holdings of securities issued by nonresidents.

Changes during 1964

January 1. The administration of exchange control was transferred from the Ministry of Finance to the Bank of Ghana. The Foreign Exchange Committee, responsible for drawing up a foreign exchange budget that established a maximum amount of foreign exchange to be used in payment for imports, was put under the chairmanship of the Governor of the Bank of Ghana. Import and export policy continued to be formulated and implemented by the Ministry of Trade. An Exchange Control Committee, under the chairmanship of the Minister of Finance, administered the allocation of payments for invisibles and capital.

January 1. The administration of import licensing for goods imported from bilateral payments agreement countries was changed. The special list which included 8 commodities that could be imported only from bilateral payments agreement countries was abolished; the same was true of the second special list of about 28 commodities for which licenses had been issued with the proviso that at least one fifth of the value of such licenses could be imported only from bilateral payments agreement countries. Instead, a special list containing some 35 commodities or groups of commodities was prepared, and import licenses for goods included in this list were issued only for importation from bilateral payments agreement countries with centrally planned economies. In addition, the previous practice of issuing licenses that were valid for imports from any bilateral payments agreement country was discontinued, and import licenses for goods from the bilateral area now specified the bilateral partner country from which the commodity had to be imported.

January 1. The practice of granting automatically an established initial remittance allowance of the personal liquid assets of foreign nationals leaving Ghana and of emigrants was reviewed. Henceforth, requests for such remittances would be considered on their individual merits. Applications had to be supported by appropriate documentation, such as evidence that the savings were genuine and that no illegal transfer of capital was involved. If the amounts involved were considerable, their transfer would be authorized over a period of a few months.

January 10. Three open general licenses for imports were established.

January 20. Six open general licenses for imports were established, in addition to those introduced on January 10, 1964.

February 21. All open general and individual import licenses were revoked, except those covering flour, sugar, milk, and rice.

February 24. Two open general licenses for imports were introduced; these covered such items as bona fide trade samples, gifts, books, newspapers, and fish. It was announced that the issue of individual import licenses would be resumed without delay, although at a reduced level. Priority was to be given to imports of machinery and equipment for various development projects, pharmaceuticals, chemicals for treating water, and essential foods.

February 24. Two open general licenses for exports were established.

April 1. It was provided that imports under individual licenses valid for 1964 had to be financed on the basis of sight or acceptance documentary credits established by the importers with a commercial bank in Ghana. For acceptance documentary credits, prior consent of the Exchange Control Authority had to be obtained by the opening bank for a credit ceiling for the individual importer before establishing such credits. In addition, banks were required to deposit with the Bank of Ghana a minimum of 15 per cent of the value of the letter of credit covering imports of consumer and consumer durable goods. This advance deposit was charged by the commercial banks to the importer before opening the letter of credit. Importers were no longer allowed to deposit sums with suppliers and draw upon these sums periodically for consignments of merchandise.

June 1. The practice of allowing remittances abroad of income by self-employed foreign residents up to an established percentage of their annual earnings was reviewed. Henceforth, requests for such remittances would be considered on their individual merits by the Exchange Control Committee. Applications had to be supported by appropriate documentation, e.g., evidence of the applicant’s unavoidable financial commitments abroad, proof that the amounts to be transferred represented genuine earnings of the applicant, and proof that there were no tax liabilities and overdrafts outstanding.

July 6. Statutory bodies and the private sector were required to channel their import applications through an appropriate ministry or government agency which endorsed those requests for imports considered to be essential. Endorsed applications were then forwarded to the Ministry of Trade for approval and issue of licenses.

July 6. It was announced that in order to ensure a more effective control over the issue and utilization of import licenses the register of importers was to be reviewed in order to reduce substantially the number of licensed importers.

August 1. The basic travel allowance of £G 50 a year was reviewed. Henceforth, travel allowances ranging from £G 20 to £G 50 a year would be granted.

August 6. Import licenses would normally be issued on a c.i.f. basis, with an endorsement to the effect that the insurance must be covered in Ghana.

September 28. All import licenses issued on or before August 31, 1964 that had not been fully utilized were revoked.

Greece

Exchange Rate System

The par value is Greek Drachmas 30.00 = US$1. The official rates are Dr 29.90 buying and Dr 30.10 selling, per US$1. Market rates for other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Greece and such limits in force in the country of the other currency concerned.

Administration of Control

Controls are administered on the policy level by the Ministry of Coordination, the Ministry of Trade, and the Currency Committee. Controls are implemented and applied by the Bank of Greece and authorized commercial banks.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles are made on the basis of the origin or destination of the goods and services involved or in the currency and manner provided for by trade and payments agreements. Settlements with countries with which Greece has bilateral payments agreements are made through controlled accounts, with the U.S. dollar as the currency of account, or in the currency of the partner country.1 Settlements with all other countries are made in any convertible currency or through Foreign Sight Deposit Accounts in drachmas.

Nonresident Accounts

Nonresidents are permitted to open with Greek banks convertible Foreign Sight Deposit Accounts in drachmas or convertible currencies. These accounts may be credited with convertible foreign exchange or the proceeds from sales of convertible currencies, with authorized payments by residents of Greece for imports or services payable in convertible currencies, and with transfers from other Foreign Sight Deposit Accounts. They may be debited for payments to residents for current transactions, for transfers to other Foreign Sight Deposit Accounts, and for the purchase and transfer abroad of any convertible currency. Any withdrawal from drachma accounts for use in Greece and any conversion of foreign exchange withdrawals into drachmas entail the loss of the conversion right of the sums withdrawn. The maximum rate of interest on such accounts is 1½ per cent per annum.

Nonresident investors enjoying the privileges of Legislative Decree No. 2687/53 (see section on Capital, below) may also establish time deposits, for a minimum period of six months and with a minimum deposit in convertible currencies equivalent to US$10,000; balances on these accounts earn interest of between 4½ per cent and 5½ per cent, and principal and interest are freely transferable in the currency of the deposit.

All drachma assets of nonresidents other than those in Foreign Sight Deposit Accounts must be declared and are held in blocked accounts. Subject to the approval of the exchange control authorities, balances on blocked accounts may be used for such purposes as personal expenses in Greece up to Dr 30,000, purchases of securities officially listed on the stock exchange in Greece, and purchases of real estate in Greece. Amounts of up to Dr 60,000 may be released for remittance by each account holder, provided that his account had been opened before December 31, 1963 and the money deposited was derived from general revenue sources; amounts of up to Dr 30,000 may be released semiannually for remittance by each account holder, from accounts opened after January 1, 1964, provided that the money deposited was derived exclusively from rents. Other amounts of balances on blocked accounts may also be transferred abroad with the prior approval of the Bank of Greece. Blocked balances may be deposited with a commercial bank, where they earn interest at current rates for sight deposits.

Imports and Import Payments

All imports require approval. For most imports, prior approval is required; however, for certain commodities, mainly machinery and raw materials, imports may be effected without prior approval. The granting of an import license implies the allocation of appropriate foreign exchange. Apart from imports for which special licenses are required, two general import procedures (E and D) are applicable to private imports, mainly for statistical purposes. Under procedure E, the approval of an authorized bank is required (1) for imports from countries participating in the European Monetary Agreement (EMA) when payment is to be made in a convertible or externally convertible European currency; (2) for imports from Canada or the United States when payment is to be made in free dollars, i.e., not on the basis of procurement authorizations under U.S. aid; (3) for imports from countries with which Greece has concluded bilateral payments agreements when payment is to be made through the relevant clearing account; and (4) for imports from Cyprus when payment is made in free Cyprus pounds or through one of the EMA countries. No license is necessary under procedure E, but import applications which have been approved by an authorized bank are registered with the Bank of Greece. Under procedure D, an import approval issued by the Bank of Greece is required for imports financed by U.S. aid, for imports other than those covered by procedure E, and for imports for which the importer requests changes in the general provisions concerning the terms of shipment, method of settlement, terms of payment, etc. For all goods that do not require a special import license, prices must be approved and pro forma invoices visaed in Greece by a local Chamber of Commerce.

Special licenses are required for imports of commodities in List A (certain luxury items, textiles, automobiles and parts, and certain foodstuffs including rice) and List B (certain types of machinery and spare parts). Imports of petroleum products similar to those produced by Greek oil refineries require prior licenses. Special regulations govern imports of petroleum products similar to those produced by Greek refineries and imports of certain other items, such as goods under monopoly control, medicines, narcotics, wheat and flour, sulphur, and motion pictures, as well as barter transactions based on clearing agreements.

For purposes of applying regulations concerning payments for imports and advance deposit requirements, all private imports are classified in nine lists (P-3, P-6, F, F-50/1-3, and F-100/1-3). Payments for imports may be made by letter of credit, by cash against shipping documents, or by acceptance of time drafts (which is permitted only for goods in Lists P-3 and P-6, the time limit being three months for List P-3 and one year for List P-6, except for machinery and spare parts, for which the time limit is three years). The Ministry of Commerce may authorize longer payment periods and may also approve deferred payments for imports not included in any one of the nine lists. When time drafts are accepted, a personal written undertaking amounting to 4 per cent (List P-6) or 8 per cent (List P-3) of the amount of the draft is required as a guarantee that the payment will be made within the prescribed time limits.

When a letter of credit is opened, the importer is required to deposit in drachmas the whole amount of the credit with the intervening bank. In addition, for those imports included in Lists F-100/1-3, further cash deposits of 12-40 per cent of the c.i.f. value are required, as security for import duties and other taxes. For imports under Procedure E, this deposit must be made when the import approval is obtained; for imports under Procedure D, the deposit must be made within 20 days of the import approval.

Advance deposits are not required for imports for which payment is to be made by acceptance of time drafts. When payments for imports are to be made against sight drafts, advance deposits in cash are required for private imports included in Lists F-50/1-3 and F-100/1-3.2 Advance deposits are the same for all countries. They are calculated on the c.i.f. invoice value and consist of two components: a prepayment required when applying for an import approval and an advance (security) against import duties and other taxes. The rates of deposit for each list of imports are set out below.

PrepaymentSecurityTotal
In per cent of invoice value
List F-50/1502070
List F-50/2451863
List F-50/3401656
List F-100/110040140
List F-100/29036126
List F-100/38032112

For goods imported and cleared through customs in the Dodecanese Islands, the advance against import duties and other taxes is reduced to one half of the above-mentioned percentages. When imports are financed with U.S. aid funds, a further deposit of 10 per cent must be made in cash or by bank guarantee and in favor of the Greek State, in addition to any deposit as specified above. All deposits must be made with the intervening bank (1) at the time the import approval is obtained, for imports under procedure E, and (2) within 10 days (for Athens and the Piraeus area) or 20 days (for the provinces) of obtaining the import approval, for imports under procedure D. Upon delivery of the shipping documents, the importer’s bank issues a permit for the customs clearance of the goods and advance deposits are refunded.

Advance payments may be made to foreign suppliers for all imports. Special regulations govern imports by state agencies, public entities, and public utility companies.

Payments for Invisibles

Payments for invisibles require approval, but this is granted freely for expenses incidental to authorized trade transactions and for certain other transactions. Transfers abroad on account of specified categories of insurance (shipping, aviation, merchandise transport, and fire) or reinsurance (accident and life) are authorized by the Bank of Greece up to specified percentages of the amounts owed.

Greek residents going abroad for family reasons, tourist travel, or business are entitled to US$200 for each trip and for any number of trips a year. Exporters and manufacturers are allowed US$20 a day for a maximum of 45 days when they travel to the United States, Canada, or the Far East; for all other countries the allowance is US$15 a day for a maximum of 30 days. Requests for larger amounts or from other businessmen, commercial representatives, etc., are submitted to the Foreign Exchange Subcommittee.

Persons traveling abroad may take with them a maximum of Dr 2,000 in Greek banknotes. Nonresident travelers holding Greek passports are required to declare their foreign exchange when leaving Greece if the amount of such exchange exceeds US$500 or its equivalent; no declaration is required from holders of foreign passports.

Exports and Export Proceeds

All exports require individual licenses, but most exports are free of quantitative limitation. Export proceeds must be surrendered within 150 days from the date of export of the goods; in special cases, however, the authorities are empowered to extend this period up to two years for manufactures and up to one year for other commodities.

Proceeds from Invisibles

Exchange receipts representing payments for services must be surrendered. Exchange proceeds from shipping are exempt from the surrender requirement, but shipowners have to pay for supplies, repairs, etc., and any taxes and fees, and must cover their disbursements and expenses in Greece in local currency obtained through the sale of foreign exchange to the Bank of Greece.

Travelers may bring in a maximum of Dr 2,000 in Greek banknotes. Greek residents returning to Greece must declare the foreign exchange in their possession. Nonresident travelers of foreign nationality need not declare their holdings of foreign exchange at the time of entering the country, and nonresidents holding Greek passports are required to declare their foreign exchange only if they intend, when leaving Greece, to take out again foreign exchange in excess of US$500 or its equivalent.

Capital

Investments in Greece by nonresidents are subject to approval. Under Legislative Decree No. 2687/53, approved foreign investments which aim at the promotion of national production or otherwise contribute to the economic advancement of Greece may be granted preferential treatment. Under Law No. 4171/61, as amended by Legislative Decree No. 4256/62, further privileges are provided for foreign capital participating in investment projects in Greece exceeding Dr 60 million in value. Moreover, Legislative Decree No. 4256/62 provides additional repatriation facilities for foreign investments which promote exports.

Repatriation facilities are as follows: (1) Approved investments according to the provisions of the legislation mentioned above may not be repatriated before one year from the date the enterprise begins to operate productively and in no case before one year from the date the capital was imported. (2) The repatriation of foreign capital may not exceed 10 per cent a year of the amount of capital imported. The repatriation of dividends on equity capital and of interest on loan capital may not exceed 12 per cent a year and 10 per cent a year, respectively. (3) Under the provisions of Law No. 4171/61, profits on approved foreign investments may be transferred abroad in amounts not exceeding 6 per cent a year of the repatriated portion of the capital, provided, however, that the amount of profits transferred shall not exceed 8 per cent of the foreign exchange earnings of the enterprise from the sale of its products abroad. (4) For investments made under Legislative Decree No. 2687/53 that are not covered by Law No. 4171/61, the transfer of profits is related to the residual capital remaining in Greece and the transfer privilege expires as soon as all capital has been repatriated. (5) Under the provisions of Legislative Decree No. 4256/62, the repatriation of capital and profits of foreign investments approved under the provisions of Legislative Decree No. 2687/53 can exceed the rates specified in (2) above, up to 70 per cent of the foreign exchange earnings of the enterprise from the sale of its products abroad. Also, foreign loans approved under Legislative Decree No. 2687/53 can be repatriated at an annual rate of up to 20 per cent, provided that the amount of the loan does not exceed double the value of the capital and that the amounts repatriated do not exceed 70 per cent of the foreign exchange earnings of the corporation.

Deviations from the general regulations may be approved for foreign capital imported to develop exports of agricultural and mining products or invested in enterprises of special importance to the economy. Specified foreign short-term investment may also be granted preferential treatment in respect of the repatriation of capital and the transfer of interest.

Transfers of capital abroad by residents require approval.

Changes during 1964

January 13. The foreign exchange allocation of US$200 a trip for travel abroad for family reasons, tourism, or business was made available for any number of trips a year; previously, the allocation had been limited to two trips a year.

February 5. Restrictions on withdrawals from blocked accounts were eased.

May 1. Lists F-50 and F-100 were abolished and products previously included in these lists were transferred to six new commodity lists—F-50/1-3 and F-100/1-3. Many advance deposit rates were changed.

June 12. The spread between the official buying and selling rates for the U.S. dollar was reduced from Dr 0.30 to Dr 0.20. Thus, the buying rate was raised from Dr 29.85 to Dr 29.90 per U.S. dollar, while the selling rate was lowered from Dr 30.15 to Dr 30.10. The spread between the official buying and selling rates for other currencies quoted by the Bank of Greece was also reduced by one third.

October 1. Interest rates on nonresidents’ time deposits established under Legislative Decree No. 2687/53 were increased from 4 per cent to 4.5 per cent for deposits of 6-12 months; from 4 per cent to 5 per cent for deposits of 1-2 years; and from 5 per cent to 5.5 per cent for deposits for longer periods.

October 31. The agreement under which settlements with Turkey were channeled through centralized accounts was terminated.

Guatemala

Exchange Rate System

The par value is Guatemalan Quetzal 1.00 = US$1. The official rates are Q 1.00 buying, and Q 1.01 selling, per US$1. The Bank of Guatemala quotes exchange rates for certain other currencies1 on the basis of their rates in the New York market. 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.

Administration of Control

Exchange control is administered by the Bank of Guatemala (Exchange Department) under the direction of the Monetary Board. Foreign exchange transactions of the public sector are carried out exclusively through the Bank of Guatemala; those of the private sector are carried out through the medium of authorized banks for the account of the Monetary Stabilization Fund maintained by the Bank of Guatemala.

Prescription of Currency

All exchange transactions must be carried out through banks. Payments to Costa Rica, El Salvador, Honduras, and Nicaragua in respect of trade and invisibles are normally settled in Guatemalan quetzales through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries. The Exchange Department of the Bank of Guatemala, however, is empowered to authorize the sale of currencies of other Central American countries to make payments to the Central American area. There are no obligations prescribing the currency for payments to and from other countries.

Imports and Import Payments

Import licenses are not required except for imports of maps of Guatemala, explosives, poultry, and wheat flour. Importers must register with an authorized bank any firm order to import merchandise. (Imports originating from Central American countries and included in the General Treaty for Central American Economic Integration are exempt from this requirement.) Registration is never refused for bona fide imports. Importers then have 90 days in which to effect their registered imports; in practice, however, this period is not rigorously enforced.

All remittances abroad to pay for imports require exchange licenses, which are granted freely by the authorized banks. Checks denominated in quetzales are authorized freely for payment for specified imports from Central American countries. Payments for imports which have to be fully or partially prepaid must be made by letter of credit. When it is impossible to establish a letter of credit and the prepayment exceeds Q 1,000, a deposit equal to 25 per cent of the amount of foreign exchange requested must be made with the Bank of Guatemala or an authorized bank in cash or in government bonds by importers who are not established importers in the country or who are unable to provide sufficient proof that the import will be delivered; the deposit is refunded when the goods arrive in Guatemala. Importers of merchandise for which payment must be made in cash or in installments, and importers of merchandise on consignment, must present the original documents usually required by the Guatemalan customs for the clearance of goods.

Authorizations to withdraw imports from customs must be obtained from the Exchange Department, except for imports whose value does not exceed Q 50, household goods, samples, printed advertising material, and those imports originating in Central American countries and included in the General Treaty for Central American Economic Integration. The Exchange Department issues such authorizations without delay. The customs officials may refuse clearance of goods if discrepancies are found between the information contained in the authorization issued by the Exchange Department and the actual conditions. For the specified imports from Central American countries, the importer must complete, at either the Exchange Department or the customs office, a special form required by the Exchange Department, giving a description of the merchandise to be imported and the date on which he made the advance payment or the date on which he undertakes to pay in the future. If these forms are completed at the customs office, they must be forwarded daily to the Exchange Department.

A surcharge of 100 per cent of the customs duty may be applied to products originating in or imported from countries with which Guatemala has an unfavorable trade balance. On December 31, 1964, this surcharge applied to certain imports from 28 countries.2 This surcharge is waived if the goods are transported in Guatemalan ships. Moreover, all imports from other areas which are included in the agreed uniform tariff list of the countries participating in the General Treaty for Central American Economic Integration are exempt from the surcharge.

Payments for Invisibles

All transfers abroad on account of current invisibles require authorization by the Exchange Department, mainly for the purpose of checking capital transactions. Payments of up to Q 200 to Costa Rica, El Salvador, Honduras, and Nicaragua do not require authorization by the Exchange Department.

Requests for foreign exchange for payments for current invisibles must be supported by such documents as may be required by the Exchange Department to verify that the operation is genuine. The sale of foreign exchange for most categories of current invisibles, including remittances of income from and repayments of registered foreign loans and investments, is authorized freely. For certain payments for current invisibles, exchange is sold up to established limits; in some cases, requests in excess of these limits are approved. There is an exchange allowance equivalent to a maximum of Q 2,500 a person in any one year for tourist travel abroad, as follows: to Central America, Q 300; to Mexico, Panama, and the Caribbean area, Q 750; and to the rest of the world, Q 2,500. Minors not traveling alone are entitled to half these allowances. The exchange allocation for travelers on business is Q 750 a person for journeys to British Honduras and the Mexican border towns, and Q 2,500 for journeys to other parts of the world. The exchange allocation for remittances abroad for family maintenance is Q 250 a month for each relative (Q 200 for those under 18 years of age), up to a maximum of Q 700 a month for each beneficiary family. Foreign technical personnel employed in Guatemala may remit abroad up to two thirds of their salaries if their families reside abroad, or up to one third if their families reside in Guatemala. Foreign technicians leaving the country permanently may, subject to individual approval, transfer their savings up to the full amount of their earnings in Guatemala. Limits are also imposed on remittances for students’ expenses abroad.

The export of Guatemalan banknotes is not prohibited; however, Guatemalan banknotes received from abroad are not converted by the Bank of Guatemala unless they come from Costa Rica, El Salvador, Honduras, and Nicaragua. For these countries, the Bank of Guatemala guarantees monthly conversions into U.S. dollars up to the following limits: Costa Rica, Q 125,000; El Salvador, Q 300,000; Honduras, Q 300,000; and Nicaragua, Q 125,000. There are no regulations prohibiting the export of foreign banknotes.

Exports and Export Proceeds

All exports require an export license from the Exchange Department of the Bank of Guatemala. Exports to Central American countries of goods included in the General Treaty for Central American Economic Integration are exempt from this requirement; for these goods, the exporter must complete a special form required by the Exchange Department presenting evidence that the export proceeds have been sold or have been committed to be sold to an authorized bank. The application for an export license must be accompanied by a full description of the nature of the transaction, including the terms and method of payment. The Exchange Department issues licenses only if certain conditions have been met: (1) for exports paid for in advance or in cash, it requires evidence that the export proceeds have been sold or committed to be sold to an authorized bank; (2) for exports on credit, it requires an undertaking to sell the relevant exchange to an authorized bank within 90 days of the date the license is issued; (3) for exports on consignment, it requires the exporter’s certified declaration showing the value of the export and his undertaking to sell the relevant exchange to an authorized bank within a period not exceeding 180 days after the declaration date.

Proceeds from Invisibles

Foreign exchange proceeds from invisibles must be surrendered. The purchase of Salvadoran banknotes by authorized banks is limited to 0 500 a person.

Capital

All foreign capital investments in Guatemala must be registered with the Exchange Department of the Bank of Guatemala. All outgoing capital payments require exchange licenses, which are granted freely in respect of remittances of proceeds from the liquidation of all registered foreign investments. Transfers abroad of resident-owned capital are not permitted.

Changes during 1964

May 5. The exchange allocations for tourist travel to various countries were increased. The maximum exchange allocation a person for tourist travel in any one year was raised from Q 1,500 to Q 2,500. The exchange allocation for business travel was raised to Q 750 for journeys to British Honduras and the Mexican border towns, and to Q 2,500 for journeys to other parts of the world.

May 5. Foreign technicians leaving the country permanently could, subject to individual approval, transfer their savings up to the full amount of their earnings received in Guatemala.

June 1. Applications for foreign exchange for the payment of imports could be processed directly by the authorized banks; previously such applications had to be presented to the Exchange Department of the Bank of Guatemala for approval. Exceptions to the new provisions were applications for foreign exchange that were not accompanied by the required supporting import documents, as well as those for imports on a c.o.d. basis; such applications continued to require the approval of the Bank of Guatemala.

Guinea

Exchange Rate System

No par value for the currency of the Republic of Guinea has been established with the Fund. The unit of currency is the Guinean franc (introduced March 1, 1960), defined as a monetary unit containing 0.0036 gram of fine gold. It corresponds to GF 50 = 1 French franc and GF 246.853 = US$1.

Exchange transactions of the Central Bank of the Republic of Guinea with the public are carried out at fixed rates.

Administration of Control

The Central Bank of the Republic of Guinea is the only authority in exchange control matters; this authority is carried out through the Exchange Control Office, which is administered by the Bank. The Bank has not delegated any of its exchange control powers to any other bank or institution. All settlements with foreign countries, including payments for imports, require individual licenses from the Exchange Control Office.

The National Licensing Commission screens all applications for import and export licenses. Licenses are issued, within the framework of an annual program, by the Ministry of Foreign Trade and Banks (the Office of the Director of Foreign Trade) only for those applications which are submitted by the National Licensing Commission.

Prescription of Currency

Settlements on account of transactions covered by bilateral payments agreements are made in currencies prescribed by, and through accounts established under, the provisions of the agreements.1 Settlements with other countries are made in convertible currencies.

Nonresident Accounts

There are three types of nonresident accounts: Nonresident Transferable Accounts in Foreign Currencies; Nonresident Transferable Accounts in Guinean Francs; and Blocked Accounts.

Balances in Blocked Accounts, which are maintained in Guinean francs, represent funds held with Guinean banks by nonresidents when their businesses were nationalized. When the commercial banks were liquidated, these balances were transferred to the Crédit National, the principal government-owned deposit bank. No regulations have yet been issued to permit debits to Blocked Accounts.

Imports and Import Payments

All imports require individual licenses, which are issued by the Ministry of Foreign Trade and Banks: the authorization for the corresponding payments is granted by the Exchange Control Office after the import license has been screened and approved by the National Licensing Commission. Once an import license has been issued and approved, this constitutes a guarantee that the foreign exchange for that import will be made available. Imports by foreign concession holders require import licenses for statistical purposes only and are not restricted.

Imports into Guinea are made within the framework of an annual import program. This program is established by the Ministry of Foreign Trade and Banks on the basis of the country’s import needs, the domestic production possibilities of import substitutes, commitments under bilateral agreements, and experience with the previous year’s import program. The program requires approval by the National Licensing Commission, which takes into consideration the amount of imports foreseen under the program, the sources of imports, and the availability of convertible currencies and of balances under payments agreements. The program is then submitted for government approval.

Certain items are imported outside the import program. These are goods for which foreign exchange is derived from sources other than the exchange reserves of Guinea, e.g., imports made by certain foreign concession holders (the Fria Company and the Compagnie Minière de Conakry) and by foreign embassies. These additional imports amount to about 25 per cent of the value of the import program. Almost all goods included in this program are imported by state trading companies that specialize in various types of commerce.

In order to encourage the repatriation of foreign exchange, a relatively liberal policy is followed with regard to the issue of import licenses to foreigners residing in Guinea who hold foreign exchange abroad. In such instances, the import of products not included in the import program is also permitted.

Payments for Invisibles

All payments for invisibles require the authorization of the Exchange Control Office. Exchange for various purposes is granted as follows: (1) Expatriate workers in Guinea may transfer abroad up to 30 per cent of their net monthly salaries if employed in the private sector and up to 40 per cent if employed in the public sector. (2) Payments for family support may be made up to GF 10,000 a month for each beneficiary, whether a child or an adult. (3) For officially recognized study abroad, the student’s relatives may transfer the equivalent of the amount of a government scholarship, i.e., GF 22,500 a month. (4) There is no basic allocation for tourist travel; each application is considered individually, a restrictive policy being followed in this respect. Individual authorization also is required for the payment in Guinea of all fares for foreign travel. (5) Applications for exchange for business travel are considered on their merits. (6) Pilgrims are granted exchange up to the equivalent of GF 60,000. (7) Import licenses are issued on a c.i.f. basis. No exchange is granted for other types of insurance with companies abroad. (8) The Foreign Investment Law guarantees that at least 20 per cent of the net annual profits of foreign investments may be transferred abroad. The percentage actually permitted to be transferred depends on the agreement concluded between the enterprise concerned and the Government. (9) In addition to any other transfers they may be permitted to make, foreign planters are permitted to transfer abroad GF 4 per kilogram of pineapples exported, GF 3 per kilogram of bananas exported, and GF 2 per kilogram of citrus fruit exported.

The export of Guinean currency is prohibited.

Exports and Export Proceeds

The Ministry of Commerce establishes an annual export program, which requires the approval of the National Licensing Commission and the Government.

All exports require individual licenses in order (1) to assure the implementation of the export program (particularly in respect of commitments under bilateral trade agreements); (2) to permit the Treasury to levy certain duties (e.g., mining companies must pay export taxes of 6 per cent on the value of ores exported); (3) to prevent shortages of goods needed for domestic consumption; and (4) to prevent the export of capital. Special authorization from designated agencies is required in addition to the export license for the following commodities: wild animals (dead or alive), edible animals, articles of historical or ethnographical interest, jewelry, articles made of precious metals, and plants and seeds.

Most exports other than those effected by foreign companies are made by a state institution, Guinexport. Exports of diamonds are made through a free diamond exchange (Bourse de Diamants) and export licenses are granted only to brokers registered with the Bourse.

Foreign planters are granted special transfer privileges related to the quantity of pineapples, bananas, or citrus fruit exported (see section on Payments for Invisibles, above).

All export proceeds must be surrendered; the Fria company, however, is allowed to retain two thirds of its export proceeds. An export license is granted only when the exporter assumes the obligation to surrender the proceeds immediately after they are collected.

Proceeds from Invisibles

Exchange proceeds accruing to residents in respect of invisibles must be surrendered. The import of foreign banknotes is permitted freely, subject to declaration on entry. Nonresidents may retain the foreign banknotes they brought in and may sell them locally to finance their expenses, whereas Guinean nationals are required to surrender all foreign banknotes they bring in. The import of Guinean currency is prohibited.

Capital

All capital transactions and transfers involving nonresidents are subject to individual licenses.

A foreign investment law of April 6, 1962, which replaced the more restrictive one of May 1960, provides guarantees against nationalization for foreign investments in the industrial and mining sectors; it also provides for preferential tax and customs treatment applicable to foreign investments and for the transfer of profits and proceeds accruing from the liquidation of such investments. The actual conditions under which foreign investments may be made are subject to negotiations within the terms of this code.

Changes during 1964

October 10. A bilateral payments agreement with Sierra Leone was signed.

November 8. With minor exceptions, Guinean nationals holding foreign exchange abroad could no longer use this exchange for import payments.

November 8. A Ministry of Foreign Trade and Banks and a Ministry of Domestic Trade were created. Attached to the former were the Office of the Director of Foreign Trade and the export company Guinexport. Attached to the Ministry of Domestic Trade were the import and distribution companies; this ministry included the Office of the Director of Domestic Trade.

November 11. A bilateral payments agreement with Algeria was signed.

Haiti

Exchange Rate System

The par value is Haitian Gourdes 5.00 = US$1. This rate is applicable to all transactions. Exchange transactions by commercial banks with the public are subject to small banking commissions. There are no controls or restrictions on foreign transactions. 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 nonresidents are imposed.

Imports and Import Payments

Although the law provides for the imposition of quantitative residents are not subject to exchange control. 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 deposits collected from residents of Haiti.

Exports and Export Proceeds

A few exports require licenses. Gold coins, bullion, etc., may be exported only by the National Bank of the Republic of Haiti. The proceeds of exports are not subject to exchange control.

Payments for and Proceeds from Invisibles

Payments for invisibles are not restricted. 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. 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 deposits collected from residents of Haiti.

Changes during 1964

April 22. Importers were required to obtain the approval of the Department of Commerce and Industry prior to placing purchase orders abroad for footwear made of leather or imitation leather.

Honduras

Exchange Rate System

The par value is Honduran Lempiras 2.00 = US$1. The official rates are L 1.98 buying, and L 2.02 selling, per US$1. Banknotes and coins in Costa Rican colones, Guatemalan quetzales, Nicaraguan córdobas, and Salvadoran colones are purchased at parity rates minus an official exchange commission of 1 per cent and sold at parity rates plus an official exchange commission of ½ of 1 per cent. Honduras has no exchange restrictions on foreign payments. Exchange may be purchased from local banks without restriction; however, for statistical purposes, buyers are required to file an application stating how the exchange will be used. 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. 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

No obligations prescribing the method of currency for payments to or from nonresidents are imposed. Payments to Costa Rica, El Salvador, Guatemala, Mexico, and Nicaragua in respect of trade and invisibles may be settled in Honduran lempiras through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries.

Imports and Import Payments

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

Exports and Export Proceeds

Exports do not require licenses. The proceeds of exports are not subject to exchange control, and the foreign exchange may be retained or used 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.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

Capital payments are not subject to exchange control.

Changes during 1964

No significant changes took place in 1964.

Hong Kong

Exchange Rate System

The par value is Hong Kong Dollars 5.71429 = US$1. The exchange rate system comprises official rates and free market rates; as far as rates for the U.S. dollar are concerned, these are, in practice, within 1 per cent of the par value. As at December 31, 1964, rates in the official market were 1s. 3132d. buying, and 1s. 21516d. selling, per HK$1, or HK$5.68⅜ buying, and HK$5.76½ selling, per US$1; rates in the free market on that date were HK$5.76 buying, and HK$5.76¼ selling, per US$1. The official market rates are those of authorized banks, based on the sterling–Hong Kong dollar rate (agreed informally by the three note-issuing banks with the Hong Kong Exchange Fund) and the sterling-foreign currency rates in the London foreign exchange market.

The official rates apply to all transactions in Hong Kong dollars against sterling, to the proceeds in U.S. dollars of exports not of local or neighboring origin, and to most authorized non-dollar transactions. The free market rates apply to other transactions.

Administration of Control

Exchange control authority is vested in the Financial Secretary of the Colony. Fifty banks are authorized to conduct exchange transactions within the framework of the local regulations and subject to specific or general approval of the local control. These authorized banks are permitted to conclude exchange transactions only at the official market rates. The free market is operated by other banks and financial institutions. Import and export licensing is carried out by the Director of Commerce and Industry.

Prescription of Currency

The Colony of Hong Kong is part of the Sterling Area, and all settlements except those through the free market must be made by the method and in the currency prescribed in the exchange regulations, as described in the following paragraphs.

Settlements for exports to and imports from other parts of the Sterling Area may be made in any Sterling Area currency. Licenses are required, however, for all payments made from Hong Kong to, or received in Hong Kong from, residents of other parts of the Sterling Area, except that authorized banks may freely make or receive such payments in respect of the following: (1) bona fide trade between Hong Kong and other Sterling Area territories; (2) payments between authorized banks or their branches in the Sterling Area for the purpose of transferring banking funds to an authorized bank or for the settlement of the exchange transactions of an authorized bank; (3) bulk payments in favor of banks or recognized dealers in Hong Kong when the payments are for bona fide family remittances and no individual payment exceeds HK$8,000; and (4) other payments not exceeding £500 or the equivalent in other Sterling Area currencies.

Payment in Hong Kong dollars for exports to Mainland China, the Republic of China, and Macao is permitted; imports from these territories may be paid for in Hong Kong dollars (but not to the credit of an External Account; see section on Nonresident Accounts, below) without exchange control approval. The proceeds of exports to all other countries outside the Sterling Area must be received in Hong Kong dollars from an External Account, in sterling from an External Account held with an authorized bank in the Sterling Area, in a foreign currency emanating from outside Hong Kong and freely exchangeable for sterling or Hong Kong dollars (the foreign currency must be surrendered to an authorized bank), or by international money order issued outside the Sterling Area; however, U.S. dollar proceeds of exports to the dollar area or to the Republic of Korea of goods originating in Mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao may be sold in the free market to the extent of the f.o.b. value of the goods; proceeds from freight and insurance payments have to be surrendered to an authorized bank. Payment for imports from countries outside the Sterling Area may be made by crediting sterling or Hong Kong dollars to an External Account or in any foreign currency.

For merchanting transactions by Hong Kong firms in goods bought from and sold to countries outside the Sterling Area, outgoing payments may be made in a Sterling Area currency to the credit of an External Account or in any foreign currency, provided that the incoming payment is received in a Sterling Area currency from an External Account or in a foreign currency from outside Hong Kong and which is freely exchangeable for sterling or Hong Kong dollars.

Nonresident Accounts

The treatment of nonresident accounts distinguishes between those of residents of other parts of the Sterling Area (their accounts being treated the same as accounts of residents of Hong Kong), those of recognized banks situated outside the Sterling Area (External Accounts), and those of other nonresidents outside the Sterling Area.

The accounts of companies and individuals resident outside the Sterling Area are treated in the same way as the accounts of residents, except that, without exchange control permission, they may not be overdrawn or be debited for any payment outside Hong Kong.1

The accounts of recognized banks situated outside the Sterling Area are termed External Accounts. These may be credited with permitted payments from residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currencies to authorized banks. They may be debited freely, but they may not normally be overdrawn, and an order for the purchase of foreign currency may be executed only by an authorized bank.

Imports and Import Payments

Except for certain dutiable and dangerous commodities, imports are free of license. If the prescription of currency requirements are fulfilled, and if related shipping documents are presented when the value of the consignment exceeds £250, the authorized banks may freely make payments to residents of countries in the Sterling Area for imports from the Sterling Area, and to residents of other countries for individual shipments not exceeding £10,000 in value from those countries.2 To make payment or establish letters of credit through an authorized bank for imports from the dollar area for local consumption or for re-export to Mainland China, the Republic of China, or Macao, the importer must surrender to an authorized bank U.S. dollars or Canadian dollars in amounts equivalent to the value of the imports; these currencies may be purchased in the free market. Imports from Mainland China, the Republic of China, or Macao are normally paid for in Hong Kong dollars (but not to the credit of an External Account), and exchange control approval is not required.

An exchange control form must be submitted for prior approval for payments for imports not covered by the regulations described above. These include (1) imports for which documents are not presented, payment is required in advance of shipment,3 and payment is not in accordance with the usual prescription of currency requirements; (2) goods imported specifically for re-export; and (3) all imports of diamonds, ships, and boats.

Payments for Invisibles

Payments made through authorized banks and not exceeding £500, or the equivalent in other Sterling Area currencies, to other parts of the Sterling Area do not require approval; for larger amounts, exchange control permission is necessary. The authorized banks have power to approve payments to nonresidents for most invisibles up to certain limits (no exchange control form is required when the payment does not exceed £100 or the equivalent). Payments for invisibles above these limits need the approval of the exchange control, which is normally granted. The basic allowance of exchange at the official rate for residents (for exchange control purposes) of Hong Kong traveling to countries outside the Sterling Area or beyond Macao is £250 or the equivalent for each individual journey. Applications for exchange in excess of this allowance to cover genuine travel expenses may be made to the exchange control. In any event, payments may be made freely through the free market by holders of Hong Kong dollars.

Exports and Export Proceeds

Exports to any destination of certain strategic goods and of such commodities as textiles and garments are subject to restrictive licensing. For exports to countries outside the Sterling Area, Mainland China, the Republic of China, and Macao, the exporter must submit to the Department of Commerce and Industry, for approval, a declaration showing how the export proceeds will be collected. If payment is not being received within six months and in accordance with prescription of currency requirements, the circumstances must be reported to the exchange control. The U.S. dollar proceeds of exports to the dollar area or to the Republic of Korea of goods originating in Mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao are freely disposable to the extent of the f.o.b. value of the goods; proceeds from freight and insurance payments have to be surrendered to an authorized bank. The proceeds of exports must be obtained in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

Receipts exceeding £500, or the equivalent in other Sterling Area currencies, from other parts of the Sterling Area require permission. When freight and insurance on exports that have originated in Mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao, and that have been financed in U.S. dollars, are paid in Hong Kong by the exporter in sterling or in Hong Kong dollars, the exporter must surrender the U.S. dollar proceeds of that freight and insurance at the official market rate. Other exchange receipts from invisibles need not be surrendered.

Capital

Licenses are required for transfers abroad of capital in currencies other than the U.S. dollar; these are granted at the official market rate only for approved purposes or, if the equivalent in U.S. dollars has been sold to an authorized exchange bank, at the discretion of the local control. Exchange for the repatriation of foreign capital is normally provided at the official market rate if the exchange control had given prior approval of the investment. Transfers of capital may be made freely in Hong Kong dollars through the free market. However, licenses are required for all receipts from, as well as transfers to, other parts of the Sterling Area which exceed £500 or the equivalent in other Sterling Area currencies; these licenses are granted for all bona fide transactions between Hong Kong and other parts of the Sterling Area.

Changes during 1964

March 20. Hong Kong applied the provisions of the General Agreement on Tariffs and Trade in its relations with Japan.

Iceland 1

Exchange Rate System

The par value is Icelandic Krónur 43.00 = US$1. The official rates are IKr 42.95 buying, and IKr 43.06 selling, per US$1. Rates for other currencies are based on these rates and the dollar rates for such currencies in other countries. Rates for settlements through clearing accounts are fixed. The authorized banks are permitted to carry out exchange transactions among themselves and to engage in arbitrage in foreign markets.

Exchange Control Territory

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

Administration of Control

The Ministry of Commerce has the ultimate decision on matters concerning import and export licensing and on payments for invisibles. The Central Bank of Iceland is responsible for the regulation of foreign exchange transactions and of exchange control, and for ensuring that all foreign exchange due to residents is surrendered to the authorized banks and that such exchange is disposed of as authorized. The two largest Icelandic banks, the National Bank of Iceland and the Fisheries Bank, are the only banks, other than the Central Bank, that are authorized to deal in foreign exchange. In addition, they issue import and exchange licenses in consultation with the Ministry of Commerce. Export licenses are issued by the Ministry of Commerce.

Prescription of Currency

All settlements with the seven countries with which Iceland maintains bilateral payments agreements must be made exclusively through clearing accounts, denominated as follows: with Rumania and the U.S.S.R., in Icelandic krónur; with Brazil, Hungary, and Poland, in sterling; with Czechoslovakia, in Icelandic krónur and Czechoslovak korunas; and with Eastern Germany, in U.S. dollars. As a general rule, exchange receipts from other countries must be obtained in convertible currencies. In practice, settlements with countries in the dollar area are made in U.S. dollars; with countries in the Sterling Area and some other countries, in sterling; and with all other countries, in their respective currencies.

Nonresident Accounts

There are two categories of nonresident krónur accounts: Foreign Accounts and Special Accounts.

Foreign Accounts may be credited with the proceeds from the sale of foreign currency to authorized banks and with authorized payments due to nonresidents from residents. Balances on Foreign Accounts may be used for authorized payments to residents and may be converted into the currency of the country of residence of the account holder. These accounts are in practice seldom used, payments for international transactions generally being made in U.S. dollars or sterling.

Special Accounts may be opened by agreement with an authorized bank. The most important of these accounts are those of foreign banks and foreign insurance companies. They may be credited freely, up to certain limits, with payments from residents.

Imports and Import Payments

All goods not included on the restricted list or subject to state trading (see below) may be imported freely without an import license from any country; in 1963, such imports constituted 72.4 per cent of the value of total imports. Commodities listed under some 450 customs headings or their parts (mainly live animals, foodstuffs, and a large number of other consumer goods) are included in the restricted list and are subject to quantitative restriction. Most of these goods are admitted, subject to individual license, under global quotas that apply to all countries with which Iceland does not maintain bilateral payments agreements. The remaining goods on the restricted list are admitted from the same countries on the basis of individual licenses issued on a discretionary basis. All goods on the restricted list require individual licenses when imported from bilateral payments agreement countries; licenses in this case are generally issued in accordance with bilaterally agreed quotas. Certain imports are only admitted under state trading.

Except for imports of automobiles, a fee of ½ of 1 per cent (minimum IKr 10.00) is charged as a license fee on the krónur amount of the import license when the license is issued. This fee is not charged on licenses for imports from countries with which Iceland maintains bilateral payments agreements. A fee of 25 per cent is charged as a license fee on the krónur amount of the import license for automobiles from all sources.

Importers of goods not requiring licenses do not have to obtain a foreign exchange permit prior to shipment from abroad, provided that the purchase is payable at sight. On the other hand, the goods will not be cleared by the customs unless payment has already been made or the importer has arranged with an authorized bank for the payment. An importer may either open a letter of credit or obtain a payment certificate which enables him at any time to buy foreign exchange to pay for the goods. For imports that require individual licenses, foreign exchange is granted in accordance with the terms stipulated in the license.

Payments for Invisibles

No exchange license is required for government payments (such as interest and amortization on external loans, expenses of the foreign service, payments to international organizations, payments for postal, telegraphic, and telephone services), for banking commissions, or for bank charges on foreign exchange transactions.

Most other outgoing payments are licensed freely on the basis of bona fide documents. An exchange allocation for tourist travel is granted up to US$280 a year, or its equivalent in other currencies, for each person. Applications for exchange for repair of ships, repair of means of transport other than ships and aircraft, transactions and transfers in connection with direct insurance, and insurance business operations abroad are considered on their merits.

Residents traveling abroad may take with them foreign banknotes and coins which they possess legally, and Icelandic banknotes and coins not exceeding IKr 2,500. Nonresidents may re-export the foreign banknotes and coins, and up to IKr 2,500 of the Icelandic banknotes and coins, which they brought into Iceland.

Exports and Export Proceeds

All commercial exports require licenses. Exchange receipts accruing from exports must be surrendered without undue delay.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered without undue delay. The owners of Icelandic ships and aircraft are, with the approval of the authorized banks, permitted to retain their foreign exchange receipts from freight, passenger tickets, or other charges, and to use them for operating purposes and for purchases of necessities for the homeward journey of the ship or aircraft. Icelandic insurance companies which reinsure abroad are permitted to retain foreign exchange earned from premiums and indemnities and to use it to pay reinsurance premiums, claims, and other regular expenditures of the insurance business in the country where the foreign exchange was earned.

Residents may bring in, upon re-entering the country, up to IKr 2,500 in Icelandic banknotes and coins; the limit for nonresident travelers is IKr 5,000. There are no limitations on the import of foreign banknotes and coins.

Capital

All foreign investments in Iceland are subject to individual approval. The participation of nonresidents in Iceland’s joint stock companies may not exceed 50 per cent. Nonresident-owned foreign capital entering in the form of foreign exchange must be surrendered. Nonresidents may be authorized to open nonresident accounts for these funds, in which case their retransfer abroad may be permitted.

Residents are obliged to surrender foreign exchange accruing to them on account of capital transactions and payments. Without the approval of the Government, residents may not obtain loans abroad, including loans for financing imports, for periods exceeding one year. Applications for the contracting of financial credits and loans abroad for a period of less than one year are considered on their merits and approved only in exceptional circumstances. The Contracting of commercial credits abroad for a period of between 3 and 12 months is also approved only in exceptional circumstances, e.g., in connection with the import of industrial raw materials for which the production process is lengthy, construction materials, etc. Commercial banks may freely permit import credits of up to 90 days, except for the financing of a number of specified imports, including motor vehicles for personal use, various household appliances, specified foods, various types of clothing, precious and semiprecious stones, watches and clocks, toys, and portland cement. Transfers of capital abroad by residents require approval, which is granted only in exceptional cases.

Nonresidents may acquire Icelandic securities and other assets with imported funds; the transfer abroad of the proceeds from the sale of these assets and securities requires authorization. Securities held in Iceland by nonresidents must be registered, and all transactions and operations concerning them are subject to licensing. The import and export of securities by residents are subject to the approval of the Central Bank.

Changes during 1964

March 5. The provisional accession of Iceland to the General Agreement on Tariffs and Trade was approved by the Contracting Parties.

July 1. The permission to use freely suppliers’ short-term credits of up to 90 days was withdrawn for a large number of imports, including specified foods, portland cement, perfumes, sanitary goods, various types of clothing, leather goods, lamps, carpets, precious and semiprecious stones, sewing machines, typewriters, bicycles, watches and clocks, furniture, and toys.

August 1. The import of a number of commodities listed under some 30 tariff headings or their parts, and previously included in the restricted list, was liberalized. The goods included fruit juices, vegetable juices, articles of fur, wall and floor tiles, and glass mirrors.

Note.—The following change was made early in 1965:

January 1. An import license fee of 25 per cent was introduced on imports of automobiles from all sources.

India

Exchange Rate System

The par value is Indian Rupees 4.76190 = US$1. Transactions in foreign exchange are conducted through authorized dealers, as follows: in sterling, at rates fixed by the Foreign Exchange Dealers Association; in other currencies, at rates fixed on the basis of the London market rates for sterling against the other currency concerned. Authorized dealers are permitted to cover their requirements of foreign currencies in the London market, and to cover their permitted transactions in certain currencies1 against sterling, rupees, or any one of these currencies, either spot or forward for periods not exceeding six months, with authorized banks in any country outside the Bilateral Account group.2 On December 31, 1964, market rates for telegraphic transfers on London were 1s. 6132d. buying, and 1s. 53132d. selling, per Re 1, and for telegraphic transfers on New York they were Rs 4.7625 buying, and Rs 4.7950 selling, per US$1.

Administration of Control

Exchange control is administered by the Reserve Bank of India, in accordance with the general policy laid down by the Government of India in consultation with the Reserve Bank. Much of the routine work of exchange control is delegated to certain commercial banks, which act as authorized dealers permitted to buy and sell foreign exchange for specified purposes under regulations laid down by the Reserve Bank.

Prescription of Currency

India is a member of the Sterling Area and has an exchange control system similar to that of the United Kingdom but adapted to suit local requirements. For prescription of currency purposes, countries are divided into three groups: Sterling Area countries, Bilateral Account countries,2 and the Convertible Account group (all other countries).

Payments to and from Sterling Area countries may be made in sterling or any Sterling Area currency, except Indian rupees, through the account of a resident of any Sterling Area country except India, or in Indian rupees through the account of a bank in any Sterling Area country except India. Payments to and from Bilateral Account countries must be settled in Indian rupees through the appropriate clearing account. Payments to countries in the Convertible Account group may be made in rupees or sterling to the credit of the account of a resident of any country in this group 3 or in any listed currency.4 Receipts from the Convertible Account group may be obtained in any listed currency,4 in rupees from the account of a bank in any country in this group, or in sterling from an External Account in the United Kingdom.

Nonresident Accounts

The accounts of residents of Bhutan and Nepal are treated as resident accounts.5 Accounts related to all other foreign countries are treated as nonresident accounts. The treatment of these accounts distinguishes between those of banks and of others.

The accounts of banks are classified in three groups corresponding to the division of countries for prescription of currency purposes, i.e., Sterling Area Accounts, Bilateral Accounts, and Convertible Accounts. These accounts may be credited with payments for imports, interest and dividends, and other authorized payments, with authorized transfers from the nonresident accounts of private firms or persons, with proceeds from sales of the currency of the country or monetary area of the account holder, and with proceeds from sales of sterling from the appropriate nonresident sterling account in the United Kingdom. They may be debited for payments for exports, and for other payments to residents of India. These accounts may also be debited for remittances by Indian nationals resident in the Sterling Area for credit to their accounts in India or for payment to Indian nationals resident in India. Transfers may be made from Convertible Accounts to other Convertible Accounts or to Sterling Area Accounts, and between Sterling Area Accounts. All other entries on Sterling Area Accounts, Bilateral Accounts, and Convertible Accounts require the prior approval of the Reserve Bank.

Nonresident accounts of private individuals or firms may be credited, without prior approval, for payment of dividends and interest on securities; refunds of amounts previously debited or overcharged; proceeds from checks issued by the Life Insurance Corporation in respect of maturity or death claims and surrendered value of policies held by nonresidents, provided that the Corporation certifies that premiums had been received in India in an approved manner and that actuarial reserves are held in India; and proceeds from the sale of Indian Government securities and of units issued by the Unit Trust of India which were originally purchased from funds in the same nonresident account. These accounts may be debited without prior approval for such items as payments for premiums on life insurance policies of the account holder or his dependents; all taxes due from the account holder in India; allowances not exceeding Rs 1,000 a month to relatives and dependents; investment in Indian Government securities and in units issued by the Unit Trust of India; and for checks up to Rs 1,000 a week drawn in favor of beneficiaries resident in India or in favor of the account holder while temporarily resident in India. All other credits and debits require the prior approval of the Reserve Bank. Transfers are not normally permitted from nonresident accounts of individuals or firms to nonresident accounts of banks, unless the amounts originally credited to such accounts could have been transferred abroad.

There are also blocked accounts, to which are credited capital proceeds that are due to nonresidents and may not be remitted abroad. Balances on blocked accounts may be placed on fixed deposit or invested in approved Indian rupee securities; the income derived from such investments may normally be remitted to the owner’s country, with the approval of the Reserve Bank.

Imports and Import Payments

Practically all imports require individual licenses. Individual licenses may be issued ad hoc, or on the basis of quotas allocated to established importers in accordance with their imports in a base period and to actual users on the basis of their entitlements/certified requirements. Generally licenses may be used to import from any country except South Africa and South West Africa. Licensing policy generally accords priority to foodstuffs, capital goods, raw materials, and other industrial requirements, while the import of other items is severely limited or prohibited. At the beginning of each financial year, an announcement on import control policy is made in the form of a Red Book, which gives in detail the policy for established importers and actual users. Licensing is in most cases on an annual basis, subject to the condition that only the first half of the annual license may be used in the first six months of the validity period of the annual license, and the second half of the license will, subject to such change as may be decided upon, be endorsed for use in the second six months and within the extended period of validity allowed for this purpose. In other cases, licenses are issued for the first six months, and a supplementary license is issued later for the second six months. There are special procedures applicable to imports of capital goods, of heavy electrical plant, and of goods imported to fulfill government contracts and for irrigation projects. In licensing imports of a capital nature, their essentiality, their potential for earning or saving foreign exchange, and the availability of medium-term or long-term credits for financing such imports are taken into account.

Where a valid import license is held, the required exchange is released by an authorized bank on presentation of the exchange control copy of the license. License holders may make payments by opening letters of credit or by remitting against sight drafts. Advance remittances before shipping documents can be submitted are not normally allowed; but in special cases, e.g., imports of machinery and capital goods, where deposits have to be made with overseas manufacturers, the Reserve Bank grants special authorization for advance payment for a part of the value of the import.

Payments for Invisibles

In general, payments abroad for invisibles require approval. Except for travel, insurance, and a few other items, foreign exchange is granted freely for such payments, especially for expenses incidental to trade transactions and transfers of recurring contractual obligations.

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

There are no restrictions on the remittance of profits, dividends, and interest to nonresident beneficiaries, provided that all current tax and other liabilities in India have been cleared. However, remittances to Indian nationals who emigrated on or after January 1, 1963 of dividends and interest on shares, securities, and deposits held in India require the prior approval of the Reserve Bank or are subject to any special directions given to the person concerned when he was granted emigration facilities; such remittances are subject to an over-all limit of Rs 20,000 a year.

Foreign employees are permitted to make reasonable remittances to their own countries to pay insurance premiums, for the support of their families, and for other expenses. Authorized dealers may allow such remittances by foreign nationals other than nationals of Pakistan up to Rs 1,500 a month, provided that this amount does not exceed 50 per cent of the remittor’s net income. Nationals of Pakistan are allowed to remit up to Rs 50 a month for the support of their dependents in Pakistan.

Applications for foreign exchange for travel or education abroad are considered on an individual basis. Travel agents and companies are not permitted to book passages abroad for persons resident in India unless the traveler has been granted travel exchange by the Reserve Bank or has been specifically granted permission by the Reserve Bank to book his passage.

The export of Indian currency notes and coins except by travelers to Nepal is, in general, prohibited. However, deck passengers to Burma, Malaysia, Singapore, Persian Gulf ports, and East Africa, and travelers to Ceylon and Pakistan, may take with them Rs 20 a person at any one time. Residents may take out foreign notes and coins up to Rs 40 a person: authorized money-changers at airports and seaports are permitted to sell foreign currency notes up to a value of Rs 40 a person to all passengers, whether Indian or foreign, who have made payments for the fare in rupees in India; nonresidents may take out the foreign notes and coins which they declared on entry, less the amounts sold to authorized dealers in India.

Exports and Export Proceeds

Export licenses are required for only a few items, and most commodities may be exported without a license. Most of the controlled commodities are licensed freely to all shippers; a few may be exported through established shippers; and a few commodities are subject to export quotas. Exports to Pakistan of potatoes, potato seed, and onions are allowed under open general license. Exports to South Africa, South West Africa, and Tibet are prohibited.

Exchange control is exercised over the proceeds of exports to countries other than Bhutan and Nepal. An exporter must declare that the full export proceeds will be received and dealt with in accordance with the prescription of currency regulations.

Foreign exchange holdings, including the proceeds of exports, in most currencies6 must be offered for sale against rupees to an authorized dealer, unless the holder has been authorized by the Reserve Bank to retain them, or the holdings are the balance on July 8. 1947 in a sterling account held by him, or he is not domiciled in India and the funds do not represent the proceeds of an export.

Proceeds from Invisibles

Proceeds from invisibles in certain currencies 6 must be surrendered.

The import of Indian currency notes and coins is, in general, prohibited. However, deck passengers from Malaysia, Singapore, Persian Gulf ports, and East Africa, and travelers from Ceylon and Pakistan, may import into India Rs 20 a person against presentation of evidence that they previously had exported this amount from India. Persons coming to India from Burma are allowed to bring in Indian currency notes up to a value of Rs 50 for an adult and Rs 25 for a child between the ages of 12 and 18. Travelers from Nepal may bring in up to Rs 75 a person. Foreign currency notes may be brought into India without limit, provided that a declaration of the total amount brought in is made to the customs authorities upon arrival. Persons holding duly certified declaration forms may sell the relevant currency notes to any money-changer or authorized dealer in foreign exchange.

Capital

The inward movement of capital is practically free, except when it is to form part of an investment requiring the prior approval of the Indian Government. Foreign investments once admitted are eligible for the same treatment that Indian enterprises receive. Repatriation of capital owned by persons residing in Sterling Area countries other than Pakistan, and by residents of Denmark, Norway, or Sweden, is authorized freely. Capital invested in approved projects after January 1, 1950 by residents of other countries, including capital appreciation on the original investment, may be repatriated at any time. The proceeds from liquidated foreign investments not eligible for repatriation are blocked (see section on Nonresident Accounts, above).

Indian nationals (including persons domiciled in India) are not normally granted any foreign exchange facilities for emigration purposes. In exceptional cases, foreign exchange may be released up to a limit of Rs 20,000 at the time of emigration and in three subsequent annual installments of Rs 10,000 each. The remainder of an emigrant’s assets are blocked; only income on such blocked assets is thereafter allowed to be remitted up to a limit of Rs 20,000 per annum. Foreign nationals who are resident but not domiciled in India are permitted at the time of their retirement to transfer to their own country the proceeds from the sale of their investments, subject to a limit of Rs 75,000 at the time of retirement and the remainder in annual installments not exceeding Rs 20,000 per annum, provided that the shares and securities concerned are quoted on recognized stock exchanges in India; in addition, they may transfer all their current remittable assets in India.

There are no restrictions on the import into India of Indian or foreign securities. The export of securities and their transfer to nonresidents require approval, as does also the sale, transfer, or other disposal of foreign securities. Persons resident in India are permitted to hold foreign securities that have been acquired in a manner not involving a breach of the Indian exchange regulations.

Changes during 1964

February 12. Remittances of commission by exporters to their selling agents abroad no longer required the prior approval of the Reserve Bank, provided that the agency agreement was registered with the Reserve Bank and that the documents were negotiated or sent for collection by the authorized dealer making the remittance.

March 23. Iranian nationals were permitted to effect family remittances not exceeding Rs 100 a month a family to Iran.

March 31. The import licensing policy for the year ending March 31, 1965 was announced. Quotas were cut for some low priority items or items where indigenous production had increased, and quotas were increased for some items essential to production for export and defense purposes. There was also some liberalization of import items required by small-scale industries. Import of five additional items were prohibited.

May 15. All bank accounts in India belonging to Chinese nationals who had left India, irrespective of their present residence, were blocked; all operations on such accounts required the prior approval of the Reserve Bank.

May 21. The daily foreign exchange allowances for certain types of travel were increased.

July 11. Exports of many crude and refined vegetable oils, including groundnut oil, became subject to individual export license.

July 17. Two bilateral accounts in Indian rupees were established for settlement of trade with Pakistan in specified commodities.

August 29. It was announced that Bengal Deshi cotton would be licensed freely for export during the 1964-65 season (September-August).

September 30. Authorized dealers were required to extend worldwide validity and negotiability to the travelers checks and travelers letters of credit issued by them, except those issued for travel to countries with which India had entered into bilateral payments arrangements.

October 8. The general permission was withdrawn under which authorized dealers could freely take up from, or grant to, principals, correspondents, and offices in the Sterling Area short-term loans and overdrafts. Henceforth, authorized dealers were freely permitted to grant or take up loans and overdrafts up to Rs 2 million to or from principals, correspondents, and offices abroad; lending or borrowing of sums in excess of that amount required the prior approval of the Reserve Bank.

October 14. It was announced that all importers would be granted the same import facilities, during the second half of the year ending March 31, 1965, as they had been given for the first half.

October 16. The authorized dealers’ authority to make remittances of dividends and interest on shares, securities, and deposits held in India by persons permanently resident outside India was extended to such dividends and interest accruing to Indian nationals who, after emigration, had taken up permanent residence abroad before January 1, 1963. Such remittances to Indian nationals who emigrated on or after January 1, 1963 required the prior approval of the Reserve Bank or were subject to any special directions given to the person concerned when he was granted emigration facilities.

November 2. Iranian nationals were permitted to make family remittances on the same scale applicable to other foreign nationals temporarily resident in India.

Indonesia 1

Exchange Rate System

No par value for the Indonesian Rupiah has been established with the Fund. The official rate is Rp 45.00 per US$1, but this is used only for accounting purposes. There is a basic rate of Rp 250 per US$1, officially called the transaction rate, which is used for certain essential imports and also serves as the basis for the calculation of the effective rates for all other payments and receipts. Exporters receive a Production-Inducement Certificate (SPP) entitling them to an automatic allocation of exchange equivalent to 20 per cent of their exchange receipts, and exporters in certain areas receive an additional certificate (SPP-Tambahan) entitling them to a further 10 per cent of their exchange proceeds. The SPP is transferable and is required for the importation of various goods. The free market rate of the SPP was Rp 6,625 per US$1 on December 31, 1964; during most of 1964, the Bank Indonesia offered these certificates at rates less depreciated than the free market rate. The effective rate for exporters amounts to the transaction rate plus 20 per cent (in some cases 30 per cent) of the SPP rate; the rate for importers using the SPP is based on the transaction rate plus 100 per cent of the SPP rate. Furthermore, the Bank Indonesia has offered “special” SPP’s at rates less depreciated than those prevailing for SPP’s. An exchange fee (LAAPLN fee) of 5 per cent is levied on all payments for imports and invisibles, except those for Category I imports effected at the transaction rate; this fee is calculated on the basis of the rate of Rp 250 per US$1. Payments for imports effected with government-allocated foreign exchange, except those settled at the transaction rate, are subject to a compulsory levy of Rp 1,350 per US$1 (see Table of Exchange Rates, below).

There are three effective buying rates: (1) The rate of Rp 520 per US$1 is applicable to all invisibles and capital and to transactions with oil companies; it is formed by adding to the transaction rate 20 per cent of the initial SPP rate of Rp 1,350 per US$1. (2) The rate of Rp 1,575 per US$1 applies to all exports other than those from the “former counterbarter trade area”;2 it is formed by adding to the transaction rate 20 per cent of the SPP rate prevailing in the free market. (3) The rate of Rp 2,237 per US$1 applies to all exports from the “former counterbarter trade area”; it is arrived at by adding 30 per cent of the prevailing free market SPP rate to the transaction rate.

There are seven effective selling rates: (1) The transaction rate of Rp 250 per US$1 applies to most Category I imports for which the Government allocates foreign exchange. (2) The rate of Rp 262, resulting from the addition of the 5 per cent LAAPLN fee to the transaction rate, applies to government payments for invisibles. (3) The rate of Rp 1,600, obtained by adding the transaction rate and the compulsory levy of Rp 1,350 per US$1, applies to a few Category I imports for which the Government allocates exchange. (4) The rate of Rp 1,612 applies to Category II and III imports for which the Government allocates foreign exchange, to nongovernment payments for invisibles, and to all capital; it is the transaction rate plus the Rp 1,350 levy plus the 5 per cent LAAPLN fee. (5) The rate of Rp 3,612 applies to imports financed with “special” SPP’s obtained from the Bank Indonesia; it is calculated by adding to the transaction rate the prevailing rate for the “special” SPP and the 5 per cent LAAPLN fee. (6) The rate of Rp 6,875 applies to Category I imports financed with SPP’s bought on the free market; it is the transaction rate plus the free market rate of the SPP. (7) A rate of Rp 6,887 applies to other imports financed with SPP’s bought on the free market; it is calculated by adding to the transaction rate the free market rate of the SPP and the 5 per cent LAAPLN fee.

For West Irian (Irian Barat) there are special exchange arrangements involving a separate currency. The rate of the Irian Barat rupiah is fixed at IBRp 3.62 per US$1. All trade and financial transactions with Malaysia have been suspended.

Administration of Control

Exchange control is administered by the Foreign Exchange Institute (which is under the direction of the Bank Indonesia), on whose behalf combined import and exchange licenses are issued by the Bureau for Import-Exchange Licenses. Export licenses are issued by the Bureau for Exports. The implementation of exchange and trade control is entrusted to the Foreign Exchange Institute, the Bank Indonesia, authorized commercial banks, and the customs.

Prescription of Currency

Payments and receipts must be effected through the authorized banks. Generally, payments are made in convertible currencies, but settlements with Mainland China, with which Indonesia has a bilateral payments arrangement, are made through a special clearing account. In addition, under an arrangement between the Bank Indonesia and the Netherlands Bank, payments for imports from the Netherlands may be settled through a special account.

Nonresident Accounts

Nonresident accounts are classified as (1) accounts of foreign banks or (2) all other nonresident accounts.

1. Accounts of foreign banks. Balances that have been created by transferring foreign currency to Indonesia are freely convertible into the same currency and may be transferred freely to accounts of nonresident banks of the same monetary area.

2. All other nonresident accounts. The opening of these accounts and all entries require permission from the Foreign Exchange Institute. These accounts are designated as Capital Accounts or Income Accounts, and transfers from the former to the latter are not allowed. For nonresident accounts of private persons, the authorized exchange banks have been given permission to make routine personal payments in Indonesia and yearly transfers up to a maximum of Rp 210,000 in the currency of the nonresident to the debit of his Income Account. The granting of licenses for remittances to the debit of Capital Accounts, i.e., capital remittances and remittances of inheritances, has been suspended, except in special circumstances, since January 1, 1954.

Imports and Import Payments

There is a registry of authorized importers, and a deposit is required for registration. Most imports require licenses, which are issued in accordance with an exchange budget; Category V imports (see below) require, in addition, the special consent of the Minister of Trade. Imports by state enterprises account for approximately 70-80 per cent of total imports.

Imports are classified in five categories: Category I includes certain essential items, e.g., rice, fertilizers, and medicines; Category II includes exchange-earning or exchange-saving raw materials, semifinished goods, and capital equipment; Category III includes other raw materials and semifinished commodities used to produce goods for domestic consumption; Category IV includes nonluxury finished goods for domestic consumption; and Category V includes luxury goods. All other imports are prohibited or are not licensed.

An import license is issued only for the c. & f. value of the import; insurance must be obtained in Indonesia. After obtaining an import license, the importer must conclude an exchange contract with an authorized bank. The bank then opens a letter of credit, provided that the importer has paid a 2 per cent contribution to the National Monument and Mosque Fund and the 5 per cent LAAPLN fee. Most Category I imports and other special imports of small value are exempt from these fees.

A 100 per cent cash cover against letters of credit is required for most imports; there are, however, a few exceptions, such as imports by industries of raw materials for their own use. Import duties have to be paid when the goods are cleared through customs. Payments for imports may not be made by a correspondent bank abroad until the Indonesian authorized bank has received documents evidencing the shipment to Indonesia of the merchandise as described in the related letter of credit or the import license.

Import Approval Certificates (SPI), with a validity period of six months, are issued to registered importers or exporters intending to import goods with their own foreign exchange. These certificates may be used only to import goods in Categories I, II, and III. However, when at least 90 per cent of the SPI has been utilized, the Bank Indonesia may at the request of the importer issue a new SPI for a value not exceeding 10 per cent of the original certificate; the new SPI may be used to import Category IV goods.

Payments for Invisibles

Government payments for invisibles are made at the rate of Rp 262 per US$1, which includes the 5 per cent LAAPLN fee; private payments for invisibles are made at the rate of Rp 1,612 per US$1, including the 5 per cent LAAPLN fee. Payments for invisibles require either a general or a special license from the Foreign Exchange Institute. General licenses are issued to the authorized banks to make payments for specified invisibles (e.g., those related to trade) without further authorization from the Foreign Exchange Institute. Special licenses are required for payments in excess of the limits established in the general licenses and for payments not covered by the general licenses (e.g., for advertising fees, film rentals, royalties, registration fees for patents and trademarks, subscriptions to newspapers and periodicals, memberships in associations, charitable remittances, legacies, and contractual amortization expenses). Foreign exchange is not made available to pay insurance premiums on imports, except those on some government imports for which a special permit is granted by the Committee for Insurance of the Government’s Imported Goods.

Under a special license, foreign nationals employed in Indonesia are allowed to remit 20 per cent of their gross taxable income for such purposes as family allowances, children’s education, and savings. In addition to this 20 per cent limit, up to the equivalent of US$3,158 is allowed to each remittor in independent professions and up to US$4,210 to each employed person. A general license permits nonresidents to remit from their Income Accounts up to Rp 210,000 annually, converted at the rate of Rp 1,612 per US$1, including the 5 per cent LAAPLN fee (see section on Nonresident Accounts, above).

The export of Indonesian and foreign banknotes and coins is prohibited, but residents going abroad are provided with small amounts of foreign banknotes to meet their traveling expenses.

Exports and Exports Proceeds

All exports require licenses, and all exporters (except those oil companies to which special arrangements apply) are required to surrender their export proceeds to an authorized bank in Indonesia. Exports of low-grade rubber, corn, soybeans, tapioca, cassava, sago, sweet potatoes, and bran are prohibited. Exporters receive a transferable Production-Inducement Certificate (SPP), which entitles them to a foreign exchange allocation equivalent to 20 per cent of the f.o.b. value of exports, while exporters in the “former counterbarter area” (see footnote 2) receive an additional allocation of 10 per cent of export proceeds. Moreover, producer-exporters receive an extra nontransferable foreign exchange allocation equal to. 5 per cent of the f.o.b. value of exports, which may be used to import certain items for their own use.

All exports, irrespective of the country of destination, must be financed by irrevocable bank letters of credit, and the drafts drawn thereon must be sight drafts. Exports cannot be invoiced in rupiahs, but must be invoiced in currencies acceptable to the Bureau for Exports.

Proceeds from Invisibles

Residents must surrender to an authorized bank in Indonesia all foreign exchange to which they become entitled; the effective exchange rate is Rp 520 per US$1. Foreign nationals resident in Indonesia may retain all income not resulting from foreign trade.

The import of Indonesian banknotes and coins is prohibited. Foreign banknotes may be imported on condition that they are surrendered to an authorized exchange bank. However, visitors planning to stay in Indonesia no longer than 90 days may, after a record has been made, retain their foreign currency and take it with them on departure or sell it to an authorized bank at the prevailing buying rate applicable to invisibles. Authorized banks must restrict their purchases of certain currencies to specified denominations, and no dealings in Malayan dollars are permitted.

Capital

There are no limitations on the remittance to Indonesia by nonresidents of capital in the form of foreign exchange, provided that the exchange is supplied in a currency which is subject to the surrender requirement. All incoming and outgoing capital transfers are made at the exchange rates applicable to invisibles. Outward transfers are subject to the LAAPLN fee of 5 per cent.

The licensing policy for capital transfers is determined on the basis of the foreign exchange budget for the year. This means that capital transfers by those who are, according to the regulations, entitled to make them are sometimes temporarily suspended. For determining the treatment to be given to capital transfers, the regulations classify, in three groups, companies operating in Indonesia with foreign capital.

Group I, also known as “old, active companies,” includes investments before January 1, 1954 in companies operating in Indonesia but which are registered abroad, as well as investments in companies that are registered in Indonesia but are owned by one or a few foreigners residing abroad. This group is divided into three categories:

Category 1Category 2Category 3
a. Estatesa. Transport and communicationse. Banksa. Insurance and administration
b. Miningf. Development
c. Industryb. Energyg. Foreign tradeb. Hotels
c. Other industriesh. Domestic tradec. Enterprises in the cultural field
d. Printing

Twenty per cent of net profits (after payment of the corporation tax) on investments in this group must be deposited in rupiah accounts as reserve profits, and the remaining 80 per cent may be used as follows: For the companies in Category 1, all of it may be transferred abroad; for those in Category 2, 60 per cent may be transferred abroad and the remaining 20 per cent retained for private use in Indonesia. Companies in Category 3 are not permitted to transfer any of the 80 per cent; these reserve profits may be used for such purposes as the purchase of Treasury notes and bills, new investments in the companies concerned, or investments in certain Indonesian enterprises, subject to the approval of the Bank Indonesia. Amortization allowances and proceeds from liquidation of investments in Group I are placed in Capital Accounts, transfers from which have been suspended since January 1, 1954.

Group II, known as “new investment companies,” comprises companies in Indonesia in which foreign capital has been invested since January 1, 1954. These investments are subject to conditions agreed between the Indonesian authorities and the interested parties. In general, companies in this group benefit from more favorable treatment than that accorded companies in Group I. Most companies in Group II are exempt from the reserve profits requirements applied to Group I; and, as a minimum, they are entitled to the same treatment accorded to companies in Group I.

Group III includes companies in Categories 1 and 2 of Group I but which are not entitled to transfer profits because they are registered in Indonesia or are not owned by one or a few foreigners residing abroad. This group is allowed to transfer dividends in respect of shares held abroad. If no direct transfer of dividends is granted, the proceeds of dividend coupons may be credited to nonresident Income Accounts of the foreign owners, balances on which are transferable up to an annual maximum amount.

For foreign capital invested under the provisions of the Foreign Investment Law of September 16, 1958, profits may be transferred entirely and capital repatriation may be allowed in the currency of the original investment, after the business has been in operation for a specified period of time to be decided by the Council for Foreign Capital Investment.

Residents are required to surrender exchange from capital, and approval is not normally granted to them for capital payments abroad.

Residents may trade in the Djakarta market in registered foreign securities, including registered bonds and shares, obligations, bank mortgages, profit-sharing certificates, and similar securities, coupons, and dividend warrants. Residents may also trade in unregistered securities, provided that a nonresident does not benefit thereby, directly or indirectly. Nonresidents are permitted to trade in specified domestic securities, provided that the proceeds of any sale are credited to a nonresident Capital Account (see section on Nonresident Accounts, above). The import of foreign securities into Indonesia requires a license, the issue of which is subject to a special import levy of 33⅓ per cent of the current domestic market value of the security. The proceeds of this levy are payable to the Foreign Exchange Fund. Imported securities representing the reinvestment of securities exported from Indonesia are exempt from this levy.

Table of Exchange Rates (as at December 31, 1964)

(rupiahs per US. dollar)
BuyingSelling
250 (Transaction Rate)

Most Category I imports for which the Government allocates foreign exchange.
520 (Rp 250 plus 20% of Rp 1,350)3 All invisibles and capital. Transactions with oil companies.262 (Rp 250 plus 5% LAAPLN fee) Government payments for invisibles.
1,575 (Rp 250 plus 20% of Rp 6,625)4 All exports other than those from the “former counterbarter trade area.”1,600 (Rp 250 plus Levy of Rp 1$50) Other Category I imports for which the Government allocates exchange.
1,612 (Rp 250 plus Levy of Rp 1,350 plus 5% LAAPLN fee)
2,237 (Rp 250 plus 30% of Rp 6,25)4Nongovernment payments for invisibles, all capital, and those Category II and III imports for which the Government allocates foreign exchange.
All exports from the “former counterbarter trade area.”3,612 (Rp 250 plus Rp 3,505plus 5% LAAPLN fee) Imports with “special” SPP obtained from Bank Indonesia.
6,875 (Rp 250 plus Rp 6,625)4 Some Category I imports with SPP obtained in free market.
6,887 (Rp 250 plus Rp 6,6254 plus 5% LAAPLN fee) Other imports with SPP obtained in free market.

Changes during 1964

January 13. Exporters obtaining for their exports a price higher than that established as the official export price were allowed to retain the difference in foreign exchange and to use the retained exchange freely for any purpose.

April 17. A new exchange rate system was introduced. The basic rate was changed from Rp 315 to Rp 250 per US$1, officially called the transaction rate. This rate was made the basis for calculating the effective rates for all payments and receipts. The previously existing exchange taxes were eliminated and a Production-Inducement Certificate (SPP) was introduced. The SPP system yielded to exporters an automatic foreign exchange allocation amounting to 20 per cent of exchange receipts, with exporters in certain areas receiving an additional exchange allocation of 10 per cent (SPP-Tambahan). The SPP’s would be freely transferable. Imports were reclassified in five categories. Holders of SPP’s might freely import most goods in Categories I, II, and III. SPP’s were initially traded at Rp 1,350 per US$1. In addition, an exchange (LAAPLN) fee of 5 per cent of the basic rate of Rp 250 per US$1 was imposed on payments for most imports and all invisibles.

May 18. The payments agreement with Czechoslovakia was terminated.

July 1. The currency system, foreign exchange regulations, and trade controls applicable to the Riau Archipelago were abolished. The Archipelago became subject to the regulations applicable elsewhere in Indonesia, except for the special regulations with respect to West Irian.

July 3. Exports of low-grade rubber were prohibited.

August 10. The Government stood ready to issue Import Approval Certificates (SPI), with a validity of six months, to registered importers or exporters intending to import goods with their own foreign exchange. Before an import with an SPI could be authorized, the importer must deposit with a correspondent abroad of the Bank Indonesia a “contribution” in foreign exchange equivalent to 1 per cent of the value of the imports.

October 31. A levy of Rp 1,350 per US$1 was introduced on all payments for imports effected with government-allocated foreign exchange other than those for specified essential commodities.

December 28. The Foreign Exchange Law of 1964 (Law No. 32 of 1964) replaced the Foreign Exchange Law of 1940. Foreign exchange originating in the national resources and undertakings of Indonesia would be controlled by the State. Foreign exchange that must be surrendered would constitute the Foreign Exchange Fund, which took over all assets and liabilities of the old Foreign Exchange Fund and would be administered by the Bank Indonesia. The authority for building up the Foreign Exchange Fund and controlling other foreign exchange in accordance with an exchange budget was entrusted to a Foreign Exchange Council. The performance of the daily operations of the Council was delegated to the Bureau for Foreign Exchange Transactions, which would be under the supervision of the Minister of Central Bank Affairs (the Governor of the Bank Indonesia) and which would replace the Foreign Exchange Institute.

Exports must be paid for in foreign exchange at the price (delivery price) and on the conditions prescribed and published by the Managing Board of the Bureau for Foreign Exchange Transactions; exchange proceeds corresponding to the delivery price must be surrendered to the Foreign Exchange Fund. Exporters must conclude a foreign exchange contract with an authorized bank and surrender their claim to the bank for collection. The rupiah equivalent of foreign exchange surrendered to authorized banks or sold by authorized banks to the Bank Indonesia would be determined by Government Order. Imports payable with exchange from the Foreign Exchange Fund required a general or special license issued by the Bureau for Foreign Exchange Transactions. When services were rendered to nonresidents, the Bureau for Foreign Exchange Transactions would determine whether payment must be required in currency to be surrendered in full or in part to the Foreign Exchange Fund. All matters pertaining to the use, pledging, or transfer of rights to foreign exchange exempt from surrender to the Foreign Exchange Fund would be regulated by Government Order in accordance with a plan for the use of foreign exchange. Except when licensed by the Bureau for Foreign Exchange Transactions, the import and export of domestic currency and the export of gold, foreign banknotes, and securities denominated in rupiah were prohibited.

An explanatory statement noted that the distinction between resident and nonresident Indonesian nationals was being abolished; that exchange receipts by individuals from personal services need not be supervised; that, in addition to the foreign exchange that would go into the Foreign Exchange Fund, there was also foreign exchange owned by the Indonesian community (both Indonesians and foreigners), which should not be surrendered direct to the Foreign Exchange Fund; that many prohibitions had to be abandoned; and that consequently many acts were intentionally not prohibited or exempt from licensing (e.g., owning gold or foreign exchange or having accounts with foreign banks). The provisions of the Law would be without prejudice to the provisions referred to in the working agreements between state oil companies and foreign oil companies. Various kinds of foreign currency that were not used for international payments (including coins other than gold coins) would not be considered foreign exchange. Imports financed with funds from the Foreign Exchange Fund would be regulated by an import plan within the framework of a foreign exchange budget. The delivery price for exports was designed to let the exporter know how much foreign currency he must surrender to the Foreign Exchange Fund.

Implementing regulations were issued in January and February 1965.

December 31. Law No. 36 of 1964 introduced a special levy of 5 per cent on most imports and on certain payments for invisibles; the levy was calculated at the rate of Rp 250 per US$1. The levy would not be applicable to West Irian or areas outside the exchange control area, such as Sabang. The proceeds were intended for the construction of the Trans-Sumatran Highway.

Iran

Exchange Rate System

The par value is Iranian Rials 75.75 = US$1. The official rates are Rls 75.00 buying, and Rls 76.50 selling, per US$1. Exchange rates for other currencies quoted by the central bank1 are based on these buying and selling rates for the U.S. dollar, taking into consideration the exchange rates of the quoted currencies in the international exchange markets. Exchange rates for currencies not quoted by the central bank are determined by the authorized banks with due regard to the rates against the U.S. dollar currently quoted in the international exchange markets.

The following charges are levied by the authorized banks on the amount of exchange sold for imports: ½ of 1 per cent for sanitary services, and 110 of 1 per cent of the invoice amount for the Export Promotion Fund.

Administration of Control

Exchange control authority is vested in the Bank Markazi Iran (the central bank). All foreign exchange transactions must take place through authorized banks. The Ministry of Economy determines the classification of imported and exported commodities.

Prescription of Currency

Payments and receipts are normally settled in sterling, U.S. dollars, or the currency of the country concerned, provided that the currency is one which is quoted by the central bank.

Transactions with the five countries with which Iran has bilateral payments agreements 2 must be conducted through agreement accounts denominated in U.S. dollars.

Nonresident Accounts

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

Imports and Import Payments

All imports into Iran are subject to control by the Central Government. The import policy is re-examined annually, and a new Import List, effective for the next Iranian year, is published by the Ministry of Economy. The Import List distinguishes between “authorized,” “unauthorized,” and “prohibited” goods. “Authorized” imports, consisting of nonluxury goods which either are not produced in Iran or are produced in Iran but not in quantities sufficient to meet domestic requirements, are divided into two main categories: (1) imports for which orders may be placed without prior approval by government agencies,3 and (2) imports that are subject to prior approval by government agencies before the import order is placed. “Unauthorized” imports include goods which have been shifted from the “authorized” list to the “unauthorized” list, as well as goods that may be permitted occasionally by the Ministry of Economy when the supply of the protected local product is considered insufficient. For “prohibited” goods, no authorizations are given.

Specified commodities, such as tobacco and cigarette paper, are imported under state monopoly, although special permits to import these commodities may be issued to private importers by the Ministry of Finance. Gold may be imported only by the central bank.

Payments for imports may be made either against bills for collection or documentary letters of credit. Payments against bills for collection may be made without authorization for goods listed in the Schedule attached to Circular No. 122 of September 22, 1962 (Iranian date 31.6.1341), for goods (mainly capital goods) listed in Schedule 1, as well as for goods listed in Schedule 2 attached to Circular No. 110 of May 1, 1962 (Iranian date 10.2.1341) and consigned to domestic manufacturers. Payments for imports of other goods required by domestic industries may also be made against bills for collection with special permission from the central bank. All other import payments must be made against documentary letters of credit. Orders for imports for which payment is to be made against documentary letters of credit must be registered with the Bank Markazi Iran prior to opening the letter of credit.

Foreign exchange obtained from the sale of exports to countries whose currencies are not quoted by the central bank may be utilized by the exporters concerned or by others to import authorized goods from these or other countries. Also, foreign exchange obtained by residents from persons abroad, other than from the sale of exports, may be used to import authorized goods. However, transactions of this nature do not exempt importers from paying the 110 of 1 per cent tax on imports and the difference between the buying and selling rates of foreign exchange. The import of gifts is restricted to Rls 10,000 for each person a year.

Advance deposits apply to all imports for which payments are made against documentary letters of credit. The deposit must be made by the importer in rials at the Bank Markazi Iran when he registers his order with the Bank and submits his application for the opening of a letter of credit. The rates of deposit are currently Rls 11.50, Rls 30.60, and Rls 76.50 per U.S. dollar (depending on the essentiality of the goods).

Authorized banks make payments for permitted imports against the presentation of shipping documents. Approval of the shipping documents by the authorized banks represents approval of the foreign exchange transfer.

Almost all imports are subject to commercial profits taxes, in addition to tariffs, which are either specific or ad valorem. The ad valorem commercial profits tax ranges from 1 per cent to 225 per cent. Monopoly taxes are included in the commercial profits taxes. The authorities specify in the Import List the commercial profit taxes for each year. All taxes are paid to the customs before the customs clearance. The clearance through customs is authorized upon the presentation of shipping documents approved by the authorized banks, specifying that payment has been made or will be made, and, when required, that the special import authorization has been received from government agencies.

Payments for Invisibles

Payments for invisibles related to imports are made on the same basis as payments for those imports. Exchange is granted to merchants for insurance of imports against bills for collection; for imports covered by documentary letters of credit, insurance must be taken out in Iran. Exchange is not granted to merchants for insurance of Iranian exports sold f.o.b. Payments for noncommercial invisibles require licenses from the central bank. Nonresidents working in Iran as technical assistants and whose employment has been approved by the Government may take out in foreign exchange about 50 per cent of their salaries. The annual travel allowance for Iranian nationals—which is limited to US$500 or its equivalent in other currencies for travel in Europe, the United States, or the Far East, and to US$100 for other countries—may be sold by authorized banks upon presentation of the traveler’s visaed passport. For children under 12 years of age accompanied by Iranian adults the allowances are 30 per cent of the above amounts. Iranian nationals leaving the country are required to pay a travel tax of Rls 10,000 for each single-voyage exit permit.

Travelers leaving Iran may take with them Rls 3,000 in Iranian banknotes. Travelers of foreign nationality may not export foreign currency in excess of the amount they imported less the amounts they have sold to authorized banks, as recorded in their passports; they may, however, convert into other currencies for traveling expenses up to the equivalent of US$50 upon presentation of their visaed passports.

Exports and Export Proceeds

Exports of some commodities, including grain and flour, require licenses. A commercial profits tax is imposed on a few exports, mainly consumer goods or raw materials. The commercial profits tax charged at the time of import on materials contained in goods for export may be returned to the exporter after the export has taken place. Under a system of export subsidies, the Ministry of Economy pays the exporter 20 per cent of the f.o.b. value of exports of iron ore, manganese ore, and washed sultanas; 15 per cent of the f.o.b. value of pickled skins (salambore), unwashed sultanas, and chromite ore; and 10 per cent of the f.o.b. value of exports of lead ore. However, the actual rates paid to the exporter by the Ministry of Economy are 90 per cent of the percentages mentioned for ores and 75 per cent of those indicated for sultanas and pickled skins; the remainder is put at the disposal of the Ministry of Economy to promote exports.

The exporter must surrender the foreign exchange value of his exports, as appraised by the customs, within eight months after the goods have been exported. Authorized banks accept export proceeds only in specified currencies (see footnote 1). Export proceeds in other currencies may be used to purchase imports from the same or other countries.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered unless used to import authorized goods.

The import of Iranian currency by travelers to Iran is permitted in unlimited amounts. The repatriation of Iranian banknotes through the mail is not permitted. Upon arrival in Iran, travelers of Iranian nationality must either sell their foreign exchange to an authorized bank or deposit it in a temporary foreign exchange account, from which transfers abroad or to nonresident accounts require licenses from the central bank. Other travelers, during their stay in Iran, may sell their exchange only to an authorized bank at the bank’s buying rate.

Capital

Transfers of capital abroad require the approval of the central bank. Except as noted below, such approval is given only in exceptional circumstances.

In accordance with the law concerning the encouragement and protection of foreign capital investment in Iran (1955) and regulations implementing the law, foreign capital invested in approved development or productive activities in industry, mining, agriculture, or transport may be repatriated, together with net profits (in accordance with the provisions contained in the implementing regulations), in the form of foreign exchange and/or goods. Transfers of exchange must be made at the selling rate prevailing at the date of transfer. However, the central bank has the option of buying the exchange or accepting it as a deposit to be converted into rials at a rate mutually agreed upon in a separate agreement, and this rate is applicable to the funds when they are repatriated. Capital imported in the form of foreign exchange must be in currencies acceptable to the central bank; the exchange is converted into rials at the buying rate prevailing at the date of application for conversion. The law does not set up any limit of participation with respect to the ratio of foreign to domestic investment, but the Supervisory Board encourages participation by Iranians in the proposed investments.

Changes during 1964

February 18. The bilateral payments agreement with Ceylon was terminated.

March 11. A new trade agreement with India provided that imports from that country of goods not on the bilateral import/export list no longer required special approval by the Iranian Ministry of Economy.

March 21. The Import/Export Regulations for the Iranian year 1343 (March 21, 1964–March 20, 1965) were published by the Ministry of Economy. The import/export policy of Iran remained substantially the same as in the previous year, with some liberalization and reduction in discrimination in import policy. Goods previously admitted only from countries with which Iran maintained bilateral agreements could be imported from any country. Imports of 30 tariff items previously classified as “unauthorized” were shifted to the “authorized” list. The commercial profits tax on 67 tariff items was reduced, and that on 39 tariff items was increased.

May 12. A bilateral payments agreement was signed with Rumania.

June 17. The special tax of 5 per cent levied on most imports from Japan was abolished, as was the subsidy of 25 per cent of the f.o.b. value paid on all exports to Japan.

June 20. A new bilateral payments agreement was signed with the U.S.S.R.; the agreement accounts would be kept in U.S. dollars instead of in rials.

September 22. The bilateral payments agreement with Turkey was terminated.

September 22. All orders for imports for which payment must be made against documentary letters of credit had to be registered with the Bank Markazi Iran prior to opening the letter of credit.

September 22. The rates of advance deposit required when documentary letters of credit are opened were expressed in rials per U.S. dollar (Rls 11.50, Rls 30.60, and Rls 76.50 per US$1) instead of in percentages of the invoice value (15, 40, and 100 per cent); the new rates were applicable also to imports received under foreign aid. The deposits henceforward had to be lodged with the central bank instead of the commercial banks.

September 23. Certain export subsidy rates were changed.

November 24. A tax of Rls 10,000 was imposed for each single-voyage exit permit to Iranian nationals leaving the country.

Iraq

Exchange Rate System

The par value is Iraqi Dinar 1 = US$2.80. Transactions in the official market are carried out in any of the listed currencies 1 or in Iraqi dinars through nonresident accounts in Iraq. The Central Bank of Iraq quotes official rates for the listed currencies for its transactions with authorized dealers. The official rates for the U.S. dollar on December 31, 1964 were US$2.790625 buying, and US$2,782 selling, per ID 1. An exchange tax is levied on the Iraqi dinar equivalent of foreign exchange granted to a person who leaves Iraq or resides abroad, except on amounts transferred for the account of persons studying abroad, persons on official missions, and foreigners (other than those married to Iraqis). The rate of duty is 8 per cent for the first ID 500 (with the exception of certain exempted amounts; see section on Payments for Invisibles, below) and 12 per cent on amounts above ID 500 (with the same exemptions) granted during any calendar year. There is a small free market (mainly in banknotes) in Iranian rials and Saudi Arabian riyals.

Administration of Control

The Board of Administration of the Central Bank of Iraq is entrusted with all powers and responsibilities in connection with exchange control; it has delegated this authority to the Foreign Exchange Committee, headed by the Governor of the Central Bank, to the Directorate of Foreign Exchange of the Central Bank, and to the licensed dealers. Foreign exchange transactions must take place through a licensed dealer unless otherwise authorized by the Board of Administration. The Directorate-General of Imports and Exports in the Ministry of Economy is the licensing authority for imports and exports.

Prescription of Currency

Settlements must be made in any of the listed currencies,1 or, under bilateral payments agreements,2 in dinars or pounds sterling through the appropriate clearing account.

Nonresident Accounts

The opening of a nonresident account requires the approval of the exchange control authorities. Transactions permitted in convertible currencies may alternatively be settled in Iraqi dinars through nonresident accounts.

Imports and Import Payments

All imports from Hong Kong, Israel, and Turkey, and imports of 66 items from all other countries are prohibited. Imports of drugs, pharmaceuticals, insecticides, fertilizers, baby food and similar products, motor vehicles and spare parts, sugar, and tea are a government monopoly. All other imports are subject to individual licensing and quotas. Imports are subject to an over-all ceiling, to commodity group ceilings, and to individual importer’s ceilings. Quotas for certain goods (accounting for about 30 per cent of the value of import licenses granted in 1960) are subject to the decision of the Minister of Economy; they represent items the licensing of which is more restrictive than that of other items. Import allocations for the remaining items are subject to the decision of the Directorate-General of Imports and Exports. Import licenses are valid for imports from all countries except Hong Kong, Israel, and Turkey. Only licensed importers and contractors who have entered into contracts with the Iraqi Government may import; they are divided into groups according to the category of imports in which they specialize. New importers who meet the requirements may also be granted import privileges.

The licensed dealers make exchange available upon presentation of the exchange control copy of the import license, except in certain cases where reference has to be made to the Central Bank.

Payments for Invisibles

All payments for invisibles require permission. Exchange is usually granted for travel, educational and medical expenses abroad, freight on exports carried on a c. & f. basis, insurance premiums, royalties, etc. Exchange is not granted to merchants for the insurance abroad of their imports or exports. Licensed dealers are permitted to transfer up to ID 50 a month for family maintenance on behalf of foreign nationals resident in Iraq, provided that remittances do not exceed half of the resident’s monthly income; it is necessary to refer to the exchange control authorities for amounts exceeding this limit.

There is a basic travel allowance of ID 300 a calendar year for each person 18 years of age or over, of ID 150 for persons aged between 5 and 18, and of ID 50 for children 5 years of age or younger, subject to a limit of ID 600 for each passport covering more than one person. Iraqi nationals traveling to Iran, to the countries of the Arabian Gulf, or on a pilgrimage to Saudi Arabia are allowed half of these amounts. Tourist travel exchange additional to the basic allowances is subject to ad hoc approval of the Central Bank. Travelers may take out ID 5 in Iraqi currency notes and the equivalent of ID 15 in foreign currency. Residents on a pilgrimage to Saudi Arabia are permitted to take out £ stg. 150 in sterling notes or the equivalent in Saudi Arabian riyals.

An exchange tax is levied on the Iraqi dinar equivalent of foreign exchange granted to a person who leaves Iraq or resides abroad, except on amounts transferred for the account of persons studying abroad, persons on official missions, and foreigners (other than those married to Iraqis). The tax is 8 per cent on the first ID 500 granted during any calendar year and 12 per cent on amounts above ID 500, with the following exemptions: ID 150 for persons 18 years of age or over, ID 75 for persons aged between 5 and 18, and ID 25 for children 5 years of age or younger.

Travelers leaving Iraq must deposit with an authorized bank 10 per cent of the Iraqi dinar equivalent of the foreign exchange granted. The deposit is refunded upon the traveler’s return to Iraq, subject to the fulfillment of certain formalities. The following are exempt from the deposit requirement: officials of government, semigovernment, and public utility departments, certain persons traveling for study purposes, foreigners except non-Iraqi wives of Iraqi nationals, and persons leaving on a pilgrimage.

Exports and Export Proceeds

Exports to Kuwait are free of restriction. All exports to Hong Kong, Israel, and Turkey, and exports of certain goods to all other countries are prohibited. Specified exports (e.g., certain kinds of livestock, certain foodstuffs in short supply, cereals and fruits, and raw materials in short supply) may be prohibited, and some of these (e.g., wheat and certain fruits) may be exported only if specially authorized by the High Supply Committee. All other exports are licensed freely. The re-export of such goods as cars and agricultural machinery is prohibited.

Exporters must undertake to repatriate their foreign exchange proceeds through a licensed dealer and to surrender them. Proceeds from exports of dates taken by sailing boats to countries of the Persian Gulf (excluding Iran) are exempt from these requirements.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers may bring in foreign exchange, including currency notes, in unlimited amounts, provided that they are declared to the Iraqi customs; foreigners may re-export any unused amount. Pilgrims returning from Saudi Arabia may bring in ID 150, and other travelers ID 5, in Iraqi notes.

Capital

Nonresidents may import capital freely, but they must deposit it with a licensed dealer; such deposits may be converted into local currency at the official rate, and repatriation to the country of origin is permitted. Foreign companies setting up as importers into Iraq must use Iraqi capital to the extent of at least 51 per cent of their total capital. One half of the profits of foreign service companies (companies rendering services only) is transferable. The transfer of profits from foreign investments in other economic activities is limited to 10 per cent per annum of the paid-up capital for commercial, banking, and insurance companies, and to 20 per cent of the paid-up capital for industrial companies. These percentages are applicable for each year separately. They also apply to profits on capital resulting from reinvestment of profits in excess of the transferable percentages. Interest payments may be made freely, subject to administrative checking. Imports of capital from Israel are prohibited. All transfers of capital abroad by residents, whether Iraqis or foreigners, require exchange control approval.

Under the Industrial Development Law (No.31 of 1961), specified enterprises in Iraq are granted partial or total exemption from income tax, stamp duties, and customs duties, provided that (1) the principal work of the enterprise is done by machine; (2) the number of non-Iraqi workers and employees (excluding Palestinian Arabs) does not exceed 10 per cent of the total staff employed, excluding essential technicians; (3) the value of machinery and tools required, excluding power-generating plant, exceeds ID 3,000; and (4) foreign non-Arab participation in the enterprise does not exceed 40 per cent. The specified enterprises are those whose main purpose is to process raw materials into semimanufactured or finished products or to process semimanufactured products into finished products, including assembly. Under the Iraqization Law of June 1961, all branches of foreign firms and all foreign-owned firms (except banks)3 must have a majority of equity capital held by Iraqi nationals; this law does not cover export agencies and operations requiring special skills.

Changes during 1964

January 27. Import duties were raised on many commodities considered nonessential.

February 10. New trade and payments arrangements were agreed with the United Arab Republic; the payments agreement of October 11, 1958 was replaced by a new one providing for the use of a clearing account in sterling at the Central Bank of Iraq.

June 17. A most-favored-nation treaty was signed with Japan. The discriminatory treatment of imports from Japan was terminated.

July 5. The amount of Iraqi currency notes that travelers may bring in or take out was reduced from ID 15 to ID 5.

July 5. The basic exchange allowances for travel were doubled; the new allowance for persons 18 years of age or over was ID 300 a calendar year.

July 5. Iraqi travelers were required, before leaving the country, to deposit with an authorized bank 10 per cent of the Iraqi dinar equivalent of the foreign exchange granted for travel purposes.

July 5. Exchange taxes of 8 per cent and 12 per cent were imposed on foreign exchange granted to persons leaving Iraq or residing abroad, except on amounts transferred for the account of persons studying abroad, persons on official missions, and foreigners.

July 14. Imports of the following goods could only be made by the Government or by government agencies: drugs and pharmaceuticals, insecticides, fertilizers, baby food and similar products, motor vehicles of all descriptions, and spare parts for motor vehicles.

July 27. One half of the profits of foreign service companies was declared transferable. The transfer of profits from other foreign investments in Iraq was limited to 20 per cent per annum of the paid-up capital for industrial investments and 10 per cent per annum of the paid-up capital for commercial, banking, and insurance investments.

August 28. Imports of tea could only be made by the Government Purchasing Board.

December 20. The bilateral payments arrangement with Tunisia was terminated.

Ireland

Exchange Rate System

The par value is Irish Pound 1 = US$2.80. Transactions in sterling take place at parity. Exchange rates for other currencies are based on London market rates. On February 15, 1961, Ireland accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement

Administration of Control

Exchange control is operated by the Department of Finance. Much of the authority for approving normal payments is delegated to commercial banks authorized for this purpose. Import licenses, where necessary, are issued by the Department of Industry and Commerce if the goods are of an industrial nature, or by the Department of Agriculture if the goods are agricultural in character. Import licensing is not used for exchange control purposes. Import and export controls are administered by the Revenue Commissioners.

Prescription of Currency

Ireland is a member of the Sterling Area, and payments to and from other parts of the Sterling Area may be made freely in any Sterling Area currency. Authorized payments to countries outside the Sterling Area may be made in Irish pounds or sterling through an External Account or in any non-sterling currency. The proceeds of exports to countries outside the Sterling Area must be received in Irish pounds or sterling through an External Account or in any specified currency.1

Nonresident Accounts

Accounts of persons resident in other countries of the Sterling Area are treated as resident accounts. Accounts of persons resident in countries outside the Sterling Area are treated as nonresident accounts and, with the exception of Blocked Accounts (see below), are designated External Accounts. These may be credited with payments authorized for transfer to countries outside the Sterling Area, with transfers from other External Accounts in Irish pounds or in sterling, and with the proceeds in Irish pounds of any non-sterling currency sold by a nonresident to an authorized bank. Balances on these accounts may be transferred freely to other External Accounts in Irish pounds or in sterling, used for payments to residents, or converted into any non-sterling currency.

Blocked Accounts are credited with funds that are due to persons resident outside the Sterling Area, Denmark, the Faroe Islands, Greenland, Norway, and Sweden, and are not eligible for transfer. These funds arise from such sources as the sale of Irish securities, proceeds from sales of real estate exceeding £1,000, and the Irish estates of persons who at the time of death were resident outside the Sterling Area. Funds in these accounts may be invested through the stock exchange in Irish or sterling securities which cannot be redeemed within five years from the date of investment. They may also be used for expenses of the account holder and his family during visits to Ireland and for the upkeep of the account holder’s property in Ireland. Balances on Blocked Accounts may be transferred freely to other Blocked Accounts in Ireland or in the United Kingdom.

Imports and Import Payments

The import of goods into Ireland is subject to two types of administrative control. Under one type, which covers only a limited range of commodities for protective purposes, imports of certain commodities are subject to quota restrictions which, with minor exceptions, are on a global basis. Individual import licenses are required for these goods and are used to limit the quantity of goods imported. All other imports are free of import licensing. Under the other type of control, prior permission of the Department of Finance is required before orders may be placed for goods originating outside the Sterling Area, if they are not to be used in Ireland or are to be delivered more than nine months after the date of the order.

For permitted imports, appropriate exchange or permission to credit Irish pounds or sterling to an External Account is granted automatically. Exchange control forms are required for import payments exceeding £2,000 to countries outside the Sterling Area.

Payments for Invisibles

Payments to other territories of the Sterling Area are not subject to exchange control unless they are for transactions outside the Sterling Area. Payments to residents of countries outside the Sterling Area require approval. Approval to make payments for most invisibles is given by the authorized banks; for other invisibles, it is given by the Department of Finance.

For tourist travel outside the Sterling Area there is a basic allowance of £250 for each person for each journey. For business travel, up to £2,500 is allowed for each journey. Limits are also established for allowances for education and other purposes. Applications for larger amounts are approved, provided that no unauthorized export of capital is involved. Not more than £50 in Sterling Area notes or £250 in other currency notes may be taken out of the country to a destination outside the United Kingdom. There is no restriction on the amount of banknotes that may be taken to the United Kingdom.

Exports and Export Proceeds

A system of export licensing is applied to a limited range of goods. Exporters of goods to countries outside the Sterling Area must obtain payment for the goods within six months of shipment, if the value of the goods exceeds £100. When payment is received in specified currencies, the exchange must be sold to an authorized bank. Exchange control forms are required for exports exceeding £2,000 to countries outside the Sterling Area.

Proceeds from Invisibles

There are no specific requirements governing exchange receipts from invisibles, but if specified currencies are received they must be sold to an authorized bank. Any foreign exchange held by a person after his return from a trip abroad may be retained for nine months from the date he received the exchange, for use on a subsequent trip abroad. There are no limitations on the import of Irish or foreign banknotes.

Capital

Exchange control approval is required for all transfers of capital to countries outside the Sterling Area. Applications by emigrants are approved up to a limit of £5,000 a family; those from other persons are considered on their merits. Incoming capital received in specified currencies must be sold to an authorized bank. The proceeds of sale of non-Sterling Area securities sold outside the Sterling Area, and certain other capital receipts from outside the Area, may be invested in non-Sterling Area securities, provided that the investment is carried out within six months from the date of receipt through a bank, a stockbroker, or a solicitor. Such funds may also be used, subject to individual permission, to purchase for personal use real estate outside the Sterling Area. Transactions in securities are controlled to ensure that capital is not transferred outside the Sterling Area.

Changes during 1964

January 1. Most import quotas were increased by 10 per cent.

July 6. Residents could, subject to individual authorization, purchase real estate outside the Sterling Area for personal use with exchange eligible for investment in foreign currency securities. Previously, such transactions could only be made on a matching basis, i.e., with funds obtained from the sale of real estate located outside the Sterling Area.

Israel

Exchange Rate System

The par value is Israel Pounds 3.00 = US$1. All exchange transactions take place at rates based on the par value.

Administration of Control

Exchange control is administered by the Department of Foreign Exchange Control of the Ministry of Finance under the responsibility of the Controller of Foreign Exchange in cooperation with other government agencies, and is carried out through authorized banks.

Prescription of Currency

Payments and receipts must be effected in the currency and manner prescribed by the exchange control authorities. Settlements with countries with which payments agreements are in force 1 are usually made in U.S. dollars or sterling as accounting units.

Nonresident Accounts

Nonresidents’ funds are held either on foreign currency accounts or on local currency accounts. A nonresident abroad may use his foreign currency account freely; when in Israel, he may convert funds held on the account into local currency at the official rate. Local currency accounts of nonresidents are of two types: (1) Registered Accounts—for foreign aviation, shipping, insurance, and film companies and for former residents—may be established only with special approval. Aviation, shipping, and insurance companies may freely convert at the official rate of exchange any amounts held on these accounts which are surplus to requirements; film companies may do so under individual arrangements made with each company. Registered Account funds held by former residents may be used for investment in listed Israel securities, for purchase of real estate, for tourist expenses in Israel up to an amount of I£100 a day for the account holder and for each member of his family, for remittances of up to I£2,500 in support of relatives who are residents of Israel, for the payment of taxes payable in Israel by the owner of the account, and for donations to public and charitable institutions. Ownership of Registered Accounts may not be transferred. (2) Blocked Accounts may be used to hold funds derived from former investments which are not eligible for transfer at the official rate, funds left behind in Israel by tourists, and proceeds from the sale of Israel bonds in Israel. Balances may not be transferred from one nonresident to another, but the accounts may be liquidated by purchasing foreign securities against Israel pounds and selling them abroad against foreign exchange. Otherwise, Blocked Accounts may be used within Israel for the same purposes as Registered Accounts but no limit is placed on the amounts which may be withdrawn.

Imports and Import Payments

Importers of goods listed in the Free Import Orders (about two thirds of total imports) must be approved as importers by the Ministry of Commerce and Industry. These goods are free of all licensing and restriction. All other imports are subject to licensing. For commodities on the Automatic Approval List (about one fourth of total imports), licenses are issued automatically upon application. All individual import licenses must be countersigned by the Department of Foreign Exchange Control of the Ministry of Finance. The currency and method of payment are prescribed in each license; if a convertible currency is prescribed, payment may be made in any convertible currency.

Exchange to pay for items listed in the Free Import Orders or to pay for licensed imports is granted automatically. An import license may prescribe whether, if payment is to be made by documentary credit, the full amount of foreign currency required must be purchased at the time of opening the credit; in such cases, funds not transferred abroad immediately must be deposited in a special account with the Bank of Israel until transfer is made. With the exception of government agencies and persons importing for export, importers utilizing credit facilities must, at the time of opening the credit, deposit 50 per cent of the cost of the goods. Licenses are issued for imports of goods on consignment provided that the recipient of the license imports goods valued at US$250,000 within three months and undertakes to deposit 10 per cent of the value of the goods with the Accountant General through an authorized bank. An importer cannot receive more than two such licenses a year. The approval of the Department of Foreign Exchange Control is required for all imports effected under foreign credits.

Payments for Invisibles

Most payments abroad for invisibles require individual licenses. Each resident is allowed exchange equivalent to US$30, which is obtainable on demand, for the purchase of books, membership dues, etc., and US$50 for certain other purposes (e.g., registration in a university). For tourist travel abroad, there is an exchange allowance equivalent to US$500 a traveler for each journey. Not more than I£100 in Israel banknotes may be taken out by travelers. Foreign tourists leaving Israel are permitted to repurchase through authorized dealers part of the same foreign currency they previously exchanged into Israel pounds, but not more than the equivalent of I£900.

Exports and Export Proceeds

Most exports do not require licenses. For some commodities, however, export licensing is retained for the purpose of quality control. The Ministry of Commerce and Industry maintains a check on export transactions with a low value-added content which are made with bilateral partners: this is done to discourage switch transactions. Export proceeds in foreign currencies must be surrendered or held on a PAZAK account (see section on Proceeds from Invisibles, below).

Proceeds from Invisibles

Exchange proceeds from invisibles must, in general, be surrendered. Alternatively, they may be kept in foreign exchange on PAZAK accounts, balances on which may be exchanged into Israel currency at any time or used to make authorized payments.

One third of the foreign exchange received by residents of Israel as restitution payments, and as pensions by disabled soldiers who served in World War II, may be retained in TAMAM accounts (see section on Capital, below).

For ten years after entering Israel, new immigrants are exempt from surrendering their foreign exchange to the Treasury, and they may keep these currencies with authorized banks in Israel or with banks abroad.

Tourists visiting Israel are expected to bring with them the amounts of foreign currency that they will need during their stay. Not more than I£100 in Israel banknotes may be brought in by travelers. Tourists and others visiting Israel who are holders of Registered Accounts (see section on Nonresident Accounts, above) may draw upon such accounts to the extent of I£100 a day for themselves and the same amount for each member of their families; if they are holders of Blocked Accounts, they may draw on these without limit.

Capital

Foreign exchange representing incoming capital has to be surrendered at the official rate or held in a PAZAK account (see section on Proceeds from Invisibles, above). Capital brought into Israel for the purpose of investment may, subject to approval, be granted preferential treatment in accordance with the Law for the Encouragement of Capital Investments of August 16, 1959, which permits a nonresident who has made an “approved” investment in foreign currency to transfer all his profits abroad in the same currency at the official rate. Repayment and amortization of capital may also be transferred on the following terms: if the investment has been kept for less than five years, the capital may be withdrawn in five equal annual installments; if the investment has been kept for more than five years, it may be withdrawn immediately. Foreign investments made in Israel without taking advantage of the 1959 law do not benefit from these transfer privileges, but most old investments have in fact been recognized as “approved” investments. Interest and dividends on bonds or shares registered on the stock exchange which have been purchased by nonresidents with exchange converted at the official rate may be transferred abroad in foreign currency at the official rate; this applies also to amounts received through sales of such shares.

Payments due to nonresidents and not permitted to be transferred abroad may be credited to Registered Accounts or Blocked Accounts.

Proceeds accruing from the repatriation or liquidation of foreign assets held by residents are treated in the same way as proceeds from invisibles. New immigrants may, for ten years from the date on which they first entered, retain their foreign assets and use them freely. Transfers abroad of a capital nature by residents are generally not permitted.

Holders of TAMAM accounts may use them to purchase abroad, for themselves or their families, foreign securities quoted on an official stock exchange and, subject to submission of evidence to the authorized bank maintaining the account, for legal costs in respect of restitution payments and for travel expenses abroad exceeding the basic travel exchange allocation of US$500. Foreign securities purchased by debiting a TAMAM account may be sold abroad for foreign currency and the proceeds again credited to a TAMAM account, or the securities may be sold to other residents against payment in Israel pounds.

Changes during 1964

During the year on various dates about 60 items were transferred to the Free Import Orders.

March 4. The limits as to amount hitherto imposed on the use of Blocked Account funds were eliminated.

Italy1

Exchange Rate System

The par value is Italian Lire 625.00 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of Lit 620.50 buying, and Lit 629.50 selling, per US$1. Market rates for certain other currencies 2 vary between limits which result from combining the official limits for the U.S. dollar maintained by Italy and such limits in force in the country of the other currency concerned. Forward premiums and discounts are left to the interplay of market forces. Authorized banks are allowed to engage in spot exchange transactions in any currencies, and in forward exchange transactions in U.S. dollars, Canadian dollars, and externally convertible European currencies. Transactions in foreign banknotes take place at freely negotiated rates.

Italy accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Administration of Control

The exchange control system is operated by the Italian Exchange Office (Ufficio Italiano dei Cambi) on the basis of instructions issued by the Ministry of Foreign Trade. All sales and purchases of exchange pass through banks authorized for this purpose. Import and export licenses, when required, are issued by the Ministry of Finance at the request of the Ministry of Foreign Trade. Payments to and from the Republic of San Marino and the Vatican City are not subject to exchange control.

Prescription of Currency

Settlements with foreign countries may be made in U.S. dollars, Canadian dollars, or externally convertible European currencies, or in lire on Foreign Accounts.

Nonresident Accounts

The main types of accounts in Italian lire which nonresidents are allowed to maintain with authorized banks in Italy are Foreign Accounts, for current transactions and Italian investments abroad, and Capital Accounts, for foreign investments in Italy. The use of these accounts, and of Special Accounts for certain investments, is described below.

1. Foreign Accounts may be credited with transfers from other Foreign Accounts, from Capital Accounts, and from Special Accounts under Law No. 43, with authorized current and capital payments, with payments for approved investments abroad by residents of Italy, and with the proceeds from sales of U.S. dollars, Canadian dollars, and externally convertible European currencies. They may be debited for purchases of any of these currencies, for transfers to any other Foreign Account, Capital Account, or Special Account under Law No. 43, for payments to residents of Italy for current and capital transactions, and for payments due to residents of Italy on account of their disinvestments abroad.

2. Capital Accounts may be credited with transfers from Foreign Accounts, from Special Accounts under Law No. 43, and from other Capital Accounts, with Italian banknotes sent to Italy by banks abroad, and with the proceeds from the liquidation of foreign investments in Italy not made under the provisions of Law No. 43 of February 7, 1956 (see below). They may be debited for transfers to any other Capital Account or to Foreign Accounts, for drawings in cash by the holder of the account or his delegates, and for the purchase of investments.

3. Special Accounts Under Law No. 43 of February 7, 1956 are accounts in the names of nonresidents who have invested in Italy convertible currencies or externally convertible European currencies in accordance with the above-mentioned law. These accounts may be credited with transfers from Foreign Accounts or from other Special Accounts and with the proceeds of sales of investments that have been made in accordance with Law No. 43. They may be debited for purchases of the same currency that was originally sold and for investments in Italy, and balances on them may be transferred to Foreign Accounts, Capital Accounts, or to any other Special Account under Law No. 43.

Imports and Import Payments

Practically all imports from countries other than Japan and the Sino-Soviet area are free of quantitative restriction. Commodities that still require individual licenses when imported from these other countries are included in a negative list (Tabella A Import), which includes goods listed under some 55 tariff headings or their parts—of these 20 relate to agricultural products and foodstuffs. However, the general permission to import goods not included in the Tabella A Import applies to Somalia, the United Arab Republic, and Yugoslavia only if the goods originate in and are shipped directly from the respective country; in addition, in respect of imports from the United Arab Republic, the payee must reside in that country or in one of the European OECD countries.

A more extensive list (Tabella B Import) contains those commodities which require an individual license when imported from the Sino-Soviet area. The list includes 110 tariff items or subitems related to agricultural products and foodstuffs, and about 840 tariff items or subitems related to other goods. Special lists contain those commodities on the Tabella B Import which may be imported freely from some of the countries3 to which the Tabella B Import applies, provided that the goods originate in and are shipped from one of these countries.

A separate negative list applies to Japan indicating the goods (listed under 156 tariff items or their parts) that are subject to individual import licensing when imported from that country. A special list contains those commodities (at present comprising 74 tariff items or subitems) for which import licenses are issued freely. All other goods from Japan may be imported freely, provided that they originate in that country, irrespective of provenance.

For imports not exceeding Lit 250,000 in value, no exchange control form is required; for imports from Lit 250,000 to Lit 500,000 in value, a form completed by the importer is required; for imports over Lit 500,000 in value, an import document completed by an authorized bank is required.

For all authorized imports, the authorized banks provide exchange or permit payment in Italian lire to a nonresident account. International postal money orders may be used to pay for imports not exceeding Lit 250,000 in value, or any lower amount within the limits established for each country to which this service is provided.

Payments for Invisibles

In principle, payments abroad for invisibles require licenses issued by the exchange control authorities. Under general authorization, however, the authorized banks may sell foreign exchange freely, provided that the necessary documents are submitted, although for certain transactions 4 there are limits beyond which the banks may make payments only after examination of the supporting documents by the Italian Exchange Office. Exchange is granted freely for remittances of earnings on investments. Residents may use international postal money orders for financial payments in the currency and within the limits established for each country.

Certain transactions (but not the related payments) in respect of services are subject to approval by the Ministry of Foreign Trade or the Ministry of Industry. These transactions can be divided into two groups: (1) contracts which require a permit if they involve residents of specified countries5 and (2) contracts which require a permit regardless of the nationality of the nonresidents involved. The first group includes transactions giving rise to expenditures for chartering of ships (excluding charters for a single trip); repairs to ships which are not urgent and not necessary for safety of operation; news agencies and newspaper correspondents (for amounts exceeding Lit 5 million a month for the same payee); purchase of publication rights, information agencies, etc. (for amounts exceeding Lit 5 million per contract); copyrights (for amounts exceeding Lit 5 million a year per contract); services of professional workers and company managers (for amounts exceeding Lit 5 million); and services of entertainers and athletes (for amounts exceeding Lit 5 million). The second group includes transactions giving rise to expenditures for production abroad of films and advertising shorts; utilization of films, scripts, synchronization, etc.; collaboration in cinematography; civil liability insurance; insurance of ships and aircraft against risks of operation; brokerage for merchandise transactions, whenever the settlement is made after the end of the year following that in which the export or import took place;6 and other transactions not permitted by general authorization.

Residents traveling to foreign countries may obtain from the banks exchange equivalent to Lit 500,000 for each trip for tourism, business, and education; banks are authorized to supply foreign exchange above these allowances, provided that they are satisfied that no unauthorized capital transfer is involved. Any person traveling abroad may take with him Lit 50,000 in Italian banknotes, and if he refrains from obtaining an allocation of foreign exchange, he may take an additional Lit 500,000 in Italian banknotes.

Exports and Export Proceeds

A few commodities in a special list (Tabella Esport) require export licenses. For exports not exceeding Lit 250,000 in value, no exchange control form is required; for exports from Lit 250,000 to Lit 500,000 in value, a form completed by the exporter is required; for exports exceeding Lit 500,000 in value, an export document completed by an authorized bank is required.

Exchange receipts must be offered for sale to an authorized bank within seven days of receipt. Proceeds in U.S. dollars, Canadian dollars, and externally convertible European currencies may be retained by authorized banks on behalf of the recipients in foreign exchange accounts for six months, during which period such balances may be used for permitted transactions or be sold to authorized banks; the banks are allowed to sell these currencies to residents for authorized transactions or to negotiate them freely with the Italian Exchange Office or among themselves. After expiration of the retention period, unused balances must be sold to the Italian Exchange Office at the lowest official exchange rate quoted during the retention period (these official rates are determined daily on the basis of the average closing rates in Milan and Rome).

Proceeds from Invisibles

Receipts from invisibles are subject to the same requirements as receipts from exports. Shipping and insurance companies and travel and fowarding agencies may keep operating accounts in U.S. dollars, Canadian dollars, and externally convertible European currencies. Residents may retain up to the equivalent of Lit 100,000 in foreign banknotes and coins left over from trips abroad and may use this exchange for other trips abroad or sell it at any time to an authorized bank. Persons may bring in any amount in Italian or foreign banknotes.

Capital

Inward and outward movements of nonresident capital are free. However, loans of any kind from nonresidents to residents and from residents to nonresidents require specific authorization from the Ministry of the Treasury or the Ministry of Foreign Trade, respectively, except, with regard to EEC countries, long-term loans for the purpose of establishing or maintaining lasting economic ties, for which no authorization of any kind is required. Repayment of such loans may be made freely, provided that it is in accordance with the repayment schedule authorized by the above-named ministries when the loan was approved.

Direct investment in EEC countries is permitted in any form and without any limit. Direct investment in other countries must be in the same line of business as that of the Italian firm making the investment and may not exceed the limit of the paid-up capital of that firm; other types of direct investment in such countries require special authorization from the Ministry of Foreign Trade. The general license to make these investments also covers the reinvestment of earnings and the use for this purpose of the liquidation of previous investments (after crediting the proceeds of the disinvestment to bank accounts similar to those established for export proceeds; see section on Exports and Export Proceeds, above).

Residents of Italy are free to buy and sell, through the Bank of Italy or the authorized banks, any foreign securities issued or payable abroad and quoted on foreign stock exchanges, and to deal in such securities among themselves against payment in lire. Such foreign securities have to be deposited with an Italian bank or with a bank abroad for account of an Italian bank.

Transfers in connection with inheritances and dowries may be made freely. Donations up to the equivalent of Lit 10 million for each beneficiary who is related to the donor are permitted; in other cases, prior authorization from the Ministry of Foreign Trade is required. The transfer of property of permanent emigrants is allowed in two steps: up to the equivalent of Lit 4 million a person upon presentation of specified documents at the time of leaving Italy (plus Lit 50,000 in Italian banknotes), and the remainder when residence has been established abroad. If the transfer is to the EEC area, the documentation for the transfer of a higher initial sum is examined by the Italian Exchange Office.

The granting of commercial credits or credits for the performance of services is permitted freely for a maximum period of up to 360 days following the export of commodities or the rendering of the services. If the period exceeds 360 days, approval of the Ministry of Foreign Trade is required, except for credits granted to residents of other EEC countries for between 360 days and up to 5 years, for which the approval of the Italian Exchange Office is required. The contracting of commercial credits, as well as credits connected with the performance of services, is permitted freely for a maximum period of 90 days preceding or following the date of importation or the rendering of the services. The contracting of such credits which precede the date of importation or the rendering of the service by between 90 days and 180 days requires the authorization of the Italian Exchange Office, while the contracting of credits which precede the date of importation or the rendering of the service by more than 180 days requires the authorization of the Ministry of Foreign Trade. For the contracting of credits for a period of between 90 days and 360 days following the importation or the rendering of the service prior examination by the Italian Exchange Office is required. The contracting of credits for periods exceeding 360 days following the importation of the goods or the rendering of the service requires authorization by the Ministry of Foreign Trade, except for credits contracted for imports or services from EEC countries for between 90 days and 5 years, for which the approval of the Italian Exchange Office is required. Loans and credits not connected with commercial transactions or with the performance of services require the approval of the Ministry of Foreign Trade. However, financial loans may be authorized by the Italian Exchange Office, provided that they are granted to or by residents of EEC countries and provided that the duration of such loans or credits does not exceed 5 years and that the amount is not more than Lit 50 million.

The export of securities is not permitted, except of those which are owned by nonresidents and have been purchased against U.S. dollars, Canadian dollars, or externally convertible European currencies, or against funds on a Foreign Account or Capital Account.

Changes during 1964

January 31. A new Tabella B Import replaced the former Tabella C Import, which contained those commodities requiring an individual license when imported from Sino-Soviet bloc countries. The number of items subject to this requirement was reduced.

April 22. Payment for imports of automobiles and other specified consumer durable goods had to be made within 30 days preceding or following the importation of such merchandise; previously, payment could be made within 360 days preceding or following such imports. The granting of credits connected with commercial transactions, or with the performance of services, to residents of other EEC countries for a period exceeding 360 days, as well as the granting and contracting of all credits not connected with commercial transactions to or from residents of other EEC countries, required the approval of the Italian Exchange Office. Previously, commercial credits to other EEC countries could be granted freely for a period of up to 5 years, while credits not connected with commercial transactions could be granted and contracted provided that the duration and the amount of the loan did not exceed 5 years and Lit 50 million, respectively, and provided, for a loan to a resident by a nonresident, that the interest rate on such a loan did not exceed 6 per cent per annum.

June 30. The bilateral payments agreement with Somalia expired.

Note.—The following changes took place early in 1965:

January 4. Payments for all imports of goods and services could be made within 90 days preceding or following arrival of the goods or the performance of the service; previously, payments for specified consumer durable goods, had to be made within 30 days preceding or following arrival of the goods. The time limit on import credits taken up abroad by Italian residents was extended to 90 days preceding or following the date of importation. Furthermore, requests for the authorization of credits preceding the date of importation by between 90 days and 180 days could now be submitted to the Italian Exchange Office for authorization, while requests for authorization of credits preceding the date of importation by more than 180 days could be submitted to the Ministry of Foreign Trade. Prior examination of the documents by the Italian Exchange Office was required if credits were to be taken up for a period of between 90 days and 360 days following the importation of the goods. Requests for the authorization of credits for a period exceeding 360 days following the importation of goods could be submitted to the Ministry of Trade for approval, except for credits taken up for imports from EEC countries for a period of between 90 days and 5 years following the importation of goods, for which the approval of the Italian Exchange Office was required.

Ivory Coast

Exchange Rate System

No par value for the currency of Ivory Coast has been established with the Fund. The unit of currency is the CFA franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at rates resulting from the relation CFAF 1 = 0.02 French franc. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

Administration of Control

Exchange control is administered by the Department of Foreign Exchange and Credit of the Ministry of Finance, Economic Affairs, and Planning. Foreign exchange transactions are handled by authorized banks under the direction of the Department of Foreign Exchange and Credit. Global annual programs for imports from countries outside the French Franc Area are coordinated by the Ministry of Finance, Economic Affairs, and Planning. Import licenses (for imports subject to quotas) are issued by the Foreign Trade Department, after checking and approval of the terms of payment by the Department of Foreign Exchange and Credit (Office of Exchange Operations). Import certificates (for imports not subject to quota restrictions) are approved by the Department of Foreign Exchange and Credit (Office of Exchange Operations).

Prescription of Currency

Ivory Coast is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with other countries are usually made through banks in France: those with Rumania through Rumanian Foreign Accounts in Bilateral Francs; those with all other countries in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

There are two types of nonresident accounts: Foreign Accounts and INR Accounts. Foreign Accounts apply to residents of countries outside the French Franc Area or to residents of French Franc Area countries who have resided outside the Area for more than two years. INR Accounts (intérieurs de non-résidents) apply to residents of French Franc Area countries who have resided outside the Area for less than two years and to residents of countries outside the Area who have lived within the Area for less than two years. Foreign Accounts are fully convertible; INR Accounts are not transferable (except between two INR Accounts), but any balance may be transferred when the holder leaves the country.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Imports from countries outside the Area may be made in accordance with an import program, which is determined annually by the Office of the Director of Foreign Trade. Under this program, semiannual global quotas are established for imports from EEC countries other than France and for imports from all other countries outside the French Franc Area. The quotas establish limits up to which import licenses may be issued, for specified commodities, to licensed traders and, in exceptional cases, to industrial and agricultural producers who are considered as end-users of the imported goods. Certain products, contained in a liberalized list, may be imported freely from countries outside the French Franc Area.

Private persons cannot obtain import licenses, except for transactions not requiring foreign exchange. For certain goods admitted without quantitative restriction, certificates of importation are issued.

The import license or certificate of importation entitles the importer to purchase the necessary foreign exchange, provided that the shipping documents are submitted to the authorized bank.

Payments for Invisibles

Payments for invisibles to countries in the French Franc Area are permitted freely; those to countries outside that Area are subject to certain restrictions and require the approval of the Department of Foreign Exchange and Credit. Payments for invisibles related to trade transactions are permitted freely when the basic transaction has been approved. Payments for transportation costs may be made freely; for payments abroad for insurance, the approval of the Director of Insurance is required. The exchange allowances are as follows: for tourism, up to the equivalent of CFAF 125,000 a year; for business travel, up to the equivalent of CFAF 100,000 for each trip; for family support, up to the equivalent of CFAF 27,500 a month for each beneficiary. In all cases, supplementary allowances may be given, provided that the applicant presents reasonable justification. Income accruing to nonresidents from profits, dividends, rents, fees, royalties, etc., may be remitted abroad, subject to verification. Nonresident workers in Ivory Coast may remit abroad, monthly, 50 per cent of their salaries. Payments in respect of many other categories of invisibles are also subject to verification.

Travelers to Dahomey, Mauritania, Niger, Senegal, Togo, and Upper Volta may take out, without limit, banknotes issued by any bank of issue within the French Franc Area. Travelers going direct to other countries in the Area may take out, without limit, banknotes issued by any bank of issue in the Area, with the exception of those issued by the BCEAO, for which the limit is CFAF 75,000. Travelers going to countries outside the French Franc Area may take out in banknotes or coins up to a maximum of F 750 in metropolitan francs, or up to 75,000 in CFA or CFP francs, or the equivalent of F 750 in notes and coins denominated in any French Franc Area currency other than the French franc. Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely; exports to all other countries require licenses, mainly to ensure repatriation of the proceeds. For certain export commodities subject to international quotas, the export license must be accompanied by an authorization issued by the organization responsible for the management of the quota.

Export proceeds in currencies of countries outside the French Franc Area must be surrendered in their entirety within three months from the date of their receipt.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts in respect of services, interest, and income due from residents of other countries must be collected and must be surrendered within three months of receipt. Travelers may bring in without limit CFA or other banknotes and coins (excluding gold coins), with the exception of Guinean and Malian currencies. Imported foreign banknotes must be declared to the customs authorities and must be surrendered to an authorized bank within one month.

Capital

Capital movements between Ivory Coast and other French Franc Area countries are free of control; those between Ivory Coast and all other countries are subject to authorization.

Foreign investment in Ivory Coast is subject to the prior approval of the Office of the Director of Foreign Exchange and Credit; approval depends on the nature and purpose of the proposed investment, a liberal policy being followed in this respect. Law No. 59-134 of September 3, 1959 provides tax and customs duty benefits and other special privileges for new enterprises recognized as having priority status.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to Ivory Coast, was terminated.

February 1. Imports of juke boxes and all other coin-operated amusement apparatus were prohibited.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to Ivory Coast, was terminated.

June 4. Regulations were announced governing the import and export of gold, gold ore, and objects made of gold.

Jamaica

Exchange Rate System

The par value is Jamaican Pound 1 = US$2.80. The currency is freely convertible into sterling at parity, subject to banking commissions. Exchange rates for other currencies are based on the buying and selling rates in the London market. The Bank of Jamaica is authorized by law to levy a commission charge of up to ¾ of 1 per cent on inward and outward transfers; at present, these charges are 316 of 1 per cent on inward transfers and ⅝ of 1 per cent on outward transfers. Jamaica accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 22, 1963.

Administration of Control

The Bank of Jamaica administers exchange control on behalf of the Ministry of Finance, subject to certain limitations in respect of which the approval of the Ministry is required. The commercial banks are designated as authorized dealers and have authority to release foreign exchange for imports, basic travel allowances, and certain other payments. Imports are regulated by the Ministry of Trade and Industry.

Prescription of Currency

Jamaica is a member of the Sterling Area and has prescription of currency requirements similar to those of other Sterling Area countries. Settlements with other parts of the Sterling Area may be made freely in any Sterling Area currency. Payments to countries outside the Sterling Area may be made by crediting Jamaican pounds to an External Account or in any foreign currency. Receipts from countries outside the Sterling Area must be received to the debit of an External Account, or in any specified currency,1 or in any other foreign currency that is freely exchangeable for sterling.

Nonresident Accounts

No distinction is made between the accounts of residents of Jamaica and those of residents of other parts of the Sterling Area.

The commercial banks are empowered to open External Accounts in Jamaican pounds for residents of countries outside the Sterling Area. The funds on these accounts are treated as equivalent to External Account sterling and may be transferred freely between residents of countries outside the Sterling Area. External Accounts may be credited with payments by residents of the Sterling Area approved by the exchange control authority, with transfers from other External Accounts, and with the proceeds from the sale to an authorized dealer of gold or foreign currencies. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for the purchase of foreign currencies.

Accounts which are credited with funds that may not be placed at the free disposal of nonresidents (e.g., proceeds from the sale of sterling and Jamaican pound securities or other capital proceeds) are designated Blocked Accounts. Permission may be given for these funds to be transferred to London, where their disposal is subject to the approval of the U.K. exchange control authorities. Blocked funds may be reinvested in Sterling Area securities which are not redeemable either optionally or contractually within five years from the date of acquisition; the income from such securities, and the proceeds at maturity of any that are redeemable, are normally available for credit to an External Account. Applications for the release of funds in Blocked Accounts for use in Jamaica by the nonresident owner must be referred to the Bank of Jamaica.

Imports and Import Payments

Most goods may be imported freely under an open general license. Other imports, i.e., those included in a special schedule and all imports originating in the Sino-Soviet bloc, South Africa, or Cuba, require individual import licenses. The special schedule comprises (1) goods for which specific quotas are assigned to importers according to their past performance, e.g., footwear and detergents (for these items vouchers are issued to importers on the basis of which licenses are granted by the Trade Administrator); (2) goods which are prohibited, e.g., canned milk, cement, and cheap clothing; and (3) goods the licensing of which depends upon local supply, e.g., poultry, eggs, and vegetables.

Payments for imports from the Sterling Area may be made freely in any Sterling Area currency. Payments for imports from other countries may be made by crediting an External Account or by purchasing foreign exchange from an authorized dealer, provided that the licensing requirements, if any, have been met, and that the importer presents documentary evidence of importation and a copy of the settlement invoice or other evidence of purchase and value.

Payments for Invisibles

Payments for invisibles originating in the Sterling Area may be made freely in any Sterling Area currency. Payments for invisibles originating outside the Sterling Area require the approval of the authorities. Approval is granted freely for payment for all commercial transactions, when the application is supported by the appropriate documentary evidence. For payments for certain other purposes, e.g., insurance premiums, approval is granted upon request. A basic exchange allocation of £J 250 for each journey for travel outside the Sterling Area is made available automatically to residents by the authorized dealers, and additional amounts for travel will be approved by the Bank of Jamaica upon presentation of satisfactory documentation (e.g., tickets, hotel reservations, and estimates of daily expenditures). Moreover, authorized dealers may, subject to the presentation of supporting evidence, sell foreign exchange for the following: cash gifts of up to £J 250 from each donor; refunds of income tax due to nonresidents; consular fees without limit, as well as transfers from the Ministry of External Affairs to accounts in the names of embassies and their established staffs, High Commissioners, and diplomats; up to a limit of £J 1,000 for (1) advertising and promotional expenses, (2) renewal and refund of premiums due to nonresident insurers, and (3) subscriptions to trade organizations; up to a limit of £J 2,000 for commissions and expenses due by Jamaican firms to their agents and representatives and for serial rights in Jamaica of newspaper and magazine articles, photographs, strip cartoons, etc.; specified payments, up to a limit of £J 2,500, that are due by Jamaican insurers to nonresident insured parties under life or endowment insurance policies; agents’ expenses and fees, up to £J 2,500, due by Jamaican insurers to nonresidents in respect of direct insurance policies; loans or overdraft facilities to nonresident individuals and nonresident-owned or nonresident-controlled Jamaican companies, up to £J 1,000 and £J 10,000, respectively. Other standard allocations include, on an annual basis, £J 2,000 for each student studying abroad and £J 500 from each remittor for each charity; applications for exchange within these limits are approved automatically by the Bank of Jamaica if supported by the appropriate documentary evidence. Requests for additional amounts or for purposes for which there are no standard limits (e.g., remittances by charitable institutions) are approved if the authorities are satisfied that no capital flight is involved.

Travelers going abroad may take with them Jamaican banknotes not exceeding £J 10 and other notes, with the exception of U.K. notes, not exceeding £J 100 in value. Nonresidents may take out the foreign currency notes they brought in.

Exports and Export Proceeds

Many exports, particularly to the dollar area, require export licenses. Some exports (e.g., vegetables) are subject to licensing to ensure adequate local supplies. Exporters to countries in the Sterling Area are not required to repatriate their export proceeds; exporters to other countries are required to surrender their exchange proceeds, which must be obtained in one of the specified currencies, to authorized dealers within six months from the date of shipment. However, certain exporters may retain, with the approval of the exchange control authorities, an agreed portion of their proceeds to facilitate the import of items necessary for their operations.

Proceeds from Invisibles

Receipts from invisibles in specified currencies must be sold to an authorized dealer. Receipts in other currencies may be retained. Travelers to Jamaica may not bring in Jamaican and/or U.K. banknotes of an aggregate value exceeding £J 10 (i.e., £ stg. 10); nonresident travelers may bring in any amount of non-Sterling Area banknotes.

Capital

Investments in Sterling Area securities by residents are permitted freely. Investments in other securities require the approval of the exchange control authorities, and such securities may only be purchased in the United Kingdom with “reinvestment” currency. The sale of securities by residents to nonresidents may be allowed, provided that the full proceeds are received in External Account sterling or in foreign currency; the latter must be surrendered to an authorized dealer in Jamaica if permission is not given to reinvest the proceeds in other securities.

Direct investments in the Sterling Area may be made freely by residents. Direct investments in other countries are restricted, but permission may be granted for investments that would enable Jamaica to earn foreign exchange in a short period.

Direct investments in Jamaica by nonresidents for which “approved status” is sought require the approval of the exchange control authorities (which is usually granted) and must be made in the currency appropriate to the country of permanent residence of the investor or in External Account sterling. To qualify for “approved status,” an enterprise must have adequate capital and the nonresident investor must take an active part in management. For foreign investments granted “approved status,” repatriation of the capital (including any appreciation in value) is permitted at any time; remittances of profits and dividends are permitted when the application is supported by the appropriate set of accounts. Remittances of profits resulting from foreign investment in respect of which “approved status” was not sought or granted are not restricted, but the realization of the invested capital (if the enterprise is bought by a resident) has to take place through Blocked Accounts (see section on Nonresident Accounts, above).

Payments for amortization of, and interest on, foreign loans (i.e., loans made by nonresidents of the Sterling Area) are permitted upon application to the exchange control authorities. However, nonresidents are not normally permitted to take security in respect of loans made to Jamaican companies owned or controlled by them.

Transfers to nonresident beneficiaries under wills and intestacies are approved, provided that all local indebtedness has been met.

Changes during 1964

April 1. A new open general license for imports replaced the open general license dated April 1, 1961, and all amendments thereto.

April 22. All import duties were increased by 10 per cent ad valorem, with the exception of those on certain basic foodstuffs, which were unchanged, and those on certain luxury items, which were increased by 20 per cent ad valorem.

November 23. The Bank of Jamaica’s commission charge on outward transfers was raised from ⅜ to ⅝ of 1 per cent.

Japan

Exchange Rate System

The par value is Japanese Yen 360.00 = US$1. The official limits of buying and selling rates for U.S. dollars (spot), which are set by the Ministry of Finance, are ¥ 362.70 (upper limit) and ¥ 357.30 (lower limit), per US$1; the exchange authorities will buy or sell exchange at rates within this range. Authorized banks may freely carry out spot and forward exchange transactions. Japan accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from April 1, 1964.

Administration of Control

The exchange control system is operated by the Ministry of Finance, the Ministry of International Trade and Industry (MITI), and the Bank of Japan as the Government’s agent. However, much of the authority for approving normal payments is delegated to authorized banks. Import and export licensing is handled by MITI.

Prescription of Currency

Payments to all countries except the Republic of Korea may be made in any currency, and receipts from those countries may be obtained in any of the designated receivable currencies;1 receipts in other currencies require an individual license. Settlements in yen with those countries must be made through a Nonresident Free Yen Account. Payments to and from the Republic of Korea are made through accounts established under the bilateral payments agreement with that country, but payments from Korea may also be accepted in any of the designated receivable currencies and payments for specified invisibles may be made without using these accounts.

Nonresident Accounts

There are two main nonresident accounts, as described below.

1. Nonresident Free Yen Accounts. These accounts may be opened by any nonresident with any authorized bank in Japan and may be credited with the yen proceeds from exports of goods to Japan and from other authorized transactions incidental thereto, with yen proceeds from sales of designated receivable foreign currencies, with transfers from other Free Yen Accounts, and with proceeds from other authorized payments. There are no restrictions on payments from these accounts. The yen balance on these accounts may be converted into any foreign currency.

2. Nonresident Yen Deposit Accounts. These accounts may be held by any nonresident with any authorized bank in Japan. They may be credited with yen proceeds from transactions other than those which are authorized to be credited to Nonresident Free Yen Accounts. Permitted credits to Nonresident Yen Deposit Accounts include proceeds from the sales of debentures and beneficiary certificates sold within six months from the date of validated acquisition, proceeds from sales of fixed assets, and yen in excess of the amount of US$5,000 which permanent emigrants are allowed to take out of Japan. Balances on these accounts are not convertible into foreign currencies, although remittances are permitted each year up to one fifth of the balance at the end of the year or US$2,000, whichever is the higher. Withdrawals from these accounts are authorized for certain purposes, such as meeting the outlays involved in managing investments in Japan and the expenses of nonresidents staying in Japan. Transfers to other Nonresident Yen Deposit Accounts are authorized freely, thus enabling the individual account holder to repatriate his funds by selling them to another nonresident in return for foreign currency.

In addition, there are Foreign Investors’ Deposit Accounts in which certain proceeds from investments liquidated by foreigners may be placed. Balances on these accounts may be used for remittances abroad or for making other investments under certain conditions. However, these accounts are of limited importance, because proceeds from foreigners’ liquidated investments may be remitted through Nonresident Free Yen Accounts without having been placed in Foreign Investors’ Deposit Accounts.

Imports and Import Payments

Imports are subject to individual licensing by the authorized banks, but in practice 93 per cent of nongovernment imports are liberalized. There are different licensing procedures for imports requiring payment in foreign currencies: (1) Under the Import Quota System (covering imports of goods on the “negative list”), the importer must first obtain from MITI an import quota, which is based on the quantitative principle. If the quota is granted, the importer receives an import quota certificate which entitles him to receive an import license from an authorized bank automatically upon application. Practically all import quota certificates are issued on a global basis, without regard to the country of origin or the currency of settlement. (2) Under the Automatic Import Quota System, import quotas for specified categories of imports are granted automatically on a global basis and without restriction by MITI. (3) Under the Automatic Approval System, imports are, in effect, free of quantitative restriction, since licenses to import the commodities specified under this system are issued freely and without limitation by the authorized banks, on application. All items subject to the Automatic Approval System may be imported from any country.

Payment for imported goods must be made under one of the standard methods of settlement for imports (generally within a period from the date of receipt of the shipping documents or the goods to four months after customs clearance). When the settlement proposal is not in accordance with one of the standard methods, prior approval of MITI must be obtained.

In general, importers must make a deposit with an authorized bank when applying for an import license; currently the amount of this deposit is 1 per cent, 5 per cent, or 35 per cent of the value of the intended imports, depending on the goods to be imported (for imports from the Ryukyu Islands and the Bonin Islands, the deposit is 110 of 1 per cent). The deposit is returned after 80 per cent of the goods has been imported or if the import transaction is canceled for a reason acceptable to the control authorities. The percentage of deposit can be increased or decreased. The 1 per cent deposit may be made in cash, securities, or other collateral; the other deposits must be made in cash.

Payments for Invisibles

Payments for invisibles require approval. However, most such payments are approved freely by authorized banks without any limitation or within certain established limits. Payments for certain invisibles, including payments that exceed the established limits, are referred to the Bank of Japan for the purpose of capital control; except for tourism, they are automatically approved without undue delay, upon verification of the authenticity of the current transaction. For tourism, an allowance equivalent to US$500 a person for one trip a year is automatically made available; for additional amounts, special authorization is required. A tourist is permitted to pay in yen, before departure, the cost of transportation to and from his destination. Certain contracts require approval; but when a license for a contract has been granted, any payment resulting from the contract may be made freely. Settlements which are not made under a “standard” method require, in principle, individual approval; under this method, payments for services, etc., may not be made more than three months before, or later than six months after, receipt of the services, etc.

Both residents and nonresidents may take out freely ¥ 20,000 in Japanese currency. A nonresident may take out freely foreign currencies up to the amount which he brought into Japan.

Exports and Export Proceeds

All exports (except exports without exchange) must be registered with an authorized bank (“bank certification”), in order that the requirements concerning prescription of currency and surrender of proceeds may be enforced.

Licenses are not generally required, except for goods subject to the following restrictions: restrictions on strategic goods to control their export to communist countries; restrictions on goods in short supply in the domestic market (e.g., minerals, fertilizers, and staple foodstuffs); and restrictions designed to forestall the imposition of import restrictions by other countries (e.g., on such commodities as pottery and porcelain, sewing machines, and certain textiles). Exports under processing and consignment sale contracts and exports for which settlement is not under the standard method also require individual licenses.

Under the standard method of settlement for exports, the value of the exported goods must, in general, be settled by drawing a bill of exchange payable within five months after sight or within six months after shipment in a designated receivable currency.

Export proceeds must be surrendered within 10 days from the date of acquisition. However, trading concerns resident in Japan may be permitted to hold foreign currency deposit accounts with authorized banks, in which they may keep their proceeds in U.S. dollars and/or sterling from exports and invisibles for a maximum of 20 days; during this period, they may use the exchange to make approved payments for their imports or for current invisibles, or sell it to the authorized banks for yen.

Proceeds from Invisibles

Receipts under the standard method of settlement may be accepted without a license. Under this method, receipts for the value of services, etc., must be obtained within one year before, or within six months after, rendering the service, etc. But contracts for services performed for nonresidents when payment is to be received by a nonstandard method are subject to individual licensing. Receipts from invisibles must, as a rule, be surrendered. However, in order to facilitate payments for current invisibles, specified residents (shipping companies, etc.) are authorized to keep foreign currency deposit accounts with banks in the designated receivable foreign currencies.

Both residents and nonresidents may bring in freely any amount in foreign or Japanese currency.

Capital

Foreign investments in Japan are generally subject to approval, mainly in accordance with the Foreign Investment Law (Law No. 163 of May 10, 1950). All acquisitions of stocks, bonds, debentures, beneficiary certificates, and claims in the form of loans by foreign investors are subject to validation or license. However, acquisitions of stocks in the securities market are automatically approved by the Bank of Japan as follows: up to 15 per cent of the stock of a corporation not classified as a restricted industry, up to 10 per cent of the stock of a corporation classified as a restricted industry,2 and up to 5 per cent of the total capital of any corporation if acquired by a single holder. Acquisition of stock for participation in management is subject to individual validation, but it is approved in principle if there is no adverse effect on the Japanese economy. All these acquisitions, to be validated, must be made against yen proceeds from the sale of foreign exchange or its equivalent. Stocks in the form of stock dividends on earned surplus or revaluation of assets may be acquired freely, but application for remittance rights must be made within three months from the date of acquisition. The following are deemed to be the same as yen proceeds from the sale of foreign exchange, if they are reinvested in Japan and if approval had been obtained for their acquisition: proceeds from the redemption after maturity of debentures, beneficiary certificates, or claims in the form of loans; dividends on stocks; interest on debentures or on claims in the form of loans; distributed profits of beneficiary certificates; receipts from technological assistance contracts; and proceeds from sales of stocks, debentures, and beneficiary certificates.

In the event of expropriation or compulsory sale of a foreign investment, the amount paid on account of expropriation may be repatriated freely.

Remittance of the proceeds from the sale of validated stock, as well as transfers abroad of earnings on foreign investments acquired with foreign currency, are permitted. Proceeds from validated debentures and beneficiary certificates may be remitted after six months from the date of acquisition.

Proceeds from the sale of stocks, bonds, debentures, beneficiary certificates, etc., acquired with yen withdrawn from Nonresident Yen Deposit Accounts may be deposited in Nonresident Free Yen Accounts, provided that the securities have been held for at least three years from the date of acquisition (or from December 18, 1964 for securities acquired before that date). Repayments of loans extended to residents from Nonresident Yen Deposit Accounts become remittable, subject to licensing by the Bank of Japan, three years from the date of the loan.

When foreign companies desire to establish a branch or a plant in Japan, they are required to inform the Bank of Japan; and when the branches or plants wish to bring in funds from their main offices abroad, they are required to obtain licenses. The branches established in accordance with such procedures are permitted to remit their profits and principal abroad.

Transfers of capital abroad and investments abroad by residents are subject to approval. Emigrants may remit to their new country of domicile up to US$5,000 or its equivalent in other foreign currencies.

Securities acquired with approval under the Foreign Investment Law may be imported and exported freely.

Changes during 1964

January 11. Imports of 3 items under the Brussels nomenclature were liberalized.

February 29. Imports of 7 items, including lead and zinc goods, were liberalized.

March 18. The rates for deposits which importers are required to make with an authorized bank were increased temporarily; the range of deposit rates was changed from 1 and 5 per cent to 1, 5, and 35 per cent.

April 1. The foreign exchange budget was abolished. For the goods still restricted, importers had to obtain an import license from MITI.

April 1. The Ministerial Council, the main function of which was to establish the foreign exchange budget and approve its revision, was abolished.

April 1. For tourism—for which no payments had been permitted hitherto—an allowance equivalent to US$500 a person for one trip a year became available automatically; for additional amounts, special authorization was required. Furthermore, a tourist was permitted to pay in yen, before departure, the cost of transportation to and from his destination.

April 1. With regard to yen-based investment (i.e., foreign yen investments made in Japan before July 1963 on the understanding that the income and principal would not be transferable in foreign currency), the Ministry of Finance announced that, from April 1, the transfer abroad of current income accruing henceforth from the investment would be permitted, while the principal and income accumulated in the past could be deposited in a Nonresident Yen Deposit Account.

April 7. Imports of 8 items, including color television receivers and electric generators with a capacity of 400,000 kw. or less, were liberalized.

April 21. The rates of advance import deposit requirements were reduced for several items.

May 8. Imports of fresh lemons were liberalized.

July 1. The import of foreign motion pictures was liberalized.

September 1. The rates of advance import deposit requirements were reduced for 27 items, including cotton, wool, and feedstuffs.

October 1. Imports of 12 items, including bulldozers and chemical fertilizers, were liberalized. This reduced the number of items still restricted, i.e., included on the “negative list,” to 162 and raised the liberalization ratio to 93 per cent.

November 20. Charter contracts for more than one year for importing coal and iron ore were liberalized.

December 18. Restrictions were eased on several types of transactions and payments. Proceeds from the sale of stocks, bonds, debentures, beneficiary certificates, etc., acquired with yen withdrawn from Nonresident Yen Deposit Accounts could in future be deposited in Nonresident Free Yen Accounts, provided that the securities had been held for at least three years from the date of acquisition (or from December 18, 1964 for securities acquired before that date). Repayments of loans extended to residents from Nonresident Yen Deposit Accounts would become remittable, subject to licensing by the Bank of Japan, three years from the date of the loan. Proceeds from the sale of real estate, acquired by nonresidents with a license, could be remitted, subject to licensing by the Bank of Japan. Proceeds from life insurance policies could be remitted freely to nonresident beneficiaries, provided that the beneficiaries had been residents in Japan when the policy-holder had purchased the insurance. Premiums of life insurance policies contracted with foreign insurance companies by residents when their status was that of nonresidents could be remitted freely. Authority to approve the following transactions was delegated by the Ministry of Finance to the Bank of Japan: the sale of foreign currency securities by residents to nonresidents; borrowing for living expenses from nonresident relatives, and loans for living expenses to nonresident relatives in cases of hardship.

Jordan1

Exchange Rate System

The par value is Jordan Dinar 1 = US$2.80. The official limits for the U.S. dollar are US$2.82 buying, and US$2.78 selling, per JD 1. Authorized banks deal in U.S. dollars and other foreign currencies at rates usually based on the rates in the London market. Fees are levied on the issue of import licenses at the rate of 4 per cent when the goods are to be paid for in foreign exchange, and ½ of 1 per cent for goods imported without exchange. A fee of 110 of 1 per cent is levied on exchange permits approved by the Central Bank of Jordan for sales of exchange for imports and invisibles, except educational expenses and import payments and payments for invisibles by government departments and certain other approved institutions.

Administration of Control

Exchange control is administered by the Foreign Exchange Department of the Central Bank of Jordan. Import policy is formulated by an Import Committee, which is composed of the Controller of Imports, the Undersecretary for National Economy, the Director of Customs, the Head of the Foreign Exchange Department of the Central Bank of Jordan, the Director of Income Tax, and two persons representing the Chambers of Commerce. The decisions of the Import Committee are carried out by the Controller of the Import Department of the Ministry of National Economy.

Prescription of Currency

Jordan is a member of the Sterling Area, and most of its trade is financed in sterling. Payments to residents of the Sterling Area may be made in any Sterling Area currency. In practice, such payments are made in sterling to a Resident Account in the United Kingdom, or in Jordan dinars to a nonresident Sterling Area Account with an authorized bank in Jordan. Payments to residents of countries outside the Sterling Area (except Yugoslavia)2 must be made in sterling to an External Account in the United Kingdom, or in Jordan dinars to a nonresident External Account with an authorized bank in Jordan, or in currency appropriate to the country of residence of the recipient and/or the country of origin of the goods.

Proceeds from exports and invisibles must be collected, and surrendered where required, as follows: from residents of the Sterling Area, in resident sterling or in Jordan dinars from a nonresident Sterling Area Account with an authorized bank in Jordan; from residents of countries outside the Sterling Area, in sterling from an External Account in the United Kingdom, in Jordan dinars from a nonresident External Account with an authorized bank in Jordan, or in any specified currency.3

Nonresident Accounts

Subject to the prior approval of the Central Bank of Jordan, authorized banks may open nonresident accounts designated either Sterling Area Accounts or External Accounts, according to the permanent residence of the account holder. These accounts must be fed with appropriate funds. The approval of the Central Bank of Jordan is necessary for redesignation of residence, for transfers from resident to nonresident accounts, and for transfers from Sterling Area Accounts to External Accounts. Transfers between similarly designated nonresident accounts, transfers from External Accounts to Sterling Area Accounts, and transfers from nonresident to resident accounts are permitted freely.

Imports and Import Payments

Imports of certain items 4 from any source and all imports from Israel are prohibited. Imports of fruits and vegetables are exempt from licensing requirements. All other imports, except those covered by an agreement between Jordan and the exporting country, require import licenses. These are granted freely by the Ministry of National Economy, except for certain items which are subject to scrutiny by either the Import Committee or the Undersecretary for National Economy, whose prior approval is also required for imports of industrial machinery and of all materials needed for the establishment or expansion of an industrial firm.

A fee of 4 per cent is payable on licenses for imports paid for in nonresident account dinars or foreign exchange. A fee of ½ of 1 per cent is payable on licenses issued without exchange (e.g., for samples, household effects, charitable donations in kind).

Licenses for imports originating in Arab League countries5 are valid for 4 months and those for imports originating in other countries for 6 months. For the latter, the importer must open a letter of credit within 45 days of the date of issue of the license and must complete the process of importation within the period of validity of the license. If the importer chooses to pay against documents, the requirement that he open a letter of credit is dispensed with, provided that the goods are shipped within 3 months of the date of issue of the license.

Payments for Invisibles

All payments for invisibles are subject to exchange control approval. Payments for the following types of invisibles are generally permitted: income of nonresidents; savings of foreign nationals who intend to return to their own countries; remittances to refugee dependents; reasonable living expenses of Jordanian nationals abroad; expenses of Jordanian residents traveling abroad; expenditures for education; expenses of medical treatment; business expenses abroad; and insurance payments in accordance with special regulations.

The policy in respect of these payments is, in general, liberal and nondiscriminatory. However, foreign exchange is not granted for travel to Iraq, Kuwait, Lebanon, Saudi, Arabia, or the Syrian Arab Republic, though residents of Jordan and nationals of these countries traveling to them may take out up to JD 100 in Jordanian notes and coins. Otherwise, persons leaving Jordan may not take out more than JD 25 in Jordanian notes and coins or the equivalent in foreign currency; in addition, tourists and other nonresidents may take out foreign currency notes which they had previously brought into the country. Remittances for family maintenance may be made by postal order at a rate not exceeding JD 10 a month to any one person resident abroad.

Exports and Export Proceeds

Export proceeds exceeding JD 50 must be collected and the foreign exchange, including sterling, surrendered. Proceeds from exports to Arab League countries of agriculture products and locally manufactured goods are exempt from the surrender requirement, except for the products of tobacco and cigarette factories, the phosphate company, the dyeing and tanning company, the cement plant, and the petroleum refinery. Exports to Israel are prohibited.

Proceeds from Invisibles

Foreign exchange (including sterling) receipts from invisibles must be surrendered to an authorized bank. Travelers entering Jordan may bring in a maximum of JD 100 in Jordanian currency notes and any amount in foreign currencies. Any person regarded for exchange control purposes as resident in Jordan may be required by the Central Bank to surrender to an authorized bank any foreign currency (including sterling) at his disposal.

Capital

Capital may be imported freely, but exports of capital require approval. Current income resulting from nonresident investments in Jordan may be transferred abroad. Under the Law for the Encouragement of Foreign Capital Investment, effective May 1, 1955, profits from approved foreign investments may be remitted regularly, without any limitation, in the currency of the original investment. After one year, repatriation of the capital is permitted in four annual installments in the same foreign currency in which the original investment was made. The Government may approve more liberal provisions upon application.

Changes during 1964

June 11. Import duties were increased across the board by 3 percentage points.

September 22. Import duties were increased across the board by a further 0.5 percentage point.

October 1. The Central Bank of Jordan took over the functions of the Currency Control Department of the Ministry of Finance. Exchange control was henceforth to be administered by the Foreign Exchange Department of the Central Bank.

October 1. The fee of ½ of 1 per cent levied on exchange permits for most invisibles was abolished. A fee of 110 of 1 per cent was levied on exchange permits for most invisibles and for most import payments.

October 1. Foreign exchange was no longer granted for travel to Iraq, Kuwait, and Saudi Arabia.

Note.—The following changes took place in 1965:

January 1. The minimum amount of export proceeds that must be surrendered was raised from JD 20 to JD 50.

January 1. Exports of phosphates to India could no longer be settled in Indian rupees.

Kenya1

Exchange Rate System

No par value for the currency of Kenya has been established with the Fund. The unit of currency is the East African shilling, which is officially maintained at par with the U.K. shilling, giving the relationship EA Sh 1 = US$0.14. It circulates freely in the East African currency area, which comprises Aden, Kenya, Tanzania, and Uganda. In transactions equivalent to at least £ stg. 5,000 with the public, the East African Currency Board stands ready to issue East African currency in exchange for sterling and to supply sterling in exchange for East African currency. In transactions covering smaller amounts, the public has to deal through the authorized banks. The buying and selling rates for such transactions are at present within ⅛ per cent and ½ per cent, respectively, of parity. Banks in Kenya base their rates for other currencies on the current market rates in London.

Administration of Control

Exchange control is administered by the Treasury. Authority for approving normal import payments and providing standard allocations of foreign exchange is delegated to authorized banks. Import and export controls are administered by the Director of Trade and Supplies in the Ministry of Commerce.

Prescription of Currency

Kenya is a member of the Sterling Area and maintains prescription of currency requirements similar to those of the United Kingdom. Settlements with residents of other countries in the Sterling Area may be made in any Sterling Area currency. Authorized payments, including payments for imports, by residents of Kenya to residents of countries outside the Sterling Area may be made in sterling, in East African shillings to the credit of an External Account, or in any foreign currency. Receipts from countries outside the Sterling Area may be obtained in sterling, in East African shillings from an External Account, or in any convertible foreign currency. However, settlements with the United Arab Republic related to merchandise transactions are made through centralized accounts denominated in inconvertible sterling, in accordance with a bilateral payments agreement.

Nonresident Accounts

Nonresident Sterling Area Accounts are held by residents of other Sterling Area countries. They may be credited with all authorized payments to Sterling Area countries by Kenya residents, with transfers from other Nonresident Sterling Area Accounts, and with the proceeds from sales to an authorized dealer in Kenya of pounds sterling or the currency (excluding East African shillings) of any other country in the Sterling Area. They may be debited for payments for exports to countries in the Sterling Area and other payments due by residents of other countries in the Sterling Area to Kenya residents, for payments to residents of other countries in the Sterling Area for any purpose, for transfers to other Nonresident Sterling Area Accounts in Kenya, for purchases of any Sterling Area currency, and for withdrawals by the account holder while he is temporarily resident in Kenya.

Accounts in East African shillings held by residents of countries outside the Sterling Area with authorized banks are, with exchange control approval, designated External Accounts. They may be credited with authorized payments by residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds from sales of foreign currency to authorized dealers. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of foreign currency from authorized dealers.

Imports and Import Payments

With relatively few exceptions, the movement of goods within the East African common market2 is unrestricted. Specific import licenses are required for certain goods from other sources; other goods may be imported without licenses. All imports from South Africa and metropolitan Portugal are prohibited.

When the importer has obtained a license from the Director of Trade and Supplies, or if the transaction is covered by an open general license, exchange is provided automatically by an authorized bank upon application and submission of the necessary documentary evidence.

Payments for Invisibles

Payments for invisibles may be made freely to residents of other Sterling Area countries. Sales of exchange for other purposes require the approval of the exchange control authorities. Travelers proceeding direct to Tanzania or Uganda may export any amount in domestic currency notes. Travelers to destinations outside the Sterling Area may take out up to EA Sh 1,000 in domestic currency notes or sterling notes and up to £ stg. 250 in other banknotes. Nonresident travelers may take out foreign currency notes up to the amount they brought in upon entry.

Exports and Export Proceeds

Exports of certain foodstuffs and agricultural products require licenses and may be subject to restriction. Exports of minerals, precious stones, and strategic materials are also subject to licensing. Other goods may be exported without licenses. With relatively few exceptions, the movement of goods within the East African common market (see footnote 2) is unrestricted. All exports to South Africa and metropolitan Portugal are prohibited.

Export proceeds, other than those in Sterling Area currencies, must be offered to an authorized bank in Kenya for conversion into East African shillings.

Proceeds from Invisibles

Receipts from invisibles in currencies other than those of the Sterling Area must be sold to an authorized bank. Travelers may bring in freely foreign currency notes; the import of domestic currency notes must not exceed EA Sh 1,000 in value for each traveler.

Capital

Movements of capital between Kenya and other Sterling Area countries are not restricted. There is no restriction on the investment of foreign funds in Kenya; but to ensure eventual repatriation, it is necessary to obtain “approved status” for the investment, which in normal circumstances is given freely.

Changes during 1964

During the year a wide range of import items was made subject to specific import licensing.

April 11. Agreement was reached among the countries of the East African common market to subject certain interterritorial trade to export and import quotas.

November 25. The upper limit on the authorized banks’ selling rates for sterling in transactions with the public was raised from ⅜ per cent to ½ per cent over parity.

Korea

Exchange Rate System

No par value for the Korean Won has been established with the Fund. On May 3, 1964 a new fluctuating rate based on an exchange certificate system was introduced. In practice, no market for exchange certificates has developed, and all transactions take place at a rate of W 255 per US$1. Many exports, however, receive subsidies ranging from W 3 to W 25 per US$1.

Administration of Control

The Ministry of Finance determines exchange rates, subject to the approval of the Cabinet. It carries out policy with respect to prescription of currency and method of settlement, foreign exchange operations, payments for nonmerchandise transactions, and capital transactions and transfers. The Bank of Korea, as the Government’s agent, executes the above functions in part; it has been delegated authority to control receipts and payments related to invisibles. The Bank of Korea and five commercial banks, as well as their branch offices, are authorized to deal in foreign exchange.

Some imports and exports are subject to approval by the Ministry of Commerce and Industry or the ministries concerned.

Prescription of Currency

Under a bilateral payments agreement with Japan, settlements with that country must be made through a bilateral clearing account, except for settlements on account of certain trade transactions requiring cash payment in U.S. dollars. There is also a bilateral payments agreement with Viet-Nam, but no clearing account has yet been established and all settlements are made in convertible exchange.

The proceeds of exports must be obtained in Canadian dollars, deutsche mark, French francs, Hong Kong dollars, Italian lire, pounds sterling, Swiss francs, or U.S. dollars. The methods of payment on account of other settlements are set forth in licenses or conditions attached to sales of exchange by the Bank of Korea.

Nonresident Accounts

Nonresidents may maintain foreign currency deposit accounts with the Bank of Korea and the authorized banks. Remittances from such accounts and withdrawals in the form of currency notes upon departure from Korea may, in general, be made freely. The approval of the bank where the account is held is required for remittances from balances that have accrued from remuneration for services in Korea, air or ship passage fares, or insurance premiums received in Korea, or from exchange deposited in accordance with a decision of the Ministry of Finance (except exchange registered at the customs on entry or remitted from abroad). The deposits may be disposed of by sale to the Bank of Korea or an authorized bank at the banks’ prevailing buying rate, and they may be debited, subject to the approval of the Ministry of Finance, for salary payments to foreign employees.

Foreign residents and nonresidents are permitted to hold foreign currency time deposit accounts with the Bank of Korea and the authorized banks. Certain residents of Korean nationality, such as the airline and some insurance companies, may maintain current deposit accounts in foreign currencies with the Bank of Korea and with authorized banks.

Imports and Import Payments

The total value and composition of imports are established under semiannual import programs. There is an automatic approval procedure for most imports, but some imports require individual licenses even when included under the automatic approval procedure. No licenses are issued for any goods originating from communist countries and for certain imports from all other countries. Imports are divided into two categories: those (including most raw materials and capital goods) paid for with U.S. aid funds and those paid for with exchange from other sources (so-called KFX imports). In certain cases, payment for imports usually financed with U.S. aid funds may be made with KFX exchange. Certain imports are reserved only for end-users, i.e., manufacturers and exporters who need specified raw materials.

Import licenses are granted only to registered traders; to maintain the status of a registered trader, a minimum value of $30,000 of exports is required each year. For each calendar quarter, a trader may submit applications for import licenses equivalent to 25 per cent of the total amount of his earnings during the same quarter from exports, from sales of goods and services to UN forces stationed in Korea, and from sales of gold to the Bank of Korea.1 Except for imports for exports, all applications for licenses for KFX-financed imports as well as for most aid imports must be accompanied by an advance deposit of W 255 per US$1. For imports of wheat and cotton under the aid program, a minimum of W 50 per US$1 must be deposited at the time the application for a “subauthorization” is filed; a minimum of W 50 per US$1, at the time the import license is issued; and the remainder, at the time the bill of lading is released.

Except for imports to be used by industries which earn foreign exchange and a few others, full payment in won is required when the letter of credit covering imports paid for with KFX exchange is opened.

Payments for Invisibles

All exports to communist countries, and exports of certain goods licenses. Foreign and Korean currency notes may not be exported without special permission. Departing foreigners may reconvert unused won notes into U.S. dollars up to US$100, and they may take out any foreign exchange that they had registered on entry.

Exports and Export Proceeds

All exports to communist countries, and exports of certain goods (such as raw cotton; raw hides; precious metals; certain ores, minerals, and chemicals; bituminous coal; pulp; and lumber) to all other countries, are prohibited.

Certain exports require individual licenses. All other exports may be made freely under an automatic approval procedure.

The export proceeds in foreign exchange must either be surrendered at the W 255 rate or be exchanged into equivalent foreign exchange certificates. Some exports, however, receive subsidies, which are fixed from time to time by the Ministry of Commerce and Industry. The subsidies in effect are as follows: W 20 per U.S. dollar for exports to new markets; W 25 per U.S. dollar for new exports; and W 3 to W 25 per U.S. dollar for commodities requiring export promotion. A trader’s export sales are taken into account in determining the amount of import licenses he may apply for (see section on Imports and Import Payments, above).

Sixteen specified commodities may be exported under a barter arrangement. They are not eligible for subsidies, and individual licenses are required. Traders who export under the barter arrangement are entitled to receive preferences in the granting of import licenses. Such preferences are limited to 50 per cent of the total value of exports, and exporters of barter items cannot receive more than 50 per cent of the import licenses available for any particular category of imports.

Proceeds from Invisibles

All proceeds -derived from invisibles must either be sold to the Bank of Korea at the W 255 rate or be exchanged for equivalent exchange certificates. The import of Korean currency notes is prohibited. Travelers may bring with them any amount of foreign exchange, which must be declared upon entry.

Capital

All capital remittances require approval. Foreign capital investment, loans from abroad, and imports of capital goods on a long-term basis can secure a guarantee of repayment and repatriation under the Foreign Investment Encouragement Law, the Law Guaranteeing Repayment for Loans, and the Law Governing Importation of Capital Goods on Long-Term Repayment Basis, respectively.

Changes during 1964

May 3. A major exchange reform was introduced which greatly simplified the exchange system. A new effective rate of W 255 per U.S. dollar was introduced, and a number of special schemes for subsidizing exports and taxing imports were eliminated. In subsequent months, there was some relaxation of quantitative restrictions on imports.

August 3. A quasi-automatic import system was introduced under which most goods previously requiring an individual import license were brought under the automatic approval procedure. The amount of import licenses that importers could obtain was related to their foreign exchange earnings as follows. No trader could submit applications for import licenses to a value in excess of 20 per cent of the total of his earnings in May, June, and July from exports, from sales of goods and services to UN forces stationed in Korea, and from sales of gold to the Bank of Korea.

September 1. Exports permitted under the barter arrangement were increased from 8 commodities to 16.

November 12. The number of items in the KFX program that could only be imported by end-users was reduced from 19 to 11. Advance deposits against imports of ordinary commodities were raised from W 100 to W 255 per US$1.

November 13. The maximum import application permitted to each trader was increased for the period August through December 1964 from 20 per cent to 25 per cent of the total of his earnings from exports, from sales of goods and services to UN forces stationed in Korea, and from sales of gold to the Bank of Korea.

November 27. The proceeds of exports could also be obtained in Canadian dollars, French francs, Italian lire, and Swiss francs; previously, only deutsche mark, Hong Kong dollars, pounds sterling, and U.S. dollars were accepted.

November 27. Nonresidents and foreign residents were permitted to hold foreign currency time deposit accounts with the Bank of Korea and the authorized banks, and certain residents of Korean nationality were permitted to hold current accounts in foreign currencies with the Bank of Korea and with authorized banks. Branch offices of all commercial banks were authorized to deal in foreign exchange.

December 19. Export subsidies ranging from W 3 to W 25 per US$1 were introduced. Exports to new markets received a subsidy of W 20 per US$1; new exports one of W 25 per US$1; and exports requiring export promotion one of W 3 to W 25 per US$1.

Kuwait

Exchange Rate System

The par value is Kuwaiti Dinar 1 = US$2.80. The dinar is officially defined in terms of gold and is at par with the pound sterling. The commercial banks’ rates for telegraphic transfers on London are KD 0.9975 buying, and KD 1.0025 selling, per £ stg. 1. Rates for other currencies in the official market are based on London market rates. There is a free market in which exchange may be dealt in without restriction as to its origin or use, and in which rates, in practice, differ from official market rates by less than 1 per cent. On December 31, 1964, the average selling rate for the U.S. dollar in the official market was KD 0.3605 per US$1, and in the free market it was within a range of KD 0.35930 to KD 0.35965 per US$1.

On April 5, 1963, Kuwait notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

There is no exchange control legislation in Kuwait. Control is exercised only over the provision of exchange in the official market for payments to territories outside the Sterling Area and over the manner of payment to other Sterling Area territories. It is administered by the Kuwait Currency Board. Authority to provide exchange for imports and related payments and, within limits, for travel is delegated to the banks operating in Kuwait. Individual Letters of Recommendation, required for other payments through the official market in currencies other than those of the Sterling Area, are issued by the Currency Board. General and individual import licenses are issued by the Ministry of Trade.

The limited control over exports is administered by the Ministry of Customs and Ports.

Prescription of Currency

Kuwait is a member of the Sterling Area, and the banks operating in Kuwait observe prescription of currency requirements broadly similar to those of other parts of the Sterling Area. Payments to other countries in the Sterling Area may be made in sterling or another Sterling Area currency. Payments through the official market to countries outside the Sterling Area may be made in sterling to the credit of an External Account or in a non-sterling currency appropriate to the area to which the payment is made. Payments from other countries in the Sterling Area may be received in any Sterling Area currency. Apart from payments to the Government, payments from countries outside the Sterling Area are not, in practice, received through the official market.

Nonresident Accounts

No distinction is made between accounts held by residents and those held by nonresidents.

Imports and Import Payments

Import licenses are required for all private imports other than foodstuffs; licenses are issued freely. Registered importers handling a variety of commodities may obtain a general license valid for one year. Other importers must obtain specific licenses. All imports from Israel, including imports of Israeli manufacture and those which contain Israeli materials or are manufactured by companies financed by Israeli capital, and all imports from South Africa are prohibited.

The importer must be either a Kuwaiti citizen or a firm in which all partners are Kuwaitis or a shareholding or limited liability company in which Kuwaitis own not less than 51 per cent of the stock. Firms in which partners are Kuwaitis and non-Kuwaitis may obtain nonrenewable general import licenses valid for two years.

Sterling Area currencies are provided freely for payments to residents of the Sterling Area for imports or for other purposes. Imports from any source may be paid for with exchange acquired in the free market.

The banks operating in Kuwait are authorized to provide External Account sterling or a non-sterling currency for payments for imports from outside the Sterling Area, provided that they receive a full set of documents covering the import and, when payment is to be made in sterling to the credit of an External Account, that they provide confirmation that they are satisfied that the goods will be landed in Kuwait. When payment is made in a non-sterling currency, the banks operate on the basis of blanket or nonspecific Letters of Recommendation which authorize them to obtain non-sterling currencies in London up to certain limits and to transfer them to accounts in the country of the currency involved. When the limits are reached, the banks obtain further authorizations under new Letters of Recommendation on presentation of accountings of how the previous allocations have been used.

For payments for goods purchased in countries outside the Sterling Area for resale without shipment to Kuwait, exchange is provided through the official market only if a bank guarantees that the proceeds of the resale will be returned to Kuwait.

Payments for Invisibles

Payments for invisibles may be made freely to residents of other Sterling Area countries, or to residents of any country in exchange acquired in the free market.

Payments through the official market to residents of countries outside the Sterling Area may be made in sterling to the credit of an External Account or in a non-sterling currency for expenses related to imports (such as freight and insurance), as part of the arrangements on payments for imports and thus subject to the same conditions (see section on Imports and Import Payments, above). The banks operating in Kuwait have been granted general authority to sell to Kuwaiti nationals non-sterling currencies up to the equivalent of KD 250 a person for each trip for travel outside the Sterling Area, without specific reference to the Currency Board. For business travel, the amount may be increased up to KD 20 a day for a maximum period of three months; this allowance is applicable to all members of the family who accompany a business traveler. Travelers may take with them any amount in Kuwaiti or other banknotes.

For all other payments for invisibles to countries outside the Sterling Area which are made through the official market, a separate Letter of Recommendation must be obtained from the Currency Board for each payment. Such authorization will be granted to provide exchange for medical or educational expenses abroad, if approval is obtained from the competent ministry. Foreign nationals working in Kuwait may remit abroad up to 75 per cent of their basic wages or salaries and, on departure, may transfer their savings. The transfer of income on foreign capital invested in Kuwait will be authorized up to the amount of net profits, including past earnings, on presentation of an audited statement. Similarly, a Letter of Recommendation will be issued to cover payments for business services, if the application is accompanied by an audited certificate.

The Currency Board will also issue to Kuwaiti nationals Letters of Recommendation providing an annual allowance in any currency of the equivalent of up to KD 3,000 for each family. This may be used for additional travel funds, for personal remittances, or for any other purpose including the transfer of capital. This exchange is automatically available; larger amounts require special authorization by the Currency Board.

Exports and Export Proceeds

Exports of sheep, poultry, and fats are prohibited, and those of other foodstuffs may be either licensed or prohibited in times of emergency or shortage; currently, exports of sugar are prohibited. Exports of arms, ammunition, and scrap metal require licenses. Licenses are not required for other exports or re-exports. All exports to South Africa are prohibited.

There are no requirements attached to receipts from exports or re-exports; the proceeds need not be repatriated or surrendered, and they may be disposed of freely, regardless of the currency involved.

Proceeds from Invisibles

No requirements are attached to the use or disposal of receipts in any currency. Travelers entering Kuwait may bring with them any amount in Kuwaiti or other banknotes.

Capital

There are no exchange control obligations on the transfer to Kuwait of resident or nonresident capital in any currency, although government agreement is necessary for the participation of nonresident capital in corporations in Kuwait.

No control is imposed on outward capital payments by residents or nonresidents to other countries in the Sterling Area, or to any country if the payment is made through the free market. A Letter of Recommendation from the Currency Board is required if a currency other than a Sterling Area currency is to be transferred through the official market. When a firm in which nonresident capital is involved is liquidated, permission is given automatically for the repatriation through the official market of the nonresident capital involved, in a currency appropriate to the residence of the investor.

Under a resolution of September 1963 of the Ministry of Finance and Industry, Kuwaiti nationals may be granted permission to transfer capital, within limits approved by the Exchange Control, to countries outside the Sterling Area for investment purposes, provided that the application is supported by sufficient information regarding the purpose of the investment and the country to which the remittance is made. Local banks are granted permission without restriction to invest their deposits outside the Sterling Area.

Transfers of capital for other purposes by residents through the official market to countries outside the Sterling Area are generally not permitted beyond an amount equivalent to KD 3,000 a family per annum (see section on Payments for Invisibles, above). Additional amounts are subject to the approval of the Currency Board, which is granted only in exceptional cases.

Changes during 1964

November 15. The administration of exchange control was transferred from the Ministry of Finance and Industry to the Kuwait Currency Board.

November 29. All private imports other than foodstuffs required an import license from the Ministry of Trade. Previously, licenses were required only for arms, ammunition, alcohol and alcoholic beverages, and narcotics.

Laos

Exchange Rate System

No par value for the Laotian Kip has been established with the Fund. The official rate is K 240 = US$1. This rate applies to imports of aid goods, government requirements, 60 per cent of export proceeds, and specified invisibles. All other transactions take place in an official free market.1 The National Bank of Laos conducts exchange transactions with authorized banks only in U.S. dollars, French francs, and pounds sterling, at rates equivalent to K 237.60 buying, and K 242.40 selling, per US$1. Banks are authorized to charge commissions not exceeding 1 per cent on purchases and sales of these currencies.

Residents and nonresidents are permitted to maintain accounts in foreign currencies with authorized banks. These accounts may be credited with unlimited amounts in foreign exchange and may be debited for any payments by the account holder. Transfers between these accounts are free. Balances on these accounts may be sold against kips either at the free market rate or, for specified purposes, at the official rate.

Administration of Control

The National Exchange Office2 jointly with the Department of Customs authorizes imports under the foreign assistance import programs, records all imports, authorizes payments for invisibles, and records exports. The Foreign Trade Department of the Ministry of National Economy issues export licenses. The five commercial banks are authorized to deal, on account of customers only, in foreign exchange at the official and free market rates.

Prescription of Currency

No prescription of currency requirements are imposed on receipts or payments, but the National Bank provides exchange for authorized payments and accepts export proceeds only in U.S. dollars, French francs, and pounds sterling. There is a bilateral payments agreement with the U.S.S.R., providing for payments to be made through a clearing account maintained in French francs as the unit of account.

Nonresident Accounts

Nonresidents are permitted to maintain accounts in foreign currencies with authorized banks (see section on Exchange Rate System, above).

Imports and Import Payments

All importers must pay an annual registration fee to the Government. Imports of charcoal, bricks, roof tiles, coffee, and soft drinks are prohibited, although import licenses are granted when shortages arise. Imports are divided into two categories: (1) those made in accordance with the import programs financed by assistance from Australia, the United Kingdom, and the United States; (2) all other imports, for which the importer has to supply his own foreign exchange and which are not subject to licensing.

There is a list of commodities which may be imported under the import program financed by the United States; certain of these commodities may not be imported from specified countries.3 However, petroleum products, for which specific U.S. aid is made available, may be imported from some of the countries on the list of excluded countries. Under the various import programs financed with foreign aid, importers apply to the National Exchange Office for licenses; after clearance by the customs authorities in respect of valuation, the exchange licenses automatically become import licenses. Under the U.S. import program, suppliers are paid direct from the Special Letter of Credit opened by the U.S. Government at the Chase Manhattan Bank of New York in favor of the Royal Lao Government, after the goods involved have been certified as conforming to the list of commodities qualified for foreign financing. Under the U.K. import program, foreign exchange is made available by the United Kingdom direct to the commercial banks upon the opening of letters of credit. Under the Australian import program, the Laotian Government requests the Australian Government to purchase and deliver to Laos specified goods. The Australian Government makes payment to the suppliers and covers all costs up to the Laotian port of entry, when the goods become the property of the Laotian Government.

The National Bank does not make foreign exchange available to pay for imports outside the import programs, with the exception of imports to meet government requirements. However, importers are free to obtain exchange through the official free market for any amount of imports.

Under the import programs financed with foreign aid, all importers are required to make a covering payment of 100 per cent for letters of credit opened.

Payments for Invisibles

Payments for certain specified invisibles that are granted foreign exchange at the official rate of K 240 per US$1 require licenses, which are issued by the National Exchange Office. Freight and insurance in connection with imports under the foreign aid import programs are regarded as a part of the import payment. The following are the main categories of payments for invisibles for which the National Bank sells foreign exchange: official expenditures by the Government; study abroad (initial installation, monthly allowances up to specified limits, transport, and other miscellaneous expenses); family maintenance; and specified insurance and reinsurance payments. All other payments for invisibles are unrestricted, but must be conducted through the free market.

Exports and Export Proceeds

All exports require licenses, and all exporters must pay an annual registration fee. Exports of gold and silver are prohibited. Sixty per cent of all export proceeds must be surrendered in U.S. dollars, French francs, or pounds sterling at the official rate to the National Bank; the remainder may be kept abroad or with domestic banks or sold in the free market. Should an exporter be paid in a currency other than U.S. dollars, French francs, or pounds sterling, he must exchange the part that is subject to surrender into one of the acceptable currencies.

Proceeds from Invisibles

Exchange surrender requirements are applied to the following invisibles: official expenses, other than salaries of foreign employees, by embassies, missions, representatives, and various foreign institutions; settlements from insurance companies; and receipts of public service companies.

Capital

Incoming capital and outgoing capital are not subject to any exchange control requirements. Transactions are conducted through the free exchange market.

Changes during 1964

January 1. The official rate of K 240 per US$1 replaced the previous rate of K 80 per US$1. The new official rate applies to imports of aid goods, government requirements, 60 per cent of export proceeds, and specified invisibles. A legal free market was established for all other transactions, including imports not financed by foreign aid, tourism, and capital transfers. The changes in the exchange system were made as part of a stabilization program supported by financial assistance from Australia, France, the United Kingdom, and the United States.

January 1. The additional deposit requirement for imports financed with foreign aid was reduced from 50 per cent to 20 per cent.

January 1. In place of nonresident accounts held in Laotian currency, nonresidents were permitted to maintain accounts in foreign currencies. Residents were also permitted to keep such accounts.

September 16. The 20 per cent additional deposit requirement for imports financed with foreign aid was abolished.

October 1. The exchange rate for customs valuation purposes was changed from K 240 to K 500 per US$1 for most goods not financed with foreign aid.

Lebanon 1

Exchange Rate System

On July 29, 1947, a par value for the Lebanese Pound was established by Lebanon with the Fund. However, exchange transactions no longer take place at rates based on that par value. All transactions take place at free market rates, which for the U.S. dollar as at December 31, 1964 were LL 3.0725 buying, and LL 3.0775 selling, per US$1. Pending the establishment of a new par value with the Fund, a “provisional legal parity” of LL 3.08 = US$1 is applied for the valuation of official assets and government transactions in foreign exchange and for customs valuation purposes. There are no restrictions on foreign payments.

Prescription of Currency

In general, no requirements are imposed on exchange payments abroad or receipts in Lebanon. In some cases, transactions with certain countries with which Lebanon has payments agreements specifying the method or channel of payment may be made through specific accounts.2

Imports and Import Payments

Imports of a few goods from any source and all imports from Israel are prohibited. Imports of certain commodities (wheat, barley, menthol, leather bags, ladies’ dresses, industrial machinery, olive oil, molasses, brushes, poultry, liquid gas, etc.) that are for the most part produced locally are subject to prior licensing. Licenses are granted for six months and may be renewed for an additional six months (or longer, for imports of industrial machinery). All other commodities may be imported freely without license. Exchange to pay for imports may be obtained freely through the free market. A municipalities tax of 3.5 per cent is levied on the value of all goods imported by sea or air.

Payments for Invisibles

No restrictions are placed on payments for invisibles. Exchange may be obtained freely through the free market.

Exports and Export Proceeds

Exports of a few goods (scraps of iron, cast iron, copper, lead, and tin) to any country and all exports to Israel are prohibited. Exports of a few items—such as livestock, wheat and wheat products, barley, Egyptian cotton, newsprint, petroleum, petroleum products, industrial and agricultural machines and equipment, and certain metals—to any country and all products intended for export to North Korea require export licenses. Exchange receipts from exports may be retained, used, or sold freely in the free market.

Proceeds from Invisibles

Exchange receipts from invisibles may be retained, used, or sold freely in the free market.

Capital

There are no limitations on capital payments or receipts. Exchange may be obtained or sold freely through the free market.

Changes during 1964

April 1. The Bank of Lebanon, the central bank, started operations.

June 1. A municipalities tax of 3.5 per cent was imposed on the value of all goods imported by sea or air. Ad valorem import taxes on certain alcoholic beverages were raised.

July 1. The specific import tax on sugar was raised from 12 piastres to 26 piastres per kilogram of white sugar and from 2 piastres to 12 piastres per kilogram of brown sugar.

July 24. Imports of medical preparations containing saccharine, sodium saccharinate, or sodium cyclamate were made subject to import licensing.

September 4. Containers for liquid gas became subject to export license.

September 16. Imports of pistachio nuts no longer required a prior import license.

November 5. Imports of liquid gas became subject to prior import license.

December 9. Imports of molasses became subject to prior import license.

Note.—The following change took place early in 1965:

January 1. A “provisional legal parity” of LL 3.08 = US$1 was established. It would be used for recording government transactions in foreign exchange, for valuation of official assets, and for customs valuation. Customs tariffs were adjusted so as to prevent any change in tax yields in Lebanese pounds.

Liberia

Exchange Rate System

The par value is Liberian Dollar 1 = US$1. U.S. currency is in circulation along with Liberian coinage. Official accounts are kept in dollars and cents. There are no restrictions on foreign exchange transactions.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

There is no general system of import control. A few items (e.g., arms and ammunition, explosives, used clothing, and pharmaceuticals) require prior licenses. Also, imports of certain goods (e.g., obscene literature, narcotics other than for medicinal purposes) and all imports from South Africa are prohibited.

Exports and Export Proceeds

Export licenses are required for precious metals, precious stones, ivory, and rubber. The surrender of the proceeds of 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 requirements are imposed on capital receipts or payments by residents or nonresidents.

Changes during 1964

No significant changes took place during 1964.

Libya 1

Exchange Rate System

The par value is Libyan Pound 1 = US$2.80. The Bank of Libya deals with commercial banks in pounds sterling and U.S. dollars only, at rates fixed daily. The rates for the U.S. dollar on December 31, 1964 were US$2.7916 buying and selling, per £L 1; the buying and selling rates were at par with the pound sterling. The commercial banks are permitted to buy or sell other currencies against pounds sterling and U.S. dollars through their foreign correspondents or branches; the banks’ rates are based on quotations in London and New York.

Administration of Control

Exchange control is administered by the Bank of Libya, which has delegated some of its powers to the authorized banks. Policy relating to import and export licensing is determined by a consultative Import and Export Council, under the chairmanship of the Minister of National Economy.

Prescription of Currency

The Kingdom of Libya is a member of the Sterling Area. Settlements with other parts of the Sterling Area may be made in any Sterling Area currency or by crediting Libyan pounds or sterling to a Scheduled Territories Account (see section on Nonresident Accounts, below). Settlements with countries outside the Sterling Area may be made in Libyan pounds or sterling through an External Account or in any foreign currency.

Libya has a trade and payments agreement with the United Arab Republic, under which settlements are made through a centralized bilateral clearing account maintained in sterling.

Nonresident Accounts

Subject to the approval of the Bank of Libya, nonresidents may open accounts with any authorized bank in Libya, in either Libyan or foreign currency. The accounts in Libyan pounds of residents of the Sterling Area are designated Scheduled Territories Accounts, and those of residents of other countries, External Accounts (the only exceptions being blocked accounts or accounts to which special procedures apply). Transfers may be made freely between Scheduled Territories Accounts, between External Accounts, and from External Accounts to Scheduled Territories Accounts. Funds held on Scheduled Territories Accounts may be converted into sterling or any other Sterling Area currency. Funds held on External Accounts may be converted into any foreign currency, including sterling.

With the approval of the exchange control authority, funds on blocked accounts may be used for expenditures in Libya up to £L 500 a year to cover the cost of current visits to Libya by the owner of the funds or a close relative; for payments in Libya of legal fees, taxes, etc.; for remittances to the owner of the funds in his country of permanent residence, up to £L 1,000 in a calendar year; and for remittances in cases of hardship. When the funds have been on a blocked Libyan pound account for five years, they qualify for remittance in full to the owner in his country of permanent residence.

Imports and Import Payments

Most imports are under open general license and do not require an individual import license. There are two lists of imports subject to individual licensing. One list comprises 42 items or groups of items which require no authorization other than an import license; these goods include various foodstuffs, certain local manufactures, and several revenue-producing commodities. Goods on the other list, which contains 8 groups of items, require the approval of the competent ministry prior to the granting of an import license; the goods include drugs and medicines, live animals, and edible vegetable oils. Imports of sugar, salt, tobacco, cigars, cigarettes, and cigarette paper are subject to government monopoly. Imports of a few goods from all countries and all imports from Israel, Portugal, and South Africa are prohibited. Exchange permits required for authorized imports are readily granted by the authorized banks, provided that there is a firm contract and any necessary import license has been obtained.

Payments for Invisibles

All payments for invisibles require licenses from the Bank of Libya. These are granted freely for expenses incidental to trade transactions. Applications for remittances in respect of other invisibles are considered on their merits.

Persons leaving the country may take with them Libyan currency notes not exceeding a total of £L 20; residents may, in addition, take out without license foreign currency notes, travelers checks, and letters of credit not exceeding a total value of £L 300 in a calendar year as a basic travel allowance. Children under 12 years of age are allowed one half of this amount. Amounts in excess of the above may be granted in special circumstances. For business travel, residents may take out the equivalent of £L 250 a trip or, subject to a maximum of £L 2,500 in any period of 6 months, the equivalent of £L 20 a day. Temporary visitors may take out any travelers checks, letters of credit, or foreign currency notes which they declared on entry.

Exports and Export Proceeds

Export licenses are required for all commodities. Export proceeds must be surrendered. Exports of vegetable oils and mares are prohibited. All exports to Israel, Portugal, and South Africa are prohibited.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers checks or foreign currency notes may be cashed only at an authorized bank or at an exchange office licensed by the Bank of Libya.

Travelers entering Libya may bring with them Libyan currency notes not exceeding a total of £L 20, and other currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable instruments in unlimited amounts. Libyan currency notes may be repatriated through banking channels, provided that details are given to establish that the notes within the authorized amount were obtained from bona fide travelers from Libya.

Capital

Under the provisions of the Foreign Capital Investment Law of January 30, 1958, foreign capital invested in projects deemed to contribute to the economic development of the country, as well as profits thereon, and salaries of foreign staff employed on such projects may be transferred freely to the country of origin. Residents of Libya taking up permanent residence abroad are permitted to transfer up to £L 5,000 for a family. The net sales proceeds after tax of real estate belonging to foreign nationals are freely transferable. Nonresident capital that is not permitted to be transferred abroad is credited to blocked accounts (see section on Nonresident Accounts, above). Residents require the prior approval of the Bank of Libya to borrow funds abroad or to import on consignment or on deferred payment terms.

Changes during 1964

July 5. A revised list was issued of goods requiring an individual import license; items freed from licensing included radios, passenger cars, and photographic and cinematographic equipment. A list was also issued of goods which, in addition to an import license, required the prior approval of the competent ministry.

July 9. The Bank of Libya required foreign investors doing business in Libya to submit immediately a full statement containing detailed data about their Libyan investments (amount, type, etc.). No transfer abroad of profits, interest, or capital relating to foreign investments in Libya would be approved by the Bank unless such a statement was filed.

Note.—The following change took place early in 1965:

February 8. The basic travel allowance was increased from £L 140 in any period of 12 months to £L 300 a calendar year. For business travel, residents could take out the equivalent of £L 250 a trip or, subject to a maximum of £L 2,500 in any period of 6 months, the equivalent of £L 20 a day.

Malagasy Republic

Exchange Rate System

No par value for the currency of the Malagasy Republic has been established with the Fund. The official unit of currency is the Malagasy franc, which is equivalent to 0.02 French franc, giving the relationship FMG 246.853 = US$1. There are fixed buying and selling rates for the French franc. Exchange rates for other currencies are based on the fixed rates for the French franc and the Paris market rates for the other currency concerned.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by the commercial banks under the direction of the Exchange Office. Import licenses are issued by the Department of Economic Affairs with the consent of the Exchange Office; import licenses not involving the granting of foreign exchange are issued by the Exchange Office.

Prescription of Currency

The Malagasy Republic is a member of the French Franc Area, and settlements with other countries of the French Franc Area are made in any currency of that Area. Settlements with other countries may be made through accounts that Malagasy banks maintain with their correspondents in countries outside the French Franc Area; frequently, however, they are made through banks in France: those with Rumania, through Rumanian Foreign Accounts in Bilateral Francs; those with all other countries, in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

All imports from countries outside the French Franc Area are subject to import licensing. For protective reasons, a few imports (secondhand clothes, edible oils, batteries, beer, cement, jute bags, and metal barrels) are subject to licensing when originating in any country, including countries in the French Franc Area. Licenses are also required for imports from countries in the Area if such goods originated from outside the Area and have not undergone transformation in a French Franc Area country in accordance with certain rules, and for all imports from French Somaliland. All other goods from the Area may be imported freely.

For restricted imports an annual import program is established. This program and the amount of foreign exchange required to implement it are determined by a joint French-Malagasy Committee. The import program is based on the establishment of quotas that fix the limits up to which specified commodities may be imported. The program contains global quotas applicable to all EEC countries other than France, and global quotas applicable to all countries outside the French Franc Area (including the EEC countries other than France). Certain quotas (i.e., for fabrics, clothing, tools, and cutlery) may be used only up to fixed percentages for imports from the Far East. Imports from countries outside the French Franc Area that do not require financial settlement require licenses not involving foreign exchange.

Issue of an import license serves as authorization to the commercial bank to make payment.

Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses are granted for imports of certain goods that are not restricted for protective reasons, provided that such imports are paid for with funds from an EFAC account held by the person who was granted the import license.

Payments for Invisibles

All payments for invisibles may be made freely to countries in the French Franc Area. All payments for invisibles to other countries are, in general, subject to approval by the Exchange Office. Residents traveling abroad may obtain a foreign exchange allocation up to the equivalent of FMG 125,000 per annum; in addition, they may take out for each trip up to F 750 in French franc banknotes or up to FMG 75,000 in Malagasy francs.

Exports and Export Proceeds

Exports to all destinations of products under quota and of so-called controlled products (see below) require an export license. Products under quota are coffee, vanilla, cloves, and superior-grade rice; these commodities require the visa of the appropriate stabilization fund before an export license is granted. Controlled products are lentils, rice, rice bran, peanut oil cake, sisal, and certain mining products; these require the visa of the competent ministry before an export license is granted. Exports of other commodities to the French Franc Area do not require an export license unless they have previously been imported from outside that Area.

With minor exceptions, export licenses or exchange surrender commitments are required for all exports to countries outside the French Franc Area. Proceeds of exports to countries outside the French Franc Area must be repatriated within three months from the date of their collection. Exporters paid in currencies of countries outside the Area may, however, retain 15 per cent of their proceeds in special EFAC (Exportations-Frais Accessoires) accounts. These accounts may be used by the holder to pay for certain imports, for representation and advertising expenses, and for business trips abroad.

Proceeds from Invisibles

Residents are obliged to collect, and surrender within one month from the date of receipt of foreign exchange, amounts due from nonresidents in respect of services and all income exceeding FMG 50,000 from foreign securities. Travelers may bring in any amount of domestic and foreign banknotes and coins (except gold coins).

Capital

Capital movements between the Malagasy Republic and other French Franc Area countries are free of control. The transfer of capital by residents to countries outside the French Franc Area is subject to individual approval. Foreign investments of any kind from countries outside the French Franc Area are subject to the prior authorization of the Exchange Office; this authorization implies a transfer guarantee—valid for all countries outside the French Franc Area—with respect to earnings as well as liquidation proceeds. Enterprises of special interest for the economy may be granted preferential treatment in accordance with an “order of approval” (arrêté d’agrément). Such enterprises may benefit from specified advantages relating to import and export duties, income taxes, the obtaining of supplementary foreign exchange allocations above those allotted in the annual import program for necessary imports, etc.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to the Malagasy Republic, was terminated.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to the Malagasy Republic, was terminated.

March 21. The import program was published for the 12-month period that began on March 15, 1964. In contrast to the previous program, this one did not include any bilateral quotas for Eastern European countries.

December 16. The Malagasy Republic notified the GATT that it had ceased to invoke Article XXXV of the General Agreement on Tariffs and Trade with regard to Japan.

Malawi1,2

Exchange Rate System

The currency of Malawi is the Malawi Pound. The official value of the Malawi pound is 2.48828 grams of fine gold, corresponding to £M 1 = US$2.80. The Malawi pound circulates concurrently with the Rhodesia and Nyasaland Pound,3 which is at par with the pound sterling, giving a relationship to the U.S. dollar of £ RN 1 = US$2.80. The authorized banks base their rates for other currencies on the current London market rates. On December 31, 1964, the rate for the U.S. dollar was US$2.81 ¼ buying, and US$2.77916 selling, per £M 1.

Administration of Control

Exchange control is administered by the Bank of Rhodesia and Nyasaland under powers delegated to it by the Ministers of Finance of the three territories of the former Federation of Rhodesia and Nyasaland. Much of the authority for approving normal current payments is delegated to the commercial banks.

Prescription of Currency

Malawi is a member of the Sterling Area and maintains prescription of currency requirements similar to those of the United Kingdom.

Changes during 1964

November 16. The Reserve Bank of Malawi, the newly established central bank of the country, started issuing the Malawi pound to replace the Rhodesia and Nyasaland pound at par. The currency change-over was to be completed by June 1, 1965. In the meantime, the two currencies would be legal tender in Malawi.

Malaysia

Exchange Rate System

The par value is Malayan Dollar 3.06122 = US$1. The Central Bank of Malaysia has not established official buying and selling rates for foreign currencies. The Currency Board buys sterling at 2s. 4⅛d., and sells it at 2s. 3⅞d., per M$1. The commercial banks quote agreed rates for customers for most Sterling Area currencies and for specified currencies.1 The rates are calculated on the basis of quotations for Malayan dollars against sterling in the Malaysian exchange market and the quotations for other currencies against sterling in the London exchange market. On December 31, 1964, the market rate for the U.S. dollar was M$3.07 per US$1.

Administration of Control

The Central Bank of Malaysia administers exchange control on behalf of the Malaysian Government throughout Malaysia (the States of Malaya and the States of Sabah, Sarawak, and Singapore).2 Much of the authority for approving normal current payments is delegated to commercial banks authorized for this purpose. The authority for import control rests with the Central Government, except in Singapore where the State Government is responsible. The day-to-day administration of import control in the States of Malaya is carried out jointly by the Ministry of Commerce and Industry and the Royal Customs and Excise, that in Singapore by the Department of Import and Export Control, and that in Sabah and Sarawak by the Royal Customs and Excise.

Prescription of Currency

Malaysia is a member of the Sterling Area and follows the prescription of currency arrangements and the sterling payments system of the United Kingdom. All payments to and from Sterling Area countries must be made in sterling or another Sterling Area currency. Payments to countries outside the Sterling Area may be made either in Malayan dollars or another currency of the Sterling Area through an External Account, or in any foreign currency. Receipts from exports to countries outside the Sterling Area must be obtained either in Malayan dollars or another currency of the Sterling Area through an External Account, or in any specified currency.

Nonresident Accounts

The accounts of residents of other countries in the Sterling Area are treated as resident accounts. The accounts of residents of countries outside the Sterling Area are treated as nonresident accounts and, unless specially restricted, are designated External Accounts. External Accounts may be credited with the proceeds of any foreign currency sold to a bank in Malaysia, with transfers of Malayan dollars or sterling from other External Accounts, and with funds eligible for transfer to countries outside the Sterling Area. Balances on External Accounts may be transferred to any other account, whether resident or nonresident, and may be converted into any foreign currency. Accounts of residents of Indonesia are designated Indonesian Accounts. All debits and credits to such accounts require prior approval.

Blocked Malayan Dollar Accounts are credited with those capital proceeds due to residents of countries outside the Sterling Area that are not permitted to be transferred abroad. Balances on Blocked Malayan Dollar Accounts may either be invested in Malaysian securities with a maturity beyond five years or, with permission of the Controller of Foreign Exchange, be transferred to a Blocked Account in the United Kingdom. Permission for such transfers to Blocked Sterling Accounts is given freely. In cases of hardship, moderate amounts are released from Blocked Malayan Dollar Accounts. Proceeds accruing from the liquidation of investments made out of Blocked Malayan Dollar Accounts must be credited to a Blocked Malayan Dollar Account. Earnings accruing from such investments, however, are freely transferable.

Imports and Import Payments

Tariffs and import controls of the various parts of Malaysia have not as yet been unified, although steps toward full unification are being taken. Some tariffs and other trade restrictions still exist between parts of Malaysia that previously were independent. Most imports are permitted freely under open general licenses or specific licenses, depending on the nature and origin of the goods. Certain imports are subject to quantitative restriction pending the introduction of protective customs duties upon the adoption of the external tariff of the Malaysian Common Market. A few imports are controlled for health, security, or moral reasons, and certain conditions must be satisfied before licenses are issued.

In respect of the former Federation of Malaya (now the States of Malaya), imports of certain textiles from Mainland China are prohibited as a measure to protect the local textile industry; imports of rice from any country are conditional on the importer purchasing one ton of rice from official stocks for every ton imported; imports of sugar and molasses3 are subject to quantitative restriction for protective reasons; all imports from South Africa are prohibited; and all imports of goods of Indonesian origin are subject to specific licensing. Singapore maintains quantitative restrictions for protective reasons on imports of a number of commodities, including torchlight and transistor radio batteries and radiopack batteries, electric bulbs, tires and tubes, and wheat flour; imports of monosodium glutamate and glutamic acid are prohibited. All imports into Singapore of goods of Netherlands origin are subject to specific import license. All imports into Sarawak from South Africa are prohibited.

Where necessary, permission is given freely for payments in foreign currency for all permitted imports. Payments in foreign currency are permitted freely for goods on open general license; for imports that require a special license, exchange control approval is forthcoming when the license has been granted.

Payments for Invisibles

Payments for invisibles to residents of the Sterling Area may be made freely. Payments related to commercial transactions and personal payments to other countries are, in general, authorized. There are no restrictions on the amount of foreign exchange made available for travel abroad. Special arrangements permit family remittances to Mainland China to be made through licensed remittance shops up to M$45 from a family in any one month. Remittances to nonresidents of dividends, interest, and agreed profits on all bona fide investments are subject to exchange control approval, which normally is given freely. Unless special permission is obtained, not more than M$500 in Malayan notes and the equivalent of £ stg. 250 in foreign notes may be taken out of Malaysia by travelers; there is, however, no restriction on the amount of Malayan notes that may be taken out of Malaysia by travelers going direct to Brunei.

Exports and Export Proceeds

The four territories of Malaysia at present maintain separate export control systems, although the Federal Government retains the right to legislate in respect of exports from any Malaysian territory. Exchange control approval is required only for exports exceeding M$20,000 in value to countries outside the Sterling Area, and for exports to Indonesia of gold, platinum, precious stones, rubber, tin, and cigarettes; this requirement serves to ensure that the proceeds are obtained in accordance with the prescription of currency regulations and are sold to an authorized bank.

Proceeds from Invisibles

The exchange control requirements governing exchange receipts from invisibles are, in general, the same as those for export proceeds. Travelers coming direct from Brunei may bring in any amount in Malayan notes, and other travelers may bring in M$500; otherwise, permission is required for the import of Malayan notes. Permission is also required for the import of currency notes of India and Indonesia. No limitations are imposed on the import of currency notes of other countries.

Capital

There are no restrictions on capital transfers to and from other countries in the Sterling Area. Inward and outward capital transfers between Malaysia and countries outside the Sterling Area require exchange control approval; such approval is freely granted for inward transfers, but the subsequent utilization of nonresident-owned funds in Malaysia in most cases is subject to individual exchange control approval.

Investment by residents of countries outside the Sterling Area in quoted stocks and bonds is freely permitted if made through a recognized stock exchange with funds from an External Account or transferred in a specified currency; investment in stocks and bonds is subject to individual approval, if it is to be made otherwise. Investments in new industrial and development projects that have been granted “pioneer status” are not restricted. The repatriation of initial capital and appreciation to countries outside the Sterling Area is permitted only for investment projects that have been approved by the exchange control authorities since January 1, 1950; the proceeds realized from investments in recognized marketable securities are not remittable unless accruing to a resident of a Scandinavian country. Funds of a capital nature owned by residents of countries outside the Sterling Area, the transfer of which is not approved by the exchange control authorities, are in the first instance credited to Blocked Malayan Dollar Accounts. Balances in such accounts may, on application, be freely transferred to Blocked Accounts in the United Kingdom. However, remittances from Malaysia to the Scandinavian countries by residents of those countries in respect of their own assets are permitted freely on application. Banks are permitted to lend funds freely for working capital to nonresident-controlled companies, unless a limit has been set to such borrowings by the exchange control authorities.

All other transfers of a capital nature to countries outside the Sterling Area are approved liberally on an individual basis by the Controller of Foreign Exchange. They include (1) the remittance of funds invested by nonresidents in companies that have gone into voluntary liquidation, provided that the liquidation has not been initiated by the nonresident; (2) the transfer of proceeds from the sale by nonresidents of real estate, furniture, etc., provided that the property since purchase has been maintained solely for occupation and/or use by the owner and has not represented an investment; and (3) gifts up to an annual total of £ stg. 250, although in certain cases applications are approved to the extent of £ stg. 1,000 per annum.

Investments by Malaysian nationals in countries outside the Sterling Area may be made only upon approval of the exchange control authorities; this is given only when such investments are considered to serve the economic interest of the country.

Changes during 1964

April 22. Imports into Singapore of tires and tubes for passenger cars, trucks, and buses from all sources, except those manufactured in the States of Malaya, became subject to quantitative restriction.

June 1. All imports from South Africa into Sarawak were prohibited.

June 12. Imports into the States of Malaya of sugar, molasses, etc. (tariff codes 061 101, 061 109, and 061 500) from all sources, including Singapore, became subject to quantitative restriction.

August 1. Imports into Singapore of monosodium glutamate from all sources were prohibited.

August 1. The import of rice into the States of Malaya was made conditional on the importer purchasing one ton of rice from official stocks for every ton imported, instead of every two tons imported.

August 6. The Exchange Control Ordinance of 1953 of the States of Malaya was extended to apply to Singapore, Sarawak, and Sabah, subject to certain modifications. Exchange control throughout Malaysia would be administered on behalf of the Malaysian Government by the Central Bank of Malaysia. As a result of the unification of exchange control, residents of Singapore no longer required prior exchange control approval to extend credit for working capital to companies resident in Malaysia that are controlled by nonresidents.

August 25. Imports into Singapore of all goods of Netherlands origin consigned from any source (including the other territories of Malaysia) were made subject to specific import license. Licenses would be issued on application, provided that an irrevocable letter of credit was opened within one week and was registered with the Registrar of Imports and Exports.

August 27. The import of 46 categories of goods of U.K. origin into Singapore was prohibited. All other goods of U.K. origin were made subject to specific import licensing. These measures were rescinded on September 1, when a new order establishing detailed licensing rules for imports from the United Kingdom was issued.

September 15. All goods of U.K. origin entering Singapore were freed from specific import licensing.

October 15. The import into Singapore of electric bulbs for domestic lighting from all sources became subject to quantitative restriction.

October 24. The Central Government of Malaysia published a preliminary list of 101 commodities to be considered for protective customs duties under the Malaysian Common Market tariff, which would apply to all territories of Malaysia. All customs areas of Malaysia (Malaya, Sabah, Sarawak, and the free ports of Labuan, Penang, and Singapore) imposed specific licensing, and in some cases quantitative restrictions, on a number of these items to prevent speculative importing.

October 24. Imports into Singapore of glutamic acid from all sources was prohibited.

Mali

Exchange Rate System

No par value for the currency of the Republic of Mali has been established with the Fund. The official unit of currency is the Mali franc, defined as a monetary unit containing 0.0036 gram of fine gold. Parity rates for the CFA franc, the French franc, and the U.S. dollar are MF 1, MF 50, and MF 246.853, respectively.

Only the Bank of the Republic of Mali is authorized to carry out exchange transactions with the public. Purchases and sales of French francs and CFA francs are made by the Bank of the Republic at their respective parities. The official buying rate for the U.S. dollar is MF 244.50, and the selling rate is MF 245.50; for 16 additional currencies 1 official buying and selling rates also are fixed. Rates for other currencies are established separately for each operation. Bilateral payments agreements with 18 countries (see section on Prescription of Currency, below) provide for settlements of transactions covered by these agreements through accounts denominated either in Mali francs or in other specified currencies; rates for these specified currencies are unitary.

The Bank of the Republic is in charge of settlements covered by bilateral payments agreements. Settlements with other countries are made either directly with the countries concerned or through the intermediary of the Paris exchange market. The Bank of the Republic occasionally concludes with foreign banks forward exchange transactions on behalf of its customers.

Administration of Control

The Bank of the Republic has sole authority in exchange control matters; it exerts this authority through the Exchange Control Office, one of its departments. None of its exchange control powers has been delegated to any other bank or institution.

Licenses for imports are issued by the Ministry of Commerce and Transportation; those for imports of investment goods must be countersigned by the State Ministry of Planning and Economic and Financial Coordination. Unless confirmed by the Bank of the Republic, import licenses do not constitute authorization for making payment for imports.

A stamp tax is levied on import and export licenses and on applications for financial transfers. The tax is MF 200 for each MF 100,000 or fraction thereof, on amounts up to MF 1 million. On amounts in excess of MF 1 million, the tax is MF 1,000 for each MF 1 million or fraction thereof.

Prescription of Currency

Settlements on account of transactions covered by bilateral payments agreements are made in currencies and through accounts established under such agreements. Bilateral accounts are maintained with Algeria, Bulgaria, Mainland China, Cuba, Czechoslovakia, Eastern Germany, Ghana, Guinea, Hungary, Morocco, Niger, Poland, Senegal, Tunisia, the U.S.S.R., the United Arab Republic, Viet-Nam, and Yugoslavia.

There are no special prescription of currency regulations applicable to settlements with other countries; settlements with these countries that require individual licenses must be made in convertible currencies.

Nonresident Accounts

Exchange control regulations provide for two categories of nonresident accounts: (1) Free Nonresident Accounts in Convertible Currencies and (2) Nonresident Accounts in Mali Francs. The first category may be credited only with transfers from abroad of convertible currencies; the accounts may be used for all payments in Mali and for transfers abroad subject to the approval of the Bank of the Republic, which is granted freely. Transfers between these accounts are free. The second category may be credited with amounts due to nonresidents in Mali francs for rents, capital receipts, etc. Debits from these accounts may be made in accordance with the provisions of the exchange control regulations. All operations through these accounts require the approval of the Bank of the Republic.

Certain categories of nonresident funds in Mali francs of a capital or other nature are credited to special foreign accounts, which are de facto blocked.

Imports and Import Payments

Imports of a few commodities are prohibited for health, safety, and similar reasons. Imports of all other goods require individual licenses, which are issued in accordance with an annual import program that provides quotas for each import category. Licenses for imports from bilateral payments agreement countries are valid only for imports from those countries. Licenses for imports from other countries may be used to import from any of those countries. Licenses are valid for up to six months; however, if the need for a longer period is justified, they may be extended for three months.

Imports may be made either by private importers or by state enterprises, among which the Société Malienne de l’Import-Export (SOMIEX) is by far the most important, having monopoly over the import of 11 items.2

The Ministry of Commerce establishes quarterly quotas for each private importer on the basis of coefficients, calculated for each importer by taking into account import fees paid by him, the number of his employees, and the number of branches operated by him. Import licenses are issued to the private importer up to the limits of the quarterly quotas accorded to him. In addition, private importers may import specified goods under the EXIC procedure (see section on Exports and Export Proceeds, below). Payments for imports may be made only when authorized by the Bank of the Republic, the import license being a document required for customs clearance.

Payments for Invisibles

Payments for invisibles require individual licenses, which are issued on a restricted basis. Payments for expenses incidental to foreign trade are permitted when payment for the basic import transaction is authorized, or when the export transaction is permitted. Specified current payments are licensed up to established limits (e.g., percentages of salaries drawn by foreigners).

Income and profits from nonresident investments in Mali that are granted benefits under the special foreign investment law (see section on Capital, below) may be transferred in accordance with provisions of investment agreements concluded by the Government with individual nonresident investors. Foreign enterprises operating in Mali that are not granted the benefits of the special foreign investment law may transfer abroad only 25 per cent of their income or profits.

Residents of Mali may purchase foreign exchange up to the equivalent of MF 3,000 a day for official or business trips. This daily exchange allowance may be increased to the equivalent of MF 5,000 a day if the increase is justified by the high cost of living in the country to be visited. In exceptional cases, higher exchange allowances may be granted.

Nonresidents leaving Mali after a temporary stay may export foreign means of payment up to the amount declared upon entry into the country. They may also exchange Malian currency for foreign currency, provided that they can prove the previous sale of such foreign currency to the Bank of the Republic or to an authorized agent. The export of Malian currency is prohibited.

Exports and Export Proceeds

Exports require individual licenses in order to assure the repatriation of export proceeds. The export of groundnuts, hides, skins, and meat, which constitute most of the controlled export trade, is reserved for state enterprises.

With the exceptions mentioned below, proceeds accruing from exports must be surrendered. At the time the export licenses are issued, exporters are required to make a deposit equal to 10 per cent of the value of the intended exports.

Under the EXIC (Exportation-Importation Concomitante) procedure, exporters of cattle and fish may use 50 per cent of their export proceeds for payment for their own imports included in the EXIC list and made through regular official channels. For exports other than products covered by the monopoly of state trading companies, the percentage of retained export proceeds may be as high as 40 per cent. Balances on EXIC accounts and import rights under the EXIC procedure are not transferable.

Proceeds from Invisibles

Proceeds accruing from transactions in invisibles must be surrendered. The import of Malian currency is prohibited.

Capital

Residents, whether of foreign or Malian nationality, may not make capital transfers on private account.

Foreigners leaving Mali permanently are permitted to transfer abroad (1) funds up to a total of six months’ salary, resulting from the sale of personal property that was in their possession for at least six months, and (2) savings out of their salary and income earned in Mali, provided that they have not taken advantage of transfer privileges in respect of their salary (see section on Payments for Invisibles, above). Funds specified under (1) and (2) may be transferred abroad in five equal annual installments.

Nonresident enterprises operating in Mali are permitted to transfer abroad in ten equal annual installments funds accruing from the partial or total liquidation of such enterprises. Funds mentioned in this and the preceding paragraph that are kept on special foreign accounts with the Bank of the Republic bear 3 per cent interest a year, which is transferable.

All or part of certain categories of funds in Mali francs owned by nonresidents must be used either to purchase 3 per cent 20-year bonds issued by the Bank of the Republic or to make investments that are approved by the Ministry of Planning. Proceeds from the amortization of bonds as well as interest on them may be transferred abroad.

According to Law No. 62 of January 15, 1962, the Government may grant special privilege status, providing for transfer, tax, and other preferential treatment, to nonresident investments that would be of special interest to the Malian economy and that are compatible with the goals of the Economic Plan. Under this law, each foreign investment is treated individually.

Preferential investment treatment may permit (1) the transfer of profits during a period not exceeding 15 years and the repatriation of proceeds accruing from the liquidation of an investment or (2) the transfer during a period to be established in each case of amounts that would include the value of investments and profits, the maximum yearly rate of which is also to be agreed. In the latter instance, an enterprise becomes the property of the Government without any indemnity, after the established period has lapsed.

Changes during 1964

January 16. A bilateral payments agreement was concluded with Niger.

July 1. A stamp tax was levied on import and export licenses and on applications for financial transfers. The tax was MF 200 for each MF 100,000 or fraction thereof, on amounts up to MF 1 million. On amounts in excess of MF 1 million, the tax was MF 1,000 for each MF 1 million or fraction thereof.

August 11. The list of “commodities that might be imported under the EXIC arrangements was revised; the new list comprised 23 items or groups of items, mostly of an essential nature.

Mauritania

Exchange Rate System

No par value for the currency of Mauritania has been established with the Fund. The unit of currency is the CFA franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at rates resulting from the relation CFAF 1 = 0.02 French franc plus or minus a commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the other currency concerned, and include a commission.

Administration of Control

Exchange control is administered by the Exchange Office. Exchange transactions are handled by the commercial banks under the direction of the Exchange Office. Import and export licenses and certificates of importation are issued by the Department of Economic Affairs with the consent of the Exchange Office.

Prescription of Currency

Mauritania is a member of the French Franc Area, and settlements with other countries in the French Franc Area are made in any currency of that Area. Settlements with Spain are made through bilateral accounts expressed in U.S. dollars. Settlements with other countries are usually made through banks in France: those with Rumania through Rumanian Foreign Accounts in Bilateral Francs; those with all other countries in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or through Foreign Accounts in Convertible Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. Most imports from other countries are subject to licensing; they are admitted in accordance with an annual import program, determined each year by a joint French-Mauritanian Committee. Under this program, global quotas are established for imports from EEC countries other than France and for imports from most other countries outside the French Franc Area. The quotas fix the limits up to which import licenses are issued for specified commodities to licensed traders and to industrial or agricultural producers. For certain goods admitted without quantitative restriction, certificates of importation are issued.

The import license of certificate of importation entitles the importer to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank. Under the EFAC arrangements (see section on Exports and Export Proceeds, below), licenses for the import of goods to be used directly by exporters are approved freely, provided that such imports are paid for with funds from EFAC accounts.

Payments for Invisibles

Payments for invisibles may be made freely to countries in the French Franc Area; those to other countries are usually subject to the approval of the Exchange Office. However, authorized banks may, without prior authorization from the Exchange Office, sell foreign exchange for the following categories of invisibles: (1) expenses related to approved commercial transactions, such as transportation, sundry expenses, insurance; (2) various services, e.g., subscriptions, banking charges, rent, farm leases, support allowances paid under court decisions; (3) tourist travel up to the equivalent of CFAF 250,000 a person for each trip; and (4) any payment not exceeding the equivalent of CFAF 25,000. In addition, the Exchange Office authorizes freely the transfer of profits from foreign investments in Mauritania. Representation, advertising expenses, and business travel may be financed with funds from EFAC accounts (see section on Exports and Export Proceeds, below). Travelers to Dahomey, Ivory Coast, Niger, Senegal, Togo, and Upper Volta may take out, without limit, banknotes issued by any bank of issue within the French Franc Area. Travelers going direct to other countries in the Area may take out, without limit, banknotes issued by any bank of issue in the Area, with the exception of those issued by the BCEAO, for which the limit is CFAF 75,000. Travelers going to countries outside the French Franc Area may take out in banknotes or coins up to a maximum of F 750 in metropolitan francs, or up to 75,000 in CFA or CFP francs, or the equivalent of F 750 in notes and coins denominated in any French Franc Area currency other than the French franc. Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

Exports to countries in the French Franc Area may be made freely. Goods that are not liberalized for export to all other countries require a license; those that are liberalized require an exchange commitment, which is subject to approval by the Exchange Office.

Export proceeds in currencies of countries outside the French Franc Area that are not used to make authorized payments abroad must be surrendered within three months from the date of their receipt. Exporters may, however, retain a specified percentage of export proceeds in special EFAC (Exportation-Frais Accessoires) accounts, which may be used by the exporters themselves to pay for imports of raw materials or equipment needed in their own business, for representation and advertising expenses, or for business trips abroad.

Proceeds from Invisibles

Proceeds from transactions in invisibles with countries in the French Franc Area may be retained. All amounts due in respect of services from residents of other countries, and income exceeding the equivalent of CFAF 50,000 earned in those countries from foreign securities, must be collected, and they must be surrendered within one month of receipt.

Travelers from Dahomey, Ivory Coast, Niger, Senegal, Togo, and Upper Volta may bring in any amount of CFA banknotes issued by the BCEAO. Travelers from other countries may bring in up to CFAF 75,000 in banknotes issued by the BCEAO. All travelers may bring in any amount of banknotes and coins issued by a bank of issue of the French Franc Area other than the BCEAO, as well as any amount of banknotes and coins (except gold coins) of countries outside the Area.

Capital

Capital movements between Mauritania and other French Franc Area countries are free of control; those between Mauritania and all other countries require approval.

The Investment Code (Law 61-122) enacted on June 26, 1961 provides for two kinds of preferential treatment for the establishment of specified companies in Mauritania: a priority regime and a long-term fiscal stability regime. Under the first regime, the proposed investment must amount to at least CFAF 75 million, to be made within a period of up to 2 years, and must provide employment for at least 20 persons. The benefits accorded under this regime include exemptions for a specified number of years from duties on the import of certain materials as well as from taxes on specified income. Under the second regime, certain companies considered to be of exceptional importance to the development of the country and making a minimum investment of CFAF 1 billion in less than 5 years are accorded special benefits, which consist mainly of the stabilization of some or all taxes for a period of up to 25 years.

Changes during 1964

February 1. Settlements with Eastern Germany ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Eastern Germany, which was also applicable to Mauritania, was terminated.

February 14. A bilateral payments agreement with Spain was signed.

March 1. Settlements with Czechoslovakia ceased to be made on a bilateral basis, as the bilateral payments agreement between France and Czechoslovakia, which was also applicable to Mauritania, was terminated.

Mexico

Exchange Rate System

The par value is Mexican Pesos 12.50 = US$1. The official rates are Mex$12.49 buying, and 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 rates on December 31, 1964 were Mex$12.49 buying, and Mex$12.49125 selling, per US$1. There are no exchange restrictions on foreign payments. 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 nonresidents are imposed on importers, exporters, or others. In accordance with the payments agreement between the Bank of Mexico and the Spanish Foreign Exchange Institute, payments for transactions with Spain are recorded by the Bank of Mexico through a special account. Payments to Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua in respect of trade and invisibles may be settled in Mexican pesos through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America.

Imports and Import Payments

Payments and transfers abroad may be made freely. Payments for imports from Spain are recorded through a special account. For a considerable number of items, import licenses from the Ministry of Industry and Trade are required before firm orders are placed; the issuance of such licenses is subject to quantitative restriction. Applications are screened by a committee composed of importers, private entrepreneurs, and government representatives. Import licenses for leather goods, alcoholic beverages, cigarettes, and motorcars and their spare parts are subject to an over-all annual limit. Imports of certain goods (assembled and unassembled automobiles and trucks, iron and steel pipes, firearms, watches, synthetic fibers, some types of jewelry, radios and television sets, equipment, machinery, and whisky, wines, and other liquors) are licensed only if the importer guarantees the export of specified commodities (mainly cotton) of an equivalent value. Imports and exports under this compensation system are effected by the National Foreign Trade Bank, which levies on the importer a fee of between 1 per cent and 1.5 per cent of the value of the import transaction, and turns the fee minus a commission over to the exporter. Exports effected under this system account for approximately 50 per cent of the value of total exports. Imports by official Mexican agencies are subject to prior approval by the Committee of Public Sector Imports; this approval is not given if a reasonably competitive domestic equivalent is available.

Payments for Invisibles

Payments for invisibles are not restricted. Transactions with Spain are recorded through a special account (see section on Prescription of Currency, above). The contracting of insurance 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 with Mexican companies or with branches of foreign companies established in Mexico in accordance with Mexican law.

Exports and Export Proceeds

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

Proceeds from Invisibles

No exchange control requirements apply to proceeds from invisibles.

Capital

No exchange control requirements are imposed on capital receipts or payments by residents or nonresidents.

Changes during 1964

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

November 26. A new customs tariff under the Brussels nomenclature came into effect.

Morocco

Exchange Rate System

The par value is Moroccan Dirhams 5.06049 = US$1. The rate of the dirham in relation to the French franc is fixed at DH 1.025 per F 1. The Bank of Morocco’s buying and selling rates for the “convertible currencies” it negotiates 1 and for the Spanish peseta are based on quotations in the leading foreign exchange markets abroad. The rates of the Bank of Morocco for the U.S. dollar on December 31, 1964 were DH 5.0159 buying, and DH 5.0311 selling, per US$1. Transactions in clearing dollars under bilateral payments agreements are carried out on the basis of the official par values declared to the International Monetary Fund. All sales and purchases of foreign currency are centralized in the Bank of Morocco, but the authorized banks are permitted to offset their foreign exchange transactions with their private customers. The authorized banks must sell to the Bank of Morocco each day the balance of their purchases and sales in each currency; compensation between banks is not permitted, so that no foreign exchange market exists in Morocco. The Bank of Morocco makes its own purchases and sales of foreign currency in the Paris exchange market. Forward exchange transactions are not permitted.

Administration of Control

Exchange control is administered by the Moroccan Exchange Office, an agency under the Ministry of Finance. This office has delegated the execution of certain exchange control measures to authorized banks. Import and export licenses are issued either by the Ministry of Commerce or by its provincial delegations; they must be countersigned by the Moroccan Exchange Office. “Import commitments” for imports from the French Franc Area (see section on Imports and Import Payments, below) require both approval by the Ministry of Commerce and the visa of the Exchange Office unless they are accompanied by a “quota certificate” or an import license.

Prescription of Currency

Morocco is one of the territories of the French Franc Area. For prescription of currency purposes, countries are classified as follows: (1) the French Franc Area countries; (2) Rumania, with which France maintains a payments agreement that applies also to transactions with Morocco; (3) the payments agreement group, comprising countries with which Morocco maintains bilateral payments agreements; 2 and (4) all other countries, the so-called area of convertibility.

Settlements with other parts in the French Franc Area are made in French francs or, with the exception of settlements for imports, in dirhams through French Franc Area Accounts (see section on Nonresident Accounts, below). Settlements with the payments agreement group are made by debiting or crediting the payments agreement accounts established for this purpose.3 Imports originating in countries in the area of convertibility may be paid for only in “convertible currencies” negotiated by the Bank of Morocco (see footnote 1). Other settlements with countries in the area of convertibility may be made only in “convertible currencies” negotiated by the Bank of Morocco or through Foreign Accounts in Convertible Dirhams. Imports from Rumania must be paid for in French francs; other settlements with Rumania may be made either in French francs or through Rumanian Foreign Accounts in Dirhams.

Nonresident Accounts

The various types of nonresident accounts are as follows:

1. French Franc Area Accounts are held in Moroccan currency by residents of other countries of the French Franc Area. These accounts may be used for settlements with residents of other countries in the French Franc Area, except for the payment for imports from those countries. They may be freely credited with and debited for sales or purchases of French francs (except banknotes) sold to or bought from the Bank of Morocco.

2. Foreign Accounts in Convertible Dirhams are reserved for residents of countries in the so-called area of convertibility. These accounts may be credited freely with authorized payments due to residents of countries in the area of convertibility (but not in respect of imports or related invisibles) and with dirhams obtained from the sale to the Bank of Morocco of “convertible currencies” negotiated by it, excluding banknotes. They may be debited freely for payments in Morocco and for purchases from the Bank of Morocco of the “convertible currencies” negotiated by it, excluding banknotes. Transfers between Foreign Accounts in Convertible Dirhams may be made freely.

3. Payments Agreement Accounts are held by the Bank of Morocco for central banks (or similar institutions) of the countries with which Morocco maintains its own bilateral payments agreements (see footnote 2), except Spain; they are used only for settlements with these countries, including settlements for imports and exports. All transactions on these accounts require approval.

4. Spanish Foreign Accounts in Dirhams are held by the Bank of Morocco for the Spanish Foreign Exchange Institute and by authorized banks in Morocco for authorized banks in Spain. They are used only for settlements in accordance with the payments agreement with Spain.

5. Rumanian Foreign Accounts in Dirhams are held by authorized banks in Morocco for authorized banks in Rumania. They are used only for settlements in accordance with the payments agreement in force between France and Rumania, except for payment for imports from Rumania.

6. Capital Accounts, which may be held by any nonresident, are credited with funds that may not be transferred abroad. Transfers between Capital Accounts related to countries in the same currency group (the area of convertibility, the French Franc Area) or related to the same country in the payments agreement group are permitted freely. Subject to certain limitations, they may be debited for purchases of Moroccan securities on the Casablanca stock exchange; for subscriptions to the capital of Moroccan companies whose shares are quoted on the Casablanca stock exchange; for subscriptions to bonds with a fixed long-term or short-term yield (i.e., which cannot be redeemed within five years from the date of purchase) issued by a Moroccan entity; for custody charges and commissions on securities held for nonresidents; and for payment of the costs of maintenance, repairs, taxes, and insurance on real estate located in Morocco. All other operations through Capital Accounts require individual licenses.

7. Suspense Accounts are used for holding nonresident funds not available for credit to any of the accounts mentioned above. Balances on these accounts may be used freely to pay taxes due to the Moroccan authorities, but all other debits to these accounts require approval.

Imports and Import Payments

There is a list of permitted imports, which is applicable to all countries. Imports of all other commodities are prohibited from all sources. For certain goods on the permitted list, protective quotas are established; for imports of such goods from any source a “quota certificate” (certificat de contingentement) is required.

For all imports, except those made through the post, the import title—import license or “import commitment” (engagement d’importation)—must be domiciled (registered) with an authorized bank, which may make payments upon submission of the required documents.

With certain exceptions, an advance deposit of 25 per cent of the f.o.b. value must be made by importers at the time the import transaction is domiciled with an authorized bank; the bank must pay the deposit to the Bank of Morocco to be held for account of the Treasury. For most imports from other parts of the French Franc Area, except Senegal, the transaction must be domiciled at least one month before importation takes place. Import licenses for goods originating outside the French Franc Area must be domiciled within a period of 15 days from the date that the Exchange Office approves the license. “Import commitments” for goods from the French Franc Area must be domiciled within 15 days after their approval by the Ministry of Commerce and the Exchange Office. The following are exempt from the advance deposit requirement: government imports; imports financed with U.S. aid; imports from countries in the payments agreement group; imports from Senegal; specified essential imports; and imports by specified organizations. The deposit is refunded when the import has taken place and payment has been made in full, or if the license is not used or the “import commitment” is allowed to expire.

Imports from other parts of the French Franc Area of petroleum products, oils and fats, cereals, and textile materials require an import license. All private imports from the French Franc Area require an “import commitment” signed by the importer and domiciled with an authorized bank at least one month before the actual importation. Unless the goods are at the same time covered by a “quota certificate” or an import license, the “import commitment”, must be approved by the Ministry of Commerce and the Exchange Office. The authorized banks may make payments freely when an approved “import commitment” is domiciled with them. Imports made and settled through postal channels are exempt from these requirements.

Imports from countries outside the French Franc Area require individual licenses. Commodities imported from countries in the area of convertibility are listed in an annual General Import Program and are divided into two groups: List A, for which import licenses are issued up to the limit of importers’ needs, and List L, for which the issue of licenses is limited to the published quotas. Imports from countries in the payments agreement group are made in accordance with the quotas established in the respective trade agreements. Imports can also be licensed under compensation arrangements.

Payments for Invisibles

Payments for most current invisibles are authorized by the Exchange Office upon presentation of the necessary justification; in several instances the approval authority has been delegated to the banks. The authorized banks are permitted to make payments and settle expenses incidental to the commercial transaction covered by the relevant import documents. Earnings after tax on approved nonresident investments in Morocco are transferable to the investor’s country of residence. Transfer of dividends on nonresident-owned shares of Moroccan companies having their main office in Morocco is freely permitted if the shares are quoted on the Casablanca stock exchange and if the Exchange Office has approved the amount of the dividend to be distributed; transfer of other dividends requires approval by the Exchange Office. Some payments are subject to limitations: A foreign employee may transfer to his country of origin, subject to the approval of the Exchange Office, 50 per cent of his wages or salary if his family does not reside in Morocco, or 30 per cent if he is single or his family lives in Morocco; the same percentages of their earnings may be transferred by foreign nationals engaged in professions, subject to a limit of DH 1,000 a month. An allocation of foreign exchange equivalent to DH 25 a trip, which may be taken up twice a year, is granted to residents of any nationality for tourist travel. Residents of foreign nationality may acquire exchange for tourist travel up to the equivalent of DH 1,000 for each passport a year by selling to an authorized bank a corresponding amount in foreign exchange, other than banknotes, from their own foreign assets not subject to surrender requirements. Applications for exchange for business travel must normally be directed to the Exchange Office, which considers each case on its merits. The allocation issued for business travel may be added to the allocation issued for tourist travel. For study abroad, a monthly allocation of foreign exchange up to DH 500 is granted, provided that no comparable educational facilities are available in Morocco. For family maintenance, there is a monthly allocation of DH 250. Travelers are not permitted to take out Moroccan banknotes.

Exports and Export Proceeds

Most exports may be made freely, although export licenses are required for a few items.

All exporters must sign an undertaking to repatriate and surrender the foreign exchange proceeds of their exports. Collection of the proceeds must take place within a maximum period of one month from the date the payment is due. The date on which the payment is due is the maturity date fixed in the commercial contract; this date must not be set, in principle, more than 90 days after the date of arrival of the merchandise at the place of destination. When the bank receiving the funds that represent the proceeds from exports receives the advice of credit in foreign currency from abroad, it must surrender the foreign exchange immediately to the Bank of Morocco.

Proceeds from Invisibles

Residents of Moroccan nationality and Moroccan companies must repatriate exchange receipts accruing from all their noncommercial claims and surrender them to an authorized bank. Other residents must surrender noncommercial receipts only if the receipts result from current transactions, and only when they accrue in foreign currencies other than those of the French Franc Area. Nonresident travelers may bring in DH 100 in Moroccan banknotes, provided that they are not bringing in any foreign exchange. With this exception, the importation of Moroccan banknotes is prohibited. Nonresident travelers may bring in freely foreign banknotes, which must be declared upon entry.

Capital

Residents of Moroccan nationality, as well as companies established in Morocco, are obliged to declare to the Exchange Office all foreign-held assets exceeding DH 250, and to repatriate and surrender certain of these assets. The disposal of other foreign-held assets requires permission. The transfer of capital abroad by residents must be approved.

Exchange is allocated to emigrants and repatriates up to DH 35,000 a person, and on account of dowries and inheritances up to the same amount.

Foreign investments in Morocco must be approved by the Exchange Office. Foreign investments approved by the Investment Committee are granted various tax and customs tariff benefits and investment bonuses similar to those granted to domestic investments, in accordance with measures put into effect on February 10, 1961; they are also granted a guarantee of repatriation of the proceeds from liquidation of the investment, when the investment has been financed either with convertible currencies or in conformity with the rules governing settlements with other countries. The Exchange Office may also grant a guarantee of retransfer of investments which are not examined by the Government Commission. The guarantee of repatriation is freely transferable between all nonresidents (if the investment has been financed with convertible currencies) and between nonresidents of the same country or currency area (if the investment has been financed with other currencies). Proceeds from the liquidation of other investments are credited to Capital Accounts.

All transactions in securities involving nonresident interests, as well as the import and export of securities, require approval.

Changes during 1964

January 1. Transfers of savings from wages, salaries, and professional fees by foreign nationals having their families in Morocco must be made semiannually, at the end of the six-month period in which the income was earned. The first transfers would be made in July 1964. Foreign nationals having their families abroad remained entitled to transfer 50 per cent of their earnings every month; from February 1, 1964 the Exchange Office would accept applications for such transfers.

January 28. A new trade and payments agreement with Cuba was signed. The Bank of Mococco opened a clearing account in sterling in the name of the National Bank of Cuba. In the period from January 1, 1964 to May 31, 1964 Morocco would settle 58 per cent of its import payments for sugar in cash sterling and 42 per cent by crediting the clearing account; in the period from June 1, 1964 to May 31, 1965 these payments would be made 50 per cent in sterling and 50 per cent by credit to the clearing account. Exports to Cuba, as well as diplomatic, consular, and similar expenditures of the two Governments, would be settled through the clearing account.

February 13. The full amount of the advance import deposits made at authorized banks must be transferred to the Treasury’s current account at the Bank of Morocco, instead of 50 per. cent, as previously.

February 17. The tourist travel allocation was reduced to DH 200 a calendar year, and the supplementary allocation for travelers passing through Spain was increased to DH 450 a trip. Children under the age of six were no longer entitled to either allocation. Exports of Moroccan banknotes by resident and nonresident travelers were limited to DH 150 a person a trip.

March 18. Foreign nationals working in the public sector could freely choose the two months in which to make their semiannual transfers of savings; the supplementary allocation of 100 per cent of their monthly earnings for each month of leave taken, which they could obtain when going abroad on leave, was reduced to 35 per cent for each month of leave taken, subject to a maximum of 105 per cent of their monthly earnings.

April 1. The obligation to surrender 50 per cent of the outstanding balance on each EFAC account was applied on a quarterly rather than on a semiannual basis.

April 15. Foreign nationals employed in the private sector and entitled to transfer semiannually 30 per cent of their earnings could freely choose the two months in which to make the transfers.

April 15. The General Import Program for 1964 was published.

April 18. Butter, flax, ramie, and certain types of glass were exempted from advance deposit requirements.

June 3. The tourist travel allocation was rounded to F 200 for those traveling to France. Travelers to Spain were permitted to take up both the regular tourist allocation and the supplementary transit allocation, even when they did not intend to travel to other countries.

June 19. Nonresident Internal Accounts were abolished.

July 1. Transactions in foreign banknotes between the authorized banks and the public had to be carried out at buying and selling rates fixed by the Bank of Morocco; the banks were not permitted to charge any commission. The Bank of Morocco also established separate buying and selling rates for its transactions in foreign banknotes with the authorized banks.

July 1. Tourist Accounts were abolished; balances in existing accounts could be utilized until January 1, 1965.

July 24. Dividends on nonresident-owned shares of Moroccan companies having their main office in Morocco could not without special authorization from the Exchange Office be transferred abroad, unless the shares were quoted on the Casablanca stock exchange and the company had obtained the Exchange Office’s approval of the amount of the dividend to be distributed. The latter condition was only attached to dividends of business years ended after July 24, 1964.

October 8. Imports and exports of Moroccan banknotes were prohibited.

October 9. The tourist travel allocations were suspended.

October 12. Imports from all sources were suspended. The authorized banks were not permitted to accept domiciliation of “import commitments” for imports from the French Franc Area or of import licenses for imports from other sources. The issuance of “quota certificates” also was suspended. Imports from the French Franc Area by parcel post or by airplane (such imports did not require an “import commitment”) were not suspended.

October 12. The Bank of Morocco suspended the granting of exchange under import letters of credit.

October 14. The banks were permitted to make available to residents of foreign nationality foreign exchange (checks, letters of credit, credits to bank accounts, and banknotes) in exchange for foreign exchange supplied by these foreigners from their own foreign holdings not subject to surrender requirements, provided that the exchange was not supplied in the form of banknotes. Such transactions were permitted up to the equivalent of DH 1,000 a passport a calendar year; higher amounts required special authorization from the Exchange Office. Export of foreign exchange thus acquired must take place within one month from the date of purchase.

November 9. A tourist travel allocation equivalent to DH 25 a trip, which could be taken up twice a year in any currency, was established for residents, irrespective of nationality, who held an individual passport.

November 20. Imports from the French Franc Area by parcel post or airplane were suspended.

November 23. A list of permitted imports applicable to all countries was issued. Items not listed, and consequently prohibited, included fresh meat, fish, vegetables, some fruits, chocolates and candy, perfumes, cosmetics, soap and detergents, footwear, ceramics, clothing, certain textiles, watches and clocks, and domestic electrical appliances. New regulations were issued regarding import procedures applicable to the French Franc Area; all permitted imports from that Area, including those made by airplane or through postal channels, became subject to individual approval.

December 15. EFAC accounts, in which exporters could keep part of their export proceeds accruing in currencies other than French Franc Area currencies, were abolished.

December 15. Nonresident travelers were permitted to bring in DH 100 in Moroccan banknotes, provided that they did not bring in any foreign exchange.

December 25. Imports made and settled through postal channels no longer required an “import commitment” or the prior approval of the Ministry of Commerce and the Exchange Office.

Nepal

Exchange Rate System

No par value for the Nepalese Rupee has been established with the Fund. The official rate of exchange vis-à-vis the Indian rupee is NRs 160 = Rs 100, giving a relationship of approximately NRs 7.619 = US$1. Most of Nepal’s foreign exchange transactions are in terms of Indian rupees; but where other currencies are involved, the rates are based on the above relationship and the exchange rate for the other currency concerned against the Indian rupee. On December 31, 1964, the rate for the U.S. dollar was NRs 7.60 buying, NRs 7.68 selling, per US$1. Exporters are granted exchange entitlements corresponding to specified proportions of their export earnings in foreign currencies other than Indian rupees (see section on Exports and Export Proceeds, below). The entitlements are freely transferable.1

Administration of Control

A Foreign Exchange Committee, consisting of representatives from the Nepal Rastra Bank and several ministries, prepares a foreign exchange budget for foreign currencies other than the Indian rupee. Permission is required from the Ministry of Finance for all foreign payments, except payments for certain specified invisibles that require authorization from the Nepal Rastra Bank and all payments to India made in Nepalese or Indian rupees. Import licensing is the responsibility of the Ministry of Industry and Commerce. All export and import transactions must be made through the Nepal Bank.

Prescription of Currency

No prescription of currency requirements apply to outgoing payments, and these may be made in the foreign currency supplied by the Nepal Rastra Bank—in practice mostly Indian rupees, sterling, or U.S. dollars. The proceeds of exports to India are obtained in Indian or Nepalese rupees; the proceeds of exports to other countries must be received in deutsche mark, Japanese yen, pounds sterling, Swiss francs, or U.S. dollars. Nepal has a trade and payments agreement with Pakistan and a provisional payments arrangement with Mainland China.

Imports and Import Payments

All imports of goods except those of Indian origin require import licenses from the Ministry of Industry and Commerce. Imports of vegetables, vegetable oil, margarine, animal fat, beef, arms and ammunition, explosives, chemicals to be used for explosives, and wireless transmitters are prohibited. Under the Trade and Transit Treaty of September 11, 1960, Nepal and India agreed to freedom of trade between themselves in Nepalese and Indian goods; Indian goods may be imported freely, and imports of all commodities subject to excise duty in India benefit from reimbursement of tax by the Government of India to the Government of Nepal.

With the exception noted below, applications to the Ministry of Finance for foreign exchange to pay for imports from countries other than India are considered on their merits; an application must, however, be in accordance with the annual foreign exchange budget and its list of commodities. Exporters entitled to import goods with exporters’ exchange entitlements are, within the limits of their entitlement, granted a license automatically (see section on Exports and Export Proceeds, below); they may obtain licenses also for all goods not included in the foreign exchange budget.

Payments for Invisibles

Payments to India may be made freely in Indian or Nepalese rupees. Payments to other countries for invisibles related to commercial transactions are usually authorized; payments for freight and insurance are given the same treatment as the related import payments.

For travel to countries other than India for medical treatment, foreign exchange is allowed up to the equivalent of US$1,000; students studying at their own expense in these countries are allowed up to US$1,500 a year. Payments for other invisibles depend on the essentiality of the transaction and the availability of foreign exchange. Nepalese and Indian currency may be taken out freely to India by Nepalese and Indian nationals only; the export of these currencies to countries other than India is prohibited. Foreign banknotes other than Indian banknotes may not be taken out by residents without permission. Nonresidents may take out the unchanged amount of any foreign banknotes they brought in; however, nonresidents other than Indian nationals may not take out Nepalese or Indian banknotes.

Exports and Export Proceeds

Exports of old coins, gold and silver and coins and jewelry made of these metals, cows, buffalos, and rhinoceros horns are prohibited. The re-export to India of non-Nepalese goods is not normally permitted, and re-exports to any destination of kerosene, petrol, cement, iron bars, and packaged foodstuffs are prohibited. All other goods may be exported freely.

The exchange proceeds of exports, except Indian rupees, must be declared and surrendered to the Nepal Rastra Bank. The exporter receives from the Ministry of Finance an exporters’ exchange entitlement corresponding to a specified proportion of his export proceeds in foreign currencies other than Indian rupees; the entitlement, which is freely transferable, may be used to obtain exchange at the official rate for any type of import, whether included in the foreign exchange budget or not.

Exporters engaged in barter trade are granted entitlements corresponding to 40 per cent of their export earnings; the remaining 60 per cent must be used to import specified commodities. Other exporters of “general exports” receive entitlements corresponding to 40 per cent of the proceeds from exports of raw jute and musk, 50 per cent of those from exports of jute manufactures, and 60 per cent of those from exports of all other goods. Industries not incurring heavy foreign exchange expenditures receive entitlements corresponding to 30 per cent of their export proceeds, while industries incurring heavy foreign exchange expenditures receive entitlements for the following percentages of export earnings during the preceding year: 60 per cent of export earnings of NRs 2 million or less; 70 per cent of export earnings over NRs 2 million but not in excess of NRs 4 million; 80 per cent of earnings over NRs 4 million but not in excess of NRs 6 million; and 85 per cent of earnings over NRs 6 million. The corresponding percentages for industries exporting raw jute and jute manufactures are 55 per cent, 65 per cent, 75 per cent, and 80 per cent.

Proceeds from Invisibles

With the exception of Indian rupees, foreign exchange proceeds derived from transactions in invisibles must be surrendered to the Nepal Rastra Bank at the official rate of exchange. Nepalese and Indian currency may be brought in freely from India by Nepalese and Indian nationals; the import of these currencies from countries other than India is prohibited. Nonresidents other than Indian nationals are not allowed to bring in Nepalese or Indian banknotes. Other foreign banknotes may be brought in freely.

Capital

No conditions are laid down concerning receipts and remittances in respect of capital transactions, but official exchange is not normally provided for capital remittances by Nepalese nationals. Nepalese citizens, whether resident in Nepal or not, are prohibited from making any type of investment in foreign countries except investments specifically exempted by government notice published in the Official Gazette.

Foreign investors in Nepal who obtain an investment guarantee may remit yearly profits of at least 10 per cent of the capital invested and, in any one year, up to 25 per cent of the principal. Industrial enterprises capitalized at US$65,000 or more may be wholly owned by foreign interests. Nepal has a bilateral Investment Guarantee Agreement with the United States.

Changes during 1964

February 12. Nepalese and Indian nationals could bring in freely, or import through the mail, any amount of Nepalese and Indian banknotes and coins from India. Nonresidents other than Indian nationals were not allowed to bring in, or import through the mail, Nepalese or Indian banknotes and coins from India. All imports of Nepalese and Indian banknotes and coins from countries other than India were prohibited.

March 30. Nepalese residents and foreigners engaged in business in Nepal were required to declare their holdings of foreign currencies other than Indian rupees and their holdings of fixed assets earning foreign exchange other than Indian rupees.

May 11. Only Nepalese and Indian nationals could take out or export through the mail Nepalese and Indian banknotes and coins to India. The export of Nepalese and Indian banknotes and coins to countries other than India was prohibited.

July 15. The proportions of export proceeds in foreign currencies other than Indian rupees for which exporters of “general exports” were granted exporters’ exchange entitlements were revised. Exporters engaged in barter trade were required to utilize 60 per cent of their export earnings to import commodities specified by the Government; they were granted an entitlement corresponding to 40 per cent of their export earnings. Exporters were granted an entitlement corresponding to 40 per cent of the proceeds from exports of raw jute and musk; 50 per cent of the proceeds from exports of jute manufactures; and 60 per cent of the proceeds from exports of any other commodity. Exporters’ exchange entitlements became freely transferable.

August 16. The Foreign Exchange Regulation Act of 1962 was enforced in five additional areas of the country. The Act prohibits transactions in foreign currencies by persons other than license holders, except with prior permission from the Nepal Rastra Bank.

August 28. All Nepalese citizens, whether resident in Nepal or not, were prohibited from making any type of investment in foreign countries, except for those investments that would be specifically exempted by government notice published in the Official Gazette.

November 9. The proportions of export proceeds in foreign currencies other than Indian rupees for which industrial exporters were granted exchange entitlements were revised. Industries not incurring heavy foreign exchange expenditures were granted exchange entitlements corresponding to 30 per cent of their export proceeds. Industries incurring heavy foreign exchange expenditures received entitlements for 60, 70, 80, or 85 per cent of their export proceeds, depending on the total amount of export earnings in the preceding year; the corresponding percentages for industries exporting raw jute and jute manufactures were 55, 65,75, and 80 per cent.

Netherlands

Exchange Rate System

The par value is Netherlands Guilders 3.62 = US$1. The official limits are f. 3.59¼ buying, and f. 3.64¾ selling, per US$1, at which rates the exchange authorities stand ready to deal; the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for other currencies vary between limits that result from combining the official limits for the U.S. dollar maintained by the Netherlands and such limits in force in the country of the other currency concerned.

Authorized banks are permitted to buy and sell convertible currencies1 and to sell inconvertible currencies, both spot and forward for up to 12 months’ delivery, against convertible currencies, including guilders on Convertible Guilder Accounts. Forward exchange contracts by authorized banks for more than 12 months require individual licenses, which are granted freely. The authorized banks may also purchase inconvertible currencies from banks abroad against any foreign currency or guilders on a Convertible Guilder Account or a Bilateral Guilder Account (see section on Nonresident Accounts, below), provided that the amounts bought are used for current payments. Residents are permitted to conclude spot transactions with other residents, including authorized banks, and they may conclude forward transactions for up to 12 months’ delivery with authorized banks.

Foreign exchange related to transactions in securities (see section on Capital, below) is traded in a spot market at free rates that are, in practice, very close to the official market rates.

The Kingdom of the Netherlands accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Exchange Control Territory

All transactions with the Netherlands Antilles and Surinam are subject to exchange control. However, vis-à-vis third countries with which payments agreements are in force, the Netherlands, the Netherlands Antilles, and Surinam constitute the Netherlands Monetary Area.

Administration of Control

Exchange control is administered by the Netherlands Bank on behalf of the Ministers of Foreign Affairs, Finance, Economic Affairs, and Agriculture. Import and export licensing are handled by the Central Import-Export Agency (CDIU) and the delegated offices, under directives from the Directorate-General for Foreign Economic Relations. Invisibles and capital transactions are licensed by the Netherlands Bank, as are all transit trade transactions. Practically all commercial banks are authorized to handle foreign exchange transactions within the scope of general and special licenses granted by the licensing authorities.

Prescription of Currency

Payments to nonresidents, if eligible for transfer abroad, must be made through an authorized bank either in guilders to the credit of a nonresident guilder account held with an authorized bank in the Netherlands or to the debit of the authorized bank’s currency holdings abroad.

All foreign countries except Indonesia and the U.S.S.R. are included in the “convertible guilder area.” Payments to the convertible guilder area may be made in any foreign currency or in guilders to the credit of any nonresident account. Receipts from countries in this area must be obtained in the convertible currencies (see footnote 1), or in guilders to the debit of a Convertible Guilder Account (see section on Nonresident Accounts, below); however, receipts may also be collected in other currencies provided that the amounts received are deposited with an authorized bank and are only used for current transactions. Transactions with Indonesia and the U.S.S.R. are settled in guilders by crediting or debiting the Bilateral Guilder Account of a banking institution of the country concerned; receipts may also be obtained in the convertible currencies, or in guilders to the debit of a Convertible Guilder Account.

Nonresident Accounts

The main categories of nonresident guilder accounts are as follows: 2

1. Convertible Guilder Accounts. These accounts may be held by any nonresident. They may be credited with transfers from other Convertible Guilder Accounts, with permitted payments by residents of the Netherlands to residents of the convertible guilder area, with proceeds from the sale of gold or convertible currencies, and with Netherlands notes and coins remitted or deposited by nonresidents. They may be debited for payments to residents for exports and services rendered to any country and for other permitted transactions, including purchases of foreign currencies. Balances on these accounts may be transferred to any other nonresident account.

2. Bilateral Guilder Accounts. These accounts are held exclusively by banking institutions established in Indonesia and the U.S.S.R., and are used for the settlement of transactions between the Netherlands and the respective country. They may be credited with transfers from any Convertible Guilder Account or from another Bilateral Guilder Account of the same country, and with proceeds from the sale in the Netherlands of gold or convertible currencies. They may be debited for transfers