Chapter

Nonmember Countries

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1962
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Cambodia

Exchange Rate System

The Cambodian Riel is defined as having a weight of 25.3905 milligrams of fine gold. Transactions in foreign currency are carried out on the basis of the rates published by the National Bank of Cambodia. These basic rates are 35 riels = 1 U.S. dollar, 98 riels = 1 pound sterling, and 10 riels = 1 French new franc. An effective rate of 60 riels = 1 U.S. dollar applies to the exchange of foreign currency by foreign tourists staying at certain hotels.

Administration of Control

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

Prescription of Currency

Imports from the French Franc Area must be paid for in French francs through special accounts. The method of payment or receipt for settlements with other countries is specified in each license. However, there are bilateral clearing accounts in sterling for settlements with Mainland China, Czechoslovakia, Eastern Germany, Poland, the U.S.S.R., and North Viet-Nam; in riels for settlements with the Republic of Viet-Nam; and in U.S. dollars for settlements with Yugoslavia.

Nonresident Accounts

Four types of account may be maintained by foreigners or nonresidents with authorized banks: Foreigners’ Accounts in Riels, Capital Accounts, Internal Accounts of Nonresidents, and Nonresident Accounts.

Imports and Import Payments

Practically all imports require import licenses. Only imports of listed commodities are authorized, including imports paid for with freely available EFAC funds (see section on Exports and Export Proceeds, below). Only licensed importers may submit applications to import. The granting of exchange out of Cambodia’s own resources distinguishes between imports from the French Franc Area, which must be paid for in French francs, and imports from other countries, which are settled in the currency of the supplying country. For imports in both these groups, quotas are announced separately for individual commodities. Various essential commodities may be imported against balances on EFAC accounts or under licenses benefiting from the “10 Per Cent Equipment and Raw Materials” procedure; exceptions are prohibited goods and goods that might compete with local production. Imports must be recorded with an authorized bank.

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

Payments for Invisibles

The approval of the National Exchange Office is required for all payments for invisibles. Foreigners residing temporarily in Cambodia, or working under contract for public authorities or private enterprises, are permitted to transfer a maximum of 30 per cent of their monthly income, plus an additional 15 per cent if the applicant’s wife is in his own country and an additional 10 per cent if he has children in his own country for whose support he is responsible. Remittances from persons earning less than 5,000 riels monthly in Phnom-Penh or less than 3,500 riels monthly in the provinces are prohibited. Travelers going abroad as tourists receive an allocation of exchange varying with the country or countries of destination. Resident travelers may buy freely one-way or return tickets for foreign travel starting from Cambodia; tickets for other journeys require licenses.

A traveler may take out no more than 400 riels in domestic banknotes. The export of foreign banknotes is subject to license, but nonresident travelers may take out the amount they imported less any exchange sold.

Exports and Export Proceeds

In general, exports require export licenses, but certain listed items may be exported against an export certificate showing how the exchange proceeds will be received and repatriated and supported by a banker’s guarantee. Exports must be recorded with an authorized bank, and the exchange proceeds must be surrendered within one month from the date of payment specified in the export license or certificate.

The following percentages may, however, be retained in special EFAC (Exportations-Frais Accessoires) accounts: 30 per cent of the proceeds of exports of maize received in U.S. dollars or sterling; 15 per cent of the proceeds of exports of maize received in bilateral clearing currencies or in inconvertible French francs; 13 per cent of the proceeds of other exports received in convertible currencies; 10 per cent of the proceeds of other exports received in other currencies, including inconvertible French francs and bilateral clearing currencies; and 40 per cent of the proceeds of exports of kapok payable in convertible French francs. Balances on EFAC accounts may be used by the exporter or supplier of the goods either to pay certain commercial expenses or to pay for imports of certain essential commodities. These balances may be sold freely at any exchange rate which may be obtained. Convertible currencies in EFAC accounts may be exchanged for other currencies, with the prior approval of the National Exchange Office.

Certain listed goods may be exported to Bangkok, Hong Kong, or Singapore under private compensation arrangements, provided that half the value of the goods is imported and that the other half is repatriated in foreign exchange.

Proceeds from Invisibles

All residents of Cambodia, other than foreigners, must surrender to an authorized bank foreign exchange received by them. Certain hotels that act as agents of the authorized banks in purchasing foreign exchange from nonresident travelers, or that are paid in foreign exchange by travel agencies abroad, may keep 15 per cent of such foreign exchange in an EFAC account. Certain hotels are authorized to pay their guests a premium of 25 riels per US$1 on their foreign exchange encashments.

A traveler may bring in not more than 400 riels in domestic banknotes. Foreign banknotes may be brought in freely, subject to declaration, but residents have an obligation to surrender such notes within seven days.

Capital

For foreign investments made before May 31, 1956, profits may be remitted abroad after payment of an Exceptional Equipment Tax. The tax rates on profits relating to the year 1959 were 30 per cent on profits of rubber plantations, 45 per cent on profits of companies whose activities were considered vital for the Cambodian economy, and 50 per cent on profits of other companies recognized as useful for the economic development of Cambodia. The tax rates on profits of foreign companies with head offices in Cambodia are reduced by 10 per cent for companies whose capital is more than 40 per cent Cambodian and by 5 per cent for companies whose capital is between 30 per cent and 40 per cent Cambodian. In the event of liquidation of such investments, the original capital may be repatriated in ten equal annual installments.

All new foreign investments in Cambodia require prior authorization from the Ministry of Finance; authorization depends, among other things, on a minimum participation of domestic capital. New foreign capital invested in Cambodia must be in foreign exchange acceptable to the National Bank. Profits of up to 20 per cent on approved foreign investments made since May 31, 1956 may be transferred, and, in the event of liquidation, the capital may be repatriated in five equal annual installments in the currency of the original investment.

Changes during 1961

January 1. Allocations of exchange for imports from Cambodia’s own resources would be made by category of commodity, with a distinction made only between imports from the French Franc Area, which would be paid for in French francs, and imports from other countries, which would be financed in the currency of the country from which the goods were supplied. An initial allocation of 30 million riels for imports from the French Franc Area and 124 million riels for imports from other countries was made for the first half of 1961. (Previously, exchange allocations for imports from Cambodia’s own resources were tied to specific currency areas.)

January 1. Hotels acting as agents of the authorized banks in purchasing foreign exchange from nonresident travelers were authorized by the Exchange Office to keep 15 per cent of the foreign exchange paid to them by travel agencies abroad for services rendered to travelers sent to the hotel by such agencies.

April 30. A second allocation, amounting to 81 million riels for imports from the French Franc Area and 113 million riels for imports from other countries, was made for the first half of 1961.

May 16. The percentage of maize export proceeds received in U.S. dollars or sterling that could be credited to EFAC accounts was established at 30.

May 29. The percentage of maize export proceeds received in bilateral account currencies or inconvertible French francs that could be credited to EFAC accounts was established at 15.

October. An allocation of 83 million riels for imports from the French Franc Area and 195 million riels for imports from other countries was made for the second half of 1961.

Switzerland

Exchange Rate System

The gold content of the Swiss Franc is established at 63310 (= 0.20322 . . .) gram of fine gold. The Swiss National Bank maintains the U.S. dollar rate in a free market between limits of Sw F 4.295 buying, and Sw F 4.45 selling, per US$1. The free market rate on December 30, 1961 was Sw F 4.316 per US$1. Market rates for Western European currencies1 vary between limits resulting from the dollar rate for the Swiss franc in relation to the dollar rates for the other currencies. Exchange is controlled in respect of most transactions with countries with which Switzerland has bilateral agreements or in respect of which Switzerland has enacted autonomous regulations. Bilateral agreements cover Switzerland’s trade and/or payments with nine countries or monetary areas,2 and Switzerland controls its payments with two others.3 In accordance with the provisions of several of these agreements, official rates are applied to transactions covered by the agreements. This domain of regulated settlements is known as the sector of controlled payments. All settlements outside this sector (including those with all other countries) may be made freely at free market rates.

Exchange Control Territory

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

Administration of Control

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

Prescription of Currency

The currency and manner of settlement on account of merchandise transactions and invisibles in the sector of controlled payments are prescribed in accordance with the provisions of the relevant payments agreements and/or by the Swiss regulations. Settlements with countries in this sector are made in Swiss francs; however, settlements with the United Arab Republic may be made in Egyptian pounds. In all other cases, settlements are not subject to regulations involving prescription of currency.

Nonresident Accounts

Nonresident accounts related to the sector of controlled payments may be grouped as follows: (1) accounts related to Bulgaria, Czechoslovakia, Greece, Hungary, Poland, Rumania, Turkey, and Yugoslavia, which are centralized with the Swiss National Bank, and (2) the “decentralized” group, comprising accounts that may be held with the Swiss National Bank and with authorized banks in Switzerland. The accounts of the second group are of two kinds: the accounts of Eastern Germany and Iran, which are transferable only to other accounts of the same nationality, and the accounts of the United Arab Republic, which are subject to special treatment.

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

Imports and Import Payments

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

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

Payments for Invisibles

Payments for invisibles may be made freely; however, payments to Eastern Germany (including East Berlin), Iran, and countries with which Switzerland has bilateral payments agreements are controlled. The export of Swiss and foreign banknotes is free.

Exports and Export Proceeds

The export (including re-export) of some goods is subject to export control through individual licenses. This export licensing system is operated in part with the assistance of appropriate trade organizations. Export proceeds received through the sector of controlled payments are converted into Swiss currency in observance of the existing regulations. Other export proceeds are freely disposable.

Proceeds from Invisibles

Proceeds from invisibles received through the sector of controlled payments are converted into Swiss francs in observance of the existing regulations. Proceeds received in convertible currencies are freely disposable. The import of Swiss and foreign banknotes is free.

Capital

Transfers of capital from countries in the sector of controlled payments require licenses if they are made through the sector of controlled payments; transfers of capital to such countries do not require licenses. Transfers of capital to and from other countries may be made freely, except that certain outgoing transfers of capital exceeding Sw F 10 million each require permission.

Banknotes

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

Changes during 1961

No significant changes took place during 1961.

Tanganyika

Exchange Rate System

The currency of Tanganyika is the East African Shilling, which is maintained at par with the U.K. shilling, giving a relationship to the U.S. dollar of Sh 1 = US$0.14. The East African shilling circulates freely in the East African currency area, which comprises Tanganyika, Kenya, Uganda, Zanzibar, and the Aden Protectorate. The East African Currency Board stands ready in transactions with commercial banks to issue East African currency in exchange for sterling and to supply sterling in exchange for East African currency at the parity rate, subject to a premium of ¼ of 1 per cent. The banks in Tanganyika base their rates for other currencies on the current London market rates.

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 the authorized banks. Import and export trade is administered by the Controller of Imports and Exports in the Ministry of Commerce and Industry. The responsibility for issuing licenses also rests with the Controller, to whom applications to import or export must be submitted before orders are placed abroad or exports are shipped.

Prescription of Currency

Tanganyika 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 Tanganyika to residents of countries outside the Sterling Area may be made in sterling or 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 or East African shillings from an External Account, or in any foreign currency.

Nonresident Accounts

Accounts in East African shillings held by residents of countries outside the Sterling Area with authorized banks are designated External Accounts. These may be credited with authorized payments by residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds of sales of foreign currency. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of foreign currency.

Imports and Import Payments

Imports from Kenya and Uganda are generally permitted free of license, exceptions being rice and maize. Goods may be imported from countries outside East Africa either under open general license from specified areas or groups of countries, or under specific license, which permits specific transactions not authorized under open general license. Most commodities from the majority of countries are at present covered by open general license. Specific licenses are required for all goods originating in Japan and the Soviet bloc and for imports from all countries of wheat and flour, maize, rice, sugar, knitted rayon in the piece, uncut diamonds, cut but not set diamonds, and gold. With few exceptions, the movement of imported goods within East Africa is unrestricted.

When the importer has obtained a license from the Controller of Imports and Exports, 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 to residents of other Sterling Area countries may be made freely. Persons going abroad, i.e., outside the East African currency area, for holidays are permitted to take with them Sh 1,000 in East African currency notes and, on application to a bank, up to the equivalent of £ stg. 250 in other currencies. Banks are also authorized to sell foreign exchange for business travel, for educational purposes up to £ stg. 750 a year, for maintenance of relatives up to £ stg. 360 a year, and for gifts up to £ stg. 250 a year. The granting of exchange for other purposes requires the approval of the exchange control authorities.

Exports and Export Proceeds

Exports of wheat and flour, maize, sugar, animal and vegetable oils, beans, meat, jute and raw nylon fibers, copra, and machinery require licenses, and may be subject to restriction. Other goods may be exported without license. With few exceptions, the movement of imported goods within East Africa is unrestricted.

Export proceeds, other than those in Sterling Area currencies, must be offered to an authorized bank in Tanganyika 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 and domestic currency notes.

Capital

Movements of capital between Tanganyika and other Sterling Area countries are not restricted. There is no restriction on the investment of foreign funds in Tanganyika, but to ensure eventual repatriation, it is necessary to obtain “approved status” for the investment, which is in normal circumstances given freely.

Changes during 1961

December 9. Tanganyika became independent, but retained its position as a Sterling Area territory.

Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Spanish pesetas, and Swedish kronor.

Bulgaria, Czechoslovakia, Greece, Hungary, Poland, Rumania, Turkey, United Arab Republic, and Yugoslavia.

Eastern Germany and East Berlin, and Iran.

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