Chapter

Surveys of Exchange Controls and Restrictions in

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1952
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Argentina

Date of Introduction

October 1931. Last major revision August 28, 1950.

Nature of Restrictive System

Restrictions are exercised through licenses required for all imports, individual import quotas for some goods, licenses for nontrade payments, and through a multiple currency practice resulting from the use of a basic, a preferential, and a free market rate. Exchange proceeds of exports must be surrendered. A multiple currency practice results on the buying side from the use of three buying rates, including a free market rate. Some exports are controlled taking into account the requirements of the internal market.

Exchange Rates

Basic official rates: buying Argentine Pesos 5.00, selling Argentine Pesos 5.00 per US$1. Another fixed rate of Argentine Pesos 7.50 per US$1 has been established, and the use of a free market yields a fluctuating rate (see Table of Exchange Rates below).

Exchange Payments

Imports. All imports require exchange licenses. These licenses are granted according to the origin and the type of import, usually on the basis of overall quotas. Individual import quotas are established for certain essential goods. In respect of certain goods from specified countries,1 these licenses are freely issued. A 20 per cent penalty is payable on the unused portion of such licenses. Preferred imports, such as fuel oils, coal, and coke, are effected at the M$N 5.00 rate. Essential imports (foodstuffs, steel, tobacco, industrial materials, metal products, pharmaceuticals, surgical instruments, etc.) are effected at the M$N 7.50 rate. Non-essential and luxury imports (auto and watch parts, motorcycles, etc.) are effected at the free market rate, currently at M$N 14.37 per U.S. dollar. Provision is made for the issuance of licenses to permit importation of industrial materials and equipment payable not earlier than three or five years, of capital goods, or of certain other imports. Provision also is made for the issuance of licenses to permit importation of essential goods “without the use of exchange.” A penalty of 20 per cent is payable on the unused portion of any such license.

Invisibles. Payments abroad require licenses and are effected at the free market rate. Earnings of registered foreign capital up to 5 per cent per annum may be remitted through the free market.

Capital. Transfers of capital require approval and are effected at the free market rate. Investments abroad by residents are not normally approved.

Exchange Recipts

Exports. Some exports are controlled in order to take into account the requirements of the internal market. Exchange proceeds of exports must be received in the appropriate currencies and surrendered. Proceeds of basic exports (meat, grains, hides, wool, etc.) must be surrendered at the M$N 5.00 rate. Proceeds of minor exports (quebracho extract, animal by-products, some textiles, etc.) must be surrendered at the M$N 7.50 rate. Proceeds of marginal exports (preserved fruit, mica, some light consumer goods) may be sold in the free market.

Invisibles. Exchange receipts from invisibles may be sold in the free market. The importation of Argentine paper pesos requires approval.

Capital. Exchange receipts from capital may be sold in the free market.

Table of Exchange Rates (as at December 31,1951)(pesos per U.S. dollar)
BuyingSelling
5.00Basic exports.5.00Preferred imports.
7.50Minor exports.7.50Essential imports.
14.37

(Fluctuating Free Market Rate)
Marginal exports. Invisibles. Capital.14.37

(Fluctuating Free Market Rate)
Non - essential and luxury imports. Invisibles. Capital.

Changes during 1951

February

Exchange would be granted at the official free rate for imports under treaty arrangements with Norway, Finland, and Israel.

Exchange would be granted at the official and free market rates for certain goods imported under trade agreements with Denmark, Netherlands, Hungary, and Czechoslovakia.

Certain imports previously entitled to the automatic granting of prior exchange permits irrespective of the country of origin could now be made only from a limited list of countries.

June

Cotton and rayon textiles, electric irons, and lampstands were added to the list of goods for which prior export permits are required.

June 29

Prior import permits “without use of exchange” were made subject to payment of an indemnity of 20 per cent on any unused portion. A bank guarantee for payment of the indemnity had to be obtained before July 31, 1951, or in the case of machinery before August 31, 1951. After these dates, permits for which no guarantee was obtained were canceled. Permits “without use of exchange” were now issued only to registered importers and end-users who must have a bank guarantee for the 20 per cent penalty on any unused part subject to a 10 per cent tolerance.

The issue of automatically granted exchange licenses was restricted to imports from neighboring countries and from Austria, Brazil, Bulgaria, Czechoslovakia, Denmark, Finland, Hungary, Norway, Poland, Rumania, Sweden, Switzerland, or Yugoslavia.

August 25

Imports from Sweden using foreign exchange were suspended until further notice.

September 7

The issuance of automatic prior exchange permits for goods from Denmark was suspended.

Permits would be issued with use of official exchange for raw material components and motors to be used in the manufacture of agricultural machinery.

All import permits “without use of exchange” were required to be revalidated by depositing with a foreign bank before September 15, 1951 the exchange to pay for the merchandise.

November

Brazil and Finland were excluded from the list of countries, imports from which were automatically granted prior exchange permits.

December 24

An indemnity of 20 per cent had to be paid by importers on the unused portion of prior exchange permits. A bank guarantee of payment of the indemnity is required.

Federal Republic of Germany

Date of Introduction

August 1, 1931. Introduced in Western Occupation Zones by Military Government Law No. 53 of May 28, 1945, and in Berlin through Ordinance No. 337 of the Allied Command on August 21, 1946.

Nature of Restrictive System

Restrictions are exercised through import prohibitions and licenses required for most imports, and through licenses required for nontrade payments; exchange is granted for imports and nontrade payments authorized by these licenses. Foreign exchange, with certain exceptions, must be surrendered. Certain exports require licenses.

Exchange Rates

On the basis of the present relation of US$0.238095=Deutsche Mark 1, the official rates are: buying DM 4.195, selling DM 4.205 per US$1.

Exchange Control Territory

The Federal Republic of Germany, with the three Western Occupation Zones, and the British, French, and U.S. Sectors of Berlin, constitutes a single exchange control territory, although exchange control and certain exchange restrictions are exercised between the two areas.

Exchange Payments

Imports. Certain imports are prohibited. Imports require import licenses1 and exchange licenses. Exchange is automatically granted for authorized imports.

Invisibles. Payments abroad require licenses which are freely granted for expenses incidental to trade transactions. Persons traveling abroad may take with them a maximum of DM 40 in German banknotes.2

Capital. Transfers of capital are not normally approved. Foreigners are allowed to sell their blocked Deutsche Marks held in West German banks to other foreigners.

Exchange Receipts

Exports. Some exports require licenses. Foreign exchange from exports must be surrendered. Exporters of commodities other than specified foodstuffs and basic raw materials may benefit from the foreign exchange working fund arrangements which provide that a portion of their exchange receipts may be used to assist export industries to cover their marginal requirements of foreign raw and auxiliary materials.

Invisibles. Exchange receipts from invisibles must be surrendered. Persons may bring in a maximum of DM 100 in German banknotes.3

Capital. The investment of foreign capital requires a license which is granted under certain conditions. Foreigners who acquire mark deposits from other foreigners are authorized to use them for the purchase of designated securities.

Changes during 1951

January 30

The utilization of export bonus (retention quota) funds for the importation of animals, foodstuffs, and stimulants was prohibited.

February 8

Nonresidents were permitted to utilize up to DM 75 per day from their Deutsche Mark accounts for travel and living expenses of themselves and their families in Western Germany, with a maximum of DM 200.

February 21

The trade liberalization program affecting listed imports from EPU countries was suspended temporarily.

February 27

A temporary embargo was announced on nearly all imports from EPU countries. Most imports required the prior approval of the Ministry of Economics.

March 3

Foreigners were authorized to sell their blocked Deutsche Marks held on deposit with banks in West Germany or Western Berlin to other foreigners. Foreigners who acquire such Deutsche Mark deposits from other foreigners were authorized to use them for the purchase of designated securities.

March 22

It was announced that the 20 per cent dollar export retention quota system was abolished. From March 22 to June 22 the bonus system would operate only for certain scarce raw material imports; after June 22 exporters were not to be permitted to retain any of their dollar export earnings.

June 1

Exports to China became subject to individual export license.

June 2

Nonresidents were permitted to send German securities from abroad to Western German financial institutions to be sold, the proceeds to be used to defray expenses of revalidating other securities.

June 20

The amount foreigners traveling to Germany were allowed to carry with them was raised from DM 40 to DM 100.

June 23

A foreign exchange working fund arrangement replaced the “foreign exchange bonus” system which was terminated June 22. Manufacturers of commodities other than specified foodstuffs and basic raw materials were permitted to use 3 per cent (in special cases, 5 per cent) of their export proceeds for certain raw materials and semi-finished goods to be used directly in export production. In August, this amount was fixed uniformly at 4 per cent, with retroactive effect to June 23.

September 21-22

The compulsory cash deposit requirement in connection with the granting of import permits was abolished.

December 15

A decree was issued by which import procedure was to be augmented by the requirement of a purchase authorization before importers could conclude contracts. The issue of a purchase authorization would normally allow the automatic issue of an import license. This decree was to come into effect January 1, 1952, when restrictions as to amount would not be applied to the issue of purchase authorizations or import licenses in respect of a large range of goods imported from EPU countries.

Hashemite Kingdom of the Jordan

Date of Introduction

September 1939. Revised July 1, 1950.

Nature of Restrictive System

Restrictions are exercised through licenses granted up to the limits of individual import quotas and through a multiple currency practice consisting of exchange taxes on payments. All foreign exchange receipts must be surrendered.

Exchange Rates

Official rates: buying US$2.82, selling US$2.78 per Jordan Dinar 1. Taxes applicable to import transactions and payments for invisibles yield the effective selling rates (see Table of Exchange Rates below).

Exchange Payments

All payments abroad require licenses. Exchange taxes of 1 per cent and 3 per cent are applied to nontrade payments in “soft” and “hard currencies”,1 respectively; for trade transactions, equivalent import license taxes are applied. An Air Force Tax of 100 per cent on these taxes is added to them.

Persons leaving Jordan for Syria or Lebanon may take out a maximum of JD 100 and persons leaving for any other country, JD 20. Persons leaving Jordan may take out the equivalent of JD 10 in currencies other than that of the Jordan Currency Board. Remittances to neighboring Arab countries and the Sterling Area may be made by postal order up to JD 5 per month per person.

Exchange Receipts

All exchange receipts must be surrendered. Persons entering Jordan from Syria and Lebanon may bring in a maximum of JD 100, and persons coming from other countries JD 20.

Table of Exchange Rates (as at December 31,1951)(Jordan dinars per U.S. dollar)
BuyingSelling
2.82All incoming payments.2.78Government payments.
2.8356

(2.78 rate plus 2 % tax)
Payments to “soft currency” countries.
2.9468

(2.78 rate plus 6 % tax)
Payments to “hard currency” countries.
Note: The above taxes include the import or exchange permit fee and the Air Force Tax of 100% of the amount of the fee.

Changes during 1951

January 16

Persons entering Jordan from Syria and Lebanon could bring in a maximum of JD 100 and persons coming from any other territory, JD 20. Persons leaving Jordan for Syria or Lebanon may take out a maximum of JD 100 and persons leaving for any other territory, JD 20. Persons leaving Jordan could take out the equivalent of JD 10 in currencies other than that of the Jordan Currency Board.

January 30

Restrictions imposed on the importation of millet and corn were lifted.

December 17

The official rates for the U.S. dollar were changed from US$2.80125 to US$2.82 buying, and from US$2.79875 to US$2.78 selling, per JD 1.

Indonesia

Date of Introduction

May 10, 1940. Last major revision March 5, 19511

Nature of Restrictive System

Restrictions are exercised through import prohibitions, licenses required for non-prohibited imports, through a multiple currency practice resulting from the use of an exchange certificate rate and of an “inducement” certificate rate, and through licenses required for nontrade payments. Foreign exchange, with certain exceptions, must be surrendered. A multiple currency practice results on the buying side from the purchase from exporters and others surrendering exchange certificates at a fixed price. All exports require licenses.

Exchange Rates

Official rates: buying Rupiah 3.79, selling Rupiah 3.81 per US$1. Exchange certificate rates: buying 199 per cent, selling 200 per cent, and the sale of “inducement” certificates (required to pay for certain imports) at 200 per cent of the value of the exchange required, added to the official rates, yield the effective rates (see Table of Exchange Rates below).

Exchange Payments

Imports. All imports require import and exchange licenses which are issued in combined form. These licenses are issued, in respect of certain goods, to most importers. For certain other goods in a so-called “free list”, these licenses are issued to any importer up to certain quota limits. For imports in these two categories, an exchange certificate for 100 per cent of the amount involved must also be provided by the applicant in order to purchase the exchange. Exchange certificates are sold by the Government through authorized banks at a price of 200 per cent on the nominal value. In addition, any non-prohibited import, except for those reserved to newly-established importers of Indonesian nationality, can be made with “inducement” certificates which are sold at a price fixed periodically by the Government. The cost of such “inducement” certificates also amounts to 200 per cent on the nominal value, which is in addition to the cost of the exchange certificate and the exchange itself. Barter transaction in a limited range of native products are allowed with Hong Kong and Singapore.

Invisibles. Payments abroad require licenses. Foreign exchange is granted for all purposes connected with trade and for the remittance of dividends due to nonresidents. In addition to the exchange license, an exchange certificate for 100 per cent of the amount involved (50 per cent in the case of payments related to merchandise exports) must also be provided in order to purchase the required exchange.

Capital. Transfers of capital require approval and an exchange certificate for 100 per cent of the amount involved must also be provided. Investments abroad by residents and remittance of nonresident capital are not normally approved.

Exchange Receipts

Exports. All exports require licenses. Exporters receiving foreign exchange must surrender it. In addition to the local currency equivalent of their exchange proceeds, they receive nominally for 50 per cent of the amount involved, an exchange certificate which must be sold immediately to the Government through an authorized bank at a price fixed by the authorities—currently 199 per cent of the face value. Exporters of certain native products other than pepper, rubber, coffee, tea, and tobacco, receive “inducement” certificates, representing 5 per cent, 7½ per cent, or 10 per cent of the value of their exports, and these “inducement” certificates can be used to effect certain imports. Export proceeds must be received in foreign exchange appropriate to the country of destination, but there are special exchange arrangements for certain foreign-owned oil companies.

Invisibles. Exchange receipts from invisibles must be surrendered. In most cases, an exchange certificate is also issued for 50 per cent of the amount surrendered. In respect of adjustments, rebates, and refunds related to merchandise imports or services, exchange certificates are issued for 100 per cent.

Capital. Exchange receipts from capital must be surrendered, and in most cases, an exchange certificate is also issued for 50 per cent of the amount surrendered. Such certificates are issued 100 per cent in respect of direct investments officially acknowledged by the exchange control authorities.

Table of Exchange Rates (as at December 31, 1951)(rupiah per U.S. dollar)
BuyingSelling
3.79

(Official Rate)
….3.81

(Official Rate)
….
7.54

(Exchange Certificate Rate)
….7.62

(Exchange Certificate Rate and also “Inducement” Certificate Rate)
….
7.56

(Rp 3.79 rate plus 50 % Exchange Certificate Rate)
Export proceeds and most invisibles.
11.33

(Rp 3.79 rate plus Exchange Certificate Rate)
Adjustments, refunds, and rebates. Approved capital.11.43

(Rp 3.81 rate plus Exchange Certificate Rate)
Imports with import license. Authorized invisibles and capital.
19.05

(Rp 3.81 rate plus Exchange Certificate Rate plus “Inducement” Certificate Rate)
Imports with “inducement” certificate.
Note: Other effective buying rates between Rp 7.56 and Rp 11.33 are applicable to exchange derived from the export of certain minor native products, in respect of which exporters receive “inducement” certificates to the extent of 5%, 7½% or 10% of the exchange surrendered.

Changes during 1951

January 1

The special accounts of nonresident private individuals who left Indonesia after August 1, 1946 (later amended to May 10, 1940) were divided into capital accounts and income accounts, remittances abroad being permitted from the latter up to specified limits.

January 6

Holders of “inducement” certificates previously valid only for imports from “soft currency” countries could obtain approval to use them to import from other countries.

February 11

The system by which exporters of native products could obtain a right to purchase foreign exchange up to a certain percentage of their export proceeds and under which this right could be sold to importers was discontinued except in respect of a few minor products.

February 22

The issue of actual exchange certificates ceased. Exporters and others surrendering exchange to the authorized banks no longer effectively received an exchange certificate but had to sell it immediately to the Government at a fixed rate.

March 5

An arrangement was introduced by which licenses to import certain goods, not in the import program at all or importable only in small quantity, could be purchased from the Government at a price fixed at 200 per cent of the official selling price of foreign exchange.

April 1

The procedure for obtaining import and exchange licenses was simplified. The allocation of import licenses on the basis of prewar imports was abolished.

Note: Effective February 4, 1952, several significant changes were made in the exchange system. The previously-existing exchange certificates and the “inducement” certificates were abolished. The official rate for the U.S. dollar became Rp 11.40 and this rate was made applicable to most exchange transactions except trade items in Canadian dollars, U.S. dollars, and in Japanese clearing-account dollars. Exporters for these currencies receive in addition to the rupiah equivalent at the official rate a negotiable “export certificate” for 70 per cent of export proceeds surrendered. “Export certificates” are required 100 per cent in order to effect imports to be paid for in these currencies. Consequently, the effective rate for such transactions is dependent on the fluctuating market rate for the “export certificates”. Apart from the normal import and exchange license, imports of luxury and semi-luxury goods require an additional license which can be purchased from the Government at a price fixed at 70 per cent of the official selling price of foreign exchange; if these goods are imported from Canada, Japan, or the United States, an “export certificate” must also be provided. The latter are not required for such items as rice, imports financed with MSA (ECA) allocations or by loans from the Export-Import Bank of Washington.

From February 4,1952 until May 12,1952, the rate for “export certificates” fluctuated in a free market, but since then the rate is fixed weekly by the Indonesian authorities.

Israel1

Date of Introduction

Foreign exchange regulations were made effective by the Mandatory Government in 1939. Exchange control was continued in effect by the Israel Government in 1948. The exchange rate structure was revised February 14, 1952.

Nature of Restrictive System

Restrictions are exercised through licenses required for all imports, for all nontrade payments, and through a multiple currency practice resulting from fixed selling rates applied to different transactions. Foreign exchange, with certain exceptions, must be surrendered. A multiple currency practice results also on the buying side from the application of different exchange rates. All exports require licenses.

Exchange Rates

The official rate of exchange is Israeli Pound 1=US$2.80. Other fixed rates apply to certain transactions (see Table of Exchange Rates below).

Exchange Payments

Imports. All imports require import licenses. Certain of these licenses are issued on the understanding that no official exchange will be granted in payment of the import. In respect of other licenses, exchange is automatically granted. Payments for highly essential imports, such as bread, flour, and sugar, are effected at the $2.80 rate. Payments for certain other essential imports, such as meats, tea, and coffee, are effected at the $1.40 rate. Payments for all other imports are effected at the $1.00 rate.

Invisibles. Payments abroad require licenses. Authorized payments are made at the $1.00 rate. The annual transfer of profits, interest, and repayment of loans to a maximum of 10 per cent of invested capital approved under Clause 21 of the Law for the Encouragement of Foreign Investments is allowed.

Capital. Transfers of capital are usually not approved.

Exchange Receipts

Exports. All exports require licenses. Exchange proceeds in “designated” currencies2 must be surrendered. Exchange proceeds from diamond exports must be surrendered at the $2.80 rate. Exchange proceeds from certain specified exports, such as citrus fruits, must be surrendered at the $1.40 rate. All other exports must be surrendered at the $1.00 rate.

Invisibles. Exchange proceeds from insurance, maintenance payments, personal gifts, legacies, commissions, and income from investments must be surrendered at the $1.00 rate. Exchange proceeds from contributions from organizations, tourists, and diplomatic expenditures must be surrendered at the $1.40 rate. Exchange proceeds from all other invisibles must be sold at the $2.80 rate. A traveler may bring a maximum of I£ 25 in one pound notes into Israel. Tourists visiting Israel are expected to bring with them, in foreign currency, such amounts as they will need during their stay. Special Tourist Letters of Credit can be acquired at points of arrival against foreign currency. Unspent balances of such Letters of Credit can be re-converted into the original foreign currency at points of departure. Declared foreign currency can be taken out.

Capital. The investment of foreign capital requires approval. Investment of foreign capital approved under Clause 21 of the Law for the Encouragement of Foreign Investment 1950 is surrendered at the $1.40 rate. Investment of foreign capital not coming under Clause 21 of the Law for the Encouragement of Foreign Investment 1950 is surrendered at the $1.00 rate. The rate of exchange for proceeds of Government loans and grants may be $2.80, $1.40, or $1.00, according to the conditions agreed on.

Table of Exchange Rates (as at December 31, 1951)(U.S. dollars per Israeli pound)
BuyingSelling
2.80Government loans and grants destined for sale at this rate. Schedule A exports (diamonds). All transactions not made at the other rates.2.80Schedule C imports. (Essential foods)
1.40Contributions. Tourists and diplomatic. Schedule B exports. Government loans and grants destined for sale at this rate. Investment approved under Clause 21 of the Law for the Encouragement of Foreign Investment 1950.1.40Schedule D imports. (Less-essential goods)
1.00Exports other than those in Schedule A and B. Life insurance. Investment not coming under Clause 21 of the Law for the Encouragement of Foreign Investment 1950. Government loans and grants destined for sale at this rate. Income from investments abroad. Individual receipts of maintenance, gifts, legacies. Commissions and fees.1.00All other transactions including income derived from approved investments.

Changes during 1951

January

All Israeli holders of United States or Canadian dollar securities were required to surrender them to Israeli authorities against cash (price of the security plus 33.5 per cent bonus for shares and 35 per cent bonus for bonds) or in exchange for 3.5 per cent Israeli dollar bonds having a 20-year currency with option to acquire 20 per cent additional bonds at issue price.

March 26

All dealings in gold except by dealers authorized by the Minister of Finance were prohibited.

November

New import restrictions were imposed limiting the granting of import licenses to most essential foods, fuel, and fertilizers.

All Israeli holders of sterling securities were required to surrender them to Israeli authorities against cash (price of security plus 80 per cent bonus) or in exchange for 3.5 per cent Israeli dollar bonds having a 20-year currency with option to acquire 30 per cent additional bonds at issue price.

1952

February 14

Three exchange rates became effective and the transactions and commodities to which each rate would apply were specified.

Japan

Date of Introduction

May 1933. Completely revised December 1, 1949.

Nature of Restrictive System

Restrictions are exercised through licenses required for all imports and licenses required for nontrade payments; exchange is granted for imports and nontrade payments authorized by these licenses. Foreign exchange must be surrendered. Certain exports require licenses.

Exchange Rates

Official rates: buying Yen 358.95, selling Yen 361.05 per US$1.

Exchange Payments

Payments to the Sterling Area must be effected in pounds sterling; to countries with which there are open account arrangements, through prescribed accounts; and to all other territories, in U.S. dollars.

Imports. Most imports require import licenses which are freely granted for certain categories of imports. Exchange is automatically granted for authorized imports.

Invisibles. Payments abroad require licenses. Foreign exchange is freely granted for expenses incidental to trade transactions.

Capital. Transfers of capital require approval. External debt service requires approval, which is granted freely in the terms laid down when the original investment was approved.

Exchange Receipts

Exchange receipts from the Sterling Area must be received in pounds sterling; from countries with which there are open account arrangements, through prescribed accounts; and from all other territories, in U.S. dollars.

Exports. Export licenses are required for certain strategic materials and essential commodities in short supply or subject to government distribution. Exchange receipts must be surrendered. A proportion of the foreign exchange proceeds from exports (maximum of 6 per cent to non-dollar area, maximum of 10 per cent to the dollar area) may be retained by exporters and used for certain approved purposes connected with the maintenance and expansion of their export business.

Invisibles. Exchange receipts from invisibles must be surrendered.

Capital. The investment of foreign capital requires approval. Exchange receipts from capital must be surrendered.

Changes during 1951

January 8

A list of 154 commodities entitled to automatic licensing approval was issued.

March 8

The export of certain strategic materials was prohibited.

May 9

A revised list of goods which could be imported under the automatic approval system was issued.

July 14

Annual foreign motion picture imports were to be limited (retroactive to April 1951) to a quota based on Japanese film production, and a payment method based on box office receipts at Japanese theaters was established.

August 20

It was announced that Convertible Yen accounts would be abolished December 31, 1951. Balances could be disposed of either by remittance abroad or by a deposit set up in a foreign currency (under certain prescribed conditions). Balances remaining on January 1, 1952 would be transferred to indigenous yen accounts.

September 7

It was announced that Japanese trade with Hong Kong would now be effected in sterling instead of on a dollar basis.

October 31

Several commodities were added to the list of those under the automatic approval system.

December 1

The authorized Foreign Exchange Credit System was abolished as of June 30,1951 and was reinstituted under the name of “Export Promotion Foreign Exchange Allocation System” on December 1,1951 (retroactive to July 1,1951). Under this arrangement, an exporter is entitled to the priority for allocation of a certain proportion of foreign exchange (i.e., to the extent of 10 per cent of their export proceeds from exports to the dollar area and 6 per cent from exports to other countries) in order to use the fund for approved payments related to the exporter’s business.

December 22

A foreign currency deposit account system was established so that persons engaged in shipping or insurance, travel agencies, and temporary (6 months) foreign residents might maintain foreign currency deposits. These deposits are restricted to U.S. dollars and sterling cash accounts, and certain restrictions are placed on receipts and payments.

December 31

The Convertible Yen account arrangements ceased.

New Zealand

Date of Introduction

December 7, 1938.

Nature of Restrictive System

Restrictions are exercised through licenses required for almost all imports from certain countries and for some imports from all other countries, and through licenses required for nontrade payments; exchange is granted for imports and nontrade payments authorized by these licenses. Foreign exchange derived from exports must be surrendered. Foreign exchange, other than Sterling Area currencies, derived from invisibles and capital must be surrendered or declared to the exchange control authorities. Practically all exports require licenses.

Exchange Rates

Official rates: buying US$2.7839, selling US$2.7507 per New Zealand Pound 1.

Exchange Payments

Payments to outside the Sterling Area must be effected either in the foreign exchange appropriate to the country of the recipient or by crediting the appropriate sterling account of a nonresident.

Imports. Imports from “scheduled” countries1 require import licenses. Certain imports from other countries, i.e. most “soft currency” countries, require import licenses which are granted up to the value of similar licenses or imports in a previous year. All other imports are free of import license. Exchange is automatically granted for authorized imports.

Invisibles. Payments abroad require licenses. Foreign exchange is freely granted for expenses incidental to trade transactions, transfers abroad of dividends, and other earnings due to nonresidents. Foreign exchange for other payments to other territories of the Sterling Area is freely granted up to specified limits. Residents traveling to specified countries are freely granted certain amounts in the appropriate currencies.

Capital. Transfers of capital require approval.

Exchange Receipts

Exports. Practically all exports require licenses. The exchange proceeds of all exports to outside the Sterling Area must be received (1) from an account in New Zealand pounds of a bank domiciled in the country to which the goods were exported, (2) from a sterling account appropriate to the country of destination, or (3) in appropriate foreign exchange. The proceeds of exports to other parts of the Sterling Area must be received from a sterling account or in the exchange of the territory of destination. Foreign exchange receipts from exports must be surrendered.

Invisibles. Exchange receipts from invisibles, in other than Sterling Area currencies, must be surrendered or declared to the exchange control authorities. The use of declared funds requires approval.

Capital. Investments by persons residing abroad are freely permitted. Exchange receipts from capital, in other than Sterling Area currencies, must be surrendered or declared to the exchange control authorities. The use of declared funds requires approval.

Changes during 1951

The number of commodities which require an import license when imported from “soft currency” countries, which at the beginning of the year was nearly 1,000, was reduced by stages so that at the end of the year the list contained only some 260 items.

January 11

Switzerland was removed from the list of “scheduled” countries.

October 10

Western Germany was removed from the list of “scheduled” countries.

December 12

Sulphur, petrolatum, oil, carbon black, asbestos fibre, and rosin coming from any country were exempted from import licensing requirements.

Portugal

Date of Introduction

September 24, 1914; revoked October 18, 1937; reimposed February 9, 1948.

Nature of Restrictive System

Restrictions are exercised through licenses required for both import and nontrade payments. Exchange is granted for authorized imports. Foreign exchange must be surrendered. All exports require licenses.

Exchange Rates

Official rates: buying Escudos 28.60, selling Escudos 28.95 per US$1.

Exchange Control Territory

Portugal and its overseas territories constitute a single exchange control territory, “the Portuguese Monetary Area”. Current payments between various territories of the Portuguese Monetary Area are effected through controlled accounts.

Exchange Payments

Imports. Some imports from EPU countries and their overseas territories1 and most imports from all other countries require advance registration equivalent to import licensing. Most goods of a value less than Esc 2,500 may be imported without such a license from EPU countries and their associated territories. Exchange is automatically granted for authorized imports. Payments to countries with which Portugal has payments agreements must be effected through appropriate accounts.

Invisibles. All payments in foreign exchange or to nonresident accounts in excess of Esc 2,500 require licenses. For lesser amounts, such payments are made if the applicant undertakes to produce documentary evidence of the obligation, should proof be required later. Payments to countries with which Portugal has payments agreements are freely permitted through appropriate accounts, if they are within the terms of the related agreement.

Capital. Transfers of capital to countries with which Portugal has payments agreements are freely permitted through appropriate accounts, if they are within the terms of the related agreement. Other transfers of capital require approval.

Exchange Receipts

Exports. Exports require advance registration equivalent to export licensing, mainly in order to insure that the exchange proceeds are surrendered.

Invisibles. Exchange receipts from invisibles must be surrendered. Persons may bring in any amount in escudos and foreign currency.

Capital. Exchange receipts from capital must be surrendered.

Changes during 1951

February

Additional items were included in the list of those free from quantitative restrictions when imported from EPU countries and their overseas territories.

May

Goods of a value less than Esc 2,500 could, until July 31, 1951, be imported without an import license from EPU countries and their overseas territories.

June

Certain goods were added to the list of those freed from quantitative restrictions when imported from EPU countries and their overseas territories.

August 4

A few goods were excluded from the provision that goods of a value less than Esc 2,500 could be imported without an import license from EPU countries and their overseas territories. For other items, this provision was extended to September 30, 1951.

August

Export licenses for olive oil were suspended.

September 30

A few additional items were excluded from the provision that goods of a value less than Esc 2,500 could be imported without an import license, but for other items this provision was extended to December 31, 1951.

Spain

Date of Introduction

November 30, 1936. Last major revision November 1, 1951.

Nature of Restrictive System

Restrictions are exercised through licenses required for imports and nontrade payments and through a multiple currency practice resulting from the use of three official rates and of a “free official market” for certain percentages of specified groups of imports. A multiple currency practice also operates on the buying side through the use of the “free official market” for certain percentages of the exchange proceeds from specified groups of exports. Foreign exchange must be surrendered. All exports require licenses.

Exchange Rates

Basic official rates: buying Pesetas 10.95, selling Pesetas 11.22 per US$1. The use of these rates is limited to government transactions. For other purposes, there is an official buying rate Pts 21.90 per US$1 and three official selling rates, Pts 16.425, Pts 21.90, and Pts 25.00 per US$1. The combination of certain percentages at one of these rates with the balance at a “free official market” rate, currently at Pts 39.65 per US$1, produces other effective rates (see Table of Exchange Rates below).

Exchange Control Territory

Spain and its overseas territories constitute a single exchange control territory, the “Spanish Monetary Area.”

Exchange Payments

Imports. All imports require import and exchange licenses which are issued in combined form. Foreign exchange is granted for authorized imports but, in some cases, the granting of exchange is delayed indefinitely and, in some others, the licenses specify that exchange will be granted only in monthly installments. Foreign firms operating in Spain may, subject to license, import for their own use capital goods and raw materials purchased with their own exchange abroad. Imports paid for with specified currencies 1 are classified into several groups to which different effective rates apply.

Invisibles. Payments abroad require licenses. Payments in the specified currencies for foreign travel, payments abroad in respect to income on foreign capital, family remittances, certain transportation expenses, repairs to Spanish property abroad, fees due to brokers and representatives abroad, and insurance premiums are effected at the “free official market” rate. Persons traveling abroad may take with them a maximum of Pts 2,000 in notes of the Bank of Spain.

Capital. Transfers of capital require approval, and are effected at the “free official market” rate in the case of specified currencies.

Exchange Receipts

Exports. All exports require licenses mainly for the purpose of insuring the surrender of exchange receipts in the appropriate currency. Exchange proceeds of some exports must be entirely surrendered at specified rates. For other exports, a certain percentage must be surrendered at prescribed fixed rates and the balance sold in the “free official market” to authorized buyers. Exports paid for in specified currencies 2 are classified into five groups, for each of which the percentage to be surrendered at the official buying rate of Pts 21.90 per US$1 is specified.

Invisibles. Exchange receipts in the specified currencies derived from tourism in Spain, income from labor abroad, family remittances, certain transportation, and insurance earnings and similar income items must be sold at the “free official market” rate. Persons may bring in a maximum of Pts 10,000 in notes of the Bank of Spain.

Capital. The receipt of capital from abroad requires approval. Capital from abroad, including repatriated Spanish capital and funds invested by Spanish subjects living abroad, is surrendered at the “free official market” rate.

Table of Exchange Rates (as at December 31, 1951)(pesetas per U.S. dollar)
BuyingSelling
10.95

(Official Basic Rate)
….11.22

(Official Basic Rate)
Government payments, including imports of rationed foodstuffs.
16.425Imports in Group A: coal, coke, and pitch.
21.90Exports not listed in any special group.21.90….
23.673

(90% at the Pts 21.90 rate, 10% at the “Free Official Market” Rate)
Exports in Group 1: almonds, chestnuts, cocoa, cork (semimanufactured products), fresh fish, fruit trees, livestock, olives, etc.
25.00Imports in Group E: liquid fuels and tobacco.
25.715

(60% at the Pts 16.425 rate, 40% at the “Free Official Market” Rate)
Imports in Group B: aluminum scrap, copper, copper alloys, creosote, ores (metallic), phosphates, metal scrap, seeds, sleepers, tinplate, etc.
27.225

(70% at the Pts 21.90 rate, 30% at the “Free Official Market” Rate)
Exports in Group 2: almond oil, apricots, cherries, cider, cork manufactures, figs, dried fish, gypsum, hazel nuts, peaches, pears, plums, potash, vegetables, etc.
28.992

(60% at the Pts 21.90 rate, 40% at the “Free Official Market” Rate)
Imports in Group C: aluminum, chromium, cobalt, ferroalloys, fertilizers, fibers (hard), fishing lines, threads, and nets, insecticides, jute, etc.
30.775

(50% at the Pts 21.90 rate, 50% at the “Free Official Market” Rate)
Exports in Group 3: bananas, chemicals, clays and silicates, cork, tanned hides, grapes, lemons, essential oils, onions, oranges, paper, peanuts, tomatoes, etc.
32.55

(40% at the Pts 21.90 rate, 60% at the “Free Official Market” Rate)
Imports in Group D: raw materials for abrasives, asbestos, asphalt, hemp, lubricants, railway materials. Raw materials for refractories and for rubber processing, tar, vaseline, etc.
34.311

(30% at the Pts 21.90 rate, 70% at the “Free Official Market” Rate)
Exports in Group 4: berets, ceramics and glass, hats, shoes and leather articles, perfumes, vinegar, wine, etc.
37.875

(10% at the Pts 21.90 rate, 90% at at the “Free Official Market” Rate)
Exports in Group 5: books, hand-made rugs, wolfram, etc.
39.63

(“Free Official Market” Rate)
Invisibles. Capital.39.65

(“Free Official Market” Rate)
All other imports. Authorized invisibles and capital.
Note: The above rates apply to exchange receipts in specified currencies. Receipts in other currencies are surrendered entirely at the Pts 21.90 rate.

Changes during 1951

July 26

Special exchange rates for certain exports were announced.

September

The export of strategic materials to certain countries including China and North Korea was banned.

November 1

Revised regulations concerning the operation of the free exchange market established July 21, 1950 became effective. Only the following currencies could be negotiated in this market:

a) Checks, transfers and remittance of funds:

U.S. dollars, pounds sterling, French francs, Moroccan francs, free Swiss francs, free escudos;

b) Notes:

U.S. dollars, French francs, Moroccan francs, Swiss francs, Portuguese escudos.

For other currencies, the Spanish Foreign Exchange Institute would establish rates based on their quotations in the free market. Authorized banks were permitted to deal in certain currencies in the free market in respect of authorized transactions.

The right to retain a portion of export proceeds to use for imports was revoked. The holder of an authorization to purchase foreign exchange must do so within 10 days. An export rate of Pts 21.90 per US$1 was established, and various export commodities were listed in five groups with a designated percentage of the foreign exchange to be sold in the free market. Foreign exchange in excess of the specified percentages and all exchange for products not listed were to be made available to the Foreign Exchange Institute at the Pts 21.90 rate.

Switzerland

Background of Exchange Controls

In Switzerland, certain capital movements to and from the country are subject to authorization. Control measures are applied to current payments as far as necessary for the working of bilateral agreements. The first of such agreements was concluded in 1931. At present, such agreements are in force with 25 countries or monetary areas.

Nature of Exchange Control System

Exchange control is exercised over certain payments to and from countries with which Switzerland has payments or similar agreements. Specified exports require licenses.

Exchange Rates

The Swiss National Bank is authorized to maintain the value of the Swiss Franc between gold limits corresponding to Sw fr 4.13-4.68 per US$1. Currently, the Swiss National Bank maintains the Swiss franc rate in a free market between the limits of buying Sw fr 4.285, selling Sw fr 4.375 per US$1. For the currencies of most of the countries with which Switzerland has payments agreements, fixed official rates are applied. In a few cases variable rates are in use; these rates are based on the currency systems of the respective countries.

Exchange Control Territory

The Principality of Liechtenstein is included in the exchange control territory of Switzerland.

Exchange Payments

Imports. Imports from countries with which Switzerland has payments or clearing agreements and certain imports from EPU countries and their associated territories 1 require import licenses. Exchange is automatically granted at fixed or agreed rates for authorized imports from those countries but payment must be effected through an appropriate account. Payments for imports from countries with which Switzerland has no payments agreement can be freely effected.

Invisibles. Payments to countries with which Switzerland has payments agreements are permitted through an appropriate account, if they are within the terms of the related agreement. Otherwise approval is required. Payments to countries with which Switzerland has no payments agreement can be freely effected.

Capital. Transfers of capital to countries with which Switzerland has payments agreements are permitted through an appropriate account, if they are within the terms of the related agreement. Transfers of capital exceeding Sw fr 500,000 require a license. Transfers to countries with which Switzerland has no payments agreement can be freely effected.

Exchange Receipts

Exports. Some exports require licenses granted up to the limits of global quotas. The export of certain other commodities, particularly to EPU countries, is regulated by arrangements made through the appropriate trade organization. Exchange proceeds of exports to countries with which Switzerland has payments agreements are received through appropriate accounts and the exchange surrendered. Exchange receipts from countries with which Switzerland has no payments agreement are freely disposable.

Invisibles. Receipts from invisibles from countries with which Switzerland has payments agreements are received through prescribed accounts and the exchange surrendered. Exchange receipts from invisibles from countries with which Switzerland has no payments agreement are freely disposable.

Capital. Receipts of capital from countries with which Switzerland has payments agreements are received through prescribed accounts and require a license. Exchange receipts of capital from countries with which Switzerland has no payments agreement are freely disposable.

Banknotes

Foreign and domestic banknotes may be freely imported and exported. Foreign banknotes are bought and sold in a free market.

Payments and Clearing Agreements

Switzerland has payments or clearing agreements or similar arrangements with the following countries and monetary areas: Austria, Argentina, Belgian Monetary Area, Bulgaria, Czechoslovakia, Denmark, Eastern Germany, Egypt, Finland, French Franc Area, Greece, Hungary, Iran, Italy, Netherlands Montetary Area, Norway, Poland, Portuguese Monetary Area, Rumania, Spanish Monetary Area, Sterling Area, Sweden, Turkey, Western Germany, and Yugoslavia.

Changes during 1951

January

Import controls were placed on certain strategic materials.

March

Export controls were extended to timber products, building iron, and some chemicals.

April 30

The import of fresh fruit and fresh vegetables became subject to import license.

May 15

The requirement of an import license for certain raw materials was canceled.

June 18

A decree was published which authorized the Department of Economics to determine what goods could be exported only under special license and to specify the goods whose export requires the production of a certificate of Swiss origin. A number of commodities were added to the list of those subject to export license.

July

Additional commodities (cocoa beans, cocoa butter, cocoa powder, chocolate paste, and chocolate) became subject to import license.

November 1

A new payments agreement concluded with Belgium made payments between Switzerland and the Belgian Monetary Area subject to regulation.

November 6

Advance payments in respect of exports to countries with which Switzerland has payments agreements required the visa of the Swiss Compensation Office.

November 26

Travelers’ letters of credit could not be honored except by authorized banks and agents authorized by the Swiss Compensation Office.

November 29

Exports to EPU countries were curtailed. Each industrial association was notified of the maximum value that its exports could reach in any month and would allocate quotas among its members.

These countries are listed as follows: Austria, Bulgaria, Czechoslovakia, Hungary, Norway, Poland, Rumania, Switzerland, and Yugoslavia.

Effective January 1, 1952, important changes in policy and procedure were made: purchase authorizations were required in order to conclude import contracts. Normally, import licenses would be granted automatically where purchase authorizations have been obtained. Purchase authorizations and import licenses would be granted for a large range of goods from EPU countries without restriction as to amount.

Effective May 1, 1952, this limit was changed to DM 20 but persons permitted to bring in DM 200 when entering the Federal Territory could take out DM 100.

Effective May 1, 1952, this limit was raised to DM 200 per person.

“Hard currencies” are listed as U.S. dollars.

A further significant revision took place February 4, 1952; see note after “Changes during 1951.”

In view of the substantive changes in the exchange system which became effective February 14, 1952, this survey represents the position in Israel as of that date.

“Designated” currencies are those of the following countries: Australia, Belgian Congo, Belgium, Brazil, Canada, Czechoslovakia, Denmark, France, Great Britain, Iceland, India, Ireland, Luxembourg, Netherlands, Netherlands West Indies, New Zealand, Norway, Pakistan, Panama, Philippines, Portugal, Sweden, Switzerland, Union of South Africa, United States, and Uruguay.

These countries are listed as follows: Albania, Argentina, Bolivia, Bulgaria, Canada, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, French Somaliland, Germany (Russian Zone), Guatemala, Haiti, Honduras, Hungary, Iran, Japan, Korea, Liberia, Liechtenstein, Mexico, Nicaragua, Panama, Philippine Republic, Poland, Rumania, Tangier, Uruguay, United States, U.S.S.R., Venezuela, and Yugoslavia.

These countries are listed as follows: Austria, Belgium, Denmark, France, Greece, Iceland, Italy, Ireland, Luxembourg, Netherlands, Norway, Sweden, Switzerland, Trieste, Turkey, United Kingdom, Western Germany, and their overseas territories.

These currencies are listed as follows: Belgian francs, Danish kroner, French francs, Mexican pesos, Netherlands guilders, Norwegian kroner, Portuguese escudos, Swedish kronor, Swiss francs, pounds sterling, and U. S. dollars.

These currencies are listed as follows: Belgian francs, Danish kroner, French francs, Netherlands guilders, Portuguese escudos, Swedish kronor, Swiss francs, pounds sterling, and U.S. dollars.

These countries are listed as follows: Austria, Belgium, Denmark, France, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Trieste, Turkey, Western Germany, their overseas territories, and all territories of the Sterling Area.

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