Chapter

Member Countries of the International Monetary Fund

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1961
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Afghanistan

Exchange Rate System

There is no agreed par value for the Afghani. The official rates are Afg 20.00 buying, and Afg 20.25 selling, per US$1 (the first category rate), and Afg 28.00 buying, and Afg 28.35 selling, per US$1 (the second category rate). In addition, there is a fluctuating free market. The official rates apply to specified transactions only. No transactions take place at the second category selling rate; allocations at this rate for certain consumer goods imported by the Government Monopolies Department are made at an effective rate of Afg 30.35 (the second category rate plus an exchange tax of Afg 2), and all other allocations at the second category rate are made at an effective rate of Afg 32.35 (the second category rate plus an exchange tax of Afg 2 and a levy of Afg 2 used for export promotion). Other effective rates arise from the obligation to surrender certain percentages of the proceeds from exports of karakul, cotton, wool, and six other commodities in mixed proportions at the specified official rates, combined with the possibility of selling the remainder at the fluctuating free market rate. All other transactions take place at the fluctuating free market rate. (See Table of Exchange Rates, below.)

Administration of Control

Foreign exchange is controlled by Da Afghanistan Bank (the central bank). The control is facilitated by the existence of certain companies specializing in the export of such commodities as karakul and cotton.

Prescription of Currency

Settlements with countries with which Afghanistan has bilateral payments agreements1 must be made in the foreign currencies specified in the agreements. The proceeds of exports of karakul, cotton, and wool must be obtained in fully convertible or externally convertible European currencies; alternatively, proceeds of exports of cotton and wool to agreement countries may be obtained in agreement currencies. There is also a bilateral trade and payments arrangement with India, under which exports to India are settled in Indian rupees, which must in turn be used for imports from that country. There are no other prescription of currency requirements.

Imports and Import Payments

There are no quantitative restrictions on imports, but import licenses are required for imports from countries with which trade and payments agreements are in force. Exchange is provided for a few imports at the first category rate and for essential industrial imports and most other essential imports at the second category rate. Import payments at the second category rate are subject to an exchange tax of Afg 2; in addition, a surcharge of Afg 2 is levied on some imports at this rate. Imports not permitted at the official rates have to be financed in the free market. Imports of tea, cotton, and silk piecegoods may be paid for only with proceeds obtained from exports of fruit. Imports of motorcars must, for 25 per cent of their c.i.f. price, also be paid for out of proceeds obtained from exports of fruit.

Payments for Invisibles

Government payments for invisibles and payments to foreigners on government contract in Afghanistan are made at the first category rate. Foreigners employed in Afghanistan may, after having sold 30 per cent of their salaries in foreign exchange for afghanis at the first category rate, have the remainder transferred abroad. A few invisibles may be remitted at the first or the second category rate (see Table of Exchange Rates, below). All other authorized payments are settled at the free market rate.

Travelers leaving Afghanistan may not take out more than Afg 500 in domestic banknotes.

Exports and Export Proceeds

Exports to countries with which trade and payments agreements are in force require export licenses. The currencies to be received for exports of karakul, cotton, and wool are prescribed (see section on Prescription of Currency, above). Portions of the export proceeds of these three commodities have to be surrendered at the official rates; the remainder may be sold in the free market or used to import essential goods. However, proceeds of exports of cotton and wool to bilateral agreement countries must be surrendered entirely at the official rates. Partial surrender requirements at official rates apply to exports of six other commodities; the remainder, and exchange proceeds from all other exports, may be sold in the free market (see Table of Exchange Rates, below). The proceeds of exports of fruit may be used to pay for imports of tea, cotton, and silk piecegoods, or to pay 2 per cent of the c.i.f. price of motorcars.

Proceeds from Invisibles

Foreigners employed in Afghanistan and paid in foreign exchange must surrender at least 30 per cent of their earnings to Da Afghanistan Bank at the first category rate in order to obtain local currency for their local expenses; they may sell the remainder in the free market. Exchange from diplomatic establishments is purchased by Da Afghanistan Bank at the first category rate. Exchange receipts from other invisibles may be sold in the free market. Travelers entering Afghanistan may bring in Afghan banknotes not exceeding Afg 500.

Capital

Foreign capital permitted to be invested in Afghanistan, either jointly with Afghan capital or otherwise, must be conducive to the prosperity and economic and technical advancement of the country even if it does not receive special privileges. The Foreign Investment Law of April 1960 provides that, beginning five years after the date of the investment, registered capital may be repatriated through the free market in annual installments of one fifth of the amount invested, and that ten years after the date of the investment the entire registered capital may at any time be repatriated through the free market. Under the Law to Encourage the Investment of Private Foreign Capital in Afghanistan, of November 18, 1958, the repatriation of registered capital and the remittance, up to 15 per cent a year, of profits thereon are guaranteed and take place through an authorized bank at the free market rate. Capital that was entered under the Foreign Investment Law of April 24, 1954 and was registered at the second category rate may be repatriated, and profits thereon remitted, at the effective rate of Afg 32.35 per US$1; but if the capital was registered under that law as having been entered through the free market, transfers may be made only at the free market rate.

Table of Exchange Rates (as at December 31, 1960)(afghanis per U.S. dollar)
BuyingSelling
20.0 (First Category Rate)

Thirty per cent of salaries of foreign employees. Exchange bought by Da Afghanistan Bank from diplomatic establishments.
20.25 (First Category Rate)

Certain budgetary expenditures of the Government. A few imports. Certain students’ expenses abroad.
24.66 (68% at First Category Rate, 17% at Second Category Rate, and 15% at Free Market Rate)

Exports of karakul.
26.40 (20% at First Category Rate and 80% at Second Category Rate)

Exports of cotton and wool to bilateral agreement countries, other than India.
28.00 (Second Category Rate)

Capital registered under the Foreign Investment Law of April 24, 1954.
28.35 (Second Category Rate)
28.74 (17% at First Category Rate, 68% at Second Category Rate, and 15% at Free Market Rate)

Exports of cotton and wool to other than bilateral agreement countries.
30.35 (Second Category Rate plus Afg 2 Exchange Tax)

Imports of sugar and petroleum products by the Government Monopolies Department (including freight and insurance).
36.40 (40% at Second Category Rate and 60% at Free Market Rate)

Exports of sesame seeds.

37.60 (20% at First Category Rate and 80% at Free Market Rate)

Exports of sheepskins and goatskins.
32.35 (Second Category Rate plus Afg 2 Exchange Tax and Afg 2 Surcharge)

Essential imports (including freight and insurance): industrial equipment; automobiles and parts; cotton piecegoods for cooperative depots; imports by municipalities; other essential goods (tea, cement, medicines) to counter domestic price increases. Business travel by industrial importers; medical expenses; other students’ expenses abroad; some pilgrims’ travel. Capital registered at Afg 28.00 and profits thereon.
39.80 (10% at First Category Rate and 90% at Free Market Rate)

Exports of casings.
39.90 (15% at Second Category Rate and 85% at Free Market Rate)

Exports of carpets and flaxseed.
42.00 (approx.) (Fluctuating Free Market Rate)

All other receipts.
42.00 (approx.) (Fluctuating Free Market Rate)

All other authorized payments.

Changes during 1960

April. A new Foreign Investment Law entered into force. The remittance of profits and dividends, up to 15 per cent a year, on registered capital would still be guaranteed. Beginning five years after the date of the investment, registered capital could be repatriated through the free market in annual installments of one fifth of the amount invested; ten years after the date of the investment the entire registered capital could at any time be repatriated through the free market.

April 2. A bilateral payments agreement with Yugoslavia entered into force, providing for settlements to be made through accounts maintained in U.S. dollars.

Argentina1

Exchange Rate System

The par value of Argentine Pesos 18.00 = US$1 does not apply to any transactions under the present system. All exchange transactions are settled through the free exchange market, in which the rate on December 31, 1960 was M$N 82.70 per US$1.

Administration of Control

Exchange may be bought and sold only at institutions (banks, finance companies, and exchange dealers) authorized expressly for this purpose. Purchases and sales of gold and foreign currencies, including foreign banknotes, may be made without restriction in the free exchange market. The Central Bank of Argentina intervenes in the free market to avoid excessive variations arising from temporary factors.

Prescription of Currency

Under the bilateral agreements with Brazil (fruit is not covered by the agreement), Spain, the U.S.S.R., and Uruguay, merchandise transactions (and, under some of the agreements, transactions in invisibles) are settled in agreement dollars according to the country of destination or origin of the goods. Transactions with other countries must be settled in convertible currencies or externally convertible European currencies.

Imports and Import Payments

Imports are free of import and exchange licensing, and exchange to pay for them is obtained in the free market. Approval by the Central Bank is required for imports of capital equipment by official agencies if payment is extended over a period of more than 180 days.

Surcharges on the c.i.f. value of imports are payable before customs clearance, as follows:

  • List 1 (fuels, principal metals, rubber, industrial machinery and motors of a type not manufactured in Argentina, newsprint, etc.): no surcharge

  • List 2 (numerous raw materials, drugs, iron and steel bars, tinplate, book paper and paper for plates, woodpulp, etc.): 20 per cent

  • List 3 (semiprocessed articles, lumber, chemical products, etc.): 40 per cent

  • List 4 (spare parts, tires, tools, etc.): 100 per cent

  • List 5 (luxuries, musical instruments, etc.): 150 per cent plus a temporary surcharge of 50 per cent2

  • List 6 (certain industrial machines and motors similar to those produced locally): 100 or 150 per cent, depending upon essentiality

All imports not specifically included in these lists are subject to a 150 per cent surcharge, plus a temporary surcharge of 50 per cent,2 except that imports of automobiles are subject to a special surcharge which varies with the weight of the automobile. Exemption from surcharge may be granted to imports under officially approved investment programs, imports for certain vital industries (oil, coal, steel, power, and railroads), certain imports from Bolivia, Brazil, Chile, Paraguay, Peru, and Uruguay, and certain personal imports by diplomats, immigrants, and others. Surcharges of less than 100 per cent paid on imports of certain raw materials and semifinished items which are subsequently incorporated into exports are refunded at the time of export in the form of a certificate, which may be applied against future payments of import duties or surcharges or, after six months, may be transferred to other importers or reimbursed in cash.

Payments for Invisibles

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

Exports and Export Proceeds

Exports are free of direct controls and the surrender of exchange proceeds is not required. Some of the principal export products are subject to retention taxes calculated on the basis of export prices fixed by the Office of the Secretary of the Treasury. The amounts retained are 10 per cent for wheat, oats, cotton, peanuts, linseed oil, wool, most meat, and some other items, and 20 per cent for some cereals and oilseeds, hides, and certain livestock by-products. The full amount of the retention tax must be deposited, prior to shipment of the goods, with an institution authorized to deal in exchange, unless the export is covered by an irrevocable letter of credit payable against shipping documents or is made by a firm with a capital of over M$N 5 million.

Proceeds from Invisibles

Exchange derived from invisibles may be sold without restriction in the free market.

Capital

Inward and outward capital transfers by residents or nonresidents are free. The corresponding exchange transactions are settled through the free market.

Changes during 1960

During the year, many minor changes were made in the surcharges and retention taxes on various import and export commodities. Only the most important of these changes are noted below.

January 1. It was established that the exemption from surcharge for imports of certain goods from Bolivia, Brazil, Chile, Paraguay, Peru, and Uruguay would be continued until the Latin American Free Trade Zone was established.

January 19. All import duties and surcharges of less than 100 per cent paid on account of raw materials and semiprocessed items subsequently incorporated into exports would be refunded at the time of export in the form of a certificate, which could be applied against future payments of import duties and surcharges or, after six months had elapsed, transferred to other importers or reimbursed in cash.

January 27. Imports of cattle for breeding purposes were shifted from List 2 (20 per cent surcharge) to List 1 (no surcharge).

January 28. Imports of machinery and spare parts for sugar mills were exempted from surcharge.

February 25. Exports of quebracho extract were freed from the 20 per cent retention tax.

March 10. Settlements with Eastern Germany were placed on a convertible currency basis.

March 14. Settlements with Yugoslavia were placed on a convertible currency basis.

March 25. Settlements with Bulgaria were placed on a convertible currency basis.

April 15. Settlements with Israel were placed on a convertible currency basis.

April 19. Imports of track-laying tractors of more than 85 horsepower and of wheeled tractors of more than 100 horsepower were exempted from surcharge. Imports of wheeled tractors of 85 to 100 horsepower were made subject to the 100 per cent surcharge.

May 6. Settlements with Hungary were placed on a convertible currency basis.

July 13. The 20 per cent retention tax on exports of edible oils was eliminated.

August 26. Imports of certain new and used ships over 3,000 tons gross, and of machinery for producing such ships, were exempted from surcharge.

September 22. The retention taxes on exports of corn, sorghum, and millet were reduced from 20 per cent to 10 per cent.

October 11. It was established that imports into the area south of parallel 42 (i.e., Patagonia) would henceforth be subject to the surcharges applicable to the rest of Argentina. However, certain firms in the southern area were allowed to pay reduced, but rising, rates of surcharge on specified proportions of their imports until June 1, 1961, after which date they would have to pay the full surcharges.

November 5. Settlements with Czechoslovakia and Poland were placed on a convertible currency basis.

November 10. The retention taxes on, inter alia, exports of wheat, oats, cotton, peanuts, and linseed oil were reduced from 20 per cent to 10 per cent, and those on exports of, inter alia, flour, meal, bran, and corn oil (formerly 20 per cent), were eliminated.

December 24. Settlements with Bolivia could be made freely on a convertible currency basis.

December 27. The exemption from surcharge for imports of certain goods from neighboring countries and Peru was extended until the effective date of the Latin American Free Trade Zone, but not beyond September 30, 1961.

Note.—The following changes took place early in 1961:

January 1. Settlements with Rumania were placed on a convertible currency basis.

January 31. It was announced that the bilateral payments agreement with Peru had been terminated and that, as from February 1, 1961, settlements with Peru could be made in any currency.

February 4. Settlements with Chile were placed on a convertible currency basis.

Australia

Exchange Rate System

The exchange rate system is unitary, based on the par value of Australian Pound 1 = US$2.24. Official rates are fixed for transactions in sterling: £A 125 buying, and £A 125/10/– selling, per UK£100. The authorized banks quote their own rates for other currencies, including the U.S. dollar, based on market quotations in London and New York.

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 the Department of Customs and Excise, which are in consultation with the Treasury and the Reserve Bank on foreign currency aspects.

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 from an account with a bank in Australia of a bank domiciled in any other country in the Sterling Area. Payments for imports from countries outside the Sterling Area may be made by crediting sterling to an External Account, 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 Australian currency from appropriate accounts, 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 by direct payment in a convertible currency.

Imports and Import Payments

Most goods may be imported freely without import license. Goods subject to license represent less than 10 per cent of current imports. No restrictions are imposed on payments for imports, provided that the prescription of currency requirements are observed.

Payments for Invisibles

All payments in respect of invisibles come under exchange control; but current invisibles are not restricted, the control operating 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 required for bona fide travel expenses and does not represent an unauthorized capital transfer. Limits are placed on remittances for family maintenance and gifts; however, the treatment of applications for such transfers is liberal, and for family maintenance, amounts beyond the normal limit are approved on application. Travelers may not take out more than £A 25 in Australian notes.

Exports and Export Proceeds

With minor exceptions, all exports require licenses issued by the Department of Customs and Excise. A condition of these licenses is that full proceeds must be 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. Unless payment is to be received in a currency and within a period corresponding to those stipulated by the Reserve Bank, the exporter’s bank will not clear the documents without specific exchange control approval.

Proceeds from Invisibles

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

Capital

All transfers of capital from Australia require specific exchange control approval. Transfers abroad of resident capital are allowed only in special cases. Approval is normally granted for the repatriation of capital by nonresidents; however, no advance commitments are given in such cases.

There are no restrictions on the receipt of capital funds from abroad, except that residents must obtain prior exchange control 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 specific exchange control approval.

Changes during 1960

January 14. The Commonwealth Bank of Australia was reconstituted and renamed the Reserve Bank of Australia.

January 14. The regulation requiring that U.S. or Canadian dollars in banknote or check form be sold to a bank in Australia was repealed, and the requirement that holdings of foreign securities involving rights to receive payment in the United States or in U.S. dollars must be offered for sale to a bank in Australia was canceled.

February 23. Import restrictions were further relaxed, so that approximately 90 per cent of Australia’s current imports were exempt from import license. The licensing regime for the 10 per cent of trade remaining subject to licensing control was also liberalized.

April 1. The import restrictions on timber were removed.

July 22. The administrative requirements concerning approved methods of payment for exports to countries outside the Sterling Area were relaxed by permitting exporters to accept payment in any non-sterling currency that is freely exchangeable for External Account sterling.

October 1. Imports of motor vehicles and their components of U.S. or Canadian origin were exempted from licensing controls. This removed the last element of discrimination in the licensing system.

Austria

Exchange Rate System

The par value is Austrian Schillings 26.00 = US$1. The official limits for the U.S. dollar are a minimum middle rate of S 25.80, and a maximum middle rate of S 26.20, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for externally convertible European currencies1 vary between limits resulting from the U.S. dollar rate for the schilling in relation to the dollar rates for the other currencies. The forward premiums and discounts are left to the interplay of market forces.

Administration of Control

Export or import licenses for goods listed in the Foreign Trade Law, if required, must be procured from the competent ministry, viz., the Federal Ministry of Trade and Reconstruction (Licensing Office), the Federal Ministry of Agriculture and Forestry, or the Federal Ministry of the Interior. The Austrian National Bank administers the exchange control and issues the exchange licenses where still required.

Prescription of Currency

Settlements with countries with which Austria has bilateral payments arrangements2 are made through clearing accounts expressed in U.S. dollars. The clearing accounts with Greece and Turkey are settled monthly in accordance with the terms of the European Monetary Agreement.3 Settlements with all other countries may be made in any convertible currency or externally convertible European currency, or through Free Schilling Accounts.

Nonresident Accounts

There are two main categories of nonresident account in schillings, viz., Free Schilling Accounts and Blocked Accounts.

Free Schilling Accounts, which are maintained with Austrian authorized banks, originate from the sale of gold, gold coins, convertible currencies, and externally convertible European currencies by a nonresident to the Austrian National Bank or to an Austrian authorized bank, as well as from transactions authorized by a special or general license of the Austrian National Bank. With a few exceptions, disposal of these accounts is permitted freely, including transfers from one Free Schilling Account to another and the conversion of balances on such accounts into any foreign currency.

Blocked Accounts are applied mainly vis-à-vis the bilateral countries and have little significance for other countries.

Imports and Import Payments

The following imports are free of quantitative restriction: goods included in two extensive liberalization lists which apply respectively to imports from OEEC countries and their dependent overseas territories, and to Canada and the United States; goods included in a shorter liberalization list applicable to imports from other countries that are Contracting Parties to the GATT (except Cuba, Czechoslovakia, and Japan); and a limited number of other commodities not listed in the Foreign Trade Law imported from any country. Import licenses are required, however, for goods on the liberalization list applicable to imports from Canada and the United States, as well as for goods on the liberalization list applicable to imports from Contracting Parties to the GATT that are not members of the OEEC, but these licenses are issued automatically upon application. Certain minor imports may be effected without license.

All other imports require individual licenses and are dealt with under various procedures, such as global quotas, bilateral quotas provided for under certain bilateral trade agreements, compensation (barter) transactions, and individual discretionary licensing. Global quotas are established for a few specified commodities imported from member countries of the OEEC, the EFTA, and the GATT, or from all countries. Imports under compensation (barter) transactions are licensed only in cases where Austria does not maintain a payments or clearing agreement with the exporting country and there is no other way of settling payments.

Goods imported from and originating in countries that settle with Austria in convertible currencies or externally convertible European currencies may be paid for without an exchange license; this applies also to imports from Greece and Turkey if the settlement is made through the relevant clearing account (but see footnote 3). In order to make payments related to such imports, importers may utilize freely their retained export and other proceeds in convertible currencies or externally convertible European currencies, or in Greek or Turkish clearing dollars, respectively, held with Austrian foreign exchange dealers, or they may purchase such currencies freely from the authorized banks.

Payments for Invisibles

Payments to countries with convertible currencies or externally convertible European currencies, and to Greece and Turkey, for nearly all transactions in invisibles are liberalized. For other payments, licenses are granted after account is taken of the terms of existing bilateral agreements and such other considerations as the principle of reciprocity and hardship cases.

Residents traveling as tourists to countries that settle their payments with Austria in convertible currencies or externally convertible European currencies, as well as to Greece and Turkey, may receive yearly allocations of exchange up to the equivalent of S 10,000. Persons leaving Austria as tourists may take with them S 10,000 in Austrian currency and any amount in foreign currency.

Exports and Export Proceeds

Licenses for exports that are regulated under the Foreign Trade Law have to be procured from the competent ministry, viz., the Federal Ministry of Trade and Reconstruction (Licensing Office), the Federal Ministry of Agriculture and Forestry, or the Federal Ministry of the Interior; goods exported by way of compensation (barter) are subject to licensing by the Federal Ministry of Trade and Reconstruction. In the issuance of export licenses, due consideration is given to the provisions of any relevant bilateral trade agreements and the fulfillment of quotas established in accordance with such agreements, and to the needs of the Austrian economy.

In principle, exports and export claims must be declared within eight days from the date of collection and the export proceeds surrendered. However, exemption from the general obligation to surrender export proceeds has been granted to claims and proceeds kept in accounts with Austrian authorized banks; such exchange in convertible currencies or externally convertible European currencies may be used freely for conversion into any other of those currencies or for payment of the holder’s debts to creditors in countries with convertible currencies or externally convertible European currencies, as far as such payments are permitted under general or individual licenses.

Proceeds from Invisibles

In principle, exchange receipts from invisibles have to be declared within eight days from the date of collection and, with the exception of currencies held with Austrian authorized banks, surrendered. A number of institutions, such as insurance companies and patent offices, are granted open licenses to use their exchange proceeds for payments on their own account.

Persons entering Austrian territory are free to bring in Austrian or foreign currency without limit.

Capital

Investments in Austria by nonresidents are generally permitted if made in convertible currencies or externally convertible European currencies or out of free or originally owned blocked schilling balances. For investments financed by other means of payment, and for loans by nonresidents to residents, special licenses are required. These licenses are granted after careful scrutiny of each case, the interest of the national economy as a whole being taken into consideration. Foreign exchange brought in for these purposes must, in principle, be surrendered. The capital and capital proceeds arising from investments may be retransferred freely.

Under an open license, the Austrian National Bank permits upon application the following transfers related to capital transactions in favor of residents of countries with which payments are settled in convertible currencies or externally convertible European currencies: (1) proceeds from the liquidation of Austrian enterprises in which these nonresidents have participated, as well as proceeds from the sale of shares in such enterprises; (2) proceeds from the sale of Austrian securities (the proceeds from the sale of foreign securities and Austrian bonds issued abroad or in foreign currency are not covered by this provision); (3) proceeds from the sale of Austrian real estate (or shares in such real estate); (4) repayment of loans and credits by Austrian residents to nonresidents insofar as the payments do not represent contractual amortization (the transfer of contractual amortization is permitted by general license); and (5) payments for claims which have passed from Austrian residents to nonresidents by inheritance. These transfers are also approved, upon application, in favor of residents of Greece and Turkey within the framework of the existing payments agreements with those countries (see footnote 3).

The transfer of capital abroad by residents is subject to approval, which is granted only in exceptional cases. Transfers to OEEC countries, as well as to Canada and the United States, of exchange representing dowries and remigrants’ funds are limited to the equivalent of US$10,000 a year.

An open license has been granted for the export of securities for the purpose of realizing rights and claims thereunder abroad, the export of nonresident-owned securities, and the export of resident-owned foreign securities for sale abroad (the proceeds must be declared and surrendered) . Nonresidents may acquire Austrian securities against payment in convertible currencies or externally convertible European currencies or to the debit of Free Schilling Accounts or Blocked Accounts (see section on Nonresident Accounts, above). Proceeds from the sale of such securities, if the securities were acquired against convertible currencies or externally convertible European currencies or to the debit of Free Schilling Accounts, and amortization and earnings on such securities may be transferred freely to owners residing in any country.

Changes during 1960

May 17. The liberalization list applicable to Canada and the United States was made identical with that applicable to OEEC countries.

June 1. The Egyptian Region of the United Arab Republic was included in the group of countries with which settlements are made in convertible currencies.

July 15. Imports of a number of goods (some 287 tariff items or sub-items) were freed from quantitative restrictions if imported from countries that are Contracting Parties to the GATT, with the exception of Cuba, Czechoslovakia, and Japan.

Belgium–Luxembourg1

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—official and free. Current transactions are settled through the official market and financial (i.e., capital and certain current) transactions are settled through the free market, although for most outgoing and a few incoming current payments there is a choice between the two exchange markets.

In the official exchange market, only authorized banks may carry out exchange transactions permitted in that market. The currencies in the official market are U.S. dollars, Canadian dollars, and externally convertible European currencies (see footnote 4). 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 currencies fluctuate between limits resulting from the U.S. dollar rate for the Belgian franc in relation to the U.S. dollar rates for the other currencies. Forward rates are left to the interplay of market forces. Authorized banks in Belgium-Luxembourg may deal with other authorized banks in any foreign currency against Belgian and Luxembourg francs, and with nonresidents in any of the currencies listed above.

Residents may sell exchange derived from certain transactions of a noncommercial nature in the free exchange market, and they may use exchange purchased in the free market for all payments except current transactions with bilateral countries. In the free market, all currencies may be bought and sold at freely fluctuating rates. U.S. dollars, Canadian dollars, and externally convertible European currencies acquired in the free market may be sold in the official market, but no other transfers between the two markets are permitted. Exchange transactions in connection with the free gold market are also carried out in the free exchange market. Rates in the free exchange market correspond to rates in free exchange markets in other countries; as at December 31, 1960, the rate for the U.S. dollar was approximately BF 50.60 per US$1.

Belgium accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961, but continued to avail itself of the transitional arrangements of Article XIV in respect of Ruanda-Urundi. Luxembourg also 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), and they are treated as 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 is exercised by the Institut Belgo-Luxembourgeois du Change, which is the central exchange control authority for the Union. Administrative powers for most payments and transfers are delegated to authorized banks, but in special cases authorized banks must submit requests for authorization to the central authority.

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, other commercial expenses including insurance, and industrial expenses (e.g., costs of processing); List B covers settlements of transport and travel firms, collateral for current trade transactions, salaries, pensions, fees, subscriptions, and public administration payments; List C covers administration expenses, income on securities, loans, etc., rents, exploitation rights, and the repatriation of certain foreign long-term investments; List D covers gifts, life insurance payments, family maintenance payments, capital investments, the liquidation of investments, dealings in gold, emigrants’ funds, inheritances, the forward covering of merchandise, collateral for noncommercial or capital transactions, travel expenses, and all transactions not in any of the other three lists.

Foreign countries are divided into two groups: (1) the bilateral countries—the Congo, Ruanda-Urundi, and the U.S.S.R.—and (2) the convertible area—all other countries.

The permissible methods of settlement for foreign payments are summarized in the accompanying table. There is a choice between the official and the free market for U.S. dollars, Canadian dollars, or externally convertible European currencies received from transactions in Lists C and D or paid for transactions in Lists A, B, and C; such payments if made in Belgian or Luxembourg francs can also be settled through a Financial or a Convertible Account.

Summary of Permissible Methods of Settlement for Foreign Payments2
Transaction ListCountry GroupForeign CurrencyExchange MarketNonresident Account in Francs
Outward Payments
A, B, and CConvertible BilateralAny

Official or free

Any

Bilateral3
DAnyAnyFreeFinancial or Bilateral3
Inward Payments
A and BAnyConvertible4OfficialConvertible or Bilateral3
CAnyConvertible4

Other
Official or free

Free
Convertible, Financial, or Bilateral3
DAnyConvertible4

Other
Official or free

Free
Convertible or Financial

Nonresident Accounts

Belgian or Luxembourg franc accounts of nonresidents are classified in three types. The use of these accounts, in addition to their use for the settlement of transactions with residents as indicated in the last column of the table above, is outlined below.

1. Convertible Accounts. These accounts are not denominated by the country of residence of the account holder, and may be opened in the name of any nonresident. They may be credited with proceeds from the sale in the official market by a nonresident of U.S. dollars, Canadian dollars, or externally convertible European currencies 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. Bilateral Accounts. These are the accounts of residents of bilateral countries (see section on Prescription of Currency, above). They may be credited with proceeds from the sale by a nonresident of U.S. dollars, Canadian dollars, or externally convertible European currencies in the official market. Balances on Bilateral Accounts may be transferred to other Bilateral Accounts of the same nationality. Transfers may also be made freely between Bilateral Accounts related to the Congo and those related to Ruanda-Urundi and—up to BF 100,000 for any one transaction—from these two types of account to Financial Accounts.

3. Financial Accounts. These accounts are not denominated by the country of residence of the account holder, and may be opened for any nonresident. They are primarily for capital transfers and traveling expenses, although other specified settlements, such as those related to dealings in gold, may be made through them. Balances on Financial Accounts may be transferred only to other Financial Accounts. Financial Accounts may be credited with proceeds from the sale by a nonresident of gold or any currency in the free market and of U.S. dollars, Canadian dollars, or externally convertible European currencies in the official market. They are exchangeable into gold or any currency at free market rates.

Imports and Import Payments

Imports of certain goods from any country outside the Belgian Monetary Area require import licenses; lists of these goods are published and made effective by Belgian and Luxembourg ministerial orders. Imports of all goods 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 are subject to license. For goods not requiring a license, only a simple form completed by the importer giving notification of the import is required.

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). Where the requirements are not fulfilled, the authorized bank submits a request to the central exchange control authority for special permission.

Payments for Invisibles

If payments for transactions in 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.

Exports and Export Proceeds

Some exports require an export license issued by the trade control authorities; lists of these goods are published and made effective by Belgian and Luxembourg ministerial orders. All exports to Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Outer Mongolia, Poland, Rumania, Turkey, the U.S.S.R., and North Viet-Nam are subject to license. For goods not requiring a 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). Export proceeds in Canadian dollars, U.S. dollars, or externally convertible European currencies must, within eight days of receipt, be surrendered to an authorized bank, or, alternatively, they may be deposited in a “commercial” account 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 Canadian dollars, U.S. dollars, or externally convertible European currencies from invisibles connected with certain commercial transactions (Lists A and B—see section on Prescription of Currency, above) must be surrendered (i.e., sold in the official exchange market), or, alternatively, they may be held in a “commercial” account with an authorized bank if they are to be used later for current payments authorized to be made in these currencies. Receipts in these same currencies from other transactions (Lists C and D) may be retained or they may be sold in the official or the free market. Receipts in all other currencies may be retained or they may be sold in the free market.

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. In addition, incoming capital may be received in U.S. dollars, Canadian dollars, or externally convertible European currencies through the official market or in Belgian or Luxembourg francs to the debit of a Convertible Account. There are arrangements by which the exchange control authorities may guarantee the repatriation of approved foreign investments that are made in Belgium-Luxembourg in accordance with the general regulations governing incoming payments. 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 financial settlements must conform to the general regulations.

Banknotes

Transactions in banknotes may be carried out freely by all residents and nonresidents at freely fluctuating rates. Banknotes may be imported and exported without restriction, but they may not be used to settle foreign transactions other than tourism, banknote arbitrage, and the purchase and sale of gold. Domestic banknotes and proceeds from the sale in the free market of foreign banknotes sent to authorized banks by foreign travelers in Belgium-Luxembourg or by persons residing abroad may be credited freely to the Financial Accounts of nonresidents.

Changes during 1960

March 1. Exports of goods of foreign origin were made subject to the normal export regime. Previously, export licenses had been required for all such exports.

March 1. All imports originating in or consigned from Japan or Hong Kong were made subject to license.

March 29. Payments by residents for imports from the Belgian Congo or Ruanda-Urundi had normally to be made by crediting Belgian or Luxembourg francs to accounts held in the names of banks in those territories on the books of authorized banks in Belgium or Luxembourg; such payments had to be made within 30 days of customs clearance or, in the case of goods sold to another country, on receipt of payment from that country. Debits to these accounts were in general made subject to prior approval from the central exchange control authorities, but authority to approve most current commercial payments in favor of residents of Belgium and Luxembourg was delegated to the authorized banks. Transfers from, or withdrawals of cash from, accounts held in the names of banks in the Belgian Congo and Ruanda-Urundi in favor of residents of those territories, other than banks, could be made only if the permission of the Central Bank of those territories had been obtained.

August 3. The regulations concerning payments to the Congo and Ruanda-Urundi were revised. Payments by residents for imports from the Congo could be made only by crediting Belgian francs to the account held in the name of the Central Bank of the Belgian Congo and Ruanda-Urundi on the books of the National Bank of Belgium. Such payments had to be made within 30 days of customs clearance or, in the case of goods sold to another country, on receipt of payment from that country. Authorizations permitting periodic transfers to the debit of accounts held in the names of banks in the Congo or Ruanda-Urundi were canceled. Instead, the Belgian and Luxembourg headquarters of companies and other organizations with agents in the Congo or Ruanda-Urundi were authorized to transfer in Belgian or Luxembourg francs, to the debit of accounts held in the names of banks in the Congo or Ruanda-Urundi, the amounts required to provide those agents in Belgium-Luxembourg with a maximum of 50 per cent of their gross pay. Authorization to transfer each month, in the same manner, a part of their pay would also be granted to officials and self-employed persons in the Congo or Ruanda-Urundi, and to agents of companies or other organizations that do not have their headquarters in Belgium- Luxembourg.

August 18. Spain was deleted from the list of countries all imports from which and all exports to which require a license.

August 26. The special requirements attached to payments to and from the Congo and Ruanda-Urundi (see March 29 and August 3, above) were canceled, and the Congo and Ruanda-Urundi were added to the list of countries with which Belgium-Luxembourg maintains bilateral payments arrangements. Accounts in Belgian or Luxembourg francs in the names of banks in the Congo and Ruanda-Urundi were designated Bilateral Accounts (of the Congo or of Ruanda-Urundi, as the case might be). Transfers could be made between these two types of account. The accounts of others, i.e., not banks, were designated Financial Accounts. A general authorization was given to the authorized banks permitting them (1) to debit Bilateral Accounts related to the Congo or Ruanda-Urundi for payments of a commercial nature as well as for gifts and maintenance payments to residents of Belgium-Luxembourg, up to BF 100,000 for each transaction, and (2) to transfer up to BF 100,000 at any one time from Bilateral Accounts related to the Congo or Ruanda-Urundi to Financial Accounts.

September 22. The authorized banks were permitted to debit Financial Accounts related to the Congo or Ruanda-Urundi for payments to residents of Belgium-Luxembourg for commercial purposes, up to BF 10,000 for each transaction.

September 30. Settlements with Rumania were placed on a convertible currency basis and Rumania was deleted from the list of bilateral countries.

October 13. Turkey was deleted from the list of countries all imports from which require a license.

November 18. The authorized banks were permitted to classify the accounts of individuals resident in the Congo or Ruanda-Urundi as resident accounts, provided the person concerned requested it.

Note.—The following changes took place early in 1961:

January 1. Bilateral Accounts could be maintained for any resident of a bilateral country, and not only, as previously, for authorized banks in those countries.

February 8. Turkey ceased to be treated as a bilateral country and was included in the convertible area.

Bolivia

Exchange Rate System

The par value of Bolivianos 190.00 = US$1, established on May 14, 1953, is not applied to any transactions under the present exchange system. All exchange transactions are carried out in a free market, in which, however, the exchange rate has remained stable since January 1959. All sales of foreign exchange by the banks and the licensed foreign exchange dealers are subject to an exchange tax of 2 per cent. The exchange rate at the Central Bank of Bolivia, Monetary Department, on December 31, 1960, was Bs 11,875 buying, and Bs 11,885 selling, per US$1; with the 2 per cent tax, the effective selling rate was therefore Bs 12,123 per US$1.

Administration of Control

As fiscal agent of the Government, the Central Bank of Bolivia, through the Ministry of Finance, executes the exchange budget for foreign payments by the Government and its agencies.

Prescription of Currency

Payments for transactions with other countries are usually made in U.S. dollars or other convertible currencies. Payments for exports and imports under bilateral trade and payments agreements are subject to the provisions of these agreements while they remain in force.1

Imports and Import Payments

Private imports are free of import and exchange licensing, and exchange to pay for such imports may be obtained freely at the free market rate plus the 2 per cent tax. Imports by the Government and its agencies are governed by an exchange budget and are paid for with exchange purchased from the Central Bank at the rate of the day.

Payments for Invisibles

Payments for invisibles and capital transfers may be made freely at the free market rate plus the 2 per cent tax.

Exports and Export Proceeds

Exports are not subject to license. The Bolivian Mining Corporation is responsible for exports of the minerals produced in its own mines. Minerals produced by private medium-sized mines are exported by the enterprises concerned. Minerals produced by small mines are exported through the Mining Bank of Bolivia. The Bolivian Government Petroleum Corporation is responsible for exports of petroleum.

All 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 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. Taxes (regalías) on exports are payable in convertible currency.

Proceeds from Invisibles

Exchange derived from invisibles may be sold at the free market rate.

Capital

Inward and outward capital transfers by residents or nonresidents are free of control. The corresponding exchange transactions are settled freely at the free market rate plus, for outward transfers, the 2 per cent tax.

Changes during 1960

August 26. The advance deposit required for imports of automobiles and certain other vehicles was eliminated.

December 9. The bilateral trade and payments agreement with Argentina was terminated.

Brazil

Exchange Rate System

The par value is Brazilian Cruzeiros 18.50 = US$1. The official rates are Cr$18.36 buying, and Cr$18.92 selling, per US$1. However, the effective rates for most private import transactions are obtained by adding to the Cr$18.92 rate the prices of the related exchange certificates obtained at auction. These prices and, consequently, the effective exchange rates fluctuate. Preferential imports, as well as government payments and certain services, are paid for at the official rate plus a fixed surcharge. Some imports of newsprint also benefit from a preferential rate. A few major export commodities are subject to the Cr$18.36 rate plus bonuses. The proceeds of all other exports have to be surrendered at the fluctuating free market rate, the exporter receiving Cr$130 per US$1 (or the equivalent in other currencies) in cruzeiros and the balance in six-month notes of the Bank of Brazil. Practically all transactions in invisibles and most capital transactions also take place at the fluctuating free market rate. (See Table of Exchange Rates, below.)

Administration of Control

The control system is operated by the Bank of Brazil under the direction of the Council of the Superintendency of Money and Credit (SUMOC). The Exchange Department of the Bank authorizes incoming and outgoing payments related to most trade transactions and to capital transactions in specified cases. It organizes the auctions of exchange for imports, establishes the total amount and the distribution among the various cities in Brazil where the exchange is auctioned, issues exchange certificates, and, on the basis of criteria approved by the Council of the SUMOC and having obtained the opinion of the Foreign Trade Department of the Bank, it establishes the percentages of the amounts to be auctioned for imports in the General and Special Categories. Government departments and public entities are requested to present to the Exchange Department semiannual estimates of their needs for imports and service payments; with these estimates as a basis, the Council of the SUMOC fixes the maximum quotas to be utilized by them. The Foreign Trade Department of the Bank of Brazil issues export and import licenses, and exercises control over prices, weights, measures, classifications, and types in export and import operations that are subject to license. The Customs Policy Council presides over changes in the categories of import commodities, subject to the approval of the Ministry of Finance. All sales and purchases of exchange pass through banks authorized for this purpose. The proceeds of exports that have to be negotiated in the official market must be sold by the banks to the Bank of Brazil, which provides the exchange needed for imports. All receipts under bilateral payments agreements, including those negotiated in the free market, must also be sold to the Bank of Brazil. The latter also buys exchange in the free market.

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 the dollar area, Austria, Belgium-Luxembourg, Finland, France, the Federal Republic of Germany, Italy, Japan, the Netherlands, Sweden, and the United Kingdom may be made in the currency of any of these countries or in U.S. dollars. Settlements with payments agreement countries are made through the relevant agreement accounts, usually maintained in clearing dollars: The bilateral payments agreement with Denmark requires that settlements be made in Danish kroner; agreements requiring that settlements be made in clearing dollars are in effect with Argentina (fruit is not covered by the agreement), Chile, Czechoslovakia, Eastern Germany, Greece, Hungary, Israel, Norway, Poland, Portugal, Rumania, Spain, Turkey, the U.S.S.R. (agreement signed on December 9, 1959), Uruguay, and Yugoslavia; and an agreement with Iceland requires settlements in clearing sterling. Fruit trade with Argentina, all trade with Bolivia, and frontier trade with Paraguay are settled in cruzeiros. Settlements with 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

Only imports of goods in the Special Category (see 2, below) and a few other specified imports require import licenses. Licenses for Special Category imports are granted freely to holders of exchange certificates purchased at auction, provided that the application complies with the regulations in force; the licenses are prerequisites for obtaining exchange at the official rate. Preferential imports, most of which require import licenses, are authorized within global quotas established in an exchange budget. Imports and import payments may be classified as follows:

1. Specified commodities for which payment is not made through the auction system: In this group are specified government imports; wheat; petroleum and petroleum derivatives; equipment, components, and spare parts for oil research and production of crude oil and for the printing industry; newsprint and magazine paper for periodicals weighing more than 80 grams; and investment goods considered essential to economic development or national security. These imports are subject to a surcharge of Cr$81.08 per US$1 or the equivalent in other currencies,1 with the exception of government imports not considered essential to economic development or national security, which are subject to a surcharge not lower than the weighted average of actual bids in the related auction category (see 2, below). Imports of newsprint by printers whose publications weigh 80 grams or less, which are paid for at the official rate plus a special, periodically adjusted surcharge, are also included in this group.2 Exchange for all these imports is allocated in the exchange budget approved by the Council of the SUMOC.

2. All other imports: These are subject to the purchase of exchange certificates at auction. For the purpose of allocating exchange in accordance with essentiality, these imports are classified in two categories: (1) General Category—raw materials, equipment, and other production goods, as well as goods for general consumption whose supply in the domestic market is not satisfactory—and (2) Special Category—other goods. Payment for exchange certificates purchased at auction must be made within 3 working days beginning with the second working day following that of purchase. Application for an import license (for goods in the Special Category) or for a certificate of exchange cover (for goods in the General Category) must be filed with the proper department within 30 days following the purchase of exchange certificates, and the goods must be shipped within the period of validity of the import license or the certificate of exchange cover. As a rule, an importer may not purchase more than US$50,000 worth of exchange certificates at any single auction. U.S. dollars and several other currencies3 are acquired by bidding for certificates denominated in dollars; successful bidders may then obtain any of these currencies for delivery after 150 days have elapsed. Auctions of inconvertible currencies are subject to minimum premiums established on the basis of 85 per cent of the average of bids made for U.S. dollars during the previous week. Special auctions are held periodically for certificates for the import of separately listed goods used in agriculture (fertilizers, insecticides, etc.), and of fruits from Uruguay. Imports of parts of motor vehicles to be assembled in Brazil according to plans approved by the Government are generally subject to the weighted average bid in the General Category.

Payments for Invisibles

Payments for expenses incidental to exports are made at the same effective rates and subject to the same conditions as the goods exported. Freight and marine insurance payments incidental to imports are made at the free market rate; exchange is not provided for the insurance of goods in Brazil or when import licenses have been issued on a c. & f. basis. Payments for all other transactions in invisibles are made through the free market. Travelers may take out domestic and foreign currency notes freely.

Exports and Export Proceeds

All exports are subject to export license, with the exception of exports of coffee, which are subject to authorization by the Brazilian Coffee Institute. Export licenses are granted without limitation except when (1) the export is contrary to national security or to obligations arising from international agreements, (2) payment is to be made in an inconvertible currency the acceptance of which is considered by the Exchange Department of the Bank of Brazil to be inconvenient, or (3) an accumulation of stocks to guarantee domestic supplies is advisable. All exports are subject to shipping permits issued by the Exchange Department.

Exports subject to the official rate are classified in two categories, for each of which a bonus has been established, as follows (in cruzeiros per US$1):

First Category (green coffee beans, roasted coffee, whole or ground, and cocoa beans): Cr$71.64 (effective rate, Cr$90.00)

Second Category (cocoa derivatives, castor beans, and crude mineral oil and derivatives): Cr$81.64 (effective rate, Cr$100.00)

Export proceeds negotiable at the official rate or received in clearing account currencies must be surrendered to an authorized bank, which in turn must sell the proceeds to the Bank of Brazil. However, mining companies are permitted to retain abroad a percentage, which is determined by the Council of the SUMOC, of their export proceeds to service registered loans used for payments of goods and services to develop their industry. The proceeds of all other exports must be surrendered to an authorized bank at the fluctuating free market rate, but immediate cash payment in cruzeiros is made only for Cr$130 per US$1 (or the equivalent in other currencies). The authorized bank negotiates freely the exchange thus obtained. For the difference between the total proceeds and the amount paid in cash, notes of the Bank of Brazil, with six months’ maturity and interest at 6 per cent per annum, are issued to the exporter. The minimum amount of these notes is Cr$10,000, fractions being paid in cash.

Proceeds from Invisibles

Exchange proceeds from most invisibles are sold through the free market. Travelers may bring in domestic and foreign currency notes freely.

Capital

The inflow and, with certain exceptions, the outflow of foreign investments take place at the free market rate. However, when investments are made in the petroleum industry or the printing industry or in a sector considered essential to economic development or national defense, repayments of the principal and transfers of interest not exceeding 8 per cent per annum may be made at the official rate, plus a surcharge which is presently Cr$81.08 per US$1 or the equivalent in other currencies.

Imports by foreign investors of groups of equipment, or, exceptionally, of equipment intended to complete or improve the capacity of existing groups, may be authorized provided there is sufficient proof that no payment therefor will be transferred abroad. Imports of production goods financed abroad may be authorized by the Council of the SUMOC. The Council may also authorize registration of loans covering other imports considered of national interest; repayments of principal and transfers of interest in this case are subject to a surcharge not lower than the weighted average of actual bids in the General Category of imports.

The commitment on the part of the Exchange Department to provide exchange for capital transactions depends on the availability of exchange, and the amounts corresponding to the obligations assumed must be taken into account in future exchange budgets.

Table of Exchange Rates (as at December 31, 1960)(cruzeiros per U.S. dollar)
BuyingSelling
18.36 (Official Rate)18.92 (Official Rate)
18.50 (Parity Rate)

Government and other official receipts.
67.57 (Official Rate plus 60% of Cr$81.08 Surcharge)4

Imports of newsprint by printers whose publications weigh 80 grams or less.
90.00 (Official Rate plus Cr$71.64 Bonus)

First Category exports.
100.00 (Official Rate plus Cr$81.64 Bonus)

Second Category exports.
100.00 (Official Rate plus Cr$81.08 Surcharge)

Government payments. Preferential imports, including specified government imports, wheat, imports for the petroleum and printing industries, petroleum and petroleum derivatives, etc. Imports of newsprint by printers whose publications weigh more than 80 grams. Amortization and interest on registered loans, credits, and financing.
181.40–199.10 (Fluctuating Free Market Rate)

All other exports.5 Most invisibles. All incoming capital.
186.40–204.10 (Fluctuating Free Market Rate)

Most invisibles. All capital transactions not effected at preferential rates.
228.92 (Official Rate plus Auction Premium)6

General Category imports.
639.92 (Official Rate plus Auction Premium)6

Special Category imports.

Changes during 1960

January 1. The bilateral payments agreement with Finland lapsed. Payments to Finland would be made by purchasing exchange at the regular auctions of U.S. dollars.

January 16. The bilateral payments agreement with Japan lapsed. Payments would be made in U.S. dollars, and Brazilian importers of Japanese goods had to purchase the necessary exchange at the regular auctions of U.S. dollars.

February 14. The surcharge on payments for imports of newsprint by printers whose publications weigh 80 grams or less was raised to 50 per cent of the surcharge payable for other preferential imports. This move was made in accordance with arrangements instituted on February 15, 1958, to raise surcharges on newsprint imports by half-yearly stages to the level of the surcharge on other preferential imports.

March 1. The bilateral payments agreement with Sweden was terminated. Payments to Sweden would be made by purchasing exchange at the regular auctions of U.S. dollars.

March 26. Regular auctions of U.S. dollars for General Category imports were to be supplemented by additional allocations up to a limit of three times the amount of the regular auctions. The additional offers were to be made at a fixed premium which was subject to revision from time to time. The premium was initially fixed at the level of the weighted average of quotations at the three preceding auctions in the General Category (Cr$225 per US$1 or its equivalent in other currencies).7 The period for delivery of exchange to purchasers of exchange certificates in convertible currency at General Category and Special Category auctions was changed from 120 to 150 days. Further, importers were required to pay the cruzeiro equivalent of exchange certificates purchased at auctions within 3 working days, instead of 5 working days as previously.

July 1. The bonus payable on First Category exports was increased from Cr$57.64 to Cr$71.64 per US$1, thus changing the effective rate for these exports from Cr$76.00 to Cr$90.00 per US$1.

July 31. A bilateral payments agreement with Greece came into effect. Settlements would be made through centralized accounts in clearing dollars.

August 14. The surcharge on payments for imports of newsprint by printers whose publications weigh 80 grams or less was raised to 60 per cent of the surcharge payable for other preferential imports.

Note.—The following changes, which were made in the exchange system on March 14, 1961, are not taken into account in the foregoing presentation:

Transactions at par value rates were discontinued. The auctioning of exchange was abolished, and exchange to pay for imports in the General Category and in the Special Category was to be obtained in the free exchange market. For these imports the importer was required, in addition to paying for his exchange at the free market rate, to purchase 150-day bills, issued by the Bank of Brazil in local currency and bearing interest at 6 per cent per annum, for a value equivalent to the payment. A certificate of exchange cover continued to be necessary for imports in the General Category. Special Category imports would require import licenses, which would be granted to holders of promessas de licença; the latter would be auctioned on the basis of global quotas. Importers could not acquire in any one week exchange equivalent to more than US$20,000.

New exchange rates would apply as follows (in terms of cruzeiros per US$1, with the previous rate in parentheses): (1) payments for preferential imports (petroleum, wheat, newsprint), Cr$200 (Cr$100), payable Cr$150 at the time the import is authorized and Cr$50 after 120 days; (2) outward financial transfers previously subject to the preferential rate, Cr$200 (Cr$100), payable Cr$150 at the time of transfer and Cr$50 after 120 days; (3) proceeds of coffee exports, Cr$90 (unchanged); (4) proceeds of cocoa exports, Cr$90 for beans and Cr$100 for derivatives (unchanged);8 (5) proceeds of castor bean exports, free market rate (Cr$100). For export proceeds sold in the free market, Cr$100 per US$1 would be paid in the form of 120-day bills of the Bank of Brazil bearing interest at 6 per cent per annum. Exchange rates for inconvertible currencies would be determined by the Bank of Brazil.

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 London, maintained within official limits.

Administration of Control

Exchange control is administered by the Exchange Control Board. Import and export controls are managed by the Directorate of Imports and Exports under the administrative control of the Ministry of Trade Development, but export control is also exercised by the State Agricultural Marketing Board and the State Timber Board, according to the commodities concerned. The registration of exporters and importers is carried out by the Registration Board.

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 must be made in a Sterling Area currency; payments to Yugoslavia, with which Burma has a bilateral payments agreement, must be made through a bilateral account denominated in sterling;1 payments to other countries may be made in sterling through an External Account, in any non-sterling 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

Unless specially exempted, private importers must be registered with the Registration Board. Except for imports by the Government (largely capital goods), most imports are subject to individual import license. Individual import licenses are divided among registered private traders, industries, mines, Joint Venture Corporations, and cooperatives, in accordance with an exchange budget.

Goods which may be imported for private trade are classified in 38 groups. Licenses are issued for each group, primarily to registered private traders, and directives are issued from time to time by the Directorate of Imports and Exports to indicate which commodities in each group may be imported and under what limitations and/or conditions.

Bulk licenses to import certain categories of goods, such as foodstuffs, textiles, hardware, building materials, and a few selected industrial materials, are granted to the nine Joint Venture Corporations (in which both private investors and the Government participate). Other importers are excluded from importing or distributing commodities reserved for the Joint Venture Corporations. Similarly, the central cooperatives are granted a bulk license to import various goods. Certain government agencies import certain goods either for distribution to the private sector or for the use of government corporations and agencies.

In addition, there are six open general licenses, covering some 5 per cent of total imports, under which, with one exception, specified commodities may be imported from any country.

There is a short list of prohibited imports, principally opium and similar narcotics, monkeys, playing cards, and gold and silver bullion.

If evidence of importation has been or will be presented, the authorized banks 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 license. In general, payments for items connected with trade are allowed and payments for other purposes are considered on a case-to-case basis. Remittances of income arising from investment are permitted freely on application, subject to presentation of evidence that all taxes due in Burma have been paid.

Requests for foreign exchange for tourist travel by residents are subject to individual license; allocations for this purpose are, however, temporarily suspended. Residents going abroad may take out K 100 in Burmese notes and the equivalent of K 100 in the currency of the country of destination 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 exchanged into kyats.

Exports and Export Proceeds

Burma has a list of prohibited exports: iron and steel, brass, copper and aluminum and scraps thereof, foreign manufactures, and commodities of local origin which it is desired to conserve for local requirements. No license is required for the export of commodities not specifically included in the lists of items subject to license, but the exporter must obtain the export proceeds in a manner satisfactory to the exchange control authorities. In general, exporters are required to surrender their foreign exchange proceeds to an authorized exchange dealer. Unless specially exempted, exporters must be registered with the official Registration Board.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered. Travelers may bring in K 100 in Burmese notes and, subject to declaration, any amount in foreign currency.

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, save foreign exchange, and generally conform to the economic plans of the Government. If approved, investments are granted certain privileges, including priority in receiving foreign exchange allocations to import necessary raw and auxiliary materials.

The law also provides for transfer abroad of profits after taxes and for withdrawal of the 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.

Foreign nationals are allowed to repatriate all their personal assets when they retire, and foreign insurance companies operating in Burma are permitted to remit their surplus funds to their home offices.

When payments in favor of nonresidents are not permitted to be transferred abroad, 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 usually are not permitted to remit funds abroad for investment.

The import, export, and transfer of securities involving nonresident interests are subject to individual license.

Changes during 1960

January 29. The foreign currency declaration procedure for tourists was simplified. Nonresident travelers who have stayed in Burma less than six months were allowed to take out any foreign currency they brought in, less the amounts they have used, and could also reconvert up to one fourth of the foreign exchange which they had previously converted into kyats.

February 9. The limitations placed on imports from Japan on December 21, 1959 were withdrawn.

February 25. Investment Rules were issued under the authority of the Investment Act, 1959, defining the facilities available to foreign investors.

May 28. Import agency business in the following items was confined to Burmese nationals: 32 specified commodities under individual license and 7 commodities under open general license, with effect from June 1, 1960; 7 other specified items under individual license, with effect from January 1, 1961.

June 8. Open General License No. 5 was introduced, allowing iron or steel wire nails, square nails and roofing nails, and washers to be imported freely from any country.

June 10. The requirement that trade with India in certain commodities had to be settled through a clearing account in inconvertible Indian rupees was extended to all commodities except cotton textiles, jute goods, coal and coke, and dried prawns.

June 10. The bilateral payments agreement with Czechoslovakia was terminated, and settlements with that country were placed on a convertible currency basis.

July 1. The bilateral payments agreement with the U.S.S.R. was terminated, and settlements with that country were placed on a convertible currency basis; but pending the liquidation of the existing clearing account balance in favor of Burma, all imports from the U.S.S.R. would continue to be settled through that account.

October 20. Open General License No. 6 was issued allowing items needed for sports and games, except rubber shoes, canvas shoes, and basketball boots, to be imported freely from any country.

November 30. Open General License No. 3 was amended to allow newspapers, periodicals, and books to be imported from any country except the United States (from the United States, these items are obtainable under the Informational Media Guarantee Program). Open General License No. 4 was amended to allow imports of groundnut oil from any country.

December 22. Resident travelers could take out sterling notes if the currency of the country of destination was not available. The amount of Indian rupee notes that residents could take out for travel to India was increased from the equivalent of K 75 to the equivalent of K 100.

December 29. By order of the Directorate of Imports and Exports, importation of the following commodities was restricted to Burmese firms: agricultural implements, spare parts for boilers and boiler accessories, and iron or steel wire nails, square nails and roofing nails, and washers.

Canada

Exchange Rate System

The exchange value of the Canadian Dollar is allowed to fluctuate. The noon market rate on December 31, 1960 was Can$0.992032 per 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

There are no obligations imposed on importers, exporters, or others prescribing the method or currency for payments to or from nonresidents.

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, a few commodities are under export control to all destinations. For security reasons, a list of restricted commodities is under export control to all destinations except the United States. 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

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

Capital

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

Changes during 1960

No significant changes took place during 1960.

Ceylon

Exchange Rate System

The par value is Ceylon Rupees 4.76190 = US$1. The exchange rate system is uniform, the rate for the U.S. dollar being based on the fixed sterling-Ceylon rupee rate and the sterling-U.S. dollar rate in London, maintained between official limits. The market rate as at December 31, 1960 was Cey Rs 4.7375 buying, and Cey Rs 4.7625 selling, per US$1.

Administration of Control

Exchange control is administered by the Exchange Control Department of the Central Bank of Ceylon, as agent of the Government of Ceylon. All transactions in foreign exchange in Ceylon must be made through authorized dealers, which are banks authorized to transact business 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 in many respects similar to the regulations of other Sterling Area countries. Imports from the Sterling Area may be paid for in any Sterling Area currency. Imports from other countries may be paid for by crediting sterling or Ceylon rupees to a sterling External Account or an External Rupee Account, or in the currency of the country of export. Receipts from exports to the Sterling Area may be accepted in any Sterling Area currency. Receipts from exports to other countries may be accepted in sterling or Ceylon rupees from a sterling External Account or an External Rupee Account, or in any specified currency.1 Settlements with countries with which there are bilateral payments agreements2 must be made through the relevant bilateral accounts. Transactions involving deviation from the general regulations require the prior approval of the Controller of Exchange.

Nonresident Accounts

The regulations governing nonresident accounts differentiate between the accounts of banks and of persons and firms abroad. Although there are no specific provisions to enable the individual nonresident to obtain conversion into his own currency of amounts credited to his account, transfers for banks and correspondents from rupee accounts in Ceylon to corresponding Sterling Area Accounts, or to corresponding sterling External Accounts, are allowed.

Imports and Import Payments

With the exception of a few items, such as firearms for use by the armed forces, imports of goods are subject to regulation. However, many commodities are governed by open general licenses and may be imported freely without individual license. Open General License No. 1 permits the free import of all goods (except some 40 items) from all countries except those in the dollar area3 and the “Ceylonized” area.4 Open General License No. 2 permits the free import of over 200 essential items from the dollar area. Open General License No. 4 covers certain goods which may be imported freely from the countries covered by Open General License No. 1 with the exception of specified OEEC countries.5 Most of the goods covered by open general licenses may be imported freely from the countries to which these licenses do not apply, including the “Ceylonized” area, under general import licenses, which are issued only to registered Ceylonese traders. Some foods and textiles may, under general import licenses issued specifically for these commodities, be imported by registered Ceylonese traders from all countries and by other traders only from countries outside the dollar area and the “Ceylonized” area (and, in the case of textiles, certain OEEC countries). Most other goods may be imported under individual licenses, which are issued to registered Ceylonese traders freely and to other importers on the basis of past performance. Policy concerning the issue of these licenses is announced from time to time. For a number of commodities, mostly those which are being produced locally, no licenses are issued. Some essential items, such as sugar, flour, and rice, are imported only on government account.

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 cost of goods, together with a valid importer’s and exchange control copy of the import license. When the goods are under open general license, the applicant must have made a declaration to that effect on the application.

The import of certain less essential goods (including air conditioning equipment, alcoholic beverages, motorcars, etc.) must be made on a letter of credit basis, and banks are required to obtain a 50 per cent cash deposit from the importer at the time such letter of credit is established.

Payments for Invisibles

All payments for invisibles are subject to exchange license. The authorized dealers may sell foreign exchange to pay for most invisibles in accordance with a detailed set of regulations. Payments for freight and other services in connection with the international transport of goods are allowed. Payments for international travel fares are permitted, provided that certain conditions are met. Payments for business travel are allowed up to a maximum of UK£7/10/- a day, subject to certain restrictions on the purpose and duration of such travel. The allocation of exchange for tourist travel is subject to individual approval by the Controller of Exchange and is limited to a maximum of Cey Rs 750 for travel to the “Indian group” of countries,6 UK£75 for travel to certain other countries,7 and UK£150 for travel to all other countries. Persons who have traveled abroad as tourists since January 1, 1956 are not at present allowed any exchange for tourist travel for a period of five years from the date of their last trip. Other remittances of a personal nature are granted for reasonable requirements for education, health, or family reasons. Business remittances to any country normally are approved, particularly when they are of a recurring or contractual nature, e.g., insurance premiums on policies denominated in foreign currency. Emigrants (Ceylonese nationals) are not allowed capital remittances, but are permitted to transfer up to a maximum of UK£150 a person to meet incidental expenses, if the tourist exchange allowance is available to them in terms of the rules for tourist travel. Indian repatriates are permitted to transfer their entire proved net assets at the time of departure. Sterling Area nationals other than Indian nationals are permitted to transfer a maximum of Cey Rs 250,000 at the time of departure, with transfers thereafter restricted to Cey Rs 50,000 a year. Nationals of countries outside the Sterling Area are permitted to transfer their savings from proved net income, subject to the limits applicable to Sterling Area nationals. Remittances of profits and dividends by nonresidents are permitted freely.

Travelers may export foreign exchange declared at the time of entry. The export of Ceylon currency notes is limited to Cey Rs 50 a person (Cey Rs 25 for children) once in 12 months.

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 but a few commodities. Licenses for exports to Albania, Austria, Bulgaria, Mainland China, China (Taiwan), Czechoslovakia, Hungary, Poland, Rumania, 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, usually within six months from the date of shipment, in an approved manner. The currencies and methods in which payments for exports must be received are stipulated in the exchange control regulations (see section on Prescription of Currency, above), and the foreign exchange must be surrendered.

Proceeds from Invisibles

Proceeds from invisibles must be received in accordance with the prescription of currency requirements applicable to export proceeds.

Travelers are not restricted in the amounts of foreign funds they may carry into Ceylon in the form of travel credit instruments, but they are obliged to declare, upon entering, their holdings of currency notes and coins. The import of sterling notes in excess of £40 is allowed only with the permission of the Controller of Exchange, and the import of Indian and Pakistan currency notes, as well as of Ceylon notes, is restricted to a maximum of Rs 75, of which Pakistan notes should not exceed Rs 20. No restriction on the import of other currency notes and coins is in force.

Capital

Certain capital movements between Ceylon and the rest of the Sterling Area are permitted under existing exchange control regulations, namely, the voluntary repatriation, subject to certain limitations, of investments of persons resident in the rest of the Sterling Area, the transfer of savings by persons temporarily resident in Ceylon and returning to another Sterling Area country for permanent residence, and the transfer to Ceylon of capital held in the rest of the Sterling Area by Ceylonese nationals. Also, transfers of capital to Ceylon are permitted for direct investment in Ceylonese businesses or for the establishment of branches or agencies of concerns resident in the United Kingdom or other parts of the Sterling Area, if the authorities are satisfied that such transfers are of economic advantage to Ceylon.

Changes during 1960

January 21. A revised list of the specified currencies was issued. Austrian schillings and Italian lire were added, while Congolese francs, Luxembourg francs, Faroese kroner, Panamanian dollars, Philippine pesos, and currencies of certain French and Netherlands overseas territories were excluded.

January 28. Registered Ceylonese traders were allowed to import red onions from India during the period January 28-March 5, under general import license regulations, to make up for a local shortage.

February 2. Imports of watches and parts were liberalized.

February 22. Imports of electric lamp bulbs were made subject to quota, and allocations of exchange equivalent to Cey Rs 2,500 each were granted to newcomers registered as Ceylonese traders for imports of this item.

June 10. Imports of electric batteries, previously subject to individual license, were liberalized.

June 21. Imports of aluminum foil and lining were made subject to individual license.

August 12. Imports of the following goods were made subject to individual license: cotton yarn and twist; banian cloth of cotton, artificial silk, or synthetic fiber; towels and toweling; banians; shirts; garments whose c.i.f. value exceeds Cey Rs 40; piece goods, of any material, whose c.i.f. value exceeds Cey Rs 7 a yard; and haircord, satin, and crepe. Imports of watches manufactured in the “Ceylonized” area were made subject to individual license.

August 13. The import of certain goods could be made only on a letter of credit basis, and importers were required to deposit with the bank opening the letter of credit a cash margin of 50 per cent of the value of the goods, at the time the letter of credit was established. The banks were required not to grant advances for the purpose of providing the required cash margin. The goods affected included air conditioning equipment, alcoholic beverages, motorcars, station wagons, photographic equipment, and watches.

September 1. The basic allowances for tourist travel were withdrawn, and all applications for tourist exchange were henceforth to be considered on their merits by the Exchange Control Department. Residents of Ceylon who had received tourist allowances after January 1, 1956 would not be granted additional exchange for travel for a period of five years from the date of their last trip; in other cases, allocations would be limited to a maximum of Cey Rs 750 for travel to the “Indian group” of countries, UK£75 for travel to certain neighboring countries, and UK£150 for travel to all other countries. The UK£150 maximum was also applied to transfers by emigrants leaving Ceylon.

September 13. Imports of watches and parts from all sources were made subject to individual license.

September 27. Imports of aluminum hollow ware were made subject to individual license.

December 22. Imports of brassières from all sources were made subject to individual license.

December 30. Imports of the following goods from all sources were made subject to individual license: camphor, erasers (of rubber, plastic, or any other material), footwear, machinery (excluding parts), and baskets, basketware, and shopping bags.

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 agreed with the Fund on October 5, 1953 is not applied to any transactions under the present exchange system.

The Central Bank of Chile deals in exchange only with the Government and its agencies (including autonomous agencies) and with authorized banks. It freely buys and sells U.S. dollars, deutsche mark, pounds sterling, Swiss francs, Argentine agreement dollars, and such other exchange or payments agreement account currencies1 as it may decide from time to time. The Central Bank determines the rate of exchange for these transactions; since January 1, 1960, the Central Bank’s rate for the U.S. dollar has remained unchanged at E° 1.049 buying, and E° 1.051 selling, per US$1.

The authorized banks may deal spot in any currency (including agreement account currencies) with their clients or with other authorized banks and, within specified limits, forward up to 90 days in any currency to cover import or export transactions.

Administration of Control

The Foreign Trade Department of the Central Bank of Chile is in charge of the operation of the exchange system. Some functions of the Department have been delegated to local commissions in important cities. The commercial banks and various exchange dealers, tourist agencies, and hotels are authorized as dealers in the exchange market.

Prescription of Currency

Settlements with bilateral payments agreement countries1 must be made according to the method and in the currency established in the regulations that give effect to the terms of the agreements with those countries. The proceeds of exports of copper by the large companies must be received in U.S. dollars or other currencies specifically authorized by the Copper Department. Large 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. Authorized banks may freely convert any currency into U.S. dollars, deutsche mark, pounds sterling, or Swiss francs, but may not convert these currencies into a currency other than one of these without specific approval for each conversion.

Imports and Import Payments

Imports are not subject to license, but government departments and agencies require permission from the Ministry of Finance for imports other than for national defense purposes.

Most imports are subject to either an advance deposit or a surcharge. No import is subject to both. The following imports are, however, exempt from advance deposits and surcharges: imports by large companies concerned with mining iron, copper, nitrates, or iodine; imports of crude petroleum and diesel oil destined for the nitrate, subnitrate, and iodine industries; 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; imports of spare parts for agricultural machinery; imports of silicon steel, jute sacks, magnetic enamels, etc.; and imports of certain capital goods.

Surcharges, ranging (in six categories) from 5 to 200 per cent of the c.i.f. value and payable in U.S. dollars, are charged on a number of specified imports, including certain lumber products, special steels, building materials, industrial machines, certain vehicles, wheat flour, edible oils, and electric motors. The surcharge is paid at the time of clearance of the goods through customs.

Advance deposits apply to most imports not subject to surcharge. The deposits are fixed from time to time by the Foreign Trade Department as a percentage of the c.i.f. value of the import, and most deposits are made in bonds (see below). For goods imported from countries with which Chile has bilateral payments agreements (see footnote 1) or imported on a consignment basis, no advance deposit is required. Goods imported on a cash basis are classified in eight categories for the purpose of determining the advance deposit payable. These categories, the advance deposit required for each, and the period for which the deposit is retained, are as follows:

  • Category A (crude petroleum, diesel and fuel oil, lubricating oil, benzine and gasoline, kerosene, cellulose, rubber, sugar, certain antibiotics, certain agricultural machinery and mining equipment, etc.): 5 per cent for 30 days

  • Category B (insecticides, Manila fibers and sacking materials, equipment for electric power and oil industries, etc.): 20 per cent for 30 days

  • Category C (paraffin, raw cotton, some antibiotics, some chemicals, certain machinery and equipment, etc.): 50 per cent for 30 days

  • Category D—divided into two subcategories—(coffee beans, yerba maté, tea, cowhides, bananas, copra, newsprint, etc.): 100 per cent for 30 days; (live cattle, dairy cows, refrigerated, frozen, and chilled beef, edible fats, bulk tobacco, etc.): 100 per cent for 90 days

  • Category E (industrial machinery, ground cocoa, nylon and similar yarns, buses, etc.): 200 per cent for 90 days

  • Category F (magazines and books, tires and tubes, etc.): 400 per cent for 90 days

  • Category H (automobiles, station wagons, jeeps, typewriters, calculators, etc., most used merchandise, domestic and industrial sewing machines, motor chassis, certain liquors, etc.): 1,000 per cent for 90 days

  • Category J (all goods not on the “permitted list”): 1,500 per cent for 90 days

Advance deposits may be made in the following ways: (a) in U.S. dollar bonds or promissory U.S. dollar notes, issued according to Article 79 of Law No. 13305 and Article 7 of Law No. 14171, for an amount equal to the deposit; (b) without prejudice to the above, advance deposits covering imports of goods included in Category A may also be made in U.S. dollars in cash.

An advance deposit certificate, duly signed by the importer, serves as a guarantee for the authorized bank to cover the sale of exchange. Exchange cover for imports not subject to advance deposits may be provided by the bank upon receipt of the shipping documents. Payments for imports are subject to the prescription of currency requirements.

Payments for Invisibles

The authorized dealers may sell exchange to cover payments for all invisibles.

Exports and Export Proceeds

All goods may in principle be exported freely; however, some items are prohibited or are subject to quota, and in order to enforce these requirements and to ensure the repatriation of export proceeds, all exports must be registered with the Foreign Trade Department of the Central Bank.

The proceeds of certain exports 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 the Nitrate and Iodine Sales Corporation (COVENSA), it is stipulated by law that, within a period of 90 days from the date of shipment or within such period as may, in special cases, be established, exporters must repatriate in instruments of international exchange the total value of their exports and must liquidate this value within 10 days from its repatriation, through an authorized bank or entity. The large copper companies are, however, required to sell to the Central Bank the necessary foreign exchange to meet their domestic costs of production. 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 invisibles arising from trade transactions must be sold in the exchange market along with the export proceeds. Exchange from other invisibles, including tourism, may be sold 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.

Under the terms of a decree-law of March 30, 1960, new capital may be brought into Chile (in the form of foreign currency, credits, or plant and equipment) under special conditions when it is for the purpose of introducing, developing, improving, or resuming productive activities related to agriculture, mining, fishing, or any other industry officially defined as being in the national interest. New plant and equipment imported for these purposes may be exempted from consular charges and all duties and fees normally collected by the customs. The President is empowered to grant by decree a number of privileges and guarantees to the investor, covering such matters as future taxation, depreciation allowances, withdrawal of capital, remittances of profits, etc. The privileges granted under this decree-law will normally be in force for 10 years, but in special cases this period may be extended to 20 years. Chilean firms already established, or which may be established, in a business similar to that for which such privileges have been granted will enjoy equal privileges for as long as such privileges are extended to foreign investors.

Capital is also granted favorable treatment when invested (1) in export industries which can compete in the international market without government assistance; (2) in production for the domestic market of goods which at present must be imported, also without government assistance; or (3) in industries using a proportion (at least 80 per cent) of domestic raw materials to provide goods for the domestic market at reduced cost for the consumer. The Foreign Investment Commission supervises capital imports.

Exchange operations related to foreign capital covered by the decree-law of March 30, 1960 have to be carried out through authorized banks.

Changes during 1960

A number of changes in the lists of imports subject to the various categories of surcharges and advance deposits took place during the year; only the most important of these are mentioned below.

January 1. A new monetary unit, the escudo, equal to 1,000 pesos, was introduced. The exchange rate and all prices and claims in pesos were adjusted at this ratio.

February 12. The advance deposit requirement of 3,500 per cent applied to imports in Category J was reduced to 1,500 per cent. It was announced that the system of using Treasury bonds to fulfill advance deposit requirements would be continued at least to the end of 1960.

April 4. A new foreign investment law came into effect, replacing that of February 2, 1954. Under the new law, privileges would be granted to new capital brought into Chile for the purpose of introducing, developing, improving, or resuming productive activities related to agriculture, mining, fishing, or any other industry officially defined as being in the national interest.

April 6. The Foreign Exchange Commission was incorporated into the Foreign Trade Department of the Central Bank.

May 2. Import surcharges were no longer required to be deposited prior to shipment of the goods: payment of the surcharges would henceforth be made at the time of customs clearance. Exchange cover for imports, which previously could be obtained only 15 or 30 days after the date of shipment (depending on whether the import came from the Western Hemisphere or elsewhere, respectively), was to be made available at the time of arrival of the shipping documents.

May 3. Advance deposits on a number of imported items, including some agricultural machinery, mining equipment, etc., were reduced from 50 or 100 per cent to 5 per cent.

May 23. Surcharges on a few items (e.g., fishing nets) were eliminated, and on a number of others (e.g., certain oils and other industrial materials) they were reduced to 5 or 10 per cent.

June 17. The advance deposit system for imports was revised and a number of commodities were shifted into lower advance deposit categories. A new 20 per cent advance deposit category was created. All advance deposits of 20 per cent or more had henceforth to be made by depositing 2-, 5-, or 8-year dollar bonds of the Chilean Government or 18-month Treasury bills; the option of making the deposit in U.S. dollars was retained only for imports in the 5 per cent category. The practice of accepting 5-year and 8-year bonds in the ratio of $1 of bond value to $2 and $3, respectively, of the advance deposit was continued. The retention period for all advance deposits of 50 per cent and under was made uniform at 30 days, and for all deposits of 100 per cent and over, at 90 days, except for some items in Category D.

September 16. The 5-year and 8-year dollar bonds used to satisfy advance deposit requirements (see June 17, above) would henceforth have to equal in face value the whole of the required advance deposit.

China (Taiwan)

Exchange Rate System

No par value for the New Taiwan Dollar has been established with the Fund. The official rates are NT$36.08 buying, and NT$36.38 selling, per US$1. However, only a few transactions take place at the official buying rate and none at the selling rate. A fluctuating exchange certificate rate, which is virtually stabilized at about NT$40 per US$1, is the rate at which most exchange transactions take place. The rates for currencies other than the U.S. dollar are determined by the Bank of Taiwan on the basis of the parity relationship of each currency to the U.S. dollar.

All exporters and other recipients of foreign exchange must surrender their total exchange proceeds against exchange certificates; these certificates are negotiable in a free market or, in the case of foreign travelers and recipients of inward remittances who do not wish to deal in the free market, they may be sold to the Bank of Taiwan at the posted exchange certificate rate (less a small handling charge) of the Taiwan Sugar Corporation (a government exporter and holder of exchange certificates). Importers and others making payments abroad acquire exchange through the surrender of an exchange certificate. On December 31, 1960, the dollar exchange certificate was quoted at NT$39.85 per US$1 in the free market and at NT$40.03 per US$1 by the Taiwan Sugar Corporation.

Administration of Control

The authority for exchange control policy is vested in the Foreign Exchange and Trade Control Commission. The decisions of the Commission are implemented by the Bank of Taiwan (delegated agency of the Central Bank of China) and its appointed banks, through which all sales and purchases of foreign exchange must be made.

Prescription of Currency

Export receipts must be obtained in U.S. dollars, Hong Kong dollars, pounds sterling, Malayan dollars, deutsche mark, or French francs. Payments may be made in the same currencies. There are no legal obligations prescribing the channel of payments to nonresidents, except that trade with Japan is conducted through special settlement accounts under the terms of the payments agreement with that country. The Bank of Taiwan stands ready to convert exchange certificates denominated in any one currency into certificates expressed in any other currency, and the conversion is made at parity rates.

Nonresident Accounts

The exchange control system does not differentiate between the accounts of residents and those of nonresidents.

Imports and Import Payments

All imports worth more than US$25 require individual licenses. Import licenses are issued only to government agencies and registered private importers, who are classified as traders, industrial end-users, or direct end-users. Import allocations for traders are governed by the amounts of the exchange certificates they submit and by their applications to import within a permissible import list; allocations for industrial end-users are based on their production needs, and for direct end-users on their needs of specified goods. A list of controlled imports comprises specified luxuries and goods competing with locally produced commodities; these may be admitted on an ad hoc basis according to special criteria. Certain goods, such as opium, are prohibited. The permissible import list covers all other goods, and import licenses for these goods are automatically approved if the application for license is accompanied by an exchange certificate.

When the import license is granted, the holder is automatically entitled to obtain the necessary foreign exchange from the Bank of Taiwan through the surrender of an exchange certificate acquired in a free market or from the Taiwan Sugar Corporation.

Payments for Invisibles

Payments to nonresidents for family maintenance are restricted by a monthly quota fixed by the authorities. Permission to make payments for such trade items as freight and insurance is determined by the approval to import the related commodities. Application for exchange for invisibles must be made to the Remittance Department of the Foreign Exchange and Trade Control Commission, which passes its recommendations to the Commission for final decision. In general, reasonable amounts of foreign exchange are granted for reinsurance premiums and for travel other than for pleasure.

Travelers leaving Taiwan may take with them no more than US$200 in foreign currency and no more than NT$500 in Taiwan currency. However, travelers who have stayed in Taiwan less than six months may take with them any unspent portions of foreign currency which they registered upon entry.

Exports and Export Proceeds

All exports require export declarations. Exports of controlled items require licenses, which are granted only after the exporter’s application has been screened and approved by the Foreign Exchange and Trade Control Commission. Exports may normally be made against receipt of letters of credit or telegraphic transfers or, with prior approval, by means of drafts on a documents-against-payment or documents-against-acceptance basis, or on consignment.

The currencies in which export proceeds may be received are prescribed. Export proceeds must be surrendered against exchange certificates equivalent to the value of the proceeds. These exchange certificates are valid for foreign payments for 180 days and may be sold in a free market.

Proceeds from Invisibles

All proceeds from invisibles must be surrendered to the Bank of Taiwan against exchange certificates. Travelers and recipients of inward remittances who do not wish to sell their exchange to the Bank of Taiwan at the official rate, or do not wish to dispose of their exchange certificates in the free market, may receive advance payment from the Bank of Taiwan at the Taiwan Sugar Corporation’s posted certificate rate (less a small handling charge). These certificates are then sold by the Taiwan Sugar Corporation on behalf of the Bank of Taiwan.

Travelers may bring in any amount of foreign currency and either hold or surrender it. The import of domestic currency is limited to NT$500 for each traveler.

Capital

Capital payments due to nonresidents normally are not permitted, and repatriation of foreign capital is allowed only in special circumstances. In accordance with the Foreign Investment Law of July 14, 1954, as revised, new foreign investments approved by the authorities are guaranteed (1) transfer of net annual profits, or accrued interest, in any foreign currency, (2) repatriation of capital (including reinvested earnings), two years after the investment has been made, at a yearly rate not exceeding 15 per cent of the total investment, and (3) 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.

New capital investments abroad by residents are prohibited in cash form, but are permissible in the form of technical services and locally manufactured equipment. Residents are permitted to hold foreign exchange representing capital receipts in an account in foreign currency and may dispose of this exchange by surrendering it to the Bank of Taiwan for local currency or using it to make payments abroad.

Changes during 1960

May 26. For the convenience of foreign visitors and to encourage inward remittances, travelers and recipients of inward remittances not wishing to sell their exchange to the Bank of Taiwan at the official rate of NT$36.08 per US$1, or not wishing to dispose of their exchange certificates in the free market, could receive advance payment from the Bank of Taiwan at the Taiwan Sugar Corporation’s posted exchange certificate rate (less a small handling charge). These certificates would then be sold by the Taiwan Sugar Corporation on behalf of the Bank of Taiwan.

May 27. A new trade and payments agreement with Japan for the period April 1, 1960–March 31, 1961 was signed. Payments between the two countries would continue to be made through special settlement accounts.

July 1. The foreign exchange certificate system was extended to apply to all imports and other payments, including government payments and imports financed with U.S. aid.

Colombia1

Exchange Rate System

The par value of Colombian Pesos 1.94998 = US$1, established on December 17,1948, is not applied to any transactions under the present exchange system. For payments for imports and 80 per cent of the freight costs, students’ remittances, official nontrade payments, and interest on and repayment of capital registered before June 17, 1957, the rate of exchange is determined at “auctions” held by the Bank of the Republic, where the Bank sells exchange at a fixed rate. This rate is referred to as the “certificate” rate, although exchange certificates are no longer issued; on December 30, 1960, it was Col$6.70 per US$1. This rate also applies to payments for crude petroleum bought in Colombia for refining in Colombia (for which the refiners must pay in dollars), with the exception of petroleum produced by the Colombian Petroleum Enterprises.

A fixed “certificate” buying rate applies to the exchange proceeds of major exports and exports of certain manufactured goods, and to imports of capital for the petroleum and metal-extracting industries. This rate may be changed from time to time in line with movements in the “auction” rate; on December 30, 1960, it was Col$6.50 per US$1.

There is also a free market, where all other transactions take place. On December 30, 1960, the selling rate in the free market was Col$7.23 per US$1.

There is an exchange tax of 9 per cent on the proceeds of exports of coffee, bananas, raw cowhides, and precious metals, and an exchange tax of 2 per cent on all other exports; and 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. (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. Purchases of “certificate” exchange must be made at the auctions of the Bank of the Republic and may be made through the commercial banks, which act as authorized agents of the Bank of the Republic. An Exchange Regulation Fund, operated by the Exchange Commission, regulates operations in the “certificate” market. The Superintendency of Imports 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, Ecuador, 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. There are also agreements concluded by the National Federation of Coffee Growers with Czechoslovakia, Eastern Germany, Hungary, Israel, Rumania, the U.S.S.R., and Yugoslavia.

Nonresident Accounts

Commercial banks are authorized to debit and credit the accounts of nonresidents.

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 Imports, and goods that may be imported freely.

Prior import registration is required for all imports; if the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. 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 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 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 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 capital goods of considerable value payable in installments; 20 per cent for certain essential goods; 65 per cent for a few items; 100 per cent for a few other items; 500 per cent for gold and silver coins; and 130 per cent for all other goods. As a general rule, the advance deposit is returned 90 days after the merchandise is cleared through customs or, if the import is received in installments, at the time of the last shipment. However, when the deposit is used to buy “certificate” exchange with the object of paying abroad the total value of the import in question, it may be returned 45 days after clearance of the goods through customs. The National Government has power in the event of a special emergency to allow import registrations for imports from countries with which Colombia has a marked trade deficit only if these countries purchase stated amounts of Colombia’s exports.

Prior exchange registration is required for all payments for imports; this is granted in f.o.b. terms upon submission of the import registration and evidence that the goods have entered Colombia. Importers, or commercial banks acting on their behalf, may purchase “certificate” exchange covering the value of their imports at the 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 Corporation for the Protection of Agricultural Products.

Payments for Invisibles

Payments by the National Government for services are made at the “certificate” 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, are also made at the “certificate” rate and are subject to the 10 per cent remittance tax. At its discretion, the Bank of the Republic may arrange for freight and insurance costs connected with imports to be paid either at the “certificate” rate or in the free market. In practice, 80 per cent of the freight on imports is payable with “certificate” exchange. Exchange at the “certificate” rate is also granted to students abroad engaged in postgraduate studies, taking professional courses not available in Colombia, or studying art; to persons sent abroad by official or semiofficial institutions to study their specialties; and to persons holding scholarships in foreign countries and needing an additional amount for living expenses. Payments for all other invisibles must be made through the free market. To aid in developing new coffee markets abroad, the National Coffee Fund may sell coffee for foreign currencies which are not freely convertible but which may be used for payments for imports, services, expenses of students and other residents abroad, technical missions, purchases of real estate by Colombian diplomatic or consular missions abroad and equipment of those missions, and other similar purposes.

Exports and Export Proceeds

Prior application for registration is required for all exports. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted.

The foreign exchange proceeds of exports of coffee, bananas, raw cowhides, and precious metals must be surrendered to the Bank of the Republic for pesos at the fixed “certificate” rate. The proceeds of most other exports are negotiated at the average buying rate in the free market for the preceding week. Exchange proceeds of manufactured goods consisting of imported raw materials are negotiated at the fixed “certificate” rate when the import component exceeds 40 per cent of the f.o.b. value; in other cases, the average buying rate in the free market for the preceding week is applied. There is an exchange tax of 9 per cent on the proceeds of exports of coffee, bananas, raw cowhides, and precious metals, and an exchange tax of 2 per cent on all other exports. Minimum surrender prices are established for exports of coffee (US$69.50 per 70-kilogram bag) and bananas (US$0.50 per bunch for exports to the United States and US$27 per ton for exports to Europe). These minimum surrender prices also serve as the basis for collection of the exchange tax. The current surrender price for coffee is higher than the f.o.b. export price; consequently, exporters of coffee have to purchase foreign exchange in the free market to fulfill the surrender requirement. Further, coffee exporters are required to retain in kind the equivalent of approximately 15 per cent of the volume of coffee exported. On the other hand, the current surrender price for bananas is substantially lower than the f.o.b. export price, so that exporters of bananas are free to sell the greater part of their foreign exchange receipts in the free market or to retain it abroad.

Proceeds from Invisibles

Exchange receipts from invisibles must be negotiated in the free market.

Capital

Capital imported for the petroleum industry and for industries extracting precious metals must be registered with the Exchange Registration Office, and all such capital imported in the form of foreign exchange must be sold to the Bank of the Republic at the rate fixed by the Board of Directors of the Bank for major exports (Col$6.50 per US$1). The repatriation of capital and remittance of profits in respect of metal-extracting industries may be made with “certificate” exchange, subject to the 10 per cent remittance tax, which must be paid with foreign exchange acquired in the free market. 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 capital with “certificate” exchange, covering the remittance tax of 10 per cent with U.S. dollars purchased in the free market. Capital imported 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 January 1, 1961)(pesos per U.S. dollar)
BuyingSelling
5.915 (Fixed “Certificate” Rate less 9% Exchange Tax)

Exports of coffee, bananas, raw cowhides, and precious metals.2
6.37 (Fixed “Certificate” Rate less 2% Exchange Tax)

Exports of manufactured goods with an import component in excess of 40 per cent of the f.o.b. value.
6.50 (Fixed “Certificate” Rate)

Capital for the petroleum and metal-extracting industries.
6.70 (“Certificate” Rate)

All imports. Government payments. Students’ remittances. Freight payments.
7.08 (“Fluctuating” Rate3 less 2% Exchange Tax)

All other exports, including manufactured goods with an import component not exceeding 40 per cent of the f.o.b. value.
7.22 (Fluctuating Free Market Rate)

Invisibles. Other capital.
7.23 (Fluctuating Free Market Rate)

Other invisibles. Unregistered capital.
7.42 (“Certificate” Rate plus 10% Remittance Tax)4

Interest on and principal of debts, and repatriation of and service on capital, registered before June 17, 1957.

Changes during 1960

February 27. The following items were added to the list of goods whose import is subject to prior license: cement, clay, fireproof bricks, and certain other structural materials (formerly on the free list), and sherry wines, pianos, and certain other musical instruments (formerly prohibited).

May 2. The advance deposit required on imports of calves, young bulls, heifers, and breeding bulls and cows was reduced from 130 per cent to 20 per cent of the c.i.f. value.

May 5. Automobiles for private use, as well as tugboats, accordions, certain wines, iron hoops, and bulbs of plants, were transferred from the list of prohibited imports to the list subject to prior import license.

May 13. The fixed “certificate” buying rate was changed from Col$6.10 to Col$6.50 per US$1.

June 1. The cash deposit required as a guarantee for coffee export proceeds when no foreign currency earnings are received before shipment was reduced from 50 per cent to 30 per cent. The guarantee applicable to minor exports was reduced from 10 per cent to 5 per cent.

June 15. The advance deposit required on imports of certain paper products was reduced from 130 per cent to 20 per cent.

June 28. The period for which advance deposits on imports are held by the Government was reduced from 90 days to 45 days after customs clearance of the merchandise, provided that the released exchange is used to pay for the import.

August 4. The advance deposit required on imports of a number of items, including animals, live plants, seeds, chemical products and preparations, cinematographic films, and several types of machinery and equipment, was reduced from 130 per cent to 20 per cent. For certain other items, such as malt, hops, pencils, paper pulp, and some steel and copper products, the deposit was reduced from 130 per cent to 65 per cent.

August 31. The use of “certificate” exchange was extended to the payment of freight charges on nonreimbursable imports financed by foreign loans to official entities.

October 25. Changes were made in the composition of the import lists by the transfer of such items as water tube boilers, machinery for sugar-cane mills, and certain heating and cooling apparatus to the list subject to prior import license, of certain cellulose and plastic materials to the free list, and of certain other plastic materials to the list of prohibited goods.

November 9. The amount of coffee that exporters are required to retain was reduced from 15 per cent to 9 per cent of the volume exported.

Note.—On January 1, 1961, the exchange tax on the proceeds of exports of coffee, bananas, raw cowhides, and precious metals was reduced from 15 per cent to 9 per cent. Also, the amount of coffee that exporters are required to retain was restored to 15 per cent of the volume exported (see November 9, above).

Costa Rica

Exchange Rate System

The par value is Costa Rican Colones 5.615 = US$1. A multiple rate system arises from the coexistence of an official and a free market. The official rates are Ȼ 5.60 for exports, and Ȼ 5.67 for essential imports, per US$1. The selling rate in the free market, covering all other imports and almost all invisibles, has been maintained at Ȼ 6.65 per US$1 since July 23, 1952. The use of this market for part of the proceeds of some exports results in additional effective rates of Ȼ 6.27 and Ȼ 6.62 per US$1 (see Table of Exchange Rates, below).

Administration of Control

The exchange control system is operated by the Central Bank of Costa Rica, and all official market transactions must be licensed by the Bank, which processes applications for payments in chronological order. Purchases and sales of official market exchange are made through the Central Bank or through authorized banks. Free market transactions are carried out through the commercial banks or through private dealers, independently of the Central Bank, but the Central Bank has the right to operate in the free market for the purpose of regulating the rate of exchange in that market.

Prescription of Currency

There are no prescription of currency requirements, but 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.

Imports and Import Payments

An importer may order any goods from abroad and have them entered through the Costa Rican customs without control or restriction. Control over payments for imports is exercised only in respect of essential imports paid for at the official rate; these imports consist of some 512 items included in a “List of Primary Needs” and represent approximately 50 per cent of total imports.

Exchange licenses must be obtained from the Central Bank to make payments for imports at the official market rate. These licenses are issued automatically and without delay. Payments for nonessential and luxury imports must be made through the free market, where the importer may purchase the necessary exchange without limitation. Under contracts signed with the Costa Rican Government, foreign-owned banana companies may import certain essential goods in lieu of surrendering exchange from their exports.

Payments for Invisibles

Payments permitted at the official rate are government payments, earnings on registered foreign capital invested after January 20, 1933 (other than earnings on foreign investments governed by special contracts) up to the amounts allocated in the annual foreign exchange budget, and specified expenses of students who are taking specialized courses abroad and are registered with the Central Bank. All these transactions require exchange licenses, which are obtainable upon submission to the Central Bank of an application with appropriate substantiating documents. Payments for all other invisibles are not controlled and are made through the free market.

Exports and Export Proceeds

The Central Bank supervises exports to assure a supply of exchange for the official market. Export licenses from the Central Bank are necessary for the physical exportation of merchandise, and they are granted if the exporter agrees to surrender the exchange proceeds at the official rate; the Bank may require the exporter to provide guarantee in this respect. Exports of goods in short supply domestically may be restricted. There is a list of strategic materials whose export to communist-dominated countries is prohibited.

The exchange proceeds of all exports must be surrendered at the official rate, with the exception of those falling under the Law on Free Exchange for Exports. Under this law, 65 per cent of the value of exports of vegetable oils and fats and of certain other commodities, and 99 per cent of the value of exports of cotton, cocoa and cocoa products, shrimp, and lobster, may be sold in the free market. These arrangements result in effective rates of Ȼ 6.27 and Ȼ 6.62 per US$1. Under contracts with the Government, foreign-owned banana companies may retain from their export proceeds foreign exchange for depreciation of equipment, profits, imports of essential goods, and payment of the export tax; the remainder is surrendered at the official rate.

Re-exports of foreign goods are subject to the regulations applying to exports; but if the goods have been imported at the free market rate, this rate will apply to their re-export.

Proceeds from Invisibles

Exchange receipts from insurance indemnities that arise from insurance the premiums on which were covered in the official market, receipts by the Government and public entities, and sales of exchange by foreign concessionnaires whose contracts require such sales in the official market, have to be surrendered at the official rate. Receipts from other invisibles may be sold in the free market.

Capital

Residents may freely receive and make transfers of capital at the free market rate without limitation. Residents may also sell exchange at the official rate, but outward transfers of capital through the official market require the approval of the Central Bank and are subject to the conditions and limitations governing that market. Exchange receipts from foreign capital registered with the Central Bank must be surrendered at the official rate. The granting of official market exchange for amortization of registered foreign capital is subject to exchange licensing by the Central Bank, which decides on the applications on a case-to-case basis and in the light of the availability of exchange for that purpose. Foreign enterprises that produce goods for export and are considered advantageous to the economy may be granted the right by the Central Bank to remit at the official rate amortization, profits, and interest on investments which they have brought into the country through the free market. However, such authorizations are limited to the amounts set for that purpose by the Central Bank in its foreign exchange budget and are restricted by the fact that the total remittances of an enterprise may not exceed the total amount of its sales of foreign exchange during a specified period. Certain foreign-owned investments are dealt with individually under special contracts. There are no limitations on the receipt or payment of unregistered foreign capital through the free market.

Table of Exchange Rates (as at December 31, 1960)(colones per U.S. dollar)
BuyingSelling
5.60 (Official Rate)

All exports except those at special rates. Certain invisibles. Registered capital.
5.67 (Official Rate)

Essential imports. Some government payments. Students’ expenses. Registered capital.
6.27 (85% at Ȼ 5.60 and 65% at Free Market Rate)

Certain exports by special authorization from the Central Bank.
6.62 (1% at Ȼ 5.60 and 99% at Free Market Rate)

Certain other exports by special authorization from the Central Bank.
6.63 (Free Market Rate)

All other receipts.
6.65 (Free Market Rate)

All other payments.

Changes during 1960

During the year, several changes were made in the eligibility of specific export commodities for the various exchange rates.

January 28. Payments for imports by government, official, and charitable agencies, formerly all made at the official rate, were made subject to the same exchange rates as private imports of the same commodities.

Cuba

Exchange Rate System

The par value is Cuban Peso 1.00 = US$1. The official rates are 1.00 peso buying (and selling for certain capital transfers), and 1.02 pesos selling (including a 2 per cent tax on the export of funds, securities, etc.), per US$1. Payments for imports of luxury and semiluxury goods are subject to exchange surcharges ranging from 30 per cent to 100 per cent of the f.o.b. value. On December 18, 1953, Cuba notified the Fund that it assumed fully the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

The Cuban Monetary Stabilization Fund, the administration of which is entrusted to a committee consisting of the Minister of Finance, the President of the National Bank of Cuba, and the Director of the Stabilization Fund, operates exchange control directly or through the National Bank. The Bank for Cuba’s Foreign Trade (Banco para el Comercio Exterior de Cuba) has the monopoly of foreign trade.

Prescription of Currency

Personal remittances exceeding US$1,000 may be made only by bank transfer. Settlements with Mainland China, Czechoslovakia, Eastern Germany, Hungary, Poland, and the U.S.S.R. are made mainly through bilateral agreement accounts denominated in U.S. dollars, and settlements with Spain are made through clearing accounts denominated in Cuban pesos.

Nonresident Accounts

Accounts in the names of nonresidents may not be opened or operated without the prior authorization of the Monetary Stabilization Fund, except for corporations or other business entities actually located and doing business in Cuba. Withdrawals from nonresident accounts are subject to a 2 per cent exchange tax if the funds are sent or used abroad or are made payable in foreign currency. There are special clearing accounts for transactions with those countries with which Cuba has bilateral payments agreements.

Imports and Import Payments

All imports and related payments are carried out through the Bank for Cuba’s Foreign Trade. Import licenses and the opening of a commercial letter of credit within 30 days of the issue of the import license are required for practically all imports. All payments for imports under documentary collection, open account, or letter of credit must have the prior approval of the Monetary Stabilization Fund.

Payments for imports of certain luxury and semiluxury goods are subject to exchange surcharges, calculated on the f.o.b. value of the import at port of origin, as follows:

  • Category 1 (frozen foods, fresh fruit, fruit juices, prepared meats, etc.): 30 per cent

  • Category 2 (mineral water, beer, wine, perfume, electric typewriters, calculating machines, other office equipment): 40 per cent

  • Category 3 (gasoline and diesel motors, air conditioning units of less than 2 horsepower and various other electrical appliances, television sets with 17-inch screens or smaller, automobiles with a factory value of not more than $750, low-priced photographic equipment, record players with a factory price of not more than $75, tape recorders, etc.): 60 per cent

  • Category 4 (china and porcelain articles, refrigerators and freezers, television sets with screens larger than 17 inches, cameras with a factory value of more than $20, automobiles with a factory value of more than $750 but not more than $2,300, wood, aluminum, and bamboo furniture, etc.): 80 per cent

  • Category 5 (jewelry, precious stones, automobiles with a factory value of more than $2,300, light airplanes, fancy leather goods, etc.): 100 per cent

There is an exchange tax of 2 per cent on exchange payments and transfers on account of imports.

Payments for Invisibles

Insurance of imports for account of Cuban residents must be obtained in Cuba. A 2 per cent exchange tax is charged on all payments on account of invisibles. Payments of US$100 or less every month are permitted freely, but there are limits on the amount of exchange that may be purchased for travel by Cuban tourists in a 12-month period (US$150), for family remittances in any one month (three remittances of US$100 each from each remittor), and for business trips and travel for reasons of health (US$150). The authorized banks may sell exchange to cover the expenses of Cuban students abroad up to US$2,000 for an academic year, or US$1,000 for a semester, subject to the presentation of satisfactory proof that the student is registered with the scholastic institution named. The provision of exchange for larger amounts or for any other purpose, including all payments for such items as royalties, insurance, transport, interest, dividends, profits, commissions, and alimony, requires the prior approval of the Monetary Stabilization Fund. The granting of exchange for personal remittances and capital transfers is considered on the basis of their essentiality, the need for them, and their urgency. Obligations concerning the method of payment apply to certain payments (see section on Prescription of Currency, above).

Foreigners departing from Cuba may exchange up to 200 pesos against proof of having converted sufficient foreign exchange previously. A limit of US$50 is placed on foreign or domestic currency notes that may be taken out of the country. Foreign travelers are exempt from the 2 per cent tax on personal funds they carry when leaving the country. International travel tickets may be sold to nonresidents only for U.S. dollars.

Exports and Export Proceeds

All exports and export receipts are handled by the Bank for Cuba’s Foreign Trade.

Proceeds from Invisibles

Exchange earnings from invisibles must be surrendered to the Monetary Stabilization Fund for Cuban pesos within three days after collection. A limit of 50 pesos is placed on the amount of Cuban currency that a traveler may bring into Cuba.

Capital

There are no exchange control requirements on incoming capital payments by either residents or nonresidents. Outgoing capital payments of more than US$100 in any six-month period require the Monetary Stabilization Fund’s prior approval, the granting of which is subject to indefinite delay.

A 2 per cent exchange tax is charged on the export of capital, on withdrawals of actual U.S. currency from banks in Cuba, even if made from U.S. dollar accounts, and on the export of securities. The tax is refunded when it is proved that the proceeds from the sale of the securities have been returned to Cuba within a specified period of time.

When duly registered with the Monetary Stabilization Fund, capital imported for investment (1) in industrial, agricultural, or other enterprises, (2) in securities issued by such enterprises, or (3) in securities of the State of Cuba, the Cuban Bank for Agricultural and Industrial Development, or other similar institutions, is exempt from the 2 per cent tax when it is re-exported.

Changes during 1960

February 13. Bilateral trade and payments agreements were concluded with the U.S.S.R.

March 31. Bilateral trade and payments agreements were concluded with Poland.

April 25. The Bank for Cuba’s Foreign Trade was established to promote and finance exports and to engage directly in the import and export trade. The Bank was also authorized to administer bilateral agreement accounts.

June 10. Bilateral trade and payments agreements were concluded with Czechoslovakia.

July 6. Licensing controls were applied to certain types of exports, such as consumer goods and raw materials, exported through the Port of Havana, to consumer goods, capital goods, and raw materials re-exported through any Cuban port, and to cattle and beef exported through any Cuban port. The Ministry of Commerce was empowered to include or exempt any product from licensing controls, as well as to issue supplementary regulations concerning export quotas.

July 13. Tickets for travel abroad would be sold only to persons with habitual residence in Cuba; only one single-way ticket at a price not exceeding $250 and one round-trip ticket at a price not exceeding $500 would be sold in one year to each person.

July 13. Bilateral trade and payments agreements were concluded with Mainland China.

July 15. The Bank for Cuba’s Foreign Trade was granted the monopoly of foreign trade.

August. The limit for monthly family remittances which could be sent by Cubans to their relatives abroad was reduced from US$150 to US$100, and the maximum number of remittances was established at three from each remittor each month.

October 30. Bilateral trade and payments agreements were concluded with Hungary.

December 18. Bilateral trade and payments agreements were concluded with Eastern Germany.

Denmark

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, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for externally convertible European currencies1 vary between limits resulting from the dollar rate for the Danish krone in relation to the dollar rates for the other currencies. Authorized exchange dealers may engage in arbitrage with one another and with their foreign correspondents in U.S. dollars, Canadian dollars, and externally convertible currencies, including Danish kroner, both spot and forward up to six months. Forward premiums and discounts are left to the interplay of market forces. Forward transactions with residents must have a commercial basis.

Denmark operates a dollar export incentive scheme which takes the form of negotiation at a premium of special transferable import rights given to exporters to the dollar area when they surrender their dollar export proceeds (see section on Exports and Export Proceeds, below).

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., the banks and stock exchange brokers who are members of the Copenhagen Stock Exchange. Foreign direct investments in Denmark require permission from the Ministry of Commerce.

Licenses for imports and exports, when they are 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 countries2 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. 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 in Danish kroner for nonresidents are convertible. Bilateral Krone Accounts are maintained for a few countries.2 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 balances exceeding DKr 75,000 are to be transferred abroad automatically at the end of each quarter. This limitation is not, however, 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. They have the character of restricted accounts and are operated according to detailed regulations. They are related to the country of residence of the account holder.

Capital Accounts are kept for nonresidents by authorized exchange dealers for holding funds which may not be transferred abroad. In particular, they are credited with capital payments, capital income, pensions, and other funds accruing to emigrants within the first three years after emigration. Capital Accounts may be used for the same payments in Denmark as those which are generally allowed from Convertible and Bilateral Krone Accounts, but balances held by persons who are or have been Danish nationals may not be used for commercial payments in excess of DKr 2,000. Balances may be transferred abroad within the limits set for restricted capital payments, i.e., up to DKr 75,000 a year for each account holder, except that for emigrants the limit is DKr 25,000 in all for the first three years after emigration. Balances belonging to Danish nationals who have emigrated to Finland, Norway, Sweden, or countries in the Sterling Area may be transferred abroad without limitation after the accounts have been blocked for three years. Transfers between Capital Accounts and between Capital and Foreign Accounts may take place freely, except for the following limitations: Transfers to accounts belonging to residents of Finland, Norway, Sweden, or the Sterling Area may be made only from accounts belonging to residents of those countries. Transfers from an account belonging to a resident of a bilateral account country may be made only to an account belonging to a resident of the same country. Transfers from Capital Accounts belonging to Danish nationals who have emigrated within the last three years are allowed to the extent that the allowance of DKr 25,000 (see above) has not been used. Exceptions to these rules can be authorized by the National Bank.

Foreign Accounts, which are kept for nonresidents by savings banks, cooperative banks, and the Public Trustee’s Office, may be credited with payments for imports, subject to permission from the National Bank; with other current commercial payments (freight, commissions, etc.), when the account holder is or has been a Danish national; with donations, etc., but if the amount exceeds DKr 2,000, only from the account holder’s family; and with loans up to DKr 75,000 per borrower in a calendar year from the same lender to members of his family. All other payments accruing to the account holder may be credited freely. Foreign Accounts may be debited freely for current payments in Denmark by the account holder and for the purchase of foreign exchange for travel (except that, if the account holder is or has been a Danish national, commercial payments may not exceed DKr 2,000). They may also be debited for the following capital payments in Denmark: on account of direct investments, subject to the permission of the Ministry of Commerce; for purchases of real estate for noncommercial use, if the purchaser is a Danish national; for purchases of or subscriptions to Danish securities quoted daily and payable only in kroner, if the investor is or has been a Danish national or the funds have been obtained from the liquidation of investments in Denmark or are being used to take up subscription rights to shares owned by the subscriber; for loans to the account holder’s family up to DKr 75,000 per borrower in a calendar year from the same lender; and for repayment of loans. Balances on Foreign Accounts of account holders residing in Finland, Norway, Sweden, or a country in the Sterling Area may be transferred abroad without limitation; transfers abroad of capital items on other Foreign Accounts are limited to DKr 75,000 per account holder in a calendar year. The rules for transfers between Foreign Accounts are the same as those for Capital Accounts (see above).

Imports and Import Payments

All imports not on a restricted list may be imported without license from the “Free List Area,” which comprises the OEEC countries, their associated territories, Finland, and the dollar area. Moreover, most of the goods which may be imported freely from these countries may be imported from other countries under a system of open general licensing. Most goods on the restricted list require either regional licenses, i.e., import licenses which may be used for imports from any country within the “Free List Area,” or individual country licenses issued in accordance with the terms of Denmark’s bilateral trade agreements. A small group of items, not otherwise licensed, may be imported by purchasing a “title to import license” (see section on Exports and Export Proceeds, below).

Payments for imports and the related shipping expenses may be made freely within a year from the end of the month in which the goods were cleared through customs. The authorized dealer may effect payment before clearance of the goods, provided that the probable date of clearance lies within a year from the date of payment. Payments for imports up to DKr 2,000 are made freely by authorized exchange dealers, provided that the importer states the purpose of the payment and the domicile of the creditor.

Payments for Invisibles

The authorized exchange dealers are permitted to make payments for most invisibles freely; only in a few cases is approval from the National Bank required. Transfers of up to DKr 2,000 for any current invisible are permitted freely. Foreign exchange for travel is allocated liberally and may be obtained in convertible currencies or externally convertible European currencies for travel to any country, including the bilateral account countries.

Travelers may take out freely DKr 2,000 in Danish banknotes and coins, any amount in foreign banknotes, and any amount in other Danish or foreign 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 and of a few industrial products to OEEC countries, their associated territories, Finland, and dollar area countries, and most exports to other countries require export licenses, which are issued by the Ministry of Commerce, the Ministry of Agriculture, or the Ministry of Fisheries. Certain exports are subject to restrictive licensing to safeguard the fulfillment of bilateral obligations, to avoid excessive credits to importing countries, to serve strategic purposes, to avoid re-export and transit transactions involving loss of dollars or externally convertible currencies, and to ensure the domestic supply of essential goods.

Foreign exchange proceeds from exports must be transferred to Denmark unless the National Bank permits otherwise. If recipients show evidence to the Bank that they need foreign exchange to meet their own future commitments, or to carry on their business, or for necessary purposes abroad, the Bank may exempt them from the general obligation to repatriate their exchange proceeds. Transferred foreign exchange must be offered for sale to the National Bank or to an authorized exchange dealer within eight days after receipt.

Exporters of most goods delivered to countries listed as belonging to the dollar area (or delivered to U.S. or Canadian military forces stationed outside the dollar area) and paid for in U.S. or Canadian dollars (or in Danish kroner from a U.S. or Canadian Convertible Krone Account) obtain, against surrender of their dollar receipts at the official rate of exchange, a “title to import license” for 5 per cent of their export proceeds. This “title to import license” carries the right to import from the “Free List Area,” against payment at the official rate of exchange, otherwise restricted goods. These import rights are transferable. The price of the titles is stabilized at 80 per cent of their face value, involving an effective premium on dollar exports in 1960 of 4 per cent.3

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be transferred to Denmark unless the National Bank permits otherwise (see section on Exports and Export Proceeds, above). Transferred foreign exchange must be offered for sale to the National Bank or to an authorized exchange dealer within eight days after receipt.

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

Capital

Residents have an obligation to repatriate proceeds realized from 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 75,000 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 drawing right to shares or the like owned by the resident concerned or the resident furnishes proof that he has repatriated a corresponding amount within the last six months from the sale of foreign securities to a nonresident. Danish emigrants are granted an exchange allowance of up to DKr 25,000 for each person. Permission from the National Bank is required for other transfers abroad of a capital nature by residents.

Direct investments in Denmark by nonresidents (including purchases of real property for commercial use) may be made only with permission from the Ministry of Commerce. Purchases by nonresidents of real property for noncommercial use may be made freely only when the purchaser is a Danish national. A nonresident who is or has been a Danish national may freely purchase or subscribe to securities expressed solely in Danish kroner. 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—and shares that are quoted daily and are expressed solely in Danish kroner—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 loans up to DKr 75,000 per borrower in a calendar year to commercial and industrial enterprises connected with the lender as subsidiary companies, branches, etc., or to members of his family.

The repatriation of direct investments made by nonresidents in Denmark is permitted freely, irrespective of when and how the original investment was made. Interest and contractual 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 may be transferred freely to any country without limitation. Individual payments on account of gifts to persons who are not relatives of the donor may not exceed DKr 2,000. Up to DKr 75,000 per beneficiary annually may be paid to the donor’s family. Nonresident-owned funds which are not yet freed may be transferred abroad up to an annual maximum of DKr 75,000 a person. Funds exceeding this maximum must be credited to a Capital Account of the owner, from which they may be transferred abroad in subsequent years at DKr 75,000 a year. Up to DKr 25,000 of the surrender value of any life insurance policy may be transferred abroad freely. These limitations of amount do not apply, however, if the payee resides in Finland, Norway, Sweden, or a Sterling Area country.

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 1960

January 1. The effective premium on dollar exports was reduced to 4 per cent.

January 1. Bulgaria was included in the convertible area.

March 1. A number of imports from the “Free List Area” were freed from quantitative restrictions. The percentage of liberalization vis-à-vis OEEC countries (1948 basis) was increased from 86 to 95, and that vis-à-vis the dollar area (1953 basis), from 89 to 97.

April 1. Licenses for imports under the dollar export incentive scheme were made valid also for imports from the dollar area.

April 1. The Directorate of Supply in the Ministry of Commerce was abolished.

May 1. The certificate system for import payments was replaced by a new procedure under which import payments exceeding DKr 2,000 may be made by authorized exchange dealers against the presentation of a “notification of payments abroad.” The notification must contain information on the currency and amount, domicile of the payee abroad, nature of the goods, country of origin of the goods, and date of customs clearance. For advance payments, the date of purchase as well as the probable date of customs clearance must be supplied. For import payments not exceeding DKr 2,000, the authorized exchange dealer need only be informed orally of the purpose of the payment and of the domicile of the payee.

May 27. The authorized exchange dealers were permitted to obtain credits from or to grant credits to their foreign correspondents for a period not exceeding six months, to finance the bona fide merchandise trade of resident customers with countries in the convertible area.

August 1. Hungary was included in the convertible area.

September 13. It was announced that the effective premium of 4 per cent on dollar exports would not be reduced from January 1, 1961 but would continue unchanged until final liquidation of the system on December 31, 1961.

December 15. The amount of Danish banknotes and coins that could be taken out of Denmark by travelers was increased from DKr 500 to DKr 2,000.

Dominican Republic

Exchange Rate System

The par value is Dominican Peso 1.00 = US$1. U.S. dollar transactions between the Central Bank and other banks take place at parity. Exchange transactions by commercial banks with the public also take place at the par value, subject to small banking commissions (except on the purchase of travelers checks). All payments abroad must be made through banks, and there is an exchange licensing system, which in some cases may be exercised in a restrictive manner or may give rise to some delay in the granting of exchange. On August 1, 1953, the Dominican Republic notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange licenses are issued by the Central Bank of the Dominican Republic, and the commercial banks have the obligation to submit daily applications for exchange to this bank.

Prescription of Currency

No obligations are imposed on importers, exporters, or other residents prescribing the method or currency for payments to or from nonresidents, except that all payments abroad must be made through banks.

Imports and Import Payments

With a few exceptions, import licenses as such are not required; but all applications for exchange have to be submitted daily by the banks for approval by the Central Bank. For intended imports exceeding RD$1,000, a statistical form must be submitted to the Special Import-Export Coordinating Committee of the Central Bank.1 The form is returned to the importer with the goods he is authorized to import recorded on it. Importers of motor vehicles and household electrical appliances are given individual quotas on the basis of their imports in a previous period.

Payments for Invisibles

Payments for invisibles require exchange licenses, which are issued within 24 hours after applications are filed. Limits are placed on the amount of foreign exchange sold to residents for foreign travel.

Exports and Export Proceeds

Export licenses are required only for sugar, in connection with the operation of export quotas established under the International Sugar Agreement, and for a few other special items. No exchange control requirements are imposed on export proceeds and these may be disposed of freely.2

Proceeds from Invisibles

Proceeds from invisibles are not subject to exchange control.

Capital

There are no restrictions on the movement of capital by either residents or nonresidents. Applications for exchange for capital remittances must be submitted daily by the banks for approval by the Central Bank.

Changes during 1960

During the year the allocation of exchange for imports and nontrade payments became subject to some delay, and certain limitations were placed on imports of motor vehicles and household electrical appliances and on the granting of exchange for foreign travel.

Ecuador

Exchange Rate System

The par value is Ecuadoran Sucres 15.00 = US$1. This rate applies to the proceeds of certain major exports and a few minor exports, essential and semiessential imports (List 1), nontrade payments by the Government, registered private and official capital, and certain other specified transactions. A multiple currency practice arises since, along with the official market, there is a free market for most minor exports, most transactions in invisibles, unregistered capital, and nonessential and luxury imports (List 2). Other rates result from the mixing arrangements applied to the exchange proceeds of exports of bananas, fish (other than tuna), pharmaceuticals, and shrimp and other shellfish. (See Table of Exchange Rates, below.)

Administration of Control

The Monetary Board classifies goods according to the exchange market through which they must be settled. The authorities of the Central Bank of Ecuador control and supervise the transactions permitted to pass through the official market. All transactions that do not qualify for this market may enter the free market—conducted mainly by exchange houses—where such transactions are free of supervision by the exchange control authorities.

Prescription of Currency

In principle, exchange proceeds must be received in convertible currencies, usually U.S. dollars; but bilateral agreements with Chile, Colombia, and Spain require settlements through special accounts, denominated in U.S. dollars, at the central banks of the countries concerned.

Imports and Import Payments

Prior import licenses are required for substantially all imports exceeding a value of US$100, other than those representing official foreign loans and those of certain foreign companies, but the licenses are issued freely. Imports are divided into two categories—essential and semiessential goods (List 1) and nonessential and luxury goods (List 2). All goods not included in these two lists are prohibited. The Monetary Board is authorized to make shifts between the lists and to add new goods to them.

An import license granted by the Exchange Department of the Central Bank for goods on List 1 carries the right to purchase the required foreign exchange at the official rate. Foreign exchange to pay for imports of goods on List 2 must be purchased in the free market. Import taxes of 5 per cent of the c.i.f. value of List 1 goods and 10 per cent of the c.i.f. value of List 2 goods must be paid to the Central Bank and are a prerequisite to the granting of licenses. In addition, a consular fee of 9½ per cent of the f.o.b. value is applied to all imports.1

Payments for Invisibles

Payments for most invisibles are made through the free market and are not subject to exchange control. Certain invisibles may be paid for at the official rate but require an exchange license from the Central Bank, which grants such licenses for the following items: contractual interest payments, repayments on loans, and other obligations abroad which are registered with the Central Bank; payments of dividends, profits, interest, and amortization on registered private foreign investments, up to 12 per cent annually, as a minimum; indispensable payments and remittances of the Government and official entities; and foreign exchange required by persons taking specialized courses abroad, provided that such persons register with the Central Bank and that the amounts do not exceed passenger fares, other expenses of travel, tuition, and a maximum of US$100 a month for living expenses.

Exports and Export Proceeds

All exports other than those of certain foreign mining companies require licenses—which are issued by the Central Bank—to ensure, among other things, the surrender of export proceeds that are subject to sale at the official rate. The official rate applies to the proceeds of such major products as coffee and to a few minor exports. The proceeds of most minor exports may be sold in the free market.

Exporters of bananas are required to surrender at the official rate the following amounts of their exchange earnings: (1) US$1.00 per stem from exports to Europe, Latin America, or New Zealand shipped from any port at any time of the year; (2) US$1.20 per stem from exports to countries outside Europe, Latin America, and New Zealand shipped from Esmeraldas and Bahia de Caráquez at any time of the year, and shipped from all ports during August, September, and October; and (3) US$1.50 per stem from exports to countries outside Europe, Latin America, and New Zealand shipped from all ports except Esmeraldas and Bahia de Caráquez at any time of the year except August, September, and October. Furthermore, up to 15 per cent of a shipment of bananas to Latin American countries may consist of substandard stems (seven or eight hands), and exporters may sell the entire proceeds from these substandard stems in the free market. Under these conditions, it is estimated that, of the total exchange value of exports of bananas, about one half is sold at the official rate, about one fourth is sold in the free market, and the balance is retained abroad.

For pharmaceutical products, 60 per cent of the exchange proceeds must be surrendered at the official rate and 40 per cent may be sold in the free market. From the proceeds of exports of fish (except tuna) and shellfish, including shrimp, US$100 per metric ton has to be surrendered at the official rate; at current market prices, it is estimated that this requirement amounts to approximately 7 per cent of the total proceeds from these exports. (See Table of Exchange Rates, below.)

Proceeds from Invisibles

Receipts from invisibles are sold through the free market and are not subject to exchange control.

Capital

Receipts of foreign capital may enter at the official rate if they are for approved purposes and are registered with the Central Bank. Registered capital and earnings of up to 12 per cent as a minimum may be transferred annually at the official rate (see section on Payments for Invisibles, above). Foreign capital for official investments, and foreign capital in the form of foreign exchange sold by foreign companies for the purpose of obtaining local currency to pay local salaries, taxes, and other charges, has to be surrendered at the official rate if the capital is to be registered. The Central Bank may refuse to register capital. Unregistered capital is free to enter through the free market in unlimited quantities. Foreign capital entering in the form of machinery, tools, etc., is treated like foreign monetary capital and requires a license, except when it represents foreign official loans or the capital of certain foreign companies under contractual agreements with the Government. Machinery, equipment, implements, materials, and other similar items brought into the country as foreign investments and intended for the development of national production are exempt from taxes if such exemption is authorized by the Ministry of the Treasury; their re-export is free and exempt from duties.

Table of Exchange Rates (as at December 31, 1960)(sucres per U.S. dollar)
BuyingSelling
15.00 (Official Rate)

Some major exports, such as coffee, and a few minor exports. Registered private capital. Official loans. Government receipts.
15.15 (Official Rate)

List 1 imports (c.i.f. value). Nontrade payments by the Government. Interest, profits, dividends, and amortization on registered capital. A few other invisibles.
15.742

Exports of bananas not shipped in boxes.
15.97 (60% at Official Rate and 40% at Free Market Rate)

Exports of pharmaceutical products.
17.263

Exports of fish (except tuna) and shellfish, including shrimp.
17.43 (Free Market Rate)4

Other exports, including bananas shipped in boxes and cacao.5 Invisibles. Unregistered capital.
17.57 (Free Market Rate)4

List 2 imports. Most invisibles. Unregistered capital.

Changes during 1960

January. A decree was issued fixing at 9½ per cent all consular fees on shipments to Ecuador. Previously, imports carried on an Ecuadoran vessel or on a vessel of the Flota Mercante Grancolombiana were subject to a preferential rate of 8½ per cent of the f.o.b. value.

February 3. Corn oil was added to import List 2.

February 5. The sale in the free market of the exchange proceeds of exports of potatoes was permitted.

March 22. The sale in the free market of the exchange proceeds of malt exports was permitted.

April 1. The advance deposit required for certain List 2 imports was reduced from 50 per cent to 25 per cent.

April 1. The exchange surrender requirement for exports of shrimp was reduced from US$300 a ton to US$100 a ton, f.o.b.

April 7. The sale in the free market of the exchange proceeds of exports of naranjillas was permitted.

May 6. The sale in the free market of the exchange proceeds of exports of polyethylene bags was permitted.

May 13. The sale in the free market of the exchange proceeds of exports of certain types of tanned leather was permitted.

August 24. The sale in the free market of the exchange proceeds of exports of domestically manufactured textiles was permitted.

August 30. The sale in the free market of the exchange proceeds of exports of groundnuts was permitted.

August 30. Exports of bananas packed in boxes were exempted for a period of 120 days from the exchange surrender requirements applicable to banana exports.

December 15. The advance deposit of 25 per cent required for certain List 2 imports was abolished (but see footnote 1).

December 20. The sale in the free market of the exchange proceeds of exports of cacao was permitted for a period of 60 days.

El Salvador1

Exchange Rate System

The par value is Salvadoran Colones 2.50 = US$1. The official rates 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. There are no exchange restrictions on foreign payments, except that payments to Spain must, and payments to Nicaragua may, be made through special accounts. On November 6, 1946, El Salvador notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

Settlements for merchandise transactions with Spain must be made through special accounts in accordance with the terms of a payments agreement with that country. El Salvador also has a payments agreement with Nicaragua, but payments for merchandise transactions with that country may be made either through special accounts or by other legal means. Otherwise, no obligations prescribing the method or currency of payment are imposed on residents.

Imports and Import Payments

Import licenses are not required, but a few imports are subject to regulation. Payments and transfers abroad may be made freely, but payments for imports from Spain must be made through special accounts. Because of the payments agreement with Nicaragua, some imports from that country are paid for through special accounts.

Exports and Export Proceeds

The proceeds of exports are not subject to exchange control, except that receipts from exports to Spain must be obtained through special accounts (see section on Prescription of Currency, above).

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

No exchange control requirements are imposed on incoming or outgoing capital transfers by residents or nonresidents.

Changes during 1960

No significant changes took place during 1960.

Ethiopia

Exchange Rate System

The par value is Ethiopian Dollars 2.48447 = US$1. The official rates are Eth$2.4750 buying, and Eth$2.5250 selling, per US$1.

Administration of Control

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

Prescription of Currency

Outgoing payments must normally be made in foreign exchange appropriate to the country of the recipient. The net proceeds of exports must be received in the currency of the country of final destination, if that currency is freely convertible. The proceeds of exports to other countries must also be received in the currency of the country of final destination, if that currency is acceptable to the Exchange Controller; otherwise, they must be received in a freely convertible currency.

Imports and Import Payments

There are no import licenses, but payments abroad for imports require exchange licenses. These licenses are granted freely in the currency appropriate to the country of origin, or in U.S. dollars or sterling for goods ordered through a third country. Application for an exchange license must be made prior to the arrival of the goods. For imports of certain nonessentials, the request for an exchange license must be accompanied by a payment to the State Bank of Ethiopia of a deposit in Ethiopian dollars of up to 150 per cent of the value of the goods to be imported.1 These deposits may be used only to make payment for the goods; if the license is canceled, the deposit may be withdrawn. Although the exchange license states that “method of payment must be letter of credit unless otherwise permitted,” cash-against-documents, mail-transfer, and telegraphic-transfer payments are, for the most part, allowed.

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 employees under contract with the Ethiopian Government may remit currently a maximum of 30 per cent of their salaries. Remittances by other foreign employees or personnel for family maintenance may be allowed to the extent of (1) 20 per cent of an annual taxable income not exceeding Eth$18,000 and (2) 10 per cent of all additional annual income in excess of Eth$18,000. Any expenditure abroad on education or for insurance premiums must be met from such remittances. Subject to proper provision having been made for local taxation, foreign companies may remit dividends on their invested and reinvested capital in the currency of the original investment; for approved projects, they may also transfer amortization at the rate of 10 per cent per annum. Emigrants’ allowances and transfers of legacies are permitted up to Eth$50,000 or the equivalent in foreign currency. For larger sums, reference has to be made to the Foreign Exchange Advisory Committee; the policy of the Committee in such cases is to spread the total transfer over a period of years so that the amount transferred in any 12-month period does not exceed Eth$50,000.

Persons traveling abroad are granted foreign exchange, in the currency of the country of destination, equivalent to Eth$50 a day for a maximum period of six weeks if the journey is made for business purposes, and up to the equivalent of Eth$700 a year if the journey is made for pleasure and/or vacation. Travelers may take with them a maximum of Eth$150 in Ethiopian banknotes.

Exports and Export Proceeds

All commodities require export licenses. When applying for a license, an exporter must state the amount of foreign exchange he expects to receive and he must submit sales contracts. 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 State Bank of Ethiopia 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$150 in Ethiopian banknotes. All foreign exchange must be declared by travelers on entry, and its subsequent use or re-export is subject to license.

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, including exemption from taxes for a period of 5 years, admission of all imports of machinery free of duty, and permission to foreign investors for the remittance abroad of 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 the original currency, provided that in any 12-month period no more than the equivalent of Eth$50,000 is transferred. All payments to foreign countries on account of capital are subject to individual exchange license. Foreign exchange is granted for repayment abroad of matured capital and for the obligations of temporary residents. Foreign employees may remit all savings upon retirement. Other types of capital transfer are handled on a case-to-case basis.

Changes during 1960

February 13. The regulation of October 1, 1959, which temporarily discontinued the issuance of exchange licenses for seven categories of import commodities, was withdrawn. At the same time, the advance deposits required for certain items were raised from 100 per cent to 125 per cent or 150 per cent.

Finland1

Exchange Rate System

The par value is Finnish Markkas 320.00 = 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 externally convertible European currencies2 vary between limits resulting from the U.S. dollar rate for the Finnish markka in relation to the dollar rates for the other currencies. Forward premiums and discounts are left to the interplay of market forces. Official, fixed, buying and selling rates are applied to some currencies. Authorized banks may conclude exchange transactions among themselves, with their Finnish customers, and with foreign authorized banks, in U.S. dollars, Canadian dollars, and externally convertible European currencies. Forward transactions may be concluded freely for periods not exceeding six 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 one from the Bank of Finland.

Prescription of Currency

For prescription of currency purposes, countries are divided into two groups: the bilateral countries,3 and convertible currency countries (all others). Settlements with the bilateral countries must be made in the currency of the agreement or in Finnish markkas through Bilateral Accounts. Settlements with the convertible currency countries may be made in any currency or through Convertible Accounts.

Nonresident Accounts

There are four categories of nonresident account, Convertible Markka Accounts, Foreign Exchange Accounts, Bilateral Accounts, and Capital Accounts.

1. Convertible Markka Accounts are held by nonresidents in Finnish markkas. These 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; with transfers from other Convertible 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 Accounts, Bilateral Accounts, or Capital Accounts.

2. Foreign Exchange Accounts are held by nonresidents in foreign currency.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, to another Foreign Exchange Account in the same currency, or to the markka account of a resident of Finland; for transfers abroad in the currency in which the account is held; and for withdrawals in Finnish currency or, if the account is held in convertible currency, in foreign currency.

3. Bilateral Accounts are held in Finnish markkas by residents of countries whose currencies are not externally convertible. They may be credited with proceeds from the sale of U.S. dollars, Canadian dollars, or externally convertible European currencies, or the currency of the country of the account holder; with transfers from another 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 payments in Finland in accordance with the relevant payments agreement, if any; for transfers to other Bilateral 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 Bilateral Account; with proceeds from the sale of any asset to a resident; 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 members of his family or, if the holder is a firm, members of its staff, up to Fmk 100,000 for each period of ten days; for payments for expenses incurred in administering the assets of the account holder; for investments in bonds expressed in Finnish currency and purchased by a bank on the account holder’s behalf; for acquisition of shares on the basis of subscription rights to stock 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 that have been sold not more than a week before; and for transfers to the Capital Account of a bank located in the same country as that of the account holder. Transfers to a Capital Account related to another country and transfers abroad of funds deposited in Capital Accounts require the specific permission of the Bank of Finland.

Imports and Import Payments

Most goods may be imported freely from nearly all countries with which Finland does not have bilateral payments agreements (see footnote 3), provided that the goods are purchased from and originate in those countries. Certain goods may be imported from the same group of countries under the global quota system, by which import licenses are issued up to the limits of certain value quotas for specified commodities. Payments for imports from these countries may be made in convertible currencies; however, from Brazil only direct import is permitted and payment must be made direct to Brazil. Imports from the bilateral countries are admitted under licenses up to quotas provided for under the related trade agreement. Other imports are subject to individual import license.

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.

Payments for Invisibles

The authorized banks have general permission to effect payments for most current invisibles, subject in some cases to maximum allowances, while for other transactions, with few exceptions, exchange licenses are granted automatically 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, for each journey, purchase from commercial banks foreign exchange equivalent to Fmk 40,000 for each visit to the Scandinavian countries and Fmk 80,000 for each visit to other countries. Resident and nonresident travelers may take out Fmk 20,000 in Finnish notes and coins and any reasonable amount in foreign notes and coins.

Exports and Export Proceeds

All commercial exports are subject to license, and all foreign exchange acquired through exports must be surrendered to the Bank of Finland or an authorized exchange dealer. Export licenses are issued automatically, provided that the country of purchase and of destination are in the group benefiting from the license-free import treatment and provided that the export is not subject to the system of price equalization, effected through a compensation transaction, made without payment, or paid for through a Capital Account.

The authorized exchange dealers, insurance companies, 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 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 only in certain circumstances. Inheritances of Canadian and U.S. citizens are in most cases transferred without limitation; for citizens of other countries, inheritances are transferred automatically up to Fmk 100,000 for each beneficiary. Nonresident foreigners are permitted to repatriate their blocked balances (1) by immediate transfer of an amount up to Fmk 1 million plus the accrued interest, if the balance had been deposited with Finnish banks prior to September 1,1939, (2) by immediate transfer if the balance at the end of 1959 did not exceed Fmk 50,000, (3) by remitting amortization quotas of bonds of a special ten-year Convertible Bond Loan issued in 1959 by the Republic of Finland and open to holders of blocked assets, or (4) in the case of balances not transferable through the above arrangements, by transferring the blocked balances in ten annual installments, subject to certain conditions.

Foreign bondholders residing abroad may repatriate amounts falling due after June 18, 1959 on account of redemption of bonds in Finnish markkas issued before September 1, 1939.

Nonresident foreigners may purchase through an authorized bank, against convertible currencies or externally convertible European currencies or by debiting a Convertible Markka Account, bonds quoted on the Helsinki stock exchange or shares included in List A of the stock exchange. When the securities so acquired are deposited in the custody of an authorized bank, the nonresident purchaser is permitted to sell the securities on the stock exchange through an authorized bank and to repatriate the proceeds of the sale in a convertible currency or an externally convertible European currency.

Any other transactions in, and the export of, securities involving nonresident interests require approval. If the securities were acquired with foreign exchange or with Finnish markkas from a Convertible or Bilateral Account, approval for their export is granted liberally. The import of securities by nonresidents and returning Finnish residents is unrestricted.

All inward capital transactions must be approved by the Bank of Finland; moreover, 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, which also examines other aspects. The Bank of Finland grants permission liberally, except where it would be contrary to the national interest; the approval of the State Council, when required, is also granted liberally. At the time it approves each incoming transaction, the Bank of Finland states the conditions for repatriation of the capital.

On demand of the Bank of Finland, residents must declare their foreign securities, foreign investments, and yields on their property owned abroad. Outward transfers of capital by residents are subject to individual approval. For direct investments, approval is granted on the merits of the case.

Finnish residents emigrating to countries outside Europe are granted an exchange allowance of up to Fmk 100,000 a person in addition to the regular travel allowance.

Changes during 1960

January 1. The bilateral payments agreement with France was terminated. The French franc was included in the list of externally convertible European currencies in the Finnish exchange regulations.

January 1. Imports from France, Canada, and the United States were placed on the same basis as those from most Western European countries and Argentina. In consequence, the import free list as well as the global import quotas were made applicable to these three countries.

January 1. Imports of Finnish and foreign currency and securities were permitted without limit; exports of foreign currency by both residents and nonresidents were allowed in reasonable amounts.

January 2. The Bank of Finland extended the authority of the authorized banks to effect payments for imports, current invisibles, and capital transactions.

January 20. Blocked funds that a nonresident could not transfer abroad on the basis of the regulations issued up to this date could be transferred in ten annual installments, subject to the requirement that the funds be placed in a “Transfer Account” (a type of Capital Account).

February 16. The system of nonresident accounts was liberalized, mainly in connection with capital items. The modified system provided for four types of account: Convertible Markka Accounts, Foreign Exchange Accounts, Bilateral Accounts, and Capital Accounts (which replaced the former Blocked Accounts). Fmk 100,000 could be withdrawn from Capital Accounts each ten days (previously, Fmk 100,000 each month) for the living expenses in Finland of the account holder and members of his family or, in the case of a firm, members of its staff.

February 16. Finnish citizens were permitted to keep foreign currency for one year after their return from a stay abroad of two years or longer; those returning from a stay abroad of less than two years were allowed to retain for three months, or in some cases longer, their foreign currency earned abroad exceeding Fmk 100,000 (which was already free from all surrender obligations).

February 16. Shipowners could hold freight earnings in foreign exchange for payment of their current expenses abroad, including wages of crews, unless the Bank of Finland prescribed otherwise.

February 16. The transport of goods entering into foreign trade could be insured with nonresident companies.

February 16. Assets owned in Finland by a nonresident could be sold freely to a resident, provided that the purchase price did not exceed the current market value and the proceeds were credited to the Capital Account of the seller. Stocks owned by nonresidents could be exchanged freely for stocks quoted on the Helsinki stock exchange.

February 16. The authorized banks were permitted to credit the value of Finnish banknotes received from a bank abroad to the sender’s Convertible Markka Account or, if the banknotes were sent from a bilateral country, a Bilateral Account. In addition, the authorized banks were allowed to purchase Finnish banknotes from foreign banks to the debit of their accounts with those banks.

April 12. The bilateral payments agreement with Uruguay was terminated.

May 25. All goods could be imported freely from countries to which the free list applied, except for those goods specified in a newly published list. The principle by which free list treatment could be given to a country only on the basis of reciprocal treatment was abolished.

May 26. The bilateral payments agreement with Paraguay was declared terminated.

June 16. The bilateral payments agreement with Iceland was terminated.

December 31. The bilateral payments agreements with Brazil and Spain were terminated.

Note.—The following changes took place on January 1, 1961: The obligation to surrender foreign exchange was limited to receipts from merchandise exports and freight and to the proceeds of sales of real property or securities. Residents were permitted to hold foreign exchange that did not have to be surrendered in foreign exchange accounts either with authorized Finnish banks or abroad. The import liberalization was increased by extending the application of the license free import treatment to nearly all countries with which Finland does not have bilateral agreements. At the same time, the global quotas were raised considerably.

France1

Exchange Rate System

The par value is New Francs 4.93706 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of NF 4.90 buying, and NF 4.9740 selling, per US$1. Market rates for most other currencies vary between limits resulting from the official limits for the U.S. dollar in Paris and in the other countries concerned. Forward transactions take place at rates freely determined by supply and demand. Authorized banks in continental France (including Corsica and the Principality of Monaco) are permitted to deal spot or forward in the Paris exchange market in all currencies. They may also deal with their correspondents in foreign markets in all currencies except Czechoslovak korunas. Forward transactions by authorized banks among themselves and with their correspondents abroad may not exceed six months.

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 Departments of Algeria, Oasis, and Saoura, 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) the Republic of Cameroon, the Central African Republic, the Republic of Chad, the Republic of the Congo (Brazzaville), the Republic of Dahomey, the Gabon Republic, the Republic of Guinea, the Republic of the Ivory Coast, the Malagasy Republic, the Republic of the Mali, the Islamic Republic of Mauritania, Monaco, Morocco, the Republic of the Niger, the Republic of Senegal, the Republic of Togo, Tunisia, and the Republic of the Upper Volta.

Most payments agreements concluded by France provide for settlements between the French Franc Area as a whole and the other country concerned. Payments from France to other parts of the French Franc Area, except Guinea, are free of restrictions.

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 on the proposals of the Governor of the Bank of France.

Prescription of Currency

General exchange control regulations and, in specific cases, individual decisions prescribe the currency and method for settlements between residents and nonresidents. For prescription of currency purposes, countries outside the French Franc Area are divided into two groups: the bilateral group2 and the area of convertibility (all other countries). Settlements with countries in the area of convertibility may be made in any of the currencies of those countries, or through Foreign Accounts in Convertible Francs (see section on Nonresident Accounts, below). Payments to countries in the bilateral group are made by crediting a Foreign Account in Bilateral Francs related to the country concerned. Payments from the bilateral group may be received to the debit of a Foreign Account in Bilateral Francs related to the country concerned, or by the same methods as those prescribed for receipts from the area of convertibility. Settlements with countries in the bilateral group may also be made in their respective currencies if the regulations of the other country permit this, as in the case of Czechoslovakia. Settlements with Hungary, Laos, and Viet-Nam are subject to special regulations.

Nonresident Accounts

The classification of nonresident accounts in French francs corresponds to the grouping of countries for prescription of currency purposes: Foreign Accounts in Convertible Francs, for residents of countries in the area of convertibility, and Foreign Accounts in Bilateral Francs, for residents of countries in the bilateral group. Foreign Accounts in Convertible Francs are not related to a specific country, while Foreign Accounts in Bilateral Francs are designated according to the country of the account holder. A nonresident account in francs may be opened by an authorized bank for a nonresident foreigner or for a French national who has been residing abroad for at least four years. Nonresident accounts established under certain bilateral agreements may be opened only with the approval of the Bank of France. Nonresident accounts in francs may not show a debit balance unless specifically permitted.

Foreign Accounts in Convertible Francs may be credited freely with francs obtained from sales of currencies of countries in the area of convertibility, in the exchange market or through a French authorized bank in an exchange market abroad; with transfers from other Foreign Accounts in Convertible Francs; and with French francs obtained from the sale of foreign banknotes. They may be debited freely for purchases in the exchange market 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 payments in the French Franc Area, irrespective of the country of residence of the nonresident on whose behalf such payment is made.

Foreign Accounts in Bilateral Francs may be credited freely with proceeds from sales in the exchange market of currencies of countries in the area of convertibility; with French francs obtained from the sale of foreign banknotes; and with transfers from a Foreign Account in Convertible Francs or from a Foreign Account in Bilateral Francs of the same nationality as the account to be credited. They may be debited freely for transfers to a Foreign Account in Bilateral Francs of the same nationality, and for payments in the French Franc Area, provided that the person on whose behalf such a payment is made resides in the country to which the account to be debited is related and the creditor is a person residing in the French Franc Area, or that the amount withdrawn is used to cover expenses in France of a person residing in the same country as that of the account debited. In addition, Foreign Accounts in Bilateral Francs may be credited with the proceeds of sales in the exchange market of the currency of the country concerned, but this possibility exists only when the regulations of the other country permit, as in the case of Czechoslovakia.

Other transactions through Foreign Accounts require individual permits.

In addition to the nonresident accounts described above, there are Tourist Accounts, intended mainly for the deposit of French banknotes held by nonresidents, and Internal Accounts of Nonresidents, mainly for persons staying temporarily in the French Franc Area or French residents staying temporarily abroad.

Imports and Import Payments

Most imports originating in the OEEC countries, their dependent territories, Finland, Canada, and the United States, many imports from other countries,3 and certain imports (mostly raw materials) from any country are free of quantitative restrictions. Other imports are licensed (1) within quotas determined on an individual commodity basis and applicable to specified countries or areas in accordance with an import plan drawn for a definite period, (2) in accordance with special import procedures, or (3) on an individual basis.

For most imports admitted freely, the importer must, in accordance with the so-called import certificate procedure, deposit with an authorized bank an invoice or a copy of the commercial contract concluded with the foreign supplier; or, if he wishes, he may apply for an import license, which is issued automatically. Liberalized imports up to NF 5,000 are exempt from licensing and declaration formalities, and require only the submission of an invoice to the customs. For some products free of quantitative restrictions, such as coal and steel products imported from other members of the European Community for Coal and Steel, the importer must apply for a license, which is granted automatically.

Imports that are not free of quantitative restrictions require an individual import license, the validity of which is normally six months. Raw materials or other goods needed for the production of goods to be exported may be imported liberally under special procedures (IMEX and EXIM) .4 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. A very small proportion of imports is effected through compensation transactions—mainly agricultural items from Eastern bloc countries.

In principle, payments for imports may be made only after documents have been presented to prove that the goods have been shipped. However, for goods imported under the import certificate 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 exchange up to six months before dispatch of the goods. Exchange may be provided on a spot or a forward basis if a documentary credit has been opened, but in other cases only on a forward basis.

Payments for Invisibles

Control over payments in respect of many categories of invisibles is supervisory, to ensure that other aspects of the control are not being circumvented. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved. However, foreign exchange is not granted to exporters and importers for insurance abroad of risks concerning persons, property, or liability in France, which may be insured only in France with French insurance companies or foreign companies authorized to conduct insurance business in France. Income accruing to nonresidents in the form of profits, dividends, and royalties is remittable, subject to supervision. Exchange up to NF 400 monthly for each beneficiary is granted for family maintenance abroad. Appropriate foreign exchange is granted for the remittance of banking commissions, patent fees, royalties, and specified categories of taxes. Transfers on account of membership fees, subscriptions, donations, and emigrants’ funds are also permitted. The authorized banks are permitted to make transfers abroad freely, up to NF 100 per remittance, for any purpose.

The exchange allowance for French residents for tourist travel abroad is NF 1,500 a calendar year. The exchange allowance for residents going abroad on business, where EFAC account facilities are not available, is NF 750 for each journey; this allowance may be taken in addition to the tourist exchange allowance. Moreover, residents may freely make arrangements through licensed travel agencies operating in France, or purchase credit cards in France, for their traveling expenses abroad, without limitation and independently of any exchange allocation.

Travelers, as well as residents and nonresidents living near French frontiers, may take with them out of France banknotes or coins (except gold coins) up to NF 250 in metropolitan francs, or up to 25,000 francs in CFA francs or CFP francs.

Exports and Export Proceeds

A number of exports are subject to individual license. Export proceeds must be collected within 180 days from the arrival of the goods at their destination and in the manner set forth in the regulations (see section on Prescription of Currency, above). The procedure is simplified for exports not exceeding NF 5,000, with a few exceptions.

Foreign exchange proceeds that are not used to make authorized payments abroad must be surrendered within a month from the date of their receipt. Certain percentages of export proceeds are, however, exempt from the surrender requirement.5 These retained percentages of export proceeds are kept in special EFAC (Exportations–Frais Accessoires) accounts, which are separate for each foreign currency or, in the case of export proceeds received in francs, separate according to the type of the nonresident franc account debited for the payment. EFAC accounts may be used only by the account holder for the needs of his professional activity. At the end of quarterly periods, 10 per cent of unused balances on EFAC accounts have to be surrendered; minimum balances not exceeding NF 1,000 or the equivalent in foreign currencies are not affected by this requirement.

Proceeds from Invisibles

Residents are obliged to collect, and to surrender within a month from the date of receipt, amounts due from nonresidents in respect of services and of income exceeding NF 500 from foreign securities.

Sales of goods by authorized producers and merchants to foreign tourists in France are made at discounts ranging from 10 to 25 per cent, corresponding to exemption from purchase taxes on the products concerned. These discounts are granted only on purchases made against checks or travelers checks expressed in currencies negotiated on the Paris exchange market, or checks issued by foreign correspondents of French banks to the debit of nonresident franc accounts.

Travelers, as well as residents and nonresidents living near French frontiers, may bring in any amount of banknotes or coins (except gold coins) in metropolitan francs, CFA francs, or CFP francs.

Capital

Most outward transfers of capital by residents require approval. However, transfers in respect of legacies, dowries, and, subject to certain time limitations, emigration are permitted freely without special authorization. Capital assets abroad belonging to or acquired by residents are not subject to repatriation or surrender. Residents of foreign nationality may dispose freely of their assets abroad. Residents of French nationality are permitted to reinvest such assets either in quoted securities in accordance with a general authorization or in other investments under individual license. Subscriptions to new issues may be made only by using the proceeds of sales of securities already owned by residents of French nationality. Proceeds from sales of foreign securities expressed in foreign currencies and owned by residents of French nationality (so-called devises-titres) may be sold at a free market rate to other residents of French nationality, who in turn may use them only to purchase securities quoted in foreign markets.

The following operations and transactions related to nonresident investments may be made freely, provided that the investment is financed in accordance with the prescription of currency regulations applicable to the country of residence of the foreign investor: (1) spot and forward purchases on stock exchanges in France of specified French securities6 officially quoted on those stock exchanges; (2) subscriptions to an increase in the capital of a French company, provided that its shares are officially quoted on a stock exchange in France; (3) subscriptions, at the time of issuance, to short-term 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 a private enterprise are officially quoted on a stock exchange in France; (4) acquisition on a spot basis through the intermediary of a notary public of immovable property or rights to such property located in France; and (5) loans to residents in accordance with certain prescribed conditions (the exchange of letters between a lender and a borrower must explicitly stipulate that repayment will be made directly by the borrower to the authorized bank whose services were used in financing the operation, in order that the transfer of funds may be made in accordance with the regulations). The liquidation of these investments and the transfer of proceeds accruing from their liquidation may be made freely.

The import of French and foreign securities on behalf of residents or nonresidents is free, provided that it is carried out through the intermediary of an authorized bank. The export of French securities held in France is permitted if they are at the free disposal of a resident of the area of convertibility. The export of foreign securities on behalf of residents of foreign nationality is permitted only when such securities were held by them prior to September 10, 1939 or were acquired with a permit after that date. Immovable property and French securities in France belonging to nonresidents may be transferred between residents of all countries in the area of convertibility or between residents of the same bilateral country. Foreign securities held in France by nonresidents may be transferred between nonresidents irrespective of their country of residence.

Banknotes

Authorized banks are permitted to buy foreign banknotes freely from any person against payment in French francs and, in accordance with a general or individual license, to sell foreign banknotes to residents going abroad against payment in French francs. They are also permitted to buy foreign banknotes from other authorized banks and from their foreign correspondents against payment in any foreign currency acquired in the exchange market or against any other foreign banknotes, or by crediting any nonresident account. Authorized banks are permitted to sell foreign banknotes to other authorized banks or to their foreign correspondents against payment in any other foreign banknotes or in currencies used for settlements with the area of convertibility, including French francs debited to a Foreign Account in Convertible Francs. Foreign currencies acquired from the sale of foreign banknotes are to be sold immediately in the exchange market.

Changes during 1960

January 1. The “new franc” was established as the legal unit of value, worth 100 “old francs.” The par value of the new franc was established at NF 4.93706 per US$1. It was announced that similar action would be taken later in French Guiana, Reunion, the French Antilles, and St. Pierre and Miquelon.

January 1. Under a decree of December 21, 1959, the Exchange Office was abolished. Some of its functions were taken over by the Bank of France—the issue of licenses for transactions of a financial nature, controls relating to assets held abroad and the repatriation of income, transactions in foreign securities, etc. Various departments of the Ministry of Finance and Economic Affairs took over other functions—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, the preparation of regulations concerning foreign trade and exchange, etc.

January 1. The import free list applicable to OEEC countries and that applicable to Canada and the United States were extended.

January 1. Finland was included in the area of convertibility.

January 15. Laos was included in the area of convertibility.

January 18. Finland was accorded the same treatment as the OEEC countries in the French import regulations.

January 23. The Bank of France ceased to quote official exchange rate limits for externally convertible European currencies, leaving the rates for these currencies to vary between limits resulting from the official limits for the U.S. dollar in Paris and in the other countries concerned.

January 23. The authority delegated to the authorized banks in exchange control matters was considerably extended, including permission to make any individual payment abroad freely up to NF 100.

January 23. The limit below which exports and liberalized imports are exempt from trade control formalities was raised from NF 3,500 to NF 5,000. The period of validity of import certificates was extended from three months to six months. Importers and exporters of merchandise were permitted to purchase forward exchange in the exchange market for their related expenses (transport, freight, insurance, etc.).

January 25. The authority delegated to the authorized banks in exchange control matters was further extended. Among other things, the amount of exchange that could be remitted abroad for family maintenance was increased from NF 250 to NF 400 monthly for each beneficiary, and the exchange allowance for residents going abroad on business was increased from NF 400 to NF 750 for each trip.

February 1. Israel was included in the area of convertibility.

February 20. Poland was included in the area of convertibility.

March 7. All settlements with Guinea were suspended.

April 5. The import free list applicable to OEEC countries and Finland and that applicable to Canada and the United States were further extended.

April 10. The U.S.S.R. was included in the area of convertibility.

April 11. The delivery of foreign exchange to travelers holding passports which had expired less than five years ago was authorized. (Previously, the passport had to be currently valid for this purpose.)

April 19. Tangier ceased to be treated as a member of the bilateral group and was included, with Morocco, in the French Franc Area.

April 27. The special regulations applicable to settlements with the Egyptian Region of the United Arab Republic were withdrawn.

May 17. Uruguay was included in the area of convertibility.

May 20. Authorized banks were permitted to use balances in foreign currencies held with their correspondents abroad for any investment, as well as for financing abroad on behalf of nonresidents and for financing imports and exports through loans in foreign currencies to resident importers and exporters.

June 26. The list of goods subject to quantitative import restrictions when imported from and originating in OEEC countries and their dependent territories and Finland, and the list applicable to imports from Canada and the United States, were reduced.

July 1. Restrictions on the transfer of film royalties to the United States were removed.

July 23. Albania was included in the area of convertibility.

July 23. The prescription of currency requirements, the system of nonresident accounts in francs, and the scope of transactions by authorized banks in foreign currency were modified: The authorized banks were permitted to deal freely in all currencies, instead of only listed currencies. Settlements with all countries outside the bilateral group could be made in the currency of any country in the area of convertibility. The currencies of all countries in the area of convertibility (instead of only listed currencies) could be bought and sold through Foreign Accounts in Convertible Francs. Foreign Accounts in Bilateral Francs could be credited with the proceeds of sales of all currencies, instead of only listed currencies.

July 23. The following categories of securities denominated in foreign currency and held on French territory were exempted from the requirement that they be deposited with an authorized bank: those issued in any country other than OEEC countries (except Iceland and Ireland), their dependent overseas territories, Japan, the Republic of the Congo (Leopoldville), the United Arab Republic (Egyptian Region), the Union of South Africa, Argentina, Brazil, Canada, Mexico, Panama, the United States, Australia, or New Zealand; those which have not earned any income during the last four years and have not given any right to subscription; shares worth less than NF 20 and other securities worth less than NF 100; and shares of companies in liquidation.

July 29. With minor exceptions, all imports from and exports to Guinea were made subject to individual license.

September 24. A revised and shortened list of goods still subject to quantitative import restrictions when imported from and originating in OEEC countries, their dependent overseas territories, and Finland, was published. The new list, except for 11 items, was made applicable also to imports from Canada and the United States.

September 25. An extended list of imports free of quantitative restrictions when imported from any of a list of specified countries (see footnote 3) was published.

October 12. French residents traveling abroad were permitted to pay their hotel and restaurant bills by credit cards, independent of any limitations placed on foreign exchange for travel outside France. The cards would be issued by the Association Internationale de l’Hotellerie at an annual cost of NF 50.

November 21. Licensed travel agencies operating in France were freed from the obligation, when organizing foreign travel, to deduct any foreign exchange from the resident traveler’s basic exchange allowance for foreign travel.

December 31. A revised and shortened list of goods still subject to quantitative import restrictions when imported from and originating in OEEC countries, their dependent overseas territories, and Finland was published. The new list, except for 5 items, was made applicable also to imports from Canada and the United States.

Note.—The following changes took place in January 1961:

January 16. Settlements with Yugoslavia were placed on a convertible currency basis.

January 25. The authority given for nonresidents’ loans to residents in French francs (see section on Capital, above) was extended to loans made in any currency.

Federal Republic of Germany1

Exchange Rate System

The par value is Deutsche Mark 4.00 = US$1. The official rates of the Deutsche Bundesbank are DM 3.97 buying, and DM 4.03 selling, per US$1. These rates are, however, 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 externally convertible European currencies,2 Icelandic krónur, and Spanish pesetas vary between the limits resulting from the dollar rate for the deutsche mark in relation to the dollar rates for the other currencies. 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. Certain categories of trade transactions and of transactions in invisibles are restricted for other than balance of payments reasons. Residents are not required to repatriate or surrender their foreign exchange holdings and these may be held in Germany or abroad.

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 controls 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 Ernährung und Landwirtschaft), and the Land Ministries of Economics. For capital transactions, the Deutsche Bundesbank is primarily the authority in charge of exchange control. All banks in Germany are permitted to carry out foreign exchange transactions.

Nonresident Accounts

Accounts in deutsche mark and in any foreign currencies may be held by any nonresident. Balances on these accounts may be transferred freely to any other account and used for any payment in Germany or abroad, including the purchase of any foreign currency, and the accounts may be credited freely with any payment. However, credit balances on nonresidents’ accounts, with the exception of savings accounts in deutsche mark of individual persons, may not carry interest.

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 6,527 items, 6,115 may be imported freely from those countries. In addition, some 155 items are liberalized when they originate in OEEC countries and their dependent territories. About 40 items originating in Yugoslavia and some 6 items originating in Uruguay are excluded from the liberalization treatment. Certain solid fuels are liberalized only when purchased and imported from other member countries of the European Community for Coal and Steel.

Goods free from quantitative restrictions are not subject to license either for import or for payment, and no prior control is exercised over such goods; but ex post control is carried out by the federal authorities, and an import declaration stamped by the Deutsche Bundesbank is required, which serves as documentation for customs control and for statistical purposes. For imports still subject to quantitative restrictions, an individual import license is required.

Payments for imports are free, even where imports are still restricted. Commodity futures may be dealt in freely. Transit trade transactions may also be carried out freely, the only requirement being that of an ex post declaration, for statistical purposes.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. The following transactions—but not the related payments—between residents and nonresidents are subject to restriction: the chartering of foreign ships outside the regular shipping lines; the use of foreign boats in certain inland waterways traffic; transactions covering the processing of goods abroad where exports of the goods to be processed or imports of the processed goods are restricted; transactions with foreign countries 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.3

German and foreign notes and coins may be exported freely.

Exports and Export Proceeds

Exporters may freely conclude export contracts with foreign importers and carry through the export of commodities. For all goods up to a value of DM 1,000, and for certain other exports regardless of value, only an export notification, serving statistical purposes, is required. All other exports require, in addition, export declarations, and certain commodities—mostly strategic goods—are subject to individual license. 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 may be used for all payments. Claims over DM 5,000 that have been overdue for more than three months must be reported to the authorities, for statistical purposes.

Proceeds from Invisibles

With a few exceptions, services performed for nonresidents do not require licenses. Special licenses are required for transactions related to specified sea services; the sale of, or the granting of licenses for, inventions, patents, registered designs, trademarks, etc.; and for technical assistance through the delivery of constructional drawings, materials, and instructions for manufacture, insofar as such assistance is for the production of goods whose export requires a license. Services related to import or export transactions that are subject to individual license also require licenses.

Receipts exceeding DM 500 on account of services have to be reported, with the exception of receipts in connection with travel.

German and foreign notes and coins may be imported freely.

Capital

There are virtually no restrictions on imports or exports of capital by residents or nonresidents, and such transactions may be carried out freely without an individual license. However, the sale of domestic money-market paper to nonresidents is not permitted. All capital movements to or from foreign countries exceeding DM 500 or its equivalent must be reported when a maturity of 12 months or more has been fixed at the time of concluding the contract. Securities of all types may be imported or exported freely.

Changes during 1960

January 1. The import free lists were further extended by the inclusion of certain types of sugar, rubber tires and tire cord, certain types of kraft paper, flax yarns and fabrics, twine and rope, etc.

June 4. Nonresidents’ accounts, except savings accounts in deutsche mark of individual persons, could no longer carry interest. Domestic money-market paper could no longer be sold to nonresidents, nor could domestic fixed-interest-bearing securities carrying the obligation to reacquire the securities later at a definitely fixed price. Domestic banks were no longer permitted to incur liability for credits granted by residents to nonresidents.

July 1. The import system was further liberalized by removing quantitative restrictions on certain industrial imports (aluminum, some chemicals, synthetic rubber, and buttons) and some agricultural products (certain seeds, red clover, crimson clover, alfalfa, sainfoin, and various other forage crops).

August 24. The Bundesbank undertook to pay a premium of 1 per cent per annum on its swap transactions in U.S. dollars with German banks, and broadened the scope of such transactions to include the financing of import and transit trade.

September 26. The Bundesbank’s premium on swap transactions in U.S. dollars was increased from 1 per cent to 1½ per cent.

November 12. The Bundesbank abolished the premium on swap transactions in U.S. dollars to finance import and transit trade. The swap premium of 1½ per cent on the export of funds continued to be paid.

Note.—The following changes took place early in 1961:

January 1. Certain modifications were made in import licensing which reduced the extent of discrimination. While the country group of OEEC countries and their dependent territories, as previously defined, remained the same except for the inclusion of Somalia, the country group comprising mainly the dollar area and the country group comprising countries outside the dollar area, the OEEC and dependent territories, and the Sino-Soviet bloc were combined as a single country group. Most commodities purchased from and originating in the countries in the two new groups, i.e., all countries outside the Sino-Soviet bloc, could be imported free of quantitative restriction. In addition, imports of some 155 items were liberalized when originating in the first group mentioned above. About 40 items originating in Yugoslavia and some 6 items originating in Uruguay were excluded from the liberalization treatment.

January 20. The Bundesbank’s swap premium on the export of funds (see November 12, above) was reduced from 1½ per cent to 1 per cent.

February 3. The Bundesbank’s swap premium on the export of funds was reduced from 1 per cent to ½ per cent.

February 9. The Bundesbank’s swap premium on the export of funds was reduced from ½ per cent to ¼ per cent.

February 13. The swap premium of ¼ per cent paid by the Bundesbank on the export of funds was abolished.

March 4. It was announced that, with effect from March 6, 1961, the par value of the deutsche mark would be changed from DM 4.20 per US$1 to DM 4.00 per US$1.

Ghana

Exchange Rate System

The par value is Ghana Pound 1 = US$2.80. Exchange rates are uniform and 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 sterling or Ghana currency for any foreign currency and engage in arbitrage in all currencies, spot or forward.

Administration of Control

Exchange control is administered by the Bank of Ghana under powers delegated by the Ministry of Finance. Authority for approving payments for imports and providing travelers with standard allocations of foreign exchange is delegated to the authorized banks. Import policy is formulated by the Minister of Trade, subject to approval by the Cabinet of Ministers, and the import and export system is administered by the Controller of Imports and Exports, whose office constitutes a department of the Ministry of Trade. The responsibility for issuing licenses also rests with the Controller, to whom applications to import or export must be submitted before import orders are placed or exports shipped.

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, sterling, or 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 sterling or Ghana pounds 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 Ghana pounds from an External Account or in any specified currency.1 However, settlements related to transactions covered by a trade and payments agreement with Israel are made through agreement accounts denominated in sterling and maintained by the Bank of Israel for the Bank of Ghana.

Nonresident Accounts

Accounts in Ghana pounds held by residents of countries outside the Sterling Area with authorized banks in Ghana are designated External Accounts. These accounts 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 currencies. They may be debited for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of foreign currency.

In addition to External Accounts, there are Blocked Ghana Accounts, 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 purposes, including investments in approved securities.

Imports and Import Payments

All imports are subject to one of the following types of import license: open general license, which permits importers, without individual licensing, to import the goods covered by the license in any quantity from any country or, in most cases, from specified groups of countries or areas; quota license, which permits established importers to import the goods covered by the license from specified countries; and specific license, which permits a specific import transaction not authorized under open general license or quota license. Imports of almost all commodities from most countries are at present covered by open general licenses or Quota licenses. Imports from the Union of South Africa or from South West Africa are approved only in exceptional circumstances.

When the importer has obtained a license, or if the transaction is covered by an open general license or a quota license, exchange is provided automatically by an authorized bank after the importer has filed an application for foreign exchange (or Ghana pounds to be paid to a nonresident account) and has submitted to the bank the necessary documentary evidence. After arrival of the goods, the importer must supply the exchange control with evidence of importation.

Payments for Invisibles

Payments for invisibles to residents of other Sterling Area countries may be made freely unless they relate to transactions outside the Sterling Area. Payments to persons resident outside the Sterling Area require specific approval of the exchange control, and documentary evidence must support all applications. Some applications are approved on request. They include commercial payments, investment income transfers and depreciation allowances, education (with certain exceptions), subscriptions, and membership fees. Other applications are approved up to established limits: education expenses and correspondence courses in specified U.S. schools; transfers of salaries of foreign employees in Ghana and transfers related to leave of company employees (and of self-employed persons who are residents of or nationals of countries outside the Sterling Area); tourist and other travel; gifts; and charitable and missionary remittances by individuals and societies. Applications to make payments for invisibles above the established limits and payments for other services are treated liberally.

For travel in all countries outside the Sterling Area, residents are granted an exchange allowance for the year ending October 31, 1961 of £G 100 for each person 12 years of age or over and £G 70 for each person under that age. A resident who did not use his basic travel allowances in the two years prior to November 1, 1960 is permitted to obtain the unused portion of the allowances which would have been obtainable in those years, in addition to the allowance to which he is entitled in the year ending October 31, 1961. Exchange allocations are also granted for cars and motorcycles taken abroad. In addition, residents may buy tickets in Ghana to the country of destination. Persons leaving Ghana may take with them banknotes in pounds sterling, Ghana pounds, other Sterling Area currencies, and other currencies, up to £G 20 in each category—the total limit being the equivalent of £G 80— and, except when traveling to the Republic of Togo, any amount in French West African currency.

Exports and Export Proceeds

All exports are subject to either open general license or specific license. A range of exports is covered by an open general license which permits exporters to export, without an individual license, one group of specified goods to the United Kingdom and another group of specified goods to any country except the Republic of Togo. Exports of goods not covered by open general license require specific licenses from the Controller of Imports and Exports prior to shipment. The larger proportion of exports is effected under monopolies granted to the Ghana Cocoa Marketing Board (for cocoa beans) or the Ghana Agricultural Development Corporation (for palm kernels, coffee, bananas, shea nuts, and copra).

Exporters of goods to countries outside the Sterling Area are required to obtain payment within six months of shipment. When payment is received in a specified currency (see footnote 1), the exchange must be sold to an authorized bank.

Proceeds from Invisibles

Receipts from invisibles in sterling need not be surrendered, but those in specified currencies (see footnote 1) must be sold to an authorized bank. With the exception of French West African franc notes from the Republic of Togo, all currency notes may be imported freely; but they must be declared and, if a specified currency, sold to an authorized bank.

Capital

Movements of capital between Ghana and other Sterling Area countries are free. Movements of capital between Ghana and countries outside the Sterling Area are subject to approval, and applications for such transfers must be supported by documentary evidence.

Investments in Ghana of funds from outside the Sterling Area in excess of £G 15,000 require prior approval if eventual repatriation of the funds is to be guaranteed. Investments of such funds up to £G 15,000 need only be notified to the exchange control in order to qualify for automatic eventual repatriation.

Subscription to the memorandum of association of a company incorporated under the Companies Ordinance of Ghana by a person resident outside the Sterling Area must be approved. Capital invested with such permission is accorded “approved status,” and qualifies for automatic repatriation to its country of origin or to the monetary area from which it came.

Profits due to nonresidents may be remitted in full after deduction of local income tax. Profits from one enterprise which are invested temporarily in another enterprise may be remitted later, provided that the investment in the second enterprise had been agreed with the authorities before it was made.

Transfers to beneficiaries under wills and intestacies and transfers of deceased persons’ estates are approved, provided that all local indebtedness has been paid. Nationals of countries outside the Sterling Area who stay in Ghana are allowed to repatriate up to £G 5,000 of their personal assets when they retire and return to their home countries; emigrants are granted £G 5,000 for a family unit, plus £G 100 for each family unit to meet landing expenses at destination; in both these cases, amounts exceeding the limits are blocked. Transfers on account of dowries are permitted up to £G 3,600.

Transactions in securities are controlled to ensure that capital is not transferred outside the Sterling Area without express permission. In the case of portfolio investments, residents have to obtain approval for any switch in their holdings of securities issued by residents of countries outside the Sterling Area.

Investments in Ghana are divided into three categories: (1) Investments in certain industries (railway transport, generation of electricity for public service, radio broadcasting, atomic energy, manufacture of armaments, waterworks for the sale of water to the public, and telecommunications) are reserved for the Government. (2) Investments in a few other industries (manufacture of alcohol, alcoholic beverages, and narcotics) may be made by private investors, but government participation in them is mandatory. (3) All other investments are open to private enterprise, but certain conditions must be fulfilled.

The Government accords favorable tax and customs tariff treatment to approved industries. “Pioneer” industries are those which are not being conducted on a scale adequate to the economic needs of the country and for which the Government considers that there are favorable prospects for future development. Companies that produce a pioneer product or provide a pioneer service can obtain tax advantages, if the Government is satisfied that it is in the public interest to accord them “pioneer” status. Industries declared as “local” industries may obtain full relief from import duties on raw materials.

Changes during 1960

January 21. Imports from Japan of all types of machinery originating in that country were permitted freely.

February 18. Measures were taken to block French assets in Ghana and to restrict payments to France.

February 26. The freedom of travelers to import banknotes was extended to all banknotes. (Previously, the import by travelers of banknotes expressed in Sterling Area currencies, including Ghana pounds, was limited to £10.) Persons leaving Ghana were permitted to take with them notes in pounds sterling, Ghana pounds, other Sterling Area currencies, and other currencies, up to £G 20 in each category—the total limit being the equivalent of £G 80. (Previously, only £20 in pounds sterling and any amount in French West African franc notes could be taken out of the country by a traveler.)

March 14. Imports of goods from dollar area countries were permitted freely, with the exception of arms and ammunition, explosives, gold, cinematographic films, petroleum products, and tobacco (unmanufactured and manufactured).

April 2. It was announced that no exchange control permission would be required for the investment in Ghana of funds not exceeding £G 15,000 from outside the Sterling Area. The transfer of profits related to, and the repatriation of, such investments would be permitted automatically.

April 17. Further measures were taken to block French assets in Ghana and to restrict payments to France.

April 21. The measures taken to block French assets in Ghana and to restrict payments to France were rescinded (see February 13 and April 17, above).

July 30. All open general licenses applicable to imports of goods consigned from the Union of South Africa or from South West Africa, and of goods originating in or manufactured in those countries irrespective of the country of shipment, were revoked. Goods sent by post and personal effects addressed to South African citizens resident in Ghana were exempted from this revocation. Imports from the Union of South Africa and South West Africa shipped or ordered before August 1,1960 (in the latter case, only if urgently needed and not obtainable from other sources) could be admitted. At the same time, it was announced that applications for individual licenses for imports from the Union of South Africa and South West Africa would be approved only in the most exceptional circumstances.

September 14. French West African franc notes could no longer be exported to, or imported from, the Republic of Togo.

September 19. Administration of the exchange control was transferred from the Exchange Control Branch of the Ministry of Finance to the Bank of Ghana.

October 1. Exports to the Republic of Togo of certain goods previously on open general license were made subject to specific license.

Greece

Exchange Rate System

The par value is Greek Drachmas 30.00 = US$1.1 The official rates are Dr 29.85 buying, and Dr 30.15 selling, per US$1. The rate of the drachma in relation to other currencies is determined by the Bank of Greece on the basis of the parity relationship of each currency to the U.S. dollar.

Administration of Control

Controls are administered on the policy level by the Ministry of Coordination, the Ministry of Trade, and a 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. Under the terms of most of the agreements, settlements are made through controlled accounts, with the U.S. dollar as the currency of account, or in the currency of the partner country.2

Nonresident Accounts

Nonresidents are permitted to hold, for current transactions, Foreign Sight Deposit Accounts in drachmas or in specified convertible currencies.3 These accounts may be credited with proceeds from sales of the specified convertible currencies, with authorized payments by residents of Greece for imports or services payable in the specified 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 purchases of foreign currencies.

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, however, balances on blocked accounts may be used for such purposes as personal expenses in Greece, up to specified amounts, the purchase of securities officially listed on the Greek stock exchange, and the purchase of real estate in Greece. Blocked balances may also be deposited with a commercial bank as sight deposits, where they earn current interest.

Imports and Import Payments

One of two general import procedures is applicable to private imports, depending on the method of payment: (1) No license is necessary, but the approval of an authorized bank is required, to import goods— except as mentioned under (2), below—from bilateral agreement countries (see footnote 2) when payment is made through the relevant clearing account; or from OEEC countries when payment is made in an externally convertible European currency; or from Canada or the United States when payment is made in free dollars provided by the Greek exchange authorities. (2) An import approval issued by the main office of the Bank of Greece is required for imports from countries specified in Procurement Authorizations covering imports sponsored by the U.S. International Cooperation Administration; for imports from any other country when the method of settlement differs from those mentioned under (1), above; and for certain specified imports originating in OEEC countries, Canada, or the United States. Payment under either import procedure may be made by opening a documentary credit, by cash against shipping documents, or, for some specified goods, by the acceptance of a time draft. Imports of specified luxury items, however, may be settled only by opening a documentary credit.

Imports of items on List A (certain luxury items, textiles, timber, coal, iron and steel, tires and tubes, newsprint, and automobiles and parts) require prior approval of a special committee at the Athens Chamber of Commerce and Industry. Imports of certain types of machinery and machinery spare parts (List B) require prior licenses from the Ministry of Industry. Imports of petroleum products similar to those produced by the Greek Oil Refinery require prior licenses from the Ministry of Trade. Special regulations govern imports of a few other items, such as monopoly items, medicines, wheat, flour, and rice. Imports of durum wheat are conditional on not less than 70 per cent by value being exported as milled flour or macaroni products.

For goods imported on the basis of cash against shipping documents (except certain commodities, mainly foodstuffs), an importer must deposit with his bank an amount in cash equal to 50 per cent or 100 per cent of the invoiced value, according to the commodity to be imported (for imports of textiles, the advance deposit is 280 per cent); in addition, he must deposit 20 per cent or 40 per cent of the c.i.f. value of the import as security for import duties and other charges. For shipments against time drafts, a personal guarantee equivalent to 8 per cent of the c.i.f. value of the goods to be imported is required. For shipments payable by letter of credit, no advance deposit or bank guarantee is, in principle, required. However, a cash guarantee equivalent to 10 per cent of the c.i.f. value is required for a few specified imports from OEEC countries, Canada, the United States, or other countries with which Greece has no payments agreements, if they are settled by opening a documentary credit; and for imports of certain commodities (mainly consumer goods) paid for by opening a documentary credit, an importer must also deposit, as security for import duties and other charges, an amount in cash equal to 40 per cent of the c.i.f. value of the goods. For commodities ultimately paid for with International Cooperation Administration funds, importers must deposit, within ten days from the date of obtaining the import license, cash or a bank guarantee covering 10 per cent of the value of the goods, in addition to any other downpayment required. After making arrangements for payment and upon delivery of the shipping documents, the importer’s bank issues a permit for the clearance of the goods and the advance deposit is refunded.

If the importer fails to fulfill the conditions prescribed for the import or payment of the goods, deposits and guarantees are partly or entirely forfeited, and a fine of up to 25 per cent of the c.i.f. value of the goods is payable. Greek importers who place orders without previously obtaining an import permit may also be subject to a fine of up to 25 per cent of the c.i.f. value of the goods.

Special regulations govern imports by state agencies, legal entities, and public companies.

Payments for Invisibles

Payments for invisibles require individual licenses, but these are granted freely for expenses incidental to authorized trade transactions and for certain other transactions. Transfers abroad on account of specified categories of insurance (e.g., shipping, aviation, merchandise transport, fire, 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$150 for each trip. Exporters and manufacturers are allowed US$20 a day for a maximum of 45 days when they go to the United States, Canada, or the Far East; for all other countries the amount 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 1,000 in Greek banknotes.

Exports and Export Proceeds

All exports are subject to individual license, but most exports are free of quantitative limitation. Export proceeds must be surrendered.

Proceeds from Invisibles

Exchange receipts representing payments for services must be surrendered. Foreign 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 at the official rate. Travelers may bring in a maximum of Dr 1,000 in Greek banknotes.

Capital

Under Legislative Decree No. 2687 of October 31, 1953, approved foreign investments in Greece that are expected to promote national production or otherwise contribute to the economic advancement of the country may be granted preferential treatment, but such investments may not be repatriated earlier than one year from the date of importation or from the time the enterprise began to operate productively. When any enterprise organized with foreign capital is granted terms more favorable than those accorded to a similar enterprise previously established with foreign capital, equally favorable terms will be extended to the previously established enterprise, at the request of the beneficiary. Special guarantees are provided in case of requisition.

Approved foreign capital may be repatriated at an annual rate not exceeding 10 per cent. Dividends on equity capital not exceeding 12 per cent a year and payments of interest on loan capital not exceeding 10 per cent a year may be transferred; however, annual earnings below these limits may be supplemented by earnings in excess of such limits from other years.

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 investments 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 1960

January 5. The personal guarantee required for imports against time drafts was reduced from 25 per cent to 8 per cent of the c.i.f. value of the goods. At the same time, it was established that the fine imposed for failure to settle payments on time drafts which are due and payable could not exceed 8 per cent of the c.i.f. value of the goods.

January 5. Import quotas were announced for the next 6 months for eight of the nine items made subject to quota control on April 1, 1959: The quotas for timber, coal, and tires and tubes would be prorated among established importers on the basis of previous imports during the 1956-58 period; importers with no record of imports in that period would be allotted licenses on the basis of their 1959 imports. The wood-pulp quota would be prorated among established importers on the basis of imports during the last 22 months. Import licenses for other quota items would be issued on a first come, first served basis. These quotas did not apply to imports from countries with which Greece has bilateral trade agreements.

February 2. All types of water meters were placed on import List B, and thus were made subject to prior license from the Ministry of Industry.

April 1. Exchange allocations for imports of durum wheat (which heretofore had been subject to the approval of the Ministry of Trade) would be granted to flour manufacturers, provided that the luxury flours and macaroni products manufactured from it were exported within six months to an amount not less than 70 per cent of the c.i.f. value of the imported wheat. Flour manufacturers were further required to deposit with their bank a guarantee equal to 25 per cent of the c.i.f. value of the wheat imported. This guarantee would be subject to automatic forfeiture for failure to export the required quantity of milled flour or macaroni products within the time prescribed by the regulation. Flour manufacturers in the Dodecanese Islands were exempted from these requirements.

April 4. The bilateral payments agreement with Japan was terminated.

April 11. A quota of US$10 million for imports of iron and steel products was announced for the second half of 1960; licenses would be granted to established importers on a first come, first served basis for imports from all countries except those with which Greece has bilateral trade agreements.

April 15. Certain types of poultry incubators, brooders, and feed-mixers were placed on import List B, and thus were made subject to prior license from the Ministry of Industry.

April 23. Imports of bus chassis were tied to exports of sultana raisins for the period up to August 31, 1960. Only chassis approved by the Ministry of Communications and Public Works could be imported. Exporters of raisins were required to deposit a guarantee equal to 25 per cent of the f.o.b. invoice value of the raisins and to submit a “certificate of consumption” to the effect that the exported raisins would be consumed in the country manufacturing the chassis. The guarantee would be forfeited if the “certificate of consumption” was not submitted within three months of shipping the raisins. Exports of raisins had to precede the import of bus chassis unless special permission was obtained from the Ministry of Trade.

May 21. Greek shipowners operating ships outside Greek territorial waters and with established offices in Greece were permitted to deposit foreign exchange assets which they had voluntarily repatriated in special foreign exchange deposits with Greek banks, from which they could draw freely to meet expenses incurred abroad.

May 26. The bilateral payments agreement with Uruguay was terminated.

July 29. All quota restrictions were removed when five of the eight items subject to import quotas at the beginning of the year (see January 5, above) were removed from the quota list and placed on List A. Thus, for imports of timber, coal, iron and steel, tires and tubes, and newsprint, only the prior approval of a special committee at the Athens Chamber of Commerce and Industry would be required. The other three items, electrical equipment, sewing machines, and woodpulp, were completely freed from quantitative restrictions. A cash guarantee was no longer required for these imports if settled by documentary credit.

August 18. The bilateral payments agreement with Finland was terminated.

September 1. The payments agreement with Italy expired.

November 28. Imports of butter and cheese were no longer subject to the requirement of an advance deposit of 100 per cent.

Guatemala

Exchange Rate System

The par value is Guatemalan Quetzal 1.00 = US$1. The official rates are Q 1.0000 buying, and Q 1.0075 selling, per US$1. Guatemala has no exchange restrictions on foreign payments. Purchases and sales of exchange must, however, be made through banks. On January 27,1947, Guatemala notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from nonresidents are imposed, except that all purchases and sales of exchange must be made through banks.

Imports and Import Payments

Import licenses are required for certain commodities. Payments and transfers abroad may be made freely through banks. A surcharge of 100 per cent of the customs duty is applied to products originating in or imported from countries on a special list prepared by the Government on the basis of an analytical study of foreign trade for the preceding year. As at December 31, 1960, this surcharge applied to imports from 26 countries1 and to certain textiles imported from Japan. This surcharge is waived if the goods are transported in Guatemalan ships.

Exports and Export Proceeds

Export licenses are required for a few items. The proceeds of exports are not subject to exchange control requirements, but the sale of foreign exchange must take place through a bank.

Payments for and Proceeds from Invisibles

Payments for and receipts from transactions in invisibles are not restricted, except that purchases and sales of foreign exchange must be made through banks. Minor exchange transactions by tourists and other travelers are exempt from this requirement.

Capital

Incoming or outgoing capital payments by residents or nonresidents may be made freely.

Changes during 1960

February 8 and 10. For each unit of wheat required by domestic flour millers, at least 30 per cent had to be purchased from domestic producers and the remainder could be imported; this ratio applied to wheat imported on and after December 1, 1959. Licenses for imports of wheat would not be granted by the National Flour Development Commission until proof of compliance with this tie-in requirement had been presented. The prohibition of September 21, 1959 on imports of soft wheat and soft wheat flour was relaxed to permit imports of special soft wheat flours not produced in Guatemala.

March 16. The prohibition on imports of some 100 commodity items and the 20 per cent duty increase imposed temporarily on November 24, 1959 were repealed. Simultaneously, duties were increased on imports of many items formerly prohibited, as well as on some of those previously subject to the 20 per cent duty increase. In addition, duties were increased on some items which were not included in the November 1959 decree.

April 30. Uruguay was removed from the list of countries imports from which are subject to a 100 per cent surcharge on the import duty. At the same time, a 100 per cent surcharge on the import duty was imposed on imports of elastic ribbon (except for footwear), cotton, nylon, artificial silk, and other textile fibers originating in Japan.

Haiti

Exchange Rate System

The par value is Haitian Gourdes 5.00 = US$1. This is a uniform rate, applicable to all transactions. Exchange transactions by commercial banks with the public are subject to small banking commissions. Under a law of February 22, 1948, remittances abroad of amounts derived from insurance premiums are subject to a 3 per cent tax. Otherwise, Haiti has no exchange restrictions on foreign payments. On December 22, 1953, Haiti notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

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 restrictions on imports, none have so far been imposed. A few imports are controlled for other than balance of payments reasons. Payments abroad may be made freely.

Exports and Export Proceeds

The proceeds of exports are not subject to exchange control. Gold coins, bullion, etc., may be exported only by the National Bank of the Republic of Haiti. A few exports are subject to license.

Payments for and Proceeds from Invisibles

Payments for invisibles are not restricted, except for a 3 per cent tax on remittances abroad of amounts derived from insurance premiums. 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 1960

June 14. A new law was promulgated authorizing the imposition of import quotas for the protection of industries using mainly raw materials of local origin or whose production may favorably affect the balance of payments.

Honduras

Exchange Rate System

The par value is Honduran Lempiras 2.00 = US$1. The official rates are L 2.00 buying, and L 2.02 selling, per US$1. 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 or currency for payments to or from nonresidents are imposed.

Imports and Import Payments

Import licenses are required for a few items. Payments and transfer 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

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. All exports, re-exports, and transshipments to countries of the Soviet bloc are prohibited.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

Capital payments are not subject to exchange control.

Changes during 1960

No significant changes took place during 1960.

Hong Kong

Exchange Rate System

The par value is Hong Kong dollars 5.71429 = US$1. There is a multiple exchange rate system comprising the official rates, the free market rates, and four mixed rates, but all of these, so far as the rates for the U.S. dollar are concerned, were within 1 per cent of the par value as at December 31, 1960 (see Table of Exchange Rates, below). The official rates are those of the 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 origin, to portions of the proceeds in U.S. dollars of exports of seven commodities of local origin, and to most authorized non-dollar transactions. The free market rates apply to most other transactions.

Administration of Control

The exchange control system in Hong Kong is operated by 43 banks 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 not permitted to conclude exchange transactions at other than the official rates.

Prescription of Currency

The Colony of Hong Kong is a part of the Sterling Area, and all payments and receipts except those effected through the free market must be by the method and in the currency prescribed in the exchange regulations, as described in the following paragraphs.

The proceeds of exports to the Sterling Area may be obtained in any Sterling Area currency; to Hong Kong’s traditional trading area,1 in Hong Kong dollars; and to all other countries, in sterling from an External Account or in any specified currency.2 However, most exports to the dollar area are not subject to prescription of currency requirements and are settled in U.S. dollars through the free market. 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 sterling to the credit of an External Account or in any foreign currency, provided the incoming payment is received in sterling from an External Account or in one of the specified currencies.

Payments for imports from the Sterling Area may be made in sterling or in any other Sterling Area currency. Approved payments for imports from all other countries may be made by crediting sterling to an External Account or in any foreign currency through the official market. In addition, approved payments for imports from Cambodia, Indonesia, Laos, Thailand, and the Republic of Viet-Nam may be made by crediting Hong Kong dollars to a nonresident account. Imports from Mainland China, China (Taiwan), and Macao may be paid for freely in Hong Kong dollars. Most imports from the dollar area for local consumption or for re-export to Hong Kong’s traditional trading area (see footnote 1) may be paid for in U.S. dollars from the free market.

Nonresident Accounts

Credits to the accounts of banks situated outside the Sterling Area, Mainland China, China (Taiwan), the Republic of Korea, and Macao require licenses; payments from these accounts, including payments for, exports invoiced in Hong Kong dollars to the countries of the account holders, may be made to residents of Hong Kong. Credits to the accounts of persons and firms resident on the North American continent or in the Philippines require licenses, but licenses are not required for credits to the accounts of persons and firms in other countries. Payments between Hong Kong and other Sterling Area territories require licenses; however, authorized exchange banks may make or receive such payments without license if the transaction is in respect of (1) bona fide trade between Hong Kong and other Sterling Area territories, (2) dividends and interest payments, or (3) small bank charges. In addition, authorized exchange banks may make payment to Hong Kong residents for family remittances from residents of British North Borneo, Brunei, Cambodia, Indonesia, Laos, Malaya, Sarawak, Singapore, Thailand, and the Republic of Viet-Nam, without the requirement of an individual license but subject to a weekly report being made by the banks.

Imports and Import Payments

Except for certain strategic materials and for some other items from specified countries, imports are free of import license. Exchange licenses are required, even if the importer provides his own exchange, for imports from any country except other parts of the Sterling Area, the dollar area (if paid through the free market), Mainland China, China (Taiwan), and Macao. The exchange licenses are granted freely, provided payment is made in accordance with the regulations (see section on Prescription of Currency, above). Foreign exchange, except U.S. dollars, to pay for authorized imports may be obtained at the rate corresponding to the official rate. U.S. dollar exchange at this rate normally is authorized only for a few imports regarded as strictly essential; for other imports payable in U.S. dollars, foreign exchange may be obtained in the free market.

Payments for Invisibles

Exchange licenses are required to obtain exchange at the official rate. These are granted to local residents for most transactions in invisibles on criteria similar to those applied in the United Kingdom; e.g., exchange at the official rate for travel, personal remittances, and similar purposes is limited. The basic allowance of exchange at the official rate for residents (for exchange control purposes) of Hong Kong traveling abroad is UK£250 for each person for the 12 months beginning November 1, 1960. Applications for exchange in excess of this allowance to cover genuine travel expenses may be made to the exchange control. If exchange at the official rate is not authorized, exchange licenses may be issued upon evidence of the prior sale to an authorized exchange bank of the equivalent in U.S. dollars (which may be purchased in the free market). In any event, payments may be made freely through the free market by holders of Hong Kong dollars. Transfers to other parts of the Sterling Area require licenses, except that authorized exchange banks may make remittances for dividends and interest without licenses.

Exports and Export Proceeds

Exports of certain strategic articles and of a few commodities in short supply to any destination require licenses.3 For exports to all countries other than those in the Sterling Area, Mainland China, China (Taiwan), the Republic of Korea, and Macao, a declaration by the exporter showing how the export proceeds will be collected must be approved by the Department of Commerce and Industry.

The U.S. dollar f.o.b. proceeds of most exports originating in Mainland China, China (Taiwan), Hong Kong, the Republic of Korea, or Macao are freely disposable. However, portions of the U.S. dollar f.o.b. proceeds of certain exports originating in these countries must be surrendered, viz., 50 per cent for cotton yarn, 25 per cent for lead, silver (subject to prior permission), and tin, 20 per cent for copper and feathers, and 15 per cent for wood oil; the remaining percentages may be sold in the free market. The U.S. dollar proceeds of exports originating in other countries must be entirely surrendered. The proceeds of exports to countries other than those in Hong Kong’s traditional trading area and the Sterling Area must be obtained in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

The receipt of transfers from other parts of the Sterling Area, unless in respect of dividends or interest, requires permission. When freight and insurance on exports that have originated in Mainland China, China (Taiwan), 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 rate. The surrender of other exchange receipts from invisibles is not insisted upon.

Capital

Outgoing transfers of capital in currencies other than U.S. dollars may be made at the official rate; but they require licenses, which are granted only for approved purposes or, at the-discretion of the local control, provided that the equivalent in U.S. dollars has been sold to an authorized exchange bank. Transfers of capital may be made freely through the free market by holders of Hong Kong dollars, but all transfers to and receipts from other parts of the Sterling Area require licenses, which are granted for all bona fide transactions between Hong Kong and other parts of the Sterling Area.

Table of Exchange Rates (as at December 31, 1960)(sterling per Hong Kong dollar or Hong Kong dollars per U. S. dollar)
BuyingSelling
1s. 3132d.

All transactions in Hong Kong dollars against sterling. (Rates for other nondollar currencies are based on the sterling rate.)
1s. 21516d.

All transactions in Hong Kong dollars against sterling.

or
HK$5.694 (approx.)

Exports not originating in Mainland China, China (Taiwan), Hong Kong, Republic of Korea, or Macao, and received in U.S. dollars.
HK$5.730 (approx.)

A few essential imports payable in U.S. dollars. All non-dollar imports. Authorized invisibles and capital.
HK$5.703 (50% at HK$5.694 and 50% at Free Market Rate)

Cotton yarn exports.4
HK$5.707 (25% at HK$5.694 and 75% at Free Market Rate)

Lead, silver, and tin exports.4
HK$5.708 (20% at HK$5.694 and 80% at Free Market Rate)

Copper and feather exports.4
HK$5.709 (15% at HK$5.694 and 85% at Free Market Rate)

Wood oil exports.4
HK$5.71⅛ (Fluctuating Free Market Rate)

All other exports. Invisibles and capital.
HK$5.71⅜ (Fluctuating Free Market Rate)

All other imports payable in U.S. dollars. Other invisibles and capital.

Changes during 1960

No significant changes took place during 1960.

Iceland

Exchange Rate System

The par value is Icelandic Krónur 38.00 = US$1. The official rates are IKr 38.00 buying, and IKr 38.10 selling, per US$1. Rates for other currencies are based on these rates and the dollar rates for the other currencies in other countries. 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 licensing and on payments for invisibles. The Central Bank of Iceland is responsible for the regulation of foreign exchange dealings and of exchange control, and ensures 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 authorized to deal in foreign exchange besides the Central Bank. In addition, they issue import and exchange licenses in consultation with the Ministry of Commerce.

Prescription of Currency

Settlements with seven countries with which Iceland has bilateral payments agreements must be made in the currency and by the methods laid down in the relevant agreement. Transactions with these countries are settled through clearing accounts denominated as follows: with Hungary, Rumania, and the U.S.S.R., in Icelandic krónur; with Brazil and Poland, in sterling; with Czechoslovakia, in Icelandic krónur and Czechoslovak korunas; and with Eastern Germany, in U.S. dollars. For settlements with other countries, the general rule is that exchange receipts must be in convertible currencies. In practice, settlements with countries in the dollar area1 are made in U.S. dollars and those with most other countries, in sterling.

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, since payments for international transactions are usually made in foreign currencies.

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

“List A” goods (about 60 per cent of all imports) may be imported freely from all countries without quantitative restriction and without an import license. Individual licenses are required for other imports, most of which (“List B” goods) are authorized either under bilateral quotas agreed with countries with which Iceland has bilateral payments agreements or under global quotas applicable to imports from all other countries.

For imports not subject to license, the importer is obliged, before the goods are shipped from abroad, to arrange 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 under bilateral and global quotas, a letter of credit is opened or foreign exchange is sold in accordance with the terms stipulated by the license.

Advance deposits of 10 per cent or more, according to the nature of the goods and the method of payment, are required from importers by the authorized banks on import payments. The same interest is paid on advance deposits as on current accounts.

Imports are subject to import fees of 40 per cent, 30 per cent, or 15 per cent, according to the category of the goods. Imports of auto-mobiles are subject to higher fees.

Payments for Invisibles

No exchange license is required for government expenses, such as payments of interest and amortization of external loans, expenses of the foreign service and payments to international organizations, payments for postal, telegraphic, and telephone services, banking commissions, and bank charges on foreign exchange transactions.

A number of other outgoing payments are licensed freely on the basis of bona fide documents and some others are licensed freely up to established limits: expenditures of Icelandic vessels abroad, except major repairs, and those of Icelandic aircraft abroad, including operating costs and repairs; commissions and brokerage related to the export of Icelandic goods; business travel, travel for education (the limits vary according to country), and travel for health; salaries and wages of seasonal workers; tourism (up to the equivalent of IKr 7,000 a year for each person); and transfers by emigrating Icelanders or foreigners (US$280 a family in addition to the tourist allowance). Applications for exchange for all other transactions are considered individually.

Residents traveling abroad may take with them foreign banknotes and coins up to the limits set by the countries to be visited. The export of Icelandic banknotes and coins is prohibited. Nonresidents may re-export foreign banknotes and coins that were declared on entry.

Exports and Export Proceeds

With minor exceptions, exports require licenses. Exchange receipts accruing from exports must be surrendered without undue delay.2

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 use their foreign exchange receipts 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 by the authorized banks to use foreign exchange earned from premiums and indemnities to pay reinsurance premiums, claims, and other regular expenditures of the insurance business in the country where the foreign exchange was earned.

The import of Icelandic banknotes and coins is prohibited.

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, however, 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 a period exceeding one year. In practice, the acceptance of loans exceeding 90 days is subject to restriction. Transfers of capital abroad by residents require approval, which is granted only in exceptional cases; however, transfers of inheritances, assets owned by emigrants, and the like, are permitted liberally.

Nonresidents may acquire Icelandic securities and other assets with imported funds, but the transfer 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 license. The import and export of securities by residents are subject to the approval of the Central Bank.

Changes during 1960

February 22. The exchange system was revised and simplified. The par value was changed from IKr 16.2857 per US$1 to IKr 38.00 per US$1. The multiple exchange rate system, which had provided for rates ranging from IKr 16.26 to IKr 32.64 per US$1, was abolished, and uniform rates without surcharges or subsidies were applied to all transactions. A tax of 5 per cent of the f.o.b. value of exported commodities produced after February 15, 1960 was introduced, but was subsequently reduced, retroactively, to 2½ per cent. The import fees charged on many imports were reduced by about one fourth or one third, according to the category of import involved. The Export Fund was liquidated.

February 22. A basic exchange allowance of UK£40 a year was established for travel abroad.

June 1. The economic program was implemented in respect of exchange and trade controls. About 60 per cent of Iceland’s total imports (calculated on a 1958 basis) were freed from all restrictions vis-à-vis all countries. Other imports were made subject to individual licenses, issued under various procedures. Payments for invisibles were also liberalized: some could be made freely without license and some would be licensed freely up to certain limits; all others remained subject to individual license.

June 16. The bilateral payments agreement with Finland was terminated, and settlements with that country were placed on a convertible currency basis.

September 10. Global quotas were established for imports in 1960 of specified goods (“List B”) from countries with which Iceland does not have bilateral trade agreements. The value of import licenses issued prior to that date was deducted from the quotas, to determine the amount available for the remainder of the year.

December 31. The bilateral payments agreements with Israel and Spain were terminated, and settlements with those countries were placed on a convertible currency basis.

India

Exchange Rate System

The par value is Indian Rupees 4.76190 = US$1. Exchange transactions take place at uniform rates. All transactions in foreign exchange must be conducted through authorized dealers, whose dealings with the general public must be effected as follows: in sterling, at rates fixed by the Exchange Banks Association; in other currencies, at rates based on the fixed rates for sterling and 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 As at December 31, 1960, market rates for telegraphic transfers on London were 1s. 6132d. buying, and 1s. 53132d. selling, per Rs 1, and for telegraphic transfers on New York they were Rs 4.73 buying, and Rs 4.7625 selling, per US$1.

Administration of Control

The administrative work and decisions on exchange control matters are handled by the Reserve Bank of India, in accordance with the general policy laid down by the Indian Government in consultation with the Reserve Bank. Much of the routine work on 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 a 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 or in any listed currency.3 Receipts from the Convertible Account group may be obtained in any listed currency,3 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, Nepal, and Tibet are treated as resident accounts. Accounts related to other foreign countries are treated as nonresident accounts. The treatment of these accounts distinguishes between those of banks and 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, authorized transfers from the nonresident accounts of private firms or persons in the same country as the account holder, proceeds of sales of the currency of the country or monetary area of the account holder, and proceeds of 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 not exceeding Rs 20,000, to residents of India. These accounts may also be debited for remittances exceeding Rs 20,000 made 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 and all transactions through the accounts of banks in the Portuguese territories in India 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 and proceeds of small checks up to certain limits. They may be debited for such items as payments for insurance premiums, income taxes, and remittances to relatives, subject to a limit of Rs 1,000 for each transaction. All other credits and debits require the prior approval of the Reserve Bank. Transfers normally are not permitted from nonresident accounts of individuals or firms to nonresident accounts of banks belonging to the same country or monetary area, unless the items originally credited to such accounts were “currently remittable” in nature.

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 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 licensing may be by quotas allocated to established importers in accordance with their imports in a base period and to actual users on the basis of their current requirements, or it may be ad hoc. Licenses may be used to import from any country (except the Union of South Africa). At the beginning of each half-yearly licensing period, 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. Imports of betel nuts, cassia, cinnamon, cloves, and mace are licensed against the importer’s guaranteed undertaking to export within six months a specified quantity of groundnut oil and/or tapioca flour. There are also special procedures applicable to capital goods, heavy electrical plant, and 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 them 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 are received are not normally permitted; 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. However, 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 beneficiaries permanently resident in any country outside India, provided all current tax and other liabilities in India have been cleared.

Foreign employees are permitted to make reasonable remittances to their own country to pay insurance premiums or other expenses and for the support of their families. For Sterling Area nationals, other than nationals of Pakistan, authorized dealers may allow such remittances by the principal member of a family, up to a maximum of £150 a month, in the currency of any Sterling Area country. Nationals of Pakistan are allowed to remit up to Rs 50 a month for the support of their dependents in Pakistan. Each application from nationals of countries outside the Sterling Area is considered on its own merits, and facilities are provided for the remittance of savings that the applicant may reasonably be expected to make.

To obtain foreign exchange for travel or education abroad, individual application must be made.

Persons leaving India, except those going to Pakistan, Afghanistan, or the Portuguese territories in India, may take out Indian and foreign currency notes and coins not exceeding a total value of Rs 75 in any one month. Persons going to Pakistan may take out not more than Rs 50 in Indian notes and coins, and another PRs 100 in Pakistan notes and coins, on any one day. Persons leaving for Afghanistan may take out Afghan currency without limit, and Rs 50 in Indian notes and coins on any one day. Persons leaving for the Portuguese territories in India may take out Indian notes and coins not exceeding Rs 50 on each visit. Travelers are prohibited from taking out Indian currency notes in denominations of Rs 100 or higher.

Exports and Export Proceeds

Except for a few items that are not available in sufficient quantities to meet even domestic consumption needs or that are of strategic importance, most exports are free of controls and restrictions. Exports are encouraged, and definite measures are taken to make available to exporters their requirements of imported raw materials. The export of the few commodities which are restricted is controlled by the Chief Controller of Imports and Exports of the Ministry of Commerce and Industry and may be effected only under an open general license or a special license. Goods on open general license are not subject to quantitative restriction and may be exported to any destination unless the license is valid only for the dollar area or for Pakistan. Controlled exports not under open general license are licensed either freely or under global quotas.

The export of goods is permitted only if the exporter makes a declaration on the prescribed form to the Collector of Customs that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within the period specified by the Reserve Bank. The currencies in which the export proceeds may be received are prescribed, and the exchange must be surrendered.

Proceeds from Invisibles

Exchange received on account of invisibles in certain currencies (see footnote 1), sterling, Hong Kong dollars, Iraqi dinars, or Malayan dollars must be surrendered.

General permission, subject to customs declaration, has been granted by the Reserve Bank for any person to bring in Indian currency and banknotes not exceeding Rs 100 from Burma, Rs 50 from Portuguese territories in India, and Rs 75 from any other country, except that one-rupee notes may not be brought in from Afghanistan or Pakistan and the import of Indian currency notes in denominations of Rs 100 or higher is prohibited. Coins may be brought in without limit, except from Pakistan and the Portuguese territories in India, where the limit for Indian coins is Rs 5 a person. Special permission from the Reserve Bank is required to send Indian currency and banknotes to India. Foreign notes may be brought into India without limit, provided 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 forms part of an investment requiring the prior approval of the Indian Government. Foreign investments once admitted are eligible for the same treatment as Indian enterprises receive. Repatriation of capital owned by persons residing in Sterling Area countries other than Pakistan, and of capital invested in India 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) who emigrate may transfer Rs 50,000 a family at the time of their departure. Any remaining assets are held in India, but remittance of income on such assets is allowed in full. Sterling Area nationals temporarily resident but not domiciled in India are permitted to repatriate their assets, including capital investments, to any Sterling Area country at the time of their repatriation. Sterling Area nationals who emigrate from India to countries outside the Sterling Area are permitted remittance facilities on the same scale as in the United Kingdom. Other 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 an over-all limit of Rs 125,000 for each holder, provided 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. Any amount in excess of that authorized for free transfer is blocked.

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. Persons resident in India who become owners of foreign securities are permitted to hold them, provided they have been acquired in a manner not involving a breach of the Indian exchange regulations. The sale, transfer, or other disposal of foreign securities requires approval.

Changes during 1960

March 12. The sum which Indian nationals are permitted to transfer abroad when emigrating from India was reduced to Rs 50,000 a family for any country. (Previously, the limits for a family were Rs 75,000 for dollar area countries, Rs 200,000 for Sterling Area countries, and Rs 125,000 for other countries.) It was also announced that any assets in excess of Rs 50,000 would be held in India; remittance of income on such assets would be allowed in full, but no further transfers of capital would be permitted.

September 23. The amount of Indian notes that could be taken into or out of the Portuguese territories in India was reduced from Rs 75 to Rs 50 a person for each visit.

October 1. The import policy for the six months ending March 31, 1961 was announced. Imports of 25 listed commodities by established importers were prohibited and import quotas for some other items were reduced.

October 29. It was announced that the Governments of India and Nepal had signed a treaty of trade and transit to come into effect on November 1, 1960. The treaty confirmed that there would not be any exchange control between India and Nepal and that payments between the two countries would continue to be made in Indian rupees. It was agreed that Nepal would meet from its own resources its foreign exchange expenditures for transactions with countries other than India. India would cease to issue licenses for imports into Nepal from third countries and to provide exchange to pay for such imports. Authorized dealers in India were instructed that documents related to Nepalese exports to countries outside India should not be negotiated through them but through the Nepal Rashtra Bank.

November 1. The amount of Indian currency notes that could be brought in by travelers from Burma was increased from Rs 75 to Rs 100 a person. At the same time, the bringing in or taking out of Indian currency notes in denominations of Rs 100 or higher was prohibited.

December 6. It was announced that applications would be considered from established importers to import betel nuts, cassia, cinnamon, cloves, and mace, up to a certain percentage of their previous imports of these items, against the importer’s bond, duly supported by a bank guarantee, that within six months of importation he would export a certain proportionate quantity of groundnut oil and/or tapioca flour.

Indonesia

Exchange Rate System

No par value for the Indonesian Rupiah has been established with the Fund. The basic official rate is Rp 45.00 per US$1, on which are based the Bank Indonesia’s rates of Rp 44.83125 buying, and Rp 45.28125 selling, per US$1.

The Bank’s buying rate applies to all receipts. The Bank’s selling rate applies to certain highly essential (Class A) imports and to payments for most invisibles and capital transactions. Other Class A imports are subject to Komponen Harga levies of 25 per cent and 60 per cent, yielding effective rates of Rp 56.53125 and Rp 72.28125 per US$1, respectively. A rate of Rp 200.00 per US$1 applies to less essential (Class B) imports. Payments for certain nonessential invisibles and capital transactions are subject to a transfer tax of 100 per cent, yielding an effective rate of Rp 90.28125 per US$1. (See Table of Exchange Rates, below.)

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 of Import-Exchange Licenses. Export licenses are issued by the Bureau for Exports. Control is actually carried out by the Foreign Exchange Institute, the Bank Indonesia, the commercial banks authorized for this purpose, and the customs.

Prescription of Currency

Payments and receipts must be effected through the authorized banks. Settlements with all except bilateral countries may take place in convertible currencies. Generally, payments to dollar area countries are made in U.S. dollars and payments to OEEC countries are made in the currency of the country concerned or in sterling. Imports originating in the dollar area may also be paid for in U.S. dollars. Settlements with Mainland China and Czechoslovakia, with which Indonesia has payments agreements, are made through special clearing accounts.

Nonresident Accounts

There are two classes of nonresident account, as described in the following paragraphs.

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 30,000 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 since January 1, 1954. However, in cases of destitution, transfers to the debit of Capital Accounts may be permitted up to limited amounts at the discretion of the Foreign Exchange Institute.

Imports and Import Payments

Business establishments wishing to import must obtain the official recognition of the Department of Trade. Most importers are required to lodge a deposit with the Foreign Exchange Fund: for Indonesian nationals, the deposit is Rp 500,000, and for nonnationals (other than those classified as industrial or horticultural and importing goods solely for their own use), the deposit is Rp 5,000,000. After the importer has been registered, the deposit may be used to finance imports, including the payment of additional import levies. All imports require licenses, which are issued in accordance with a quarterly exchange budget. Specified goods, amounting to approximately 80 per cent of total imports, may be imported only by state enterprises.

Imports are classified in two categories, Class A and Class B. Imports in Class A—goods designated as essential—constitute 85 to 90 per cent of total imports. Except for goods characterized as basic necessities (e.g., rice), most Class A imports are subject to Komponen Harga levies on the basic official rate of 25 per cent (for most types of raw materials and capital equipment) or 60 per cent (for other raw materials and certain consumer goods). Imports in Class B—goods designated as less essential, mostly certain consumer goods and luxury items—constitute 10 to 15 per cent of total imports, and a rate of Rp 200 per US$1 is applied to them.

Import licenses are issued only for the c. & f. value of the import; insurance has to be covered in Indonesia. After obtaining the import license, the importer is required to conclude an exchange contract with an authorized bank, which then opens a letter of credit. Private importers are subject to a 100 per cent cash cover requirement against the letter of credit, except for incidental imports of essential goods and imports by industries of raw materials for their own use. Payments for imports may be made by a correspondent bank abroad only after the bank has received the documents evidencing the shipment to Indonesia of the merchandise as described in the related letter of credit or the import license.

Payments for Invisibles

Payments for most invisibles are made at the Bank’s selling rate and are subject to either general or special license from the Foreign Exchange Institute. Certain specified payments considered to be non-essential (e.g., foreign travel, expenses of agents abroad, patent fees and royalties, transfers from nonresident Income Accounts, and private contributions to international associations not having a “humanitarian” purpose) are subject to a transfer tax of 100 per cent. General licenses are issued to the authorized banks to make payments for specified invisibles on certain conditions without further authorization from the Foreign Exchange Institute. Payments in excess of the limits established in the general licenses and payments not covered by those licenses (e.g., 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) require special licenses from the Foreign Exchange Institute. Foreign exchange is not made available to pay insurance premiums on imports, except for some government imports with a special permit from 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 and children’s education, and as remittances of savings. In addition to this 20 per cent limit, there are annual limits of US$3,158 (Rp 36,000 at the previous rate of Rp 11.40 per US$1) for each remittor for those in independent professions and US$4,210 (Rp 48,000 at the previous rate of Rp 11.40 per US$1) for employed persons. A general license permits nonresidents to remit from their Income Accounts up to US$667 (Rp 30,000 at the basic official rate of Rp 45 per US$1) annually (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 Export Proceeds

All exports require licenses. There are no general limitations as to the destination of exports, but the Bureau for Exports will refuse to issue an export license if, for example, the shipment should not conform to existing trade agreements. Exports of high-grade rubber, estate coffee, and tea to Singapore and Malayan ports are prohibited.

Exporters (with the exception of those oil companies to which special arrangements apply) are required to surrender to an authorized bank in Indonesia all foreign exchange to which they become entitled. All exports, irrespective of the country of destination, must as a rule be financed by irrevocable bank credits, and the drafts drawn on such credits must be sight drafts. Exports may not be invoiced in rupiah, but must be invoiced in a currency acceptable to the Bureau for Exports.

Exports are subject to an export tax of 10 per cent. Under a special scheme, exporters from certain coastal regions of Sumatra may retain abroad 30 per cent of their proceeds from exports of goods to Singapore and Malaya for importing specified commodities.

Proceeds from Invisibles

Residents are required to surrender to an authorized bank in Indonesia all foreign exchange to which they become entitled. Foreign nationals resident in Indonesia may retain, in the currency of the country of their nationality, all income not arising 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 at the rate fixed by the Foreign Exchange Fund. 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 Bank’s buying rate. They may exchange only the following currencies and only with an authorized bank: U.S. banknotes (in denominations not exceeding $50) and U.S. travelers checks; sterling banknotes (in all denominations) and sterling travelers checks (payable outside the Sterling Area); Malayan banknotes (in denominations not exceeding M$10); Australian banknotes (in denominations not exceeding £A 25); and banknotes of the Federal Republic of Germany (in denominations of DM 5, DM 10, DM 20, DM 50, and DM 100).

Capital

There are no limitations on the remittance to Indonesia by nonresidents of capital which, if it were in the form of foreign exchange, would have to be surrendered in accordance with the regulations. All incoming and most outgoing capital transfers are made at the Bank’s buying and selling rates. A few capital payments that are deemed nonessential, e.g., transfers from nonresident Capital Accounts, are subject to a transfer tax of 100 per cent.

For the purpose of determining the treatment to be given them, companies operating in Indonesia with foreign capital are classified in three groups, as described in the following paragraphs.

Group I, also known as “old, active companies,” includes investments in Indonesia before January 1, 1954 in companies registered abroad, as well as investments in companies which, although they are registered in Indonesia, are owned by one or a few foreigners residing abroad. This group is divided into two categories:

Category 1Category 2
  • a. Estates

  • b. Mining

  • c. Industry

  • a. Transport and communication

  • b. Energy

  • c. Other industries

  • d. Printing

  • e. Banks

  • f. Development

  • g. Foreign trade

  • h. Domestic trade

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 then be used as follows: In Category 1, it may all be transferred abroad at the Bank’s selling rate; in Category 2, 60 per cent may be transferred abroad at the Bank’s selling rate and the remaining 20 per cent retained for private use in Indonesia. The reserve profits may be used for certain purposes, such as reinvestment in the companies concerned or in certain Indonesian enterprises, subject to approval by 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. Enterprises which formerly were in a third category are now classified in Group III (see below).

Group II, also known as “new investments,” comprises foreign capital invested in Indonesia 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 as that accorded to companies in Group I. Transfers of profits and authorized repatriation of capital by “new investments” are made at the Bank’s selling rate.

Group III, also known as “passive companies,” includes foreign investments in Indonesia that do not fall into the two groups described above. In principle, no direct transfers of profits or dividends are allowed for this group. However, in special cases, e.g., when the shares of the company—registered in Indonesia—were originally quoted on the Djakarta Stock Exchange or abroad, a direct transfer for dividend coupons received from abroad may be allowed, but not above 30 per cent of the company’s paid-up capital. 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 (see section on Nonresident Accounts, above).

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 a nonresident does not benefit thereby, directly or indirectly. Nonresidents are permitted to trade in specified domestic securities, provided 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 is subject to 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, 1960)(rupiah per U.S. dollar)
BuyingSelling
44.83125 (Bank’s Buying Rate)1

All receipts.2
45.28125 (Bank’s Selling Rate)1

Imports (Class A) of goods for “basic needs.” Government payments for debt service. Capital and invisibles not subject to the transfer tax.
56.53125 (Bank’s Selling Rate plus 25% Komponen Harga Levy)

Imports (Class A) of most types of capital equipment and raw materials.
72.28125 (Bank’s Selling Rate plus 60% Komponen Harga Levy)

Imports (Class A) of certain consumer goods and raw materials.
90.28125 (Bank’s Selling Rate plus 100% Transfer Tax)

Specified nonessential invisibles and capital payments.
200.00 (Special Rate)

Imports of Class B (less essential) goods.

Changes during 1960

August 29. The 20 per cent exchange tax on all exchange receipts was abolished, making the Bank’s buying rate (based on the official rate of Rp 45 per US$1) the rate applicable to all exchange receipts. However, an export tax of 10 per cent was established for all exports. Imports (formerly classified in six groups, five of which were subject to surcharges on the official rate ranging from 25 per cent to 200 per cent) were reclassified into two broad categories, Class A and Class B. Imports in Class A were further divided into three groups, for which payments were to be made at the Bank’s selling rate or the Bank’s selling rate plus a Komponen Harga levy of 25 per cent or 60 per cent. Payments for Class B imports were to be made at a special rate of Rp 200 per US$1. A transfer tax of 100 per cent was established on payments for specified nonessential invisibles and capital transactions.

October 15. It was announced that the official rate of Rp 45 per US$1 would, with effect from August 29, 1960, apply for conversion purposes to the operations of the oil companies.

Iran

Exchange Rate System

The par value is Iranian Rials 75.75 = US$1. All transactions take place at the rates fixed by the Bank Markazi Iran: Rls 75.00 buying, and Rls 76.50 selling, per US$1. There are charges on the invoiced amount of all imported goods of ½ of 1 per cent for sanitary services and 110 of 1 per cent under the law on encouragement of exports.

Administration of Control

Exchange control authority is vested in the Bank Markazi Iran (the central bank). Import licenses are issued by the customs authorities and exchange licenses by the Bank Markazi. All foreign exchange transactions must take place through authorized banks. The Ministry of Commerce determines the classification of imported and exported commodities.

Prescription of Currency

Payments and receipts are normally settled in the currency of the country concerned, provided the currency is one in which the Bank Markazi deals, or in sterling or U.S. dollars. Alternatively, payment may be made in a currency acceptable to both countries.

Transactions with countries with which Iran has payments or clearing agreements must be conducted in the currencies specified in the agreements: U.S. dollar accounts are used for transactions under the agreements with Hungary and Turkey; the Swiss franc is specified in the agreement with Czechoslovakia, sterling in the agreement with Poland, and the rial in the agreement with the U.S.S.R.

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.

Imports and Import Payments

Except for personal belongings, goods imported must, in general, be new and unused.

Exchange for imports is allocated freely, except for goods included in a list of prohibited imports. For the Iranian year 1339 (March 21 1960-March 20, 1961), the Bank Markazi is obliged to open letters of credit and to settle promissory notes for such imports on the basis of actual imports in the previous year. The regulations provide that, should the country’s foreign exchange reserves be insufficient for all authorized goods, priorities in payment may be established. If the “quota” established is exhausted and foreign exchange is available, additional exchange will be provided by the Bank Markazi with the agreement of the Ministry of Commerce. Specified commodities, such as sugar, silkworm eggs, tobacco, and cigarette paper, are imported under state monopoly, although special permits to import these commodities may be issued to private traders or institutions. Imports from Eastern Germany are also under state monopoly. Certain goods may be imported only with the consent of appropriate Iranian ministries.

Import licenses, which are required to clear goods through customs, are issued automatically by the customs authorities on receipt of documents showing that payment has been or will be made through an authorized bank. The customs authorities check whether the import is permitted (i.e., not prohibited), and customs clearance of a list of items is subject to payment of specified commercial profit taxes. Imports of precious metals, e.g., silver, gold, and platinum, are permitted if no exchange is transferred for that purpose; in such cases, an import license is not required.

Authorized banks may make payments against shipping documents for imports that are not prohibited. Charges are levied on the invoiced amount of all imported goods of ½ of 1 per cent for sanitary services and 110 of 1 per cent under the law on encouragement of exports. Persons holding “own exchange” are permitted to use that exchange for imports, provided they pay the above charges and Rls 1.50 per US$1 of the import value to an authorized bank; importers of books, newspapers, and periodicals are exempt from the Rls 1.50 per US$1 charge.

Payments for Invisibles

Payments for noncommercial purposes require licenses issued by the Bank Markazi, except that students have to present licenses issued by the Ministry of Education.

Each person presenting a visaed passport to an authorized bank will be sold, once in a year, UK£200 for travel in Europe and US$500 for travel in the United States. For children under ten years of age, half these sums will be sold. Persons going abroad for medical treatment will, in addition, be granted exchange licenses for medical expenses upon presentation of the relevant bills duly certified by the local Iranian Consulate.

Travelers may take with them Rls 3,000 in Iranian banknotes. Nonresident travelers may not export foreign currency in excess of the amounts they imported less the amounts they have sold to authorized banks, as recorded in their passports; they may, however, purchase up to US$20 (US$100 if the visitor has resided in Iran for at least three months), or the equivalent in other currencies, for traveling expenses, upon presentation of their visaed passports.

Exchange is granted to merchants for insurance of Iranian imports; but for imports covered by documentary credits, the insurance must be taken out in Iran and the exchange granted must be used for this purpose. For imports made against sight drafts, however, the c.i.f. value of the goods may be transferred to the exporter abroad. Exchange is not granted to merchants for insurance of Iranian exports sold f.o.b.

Exports and Export Proceeds

Exports of some commodities, including grain and flour, are subject to license.

Export proceeds, up to the amount of the export value as appraised by the customs authorities, must be offered for sale to an authorized bank within eight months after the export takes place. Authorized banks accept export proceeds in Belgian francs, deutsche mark, French francs, Indian rupees, Italian lire, Netherlands guilders, Pakistan rupees, pounds sterling, Swedish kronor, Swiss francs, and U.S. dollars. Export proceeds in other currencies may be used to purchase imports payable in the same currency.

Proceeds from Invisibles

Exchange receipts derived from invisibles must be surrendered unless used to import goods.

Travelers to Iran are permitted to bring with them unlimited amounts in foreign currencies and Iranian banknotes, but the repatriation of Iranian banknotes through the mail is not permitted. Travelers of Iranian nationality must either sell their exchange to authorized banks or deposit the funds in a temporary foreign exchange account, from which transfers abroad or to nonresident accounts will require a license from the Bank Markazi. Other travelers, during their stay in Iran, may sell their exchange only to an authorized bank at the bank’s buying rate.

Capital

Except as noted below, transfers of capital abroad require the approval of the Bank Markazi, which is given only in exceptional circumstances.

In accordance with the law concerning the encouragement and protection of foreign capital investment in Iran (1955) and the 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 in the original currency and at the commercial selling rate prevailing at the date of transfer. Capital imported in the form of foreign exchange must be in a currency acceptable to the Bank Markazi; exchange is converted into rials at the commercial buying rate prevailing at the date of application for conversion. The Bank Markazi has the option to buy the exchange, or to accept it as a deposit to be converted into rials, at a rate mutually agreed upon in a separate agreement; in this case, the rate applicable to repatriation is that mutually agreed rate. The law guarantees legal protection for foreign capital invested in accordance with its provisions and for the profits thereof, and provides for a committee to make recommendations on proposed investments to the Council of Ministers.

Changes during 1960

April 16. The import program for the Iranian year 1339 (March 21, 1960–March 20, 1961) was published. Imports of all goods except those on the list of prohibited imports were authorized, and the Bank Melli Iran was obliged to open letters of credit and pay drafts for all authorized goods on the basis of imports in the year 1338. Certain changes were made in the list of prohibited imports, and the scope and amount of the commercial profit taxes were increased.

May 28. Under a decree ratified on this date, the Bank Markazi Iran was established as the central bank of Iran and took over exchange control authority which had previously been vested in the Bank Melli Iran.

June 26. Travel allowances were reduced from UK£400 or US$1,000 a year to UK£200 or US$500. At the same time, the amount provided for the traveling expenses of foreign nationals who had not brought exchange into the country was reduced from US$100 to US$30; subsequently, this amount was reduced to US$20.

August 23 and September 17. The commercial profit taxes were further increased.

October 11. A trade and payments agreement between Iran and Japan was signed and provisionally entered into force. Its provisions included the termination of the special restrictions which had been applied by Iran to certain Japanese imports.

October 27. The amount of exchange available for foreign nationals leaving Iran (see June 26, above) was increased from the equivalent of US$20 to the equivalent of US$100 for a visitor who had been residing in Iran for at least three months.

Iraq

Exchange Rate System

The par value is Iraqi Dinar 1 = US$2.80. Most transactions in the official market are effected in sterling or in Iraqi dinars through nonresident accounts in Iraq. The Central Bank of Iraq quotes official rates for U.S. dollars, Swiss francs, deutsche mark, Netherlands guilders, Belgian francs, and Austrian schillings, and operates at these rates with authorized dealers. There is a small free market (mainly in banknotes) for limited transactions in Iranian rials and Saudi Arabian riyals.

Administration of Control

Exchange Control Law No. 18 of 1950 entrusts the Board of Administration of the Central Bank of Iraq with all powers and responsibilities in connection with exchange control. In practice, how-ever, the Board has delegated most of its administrative authority to the Directorate of Foreign Exchange of the Central Bank. All foreign exchange transactions must take place through licensed dealers unless specially authorized by the Central Bank. All imports and some exports, other than of banknotes, coins, gold, and securities, are subject to licensing by the Directorate-General of Imports and Exports in the Ministry of Commerce.

Prescription of Currency

Settlements must be made in convertible currencies or, under bilateral payments agreements, in dinars through an appropriate dinar account of a nonresident.1

Nonresident Accounts

Nonresident accounts are designated according to the residence of the account holder.

Imports and Import Payments

An annual program based on the anticipated needs of the economy and other considerations (e.g., protective reasons and exchange availabilities) establishes the total value and composition of imports.

All imports from Israel and certain imports from all other countries are prohibited. Other goods may be imported under individual license. Only registered importers may apply for import licenses. Imports of certain goods are licensed against quotas at selected times during the year. All other goods may be imported without any specific allocation, and applications for import licenses for these items may be made at any time during the year. Licenses are valid for imports from all sources except Israel.

Authorized exchange dealers may make exchange available upon presentation of the exchange control copy of the approved import license. Payments to Cyprus require special authorization.

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. or a c.i.f. basis, insurance premiums, and royalties on certain motion-picture films. Exchange is not, however, granted to merchants for the insurance abroad of their imports or exports. For the transfer of interest and profits, exchange is provided if the amounts applied for are considered reasonable. 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 the remittances do not exceed half of the resident’s monthly income; for amounts exceeding this limit, it is necessary to refer to the exchange control authorities.

For tourist travel, there is a basic yearly allowance for each person of ID 300. Travelers may take out ID 15 in Iraqi currency notes and the equivalent of ID 25 in foreign currency. Pilgrims to Saudi Arabia are permitted to take out the equivalent of ID 160 in foreign exchange, of which ID 80 may be in Iraqi notes and coins. The granting of exchange to meet the costs of business travel is subject to administrative approval. Most travel fares are payable in Iraqi dinars to travel agents in Iraq.

Exports and Export Proceeds

All exports require licenses. Specified exports (e.g., certain kinds of livestock, certain foodstuffs in short supply, cereals and fruits, and raw materials in short supply) can be prohibited, but some of these (e.g., wheat and certain fruits) may be exported if specially authorized by the High Supply Committee. All exports to Israel and exports of certain goods to all other countries are prohibited, but export licenses are at present issued freely for all other shipments. Generally, goods imported into Iraq may be re-exported, subject to license; however, such specified goods as cars and agricultural machinery may not be re-exported.

Only registered exporters may apply for export licenses. Exporters must undertake to repatriate through a bank foreign exchange in prescribed currencies to the agreed value of the exports. However, foreign exchange proceeds from exports of dates to Pakistan may be used to obtain imports from that country in accordance with special arrangements.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers may bring in foreign currency, including notes, in unlimited amounts, provided that declarations are made to the Iraqi customs, and foreigners may re-export any unused amount. Pilgrims returning from Saudi Arabia may bring in ID 80, and other travelers ID 15, in Iraqi notes.

Capital

In general, all transfers of capital abroad require exchange control approval. The transfer of capital abroad by residents is not allowed, except for the 30 per cent of their deposits that authorized banks may be permitted to invest abroad. 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 investment in Iraq is permitted freely, and exchange is provided for the repatriation of reasonable profits upon submission of an audited earnings statement and proof that local taxes have been paid. Interest payments may be made freely, subject to administrative checking. Imports of capital from Israel are prohibited.

Changes during 1960

January. A bilateral trade and payments agreement was signed with Tunisia.

May. A bilateral trade and payments agreement was signed with Mainland China.

August. Travelers could take out ID 15 in Iraqi currency notes and the equivalent of ID 25 in foreign currency. Pilgrims returning from Saudi Arabia could bring in ID 80 in Iraqi notes.

Ireland

Exchange Rate System

The par value is Irish Pound 1 = US$2.80. Exchange rates are based on the parity of the Irish pound with sterling and the London market rates for sterling against other currencies. 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, whose permission is required before orders may be placed for goods originating outside the Sterling Area, if the goods are not to be used in Ireland or are to be delivered more than nine months after the date of the order. 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

The Irish Republic is a member of the Sterling Area, and payments to and from other parts of the Sterling Area may be made in a Sterling Area currency without formality. 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 may be accepted in Irish pounds or sterling through an External Account or in any specified currency.

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. External Accounts 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 capital funds due to persons resident outside the Sterling Area and 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 the 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 Irish pounds or sterling, regardless of the account holders’ countries of residence, except that transfers may not be made to the account of a resident of Denmark, the Faroe Islands, Greenland, Norway, or Sweden from the account of a person resident outside those countries.

Imports and Import Payments

The import of goods into Ireland is subject to two types of administrative control: (1) regulations applied by the Department of Industry and Commerce under the Control of Imports Acts 1934 and 1937, and by the Department of Agriculture under the Agricultural Produce (Regulation of Imports) Act 1938 and the Acts relating to dairy produce and cereals, and (2) regulations applied by the Department of Finance under the Exchange Control Acts 1954 and 1958. Only the former are used to limit the quantity of goods imported; they cover only a limited range of commodities for protective purposes.

Under the first type of control, 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. All other imports are free from this import licensing. Under the second type of control, the 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. The submission of an exchange control form is required for amounts exceeding £500.1

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 persons resident outside the Sterling Area require approval, but there is a general authority covering the costs of transport, handling, and insurance of Irish imports and exports. Other payments for invisibles are authorized freely.

There is a basic allowance of exchange for tourist travel of £250 for each adult for 12 months, but applications for larger amounts are approved provided 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.

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 are required to obtain payment for the goods in the manner prescribed in the regulations 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. 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, except that certain capital receipts in foreign currency may be invested in securities payable in that currency, provided the investment is carried out within six months through a bank, a stockbroker, or a solicitor. Transactions in securities are controlled to ensure that capital is not transferred outside the Sterling Area.

Changes during 1960

March 31. The prior permission of the Department of Finance was no longer required for placing orders for imports not covered by General Exemptions, unless the goods were not to be used in Ireland or were to be delivered more than nine months after the date of the order.

April 28. The special import levies imposed in 1956 were further reduced, and some were abolished entirely.

September 1. Exchange control forms were no longer required for exports not exceeding £2,000 (previously £500) to countries outside the Sterling Area.

Israel1

Exchange Rate System

The par value is Israel Pounds 1.80 = US$1. This rate applies to most transactions, but for some transactions special premiums give rise to other rates. Premiums ranging from I£0.36 to I£1.20 per US$1 are applied to that part of the exchange proceeds of exports of industrial and agricultural products, and of certain services, which is regarded as value added domestically. A premium of 20 per cent is paid to nonresident tourists, to foreign personnel in diplomatic and consular missions in Israel, and on foreign exchange surrendered within three years of entry by new immigrants. (See Table of Exchange Rates, below.)

Administration of Control

Exchange control is exercised by the Department of Foreign Exchange Control of the Treasury (Ministry of Finance), under the responsibility of the Controller of Foreign Exchange in cooperation with other government agencies, and is carried out through the authorized banks. The official exchange rates are published by the Bank of Israel.

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 force2 are usually made in U.S. dollars as an accounting unit, sterling, or the currency of the partner country.

Nonresident Accounts

Nonresidents’ funds are held either as foreign currency accounts or as local currency accounts. A nonresident abroad may use his foreign currency account freely; if in Israel, he may convert it into local currency. Local currency accounts of nonresidents are of two types, Registered Accounts and Blocked Accounts, the only difference in their use being that Blocked Accounts may be transferred freely between nonresidents while Registered Accounts may not. Blocked Accounts are opened for the holding of funds derived from former investments or funds transferred to Israel at the official rate of exchange; other nontransferable funds are credited to Registered Accounts. Both types of account may be used for investment in Israel securities, for the purchase of real estate, for the payment of property taxes payable by the account holder, for tourist expenses in Israel of up to I£100 a day for the account holder and the same amount for each member of his family if the account has been held for at least one year, for remittances of up to I£2,500 to relatives who are Israel residents if the account has been held for at least one year, and for donations to public or charitable institutions up to I£5,000 a year.

Imports and Import Payments

All imports require individual licenses. Every import license must be countersigned by the Department of Foreign Exchange Control of the Ministry of Finance, to indicate that the proposed method and channel of payment are approved. Exchange to pay for licensed imports is granted automatically at the official rate. For many commodities, import licenses are issued upon application. Before the license will be issued, 20 per cent of the c.i.f. value of an import being made on “cash-against-documents” or “private credit” terms has to be paid to a special (Wapa) account at the Bank of Israel. At the time of opening a documentary credit, the entire amount of foreign currency or clearing currency required must be purchased, and, if it is not transferred abroad immediately, it must be deposited in a special account with the Bank of Israel until the transfer is made. When opening “cash-while-using-credit” documentary credits, 40 per cent of the value of the import has to be deposited in Israel currency in special accounts at the Bank of Israel and used later to purchase foreign exchange to cover payments made by the bank’s correspondents abroad to the suppliers. Government agencies are exempt from these advance deposit requirements.

Payments for Invisibles

Most payments abroad for invisibles require individual licenses. Many authorized payments are made at the official rate, e.g., the annual transfer of all profits, interest, and repayments on loans. If in any one year the profits are less than 10 per cent of the investment, an additional allocation of foreign exchange may be allowed.

The export of Israel banknotes is prohibited. 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£360. Israel residents intending to travel abroad may buy foreign securities at free market prices from the holder of a Pamaz Transfer account (see section on Proceeds from Invisibles, below). After holding these securities for at least 15 days, they may sell them abroad and receive out of the proceeds an amount not exceeding US$120, or its equivalent, for travel purposes. Residents must acquire foreign exchange in the same manner for payments for many other invisibles.

Exports and Export Proceeds

Locally produced goods that fulfill certain requirements may be exported without a license; other exports require licenses. Exports to certain clearing countries are not permitted unless the value added domestically is at least 20 per cent. Export proceeds in foreign currencies must be surrendered at the official rate of I£1.80 per US$1; the portion corresponding to the import component may be deposited with authorized commercial banks in Demamach accounts (foreign exchange accounts). The use of these accounts for replacement of the import component is subject to import license, and they are not transferable.

All exports receive premiums, which vary according to certain factors and are calculated on the net value added, i.e., the value of the export after deducting the direct and indirect foreign exchange costs. For exports of citrus fruits, the premium for the 1959-60 season is I£0.50 per US$1 of the net value added. For most other exports, the premium is I£0.85 per US$1 of value added. An additional export premium of I£0.15 per US$1, also calculated on the net value added, is given for exports of all goods, other than citrus products, to West Africa.3 Certain products are temporarily granted exceptional premiums of up to I£1.20 per US$1 of net value added when sold to specified new markets.

Proceeds from Invisibles

Exchange proceeds from invisibles must, in general, be surrendered or kept in foreign exchange as time deposits (Pazak accounts). Convertible currencies—but not clearing currencies—received from abroad may be deposited in these accounts, which are available for exchange into Israel currency at the rate prevailing at the time the exchange is made. Residents of Israel who receive convertible currencies from inheritances and legacies, social security payments, pensions,

rentals, life insurance, the income of authors, journalists, artists, lawyers, and doctors, royalty payments, personal compensation, or from the liquidation of property abroad for the purchase of which no foreign exchange had been allocated, and who sell the exchange or any part thereof to the Ministry of Finance at the official rate, are entitled to receive a bonus in the form of interest-bearing debentures with a face value of 20 per cent of the Israel pounds received by them. Alternatively, one third of the foreign exchange so received may be retained in a Tamam (or Pamaz Transfer) account—a third type of foreign exchange account—and up to two thirds may be deposited in a Pazak account. Holders of Tamam accounts may use them for certain purposes, including the purchase of foreign securities, for themselves or their immediate families, without prior approval. Foreign securities purchased to the debit of a Tamam account may be sold to other Israel residents at free market quotations.

For a period of ten years after entering Israel, new immigrants and temporary residents are exempt from surrendering their foreign currencies to the Treasury or depositing them in PAZAK accounts, and they may keep these currencies with authorized banks in Israel or with foreign banks abroad. During the first three years after entry, new immigrants and temporary residents are granted a 20 per cent premium on all foreign exchange they surrender.

Premiums are also granted on exports of certain services. These are I£0.36 per US$1 of net value added on shipping, I£0.85 per US$1 on contractual services and on airline transportation, and I£0.85 per US$1 on 40 per cent of air freight.

Tourists visiting Israel are expected to bring with them the amounts of foreign currency that they will need during their stay. On changing their foreign currency into Israel pounds, they are given a 20 per cent premium on amounts up to US$1,500 a month. The same facility is extended to foreign personnel in diplomatic and consular missions up to a maximum of US$1,500 a month. The import of Israel banknotes is prohibited. Tourists and others visiting Israel who are holders of Blocked Accounts or Registered Accounts (see section on Nonresident Accounts, above) are permitted to draw upon such accounts to the extent of I£100 a day for themselves and the same amount for each member of their families, provided that they have held the account for one year or more.

Capital

Foreign exchange representing incoming capital has to be surrendered at the official rate. Capital brought into Israel for the purpose of investment can, 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. Repayment and amortization of capital may also be transferred on the following terms: If the investment has been kept for five years or less, 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 during the period which remains until the end of ten years from the date the investment was made. An investment kept for ten years or more may be withdrawn immediately. Foreign investments effected 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 that are registered on the stock exchange and that 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 bonds or shares.

Payments due to nonresidents and not permitted to be transferred abroad may be credited to Registered or Blocked Accounts (see section on Nonresident Accounts, above).

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 of first entry retain their foreign assets without declaring them and use these assets freely; on any part of their holdings which they surrender during the first three years, they receive a 20 per cent premium on the official rate. Transfers abroad of a capital nature by residents are not as a rule permitted, but may be effected by selling abroad foreign securities purchased from holders of Tamam accounts. Holders of such accounts may import any foreign security quoted on an official stock exchange in the issuing country, and these securities are freely negotiable among residents.

Exports of, and transactions in, securities involving nonresident interests are subject to approval. However, foreign capital in Blocked Accounts may be invested freely in securities quoted on the Tel Aviv stock exchange. Nonresidents also may freely purchase such securities with foreign exchange sold at the official rate.

Table of Exchange Rates (as at December 31, 1960)4(Israel pounds per U.S. dollar)
BuyingSelling
1.80 (Official Rate)

All exports. Most invisibles, including appeals and charitable donations. Capital.
1.80 (Official Rate)

Authorized imports. Authorized invisibles. Capital.
2.16 (Official Rate plus 20% Premium)

Tourist exchange. Exchange sold by personnel of foreign missions up to certain limits. Exchange sold by new immigrants within three years of entry.

Changes during 1960

January 13. The bonus of I£0.70 per US$1 paid on transfers of foreign exchange to Israel by certain categories of new immigrants was discontinued.

February 1. The payments agreement with France was terminated.

March 6. New immigrants were exempted, for ten years after their first entry, from the obligation to offer their foreign currencies for surrender, and they were granted a 20 per cent premium on any foreign exchange transferred to Israel and surrendered during the first three years of that period.

March 18. The payments agreement with Turkey was revised to provide for partial payments in convertible exchange.

April 1. The discount on the proceeds of exports to Iceland was abolished.

April 15. The payments agreement with Argentina was terminated.

June 1. The proceeds of exports to Hungary and Rumania were granted the regular premium of I£0.85 per US$1 of net value added.

June 15. A consolidated list of liberalized imports and corresponding customs duties and customs surcharges was issued.

June 27. The amount of foreign currency which foreign tourists could repurchase from authorized banks when leaving Israel was increased from the equivalent of I£180 to the equivalent of I£360.

July 1. The premium on the proceeds of exports to West Africa was reduced from I£1.20 to I£1.00 per US$1 of net value added.

September 1. New import regulations were issued revising the procedures applicable to advance deposits for the opening of documentary credits for imports.

November 28. Balances on Blocked or Registered Accounts could be used, up to I£5,000 a year, for donations to public or charitable institutions in Israel.

November 28. Israel citizens were permitted to purchase gold, hold it in Israel, or hold it abroad through the intermediary of an authorized dealer. Such gold could be sold to other Israel citizens for Israel pounds, or be sold abroad, through an authorized dealer, for convertible currency.

Note.—The following changes took place early in 1961:

January 1. The 20 per cent bonus payable on sales of convertible currencies to the Ministry of Finance was made applicable to the income of authors and journalists, artists, lawyers, and doctors, and to royalty payments.

January 1. The bilateral payments agreement with Iceland was discontinued.

February 15. The bilateral payments agreement with Finland was terminated.

Italy

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 most externally convertible European currencies1 vary between limits resulting from the dollar rate for the lira in relation to the dollar rates for the other currencies. Forward premiums and discounts are left to the interplay of market forces. Authorized banks are allowed to engage in spot and forward exchange transactions in any currencies. There is a separate exchange market for banknotes, which is related to certain capital transactions (see section on Banknotes, below). Italy accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Exchange Control Territory

Exchange control is not exercised over payments from the Italian Republic to the Republic of San Marino or the Vatican City.

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.

Prescription of Currency

Payments to Portugal, with which Italy has a clearing agreement,2 must be made by crediting the clearing account; receipts from Portugal may be accepted from the clearing account, in lire to the debit of a Foreign Account (see section on Nonresident Accounts, below), or in U.S. dollars, Canadian dollars, or externally convertible European currencies except Portuguese escudos.1 These currencies, and Italian lire debited or credited to any Foreign Account, may be used for settlements with all other countries, except that certain payments must be settled in lire through Capital Accounts (see section on Nonresident Accounts, below) and all settlements with Somalia must be made in lire through a special centralized account.

Nonresident Accounts

The main types of account in Italian lire which nonresidents are allowed to maintain with authorized banks in Italy are Foreign Accounts, primarily for current transactions, and Capital Accounts, for financial transactions (mainly investments and income thereon, banknote transactions, and the travel expenses of nonresidents in Italy). The use of these accounts is described below.

1. Foreign Accounts may be held by residents of any foreign country. They may be credited with transfers from other Foreign Accounts, with authorized current payments by residents of Italy, and with the proceeds of sales of U.S. dollars, Canadian dollars, and externally convertible European currencies except Portuguese escudos, and they may be debited for purchases of any of these currencies, for transfers to any other Foreign Account or Capital Account, and for payments to residents of Italy for current transactions.

2. Capital Accounts may be held by residents of any foreign country. They may be credited with transfers from Foreign Accounts and from other Capital Accounts, with proceeds from sales by nonresidents of foreign banknotes in the Italian market and with Italian banknotes sent to Italy by banks abroad, with proceeds from the sale of foreign-owned personal property and real estate in Italy, and with payments arising from the regulation of foreign-owned capital in Italy under Legislative Decree No. 211 of March 2, 1948 and Law No. 43 of February 7, 1956. Capital Accounts may be debited for transfers to any other Capital Account, for the purchase of investments, for living and traveling expenses in Italy, for payment of taxes, and for certain other expenses. They are not exchangeable in Italy into foreign currency, except in banknote form, and transfers from them to Foreign Accounts are not permitted.

There are special centralized accounts for transactions with Somalia and the Portguese Monetary Area (but see footnote 2).

Imports and Import Payments

Import licenses for goods from OEEC countries and their associated territories, Afghanistan, the Republic of the Congo (Leopoldville) Ethiopia, Finland, Iraq, Nepal, Saudi Arabia, Somalia, the Sudan, Thailand, the United Arab Republic (Egyptian Region), Viet-Nam, and Yemen are required only for a few items; these are listed in a Tabella “B Import” Licenses are also required for a few commodities when imported from the dollar area and certain other countries;3 these are listed in a Tabella “A Import.” Separate positive and negative lists (Tabella “C Import” and Liste Particolari) indicate the goods that may be imported without import license from various other countries, all other imports from these countries being subject to license. 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 in accordance With the regulations (see section on Prescription of Currency, above). International postal money orders may be used to pay for imports not exceeding Lit 50,000 in value.

Payments for Invisibles

In principle, payments abroad for invisibles require licenses issued by the exchange control authorities; but in practice, the authorized banks may grant foreign exchange freely for expenses incidental to trade transactions, provided the necessary documentation is submitted. They are also permitted to approve payments abroad up to specified limits for other types of expenditure, such as travel. Applications for amounts beyond these limits are approved on a liberal basis, subject, when appropriate, to the prior examination of supporting documents by the Italian Exchange Office. Exchange is granted freely for remittances of earnings on investments in Italy in productive enterprises (see section on Capital, below). Residents may use international postal money orders for financial payments in the currency and within the limits established for each country. As a rule, when the cost of insurance premiums is being met by Italian exporters or importers, payment to domestic or foreign insurance companies operating in Italy is in lire; premiums may be paid in foreign exchange or in lire credited to a Foreign Account only for goods arriving in Italy or being sent out of Italy the insurance on which has been stipulated by contractual agreement with an insurance company chosen by the seller or buyer abroad.

Residents traveling to foreign countries may obtain from the banks exchange equivalent to Lit 500,000 for each trip for tourism, business, and education; larger amounts can be granted by the banks in particular cases, account being taken of the economic situation of the applicant as well as the duration and purpose of the trip. 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 listed in a special table (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. Payment must be received in accordance with the regulations (see section on Prescription of Currency, above).

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 except Portuguese escudos may be retained by the recipients in foreign exchange accounts for six months, during which such balances may be used for permitted transactions or sold to other residents through authorized banks; the banks are allowed to sell these currencies to residents for authorized transactions or to negotiate them freely with the Exchange Office or among themselves. After expiration of the retention period, unused balances must be sold to the 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, except that shipping and insurance companies and travel and forwarding agencies may keep operating accounts in U.S. dollars, Canadian dollars, and any externally convertible European currency except Portuguese escudos. Persons may bring in any amount in Italian or foreign banknotes.

Capital

In accordance with the provisions of Law No. 43 of February 7, 1956, the repatriation of capital invested in the establishment or expansion of productive enterprises and the transfer of income thereon are not restricted. For other investments, the original capital may be repatriated after a minimum period of two years and the transfer of income is limited to 8 per cent. Any amounts which arise from investments that are not freely transferable abroad may be credited to Capital Accounts (see section on Nonresident Accounts, above).

Italian companies may freely take up participations in foreign companies and purchase foreign shares, provided such investments are in their lines of business and are intended to facilitate the expansion of the firms’ activities abroad. Residents may make other investments in countries of the European Economic Community in accordance with the Community’s program of liberalization of capital movements (direct investments and their liquidation, movements of personal capital, short-term and medium-term commercial credits, etc.). Other investments abroad by residents are subject to approval, which is granted only when such investments are considered economically advantageous. Residents may be authorized to make investments abroad with foreign banknotes purchased in Italy or by crediting lire to a Capital Account.

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 except Portuguese escudos, or against funds on a Capital Account.

Banknotes

Residents are authorized to receive foreign banknotes from non-residents as gifts or in payment for goods sold and services rendered to tourists during their stay in Italy. Banknotes so acquired must be sold to an authorized bank within seven days. A bank abroad may remit Italian banknotes to authorized banks in Italy for the credit of its Capital Account. Authorized banks may deal among themselves or with the Italian Exchange Office in foreign banknotes, sell foreign banknotes to residents traveling abroad or investing overseas, or export foreign banknotes for credit or for exchange into U.S. dollars, Canadian dollars, or externally convertible European currencies except Portuguese escudos.

Changes during 1960

March 16. The period within which an exporter is required to surrender exchange proceeds to an authorized bank was extended from 15 days to 6 months.

March 30. An initial par value of Lit 625.00 per US$1 was agreed with the International Monetary Fund.

June 4. The “global” compensation arrangements for trade with Uruguay were abolished, and settlements with that country were placed on a convertible currency basis.

July 1. A bilateral agreement with Somalia established that all settlements between Italy and Somalia would, for a period of at least 18 months, be made through a centralized clearing account in inconvertible Italian lire.

August 31. The limit on the value of imports and exports below which no exchange control form need be presented to the customs was raised from Lit 50,000 to Lit 150,000. Imports and exports with exchange settlements valued from Lit 150,000 to Lit 500,000 required only the completion of a form by the importer.

September 1. The bilateral payments agreement with Greece was terminated, and payments to and from that country could be made in convertible currencies.

September 1. The basic tourist exchange allowance was increased from Lit 300,000 to Lit 500,000.

September 19. A general authorization permitted the authorized banks to make payments to and accept receipts from other countries in the European Economic Community (EEC) in respect of a wide range of capital transactions. Another general authorization permitted the authorized banks to allow, in respect of trade with other EEC countries, payments for imports and exports to be made within five years before or after the date of import or export.

December 14. Finland was included in the list of countries benefiting from the import liberalization treatment accorded to the OEEC countries and some others.

December 17. The limit on the value of individual imports and exports below which no exchange control form is needed (see August 31, above) was raised from Lit 150,000 to Lit 250,000.

Japan1

Exchange Rate System

The par value is Japanese Yen 360.00 = US$1. The official rates of authorized banks for telegraphic transfers in U.S. dollars are maintained between official limits of ¥ 358.20 buying, and ¥ 361.80 selling, per US$1. Authorized banks may freely carry out spot and forward exchange transactions in the designated currencies.2

Administration of Control

A Ministerial Council, whose main function is to establish the foreign exchange budget and approve its revision, is the highest control authority on the policy level. The Ministry of International Trade and Industry (MITI) carries out exchange and trade control policy in respect of merchandise transactions and nonmerchandise transactions incidental thereto. The Ministry of Finance, through its Foreign Exchange Bureau, carries out policy in respect of prescription of currency and method of settlement, the operations of the foreign exchange fund, payments for nonmerchandise transactions, and capital transactions and transfers. The Ministry of Finance also has the function of determining exchange rates. The Bank of Japan, as the Government’s agent, executes the above functions in part. Authorized banks carry out the controls on the technical, administrative level.

Prescription of Currency

Settlements on account of merchandise transactions and invisibles are made in accordance with the following prescription of currency requirements: (1) Payments to and from all countries except the open account countries may be made in any of the designated currencies.2 (2) Payments to and from the open account countries—China (Taiwan) and Korea—are made through the accounts established under the bilateral payments agreements with those countries; alternatively, incoming payments from these two countries may be accepted in any of the designated currencies.2 Deviations from these prescription of currency requirements are subject to individual licenses from the control authorities.

Nonresident Accounts

There are four main classes of nonresident account, as described below.

1. Nonresident Free Yen Accounts. Free yen accounts may be opened by nonresidents with any authorized bank in Japan and may be credited with the yen proceeds from sales of designated foreign currencies, with transfers from other free yen accounts, and with other authorized payments. Yen on these accounts may be exchanged into any of the designated currencies. However, there are some restrictions on crediting nonresident earnings to these accounts.

2. Nonresident Yen Deposit Accounts. These accounts may be held by any nonresident. Debits to these accounts for the personal needs of the account holder or for certain payments in yen without compensation to a resident or to a nonresident are authorized freely; debits for conversion into foreign currency require individual licenses.

3. Nonresident Foreign Currency Deposit Accounts. To facilitate the application of exchange control, nonresidents are authorized to keep deposit accounts with banks in the designated currencies.

4. Foreign Investors’ Deposit Accounts. Certain proceeds of foreigners’ liquidated investments may be placed in Foreign Investors’ Deposit Accounts. These accounts may be used for remittances abroad or for making other investments under certain conditions.

Imports and Import Payments

Practically all imports are subject to individual import license. Most of the authorized imports are covered by the exchange budget and are communicated through announcements by the trade control authorities.

There are three different licensing procedures for imports requiring payment abroad: (1) Under the foreign exchange fund allocation system (covering imports of most foodstuffs and some raw materials and other essentials), the importer must first obtain from the trade control authorities an allocation of foreign exchange. If the allocation is granted, the importer receives an exchange allocation certificate which entitles him to receive an import license from an authorized bank automatically upon application. Exchange allocation certificates for commodities (except rice and sugar) under this system are issued on a global basis, without regard to the country of origin or the currency of settlement. (2) Under the automatic fund allocation system, allocations of foreign exchange for specified categories of imports are granted automatically and without restriction by the Ministry of International Trade and Industry. (3) Under the automatic approval system, imports are, in effect, free from quantitative restriction, since licenses to import the commodities specified under this system are issued freely by the authorized banks on application, up to the total amount appropriated for the system in the exchange budget, and additional amounts are provided if the original appropriation has been exhausted. All items subject to the automatic approval system, except refined lard and soybeans, may be imported from any country. When the proposed payment for an import is not in accordance with the prescribed methods of settlement, prior approval of the Ministry of International Trade and Industry must be obtained. This Ministry also issues import licenses for special transactions, such as imports without exchange.

In general, except for goods imported under the foreign exchange fund allocation system, applicants for import licenses must furnish a deposit in the form of currency, securities, or a letter of guarantee; the amount of this deposit is 1 per cent of the value of the intended import, except for imports from the Ryukyu Islands, for which it is 110 of 1 per cent. The deposit is returned after the goods have been imported or if the import transaction is canceled for a reason acceptable to the control authorities.

Payments for Invisibles

Payments for invisibles are in general subject to individual license. However, about 60 per cent of payments for current invisibles are, in practice, permitted freely. Payments related to foreign trade, e.g., freight (but not all import freight), insurance, and other incidental costs, are approved automatically. Payments designated by the Ministry of Finance or the Ministry of International Trade and Industry as having no significant effect on the balance of payments and involving no danger of capital flight—such as living expenses of relatives, donations, and expenses for travel abroad for a specific purpose—are either free from all restriction or subject only to approval by the authorized banks. Where a license for a contract has been granted, any payment arising from the contract is authorized automatically by an authorized bank.

Both residents and nonresidents may take out freely ¥ 20,000 in Japanese currency.

Exports and Export Proceeds

All exports 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); restrictions on goods likely to be exported at unduly low prices (e.g., pottery and porcelain, sewing machines, and certain textiles); and restrictions designed to forestall the imposition of import restrictions by other countries (e.g., restrictions on exports of certain textiles to a number of countries). Barter exports and exports under processing contracts also require specific approval.

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 payments for their imports or current invisibles or sell it to the banks for yen.

Proceeds from Invisibles

Receipts by the standard methods of settlement may be accepted without a license. But contracts for specified services are subject to individual license, e.g., services between residents which give rise to foreign claimable assets, and services performed for nonresidents when payment is to be received by a nonstandard method. 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 currencies. Both residents and nonresidents may bring in freely any amount in foreign or Japanese currency.

Capital

In accordance with the Foreign Investment Law (Law No. 163 of May 10, 1950), foreign investments in Japan are generally subject to approval. All acquisitions of stocks, debentures, beneficiary certificates, and claims in the form of loans by foreign investors are subject to individual license if a guarantee for remittance of income or principal is desired. However, acquisitions of stocks in the securities market are generally approved up to 15 per cent of the stock of any corporation not classified as a restricted industry and up to 10 per cent of the stock of any corporation classified as a restricted industry.3 All these acquisitions must be made against the 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. Redemption after maturity of debentures and beneficiary certificates, dividends, interest, receipts from technological assistance contracts, and proceeds from sales of stocks and debentures are deemed to be the same as the yen proceeds from the sale of foreign exchange if they are reinvested in Japan.

In the event of expropriation or compulsory sale of a foreign investment, the amount paid on account of expropriation may be repatriated freely.

For the purpose of facilitating new foreign investment, the following two formulas have been established: (1) Since July 21,1959, applicants have been able to obtain “conditional approval” under the Foreign Investment Law for a foreign investment in Japan. For investments so approved, the remittance of principal and earnings is guaranteed, subject to the condition that the Government can temporarily defer the remittance if Japan’s balance of payments situation so requires. (2) A “prior designation” procedure under the Foreign Exchange and Foreign Trade Control Law has also been operative since July 21, 1959. For a foreign investment so designated by the authorities at the time the investor acquires an equity investment (stocks, debentures, and beneficiary certificates) or concludes a technological assistance contract, the remittance of earnings and principal will be automatically approved, subject to the condition that the remittance can be temporarily deferred if Japan’s balance of payments situation so requires.

Up to one third of the proceeds of liquidated stocks and investment trust certificates may be remitted in any one year following a two-year deferment after the investment. For debentures and loan trust certificates, the entire principal may be remitted after five years from the date of acquisition. Rights to the allotment of newly issued stocks may be sold if the issuing company gives its consent, or the value of the rights can be realized by selling the stocks with rights and purchasing the same stocks without rights or purchasing other stocks. (This constitutes a preferential treatment of foreign investors since, under the Japanese commercial code, the right to the allotment of newly issued stocks may not be sold.)

All other capital transactions and transfers having an exchange control aspect are subject to individual license, although in practice, for most transactions, an exchange license is not required for foreign investment in Japan if remittance of income or principal is not desired.

Transfers of capital abroad and investments abroad by residents are subject to approval.

Securities acquired with approval under the Foreign Investment Law may be imported and exported freely.

Changes during 1960

January 4. Several measures to liberalize imports became effective: Discrimination vis-à-vis the dollar area was removed for imports of 4 of the 10 items (lawan wood, gypsum, abaca fibers and waste, and copper alloy scraps) under the automatic approval system. The automatic approval list was extended to cover 60 items shifted from the foreign exchange fund allocation system and 13 items previously importable under the barter system; 36 consumer goods and miscellaneous items were shifted to the automatic fund allocation system; global quotas were set for certain commodities importable previously only under bilateral trade arrangements; quotas were set also for certain imports not generally approved, such as binoculars and fountain pens; import quotas for certain items, such as automobiles and watches, were increased; restrictions on the import of automobiles by foreigners resident in Japan without the use of foreign exchange were relaxed.

January 15. The separate auctioning in Brazil of bilateral sterling earned from Brazil’s exports to Japan was discontinued, and settlements between the two countries were to be made on a convertible currency basis.

February 1. The exchange allowance for current expenses of representative offices abroad of Japanese firms was increased.

February 8. The following measures to liberalize transactions in invisibles became effective: Exchange restrictions governing travel for purposes other than pleasure, for which little or no exchange allocation was made, were eased by granting the authorized banks greater authority to approve applications and by raising the limit of some allocations. Miscellaneous remittances, e.g., for family maintenance, bank charges, and copyright fees, could be approved by the authorized banks up to specified amounts set for each category. The Inter-Office Offsetting Accounting System, formerly applied to a limited number of trading firms with overseas branches, was broadened to cover all such firms. Shipping and airline companies resident in Japan were permitted, without a license, to conclude with any overseas companies contracts for establishing agents abroad. The restrictions on remitting expenses incidental to their ordinary business were eased, and the number of items that may be settled through accounts between these firms and their branch offices abroad was expanded. Permission was granted to remit freely, through an authorized bank, dividends on specified stocks and capital and interest on national and local bonds acquired by nonresidents before the end of World War II. Services to nonresidents by means of technological assistance could be rendered freely, provided the remuneration received, if in foreign currency, was reasonable.

February 15. Payments abroad for such expenses incidental to trade transactions as freight and agents’ commissions (with a few exceptions) and insurance premiums were permitted automatically through authorized banks.

February 22. Usance bill facilities were extended to all imports except certain luxuries and nonessentials specified in a “negative” list. (Previously, these facilities had been available only in respect of 60 items, principally raw materials.)

March 31. The bilateral payments agreement with Greece was terminated.

April 1. Trading concerns resident in Japan were permitted to hold foreign currency deposit accounts in U.S. dollars and/or sterling with authorized banks. They could credit their exchange receipts in these currencies to these accounts and hold them for a maximum of 20 days, during which they could use the exchange to pay for their imports or current invisibles or sell it to the banks for yen.

April 7. Discrimination against imports from the dollar area of iron and steel scrap, beef tallow, and crude lard under the automatic approval system was removed. The automatic approval list was extended by the addition of 304 items, including types of waste leather, synthetic perfumes, certain agricultural products, chemicals, and some metal and mineral products. Another 282 items were added to the automatic fund allocation system list, including recording tape, certain kinds of machinery and equipment, and chemicals.

May 20. Insurance companies resident in Japan could enter freely, without a license, into reinsurance transactions with foreign underwriting agencies and insurance companies. Shipping, airline, and insurance companies resident in Japan were permitted, without a license, to conclude with any foreign companies contracts to become their agents in Japan.

June 1. Controls over foreign investments were relaxed. Foreign investors were permitted to purchase fairly freely in the market up to 15 per cent (previously 8 per cent) of the stock of any corporation not classified as a restricted industry and up to 10 per cent (previously 5 per cent) of the stock of any corporation classified as a restricted industry (see footnote 3). Acquisition of stocks exceeding the above limits would be examined case by case, but the actual criteria of such examination were eased noticeably. The remittance of principal would be permitted freely, after a two-year deferment period, in three annual installments (previously five annual installments), and this privilege was made cumulative, i.e., any permitted amount not remitted in one year could be included in the installments of subsequent years. The entire principal of debentures and loan trust certificates sold five years after the date of acquisition could be remitted. (Previously, only redemptions at maturity could be remitted in a lump sum.)

July 1. The partial external convertibility of the yen was introduced through the creation of a system of nonresident free yen accounts, and the yen was designated as one of the currencies which could be used for international settlements. Free yen accounts opened by nonresidents with any authorized bank in Japan could be credited with the proceeds from sales of designated foreign currencies, with transfers from other free yen accounts, and with other authorized payments. Balances on these accounts could be converted into any of the designated foreign currencies.

July 1. Discrimination was removed in respect of imports of cattle hides under the automatic approval system. A further 72 items, mainly chemical products, were added to the automatic approval system list. Thirty-eight new items, including sports goods, precious stones, and certain stationery supplies, were added to the automatic fund allocation system list.

July 4. Permission would be granted automatically for business travel abroad within a specified number of days. Restrictions on the establishment of representative offices abroad by Japanese trading firms and manufacturing companies, and on the remittance of expenses for such offices, were relaxed. The application of the retention quota scheme to transactions in invisibles was discontinued.

August 1. Usance bill facilities, previously not available for imports of nonessential goods, were extended to cover all imports.

August 1. Restrictions on borrowing from nonresidents by overseas branches of Japanese trading firms and manufacturing companies were removed.

August 31. The limits imposed on the amount which a Japanese bank could borrow from foreign banks, apart from borrowings through Japanese import usance facilities, and on the amount of credit which a Japanese bank could extend in overseas countries, were removed.

September 1. Restrictions on the exchange position taken by the banks were relaxed.

September 10. The amount of Japanese currency that both residents and nonresidents could take out freely was increased from ¥ 2,000 to ¥ 20,000. Travelers could bring in any amount in Japanese currency.

October 1. The retention quota scheme, under which exporters were allowed to retain 3 per cent of their export proceeds to defray certain specified expenses abroad, as well as to import goods from a specified list, was abolished.

October 1. Discrimination vis-à-vis the dollar area on imports of pig iron (excluding charcoal pig iron) under the automatic approval system was removed. The automatic approval list was extended by the addition of 236 items, including certain agricultural products, chemicals, glass and household articles, and metal and mineral products; and 244 new items, including machinery, railway equipment, various kinds of fish, synthetic fibers, jewelry, metal products, chemicals, and various medical and pharmaceutical products, were added to the automatic fund allocation list.

October 6. Restrictions on charter contracts were relaxed. Shipping companies resident in Japan were freed from all restrictions in the chartering of foreign ships (excluding tankers) for no more than six months, and in payment of charterage. Certain restrictions on the operations of Japanese fishing companies were relaxed.

October 10. The Inter-Office Offsetting Accounting System was made applicable to Japanese manufacturing companies and department stores.

November 7. Restrictions on imports of foreign films were relaxed. The monthly remittance ratio of nonresident income arising from the distribution of films under the percentage contract was raised from 30-40 per cent to 40-50 per cent (effective from December).

November 9. Restrictions on short-term borrowing in foreign currencies were relaxed. Manufacturing firms could borrow operating funds in foreign currency for periods of 6 months to 1 year.

November 12. The time limit on import usance facilities extended by authorized banks was raised from 90 days to 120 days after receipt of shipping documents.

December 24. Permission was granted to remit freely the principal of specified stocks acquired by nonresidents before the end of World War II.

Note.—The following changes took place early in 1961:

January 4. Restrictions on miscellaneous remittances were greatly relaxed.

February 2. Permission was granted to remit freely dividends on stocks that were acquired by nonresidents before the end of World War II.

Jordan1

Exchange Rate System

The par value is Jordan Dinar 1 = US$2.80. The official rates for the U.S. dollar are based on the buying and selling rates in the London market. There are two exchange markets: the official market, applicable to most transactions; and the free market, where rates fluctuate in accordance with supply and demand, applicable to payments in respect of imports originating in and shipped from Lebanon or the Syrian Region of the United Arab Republic and payable in Lebanese or Syrian pounds.2 There is now little difference between the official market rates and the free market rates. A tax of ½ of 1 per cent is levied on sales of exchange for invisibles, except expenses for education, whether payment is made at the official or the free rate (see Table of Exchange Rates, below). Fees of 4 per cent for goods paid for at the official rate and ½ of 1 per cent for goods paid for at the free market rate are payable on import licenses.

Administration of Control

Exchange control is administered by the Exchange Control Department of the Ministry of Finance under the direction of the Controller of Currency, pending the establishment of a central bank, which will take over these functions. Import policy is formulated by an Import Committee, which is composed of the Controller of Imports, the Undersecretaries for National Economy and Customs, the Economic Adviser to the Ministry of National Economy, the Controller of Currency, and the Director of Income Tax. The regulations 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 persons resident outside the Sterling Area may be made by crediting an External Account. An allocation of sterling can be used to pay for imports from any country, but payments for which currencies other than sterling are provided at official rates must in general be made in the currency prescribed in the individual import license, according to the country of origin.

Proceeds from exports and invisibles must be surrendered, where required, as follows: from Arab League countries3 outside the Sterling Area, in any Arab League currency or in sterling from an External Account; from Arab League countries within the Sterling Area, in any Arab League currency or in sterling from a Sterling Area account; from other Sterling Area countries, in sterling or in Jordan dinars from a Sterling Area account; from non-Arab League countries outside the Sterling Area, in sterling or Jordan dinars from an External Account or in any specified currency.

Nonresident Accounts

Subject to the prior approval of the Controller of Currency, authorized banks may open nonresident accounts designated in accordance with Sterling Area practice. These accounts must be fed with appropriate funds. The approval of the Controller of Currency is necessary for redesignation of residence and for transfers from resident to nonresident accounts. Transfers between nonresident accounts and transfers from nonresident to resident accounts are permitted freely.

Imports and Import Payments

Imports of certain items4 and all imports from Israel are prohibited. Certain goods5 may be imported only from the United States. Imports of industrial machinery require the approval of the Ministry of National Economy. All other imports except those covered by an agreement between Jordan and the exporting country require import licenses.

Payments are made in Lebanese or Syrian pounds at the free market rate for imports of goods originating in and shipped from Lebanon or the Syrian Region of the United Arab Republic (except barley, maize, and sheep, which are paid for at the official rate).6 Payments for other imports are made at the official rate.

A fee of ½ of 1 per cent is payable on licenses for goods imported without exchange or paid for in Lebanese or Syrian pounds at the free market rate, and a fee of 4 per cent is payable on licenses for imports paid for at the official rate.

Licenses for Arab League commodities are valid for 4 months and those for non-Arab League commodities 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 to all countries except Lebanon and the Syrian Region of the United Arab Republic are approved at the official rate in the currency of the country to which payment is due or in sterling. Payments to Lebanon and the Syrian Region are approved at the free market rate in the currency of the country concerned, except that remittances for education are granted in sterling. A tax of ½ of 1 per cent is levied on payments for all invisibles except expenses for education. 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 Jordan nationals abroad; expenses of Jordan residents traveling abroad; expenditures for education; expenses of medical treatment; business expenses abroad; and insurance payments in accordance with special regulations. Although the policy in respect of these payments is, in general, not discriminatory, there are certain variations reflecting the different conditions in various foreign countries. Thus, for tourist travel to Europe the allowance is JD 150 a month for one month in any one year, but larger allowances are approved for travel to the United States. For travel to Lebanon and the Syrian Region of the United Arab Republic, there is no allowance of foreign currency but residents of Jordan and nationals of Lebanon or the Syrian Region traveling to these countries may take out up to JD 100 in Jordan banknotes. Otherwise, persons leaving Jordan may not take out more than JD 5 in Jordan banknotes. Persons leaving Jordan for any destination may take out the equivalent of JD 100 in foreign banknotes and any amount of such notes previously brought into the country by them. Each person may send JD 5 a month by postal or money order to other Arab League countries.

Exports and Export Proceeds

In general, export proceeds exceeding JD 20 must be surrendered in the prescribed manner (see section on Prescription of Currency, above). Proceeds from exports of vegetables, fruits, and other perishable commodities are exempt from the surrender requirements on the understanding that the proceeds will be used to pay for imports from Arab League countries. Exports to Israel are prohibited.

Proceeds from Invisibles

Receipts from invisibles must be surrendered to the banks in the appropriate manner (see section on Prescription of Currency, above). Residents of Jordan and nationals of Lebanon or the Syrian Region of the United Arab Republic entering Jordan from these countries may bring in a maximum of JD 100 in Jordan banknotes; otherwise, the limit is JD 5. All persons may bring in any amount in foreign currencies.

Capital

Capital may be imported freely, but exports of capital require approval. Current income arising 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 as the original investment. The Government may approve more liberal provisions upon application.

Table of Exchange Rates (as at February 21, 1961)(U.S. dollars per dinar)
BuyingSelling
2.82 (Official Rate)

Exports to all countries except Lebanon and the Syrian Region of the U.A.R. Some invisibles.
2.796 (Free Market Rate)7

All other exchange receipts.
2.788 (Official Rate)

Government payments. Imports not paid for in Lebanese or Syrian pounds.9
2.7768 (Free Market Rate)7

Imports authorized in Lebanese or Syrian pounds.9
2.766 (Official Rate with ½% Tax)

Invisibles authorized in other currencies.
2.762 (Free Market Rate7 with ½% Tax)

Invisibles authorized in Lebanese or Syrian pounds.

Changes during 1960

January 30. Exchange at the official rate was provided for payments for imports from the Sudan.

April 20. Exchange at the official rate was provided for payments for imports from Morocco.

April 25. Exchange at the official rate was provided for payments for imports from the Egyptian Region of the United Arab Republic.

Note.—The following changes took place early in 1961:

February 5. A defense order was issued restricting the import of certain types of goods to imports from the United States.

February 23. It was decided that goods originating in and shipped from countries other than Lebanon and the Syrian Region of the United Arab Republic should be paid for in foreign exchange at the official rate.

Korea1

Exchange Rate System

There is no agreed par value for the Korean Hwan. A flexible rate, called the banking rate, applies to all transactions. It consists of two components: a fixed basic rate of hw 1,250 per US$1, and a certificate rate which may be varied from time to time by the Monetary Board of the Bank of Korea. The initial certificate rate was announced on February 2, 1961 as hw 50 per US$1, making the banking rate hw 1,300 per US$1.

All foreign exchange acquired by residents must be surrendered to the Bank of Korea at the banking rate. Upon surrender the seller receives, in addition to the hwan proceeds, exchange certificates issued by the Bank. These certificates are not transferable and are valid for three months from the date of issue, during which time the holder may repurchase foreign exchange, up to the total certificate amount, at the banking rate prevailing at the time of surrender. Others, subject to the regulations governing sales of foreign exchange to residents, may purchase foreign exchange at the current banking rate.

Administration of Control

Exchange control is administered by the Ministry of Finance and by the Bank of Korea (the central bank), which is the only authorized exchange bank in Korea and through which all exchange transactions must pass. Exchange control regulations are issued by the Monetary Board of the Bank and the Ministry of Finance. The Ministry of Finance reviews demands for and supplies of foreign exchange and instructs the Bank of Korea to sell foreign exchange for imports. The Bank of Korea controls receipts and payments related to invisibles. The Bank of Korea has been given authority to control imports under the automatic approval procedure and exports. Certain imports and exports must be approved by appropriate ministries.

Prescription of Currency

Proceeds from exports must be obtained in U.S. dollars, Hong Kong dollars, pounds sterling, Japanese yen, deutsche mark, or another currency authorized by the Bank of Korea. The methods of payment for imports and other purposes are prescribed through licensing or through conditions attached to sales of exchange by the Bank of Korea. There is a bilateral payments agreement with Japan under which—except in certain cases, e.g., exports of rice and imports of food—settlements with Japan must be made through a bilateral clearing account; however, all exchange earnings received after February 2, 1961 may be used to pay for imports from Japan.

Foreign Currency Accounts

Nonresidents may maintain foreign currency deposit accounts with the Bank of Korea. Remittances from such accounts and withdrawals in the form of currency notes upon departure from Korea may, in general, be made freely. However, the approval of the Governor of the Bank of Korea 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 Monetary Board (except exchange registered at the customs on entry or remitted from abroad). Otherwise, the deposits may be disposed of only by sale to the Bank of Korea at the prevailing banking rate.

Imports and Import Payments

Only registered traders are allowed to import; the requirement for maintaining status as a registered importer is a certain minimum value of annual imports. Import commodities are divided into two categories: automatic approval and permission required. The Bank of Korea licenses the automatic approval items freely, provided that the importer applies for a letter of credit and complies with the “check price” system established by the Ministry of Commerce and Industry. All other authorized imports require individual licenses from the Ministry of Commerce and Industry. In general, the former procedure applies to essential goods and the latter to less essential goods. All imports from communist countries, and certain imports from all other countries, are prohibited.

Payments for Invisibles

All remittances abroad to pay for invisibles require approval. The Bank of Korea may give approval to foreigners residing in Korea to make payments abroad, such as tax payments and gifts to relatives, up to US$500 at any one time. The remittance of profits is subject to permission of the Government.

The export of Korean currency notes and foreign currency is prohibited, but departing foreigners may reconvert unused hwan notes for U.S. dollars up to US$100, and they may take out any foreign exchange that they had registered on their entry into Korea.

Exports and Export Proceeds

Exports of certain specified goods—such as tobacco, raw cotton, raw hides, precious metals, certain ores, minerals, and chemicals, bituminous coal, cement, pulp, and lumber—and all exports to communist countries are prohibited. Most goods may be exported freely under an automatic approval procedure, but certain export goods require the authorization of the ministry concerned.

The foreign exchange proceeds of exports must be sold to the Bank of Korea at the banking rate. Most exports are subsidized. The subsidies are fixed from time to time by administrative decree in terms of hwan per U.S. dollar. The subsidy is paid when the relevant bills of lading are issued.

Proceeds from Invisibles

All proceeds derived from invisibles must be sold to the Bank of Korea at the banking rate.

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.

Changes during 1960

January 1. Three additional export commodities were added to the list benefiting from the retention quota arrangements. The percentages of retained exchange were raised to 20 per cent and 30 per cent (from 10 per cent and 20 per cent, respectively), according to the category of goods exported. It was established that the export for the first time of any commodity entitled the exporter to retain 100 per cent of the export proceeds.

February 23. The official exchange rate was changed from hw 500 to hw 650 per US$1.

May 30. Korean citizens not holding an Import Account or a General Account could apply for foreign exchange for travel abroad for such purposes as attending international conferences and participating in international athletic meetings.

June 15. The Minister of Finance removed the limitation on the number of times that foreign exchange held on Import Accounts, including amounts transferred from General Accounts, could be transferred to other Import Accounts.

July 20. A new retention quota system was introduced under which 5 per cent of the proceeds of all exports, with the exception of those commodities specifically excluded, and 20 per cent of the proceeds of the export of a commodity for the first time, could be used to buy goods on a compensatory import list.

Note.—The following changes took place early in 1961:

January 1. The official exchange rate was changed from hw 650 to hw 1,000 per US$1, and foreign exchange taxes were abolished.

February 2. The Korean Government announced a new exchange system. The previous multiple currency practices were abolished and a flexible rate, called the banking rate, would henceforth apply to all transactions. The banking rate would consist of two components: a fixed basic rate of hw 1,250 per US$1, and a certificate rate which could be varied from time to time by the Monetary Board of the Bank of Korea. The certificate rate was fixed initially at hw 50 per US$1, making the initial banking rate hw 1,300 per US$1. All existing foreign exchange held by residents on Import Accounts, General Accounts, etc., had to be surrendered to the Bank of Korea at hw 1,300 per US$1. All foreign exchange acquired subsequently by residents had to be surrendered to the Bank of Korea at the banking rate and the Bank would issue to them exchange certificates entitling them to repurchase foreign exchange to the total amount shown on the certificate at the banking rate prevailing at the time of the surrender. The Korean Government also contemplated the levy of special customs duties on imports and the granting of subsidies to exports requiring assistance.

February 16. Exchange acquired by those acting for foreign airlines, shipping companies, or insurance companies, and which is to be remitted abroad, had to be deposited in a resident account, and its disposal required the permission of the Governor of the Bank of Korea. The approval of the Governor of the Bank of Korea was also required for remittances from nonresident accounts if the funds had 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 Monetary Board, but excluding exchange registered at the customs on entry or remitted from abroad.

Lebanon

Exchange Rate System

The par value is Lebanese Pounds 2.19148 = US$1. However, all transactions take place at free market rates, which for the U.S. dollar as at December 31,1960 were LL 3.1435 buying, and LL 3.1455 selling, per US$1.

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 concluded payments agreements specifying the method or channel of payment may be made through specific accounts.1

Imports and Import Payments

Imports of a few goods from any source and all imports from Israel are prohibited. Imports of certain commodities (dried milk, wheat, barley, menthol, leather bags, ladies’ dresses, etc.) that are for the most part produced locally are subject to license. All other commodities may be imported freely without license. Exchange to pay for imports may be obtained freely through the free market.

Payments for Invisibles

Exchange to pay for invisibles may be obtained freely through the free market or payment may be made freely in local currency to any account.

Exports and Export Proceeds

Exports of a few goods (scraps of iron, cast iron, copper, lead, and tin) and all exports to Israel are prohibited. A few items—such as livestock, wheat and wheat products, barley, jute goods, Egyptian cotton, newsprint, cement, petroleum and petroleum products, industrial and agricultural machines and equipment, and certain metals— and all products intended for export to North Korea are subject to export license. No surrender requirements are imposed on exchange receipts from exports, which may be retained, used, or sold freely in the free market.

Proceeds from Invisibles

There are no surrender requirements imposed on exchange receipts from invisibles, which may be retained, used, or sold freely in the free market.

Capital

There are no limitations on capital payments or receipts, and exchange in respect of capital movements may be obtained or sold freely through the free market.

Changes during 1960

September 14. Imports of peanuts were made subject to license.

October 4. Exports of olive oil, pine nuts, and walnuts were made subject to license.

November 14. Imports of some glass items were made subject to license.

December 2. Imports of maritime pine wood were made subject to license.

December 19. Imports of most plastic-coated materials were made subject to license.

Libya

Exchange Rate System

The par value is Libyan Pound 1 = US$2.80. Exchange rates are based on the fixed rate for sterling, with which the Libyan pound is at par, and London market rates for sterling against other currencies. The rates for the U.S. dollar as at December 31, 1960 were US$2.80½ buying, and US$2.80316 selling, per £L 1.

Administration of Control

Exchange control is administered by the National Bank of Libya, which has delegated some of its powers to the banks. Policy relating to import and export licensing is formulated by a consultative Import and Export Council, under the chairmanship of the Ministry of National Economy and comprising officials of that Ministry and of the Ministry of Finance, the chief financial officials of the Provinces of Tripolitania, Cyrenaica, and the Fezzan, and officials of the National Bank.

Prescription of Currency

The United Kingdom of Libya is a member of the Sterling Area, and conforms to the prescription of currency arrangements and the sterling payments system of the United Kingdom (see section on Prescription of Currency in the survey on the United Kingdom). Exchange control is, however, exercised over payments from Libya to other members of the Sterling Area. Imports of goods originating in countries outside the Sterling Area may be paid for by crediting Libyan pounds or sterling to an External Account or in any foreign currency; for goods originating in countries within the Sterling Area, payment is made in any Sterling Area currency or by crediting Libyan pounds or sterling to a Scheduled Territories Account (see section on Nonresident Accounts, below).

Libya has a trade and payments agreement with the Egyptian Region of the United Arab Republic, under which settlements are made through a centralized bilateral clearing account maintained in pounds sterling.

Nonresident Accounts

Subject to any conditions that may be laid down by the National 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 countries outside the Sterling Area are designated External Accounts, while those of residents of the Sterling Area are designated Scheduled Territories Accounts. (The only exceptions are 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 in Scheduled Territories Accounts may be converted into sterling or any other Sterling Area currency. Funds held in External Accounts may be converted into any foreign currency, including sterling.

Imports and Import Payments

Most imports do not require an individual import license. Commodities subject to individual import license include processed foodstuffs, items that are manufactured locally, and several revenue-producing items. Imports of a few goods from all countries, and all imports from Israel, are prohibited. Exchange permits required for authorized imports are readily granted by the authorized banks, provided there is a firm contract and any necessary import license has been obtained.

Payments for Invisibles

All payments for invisibles require licenses. These are granted freely for expenses incidental to trade transactions, but 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 50, foreign currency notes not exceeding £L 10 in value, and, in any period of 12 months, foreign currency notes not exceeding a total value of £L 100 and travelers checks or letters of credit which, when added to the amount taken in foreign currency notes, do not exceed an aggregate value of £L 100. Children under 12 years of age are limited to one half of these amounts. Amounts in excess of the above may be granted in special circumstances. Temporary visitors may take out any travelers checks, letters of credit, or foreign currency notes declared on entry.

Exports and Export Proceeds

Export licenses are required for all commodities. Export proceeds must be surrendered, either to the National Bank or to another bank in Libya. Exports of gold and silver, and of bonds, coupons, or other documents of negotiable value, are subject to special permit. Exports to Israel are prohibited.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered. Travelers checks or foreign currency notes must be offered for sale at the official rate to an authorized bank or any exchange office licensed by the National Bank of Libya.

Travelers entering Libya may bring with them Libyan currency notes not exceeding a total of £L 50, and other currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable instruments in unlimited amounts.

Foreign currency notes, travelers checks, letters of credit, bonds, coupons, securities, and other negotiable instruments may also be sent by mail into Libya, without restriction, from a foreign bank to any bank authorized to operate in Libya. Libyan notes may be repatriated through banking channels, provided that details are given to establish that the notes were obtained from bona fide travelers from Libya within the authorized amount.

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 accruing 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, except those covered by the Libyan-Italian property agreement (to whom special arrangements apply), are permitted to transfer up to £L 5,000 for a family.

Changes during 1960

May 12. A new trade and payments agreement was signed with the Egyptian Region of the United Arab Republic. Under the new arrangements, all trade and transfers between the two countries would be settled in pounds sterling through a single clearing account maintained in that currency. Balances on the account would be settled in sterling if they exceeded the agreed limit.

May 26. In accordance with a decision of the Council of Ministers on May 12, 1960, increased facilities were made available for remittances to Italy of funds subject to restriction under the terms of the Libyan-Italian property agreement, and for the remittance abroad of funds derived from sales to Libyan nationals of immovable property owned in Libya by Italian nationals.

June 20. Foreigners could no longer acquire ownership of property in Libya without a special permit.

August 18. Residents of Libya taking up permanent residence abroad, except those covered by the Libyan-Italian property agreement, were permitted to transfer up to £L 5,000 for a family.

August 21. A notice was issued permitting balances on blocked accounts in Libyan pounds to be released five years after the original blocking.

September 24. The foreign exchange holdings of the commercial banks were limited to an amount approximately equal to ten days’ requirements. Banks in Libya were no longer permitted to deal with each other in foreign currency, and all such transactions had to be carried out with the National Bank.

Malaya

Exchange Rate System

No par value for the Malayan Dollar has been established with the Fund. The Malayan dollar has a fixed relationship to the pound sterling based on M$1 = 2s. 4d. Rates for U.S. and Canadian dollars, applicable both to merchandise transactions and to transactions in invisibles, are fixed by the Exchange Banks Association of the Federation of Malaya; these rates are based on the London-New York cross rate, within the limits of US$2.82 and US$2.78 per UK£I.

Administration of Control

Exchange control is administered by the Bank Negara Tanah Melayu (the central bank), on behalf of the Treasury. However, much of the authority for approving normal current payments is delegated to commercial banks authorized for this purpose. Import controls are administered by the Comptroller of Customs.

Prescription of Currency

The Federation of Malaya 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 a nonresident 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 a nonresident account, or in any specified currency that is freely offered and freely transferable to Malaya.

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 Malaya, 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.

Imports and Import Payments

Imports are permitted freely under an open general license, under specific licenses, or without license, depending on the nature and origin of the goods. However, a few imports are controlled for health, security, or moral reasons, and certain conditions must be satisfied before licenses are issued; imports of poultry from Thailand are controlled under a quota system; imports of certain textiles from Mainland China are prohibited as an antidumping measure; and all imports from the Union of South Africa are prohibited.

Foreign exchange appropriate to the country of origin of the merchandise is made available freely for all permitted imports.

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 UK£250 in foreign banknotes may be taken out of Malaya by travelers.

Exports and Export Proceeds

All exports to countries outside the Sterling Area (except individual exports not exceeding M$20,000 in value and certain exports to Indonesia) require the approval of the exchange control authorities, to ensure that the proceeds are obtained in accordance with the prescription of currency regulations and that the foreign exchange proceeds are sold to an authorized bank. Exchange control approval is not usually required for exports to Indonesia of goods other than gold, platinum, precious stones, rubber, tin, and cigarettes.

Proceeds from Invisibles

The requirements governing exchange receipts from invisibles are in general the same as those for proceeds of exports. Travelers coming direct from Singapore, North Borneo, Sarawak, or 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 and of currency notes of India, Indonesia, and Thailand. No limitations are imposed on the import of currency notes of other countries.

Capital

There are no restrictions on the movement of capital, profits, and dividends within the Sterling Area.

Control over the entry of capital (as distinct from cash balances) from residents of countries outside the Sterling Area is applied as follows: (1) Investments in new industrial and development projects that have been submitted to and approved by the exchange control authorities are not restricted. (2) Investments in existing Federation securities are normally permitted, provided that the securities are purchased through a recognized stock exchange and the investment funds are remitted through banking channels.

The repatriation to countries outside the Sterling Area of initial capital and appreciation is permitted only for projects that have been approved by the exchange control authorities after January 1, 1950. The proceeds realized from investments in recognized marketable securities are not remittable and must be deposited in a blocked account, except that remittances from Malaya to the Scandinavian countries by Scandinavian nationals in respect of their own assets are permitted freely on application.

Changes during 1960

January 1. It was announced by the exchange control authorities that applications for foreign exchange would no longer be required for imports up to a value of M$5,000.

July 1. All licensing procedures in respect of imports of watches, motor vehicles, and radio sets from the dollar area and the non-sterling OEEC countries, and in respect of all imports from Czechoslovakia, were removed. Thus, Malaya no longer maintained any import restrictions or licensing procedures for imports from the dollar area and the non-sterling OEEC countries except those necessary for health, moral, or security reasons.

July 20. A ban on the import from Mainland China of dyed, bleached, or printed drill, poplin, haircord, satin drill, tussore, and serge was imposed in order to protect the local textile industry.

August 1. The Bank Negara Tanah Melayu took over the administration of the exchange control on behalf of the Treasury.

August 1. All imports from the Union of South Africa were prohibited.

August 17. Licensing procedures in respect of the import of the 25 items from Japan listed in the sixth schedule to the open general license were removed.

September 17. It was announced that individual exports to countries outside the Sterling Area not exceeding M$20,000 in value would not require specific exchange control approval. This relaxation, however, did not absolve the exporter from his obligations under the Exchange Control Ordinance to deal with the proceeds in accordance with the prescription of currency regulations.

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 31,1960 were Mex$12.490¼ buying, and Mex$12.491⅛ selling, per US$1. There are no exchange restrictions on foreign payments, but payments to two countries with which Mexico has payments agreements may be made through special accounts. The granting of some import licenses is subject to quantitative restriction. On November 12, 1946, Mexico notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from nonresidents are imposed on importers, exporters, or others. Payments for transactions with Czechoslovakia and Spain may be recorded by the Bank of Mexico through special accounts. (Mexico has a payments agreement with Czechoslovakia;1 the agreement with Spain is between the Bank of Mexico and the Spanish Foreign Exchange Institute.)

Imports and Import Payments

Payments and transfers abroad are made freely. Payments for imports from Czechoslovakia and Spain may be recorded through special accounts. For a considerable number of items, a prior import license must be obtained from the Ministry of Industry and Trade before firm orders are placed; the issuance of such licenses is subject to quantitative restriction. 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 an equivalent amount of certain listed commodities, mainly cotton. Imports by official Mexican agencies are subject to the prior approval of the Committee of Public Sector Imports.

Payments for Invisibles

Payments for invisibles are not restricted. Such transactions with certain countries may be recorded through special accounts (see section on Prescription of Currency, above). The contracting of insurance with foreign companies for persons in Mexico, or on property of Mexican ownership, or where the risks are for the account of persons in Mexico or may occur in Mexico, is permitted only with branches established in Mexico in accordance with Mexican law.

Exports and Export Proceeds

Certain exports require export 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 apply to incoming or outgoing capital payments by residents or nonresidents.

Changes during 1960

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

Morocco1

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 1.026 per NF 1. The value of the dirham in relation to other currencies is based on the gold parity of the currencies as declared to the International Monetary Fund. The rate for the U.S. dollar as at December 31, 1960 was DH 5.05290 buying, and DH 5.06808 selling, per US$1. The Bank of Morocco centralizes all sales and purchases of foreign currency. The authorized banks are, however, permitted to offset purchases and sales of foreign exchange by their private customers.

Exchange Control Territory

Although Morocco is one of the territories of the French Franc Area, some restrictions are placed on the movement of funds from Morocco to other parts of the French Franc Area.2 However, imports from those territories and the related payments are entirely free, except where a quota system has been established to protect Moroccan production.

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 by the Ministry of Commerce, and sometimes by its provincial delegations, and must be countersigned by the Moroccan Exchange Office.

Prescription of Currency

For prescription of currency purposes, countries are divided into four groups: (1) the French Franc Area; (2) the bilateral group (countries which have bilateral payments agreements with the French Franc Area);3 (3) the payments agreement group (countries with which Morocco has bilateral payments agreements);4 and (4) the area of convertibility (all other countries).

Settlements with other parts of the French Franc Area are made in any currency of that area, or in Moroccan currency through French Franc Area Accounts (see section on Nonresident Accounts, below). Settlements with the bilateral group may be made in either dirhams or French francs through a Foreign Account related to the country with which, the settlement takes place. Settlements with the payments agreement group are made by debiting or crediting the special accounts opened in the books of the pertinent institutions of issue. Settlements with countries in the area of convertibility may be made either in one of the convertible currencies negotiated by the Bank of Morocco5 or through Foreign Accounts in Convertible Dirhams; imports originating in countries in the area of convertibility must, however, always be settled in convertible foreign currencies.

Nonresident Accounts

Nonresidents may, according to circumstances, open one of the following types of account:

1. French Franc Area Accounts, which are held in Moroccan currency, are reserved for persons residing in other countries of the French Franc Area. They may be credited freely with proceeds from sales to the Bank of Morocco of currencies of other countries of the French Franc Area or of convertible currencies, with proceeds from sales of banknotes issued in other countries of the French Franc Area, with payments due to residents of other parts of the French Franc Area, and with transfers from any other French Franc Area Account. They may be debited freely for payments in Morocco, for purchases from the Bank of Morocco of currencies of other countries in the French Franc Area, and for transfers to the credit of another French Franc Area Account.

2. Foreign Accounts in Convertible Dirhams are reserved for residents of countries in the area of convertibility. These accounts may be credited freely with dirhams obtained from the sale to the Bank of Morocco of convertible currencies negotiated by it,5 excluding banknotes, with payments due to residents of countries in the area of convertibility, and with transfers from other Foreign Accounts in Convertible Dirhams. They may be debited freely for purchases from the Bank of Morocco of the convertible currencies negotiated by it (see footnote 5), excluding banknotes, for transfers to other Foreign Accounts in Convertible Dirhams, and for payments in Morocco.

3. Bilateral Foreign Accounts in Dirhams are reserved for residents of countries in the bilateral group. They are used for settlements between Morocco and the country of the account holder.

4. Capital Accounts, which may be held by any nonresident, are credited with capital proceeds which may not be transferred. They may be used for certain types of operations in Morocco and, in particular, for investments. In addition, balances on Capital Accounts are transferable between nonresidents, subject to certain limitations.

5. Tourist Accounts are designed mainly for the deposit of Moroccan banknotes held by nonresidents.

6. Internal Accounts of Nonresidents are intended mainly for foreign persons staying temporarily in Morocco or for Moroccan residents staying temporarily abroad.

Imports and Import Payments

With the exception of certain items, for which there are protective quotas, imports from other parts of the French Franc Area may be made without license. However, payments for imports from the French Franc Area are subject to “import commitments,” which allow the Exchange Office to control the import transaction. Imports from countries outside the French Franc Area are subject to prior licenses. These may be used to import from all countries in the area of convertibility if they are issued under the General Import Program; if issued under quotas established in bilateral trade agreements, they may be used only to import from the country concerned. Import licenses and import commitments must be domiciled with an authorized bank. The authorized banks are permitted to make payments and settle expenses incidental to the commercial transactions covered by these documents.

Payments for Invisibles

Payments for current invisibles are authorized by the Exchange Office upon presentation of the necessary justification. Certain payments are, however, subject to limitations. A foreign employee may transfer abroad 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. An allocation of foreign exchange equivalent to DH 500 a year is granted for tourist travel; this can be increased by DH 250 in Spanish currency if the tourist travels through Spain. For business travel, an allocation of foreign exchange equivalent to DH 500 is granted for each trip; additional personal allocations may be granted according to need. For study abroad, a monthly allocation of foreign exchange of up to DH 500 is granted. For family maintenance, a monthly allocation of DH 250 is granted. In addition, foreigners residing in Morocco may be authorized by the Exchange Office, after they have returned to their country of origin permanently, to transfer within certain limits the proceeds of the liquidation of their property in Morocco. The total amount authorized varies with the number of departures and Morocco’s available holdings of the currency of the country of origin of the persons involved; in principal, it is DH 35,000. Persons residing abroad who inherit property in Morocco are granted identical facilities.

Travelers may take with them DH 300 in Moroccan banknotes for each trip, in addition to the exchange allocation.

Exports and Export Proceeds

In principle, Moroccan products may be exported freely. However, licenses are required for certain commodities.

Each exporter must sign an undertaking to repatriate and surrender the foreign exchange proceeds of his exports. Exporters are given a 30-day period after accrual to collect the proceeds of their exports and an additional 30 days to surrender the exchange to the Bank of Morocco, except that proceeds in currencies of the French Franc Area must be surrendered immediately.

However, exporters may retain 8 per cent of their exchange proceeds in EFAC (Exportations-Frais Accessoires) accounts, which may be used freely to pay commissions to nonresident representatives and agents, advertising costs, premiums for transport insurance, transport expenses, export duties, and consular fees. Balances on EFAC accounts may also be used either for imports of raw materials, equipment goods, or other goods intended exclusively for the firm that holds the account, provided that a license is granted, or for commercial travel expenses, subject to a maximum of DH 500 for each country visited. The use of balances on EFAC accounts for other purposes requires prior authorization. Every six months, 50 per cent of the outstanding balance on each EFAC account must be surrendered to the Bank of Morocco.

Proceeds from Invisibles

Residents of Moroccan nationality and companies established in Morocco must repatriate all their noncommercial claims, including those in currencies of the French Franc Area, and surrender them to an authorized bank. Other residents must surrender noncommercial receipts only when they do not arise from current transactions, and only when accruing in foreign currencies other than those of the French Franc Area. Domestic and foreign banknotes may be brought in freely.

Capital

Residents of Moroccan nationality, as well as companies established in Morocco, are obliged to declare all foreign-held assets exceeding DH 250 to the Exchange Office and to repatriate and surrender certain specified assets. The disposal of foreign-held assets in any other way requires permission. The transfer of capital abroad by residents is subject to approval.

Foreign investments in Morocco are subject to prior approval of the Exchange Office. With the exception of contributions in kind and of investments financed by debiting a Capital Account, foreign participation must be financed either by the sale of convertible currency, or according to the existing regulations between Morocco and the investor’s country of residence if the investor resides in one of the countries of the bilateral group or in a country with which Morocco has concluded a payments agreement (see section on Prescription of Currency, above). To encourage foreign persons and firms to invest in Morocco, an “investment charter” has been issued, which provides, among other advantages, a guarantee of repatriation of the total proceeds, upon liquidation, for investments financed in foreign currency and made in economic sectors that have priority ratings. For investments which are not accorded the repatriation guarantee, the proceeds of liquidation may only be credited to a Capital Account.

Changes during 1960

January 1. Payments agreements with Czechoslovakia and Poland entered into force.

February 4. Exporters were permitted to retain the proceeds of their exports for 30 days after collection, except proceeds in currencies of the French Franc Area, which remained subject to surrender to the Bank of Morocco upon collection.

April 19. A payments agreement with Guinea entered into force.

April 19. Tangier became subject to the Moroccan exchange control regulations and foreign trade regulations. Traders established in Tangier were permitted to credit their holdings of convertible currencies as at that date to Free Transit Accounts, which could be used to finance transit and processing transactions, provided that the goods purchased passed physically through Tangier and were re-exported within 12 months.

May 1. A General Import Program, valid through December 31, 1960, entered into effect. This program replaced the separate import programs for the dollar area, the Sterling Area, and the transferable area, and thus afforded greater flexibility in sources of supply and allowed more foreign competition. In addition, certain quotas of the General Import Program were not of a limiting type and could be increased automatically.

June 20. An exchange control circular was issued consolidating the existing regulations concerning investments financed by capital received from countries outside the French Franc Area.

June 20. The system of Foreign Accounts in Moroccan currency was reorganized, and the prescription of currency requirements were revised. Foreign Accounts in Transferable Francs and Foreign Accounts in Free Francs were replaced by Foreign Accounts in Convertible Francs. An exchange control circular was issued consolidating the regulations applicable to Capital Accounts.

August 8. A payments agreement with Eastern Germany entered into force.

Note.—The following changes took place early in 1961:

January 1. The law instituting a new currency unit, the dirham, entered into force. (The dirham is equal to, and is subdivided into, 100 Moroccan francs.)

January 13. An exchange control circular was issued authorizing foreign employees residing in Morocco, if they are single or if their families reside in Morocco, to transfer abroad 30 per cent of their salaries (instead of 20 per cent, as previously), beginning with January 1961 salaries.

January 16. Yugoslavia was removed from the bilateral group and was then considered as being in the area of convertibility. The Yugoslav dinar was no longer negotiated by the Bank of Morocco.

February 10. A legal document of December 31, 1960, setting forth measures to encourage private investment, was officially published.

Netherlands

Exchange Rate System

The par value is Netherlands Guilders 3.80 = US$1.1 The official limits are f. 3.77 buying, and f. 3.83 selling, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits.1 Market rates for externally convertible European currencies vary between limits resulting from the dollar rate for the Netherlands guilder in relation to the dollar rates for the other currencies.

There are spot and forward exchange markets for the convertible currencies.2 Authorized banks are allowed to conclude with nonresidents spot transactions and forward transactions for up to 12 months’ delivery in the convertible currencies against guilders on Convertible Guilder Accounts or against the convertible currencies. They are also allowed to conclude transactions in inconvertible currencies under certain conditions (see section on Changes during 1960, March 28 and May 30, below). 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. Residents are permitted to buy foreign exchange in connection with all permitted transactions.

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, New Guinea, and Surinam are subject to exchange control. However, vis-à-vis third countries with which payments agreements are in force, the Netherlands and the overseas territories 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, Agriculture, and Home Affairs. Import and export licensing are handled by the Central Import-Export Agency (CDIU) and its 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 always 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.

For prescription of currency purposes, 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 2), or in guilders to the debit of a Convertible Guilder Account (see section on Nonresident Accounts, below). 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 account are described below.

1. Convertible Guilder Accounts. These accounts may be held by all nonresidents. 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 Netherlands 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 those two countries, respectively. They may be credited with transfers from Convertible Guilder Accounts 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 to another Bilateral Guilder Account related to the same country.

3. N Accounts–Indonesia. These accounts apply only to nonresidents residing or domiciled in Indonesia, regardless of nationality. There are special regulations applicable to the crediting and debiting of these accounts.

4. K Accounts. These accounts may be held by all nonresidents, regardless of nationality, except those who reside in Indonesia. Balances on K Accounts may be used only for payments directly resulting from transactions in securities. K Accounts may be credited with proceeds from the sale of foreign currencies other than Indonesian rupiah, with transfers from Convertible Guilder Accounts or with funds which ma be credited to Convertible Guilder Accounts, with transfers from other K Accounts (except nonexportable K Accounts),3 and with the proceeds of sales of securities (except nonexportable securities).3 K Accounts may be debited for purchases of securities. With the exception of nonexportable K Accounts, they may also be debited for transfers to any other K Account and for purchases of foreign currencies other than Indonesian rupiah. Convertible currencies acquired in this manner must be obtained by debiting a resident’s “reinvestment” account (in which are held the foreign exchange proceeds in convertible currencies of sales by residents of foreign securities).

Imports and Import Payments

Most goods from all countries except Hong Kong, Japan, the Sino-Soviet area, and Yugoslavia may be imported under open general license, and no documents are required to clear the goods through customs. Imports from the countries listed above, and a few items from all countries, require individual licenses; these are usually issued automatically for imports from Hong Kong and Yugoslavia.

Payments for imports may be made freely, provided that the method of payment is in conformity with the general prescription of currency regulations. Payments for imports valued at less than f. 200 may be made without documents.

Payments for Invisibles

Payments abroad for invisibles are permitted freely. Exchange for travel is provided up to the countervalue in the appropriate currency of f. 3,000 for trips lasting up to two weeks, and the entire allowance may be taken, if the traveler wishes, in Netherlands banknotes. For longer visits, exchange equivalent to f. 150 a day will be provided for further periods up to 75 days, making an additional allowance of f. 11,250 a person. A resident traveler abroad may, in addition to the aforementioned amounts, have the equivalent of f. 1,500 remitted to him through banking channels. Payments for interest, dividends, and contractual amortization due to nonresidents are permitted freely by crediting the appropriate nonresident account.

Nonresidents may export all unutilized negotiable instruments and foreign and Netherlands banknotes and coins which they have imported or have obtained in the Netherlands by drawing on their accounts or exchanging other currencies.

Exports and Export Proceeds

Export licenses or declarations are required for only a few commodities, and for all exports to Yugoslavia and the Sino-Soviet area.

The surrender of export proceeds is not obligatory; but if they are surrendered, it must be at the official rate. The collection of export proceeds is obligatory; they must be received in accordance with the prescription of currency requirements and may then be held in appropriate foreign currency accounts with authorized banks. The use of such funds is subject to the usual licensing requirements.

Proceeds from Invisibles

Exchange receipts from invisibles need not be surrendered and may instead be credited to foreign currency accounts. For settlement in guilders of incoming exchange exceeding f. 200 derived from current invisibles, the recipient must indicate to an authorized bank the nature of the underlying transaction, as well as the amount and currency received. The authorized banks must also verify that receipts are in accordance with the prescription of currency requirements.

Nonresidents may bring into the Netherlands unlimited amounts in Netherlands banknotes, foreign banknotes, and negotiable instruments. These may be sold only to an authorized bank or an authorized exchange office, or they may be used to pay tourist expenses in the Netherlands. Residents are obliged to bring back to the Netherlands any unutilized portion of the banknotes and coins which they were entitled to take with them on their outward journey.

Capital

Inward and outward capital transfers and the shifting of foreign-owned capital within the Netherlands from one asset to another are subject to control, but general licenses have been granted for most types of capital transaction.

All authorized capital transactions, other than transactions in securities, take place at the official exchange market rates. All payments in respect of transactions in securities are channeled through a free market, where payments and receipts must be either in guilders through K Accounts or in convertible currencies through “reinvestment” accounts (see below). In addition, nonresidents may debit their Convertible Guilder Accounts to pay residents for transactions in securities.

Residents may buy foreign securities from, or sell them to, other residents. Residents may sell foreign securities abroad against any foreign currency except Indonesian rupiah. The exchange so acquired must be deposited with an authorized bank or securities broker in the Netherlands and may be sold or retained. If convertible currencies are acquired, a “reinvestment” account may be credited. “Reinvestment” accounts may be used to buy securities officially quoted either in the Netherlands or abroad. However, transactions between residents of the Benelux countries in Netherlands, Belgian, Luxembourg, and Congolese securities are not restricted to officially listed securities.

New capital investments in the Netherlands by nonresidents are in general permitted only if made in convertible currencies. Capital proceeds held by nonresidents in K Accounts may be reinvested in the Netherlands or transferred by purchasing “reinvestment” currencies, provided the K Account is not classified as nonexportable (see section on Nonresident Accounts, above).

Nonresidents may have their securities, Netherlands or foreign, exported to them (but this does not apply fully to Bulgaria and Rumania).

Emigrants may avail themselves of the same facilities as travelers (see section on Payments for Invisibles, above), i.e., export up to f. 14,250 for each person. On establishing residence abroad, they may apply for treatment on the normal nonresident basis.

Changes during 1960

January 1. Eastern Germany was included in the convertible guilder area.

February 23. The nonexportability of K Accounts and of the deposits of securities of residents of the Netherlands Antilles was discontinued.

March 28. Authorized banks were permitted to buy inconvertible currencies from banks abroad against foreign currency or guilders on a Convertible Guilder Account or a Bilateral Guilder Account, provided that the amounts bought were used only for current payments.

April 1. Bulgaria was included in the convertible guilder area.

April 8. Exchange for travel abroad was provided, under a general license, up to the countervalue of f. 3,000 for each person for journeys lasting up to two weeks. This amount could be increased by f. 11,250 for longer trips (on the basis of f. 150 a day up to an additional 75 days) upon written declaration made to an authorized bank before departure, and a further f. 1,500 could, if requested, be provided through banking channels. Within the f. 3,000 limit, the export of any combination of Netherlands and foreign banknotes was permitted. Emigrants were permitted substantially the same facilities, i.e., they could export f. 14,250 for each person. Nonresidents could export all unutilized negotiable instruments and foreign and Netherlands banknotes and coins which they had imported or had obtained in the Netherlands by drawing on their accounts or exchanging other currencies. Residents were obliged to bring back to the Netherlands any unutilized portion of the banknotes which they had been entitled to take with them on their outward journey.

May 30. Authorized banks were permitted to buy and sell convertible currencies and to sell inconvertible currencies, both spot and forward for up to 12 months’ delivery (previously 6 months), against convertible currencies, including guilders on Convertible Guilder Accounts. Residents were permitted to buy foreign currencies (except those on “reinvestment” accounts) from authorized banks or other residents, provided that the buyer needed the currencies for authorized payments.

July 1. Restrictions were removed on imports of a number of commodities, mainly agricultural.

July 16. General licenses were issued permitting residents to carry out the following transactions with nonresidents: to pay to nonresidents amounts due for interest and contractual amortization on authorized loans; to enter into agreements for donating sums of money to nonresidents and to make payments to nonresidents on account of such agreements; to lend money to nonresidents not residing or domiciled in Indonesia for amounts not exceeding f. 10,000 in a calendar year to the same nonresident; to sell real estate to nonresidents; to extend mortgage loans to nonresidents not residing or domiciled in Indonesia in connection with sales of real estate, provided that the loan does not exceed 50 per cent of the sales price of the real estate; to utilize foreign exchange obtained from the sale of real estate located abroad to reduce any mortgage debt on the real estate concerned, or to pay expenses and taxes abroad in connection with the real estate concerned; to purchase from nonresidents real estate located in the Netherlands or abroad, and to pay the purchase price thereof; to pay to nonresidents amounts originating from the liquidation of enterprises; and to make payments to nonresidents in fulfillment of obligations to non-residents arising from guarantees connected with capital transactions.

July 28. Residents were permitted to borrow from nonresidents up to f. 10,000 in a calendar year from the same nonresident.

August 6. The designation “nonexportable” would no longer be used in relation to K Accounts and securities belonging to residents of Mainland China, Czechoslovakia, Eastern Germany, Hungary, Poland, and the U.S.S.R. K Accounts and securities purchased with funds on K Accounts related to Bulgaria and Rumania would still be designated “exportable” or “nonexportable,” to indicate whether guilder securities bought by means of such accounts could be exported or not (“nonexportable” deposits concern mainly funds and securities which were already in the possession of residents of these countries before the war).

August 6. The limitations on the transfer of dividends on unquoted securities were abolished.

September 1. Authorized banks were permitted to finance international trade transactions for periods up to 12 months (previously 6 months). Advance payments for imports were permitted, provided that the credit terms did not exceed 5 years and, if exceeding 1 year, were not “unusual.” (Previously, the limit was 1 year.)

Netherlands Antilles

Exchange Rate System

The par value is Netherlands Antilles Guilders 1.88585 = US$1. Exchange transactions between commercial banks and the public take place at Ant. f. 1.87 buying, and Ant. f. 1.89 selling,1 per US$1, plus an exchange tax of Ant. f. 0.015 per US$1, making the effective selling rate for the U.S. dollar Ant. f. 1.905 per US$1. The selling rates for other currencies (mainly Netherlands guilders and pounds sterling) are set from time to time at rates derived from the rate for the U.S. dollar in the Netherlands and the United Kingdom.

Administration of Control

The commercial banks have authority to provide foreign exchange for practically all current transactions. Exchange licenses, where required, are issued by the Foreign Exchange Control Board.

Prescription of Currency

Payments may be made in any currency except Netherlands Antilles guilders. Receipts may be accepted in any convertible currency except Netherlands Antilles guilders. All outgoing payments in foreign exchange made by the authorized banks must be reported to the exchange control, for statistical purposes.

Imports and Import Payments

Licenses are required only for imports of certain luxury goods. These licenses must be obtained from the Foreign Exchange Control Board, and they carry the right to obtain foreign exchange to pay for the import. As a rule, licenses are valid for five months, but in some cases they may be extended for a further three months. Payments for goods not requiring a license may be made freely.

Payments for Invisibles

Payments related to foreign trade, current payments on account of services and short-term banking and credit facilities, and remittances for family maintenance, medical care, education, etc., may be made freely through the authorized banks. For payments representing interest on loans or net income from other investments, and for amortization of loans or depreciation of direct investments, licenses are granted on application, subject to verification of facts.

Nonresidents may take with them on departure foreign currency they brought in on arrival. The export of Netherlands Antilles banknotes is limited to Ant. f. 100 a person, or Ant. f. 200 a person for those leaving by a ship of the Royal Dutch Steamship Company.

Exports and Export Proceeds

All exports require licenses, which normally are always granted. Exchange proceeds must be surrendered to an authorized bank.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered to an authorized bank.

Travelers may bring with them checks or letters of credit in Netherlands Antilles currency, and checks, letters of credit, or notes in foreign currencies, in unlimited amounts. Each traveler may also bring in Ant. f. 100 in Netherlands Antilles banknotes, or Ant. f. 200 if arriving by a ship of the Royal Dutch Steamship Company.

Capital

Licenses for foreign investments in the Netherlands Antilles are in general granted if the investment is in the economic and social interest of the islands.

Life insurance contracts by residents with foreign insurance companies with a minimum term of ten years are licensed freely up to an amount which is fixed annually, depending on the foreign exchange position (in 1960, such contracts were permitted up to US$25,000 a person).

Investments by individual residents in officially quoted foreign securities are licensed freely up to amounts fixed annually, depending on the foreign exchange position (in 1960, these investments were permitted up to US$15,000 a person). In considering applications by other residents for such investments, the Foreign Exchange Control Board takes into account the merits of each case and, in particular, the limited opportunity for domestic investment.

Changes during 1960

No significant changes took place during 1960.

Netherlands New Guinea

Exchange Rate System

No par value has been established for the New Guinea Guilder. It is officially at par with the Netherlands guilder, giving the relationship NG f. 3.80=US$1.1 Exchange transactions take place at NG f. 99.50 buying, and NG f. 100.50 selling, per f. 100. The rates for other currencies are based on Amsterdam market rates.

Administration of Control

The branches of the only commercial bank in the territory have authority to provide foreign exchange for practically all current transactions. Exchange control is administered by the Director of Finance.

Prescription of Currency

No prescription of currency requirements are imposed on receipts or payments.

Imports and Import Payments

Licenses are required only for imports of rice, wheat flour, and refined beet and cane sugar,2 and for a few imports restricted for health and security reasons. Exchange for all other imports is provided automatically.

Payments for Invisibles

Foreign exchange is provided freely by the commercial bank for most current payments, including those related to foreign trade and services and family maintenance. For exchange for other purposes, application must be made to the exchange control authorities. There is an exchange allowance for travel abroad by residents of NG f. 125 a day for each person, up to a maximum of NG f. 2,000 a trip.

Resident travelers may take out NG f. 200 in local currency, and nonresident travelers may take out the currency they brought in.

Exports and Export Proceeds

All exports are free of license. There are no exchange surrender requirements.

Proceeds from Invisibles

Exchange proceeds from invisibles do not have to be surrendered. Nonresident travelers may bring in NG f. 1,000 in local currency.

Capital

Payments in respect of capital transactions are subject to control, but applications for exchange (in practice, these are mainly from emigrants) are approved on a liberal basis.

Changes during 1960

No significant changes took place during 1960.

Nicaragua1

Exchange Rate System

The par value is Nicaraguan Córdobas 7.00 = US$1. The official rates are C$7.00 buying, and C$7.0525 selling, per US$1. These rates apply to most transactions; there is, however, a fluctuating free market for foreign notes and coins, which is used for travel exchange and certain other transactions (see Table of Exchange Rates, below).

Administration of Control

The control system is administered by the Central Bank of Nicaragua, which by law has the sole authority to purchase and sell foreign exchange. This authority has, however, been delegated to the commercial banks, and the Central Bank does not deal with the public except in special situations or for purposes of monetary control. The Central Bank also issues export licenses and grants applications for import registrations according to a classification established by the Ministry of Economy.

Prescription of Currency

There is no prescription of currency. However, the Central Bank has the power to prohibit the export of any domestically produced article if the currency stipulated for payment is not easily convertible into dollars in international markets. Incoming and outgoing payments normally are made in U.S. dollars, except that payments to El Salvador can be made through special accounts established under a bilateral payments agreement with that country. Nicaragua has no payments or clearing agreements with other countries.

Imports and Import Payments

All imports are subject to license. For most imports licenses are issued automatically; however, the import of all types of footwear is prohibited and the import of cotton-ginning plants, milk-pasteurizing and milk-sterilizing machines, and slaughterhouse equipment requires the prior approval of the Ministry of Economy.

For the purpose of advance deposit requirements, three import categories have been established on the basis of essentiality. No advance deposit is required for items in List I. For items in List II, the importer must deposit in domestic currency 100 per cent of the c.i.f. value before making an application to import, and the license is issued within 48 hours. For items in List III (all goods not included in List I or II), the importer must make an advance deposit of 100 per cent 30 days before receipt of the import license. The advance deposit is refunded to the importer when the goods reach Nicaragua and the importer makes payment to the foreign supplier. Merchandise imports for certain investment purposes are exempt from advance deposits.

For imports which must be paid for by sight draft, the Central Bank is required to sell exchange during the period of validity of the import registration (six months). This period of validity may be extended for an additional two months if circumstances should make it necessary. Once this period has expired, the Central Bank is under no obligation to sell such exchange. In the case of imports with deferred payment, the obligation to sell exchange expires at the expiration of the period of payment.

Payments for Invisibles

Payments for invisibles at the official selling rate are subject to prior authorization, which is granted only for the following: government payments, remittances on account of registered foreign investments and of registered foreign loans, and salaries and fees for specialized services. The Central Bank also authorizes the sale of exchange at the official rate to autonomous entities and public service institutions to pay insurance and reinsurance premiums, provided that the applicant guarantees to deposit with an authorized banking institution all indemnities resulting from the insurance or reinsurance. Payments for other invisibles are usually made through the free market. Domestic currency notes may be exported freely.

Exports and Export Proceeds

Exports are subject to a licensing procedure similar to that for imports. The licensing procedure serves to confirm that the prices at which the goods are exported are not lower than the minimum prices in foreign currency in world markets on the date of export, and to ensure that all exchange receipts are surrendered at the official rate.

Proceeds from Invisibles

Proceeds from most invisibles must be surrendered at the official rate. Domestic currency notes may be imported freely.

Capital

Under the Law on Foreign Investments of February 26, 1955 (effective March 11, 1955), foreign investments approved by the Central Bank and registered are granted favorable treatment. Foreign investments may be made in any form; if made in foreign exchange, the exchange must be surrendered. The law provides that exchange transactions in respect of foreign investments are to be carried out at the exchange rate applicable to the essential import category on the day of the transaction. Foreign investments are granted the following privileges: free repatriation of the registered capital; free transfer of earnings, profits, or interest on the capital; and free re-exportation of goods imported for investment. Profits not transferred abroad during the year following the year in which they were earned and not registered as foreign capital are treated as domestic capital.

Remittances on account of foreign capital invested prior to March 11, 1955 and registered under the Law for the Regulation of International Exchange of November 9, 1950 are subject to individual approval by the Central Bank, with the limitation that remittances of profits or amortization may not exceed 10 per cent of the capital annually. Remittances on account of investment subject to special contracts signed with the Government are bound by the terms of the contract.

Banknotes

Foreign currency notes may be negotiated in the free market.

Table of Exchange Rates (as at December 31, 1960)(córdobas per U.S. dollar)
BuyingSelling
7.00 (Official Rate)

All exports. Most invisibles. Registered capital.
7.0525 (Official Rate)

All imports. Government payments. Registered capital. Salaries and fees for specialized services. Certain insurance premiums.
7.25 (Fluctuating Free Market Rate)

Foreign banknotes and coins.
7.35 (Fluctuating Free Market Rate)

Other invisibles and capital.

Changes during 1960

January 26. Four commodities previously in import List II or III were transferred to List I. Among the items transferred were materials for coating roofs, chemicals used for curing meat and manufacturing sausages, seeds, bulbs, and trees and other live plants.

February 11. It was stipulated that the prior approval of the Ministry of Economy was required to import cotton-ginning plants, milk-pasteurizing and milk-sterilizing machines, and slaughterhouse equipment.

July 9. The import of all types of footwear was prohibited.

August 29. Certain commodities in import List II or III were transferred to List I, mainly materials used in milk production and transportation.

November 12. Certain commodities (component parts and needles for record players, etc.) were transferred to import List I.

December 8. Instruments for orthodontic practice were transferred to import List I.

December 19. Materials for hat making were transferred to import List I.

Note.—On January 1, 1961 the Organic Law of the Central Bank of Nicaragua became effective, and the Issue Department of the National Bank of Nicaragua was replaced by the Central Bank in administering the control system. The National Bank would continue to operate as a government-owned commercial bank.

Nigeria1

Exchange Rate System

The Nigerian Pound is officially at par with the pound sterling, making it equal to US$2.80. The Central Bank of Nigeria is required by law to buy and sell sterling at rates within fixed limits (£100/15/– buying, and £99/5/– selling, per 100 Nigerian pounds). No official rates are quoted for the U.S. dollar by the Central Bank, but it deals in U.S. dollars on a day-to-day basis at rates which reflect the international sterling–U.S. dollar market rate. The commercial banks in Nigeria base their rates for other currencies on the current London market rates for these currencies plus the cost of transfer to Lagos and brokerage.

Administration of Control

The administration of exchange and trade controls is carried out by the Federal Minister of Finance and the Federal Minister of Commerce and Industry. Authority to approve applications for foreign exchange within the scope of instructions issued by the Federal Minister of Finance is delegated to authorized banks.

Prescription of Currency

Nigeria is a member of the Sterling Area, and settlements between residents of Nigeria and residents of other Sterling Area countries may be made freely in sterling or another Sterling Area currency. Authorized payments to countries outside the Sterling Area may be made in sterling to the credit of an External Account or in any other currency. The proceeds from exports to countries outside the Sterling Area may be received in sterling from an External Account or in any specified currency.2

Nonresident Accounts

Accounts in Nigerian pounds held by residents of countries outside the Sterling Area with authorized banks are 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 by nonresidents of foreign currency. 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.

In addition to External Accounts, there are also Blocked Accounts. Their purpose is to receive funds, e.g., capital proceeds, which are not placed at the free disposal of nonresidents but which may be used for authorized purposes, including investments in approved securities. Most of the Blocked Accounts are held by persons who stayed for some length of time in Nigeria and subsequently returned to countries outside the Sterling Area.

Imports and Import Payments

The import of certain goods is prohibited for health, safety, moral, or religious reasons. Certain imports (altogether about 20 commodities or groups of commodities) are also prohibited unless specific conditions have been complied with; these conditions are specified in the licenses authorizing such imports. Most other commodities may be imported under open general license. Individual import licenses are, however, required for (1) imports from the dollar area of coal, petroleum products, gold, gold chloride, and other gold products, used clothing, and produce the export of which is subject to Marketing Board control in Nigeria (see section on Exports and Export Proceeds, below), and (2) all imports from certain countries, mainly those in the Sino-Soviet bloc.

Foreign exchange is granted automatically for all authorized imports.

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 approval of the exchange control authorities.

An allowance of up to £250 in foreign exchange in one year may be granted by authorized banks to residents of Nigeria for travel outside the Sterling Area. Persons going abroad are permitted to take with them £50 in U.K. and Nigerian banknotes and up to the equivalent of £250 in other currency notes; visitors may, however, take out the amounts they brought into Nigeria in foreign currency notes.

Exports and Export Proceeds

The export of certain goods (African antiquities or works of art produced before 1918, objects that are being used or have been used in African ceremonies), and of all goods exported otherwise than in an aircraft or in a steamship, is prohibited, except under prescribed conditions. The export of explosives, other than industrial explosives, is also prohibited. Most other locally produced goods may be exported freely to any country under open general license. However, a number of restricted items, including those covered by the Central Marketing Board Ordinance, may be exported only under individual license. (The Central Marketing Board Ordinance covers such items as cocoa, cotton, cottonseed, benniseed, groundnuts, groundnut oil, palm oil, and palm kernels.)

Export proceeds other than those in Sterling Area currencies must be offered to an authorized dealer in Nigeria for conversion into Nigerian pounds or in the United Kingdom for conversion into sterling within 180 days from the day of shipment.

Proceeds from Invisibles

Receipts from invisibles in currencies other than those of the Sterling Area must be sold to an authorized bank. Persons entering Nigeria may bring in freely foreign and domestic banknotes.

Capital

There are no restrictions on the movement of capital between Nigeria and other Sterling Area countries.

The investment in Nigeria of funds from countries outside the Sterling Area must have the prior approval of the Federal Minister of Finance. Such prior screening, however, is meant only to eliminate speculative ventures which would not contribute, directly or indirectly, to the economy of the country. Once the initial investment is granted “approved status,” repatriation of the original capital and remittances of profits are normally permitted after local expenses and taxes have been met.

Transactions in securities involving residents of countries outside the Sterling Area are subject to certain controls.

Changes during 1960

January 28. Travelers were permitted to take out of Nigeria foreign currency notes, other than sterling notes, up to the equivalent of £250, instead of £100 as previously. Visitors would continue to receive permission to take out the amounts they brought into Nigeria in foreign currency notes. The amount of U.K. and Nigerian banknotes that may be taken out of Nigeria was increased from £10 to £50.

February 11. Import licensing controls were removed from a further range of goods from the dollar area countries, including flexible tubing, dredging equipment, machinery, and road motor vehicles.

June 23. The open general export licenses were revised and reissued, the main effect being to free tin, crude rubber, and lead ore from export licensing controls.

October 1. Nigeria became independent, but remained a member of the British Commonwealth of Nations and of the Sterling Area.

Norway1

Exchange Rate System

The par value is Norwegian Kroner 7.14286 = US$1. The official limits for the U.S. dollar are NKr 7.09 buying, and NKr 7.20 selling, per US$1, at which rates the exchange authorities stand ready to deal, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for externally convertible European currencies2 vary between limits resulting from the dollar rate for the Norwegian krone in relation to the dollar rates for the other currencies. The forward premiums and discounts are left to the interplay of market forces.

Administration of Control

Import and export licenses, where required, are generally issued by the Ministry of Commerce. However, for most agricultural goods, import licenses are issued by the Ministry of Agriculture, and for fish and fish products, export licenses are issued by the Ministry of Fisheries. All payments to and from nonresidents must be made through one of the Norwegian authorized banks or through the Bank of Norway. Authorized banks may effect payments freely for imports not requiring an import license and for most invisibles. Payments in the restricted sector require, in general, approval from the Ministry of Agriculture (for most agricultural goods), the Ministry of Commerce (for other goods), or the Bank of Norway (for invisibles).

Prescription of Currency

For prescription of currency purposes, foreign countries are divided into two groups: the bilateral area3 and the convertible area (all other countries). Settlements with countries in the bilateral area must be made in the manner prescribed in the relevant payments agreement. Settlements with countries in the convertible area may be made in any convertible currency or externally convertible European currency, including Norwegian kroner on Convertible Krone Accounts (see section on Nonresident Accounts, below). However, payments to Greece and Turkey must be made through the clearing accounts of those countries with the Bank of Norway; balances on these accounts are considered by the Norwegian authorities to be convertible.

Nonresident Accounts

The main type of nonresident account is the Convertible Krone Account. Such accounts may be held for residents of countries in the convertible area (see section on Prescription of Currency, above). They may be credited with authorized payments by residents of Norway to the convertible area, with transfers from other Convertible Krone Accounts, and with proceeds from the sale in Norway of convertible currencies and externally convertible European currencies. They may be debited for authorized payments from the convertible area to residents of Norway, for transfers to other Convertible Krone Accounts, and for purchases in Norway of convertible currencies and externally convertible European currencies.

Nonresident-owned capital, which normally may not be transferred abroad, is deposited in Capital Accounts. These accounts may be used by the holder for such expenses in Norway as personal taxes, insurance premiums, and traveling expenses, as well as for direct investments, upon approval, and for investments in bonds that are issued in Norwegian kroner only. Bonds acquired in this way may either be deposited with a Norwegian authorized bank or be sent to the owner abroad. Capital amounts which, according to the general rules or specific permission, are transferable abroad, may be credited to a Convertible Krone Account.

Imports and Import Payments

All commodities not included in a small published list of nonliberalized goods may be imported freely from all countries except Albania, Bulgaria, China (Mainland), China (Taiwan), Eastern Germany, Japan, North Korea, the Republic of Korea, North Viet-Nam, and the U.S.S.R. These goods, and certain categories of fruits and vegetables, are not subject to license and may be imported upon presentation of the original invoice.4 Licenses are required to import these same goods from other countries, but are for the most part granted freely for imports from Albania, Bulgaria, and Eastern Germany. Imports of commodities in the list of nonliberalized goods, except government imports, require import licenses; however, these licenses are for the most part granted liberally. Most of the commodities in the list of nonliberalized goods are included in a global quota list, which permits such imports up to certain limits from all countries in the global quota area (all countries except those in Eastern Europe, China (Mainland), China (Taiwan), Israel, Japan, North Korea, the Republic of Korea, and North Viet-Nam). Some commodities on the nonliberalized list are subject to bilateral quotas, while others are licensed on an ad hoc basis. Those licensed on an ad hoc basis include specialized and secondhand ships, which are licensed freely provided that certain regulations (requiring in principle that such purchases be fully financed by foreign loans with maturities of at least five years from the date of delivery) are complied with. A small number of imports are prohibited for health and similar reasons, and certain goods (some grains, alcoholic beverages, equipment and materials for the fishing industry, pharmaceutical products, and drugs) are imported only by State monopolies.

If no license is required, or when an import license has been obtained, payment may be made without delay, provided that the method of payment is in conformity with the general rules (see section on Prescription of Currency, above).

Payments for Invisibles

Exchange for payments to countries in the convertible area for most invisibles, including income from capital and contractual amortization, may be obtained freely. Payments for invisibles to countries in the bilateral area must be made in the manner prescribed in the relevant payments agreement, a liberal practice being followed with regard to most invisibles.

Norwegian tourists to all countries are granted the equivalent of NKr 2,000 a year for each adult and NKr 500 a year for each child under 16 years of age. For business travel, the allowance is the equivalent of NKr 150 a day in all European countries and the equivalent of NKr 250 a day in other countries. There are also exchange allowances for students’ expenses, medical and hospital expenses, family maintenance, and some other payments. Each person leaving Norway may export NKr 350 in Norwegian banknotes and coins in denominations not exceeding NKr 100. Nonresidents leaving Norway may export any foreign banknotes that they can prove they brought into the country.

Exports and Export Proceeds

Most goods may be exported freely to countries in the convertible area, against a declaration or a license, which is granted automatically. Exports subject to regulation are listed and require export licenses. Payment must be received within six months of shipment and in conformity with the regulations (see section on Prescription of Currency, above). All exchange from exports must be surrendered.

Proceeds from Invisibles

Receipts from invisibles must be surrendered. Each person entering Norway may import NKr 1,000 in Norwegian banknotes, in denominations not exceeding NKr 100, and any amount in foreign banknotes.

Capital

Inward transfers of capital and investments in Norway by nonresidents are subject to approval by the Bank of Norway. Outward transfers of capital are subject to individual license, the granting of which depends on such circumstances as the merits of the case, the transfer possibilities under a relevant payments agreement, the possibility of compensation with Norwegian assets abroad, etc. Outward transfers in respect of investments made in Norway after World War II are granted freely. Payments for contractual amortization are also permitted freely.

In accordance with an agreement concluded by Norway with Denmark, Sweden, and the United Kingdom in 1950, capital transfers to these countries normally are permitted. Transfers to the United States and Canada may take place within certain limits; above these limits, transfer depends upon the merits of the case, but inherited capital assets owned by residents of the United States or Canada may be transferred freely. Inheritances and dowries may be transferred freely to OEEC countries. Emigrants are granted the equivalent of US$5,000 a person, in addition to the tourist allowance; an emigrant may also transfer US$5,000 one year after emigration and any remaining assets upon being declared a nonresident. Repatriation of moderate amounts of other nonresident-owned capital is permitted in cases of hardship. Most transactions in securities involving nonresident interests are subject to approval.

In general, resident-owned capital assets abroad, other than securities, real estate, and other authorized investments, have to be surrendered. Applications for capital transfers to make direct investments abroad are considered on their individual merits, and portfolio investment abroad is approved only exceptionally.

Changes during 1960

January 1. Imports of private cars and delivery vans from the dollar area were placed on the same basis as imports from OEEC countries. The global quota area (comprising the dollar area, OEEC countries, and a few others) was extended to include Argentina, Brazil, Cambodia, Ethiopia, Liberia, and Somalia.

April 1. The import of coffee, formerly carried out by a panel consisting of representatives from the Government and the Wholesale Grocers’ Association, was shifted to private importers. The issuance of import licenses for coffee was transferred from the Ministry of Commerce to the Import Committee of the Wholesale Grocers’ Association. Individual private importers were permitted to import green coffee under validated licenses, provided that at least 75 per cent of the total quantities imported in the calendar year came from Brazil.

April 1. Fruit cocktail, dried apples, pears, and mixed fruit could be imported freely.

April 22. Travel exchange regulations were modified and liberalized. The allowance for business travel to non-European countries other than Canada and the United States was increased from the equivalent of NKr 150 a day to the equivalent of NKr 250 a day, thus unifying the allowance for all non-European countries (NKr 250 a day was already allowed for travel in Canada and the United States). The allowance for repair of automobiles abroad was increased from NKr 500 to NKr 1,000 a car.

June 1. Accounts heretofore designated “Krone Accounts with foreign addresses” were redesignated “Capital Accounts.” Up to NKr 25,000 belonging to a resident of any country in the convertible area could be transferred to a Convertible Krone Account, any balance in excess of that sum being credited to a new Capital Account. Accounts belonging to residents of countries in the bilateral area were to be transferred to Capital Accounts.

July 1. About 375 commodities on a list of approximately 800 items imported on private account and subject to import license were liberalized, so that the OEEC liberalization percentage (1948 basis) was now 83.2 and the new liberalization percentage (1953 basis) was 94.3. In accordance with the European Free Trade Association agreement, almost all goods not previously liberalized (other than agricultural goods) were made subject to global quotas. In addition, the global quota area was extended and the number of countries benefiting from the license-free regime was increased. Existing global quotas were increased by at least 20 per cent.

October 1. New cars and delivery vans were removed from the list of nonliberalized imports. As a transitional step, however, certain restrictions were maintained on imports of used cars more than three years old.

Note.—The following changes took place early in 1961:

January 1. A limitation on payments to the dollar area in respect of film rentals was removed.

January 20. The limit of US$10,000 on the transfer of inheritances and dowries to OEEC countries was removed. The exchange allowance for emigrants (in addition to the tourist allowance) was increased from US$500 to US$5,000 a person, plus US$5,000 one year after emigration and any remaining assets upon being declared a nonresident.

Pakistan

Exchange Rate System

The par value is Pakistan Rupees 4.76190 = US$1. All transactions in foreign exchange must be conducted through authorized dealers, whose transactions with the general public must be effected at rates authorized by the State Bank of Pakistan on the basis of par values established with the International Monetary Fund. Authorized dealers in Pakistan are permitted to cover in the London market their requirements of specified currencies. They may also cover their permitted transactions in specified currencies against sterling or Pakistan rupees, either spot or forward for a limited period, with their agents in the countries concerned. As at December 31, 1960, market rates for telegraphic transfers on London were 1s. 6132d. buying, and ls. 53132d. selling, per rupee, and on New York they were PRs 4.7300 buying, and PRs 4.7625 selling, per US$1. Other effective rates arise from the negotiation of bonus vouchers which certain exporters may sell at freely determined rates to importers who need them in order to obtain import licenses for various commodities. As at December 31, 1960, these bonus vouchers were quoted at rates around PRs 120 per PRs 100 nominal value.

Administration of Control

All transactions in foreign exchange must be conducted through authorized dealers. The State Bank of Pakistan has delegated to 21 commercial banks authority to deal in all foreign currencies, to supervise surrender requirements, and to sell exchange for specified purposes within limits prescribed by the State Bank. Applications for import licenses are submitted through these commercial banks.

Prescription of Currency

Pakistan is a member of the Sterling Area, and the prescribed methods for settling both trade and nontrade transactions are similar to those of most other Sterling Area countries.

Exchange receipts have to be obtained through a bank. Receipts from countries in the Sterling Area must be received in sterling from the account of a resident of the Sterling Area (other than a resident of Pakistan) or in Pakistan rupees from the account of a bank in the Sterling Area. Receipts from countries outside the Sterling Area must be obtained in sterling from an External Account in the United Kingdom, in Pakistan rupees from the account of a bank outside the Sterling Area, or in any specified currency.

Payments abroad must be made through an authorized bank. Payments by residents of Pakistan to countries in the Sterling Area are made by transferring sterling or any other Sterling Area currency, including Pakistan rupees, to an appropriate account; payments to countries outside the Sterling Area are made by transferring sterling or Pakistan rupees to a nonresident account or, in some cases, in the recipient’s currency. In the case of imports, payment is made to the country of origin of the goods.

No exchange control is exercised over transactions with Afghanistan, and settlements are made in Pakistan rupees or afghanis. Trade transactions under “barter” agreements are settled through special accounts in inconvertible currencies.

Nonresident Accounts

Different rules apply to nonresident rupee accounts of individuals, firms, or companies, on the one hand, and to nonresident rupee accounts of banks, on the other. Authorized dealers may open rupee accounts for banks abroad without reference to the State Bank, but approval is required for opening other nonresident accounts. Transfers from nonresident banks’ rupee accounts in Pakistan to the corresponding sterling accounts in the United Kingdom are allowed, but other nonresident account holders must obtain permission from the exchange control for transfers from their credit balances. Accounts of residents of India held prior to the imposition of exchange control on transactions with India are governed by separate regulations.

Imports and Import Payments

All imports are subject to license, except goods imported by the Central Government for defense purposes, goods for which orders are placed directly by departments of the Central Government, goods in transit, personal baggage, certain imports over the land route from Afghanistan and Iran, and certain other items permitted under a Ministry of Commerce Notification (No. 335/260/24, June 12, 1951). An import license may be used in any country of the world, except for items for which single-country licenses are issued under the terms of trade agreements with particular countries. Import licenses are issued only on a c. & f. basis, and are generally issued for commodities specified in the half-yearly import policy announcements. In addition, import licenses are issued for specified items under the Export Bonus Scheme, and for other specified items under “barter” arrangements concluded with foreign governments or with concerns abroad.

Where a valid import license is held, the required exchange is released by an authorized bank when it receives the related import document. The license holder may make payment by opening a letter of credit or by remitting against a sight draft. Advance remittances before shipping documents are received are not normally permitted, but in special cases—e.g., imports of machinery and other capital goods where deposits have to be made with overseas manufacturers—the State Bank may authorize advance payment for a part of the value of the goods.

Payments for Invisibles

Payments for invisibles are controlled by the State Bank and require licenses. However, under authority delegated to them, authorized dealers may sell exchange or make remittances in accordance with detailed regulations. Remittances of a personal nature are either subject to quotas or are permitted on their individual merits. Separate regulations govern payments to India for such purposes as family maintenance. Remittances by Pakistan nationals to their families abroad require special authority. Foreign exchange is granted for expenses incidental to trade transactions, but not to importers for transport insurance, which may only be taken out with insurance companies in Pakistan. Exchange is granted for transfers abroad of dividends and other earnings due to nonresidents. Payments for international travel fares are permitted if certain conditions are met. There are basic allocations of exchange for tourist travel, according to geographic areas (see section on Changes during 1960, May 3, below), and an annual allowance for pilgrimages to Saudi Arabia. Exchange for business travel, medical treatment, and students’ expenses in other countries and for sponsored cultural trips may be granted on an individual basis. Exporters may use part of their entitlement under the Export Bonus Scheme for business travel or for opening and maintaining branch offices outside Pakistan.

Nonresident travelers may take out foreign currency not exceeding the amounts they brought in and PRs 20 in Pakistan currency notes.1 Residents may take out PRs 20 in Pakistan currency notes at any one time and, if leaving for Afghanistan, any amount of Afghan currency. Individual permission is required for the export of other currencies.

Exports and Export Proceeds

The export of all commodities is allowed freely. Only 17 listed items require export licenses.

The State Bank exercises control over exchange receipts and requires a declaration by the exporter to ensure surrender of the foreign exchange earned. The exporter declares that, when payment in accordance with the prescribed method is received, he will surrender the foreign currency within a certain period of time. After making sure that the exporter’s declaration meets all conditions, the authorized dealer certifies the export shipment.

Under the Export Bonus Scheme, exporters of cotton yarn, after surrendering all their exchange receipts for local currency, are issued bonus vouchers in rupees equivalent to 10 per cent of the net exchange surrendered; for exporters of jute and cotton manufactures and of primary products other than raw jute, raw cotton hides, skins, wool, tea, and rice (but superior varieties of rice are included in the scheme), the percentage is 20; and for exporters of all other manufactures, the percentage is 40. These vouchers are freely transferable and entitle the holder to import a wide range of specified commodities.

Proceeds from Invisibles

With the exception of Afghan currency, which may be retained, incoming foreign exchange derived from invisibles must be surrendered at the official rate within one month. Exporters of certain services (aircraft repairs, salvage operations, ship repairs, and shipping) are entitled to receive bonus vouchers equivalent to 20 per cent of the net foreign exchange earned by them; these vouchers are freely transferable and entitle the holder to import a wide range of specified commodities. Each traveler entering Pakistan, except those traveling on Category “A” visas (from India),2 may bring with him PRs 5,000 in Pakistan currency notes, subject to declaration to the customs, and Rs 5 in coins that are legal tender in India. There is no limitation on the import of other currency notes, but they must be declared to the customs on entry.

Capital

Investments in Pakistan by nonresidents are subject to approval. In order to encourage industrial development in Pakistan, the Government follows a liberal policy toward foreign entrepreneurs, who can start any industry in the private sector without any conditions being laid down regarding the participation of local capital.

Repatriation facilities are as follows: (1) Foreign capital invested in approved industries established after September 1, 1954 may be repatriated at any time thereafter to the extent of the original investment, and current profits may be transferred without restriction, to the country of origin of the capital. (2) Profits that are reinvested in approved industrial projects with the approval of the Government may be treated as investment for the purpose of subsequent repatriation. (3) Appreciation of any capital investment under (1) and (2) may also be treated as investment for the purpose of subsequent repatriation. These repatriation facilities will be subject to the exchange control regulations in force at the time, and they will not apply to the purchase of shares on the stock exchange unless the purchase is an integral part of an approved investment project, or to capital invested in Pakistan before September 1, 1954.

Guarantees provide for just and fair compensation in the currency of the country of origin of the capital, in the event of nationalization of any project. (The subject of issuing a Foreign Investment Law in Pakistan is under active consideration.)

Special facilities are provided for nonresidents who remit funds to Pakistan and invest in Government of Pakistan bonds and in shares quoted on the Pakistan stock exchange. Such investments may be repatriated freely and interest or dividends up to 5 per cent a year remitted for a period of two years, after which these facilities are no longer available. Foreign nationals in Pakistan or abroad may register their investments in National Prize Bonds issued by the Government of Pakistan, and thus facilitate repatriation at any time of the principal and prize winnings.

Transfers of capital abroad by residents are in general not permitted. However, detailed rules govern the transfer of capital by persons emigrating or retiring from Pakistan, depending upon the nationality of the person concerned and the country or monetary area to which the transfer is to be made. Foreign nationals, other than Indian nationals, are permitted to transfer their genuine savings in full. The policy with regard to Indian nationals is based on reciprocity. Residents are permitted to sell foreign securities upon approval by the State Bank, provided that the foreign exchange proceeds resulting from such sales are surrendered, but there is no provision for purchases of foreign securities by residents. In this connection, foreigners residing in Pakistan are considered nonresidents.

Exports of, and transactions in, securities involving nonresident interests are subject to approval. Proceeds accruing from the liquidation of nonresident capital assets may be credited to blocked accounts. Balances on blocked accounts may be invested in approved securities payable in Pakistan rupees.

Changes during 1960

January 1. The amount of Pakistan banknotes that could be brought into Pakistan by travelers, except those traveling on Category “A” visas (from India), was increased from PRs 2,000 to PRs 5,000, subject to declaration to the customs on entry.

January 6. It was announced that foreign investors who transfer funds to Pakistan would be permitted to use those funds to purchase National Development Savings Certificates, but that the repatriation of such investments or interest thereon would not be allowed.

January 12. It was announced that a limited payments agreement had been concluded with the Government of India, providing for the export and import of specified commodities on a balanced basis. All payments in respect of such transactions would be channeled through an account in inconvertible Indian rupees maintained in the name of the National Bank of Pakistan on the books of the State Bank of India.

January 27. Details of the exchange facilities for the 1960 Haj Pilgrimage were announced. Exchange would be allocated by ballot up to a certain maximum per person, depending on the means of travel and provided that the full amount required for the purchase of the exchange was deposited at the time of application.

January 30. It was announced that purchases of Indian currency notes would in future take place on a collection basis at world market prices, instead of at the fixed rates previously laid down by the State Bank of Pakistan; fixed rates would now be applicable only to sales of Indian currency notes.

January 30. It was announced that, with effect from January 22, 1960, the percentage of the proceeds of exports of cotton yarn qualifying for an Export Bonus voucher would be reduced from 20 per cent to 10 per cent.

February 1. With effect from January 2, 1960, iron and steel scrap for re-rolling purposes, inter-office telephone communication systems, electric light bulbs, and motorcars were included in the list of items that could be imported under the Export Bonus Scheme.

February 1. With effect from December 1, 1959, exports of superior varieties of rice—namely, Basmati, Parmal, and Begmi—were placed under the Export Bonus Scheme.

May 3. It was announced that basic exchange allowances would be granted for travel to the following countries: (1) Middle Eastern countries and countries on the African continent (but excluding the Persian Gulf Sheikdoms) by air or by sea; (2) Turkey, Iraq, and Iran by land route; (3) Europe, Turkey, South America, North America, the Philippines, and Far Eastern countries; (4) South East Asia (except India and Burma). The actual exchange allowance would depend on the countries to be visited and the merits of each application, subject to a maximum of UK£150 for each adult.

June 24. The import licensing policy for July-December 1960 was announced. Certain important industrial items, a few agricultural items, certain consumer goods, and (for import into East Pakistan only) five other commodities were placed under automatic licensing. In respect of these items, industrial consumers as well as commercial importers would be entitled to apply for another license as soon as they were able to show, to the satisfaction of the licensing authority, that they had fully and properly utilized one license. For items placed under automatic licensing, initial licenses would, generally speaking, be issued to industrial consumers at 100 per cent of assessed requirements, and to commercial importers at 100 per cent of their category but subject to adjustment for any licenses issued to them in advance for the shipping period July-December 1960. The assessed requirements of industrial consumers, except where revised by the assessing authority, would be the same as those adopted for licensing during the shipping period January-June 1960. In addition, applications were invited from newcomers to import certain commodities—mainly those subject to the automatic licensing procedure described above. Import licenses would be valid for imports from all countries, except licenses issued under triangular aid programs or licenses which, under bilateral trade agreements or barter arrangements, specify the country of origin of the goods to be imported.

June 30. Earthenware, china, porcelain, glass, glassware, and mechanical and educational toys were removed from the list of items that could be imported under the Export Bonus Scheme.

June 30. With effect from June 24, 1960, the following items were removed from the list of items that could be imported under the Export Bonus Scheme: secondhand clothing (woolen and woolen mixtures); sheet glass, including beveled and plain mirrors; and shaving brushes and tooth brushes.

July 8. It was announced that foreign nationals, other than those of Indian nationality or employed by the Pakistan Merchant Navy, would now be allowed to make monthly remittances for the support of their dependents in their home countries at the rate of 50 per cent of their net monthly income, without, as previously, a quantitative limit.

July 16. It was announced that no further cuts would be made in the amount of family remittances to India by Pakistan nationals. (A program by which such payments would be reduced every six months by 12½ per cent of the amount remittable at the end of 1958 had applied since January 1, 1959.)

July 27. It was announced that the limit of 50 per cent of income for family maintenance remittances (see July 8, above) would not apply to persons holding Afghan passports, in view of the absence of exchange control between Afghanistan and Pakistan. Certain specialized cases were made subject to individual approval by the State Bank of Pakistan.

September 6. It was announced that the Export Bonus Scheme would not apply to goods exported to Portuguese territories in India on or after June 16, 1960.

September 30. A circular was issued by the exchange control authorities announcing that they were prepared to consider applications for exchange, supported by documentary evidence, from persons who had been receiving medical treatment abroad during the preceding three years.

October 14. The attention of authorized dealers was drawn to a notification of the State Bank permitting travelers to Pakistan to bring in Bank of England notes without limit, subject to declaration, in place of the limitation of £20 which had existed previously.

October 19. The authorized dealers were advised that, for imports brought in by Pakistan International Airways, freight could be paid in Pakistan rupees and would not require adjustment against the amount of the import license, as would be the case if shipment were made by some other carrier.

October 28. Details were published of the facilities available for persons of Indo-Pakistan origin who have settled abroad, as well as for other foreigners resident outside Pakistan, to invest in Government of Pakistan bonds and in shares quoted on the Pakistan stock exchange. Funds transferred by such persons to Pakistan through regular banking channels would qualify, for a period of two years, for the transfer of interest and dividends up to 5 per cent a year and for repatriation up to the extent of the capital brought in. After those two years, the capital could be repatriated only if it had been deposited in a nonresident rupee account with a bank in Pakistan at the end of the two years; but if the funds continued to remain invested, the facilities for transfer of interest and dividends and for repatriation of capital would no longer apply.

December 1. The procedure by which bonus vouchers under the Export Bonus Scheme had to be registered with the State Bank before import commitments could be entered into was dropped; holders of such vouchers were free to enter into import commitments and to open letters of credit through authorized exchange dealers.

December 8. Details were published of the procedure by which foreign nationals resident in Pakistan or abroad could register their investments in National Prize Bonds issued by the Government of Pakistan, and thus facilitate eventual repatriation of the principal and prize winnings of their bonds.

Panama

Exchange Rate System

The par value is Panamanian Balboa 1.00 = US$1. U.S. currency notes circulate freely in Panama, and local currency is represented only by the silver balboa and subsidiary coins. Exchange transactions by commercial banks are based on New York market quotations. Panama has no exchange restrictions on foreign payments. On November 26, 1946, Panama notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

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

Imports and Import Payments

Import licensing is in effect for a few items and a few imports are subject to quantitative restriction. Payments abroad may be made freely.

Exports and Export Proceeds

Export permits are required for a few items and a few exports are prohibited. The proceeds of exports are not subject to exchange control.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

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

Changes during 1960

No significant changes took place during 1960.

Puauaguay1

Exchange Rate System

The par value of Paraguayan Guaraníes 60.00 = US$1 is not applied to any transactions under the present exchange system. The value of the guaraní is determined in a free market, where the rate for the U.S. dollar on December 31, 1960 was about ₲ 126 per US$1. A rate of ₲ 121 per US$1 applies to Spanish agreement currency. Four surcharges of 5 per cent each of the c.i.f. value are payable on most imports, and taxes of 7½ per cent and 2½ per cent of the value of the goods are payable on most exports.

Administration of Control

The Central Bank of Paraguay is in charge of the operation of the exchange system.

Prescription of Currency

Paraguay has a bilateral payments agreement with Spain, under which exchange payments and receipts must be effected through a clearing account in terms of U.S. dollars. Otherwise, there are no prescription of currency requirements.

Imports and Import Payments

No licensing restrictions are imposed on imports. However, imports of certain commodities (certain low-priced textiles, automobiles and station wagons, whisky, beer, cigarettes, portland cement, and certain manufactures of wood) are temporarily prohibited. Moreover, many imports are subject to advance deposits, which vary according to the category and essentiality of the merchandise, as follows: Category I, 50 per cent; Category II, 110 per cent; Category III, 200 per cent. These deposits are retained for a minimum of 120 days or, if the deposit is made after the date of shipment, for a minimum of 180 days. Advance deposits are not required for government imports, imports in special circumstances—e.g., by diplomats—or imports from Argentina, Bolivia, Brazil, or Uruguay.

Four surcharges of 5 per cent each of the c.i.f. value are payable on imports from countries other than Argentina, Bolivia, Brazil, and Uruguay, even if no foreign exchange payment takes place. Government imports and imports by certain international agencies are exempt from all of the surcharges, and imports of wheat and of petroleum products are exempt from one of them. The surcharges are collected by the authorized bank either at the time the import remittance is made or at the time of delivery of the documents for customs clearance, which-ever is the earlier.

Imports on credit for a term of more than three months require approval from the Central Bank. Payments for imports from Spain, with which Paraguay has a bilateral payments agreement, must be made through the clearing account with that country.

Exports and Export Proceeds

Certain commodities are subject to export licensing, in order to maintain domestic supplies. The surrender of the proceeds of exports is not required, and exchange receipts are freely disposable. For the time being, most exports are subject to taxes in guaraníes of 7½ per cent and 2½ per cent of the value of the goods. Exemptions from these taxes have been granted for a number of agricultural and forestry products.

Payments for and Proceeds from Invisibles

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

Capital

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

Changes during 1960

April 8. A third exchange surcharge of 5 per cent of the c.i.f. value of imported goods was introduced, raising total surcharges on imports to 15 per cent.

August 11. Imports of certain low-priced textiles sold in competition with domestic products were temporarily prohibited.

August 17. Imports of automobiles, station wagons, whisky, beer, cigarettes, portland cement, and certain manufactures of wood were prohibited for the six months ending January 31, 1961.

September 16. A fourth exchange surcharge of 5 per cent on the c.i.f. value of imported goods was introduced, raising total surcharges on imports to 20 per cent. Wheat and petroleum products were exempted from this surcharge.

September 16. The 20 per cent advance deposit on imports of certain items was discontinued, and the 300 per cent deposit on imports of certain luxury goods was reduced to 200 per cent. Categories of imports subject to advance deposits were thus reduced to three: Category I, 50 per cent deposit; Category II, 110 per cent deposit, and Category III, 200 per cent deposit. At the same time, an arrangement whereby exporters of certain agricultural and forestry products were entitled to import certain types of goods without making advance deposits was terminated.

Note.—With effect from January 1, 1961, the payments agreement with Uruguay was terminated and settlements with that country were placed on a convertible currency basis.

Peru1

Exchange Rate System

The initial par value of Peruvian Soles 6.50 = US$1, established on December 18, 1946, is not applied to any transactions under the present exchange system. No new par value has been proposed. All exchange transactions are settled through the exchange market, in which the rate on January 31, 1961 was S/. 26.81 per US$1. There are no restrictions on foreign payments. Peru accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Prescription of Currency

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

Imports and Import Payments

Imports are permitted freely, except imports from Eastern Europe (excluding Czechoslovakia) and Mainland China. Exchange for payments abroad may be obtained freely in the exchange market.

Exports and Export Proceeds

Exports are not subject to license, and no control is exercised over export proceeds.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

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

Changes during 1960

May 16. The certificate system and the licensing of exports were abolished. The certificate rate was eliminated.

Note.—On January 31, 1961, the bilateral payments arrangement with Argentina was terminated.

Philippines1

Exchange Rate System

The par value is Philippine Pesos 2.00 = US$1. The official rates are ₱ 200.37 buying, and ₱ 201.50 selling, per US$100. These rates represent the official minimum buying and maximum selling rates of commercial banks for sight drafts and telegraphic transfers of US$500 and over. The free market rate, which is determined by the Monetary Board of the Central Bank of the Philippines, has been ₱ 3.00 per US$1 since September 12, 1960. The minimum buying rate in the free market for sight drafts and telegraphic transfers of US$500 and over is ₱ 299.437 per US$100, and the maximum selling rate is ₱ 301.050 per US$100. Under legislative authority which permits the Central Bank to levy a “margin” fee of up to 40 per cent on sales of exchange, the Central Bank is presently collecting 15 per cent on sales of exchange covering about two thirds of total payments for imports and invisibles.

The official rate is applied to 25 per cent of proceeds from exports (other than gold), U.S. Government expenditures, and certain invisibles, and the remaining 75 per cent is surrendered at the free market rate, giving rise to an effective mixing rate of ₱ 2.75 per US$1. Proceeds from gold sales are surrendered at a special rate. All other receipts are surrendered at the free market rate. The official rate is applied to payments for specified imports and certain other payments and the free market rate is applied to the rest, plus, in most cases, the margin of 15 per cent. Gold producing companies are permitted to pay for their import requirements at the official rate until June 1, 1961, after which the free market rate will apply. A service charge of ½ of 1 per cent is imposed on all payments for imports at the official rate. An arrangement for converting blocked pesos into U.S. dollars through the purchase and sale of gold results in other effective exchange rates. (See also Table of Exchange Rates, below.)

Administration of Control

Exchange controls are administered by the Central Bank of the Philippines, whose Monetary Board determines the allocations of foreign exchange to regular, qualified importers on a quarterly basis and to others on a nonrecurring basis. The Board also determines the amount of foreign exchange to be allocated for import payments at the official and free market rates. In the licensing of exchange for imports, the Monetary Board is assisted by an Import-Export Committee appointed for this purpose. All sales and purchases of exchange must pass through authorized agent banks (the commercial banks and, for transactions connected with travel, various other concerns, including the American Express Company). Post offices are also authorized to sell U.S. dollar money orders payable in the United States and its territories and possessions for certain specified purposes, subject to certain conditions and restrictions. The authorized agent banks are permitted, without prior approval of the Central Bank, to issue exchange licenses and sell exchange at the official rate for specified transactions and in specified amounts. Applications for exchange licenses outside the scope of authority of the authorized agent banks are referred to the Central Bank. The authorized agent banks are also permitted to sell exchange at the free market rate to all qualified purchasers, reference to the Central Bank being required in only a few cases.

Prescription of Currency

There are no prescription of currency requirements for outgoing payments, but all exchange proceeds from exports must be obtained in U.S. dollars, pounds sterling, deutsche mark, Swiss francs, or Canadian dollars.

Nonresident Accounts

Nonresident accounts are composed primarily of nonresident peso funds which were in the Philippines prior to the imposition of exchange controls, savings of former residents, unremitted portions of income or other earnings of nonresidents from real and personal properties held by them prior to December 9, 1949 or from investments made since that date with the approval of the Central Bank, proceeds of sales of nonresident-owned assets, and other items of a similar nature which are not remitted abroad because of exchange restrictions. These funds are not ordinarily convertible into foreign exchange and must, as a prerequisite for remittance abroad, be deposited with commercial banks in special, blocked, fiduciary accounts in the names of the nonresident owners; all credits and debits to such accounts may be made only in accordance with rules promulgated by the Central Bank. The funds in these special accounts may, however, be used, subject to the approval of the Exchange Control Department of the Central Bank, for certain specified purposes, e.g., for local expenses; for local production of motion-picture films by or on behalf of foreign motion-picture companies; for purchases of government bonds; for purchases of shares of stock in companies engaged in mineral extraction that have not declared any dividends during the last five years or since the date of their organization; and for purchases in the free market of domestically mined gold bullion of a minimum fineness of at least .999—the gold to be delivered for account of the Central Bank, which will make payment for it abroad at the official price of US$35.00 an ounce less a service charge of 310 of 1 per cent of the dollar value. Blocked pesos may also be used for such other purposes as may be authorized by the Monetary Board on a case-to-case basis.

Nonresident-owned peso accounts, including credits in the books of residents in favor of nonresidents, which are not deposited in special, blocked, fiduciary accounts with commercial banks may be invested or used in the Philippines without further licensing, but with no right of remittance, directly or indirectly, of the capital or earnings thereof.

Imports and Import Payments

For exchange control purposes, imports are classified in eight categories: (1) decontrolled items, (2) essential consumer goods, (3) semiessential consumer goods, (4) nonessential consumer goods, (5) essential producer goods, (6) semiessential producer goods, (7) non-essential producer goods, and (8) unclassified items. All imports are to be procured at the free market rate, with the exception of 50 per cent of imports under the decontrolled category and 25 per cent of the import requirements of dollar-earning industries, to which the official rate applies. The official rate also applies to government expenditures within the budget for the fiscal year ending June 30, 1961, and to forward exchange contracts with Monetary Board approval. Government expenditures after June 30, 1961 will be treated in the same manner as other, similar, private transactions.

Exemption from the exchange margin has been given in respect of most of the decontrolled items and also several other items, such as fertilizers, certain chemicals, most drugs and medicines, certain spare parts and equipment, and explosives imported by end-users, e.g., mining companies.

Importers applying for exchange allocations at the official rate are classified according to status as government, old producer, new producer, or importer qualified by the Central Bank or by the Bankers’ Committee prior to the issuance of Circular No. 105 on April 25, 1960.

In general, exchange at the free market rate may be purchased with a minimum of restriction. For the unclassified items, however, exchange may be purchased only upon the specific authorization of the Central Bank. Holders of regular exchange allocations in the past may purchase exchange in the free market, but access to that market is extended to new producers and new importers only when they are Philippine nationals2 or corporations of which at least 60 per cent is owned by Philippine nationals. Producers (old and new) are required to use the exchange so purchased to import raw materials and spare parts essential for their productive activity. New importers are considered eligible only when they have been in business for at least three years and can show evidence of adequate capitalization and sales.

Certain imports at the free market rate are exempt from the margin, e.g., imports by publishers of newsprint in excess of their regular quotas, and imports by Philippine suppliers to the U.S. Armed Forces, who are permitted to use up to 90 per cent of their earnings on dollar contracts to pay for imports without the margin.

Payments for Invisibles

Sales of exchange at the official rate for payments for invisibles are limited to existing contractual obligations, including deferred payments approved by the Monetary Board prior to April 25, 1960, remittances by foreign news services, maintenance and tuition fees of students studying specific subjects abroad, and government expenditures within the budget for the fiscal year ending June 30, 1961 (after which all government expenditures will be treated in the same manner as other, similar, private transactions). Foreign technicians and executives employed by firms doing business in the Philippines may remit abroad not more than 50 per cent of their basic salaries at the free market rate. Profits and dividends declared out of profits earned from January 1960 may be remitted in full at the free market rate. Profits and dividends earned before January 1960 may be remitted at the official rate, but only up to 50 per cent of the amount indicated by the firm’s social productivity rating.3 Payments for invisibles are subject to payment of the margin of 15 per cent, except where exemption has been specifically authorized. Payments which have been so exempted include premiums on certain life insurance policies, repayment of loans contracted by the Government with foreign agencies, certain tuition fees, and interest and redemption payments on certain government bonds.

Travelers may take out with them a maximum of ₱ 20 in Philippine currency, of which coins may not exceed ₱ 5.

Exports and Export Proceeds

Exports are not in general restricted, but they are controlled to ensure that the foreign exchange proceeds are surrendered to an authorized agent of the Central Bank. Exports of certain strategic materials and items deemed essential for industrialization and economic development are prohibited. Exports of certain products of marginal and submarginal industries are permitted under a barter arrangement which permits the exporter to import specified classes of goods outside the regular licensing procedure.

With the exception of exports under barter arrangements, the proceeds of all exports must be obtained in U.S. dollars, pounds sterling, deutsche mark, Swiss francs, or Canadian dollars, and surrendered to an authorized agent. As a general rule, no commodity may be exported from the Philippines unless covered by a draft drawn in one of these currencies and unless collection of the proceeds will be undertaken by an authorized agent. However, payments by means of telegraphic transfer, check, or mail transfer may also be allowed, provided that such payments are made in advance of the export shipment. Twenty-five per cent of export proceeds are surrendered at the official rate and 75 per cent at the free market rate, making an effective buying rate of ₱ 2.75 per US$1. There are special arrangements for proceeds from gold exports: the effective buying rate is ₱ 3.60 per US$1, and gold exporters are permitted to retain 90 per cent of their earnings to pay for imports of goods in all categories except those in the unclassified category.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered. The free market rate is applied to receipts from tourism, inward remittances of Philippine citizens abroad and veterans, foreign investments, certain charitable contributions, and personal expenses of foreign diplomatic personnel. All other receipts from invisibles are surrendered at the mixing rate, i.e., 25 per cent at the official rate and 75 per cent at the free market rate. Travelers may bring in a maximum of ₱ 20 in Philippine currency, of which coins may not exceed ₱ 10 for third-class passengers.

Capital

All exchange receipts from capital must be surrendered at the free market rate. All transfers of capital require approval of the Central Bank. The transfer abroad of nonresident-owned capital invested prior to December 9, 1949 is not ordinarily allowed. Capital invested by nonresidents after December 9, 1949 is eligible for transfer abroad with the prior approval of the Central Bank. Transfers in connection with contractual obligations which were approved by the Monetary Board prior to April 25, 1960 may be made at the official rate; these include deferred payments on imports of capital goods, various foreign loans, and other payments arrangements. All other capital transfers are made at the free market rate.

The import and export of, and transactions in, securities involving nonresident interests are subject to license. For certain transactions, licenses may be issued by authorized securities dealers on behalf of the Central Bank.

Foreign assets held by residents and acquired prior to December 9, 1949 are subject to declaration and their use or disposal is subject to approval. Earnings and other acquisitions of foreign exchange abroad by residents since that date must be remitted to the Philippines and surrendered. Transfers of capital abroad by residents are in principle not permitted.

Table of Exchange Rates (as at March 15, 1961)(pesos per U.S. dollar)
BuyingSelling
2.00 (Official Rate)2.02 (Official Rate)

Some Philippine Government expenditures for the fiscal year ending June 1961.4 Fifty per cent of those decontrolled imports which are exempt from the exchange margin.
2.75 (25% at Official Rate and 75% at Free Market Rate)

All exports, other than gold. U.S. Government expenditures. All invisibles not negotiable at the free market rate.
2.30 (Official Rate plus 15% Margin)

Some Philippine Government expenditures for the fiscal year ending June 1961.4 Fifty per cent of those decontrolled imports which are subject to the exchange margin, and 25 per cent of the import requirements of dollar-earning industries. Forward exchange contracts with Monetary Board approval.
3.00 (Free Market Rate)

Inward remittances of Philippine citizens abroad and veterans; personal expenses of diplomats; tourist receipts; certain charitable contributions. Approved foreign capital.
3.00 (Free Market Rate)

Those imports in excess of Central Bank quotas which are exempt from the exchange margin, and imports equal to 90 per cent of the exchange earnings of contractors supplying U.S. bases.
3.60 (Special Rate)

Exports of gold.
3.45 (Free Market Rate plus 15% Margin)

All other imports that are subject to the exchange margin. All invisibles subject to the exchange margin that are not paid at the official rate.
Note: The arrangement for the conversion of blocked pesos into U.S. dollars via the domestic gold market (see section on Nonresident Accounts, above) gives rise to other effective rates depending upon the domestic price of gold in the Philippines. This table does not take account of the % of 1 per cent service charge on all payments for imports at the official rate.

Changes during 1960

April 25. As part of a program for the gradual lifting of exchange restrictions, a free market was established, limited at first to about one fourth of all exchange transactions. The free market rate was set by the Monetary Board at ₱ 3.20 per US$1. The entire proceeds of gold exports and receipts from tourism were purchased at this rate; of exchange receipts from other invisibles and exports, 25 per cent was purchased at the free market rate and the remaining 75 per cent at the official rate, making an effective buying rate of ₱ 2.30 per US$1. Payments at the free market rate were limited to (1) imports of items in the categories of nonessential producer goods, semiessential and nonessential consumer goods, and most unclassified items, (2) imports, in excess of quotas, of other items for which exchange was made available at the official rate, and (3) all payments for invisibles and capital other than Philippine Government expenditures, existing contractual obligations previously approved by the Monetary Board, permitted freight, and reinsurance premiums. For these payments, the effective rate was the free market rate plus the exchange margin of 25 per cent, i.e., an effective rate of ₱ 4.00 per US$1.

May 25. The 25 per cent advance cash deposit for capital goods purchased under deferred payments arrangements was abolished; the cash deposit required for essential raw materials was reduced from 50 per cent to 25 per cent and that for essential consumer goods from 100 per cent to 50 per cent; and the deposit for imports for which exchange had to be purchased through the free market (nonessential producer goods and semiessential and nonessential consumer goods) was reduced from 100 per cent to 25 per cent.

September 7. All advance cash deposits on imports were abolished.

September 12. The free market rate was changed from ₱ 3.20 to ₱ 3.00 per US$1, and the proportions in which receipts were to be surrendered were changed to 30 per cent at the free market rate and 70 per cent at the official rate (formerly 25 per cent and 75 per cent). These measures left the mixing rate on the buying side unchanged at ₱ 2.30 per US$1, but changed the most depreciated rate on the selling side from ₱ 4.00 to ₱ 3.75 per US$1.

November 22. The ₱ 3.75 rate was applied to proceeds of gold exports. At the same time, the gold producing companies were permitted to retain 90 per cent of their export proceeds to pay for imports in the following proportions: nonessential producer goods, 50 per cent; semiessential consumer goods, 50 per cent; semiessential producer goods, 25 per cent; and nonessential consumer goods, 25 per cent.

November 28. The second phase of the “decontrol” program (see April 25, above) was put into effect: (1) Fifty per cent of the proceeds from exports, U.S. Government expenditures, and invisibles other than those mentioned below were to be surrendered at the official rate and 50 per cent at the free market rate. Incoming foreign investment, receipts from tourism, inward remittances of Philippine citizens abroad and veterans, and exchange received from diplomatic personnel for their personal expenses were to be surrendered at the free market rate. (2) Sales of exchange at the official rate (plus the exchange margin, where applicable) were limited to the following: imports in the decontrolled category; 50 per cent of existing foreign exchange allocations for imports of essential producer and essential consumer goods and of some unclassified items; 40 per cent of existing foreign exchange allocations for imports of semiessential producer goods; supplies needed by gold mines (until June 1, 1961), radio and television stations, and educational institutions; government expenditures under the budget for the fiscal year ending June 30, 1961; special financing items previously approved by the Monetary Board; remittances by foreign news services; and maintenance and tuition fees of students taking scientific and technological courses abroad. Sales of foreign exchange other than the above and those in excess of import allocations at the official rate were to be made at the free market rate. (3) The exchange margin was reduced from 25 per cent to 20 per cent. Accordingly, the rate applying to proceeds of gold exports was reduced from ₱ 3.75 to ₱ 3.60 per US$1, less the service charge of 310 of 1 per cent.

December 13. The retention privilege granted to gold producers (see November 22, above) was amended to permit them to use their retained export proceeds to pay for the following proportions of their imports: nonessential producer goods and semiessential consumer goods, 50 per cent; nonessential consumer goods, 30 per cent; and unclassified items, 20 per cent.

Note.—The following changes took place early in 1961:

January 4. Inward remittances of the nature of foreign investments had to be approved by the Central Bank to entitle them to full conversion at the free market rate; otherwise, they had to be converted into pesos 50 per cent at the official rate of ₱ 2.00 per US$1 and 50 per cent at the free market rate.

January 5. It was announced that payments for reinsurance premiums after November 28, 1960, as well as claims on losses under reinsurance contracts and covers and claims on marine losses occurring after that date, must be made at the free market rate.

January 6. Gold producing companies were allowed to procure all their import requirements at the official rate until June 1, 1961. They were also authorized, to the extent of 90 per cent of the export proceeds of their gold shipments, to cover their imports of required commodities, except unclassified items, without any regard to percentage distribution.

March 2. The third phase of the “decontrol” program (see April 25 and November 28, above) was put into effect. The proceeds from exports, U.S. Government expenditures, and invisibles other than those mentioned below were to be surrendered 25 per cent at the official rate and 75 per cent at the free market rate. Foreign capital investments, receipts from tourism, inward remittances of Philippine citizens abroad and veterans, and exchange received from diplomatic personnel were to be surrendered at the free market rate, as previously. Sales of exchange at the official rate (plus the exchange margin, where applicable) were limited to 50 per cent of imports in the decontrolled category; 25 per cent of imports required by dollar-earning industries; government expenditures within the budget for the fiscal year ending June 30, 1961 (after which government expenditures will be treated in the same manner as other, similar, private transactions); and forward exchange contracts with approval of the Monetary Board. Sales of foreign exchange other than the above were to be made at the free market rate.

March 15. The exchange margin was reduced from 20 per cent to 15 per cent.

Portugal1

Exchange Rate System

The parity of the Portuguese Escudo in terms of the U.S. dollar is Esc 28.75 = US$1. The limits for the U.S. dollar have been fixed at Esc 28.42 buying, and Esc 29.08 selling, per US$1, in accordance with Article 9 of the European Monetary Agreement. Market rates for externally convertible European currencies2 vary between limits resulting from the dollar rate for the escudo in relation to the dollar rates for the other currencies.

Exchange Control Territory

Portugal and the Portuguese overseas territories3 constitute a single exchange control territory, the Portuguese Monetary Area. The exchange control regulations of Portugal are applied almost uniformly throughout the area, and current payments between the various territories are made freely through controlled accounts.

Administration of Control

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

Prescription of Currency

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

Nonresident Accounts

Nonresidents’ accounts in escudos belonging to persons or firms resident or domiciled in countries with convertible currencies may be converted freely into any other convertible currency at the market rates.

Imports and Import Payments

All imports are subject to registration, mainly in order to enforce the prescription of currency regulations. The presentation of the registration form to the customs enables the import to be cleared. Most imports from OEEC countries and their overseas territories, and, except for certain agricultural items and raw materials, from Canada and the United States, are free of import license. Many goods valued at less than Esc 2,500 may be imported freely from OEEC countries and their associated territories. Appropriate exchange is granted automatically for authorized imports.

Payments for Invisibles

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

Exports and Export Proceeds

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

Proceeds from Invisibles

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

Capital

Most movements of capital between metropolitan Portugal and other member countries of the OEEC are free from restrictions and are classified in two lists. Transfers of capital specified in List No. 1 are subject to prior authorization by the Inspectorate-General of Credit and Insurance; such authorization is granted after the bona fides and the legality of the transaction have been established.

List No. 1 comprises the following transactions: (1) direct investment of foreign capital in activities of recognized interest for Portugal’s development, and direct investment of Portuguese capital abroad if such capital is not considered essential to Portugal’s own development; (2) transfers of amounts resulting from the liquidation of direct investments in Portugal, provided that the original investment represented an inward movement of capital; (3) personal transfers for purposes of emigration (not to exceed Esc 100,000), for repatriation of nationals of OEEC countries (not to exceed Esc 350,000 a year for a family), for bequests and gifts (amounts in excess of Esc 300,000 a year require special approval), and in respect of life insurance policies; and (4) inward movements of capital resulting from the sale by a resident of metropolitan Portugal of securities in another OEEC country, provided that the transaction conforms to Portuguese exchange control regulations.

Transactions specified in List No. 2 refer to private capital movements between metropolitan Portugal and other member countries of the OEEC for which no prior authorization is required under current Portuguese exchange control regulations. These cover the following categories: (1) the liquidation in Portugal of direct investments belonging to a resident of another OEEC country; (2) the physical movement of domestic and foreign securities between Portugal and other OEEC countries; and (3) the purchase of foreign securities in OEEC countries by residents of Portugal, provided that the funds do not belong to a credit institution domiciled in Portugal and that they do not have to be surrendered to such an institution. Residents may sell their foreign securities in OEEC countries for foreign currency that is either convertible or available for reinvestment, and either reinvest the sale proceeds or transfer them to other residents of Portugal; or they may conduct arbitrage operations between two centers in other OEEC countries in such securities with other residents of Portugal.

All other capital movements require specific approval, but transfers of capital to other countries with which Portugal has payments agreements are licensed freely within the terms of the relevant agreement. All inward and outward movements of capital exceeding Esc 10 million require the approval of the Minister of Finance.

Changes during 1960

June 10. It was announced that OEEC liberalization would, with the exception of certain agricultural items and raw materials, apply also to imports from the United States and Canada.

June 27. The liberalization measures applied to imports of motor vehicles were suspended, reducing the OEEC liberalization from 93.6 per cent to 85.3 per cent.

July 15. New regulations governing inward and outward movements of private capital came into effect. For transfers of capital not exceeding Esc 10 million, prior authorization would be required from the Inspectorate-General of Credit and Insurance, which was authorized to publish the types of capital transaction free from restriction.

November 7. A notice of the Inspectorate-General of Credit and Insurance, dated October 27, 1960, was published, giving further details of the regulations governing inward and outward movements of capital. The notice listed those capital movements which were liberalized between metropolitan Portugal and other OEEC countries, distinguishing between those for which no special prior authorization was required and those subject to prior permission.

Ruanda–Urundi

Exchange Rate System

The par value is Rwanda and Burundi Francs 50.00 = US$1.

Administration of Control

Exchange control is administered by the Bank of Issue (Banque d’Emission du Rwanda et du Burundi), with some authority delegated to the commercial banks. Import licenses are issued by the Chief of the Service of Economic Affairs.

Prescription of Currency

In general, outgoing payments may be made in any currency but all receipts have to be obtained in a convertible currency. However, transactions with the Congo and the U.S.S.R. are settled through bilateral clearing accounts in Belgium.

Nonresident Accounts

The accounts of nonresidents are not related to the country of residence of the account holder, but approval is required to open such accounts either in Rwanda and Burundi francs or in foreign currencies. Subject to individual license, nonresident accounts may be credited with any foreign exchange transferred to Ruanda-Urundi by the account holder, with the foreign exchange proceeds from sales of stocks and the collection of coupons and redeemable stocks, and with other amounts received. They may be debited for all payments to residents of Ruanda-Urundi, for transfers to other nonresident accounts, and, with the individual authorization of the Bank of Issue, for transfers to the country of the account holder.

Imports and Import Payments

All imports require a document described as an “import license and payment authorization,” which must be approved by the Chief of the Service of Economic Affairs and by the Bank of Issue. Such documents are approved liberally. General import licenses for certain goods may be issued; payments for such imports must conform to the general authorizations of the Bank of Issue.

Payments for Invisibles

Payments for invisibles must be made through authorized banks and require the prior approval of the Bank of Issue, which is given liberally. Foreigners residing in Ruanda-Urundi may, by special authorization, transfer periodically part of their salaries or professional incomes.

Travelers may take out the amount of foreign or domestic currency which they declared on their entry into Ruanda-Urundi.

Exports and Export Proceeds

For all exports, an “exchange encashment declaration” must be lodged with an authorized bank before the goods are shipped. Exchange proceeds from exports must be surrendered. Gold producers in Ruanda-Urundi may sell, through a Cooperative Society of Producers of Congo Gold, up to 90 per cent of their production of fine gold either abroad or, for medical, industrial, or artistic purposes, to residents; the remainder must be sold to the Bank of Issue.

Proceeds from Invisibles

Proceeds from invisibles may be accepted freely in convertible currencies, provided this does not involve commitments by the beneficiaries to make future payments abroad.

Travelers may bring in unlimited amounts of foreign and domestic currency. Declaration on entry is required only if the traveler intend to take the currency with him on departure.

Capital

The transfer of capital abroad is, in general, prohibited. However, applications on behalf of nonresidents to remit abroad the proceeds of disinvestments are considered liberally.

Changes during 1960

August 4. A decree authorizing the establishment of a Bank of Issue of Rwanda and Burundi was promulgated.

September 1. All imports from, and all payments to and from, Belgium, Luxembourg, and the Congo—which previously could be made free of formality—were made subject to prior license or authorization.

September 22. The following measures became effective: (1) The Bank of Issue of Rwanda and Burundi began operations. It took over the activities in Ruanda-Urundi of the Central Bank of the Belgian Congo and Ruanda-Urundi. (2) The Rwanda and Burundi franc became the sole legal tender in Ruanda-Urundi. Deposits previously expressed in Congolese francs were converted within certain limits and on certain conditions into Rwanda and Burundi francs. For the period September 22–October 10, 1960, Congolese franc notes could be exchanged for new notes of the Bank of Issue and the import of notes of the Central Bank of the Belgian Congo and Ruanda-Urundi was prohibited. (3) All transactions involving the movement of funds between residents of Ruanda-Urundi and residents of other countries were made subject to authorization by the Bank of Issue.

Saudi Arabia

Exchange Rate System

The par value is Saudi Arabian Riyals 4.50 = US$1. The Saudi Arabian Monetary Agency sells exchange to banks at the par value rate, and this serves as the basis for exchange quotations in the market. There are no restrictions on foreign payments. Saudi Arabia accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from March 22, 1961.

Prescription of Currency

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

Imports and Import Payments

Import licenses are not required, and exchange for payments abroad may be obtained freely. All imports from Israel are prohibited.

Exports and Export Proceeds

Export licenses are not required, and no control is exercised over export proceeds. All exports to Israel, and the re-export of certain imported items benefiting from government subsidy, are prohibited.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

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

Changes during 1960

January 8. An initial par value of SRls 4.50 per US$1 was established with the International Monetary Fund. This unitary rate replaced the official rate of SRls 3.75 per US$1 and the free market selling rate of SRls 4.75 per US$1 that had been established by the Saudi Arabian Monetary Agency on July 22, 1959. At the same time, major reforms affecting the monetary and import systems were announced. The distinction between the free and official exchange markets was eliminated, and all restrictions on imports and payments were abolished. It was also decreed that the Saudi Arabian currency should henceforth be backed 100 per cent by gold or convertible currencies.

Spain

Exchange Rate System

The par value is Spanish Pesetas 60.00 = US$1. The official limits are Pts 59.55 buying, and Pts 60.45 selling, per US$1. Authorized banks may deal in designated currencies1 at rates between these limits. Purchases and sales of clearing currency are centralized in the Spanish Foreign Exchange Institute, which publishes the rates at which it settles the transactions it carries out direct, the rates applicable to currencies not quoted on the exchange market (Portuguese escudos and clearing dollars), and the rates applicable to banknotes. These rates are based on the rates of the previous week.

Exchange Control Territory

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

Administration of Control

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

Prescription of Currency

Prescription of currency requirements are applied to all categories of exchange payments through individual licenses. Settlements on account of merchandise transactions and invisibles are made, as a rule, in the currency determined on the basis of the country of origin or destination or in the manner prescribed by the provisions of the relevant bilateral trade and payments agreement. Under bilateral agreements, settlements with Argentina, Brazil, Bulgaria, Chile, China (Taiwan), Colombia, Cuba, Czechoslovakia, Ecuador, El Salvador, Greece, Hungary, Mexico, Morocco, Paraguay, Poland, Rumania, Tunisia, Turkey, the United Arab Republic (Egyptian Region), Uruguay, and Yugoslavia are made through agreement accounts expressed in U.S. dollars.

Nonresident Accounts

There are two main categories of nonresident account, transferable peseta accounts and blocked peseta accounts.

Transferable peseta accounts are in the names of foreign banks. They may be credited with the proceeds of foreign exchange sold in the Spanish foreign exchange market. They may be debited for purchases of foreign currencies and, in principle, for transfers to other transferable peseta accounts; however, debits to these accounts are supervised by the Spanish Foreign Exchange Institute.

Blocked peseta accounts arise from capital earnings and capital proceeds which may not be freely transferred. Holders of these accounts may withdraw up to Pts 30,000 for their personal expenses when in Spain, and this amount may be increased to cover larger personal expenditures and for investments in real estate, Public Debt, and industrial bonds. These investments must be justified in due course.

Imports and Import Payments

All imports require either an import license or an “import declaration” issued by the General Department of Foreign Trade. “Import declarations” are issued freely for goods included in an import free list that applies to most countries2 with which Spain has no bilateral payments agreements. All other imports are subject to license. There are global quotas for specified imports from countries to which the free list applies. Exchange to pay for authorized imports is granted automatically.

Payments for Invisibles

All transfers abroad and payments by residents in favor of nonresidents on account of invisibles are subject to individual license. These licenses are normally granted for all invisibles related to trade. Transfers up to the equivalent of Pts 2,000 may be made without restriction, as may transfers of income from investments recognized as having economic and social priority. Rents, interest on debentures, mortgages, etc., and proceeds from business activity, as well as dividends on transferable securities issued by Spanish companies, may be transferred without restriction up to a limit of 6 per cent a year of the amount invested. Income from investments made before July 27, 1959 may be transferred without restriction to countries with which Spain does not have bilateral payments agreements. A general license permits the reinsurance abroad of risks insured in Spain with Spanish firms or with foreign insurance companies operating in Spain. Other insurance contracts abroad may not be concluded, except where they concern exports and imports of goods. There is a basic annual exchange allowance for tourist travel of Pts 9,000 a person.3 For business travel, exchange is made available up to the equivalent of Pts 750 a day for a maximum of 30 days for each trip. For longer business trips, the banks must apply to the Spanish Foreign Exchange Institute for additional exchange, which is granted on a liberal basis for this purpose. Applications for exchange for other purposes are considered individually, either by the ministry concerned or by the Spanish Foreign Exchange Institute. Persons traveling abroad may take with them Pts 3,000 in notes of the Bank of Spain.

Exports and Export Proceeds

All exports are subject to prior licensing by the General Department Of Foreign Trade. All export proceeds must be sold in the exchange market or to the Spanish Foreign Exchange Institute through authorized banks. The proceeds of certain major exports are subject to provisional export taxes.

Proceeds from Invisibles

All exchange proceeds from invisibles must be sold in the exchange market or to the Spanish Foreign Exchange Institute through authorized banks. Persons may bring in a maximum of Pts 50,000 in notes of the Bank of Spain.

Capital

All incoming capital representing foreign investment in Spanish enterprises and investment in real estate requires approval. Capital may be imported in the form of foreign exchange, capital goods, patents, knowhow, and some other forms. Registration with the Spanish Foreign Exchange Institute is necessary if the investment is to receive the established treatment for the remittance abroad of income (see section on Payments for Invisibles, above) and of principal. Under the Foreign Investment Law of July 27, 1959, the principal (plus any capital appreciation) of new investments recognized as having economic and social priority may be repatriated, as a rule, within a period of two years starting two years after the investment was made. The principal (but not capital appreciation) of new investments not recognized as having priority may be repatriated within a period of four years starting two years after the investment was made.

Direct foreign investment in Spanish enterprises is authorized freely up to a limit of 50 per cent of the capital of the enterprise; beyond this limit it is subject to special authorization by the Council of Ministers. Investment in Spanish companies dealing with oil, banking, insurance, mining, motion pictures, and shipping is governed by the Foreign Investment Law of July 27, 1959 only for matters not covered by other legislation to which they remain subject.

The purchase by nonresidents of shares in Spanish companies (excluding those in the fields to which the law of July 27, 1959 does not apply or which are subject to special legislation) is permitted without restriction up to a maximum of 50 per cent of the capital of such companies, but the shares must be acquired with transferable pesetas or with pesetas resulting from the sale of foreign exchange in the Spanish exchange market. Nonresident holders of shares of Spanish companies are allowed to transfer abroad at any time proceeds derived from the sale of such shares, up to the amount of the original purchase price. These transferable pesetas may also be used for further purchases of shares. Peseta proceeds from the sale of shares over and above the amount of the original purchase price may also be used to purchase shares, in which case earnings may be transferred up to a maximum of 6 per cent of the capital annually.

The export of capital belonging to residents is subject to prior authorization, which is always granted provided that it contributes to the expansion of Spanish exports, that it does not imply any unfair competition for such exports, and that there exist guarantees for the repatriation of profits and capital.

Changes during 1960

January 26. By a decree of January 23, 1960, the requirement of an advance deposit of 25 per cent of the peseta value of imports was suspended.

May 1. The import free list was extended.

May 14. The authorized banks were allowed to grant the equivalent of Pts 750 a day for a maximum of 30 days for business trips, i.e., the equivalent of Pts 22,500 for each traveler and each trip. For longer trips, the banks could apply to the Spanish Foreign Exchange Institute for additional exchange. Previously, there had not been any automatic allocation for business travel.

June 2. The basic travel allowance for Spanish tourists going abroad was increased from the equivalent of Pts 3,000 to the equivalent of Pts 6,000. The amount of Spanish banknotes which travelers could take out of Spain was increased from Pts 2,000 to Pts 3,000. The amount of Spanish banknotes which persons entering Spain were permitted to bring with them was increased from Pts 10,000 to Pts 50,000.

October 26. Settlements with the Egyptian Region of the United Arab Republic were to be made through an agreement account expressed in U.S. dollars and not, as previously, in Egyptian pounds.

December 1. The basic annual travel allowance for Spanish tourists going abroad was increased from the equivalent of Pts 6,000 to the equivalent of Pts 9,000.

December 9. It was announced that the import free list would be extended, with effect from January 1, 1961.

December 31. The bilateral payments agreement with Finland was terminated.

Sudan

Exchange Rate System

The par value is Sudanese Pound 1 = US$2.87156. Official rates for transactions in sterling are fixed by the Bank of Sudan, whose rates for transactions with authorized banks and the Government are LSd 0.974 buying, and LSd 0.976 selling, per UK£1. The banks deal with the public at rates between LSd 0.9695 buying, and LSd 0.9785 selling, per UK£1. Official rates for the U.S. dollar are fixed daily by the Bank of Sudan and are based on London market rates. The authorized banks quote their own rates for other currencies, based on market quotations in London.

Administration of Control

Exchange control is administered by the Bank of Sudan, much of the detail being carried out by authorized banks. Licensing of imports and exports is the responsibility of the Ministry of Commerce, Industry, and Supply, but all licenses must be validated by the exchange control authorities or by the authorized banks under the powers delegated to them.

Prescription of Currency

Transactions with bilateral countries1 are normally settled in Sudanese pounds through the relevant Bilateral Account; however, except for transactions with the Egyptian Region of the United Arab Republic, some noncommercial invisibles have to be settled outside these accounts. Payments to all other countries and monetary areas (the “convertible area”) may be made in Sudanese pounds to the credit of any nonresident account or in any foreign currency; receipts from the “convertible area” may be accepted in Sudanese pounds from any Convertible Account or in U.S. dollars, External Account sterling, or any other fully or externally convertible currency.

Nonresident Accounts

The accounts in Sudanese pounds of residents of all countries other than bilateral countries are designated Convertible Accounts and are exchangeable into any foreign currency. Bilateral Accounts are used for most transactions with countries with which the Sudan has bilateral payments agreements (see footnote 1).

Imports and Import Payments

A wide range of goods, including such essential items as tea, grey cloth and other textiles, and raw materials for domestic industries, may be imported under an open general license, which is designed to permit imports of these goods freely from any source. However, before entering into firm contracts with foreign suppliers, importers must register such imports with the Ministry of Commerce, stating the quality, quantity, and value of the goods, and there are a few limitations, e.g., a reduction in the amount endorsed for registration in order to avoid unnecessary overstocking, or rejection of endorsement when the price of the import is considered unduly high. Goods not covered by the open general license require individual import licenses. Imports from Israel are prohibited. Exchange appropriate to the country of origin of the goods is granted for all permitted imports.

Payments for Invisibles

Most payments for invisibles require licenses. Remittances within reasonable limits are permitted for family maintenance, education and medical expenses, and assistance to close relatives. Foreign nationals are also permitted to remit reasonable amounts of current savings to their own countries. Shipping charges, insurance premiums, profits, interest, and dividends earned by nonresidents may be remitted freely upon presentation of the required documents. Travel expenses for tourism and other purposes are authorized up to the equivalent of LSd 100 for each adult, and LSd 25 for each child, annually. Travelers may not take out of the Sudan more than LSd 10 in Sudanese currency.

Exports and Export Proceeds

Exports from the Sudan are subject to license, to surrender of the proceeds, and to certain regulations governing the credit terms that can be extended to foreign buyers. Export licensing is quite liberal. The proceeds of exports must be repatriated and surrendered through an authorized bank within six months after export. Exports on credit are limited by the six-month surrender requirement, as well as by specific regulations governing consignment sales. Exports to Israel are prohibited.

Proceeds from Invisibles

Receipts from abroad in respect of invisibles must be surrendered to authorized banks and are subject to the general prescription of currency requirements. Travelers entering the Sudan may bring in LSd 10 in Sudanese currency and any amount in notes and coins of other countries permitted by their regulations to be taken out of those countries.

Capital

Under a law for the encouragement of foreign investment, incoming foreign capital may be registered and thus may receive, among other advantages, a guarantee for repatriation of the original capital and profits thereon. Emigrants may transfer up to UK£2,000 to their new country.

Changes during 1960

February 22. The Bank of Sudan was established, and, among other functions, it took over the administration of exchange control.

July 9. The open general license was extended to include 26 additional items, consisting mostly of consumer goods.

Surinam

Exchange Rate System

The par value is Surinam Guilders 1.88585 = US$1. The official rates are Sur. f. 1.87 buying, and Sur. f. 1.90 selling, per US$1. The rates for other currencies are based on the quotations for the U.S. dollar in terms of those currencies.

Administration of Control

The commercial banks have authority to provide foreign exchange for practically all current transactions. Exchange licenses, where required, are issued by the Foreign Exchange Control Board.

Prescription of Currency

Settlements must, in general, be made in convertible currencies;1 payments to and from the Netherlands Antilles may also be made in Netherlands Antilles guilders or in Surinam guilders. Payments to and from the U.S.S.R. must be made through bilateral accounts in Netherlands guilders in the books of authorized banks in the Netherlands.

Nonresident Accounts

Nonresidents may freely open and hold accounts in foreign currency with domestic banks.

Imports and Import Payments

There are no restrictions on imports, except for a few agricultural commodities for which import quotas are established.

No licenses are required for making foreign exchange payments through banks in respect of imports, including c.i.f. shipments by means of letters of credit, sight drafts, or on a c.o.d. basis. For imports covered by other means, exchange is granted on application, subject to verification of facts, the import license serving as a payment license.

Payments for Invisibles

Payments up to specified amounts on account of certain services (contracts, advertising expenses, authors’ royalties, subscriptions, film rentals, insurance premiums other than for life insurance, reinsurance premiums, family maintenance, education and tourism expenses, and gifts), and payments connected with passenger transportation without limit, may be made freely through authorized banks.

Payments due as interest on loans and as net income from other investments, and payments of moderate amounts for amortization of loans or depreciation of direct investments, may be made if an application supported by an auditor’s report is duly presented to the Foreign Exchange Control Board for verification.

Exports and Export Proceeds

Except for gold, exports are free from license, provided the exporter undertakes to surrender the proceeds within six months. A certain type of local timber used in the manufacture of plywood and particle board for export may be exported only in special circumstances. The exchange proceeds of exports must be surrendered to an authorized bank.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered to an authorized bank. Travelers may bring into Surinam domestic and foreign currency without limit.

Capital

A declaration of the Foreign Exchange Control Board in 1953 provides for the transfer abroad of capital proceeds from the sale to residents or the liquidation of fully or partly foreign-owned companies or other forms of enterprise. It also provides for the transfer of profits. An Investment Law passed on February 3, 1960 provides for additional incentives to private foreign investment in Surinam.

Earnings (dividends) which are taxable must be transferred within a period of three years; otherwise, they become part of the firm’s working capital and may only be transferred in quotas of 20 per cent annually.

Licenses are granted on application for transfers abroad from a deceased’s estate, up to a maximum of Sur. f. 25,000 annually; for estates over Sur. f. 125,000, further annual transfers above the maximum of Sur. f. 25,000 are permitted so as to spread them over a period not exceeding five years. The repatriation of personal assets belonging to departing persons, including emigrants, is permitted up to specified amounts.

Transfers for investment in foreign securities by residents are not permitted, although exception may be made for direct investments abroad when it is considered that Surinam interests will benefit.

Changes during 1960

February 3. A new Investment Law was passed providing a number of incentives to foreign investment in Surinam, such as exemption from income and other taxes for specified periods, full or partial exemption from customs duties, and liberal depreciation allowances.

Sweden

Exchange Rate System

The par value is Swedish Kronor 5.17321 = US$1. The Sveriges Riksbank’s official limits for the U.S. dollar are SKr 5.135 buying, and SKr 5.2125 selling, per US$1, and the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for externally convertible European currencies’ fluctuate between limits resulting from the dollar rate for the Swedish krona in relation to the dollar rates for the other currencies. Forward market rates for these currencies are left to the interplay of market forces. Sweden accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 15, 1961.

Administration of Control

Import and export licenses, when required, are issued by the National Board for Foreign Trade Licenses or, in the case of foodstuffs, the National Agricultural Marketing Board. All payments to and from nonresidents must in principle be made through one of the 15 Swedish authorized banks, which have been given wide powers by the Sveriges Riksbank to approve payments. The Riksbank receives individual reports on receipts from exports and invisibles and payments for imports and invisibles, when they exceed SKr 10,000 in the case of transactions with Denmark, Finland, and Norway, or SKr 5,000 in the case of transactions with other countries.

Prescription of Currency

For prescription of currency purposes, countries are divided into two groups: the bilateral countries2 and the convertible area (all other countries). Payments to residents of bilateral countries must be made in the currency of, or by crediting kronor to a Bilateral Account related to, the country concerned. Receipts from bilateral countries may be accepted in any currency of the convertible area or in kronor through a Bilateral Account of the country concerned or any Convertible Account. Payments to residents of the convertible area may be made in any foreign currency or by crediting kronor to any Regular Account (see section on Nonresident Accounts, below). Receipts from countries in the convertible area may be accepted in any currency of that area or in kronor to the debit of any Convertible Account.

Nonresident Accounts

There are two main types of nonresident account held in Swedish kronor with authorized banks in Sweden: Regular (i.e., current) Accounts and Restricted Accounts.

Regular Accounts include Bilateral Accounts, held by residents of countries with which Sweden has bilateral payments arrangements (see footnote 2), and Convertible Accounts, held by residents of all other countries. Convertible Accounts may also be held by residents of bilateral countries, e.g., in cases where the amounts credited to such accounts emanate from other Convertible Accounts or from the sale of currencies of the convertible area. Convertible Accounts may be debited for transfers to any other Regular Account and for authorized payments to residents of Sweden, and exchanged into any foreign currency. They may be credited with transfers from other Convertible Accounts, with authorized payments to the convertible area by residents of Sweden, and with sales of currencies of the convertible area. Bilateral Accounts may be debited for transfers to other Bilateral Accounts of the same country, exchanged into the currency of that country, and debited for authorized payments to residents of Sweden from residents of the country of the account holder. They may be credited with transfers from other Bilateral Accounts of the same country or from any Convertible Account, with authorized payments by residents of Sweden, and with sales of currencies of the convertible area. Replenishment of Regular Accounts with the proceeds from sales of convertible currencies or by transfers from other Regular Accounts may not result in the creation of abnormal balances on the accounts.

Restricted Accounts are held mainly by Swedish emigrants. They may be used freely to cover the holder’s and his family’s living expenses in Sweden and for investment in Swedish bonds quoted on the Swedish stock exchange. Bonds purchased in this way and proceeds therefrom must be deposited in a “restricted securities” account with an authorized bank or stockbroker.

Imports and Import Payments

Practically all goods may be imported freely, only a marginal fraction being subject to license. Licenses, where required, are generally granted on a nonrestrictive and nondiscriminatory basis.

Technically, the import regime is administered through three liberaliation lists, one of which is of only minor importance. The other two refer to agricultural and industrial items, respectively, and both are applicable to all countries except those few belonging to the Sino-Soviet bloc or having a bilateral quota agreement with Sweden. In respect of a small number of agricultural items, the liberalization applies only to the OEEC area,3 Finland, and Yugoslavia.

Payments for all imports, including normal advance payments (see Payments for Invisibles, below) may be made freely through the authorized banks and—except for imports from Hungary—without the formality of presenting an import license, if such is required, to the bank.

Payments for Invisibles

Payments to nonresidents for all current invisibles may be made freely through the authorized banks, but for three categories of payments, the approval of the Riksbank is necessary when certain established limits are exceeded. These are (1) tourist expenses exceeding SKr 6,000 a person for any one journey, (2) payment of insurance premiums exceeding SKr 1,000 a year, under life, pension, or annuity contracts with foreign companies signed after January 1, 1957, and (3) certain advance payments for imports and ship disbursements exceeding SKr 50,000 or, in the case of contractual payment for machinery imports, exceeding one third of the total value. Applications for amounts in excess of these limits are authorized individually by the Sveriges Riksbank.

Each person leaving Sweden may take with him freely Swedish and foreign banknotes and coins up to a maximum of SKr 6,000. Nonresidents leaving Sweden may, in addition, freely export foreign banknotes and other means of payment brought into the country by them.

Exports and Export Proceeds

Most exports to practically all countries in the convertible area are exempt from license if payment is to be received within six months after the dispatch of the commodity and is to be made in conformity with the general regulations (see section on Prescription of Currency, above). Proceeds from exports of goods (as well as from invisibles) do not have to be surrendered; they may be kept in a foreign currency account with a Swedish authorized bank and used by the holder to make authorized payments abroad, or they may be sold to an authorized bank against Swedish kronor.

Proceeds from Invisibles

Receipts from invisibles need not be surrendered. Each person entering Sweden may bring in a maximum of SKr 6,000 in Swedish banknotes and coins, and other means of payment without limitation.

Capital

Investments in Sweden by nonresidents are subject to approval. Such approval is normally granted where direct investments are concerned. Transfers from Sweden on account of dividends and other earnings on investments, interest on loans, and contractual amortization of bonds and debentures are permitted freely. Inheritances due to nonresidents may also be transferred. The repatriation of other nonresident-owned capital is subject to approval, which is, however, usually granted. Emigrants may transfer abroad up to the equivalent of SKr 75,000 for each person, on special application.

Requests by residents to transfer capital abroad for direct investment are considered on their merits and are in most cases approved. Transfers of capital abroad for portfolio investment are permitted only exceptionally.

Securities may be imported into Sweden through the intermediary of an authorized bank; however, their disposal is subject to approval. The export of securities is, in principle, also subject to approval.

Residents of Sweden who own foreign securities—other than those representing a direct investment—are permitted to use within six months the proceeds from the sale of these securities abroad to invest in other foreign securities denominated in a currency of the convertible area or in Swedish kronor; these proceeds may not, however, be transferred to another resident (other than an authorized bank). Residents are permitted to buy from and sell to other residents such foreign securities held in Sweden.

Changes during 1960

January 1. The group of countries to which the export free list applied was extended to include, with few exceptions, all countries in the convertible area. At the same time, iron ore, paper pulp, newsprint, and many other commodities were placed on the export free list.

March 1. The bilateral payments arrangement with Brazil was terminated, and Brazil was included in the convertible area.

March 8. Some changes were made in the regulations concerning forward transactions, to the effect, inter alia, that all authorized payments—not only payments for exports and imports—could form the basis for forward transactions and that multilateral forward transactions could be carried out by the Swedish banks in all convertible currencies for periods up to 12 months.

March 21. The general permissions concerning foreign currency accounts held by nonresidents with Swedish authorized banks were extended, and the banks were permitted to earn interest abroad on such accounts.

March 24. Except for imports from Hungary, importers were no longer required to show an import license (if such was required) to an authorized bank before being permitted to make payment for an import. However, it was emphasized that import licenses would not be granted automatically merely because payment had already been made or a documentary credit opened. At the same time, the rules regarding advance payments for imports were further liberalized: such payments could be made freely where delivery was to take place shortly or where the total value of the goods did not exceed SKr 50,000 (previously SKr 25,000).

April 1. Except for a few agricultural products, the free list formerly applied to imports from the OEEC area was made applicable to imports from the dollar area and almost all other countries. At the same time, the free list was extended by the addition of a number of goods, including ships, works of art, and valuables of certain kinds. Motor vehicles and component parts, for which import licenses had been granted freely for some time, were, however, still excluded from this free list.

April 4. The basic annual exchange allowance for tourist travel was dropped and instead, for each trip abroad to any country, the equivalent of SKr 6,000 could be obtained in any currency and could be taken out of the country, without formalities, in travelers checks, travel instruments of credit, or banknotes, including Swedish banknotes, at the traveler’s option. At the same time, the amount of Swedish banknotes that travelers could bring into the country without documentation was increased to SKr 6,000. The previous limitation of SKr 100 on denominations of Swedish banknotes that might be imported and exported was withdrawn.

June 1. The bilateral payments agreement with Poland was terminated, and Poland was included in the convertible area.

June 1. Advance payments from Sweden in connection with merchanting trade were permitted for goods not exceeding a total value of SKr 50,000 (previously SKr 25,000).

June 7. The Swedish authorities informed the Fund that Sweden no longer claimed balance of payments justification for any remaining import restrictions.

June 13. The provisions for payments to the dollar area of insurance premiums under life, pension, and annuity contracts were amended to conform to similar payments to other countries.

July 1. The foreign exchange ordinance was prolonged, thus continuing exchange control from July 1, 1960 to June 30, 1961. The prohibition on the granting of advances by residents against security given by a nonresident was deleted from the ordinance, and certain other modifications were made.

August 1. Imports were further liberalized by adding gold jewelry and certain other articles of gold and platinum to the free list. Some semimanufactures of gold and platinum were added to the export free list. Imports and exports of gold in bars, coins, plates, tubes, and the like remained subject to control.

October 7. Foreign exchange banks and stockbrokers were granted general authorization to effect purchases from abroad of nonresident-owned Swedish securities, up to an amount of SKr 5,000.

November 1. Certain agricultural products, including butter, milk powder, and margarine, were added to the OEEC free list issued by the National Agricultural Marketing Board. The area from which products of OEEC origin, placed on that list, could be imported without license was, with few exceptions, extended to include all countries in the convertible area.

Thailand

Exchange Rate System

No par value for the Thai Baht has been established with the Fund. There are fluctuating free market rates at which all authorized transactions take place. All incoming exchange must be sold to an authorized agent at these rates. All outgoing payments are subject to approval (given automatically for bona fide commercial transactions) and take place also at the fluctuating free market rates. As at December 30, 1960, the free rate for the U.S. dollar was B 20.95 buying, and B 21.14 selling, per US$1.

Administration of Control

Exchange control is administered by the Bank of Thailand on behalf of the Ministry of Finance; the Bank delegates responsibility for most transactions to authorized agents, i.e., authorized banks and authorized companies. Certain imports and a few exports are subject to licensing by the Ministry of Economic Affairs.

Prescription of Currency

There are no special requirements concerning the currency to be used for settlements with foreign countries; however, payments are made largely in sterling and related currencies or in U.S. dollars.

Nonresident Accounts

There are two types of nonresident account, Transferable Accounts and Blocked Accounts. Transferable Accounts may be credited with the proceeds of sales of foreign currency and with funds eligible for remittance abroad in foreign currency. Balances on Transferable Accounts are convertible into foreign currency at any time and may be debited to pay for exports. Transfers of baht to and from Blocked Accounts require approval, which is granted automatically for certain current payments; approval is not, however, required when the account is held for foreign diplomatic entities, international organizations stationed in Thailand, or Thai nationals temporarily abroad.

Imports and Import Payments

Most commodities may be imported freely; but import licenses are required for 72 listed commodities, and for most of these items licenses are not usually granted. All imports of goods originating in Mainland China are prohibited. Imports of paper, tea leaf, and tea dust are subject to a requirement that the importer purchase a proportionate quantity of the same type of goods produced in Thailand.

Payments for imports must be made by letter of credit, unless approval otherwise is given. Importers must obtain, in addition to the usual documents, a “certificate of payment” from an authorized agent before imported goods exceeding B 3,000 in value can be cleared through the Bangkok customs or goods exceeding B 5,000 in value can be cleared through other customs stations.

Payments for Invisibles

Payments for invisibles require authorization. In general, exchange is provided freely for transactions in invisibles when the applications are supported by the documentary evidence specified in the regulations.1 For foreign travel and family remittances, however, the amounts of exchange that the authorized agent may sell are subject to certain maximum limits.

The authorized agents may approve exchange allowances for persons traveling abroad of UK£225 or US$630, or UK£14/5/9 or US$40 a day for not more than 90 days, whichever is the greater. For business travel, additional foreign exchange may be obtained in certain cases for entertainment expenses. No person may take out local currency exceeding B 500 without the prior approval of the exchange control authorities.

Exports and Export Proceeds

Certain categories of exports are subject to a licensing procedure;2 all others may be exported freely. The exporter is required to obtain a “certificate of exportation” from an authorized agent in order to clear the shipment through customs, as follows: for shipments of rice, rice flour, tin, or rubber exceeding B 1,000 in value through any customs station; for shipments of charcoal or wood exceeding B 10,000 in value through certain provincial customs stations; and for goods exceeding B 3,000 in value through the Bangkok customs or B 5,000 in value through other customs stations. This certificate assures repatriation of the export proceeds. Export proceeds must be sold to authorized agents within seven days of receipt but not later than three months after the date of export.

Proceeds from Invisibles

All receipts from invisibles must be sold to an authorized agent. No person may bring into Thailand local currency exceeding B 500 without a permit, and a family traveling under the same passport may not bring in more than B 1,000 without a permit. Travelers may bring in foreign currency not exceeding the equivalent of B 3,000.3

Capital

All outward transfers of capital, including premiums on life insurance policies, by residents or nonresidents are subject to approval. Foreign exchange from inward capital movements must be sold to an authorized agent. Foreign investments in Thailand can be accorded preferential treatment under the Industrial Investment Act of October 17, 1960; this treatment can include a guarantee of the transfer abroad of current net earnings. The repatriation of capital is considered on the merits of each case.

Changes during 1960

February 2. Imports of tin and wolfram ores were prohibited. The prohibition on tin was imposed in order to prevent foreign tin from being included in Thailand’s exportable quota under the International Tin Council agreement.

August 26. It was announced that prior approval must be obtained from the Ministry of Economic Affairs before making any contract to export rice, except with regular customers (i.e., in Hong Kong, Singapore, and Malaya). Moreover, when dealing with their regular customers, exporters must observe the following rules: the shipment should not exceed the average quantity of past shipments; a letter of credit must be opened to cover the shipment; and export licenses for rice would expire within one month and would not be renewed.

September 15. Regulations on rice exports imposed in the previous month were somewhat relaxed. Shipments of rice could be covered by bills payable upon presentation of documents, instead of only by letters of credit, as previously.

October 4. Exchange control requirements were relaxed, and authorized agents of the Bank of Thailand were given wider discretionary powers to approve foreign exchange transactions on behalf of the exchange control authorities. The major changes in the powers of the agents were authority to approve the following: (1) allocations of exchange to persons traveling abroad up to UK£225 or US$630, or UK£14/5/9 or US$40 a day for not more than 90 days, whichever is the greater (administrative officers of government and business organizations could be granted 50 per cent more for entertainment expenses); (2) remittances of foreign exchange for such items as leave salaries for foreign employees on vacation, provident fund contributions, trademark registration fees, audit fees, and sundry expenses on imports and/or exports where information and documentary evidence are considered satisfactory; (3) applications to receive baht from nonresident Blocked Accounts, except for the purchase of foreign currency; (4) applications by foreigners to exchange checks on their bank accounts in foreign countries for other means of foreign payment or to mail out such checks directly. In addition, for both imports and exports, the documentary evidence that authorized agents were required to submit to the exchange control authorities was reduced considerably.

October 17. An Industrial Investment Act was enacted into law by the Constituent Assembly. The law, which includes provisions of and is similar to the Industrial Promotion Act of 1954 and Revolutionary Party Decrees Nos. 33 and 47, authorizes the issue of decrees specifying industries to be promoted, in particular, agriculture, fisheries, transport, and tourism. The provisions relating to transfers of profits and capital were unchanged from the former Industrial Promotion Act.

December 8. The export of eggs through the Port of Bangkok required a license issued under the Royal Decree Controlling the Exportation of Certain Merchandise from the Kingdom (No. 13) 1947.

December 12. The status of Transferable Accounts of nonresidents was further clarified: The baht to be credited to such accounts must be derived from the sale to authorized agents of foreign currencies received from abroad, or funds covering service and other payments which may normally be remitted abroad in foreign currency. Balances on Transferable Accounts may be converted into foreign currency at any time or used to pay for exports. The authorized agents were given power to approve applications for the crediting and debiting of Blocked Accounts of nonresidents, except for the purchase of foreign currency.

December 15. Woven fabrics containing more than 50 per cent of pure silk, whether in sheet, piece, or roll, were added to the list of items for which import licenses are required.

Tunisia

Exchange Rate System

No par value for the Tunisian Dinar has been established with the Fund. The official value of the dinar is 2.115880 grams of fine gold, corresponding to 0.420 dinar = 1 U.S. dollar and 1 dinar = 11.7549 new French francs. Exchange rates for currencies other than the French franc are based on the rates in the official exchange market in Paris, to which the authorized banks have access.

Administration of Control

Exchange control is administered by the Central Bank of Tunisia, the Office of the Secretary of State for Finance and Commerce, and the authorized banks. Import and export licenses are issued by the Office of the Secretary of State for Finance and Commerce, which also allocates import quotas.

Prescription of Currency

Tunisia is one of the territories of the French Franc Area, but all payments to other parts of that area require prior approval from the Central Bank of Tunisia. Settlements with other parts of the French Franc Area are made in any currency of that area, including dinars.

Countries outside the French Franc Area are classified in three groups: (1) the payments agreement countries (countries with which Tunisia has bilateral payments agreements: Mainland China, Czechoslovakia, Iraq, Poland, the U.S.S.R., and Yugoslavia); (2) the bilateral group (countries which have bilateral payments agreements with the French Franc Area: Bulgaria, Eastern Germany, Hungary, and Rumania); and (3) the area of convertibility (all other countries). Settlements with the payments agreement countries are made as follows: with Czechoslovakia, Iraq, Poland, and Yugoslavia, in agreement dollars; with the U.S.S.R., in Tunisian dinars; and with Mainland China, in Swiss agreement francs. Settlements with countries in the bilateral group must generally be made in Tunisian currency through appropriate nonresident accounts; exceptionally, certain transactions with Hungary must be settled in convertible exchange. Settlements with countries in the area of convertibility must generally be made in specified convertible or externally convertible currencies,1 or in Tunisian dinars through appropriate nonresident accounts; exceptionally, most commercial transactions with India must be settled in Indian rupees.

Nonresident Accounts

Certain payments to residents of other parts of the French Franc Area may be made by crediting accounts in Tunisian dinars (detailed regulations concerning such dinar accounts have not been issued). Residents of countries outside the French Franc Area are permitted to maintain with authorized banks Foreign Accounts in Convertible Dinars and Foreign Accounts in Bilateral Dinars.

Foreign Accounts in Convertible Dinars may be held by residents of the area of convertibility. They may be credited freely with proceeds from sales of the specified currencies (see footnote 1) either in the Paris exchange market or to a Tunisian authorized bank, with authorized payments due to countries in the area of convertibility, and with transfers from other Foreign Accounts in Convertible Dinars. They may be debited freely for purchases in the Paris exchange market of any foreign currency negotiated in that market; for purchases of any of the specified currencies through a Tunisian authorized bank; for transfers to Foreign Accounts in Convertible or Bilateral Dinars; and for payments in the French Franc Area (including Tunisia), irrespective of the country of residence of the nonresident on whose behalf such payment is made.

Foreign Accounts in Bilateral Dinars may be held by residents of countries in the bilateral group. They may be credited freely with proceeds from sales in the Paris exchange market of the specified currencies, with authorized payments due to a resident of the country of the account holder, with transfers from any Foreign Account in Convertible Dinars, and with transfers from a Foreign Account in Bilateral Dinars of the same nationality. They may be debited freely for transfers to a Foreign Account in Bilateral Dinars of the same nationality, and for any payment in Tunisia, provided that the person on whose behalf such a payment is made resides in the country to which the account to be debited is related and the creditor is a person residing in Tunisia, or that the amount withdrawn is used to cover expenses in Tunisia of a person residing in the same country as that of the account debited.

Other transactions through Foreign Accounts in Dinars require individual authorization from the Central Bank of Tunisia.

In addition to the nonresident accounts described above, there are Foreign Accounts in Foreign Currencies, Blocked Accounts, and Internal Accounts of Nonresidents. Foreign Accounts in Foreign Currencies are used mainly by foreign embassies and by certain nonresident business firms which desire to hold some foreign exchange for the convenience of their branches in Tunisia; funds in these accounts may at any time be transferred to the country of origin. Blocked Accounts are designated by area or country; the proceeds of liquidation of foreign investments not covered by a retransfer guarantee must be credited to such accounts. Blocked Accounts are negotiable: transfers may be made freely from Blocked Accounts related to the area of convertibility to those related to the bilateral group, and transfers may be made freely between Blocked Accounts related to the area of convertibility. There are no Blocked Accounts related to the French Franc Area. Internal Accounts of Nonresidents are intended mainly for foreign persons staying temporarily in Tunisia and gainfully employed there.

Imports and Import Payments

With a few exceptions, imports originating in France and other countries of the French Franc Area do not require import licenses unless the goods originate elsewhere. Imports from countries outside the French Franc Area are subject to individual license, except that liberalized goods valued at less than D 200 and certain spare parts valued at less than D 50 are free of license. Licenses are valid for six months and are issued automatically for commodities on a liberalization list, applicable to imports from the area of convertibility, and for imports financed through EFAC accounts.

Imports of commodities not on the liberalization list are licensed either on the basis of quotas in accordance with the bilateral trade agreements which Tunisia has with certain countries, or on the basis of three specific import programs—one for imports from the United States and dependencies, a second for imports from countries in the Sterling Area (excluding the United Kingdom and its dependent territories), and a third for imports from any country. Under the last program, global quotas are set for imports from any country of certain commodities, such as butter, canned milk, cheese, tea, coffee, cotton cloth, and footwear. Import quotas are distributed among applicants by the Office of the Secretary of State for Finance and Commerce in proportion to their actual imports from the countries concerned. New licenses for specific imports are granted only to the extent that licenses previously obtained have actually been used.

All import licenses and import payments must be recorded with an authorized bank. Compensation transactions may be approved in exceptional cases. Payments for imports from France and other countries of the French Franc Area are subject to prior authorization from the Central Bank of Tunisia, which limits itself to checking the bona fide character of the application. When applying for an authorization to purchase French francs, importers must declare that they do not have in France or in other countries of the French Franc Area financial resources which could be used to pay for their imports.

Payments for Invisibles

All payments abroad for invisibles require exchange control approval. Travelers leaving Tunisia may take with them on each trip D 20 in Tunisian banknotes—or the equivalent in banknotes of another country of the French Franc Area—and once a year the equivalent of D 30 in banknotes of the country of destination, which may be obtained from an authorized bank. If, on the same trip, a traveler is going to a country in the French Franc Area and to a country outside that area, he may take with him, in addition, the equivalent of D 50 in banknotes of the country of destination or transit in the French Franc Area. Nonresident travelers may also obtain foreign currencies against payment in French francs, but foreign banknotes are provided only up to the amount permitted to be imported under the regulations of the country to be visited. All other exports of foreign banknotes are subject to license.

Nondiscriminatory allocations have been established for certain other invisibles, such as savings from wages and salaries, family maintenance, and study and medical care abroad. Capital earnings (profits, dividends, interest, rents, etc.) may be transferred freely.

Exports and Export Proceeds

Exports to countries outside the French Franc Area require export licenses. For all exports, the exporter must give an undertaking to collect and surrender the exchange proceeds: Proceeds of exports to France and the rest of the French Franc Area must be collected and surrendered in Tunisia within 3 months from shipment, and proceeds of exports to other countries within 30 days from the date payment is due; this regulation applies whether the proceeds are in French francs or other currencies. Certain percentages of the proceeds of exports to countries outside the French Franc Area may, however, be retained in special EFAC (Exportations–Frais Accessoires) accounts and used by the original exporter or supplier of the goods to pay certain commercial expenses and for imports of raw materials or producer goods used by him in his business. The percentages that may be retained in EFAC accounts are 15 per cent of the proceeds of exports paid in convertible and externally convertible currencies, other than currencies of the French Franc Area, or in dinars from a Foreign Account in Convertible Dinars, and 10 per cent of the proceeds of exports paid in other currencies of countries outside the French Franc Area (including clearing currencies). These percentages apply to firm sales; for sales at best, 6 per cent may be retained. Convertible and externally convertible currencies in EFAC accounts may be exchanged for any other currency. Every six months, 10 per cent of the unused balances on EFAC accounts must be surrendered.

Proceeds from Invisibles

Residents must surrender to an authorized bank any foreign exchange received by them, other than currencies of the French Franc Area, that is derived from invisibles. Domestic and foreign banknotes may be brought in freely.

Capital

Outward transfers of capital are restricted. Residents may, through the intermediary of a Tunisian authorized bank, freely purchase Tunisian securities on the official stock exchanges of other countries of the French Franc Area. Transfers upon final departure and transfers of inheritances are permitted up to D 3,500 per beneficiary.

Foreign investments in Tunisia require prior authorization by the Central Bank of Tunisia. Those foreign investments which are, in addition, approved by the Tunisian Government may be given a guarantee for the transfer of current earnings and the retransfer at any time of the full proceeds upon liquidation; such guarantees are given only on investments received from countries outside the French Franc Area and financed in convertible currencies or in the currency of the investor’s country of residence.

Changes during 1960

January 1. A bilateral payments agreement with Poland entered into force.

January 4. Circular No. 1 of the Central Bank of Tunisia entered into force, codifying the regulations governing settlements between Tunisia and other parts of the French Franc Area; the circular also established allocations for transfers to the French Franc Area in respect of certain current invisibles.

January 19. A list of global quotas applicable to imports from all countries was published.

August 5. The bilateral payments agreement with the Egyptian Region of the United Arab Republic was terminated.

August 9. The application of the import free list was extended to all countries in the area of convertibility.

September 28. The bilateral payments agreement with Spain was terminated.

October 5. A contract was signed between the Tunisian Foreign Trade Office and the State Trading Corporation of India, in accordance with which most trade between the two countries would be settled through a clearing account in Indian rupees.

December 5. A bilateral payments agreement with Iraq entered into force.

Turkey

Exchange Rate System

The par value is Turkish Liras 9.00 = US$1. The official rates are LT 9.00 buying, and LT 9.045 selling, per US$1.

Administration of Control

Exchange control is administered by the Ministry of Finance. In principle, the Central Bank of the Republic of Turkey issues import certificates required for imports by both the public and the private sectors. However, the Ministry of Finance distributes exchange for immediate and unforeseen investment needs, within a global quota placed at its disposal, and certain imports require the permission of the relevant ministry or department, for public security or health reasons.

Prescription of Currency

Settlements on account of merchandise and invisibles must be made in U.S. dollars with the dollar area, in currencies convertible into U.S. dollars with other countries, or in accordance with the terms of the relevant payments agreement. Turkey is a participant in the European Monetary Agreement and has clearing account arrangements with Austria, Denmark, France, Greece, Norway, and Switzerland; the accounts with Austria, Greece, and Norway are settled monthly under the European Monetary Agreement. In addition, Turkey has bilateral trade and payments agreements with 13 countries.1

Imports and Import Payments

All imports are subject to import license, although approximately 50 per cent of imports (on the basis of private imports in 1948) are liberalized, and for these items licenses are granted freely on application. Import licenses are issued only to registered importers and government departments and according to import programs, of which there have been five since 1958. The present (fifth) import program, which covers requirements for the last quarter of 1960, classifies imports from countries with which Turkey does not have bilateral trade agreements into commodities that are licensed freely and commodities for which global quotas are established. The global quotas are divided into quotas for importers and quotas for industrialists, the latter designed to enable industrialists to meet their requirements by importing directly. Licenses for commodities subject to global quotas are issued freely within the quotas, but any one importer may not obtain a license for goods valued at more than 20 per cent of the quota. There are also quotas for imports from individual countries under the bilateral trade agreements concluded by Turkey with those countries; for these quotas the limitation on any one importer obtaining a license for more than 20 per cent of the quota does not apply.

An advance deposit of 10 per cent of the value of the import is required for all imports except those by state agencies and those under the industrialists’ quotas. The deposit must be made at the time of applying for the import license and is refunded at the time the import is completed.

Payments for Invisibles

In principle, payments for invisibles related to trade, particularly imports, to foreign investment, and to technical assistance are licensed freely. Payments for other transactions also require prior licenses, which are granted automatically for such purposes as travel for health, subscriptions for books, newspapers, and periodicals, subscriptions to international organizations, registration fees, advertising expenses, consulate income, payments by the Government, payments by the Post Office Administration and similar state institutions, banks’ commissions and expenses, a proportion of insurance companies’ payments, taxes, and court fees. Exchange for business travel is granted within limits varying according to the amount of income or corporate tax paid by the applicant firm.

Travelers are permitted to export LT 200 in Turkish banknotes and coins. Nonresident travelers may take out the unspent portion of the foreign exchange recorded in their passports on entry.

Exports and Export Proceeds

Most goods may be exported freely, but a few commodities require an export license, either in order to prevent re-exportation or from the standpoint of domestic need. Exporters are required to sell to a bank in Turkey the foreign exchange proceeds of goods exported, within three months from the date of export and within ten days from the date on which the foreign exchange is placed at their disposal.

Proceeds from Invisibles

Foreign exchange accruing to residents for services rendered by them to nonresidents must be surrendered within three months from the date on which the service was rendered and within ten days from the date of acquisition of the exchange. Travelers are permitted to import LT 200 in Turkish banknotes and coins.

Capital

Capital transfers abroad by residents and capital transactions between residents and nonresidents are subject to the approval of the exchange control authorities.

Foreign investments in Turkey require approval. Foreign companies and contractors established abroad who wish to do business in Turkey must import in the form of foreign exchange the capital and operating funds required by the business. In principle, assets and balances owned by, and earnings accruing to, nonresidents cannot be converted into foreign currency, and if they exceed LT 5,000 a year they are blocked. Subject to individual permit, blocked assets and balances may be utilized within Turkey, except as capital for business.

Foreign capital invested in Turkey under the terms of the Law to Encourage Foreign Investments is accorded preferential treatment, provided the enterprise in which the investment will be made will tend to promote the economic development of the country, will operate in a field of activity open to Turkish private enterprise, and will not entail monopoly or special privilege. Under this law, as amended, annual profits, interest, and dividends on approved investments and all or part of the invested capital or foreign loan may be remitted abroad in the original currency of the capital. Registered shares or stock certificates issued under this law are freely transferable between persons of all nationalities both in Turkey and abroad. The capital and interest on long-term loans and credits extended by nonresidents to enterprises in Turkey (including those of an agricultural character) may be accorded the same transfer benefits. Foreign capital imported under the Petroleum Law is also accorded certain preferential treatment.

Transactions in securities, including their export and import, require approval where nonresident interests are involved.

Changes during 1960

February 16. The exchange proceeds of tobacco from the 1958 crop exported in the following months were to receive the LT 5.60 per US$1 export rate, plus a special premium of 15 per cent for the Aegean variety and 30 per cent for Black Sea and Marmara varieties.

March 23. The bilateral payments agreement with Japan was terminated.

April 21. The bilateral payments agreement with Spain was terminated.

June 1. A ministerial decree abolishing the Interministerial Coordination Committee was published.

June 30. The bilateral payments agreement with Belgium-Luxembourg was terminated.

August 20. The par value was changed from LT 2.80 per US$1 to LT 9.00 per US$1, and all previously existing multiple currency practices were eliminated.

October 3. Under the fifth import program, imports were reclassified for licensing purposes. Two categories, the “automatic allocation list” and “imports financed from foreign credits,” were eliminated, so that imports were now classified in three groups: a free list, a list of global quotas, and a special category listing bilateral quotas for imports from countries having bilateral trade agreements with Turkey.

Union of South Africa1

Exchange Rate System

The par value is South African Rand 1 = US$1.40. Exchange rates are uniform and are based on the fixed rates for sterling against rands (R 199.75 buying, and R 200.75 selling, per UK£100) and the London market rates for sterling against other currencies. Subject to certain limitations, authorized dealers are permitted to conduct forward exchange operations among themselves and with overseas banks. The rates for the U.S. dollar as at February 14, 1961 were US$1.40516 buying, and US$1.39716 selling, per R 1.

Exchange Control Territory

There are no exchange or trade restrictions between the Union of South Africa, South West Africa, Basutoland, Swaziland, and the Bechuanaland Protectorate. These territories are regarded as forming with the Union of South Africa a single exchange control territory.

Administration of Control

Import and export licenses are issued by the Director of Imports and Exports acting on behalf of the Secretary for Commerce and Industries. Exchange licensing is the responsibility of the Treasury, which has delegated this authority to the South African Reserve Bank, which in turn has delegated to the commercial banks much of its licensing power. Appropriate exchange for licensed imports is made available by the authorized dealers upon presentation of suitable documentary evidence.

Prescription of Currency

The Union of South Africa is a member of the Sterling Area, and settlements with residents of other countries in the Sterling Area may be made in any Sterling Area currency. Settlements with residents of other countries may be made in sterling or rands to or from an External Account or in any specified currency,2 or, for outgoing payments only, in any other non-Sterling Area currency.

Nonresident Accounts

Nonresident accounts are the accounts of residents of countries outside the Union of South Africa, South West Africa, Basutoland, Swaziland, and Bechuanaland. They are divided into two categories, Nonresident Sterling Area Accounts and External Accounts.

Nonresident Sterling Area Accounts are held by residents of Sterling Area countries. They may be credited with all authorized payments by Union residents to Sterling Area countries, with transfers from other Nonresident Sterling Area Accounts, and with the proceeds of sales to an authorized dealer in the Union of pounds sterling or the currency of any other country in the Sterling Area (excluding the Union). 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 Union residents; for payments to residents of other countries in the Sterling Area for any purpose; for transfers to other Nonresident Sterling Accounts in the Union; for purchases of any Sterling Area currency; and for withdrawals by the account holder while he is temporarily resident in the Union.

External Accounts are held by residents of countries outside the Sterling Area. They may be credited with all authorized payments by Union residents to countries outside the Sterling Area, with transfers from other External Accounts in the Union and from External Accounts in the United Kingdom or other countries in the Sterling Area (provided that the transaction has been approved in the Sterling Area country concerned), and with the proceeds of sales to an authorized dealer in the Union of specified currencies (see footnote 2). They may be debited for payments to Union residents and residents of other countries in the Sterling Area for any purpose, for transfers to other External Accounts in the Union or in any other country in the Sterling Area, for purchases of any non-sterling currency, and for withdrawals by the account holder while he is temporarily resident in the Union.

In addition, there are Blocked Accounts, which are used for settlements resulting from transactions in restrictively endorsed securities and for controlling the assets of emigrants from the Union. Balances on Blocked Accounts may be invested in South African securities. The proceeds from sales of restrictively endorsed securities owned by residents of countries outside the Sterling Area (except emigrants from the Union) may, on instructions from the customer, be transferred by the authorized banks to a bank in the United Kingdom for credit to a Blocked Sterling Account. Any other disposition of these securities, as well as of the proceeds arising from them, requires the approval of the South African Reserve Bank.

Imports and Import Payments

All importers of goods subject to import license must be registered with the Director of Imports and Exports. Approximately 25 per cent of imports are free of license, including all goods imported from, produced in, or manufactured in the Federation of Rhodesia and Nyasaland. Import licenses are valid for imports from any country.

For import control purposes, the following broad categories may be distinguished: (1) goods that may be imported without specific authority or import license; (2) goods that may be imported only under license, but for which no specific quotas are established—licenses for this category are issued to cover the importers’ full requirements, which are determined, among other things, on the basis of the inventories of the commodity concerned and changes in the turnover of individual importers; (3) goods (“general merchandise”) that are subject to specific annual quotas granted to individual importers—the quotas are expressed as a percentage of the actual value of the goods imported in 1948, but from time to time allowances are made for new and rapidly growing firms. Importers who receive quota allocations then apply for an import license.

Specific licenses are required for imports of built-up motorcars, whether new or used, costing more than R 1,600 f.o.b. when new, juke boxes, pin tables, novelty tables, and amusement machines, and certain books and periodicals (comics, science fiction, detective magazines, etc.), and their import is virtually prohibited.

Upon presentation to his bank of an import license or, where an import license is not required, evidence of importation, an importer is granted exchange to pay for the import.

Payments for Invisibles

All payments to nonresidents for current invisibles require exchange licenses. In some cases there is no limitation of amount; in others, authority is delegated to the commercial banks to approve payments up to established limits and the Reserve Bank takes a liberal attitude toward requests for larger amounts. For current income payments, such as declared dividends, profits, royalties, etc., that accrue in the Union, approval is given by the authorized banks without reference to the Reserve Bank. Exchange to pay for membership fees, family maintenance, etc., is granted liberally. For travel (both tourist and business) there is a basic exchange allocation of R 2,500 for each adult and R 1,250 for each child under 12 years of age for each trip outside the Union. Special allowances are granted to persons of managerial and executive position for their reasonable requirements, and all travelers who need more than their basic allowance are granted their full reasonable requirements. All tickets for travel abroad may be paid in rands. Persons leaving South Africa may take freely R 200 in South African Reserve Bank notes and the equivalent of R 200 in other notes, in addition to the basic travel allowance. In exceptional circumstances, the export of larger amounts in notes is permitted.

Exports and Export Proceeds

The export of commodities considered as being in relatively short supply, or for which domestic prices are substantially lower than those obtainable overseas, are subject to export license irrespective of destination (with the exception of exports to Basutoland, Swaziland, and the Bechuanaland Protectorate). Certain other goods are controlled for strategic reasons only, and permits are required for their export to destinations other than the United Kingdom, any Commonwealth country, any British colony, possession, protectorate, or mandated territory, or the United States. The re-exportation of imported goods is controlled to prevent commodity and exchange arbitrage.

Unless otherwise permitted, all export proceeds must be surrendered within 6 months from the date of shipment and 30 days from the date of collection.

Proceeds from Invisibles

Proceeds from invisibles (sterling as well as other foreign exchange) must be surrendered within 30 days from the date of their acquisition, unless exemption is obtained. There are no limitations on the import of foreign or domestic banknotes.

Capital

The following payments related to nonresident capital may be carried out directly by the authorized banks without reference to the South African Reserve Bank: transfers to nonresidents of the proceeds of securities endorsed as “transferable”; the proceeds of South African quoted securities owned by residents of other Sterling Area countries; the full proceeds of legacies due after January 1, 1959 from the estates of persons who at the time of death were regarded as permanently resident in the Union; amounts up to R 2,000 to each beneficiary in the case of other transfers of legacies; and amounts up to R 20,000 for a family unit as settling-in allowances for emigrants. Other withdrawals of capital invested in the Union by nonresidents require approval by the South African Reserve Bank, but the policy in this respect is liberal, the sole purpose of the control being the prevention of illegal transfers of capital owned by residents of the Union or residents of, other Sterling Area countries.

Foreign exchange accruing to residents from capital transfers and transactions must be surrendered. For outward transfers of capital by residents, the general rule is that such transfers require approval of the South African Reserve Bank. However, there are no restrictions on the transfer of capital by members of South African stock exchanges in respect of purchases in London of South African shares3 quoted on the London and South African stock exchanges. In addition, applications by Union residents to retain in, or transfer to, the Federation of Rhodesia and Nyasaland, funds for bona fide long-term investment in specific development projects or for the expansion of existing Union-owned or Union-controlled projects are considered favorably by the South African Reserve Bank.

Changes during 1960

January 14. Travel allowances for residents going abroad were established at £SA 1,250 for each adult and £SA 625 for each child under 12 years of age for each trip outside the Union; previously, these exchange allocations had been £SA 10 a day for each adult, with a maximum of £SA 500, and £SA 4 a day for each child, with a maximum of £SA 200. The exchange allocation for business travel, previously £SA 15 a day for a maximum period of 90 days, was made the same as that for tourist travel. The amount of notes that travelers may take out was increased from £SA 20 to £SA 100 for South African Reserve Bank notes and from the equivalent of £SA 10 to £SA 100 for other notes, in addition to the travel allowance.

Note.—The following changes took place early in 1961:

January 1. The policy in issuing import licenses remained the same as in 1960, except for the following minor changes: (1) advance issues for general merchandise imports amounted to 25 per cent of the assessment basis (40 per cent in 1960); (2) import licenses for passenger motor vehicles were adjusted to allow for stocks in excess of four months; and (3) importers were urged to make more use of locally available products in order to conserve foreign exchange.

February 14. The South African rand (R) became the unit of currency, replacing the South African pound on a basis of £SA 1 = R 2.

United Arab Republic: Egyptian Region

Exchange Rate System

The par value is Egyptian Pound 1 = US$2.87156. Commercial banks’ rates as at December 31, 1960 were US$2.8660 buying, and US$2.8375 selling, per LE 1. These rates (or their equivalents in other currencies) apply to a few exports, a few invisibles, including Suez Canal dues, and all transactions settled through bilateral accounts that are not expressed in Egyptian pounds. A variable premium, which was 6.38 per cent on December 31, 1960, applies to convertible currencies1 received from exports of cotton and silk in various forms. Most other export proceeds in convertible currencies receive a premium of 17.5 per cent. Proceeds in convertible currencies from invisibles (with certain exceptions) receive a premium of 27.5 per cent. A premium of 10 per cent is payable by the remittor on payments in convertible currencies for all imports and most invisibles. The premiums are calculated on the Egyptian pound at the par value rate (see Table of Exchange Rates, below). A tax of 10 per cent is charged in most cases on exchange allocated for travel and for remittances to Egyptian nationals residing permanently abroad. There is a special rate of LL 7.75 = LE 1 for transactions with Lebanon.

Administration of Control

Exchange control in the Egyptian Region is supervised by a Supreme Committee for Foreign Exchange, which is set up by the Minister of Economy. The exchange control laws, ministerial arrêts, decree-laws, and instructions of the Minister of Economy and of the Supreme Committee are carried out by a Director of Exchange Operations appointed by the Minister of Economy. The technical work of exchange control is performed, under the supervision and instructions of the Director of Exchange Operations, by the Central Exchange Control attached to the Central Bank of Egypt. An Export Board controls exports. An Import Control Office is responsible for issuing import licenses.

Prescription of Currency

Payments to residents of countries with which the Egyptian Region does not have bilateral payments agreements may be made in the currency of the payee’s country when that currency is available; in a convertible currency (see footnote 1); in Egyptian pounds to the credit of the appropriate nonresident account; or in any other manner permitted by the Central Exchange Control. Receipts may be accepted in the currency of the payor’s country, if it is an “acceptable” currency;2 in any other convertible currency; in Egyptian pounds to the debit of an appropriate nonresident account; or in any other manner permitted by the Central Exchange Control.

Payments to countries with which the Egyptian Region has bilateral payments agreements are made according to the terms of those agreements.3 Settlements with the Syrian Region are made in Egyptian pounds through special accounts.

Suez Canal dues must be paid in Egyptian pounds by debiting a Shipping Account No. 1. Balances on this type of account may be created by selling a convertible currency (see footnote 1) to an authorized bank in Egypt, or by debiting a Free Nonresident Account.

Nonresident Accounts

In addition to the special accounts related to the bilateral payments agreements of the Egyptian Region,3 there are three main types of nonresident account: Free Nonresident Accounts, Nonresident C Accounts, and Nonresident D Accounts.

Free Nonresident Accounts may be opened in the name of any nonresident, irrespective of his country of residence. They may be credited with proceeds from the sale of any convertible currency (see footnote 1) that has been transferred from abroad; with transfers from other Free Nonresident Accounts; with interest on the account; and with the Egyptian pound equivalent of any transfer authorized in convertible currencies by the Central Exchange Control. They may be debited for payments due to residents; for transfers to other Free Nonresident Accounts or Nonresident C or D Accounts; and for payments abroad in any convertible currency.

Nonresident C Accounts may also be opened in the name of any nonresident, irrespective of his country of residence. They may be credited with proceeds from the sale of any convertible currency (see footnote 1) that has been transferred from abroad; with transfers from Free Nonresident Accounts or other Nonresident C Accounts; and with any amounts authorized to be credited to these accounts by the Central Exchange Control. They may be debited for payments due to residents, except for exports, Suez Canal dues, and ships’ disbursements; for transfers to other Nonresident C Accounts; and—provided that Central Exchange Control authorization is obtained—for transfers to Nonresident D Accounts and payments abroad in convertible currencies.

Nonresident D Accounts may be opened in the name of any nonresident whose place of residence is in a bilateral payments agreement country (see footnote 3). The account must be designated by the name of the partner country concerned, and transfers from the account of one country to any other country may not be made without Central Exchange Control authorization. These accounts may be credited with the proceeds from the sale of any convertible currency that has been transferred from abroad; with transfers from a Free Nonresident Account and—provided the authorization of the Central Exchange Control has been obtained—with transfers from a Nonresident C Account; with transfers from other Nonresident D Accounts of the same nationality; and with any sum authorized to be credited to the account by the Central Exchange Control. They may be debited for payments due to residents, except for exports, Suez Canal dues, and ships’ disbursements; and—provided authorization of the Central Exchange Control is obtained—for transfers to other Nonresident D Accounts and for payments to the country in whose name the account is designated.

Nonresidents who are in the Egyptian Region for less than five calendar years may open “provisionally nonresident accounts” in Egytian pounds, and credit them with remittances from abroad or with income derived from services rendered locally. These accounts may also be credited with Egyptian or foreign banknotes brought in by the these accounts may not be made without prior authorization of the account holder and declared at the customs. Remittances abroad from Central Exchange Control.

There are also blocked accounts, which may be credited with any payment to a nonresident not remittable under the exchange control regulations. Transfers may be made between blocked accounts of the same nationality. These accounts may be debited for amounts up to LE 1,000 a year for living expenses of the account holder in the Egyptian Region. They may also be debited for investments in Egyptian Government loans and in registered shares in nominative form of companies established in the Egyptian Region, and for subscriptions to increases in capital of Egyptian companies in which the account holder is already a shareholder. Income derived from such investments may be remitted to the nonresident beneficiary.

Imports and Import Payments

Practically all imports require individual licenses, the issuance of which is dependent on the currency and method of settlement and the category of goods. A fee of 9 per cent of the value of the import license is payable in advance; this fee is refunded to the importer if he is unable to import the goods for reasons beyond his control. Certain goods, such as industrial equipment and raw materials, supply articles, and petroleum products, are exempt from payment of this fee. There is also a statistical tax of 5 per cent payable on imports.

An import budget is prepared by the Central Exchange Control on a six months’ basis and is communicated to the Import Control Office, which allocates and distributes import licenses. In the allocations for imports, a distinction is made between convertible currencies (see footnote 1) and bilateral agreement currencies; for the latter, the amount available is indicated separately for each agreement currency. Importers are, in general, required to furnish documentation regarding their imports in previous years, as a basis for future allocations. As a rule, licenses are issued for imports of essential goods and raw materials; and they are issued on a restrictive basis for semiessential goods. There is a fairly extensive list of prohibited imports, mainly luxury goods and goods manufactured domestically, and all imports from Israel are prohibited.

Payments for imports in convertible currencies are subject to a premium of 10 per cent. Payments to countries with which the Egyptian Region has bilateral payments agreements are made either in Egyptian pounds or at the commercial banks’ rate in the currency specified in the agreement (see section on Prescription of Currency, above). Advance payments exceeding LE 100 for imports require the prior approval of the Central Exchange Control.

Trade and payments relations with the Syrian Region are covered by special arrangements; most goods may move freely between the two Regions.

Payments for Invisibles

Banks are authorized to effect payments for certain invisibles; payments for other invisibles require the prior approval of the Central Exchange Control. Payments in convertible currencies (see footnote 1) for invisibles are subject to a premium of 10 per cent, with certain exceptions, such as insurance payments, government pensions, and cost of tickets for travel abroad. Exchange is normally made available for expenses associated with approved trade transactions and other current payments. Expenses for permitted travel, family maintenance, film royalties, and subscriptions and fees of professional organizations usually are approved within specified quotas. There is a basic exchange allowance for travel of LE 75 a year for each adult, with additional amounts for elderly persons. For travel to the Syrian Region an allowance of LE 50 a month is authorized, LE 2 of which may be in cash. Exchange for travel and for remittances to Egyptian nationals residing permanently abroad is subject to a 10 per cent tax; however, remittances of diplomats, students, certain officials, and some others are exempt from this tax.

Residents may not export Egyptian pound notes; and they may not export foreign banknotes in excess of LE 10 without specific permission. Foreign tourists leaving the Egyptian Region may take with them any remaining Egyptian or foreign banknotes that they had brought in and declared.

Exports and Export Proceeds

Apart from exports to Israel, which are prohibited, and commodities required for the national economy, whose export may be restricted, exports may be made free of license but an export form must be submitted. In addition, exporters of cotton, silk yarns, and textiles must submit a certificate of suitable price to the Cotton, Silk Yarn and Textiles Consolidated Fund, and for exports of cotton, a declaration of value duly approved by the Cotton Section of the Central Bank of Egypt in Alexandria must also be supplied.

Export proceeds must be repatriated within three months from the date of shipment of the goods. Proceeds from exports to payments agreement countries must be obtained in accordance with the provisions of the relevant agreement (see section on Prescription of Currency, above).

The proceeds of exports to countries with which the Egyptian Region has bilateral payments agreements requiring settlements in currencies other than the Egyptian pound (see footnote 3) are surrendered at the commercial banks’ rate, as are also the proceeds in any currency of exports of petroleum, petroleum products, rice, and groundnuts, and all export proceeds received in inconvertible currencies. Export proceeds in convertible currencies receive, according to the commodity exported, a variable premium, which is announced weekly, for the proceeds of exports of raw cotton, cotton and silk yarns, and cotton and silk textiles, or a fixed premium for the proceeds of other exports.

Egyptian banknotes sent from abroad may be accepted in payment for some exports (books, Egyptian periodicals, and motion-picture films) and in partial payment (25 per cent of the value) for most others.

Proceeds from Invisibles

All persons and legal entities in the Egyptian Region are obliged to offer to authorized banks at the commercial banks’ rate, within one month from the date of their collection abroad, all proceeds in foreign currencies derived from invisibles. Proceeds in convertible currencies, however, receive a premium of 27.5 per cent, except for bank charges and commissions, amounts received to cover expenses of ships and planes in Egypt, amounts received for the credit of Shipping Accounts, surpluses of Egyptian shipping and airline companies abroad, insurance and reinsurance operations, and amounts due from provident funds. Suez Canal dues must be received in Egyptian pounds from Shipping Accounts No. 1, which may be fed only with sales of convertible currencies (see footnote 1) at the commercial banks’ rate or by transfers from a Free Nonresident Account.

Persons arriving in the Egyptian Region from abroad are permitted to bring in and use locally unlimited amounts in Egyptian or foreign banknotes, subject to customs declaration.

Capital

Transfers abroad by residents for the purpose of acquiring capital assets or securities outside the Egyptian Region require individual licenses, which normally are not granted except for transfers to some neighboring countries. The import and export of securities and similar items require licenses.

Nonresidents may freely purchase securities on Egyptian stock exchanges against payment in “acceptable” foreign currencies (see footnote 2) or in Egyptian pounds by debiting an appropriate non-resident account. Certain categories of securities may be bought to the debit of blocked accounts (see section on Nonresident Accounts, above). Proceeds from sales of securities held under “nonresident dossier” are credited to blocked accounts. Transfers of securities between residents of the same monetary area are permitted. Transfers abroad are permitted in respect of (1) securities drawn or matured in accordance with the original terms of issue, (2) the value of life or endowment policies on surrender or at maturity, (3) matured mortgages, and (4) accrued alimony under court orders up to LE 5,000.

An amount not exceeding LE 5,000 a family—irrespective of whether the sum is made up of capital or income—may be released from a family’s assets in the Egyptian Region to residents of foreign nationality who acquire nonresident status. Any amount above this limit is credited to a blocked account, except that capital transfers to Switzerland may exceed LE 5,000. Any payment of a capital nature not remittable under the exchange control regulations must be credited to a blocked account.

The Foreign Investment Law of April 2, 1953 and Law No. 475 of 1954 define the treatment of new foreign investments that contribute to the development of the Egyptian economy in the fields of industry, agriculture, metallurgy, mechanization, transport, and tourism, and establish the limits for transfers of profits. Requests for transfers of profits not covered by these laws are considered on an individual basis. Decrees providing for the Egyptianization of certain types of foreign investment (mainly banks and insurance companies) were put into effect early in 1957.

Table of Exchange Rates (as at December 31, 1960)(Egyptian pounds per U.S. dollar)
BuyingSelling
0.349 (Commercial Banks’ Rate)

Receipts from a few specified exports and invisibles. Suez Canal dues. All receipts in bilateral agreement currencies and inconvertible currencies.
0.352 (Commercial Banks’ Rate)

Payments for a few invisibles.4 All payments in bilateral agreement currencies.4
0.371 (Commercial Banks’ Rate plus 6.38% Premium)

Receipts in convertible currencies from exports of cotton and silk.
0.387 (Commercial Banks’ Rate plus 10% Premium)

Payments in convertible currencies for all imports and most invisibles.4
0.410 (Commercial Banks’ Rate plus 173% Premium)

Receipts in convertible currencies from exports other than cotton, silk, and a few other specified exports.
0.423 (Commercial Banks’ Rate plus 20% Premium)

Payments of capital to nonresidents leaving the Egyptian Region permanently.
0.445 (Commercial Banks’ Rate plus 27.5% Premium)

Receipts in convertible currencies from most invisibles.

Changes during 1960

January 4. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles was reduced to 20.48 per cent.

January 5. The premium applicable to payments in convertible currencies for all imports and most invisibles was reduced from 27.5 per cent to 20 per cent.

January 11. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles was reduced to 16.28 per cent.

January 25. The premium on proceeds in convertible currencies of exports of raw cotton from the new crop (1960-61) was established at 7.35 per cent.

January 30. A trade and payments agreement with Austria was signed providing for settlements to be made either in convertible currencies or in Egyptian pounds.

February 8. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from the 1959-60 crop, was reduced to 14.94 per cent, and that on proceeds in convertible currencies of exports of raw cotton from the 1960-61 crop was reduced to 6.38 per cent.

March 21. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from the 1959-60 crop, was reduced to 13.64 per cent.

April 1. It was announced that, from September 1, 1960, no further authorization would be granted for the payment of exports by debiting an Export Account, except in the case of cotton export contracts already signed calling for shipment after September 1, 1960, provided that such contracts were registered with the authorities by April 18, 1960. The regulations governing Export Accounts would remain valid until September 1, 1960. After that date, existing balances could be used only for payments for certain invisibles.

April 19. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from the 1959-60 crop, was reduced to 12.99 per cent.

April 20. The import program for 1960 was announced by the Ministry of Economic Affairs of the Egyptian Region. Priority was given to capital goods, raw materials for industry, and essential consumer goods. However, in order to develop the tourist industry, hotels and public establishments visited frequently by tourists were permitted to import certain tourist items after written approval of the Tourist Administration.

March 16. Soda sulphate, crayons, lead pencils, certain items of clothing, and enameled sanitary articles were added to the list of prohibited imports. In addition, permission to import small automobiles by way of barter transactions, which had been granted by a law of 1959, was revoked.

July 1. The statistical tax applicable to all imports was increased from 1 per cent to 5 per cent.

July 3. All limitations on the amount of Egyptian pound notes that persons entering the Egyptian Region could bring in with them were removed. Residents leaving the Egyptian Region, however, were prohibited from taking any Egyptian pound notes with them, although they could take the equivalent of LE 10 in foreign currencies.

July 4. The premium applicable to payments in convertible currencies for all imports and most invisibles, which had been reduced from 27.5 per cent to 20 per cent at the beginning of the year (see January 5, above), was reduced to 10 per cent.

July 4. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from the 1959-60 crop, was reduced to 12.36 per cent.

August 1. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from the 1959-60 crop, was reduced to 11.11 per cent.

August 15. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from the 1959-60 crop, was reduced to 10.5 per cent.

August 29. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from the 1959-60 crop, was reduced to 9.29 per cent.

September 1. Balances on Export Accounts could be used only for payments for certain invisibles (see April 1, above).

September 5. The premium on proceeds in convertible currencies of exports of cotton and silk yarns and textiles, as well as of raw cotton from any crop, was established at 6.38 per cent.

October 22. Under a ministerial arrêt (No. 893) a revised Manual of Exchange Control Regulations was issued. It established, among other things, a new system of nonresident accounts, which came into operation on November 1, 1960.

November 1. A premium of 20 per cent was made payable on payments of capital to nonresidents leaving the Egyptian Region permanently.

Note.—With effect from January 1, 1961, in accordance with the provisions of Law No. 250 promulgated in July 1960, as amended by Law No. 277 of 1960, the National Bank of Egypt was separated into two banks: the Central Bank of Egypt, to supervise the banking system of the Egyptian Region and to exercise normal central banking activities, including the technical work of exchange control; and the National Bank of Egypt, to operate as a regular commercial bank.

United Arab Republic: Syrian Region

Exchange Rate System

The par value is Syrian Pounds 2.19148 = US$1. The official rates are LS 2.19 buying, and LS 2.21 selling, per US$1; however, no transactions take place at these rates. Most exchange transactions take place at the controlled free market rate, but there is also an uncontrolled free market rate, mainly for capital transactions and some invisibles. As at December 31, 1960, the rates in the controlled free market were LS 3.565 buying, and LS 3.585 selling, per US$1.

Administration of Control

General policy is determined by the Government through the Minister of Economy, usually on the suggestions of the Exchange Office. The Exchange Office, which works under the general directives of the Council on Money and Credit, is the final authority on all matters pertaining to exchange policy and control. According to an agreement between the Central Bank of Syria and the Administrative Board of the Exchange Office, all transactions of the Exchange Office are executed through the Central Bank, which provides the Exchange Office with the required staff and office supplies. Import licenses are issued by the Ministry of Economy. Authorized commercial banks are responsible for recording the exchange proceeds of most exports.

Prescription of Currency

The Exchange Office is empowered to prescribe the currencies to be obtained for exports of certain goods. The usual requirement is that proceeds of major exports to all countries except those with which the Syrian Region has bilateral payments agreements1 be obtained in the currency of the country to which the goods are exported, if it is an “acceptable” currency,2 or a stronger currency, at the exporter’s choice. Prescription of currency requirements are not applied to outgoing payments. Trade and payments relations with the Egyptian Region are covered by special arrangements; most goods may move freely between the two Regions.

Imports and Import Payments

All imports, except of specified products from neighboring countries, require licenses. There is a tax of 2 per cent on the issue of import licenses, except for government imports and imports of basic foods, most raw materials and equipment, and petroleum and petroleum products. At present, licenses are granted only for imports of pharmaceuticals, food products, paper and cardboard, spare parts for vehicles and for industry, and machinery, equipment, and raw materials needed by industry. All imports from Israel are prohibited.

Exchange for most licensed imports may be obtained at the controlled free market rate. However, advance deposits are required for imports financed through documentary credits: 15 per cent for essential items and 40 per cent for all other commodities.

Payments for Invisibles

Exchange for some invisibles, mainly those associated with trade, may be obtained at the controlled free market rate. All other invisibles must be paid for through the uncontrolled free market.

Exports and Export Proceeds

Exports of a few goods to any country and all exports to Israel are prohibited. Most other exports are free of license. The proceeds of certain major exports to countries other than those with which there are bilateral payments agreements (see footnote 1) have to be obtained in “acceptable” currencies (see footnote 2), according to destination, and recorded with and repatriated through authorized banks in Syria. There is, however, no obligation on the part of exporters or others to sell their export proceeds, which may be held or sold freely to any authorized bank. The authorized banks are permitted to use exchange derived from export proceeds only to finance import transactions.

Proceeds from Invisibles

There are no requirements imposed on proceeds from invisibles, and such exchange may be held, sold in the uncontrolled free market, or otherwise disposed of.

Capital

Imports and exports of capital are free of all restriction and may be dealt with in the uncontrolled free market without limitation.

Changes during 1960

March 28. A bilateral payments arrangement with Viet-Nam entered into force.

April 18. Certain durable goods of a luxury or semiluxury nature, including motor vehicles other than buses, washing machines, heaters, and refrigerators, were added to the list of suspended imports, and it was announced that the suspension of imports of these items would continue at least until June 1961.

April 30. Advance deposits of 15 per cent for essential items and 40 per cent for all other commodities were introduced on imports financed through documentary credits.

November. The bilateral payments arrangement with Poland was terminated.

December. The import of all commodities was suspended, except pharmaceuticals, food products, paper and cardboard, spare parts for vehicles and for industry, and machinery, equipment, and raw materials needed by industry.

Note.—By Presidential Decree No. 11 of February 4, 1961, a comprehensive exchange control system was imposed in the Syrian Region, and during the following ten days a number of ministerial orders were issued implementing the decree, as follows (the changes are not taken into account in the foregoing presentation):

All dealings in foreign exchange and all transactions in which nonresidents are concerned were prohibited unless authorized by the Ministry of Economy through the banks and authorized exchange agents. All authorized transactions would take place at rates based on the official exchange rate maintained by the Exchange Office for dealings with the banks and authorized exchange agents. The rates for the public were set at LS 3.5675 buying, and LS 3.5875 selling, per US$1. The uncontrolled free market was abolished. The exchange proceeds of exports must be surrendered to authorized banks. All imports, except from the Egyptian Region, were made subject to license. Foreign exchange for students, for medical treatment abroad, and for business travel would be authorized in amounts considered to be reasonable. Exchange allocations equivalent to LS 100 a year for tourist travel to neighboring countries, and equivalent to LS 750 a year for tourist travel to Europe, would be provided. Travelers to the Egyptian Region could take out LE 300 in Egyptian banknotes. No limit would be placed on the amount of foreign banknotes that could be brought in by travelers. Nonresidents upon leaving the Syrian Region could take out all or part of the foreign currency which they had brought in; however, foreigners who entered the Syrian Region prior to February 5, 1961 must obtain permission to take out more than the equivalent of US$1,000 in foreign exchange. Travelers could bring in Syrian currency notes without limit, but not more than LS 100 could be taken out of the Syrian Region.

United Kingdom

Exchange Rate System

The par value is United Kingdom Pound 1 = US$2.80. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of US$2.82 buying, and US$2.78 selling, per £1. Market rates for other convertible or externally convertible currencies are free to move within a range of rates resulting from the official dollar limits of the United Kingdom in relation to the dollar limits of the other countries concerned. Forward premiums and discounts are left to the interplay of market forces. Authorized banks are allowed to engage in spot and forward exchange transactions in any currencies.

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

Exchange Control Territory

Exchange control is not imposed on transactions with other parts of the Sterling Area (“Scheduled Territories” in the nomenclature of the U.K. exchange control); in addition to the United Kingdom, the Sterling Area comprises Australia, Burma, Ceylon, Cyprus, Ghana, Iceland, India, the Irish Republic, the Hashemite Kingdom of Jordan, Libya, the Federation of Malaya, New Zealand, Nigeria, Pakistan, the Federation of Rhodesia and Nyasaland, the State of Singapore, and the Union of South Africa, together with all British Colonies, Protectorates, Protected States, and Trust Territories. Exceptionally, sterling payments to Hong Kong are screened to ensure that residents in other parts of the Sterling Area do not have access to Hong Kong’s free market. Control is also exercised over the acquisition of foreign currency securities from the rest of the Sterling Area and over the sale of dollar securities to residents in other parts of the Sterling Area.

Administration of Control

Exchange control in the United Kingdom is administered by the Bank of England on behalf of the U.K. Treasury. However, much of the authority for approving normal payments is delegated to the commercial banks, practically all of which are authorized for this purpose. Import and export licensing is handled by the Board of Trade.

Prescription of Currency

Payments from countries in the Sterling Area may be received in any Sterling Area currency; payments from countries outside the Sterling Area must be received in sterling from an External Account or in any specified currency;1 alternatively, any other foreign currency that is freely exchangeable for sterling may be accepted. Payments to countries in the Sterling Area may be made in any Sterling Area currency; payments to countries outside the Sterling Area may be made by crediting sterling to an External Account or in any foreign currency. The availability of funds in sterling accounts is outlined in the section on Nonresident Accounts, below.

Nonresident Accounts

The sterling accounts of persons, etc., resident in other parts of the Sterling Area (see section on Exchange Control Territory, above) are treated as those of residents of the United Kingdom. Thus, for transfers within the Sterling Area no U.K. exchange control permission is required; but for payments to other countries by residents of any territory of the Sterling Area, the U.K. authorized banks are required to ensure that the payment has the approval of the exchange control authority of the territory concerned.

External Accounts. With the exception of Blocked Accounts (see below), the sterling accounts of nonresidents, i.e., those resident outside the Sterling Area, are designated External Accounts. Balances on External Accounts are available for payments to residents of the Sterling Area, for transfers to other External Accounts, and for purchases of any foreign currency or gold. They 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 or gold.

Blocked Accounts. These accounts are applicable to residents of all countries outside the Sterling Area except Denmark, Norway, and Sweden (residents of these three countries may transfer all their sterling assets to their respective countries). The purpose of Blocked Accounts is to receive funds that are not placed at the free disposal of nonresidents, e.g., capital proceeds. Such funds may be used to purchase on a recognized stock exchange in the United Kingdom securities that are payable in a Sterling Area currency, cannot be redeemed under any contractual provision within five years from the date of acquisition, and are not optionally payable in dollars; the income from such securities, and the proceeds at maturity of any that are redeemable, may be remitted to the country of the holder. Transfers between Blocked Accounts are permitted freely, and Blocked Account sterling is negotiable, mainly against U.S. dollars, in free markets abroad.

Imports and Import Payments

Imports of practically all goods are permitted freely, under an Open General License, from all sources other than Japan and the “Eastern Area.”2 Sixteen items imported from various other countries are subject to restriction; of these, nine are specifically restricted when imported from the dollar area. Restricted imports from Japan comprise those goods listed in Schedule I, Parts I and II, of the Open General License; the greater proportion are consumer goods. Restricted imports from the “Eastern Area” consist of goods not listed in Schedule II of the Open General License.

Permission to import either under the Open General License or by some other form of license carries with it an entitlement to obtain foreign exchange to pay for the import. Exchange control forms are not required for payments to residents of the Sterling Area, or for payments to other countries for imports not exceeding £500.3

Payments for Invisibles

Payments for invisibles to residents of the Sterling Area may be made freely. Payments to countries outside the Sterling Area require exchange licenses, but these are granted freely, subject to the presentation of supporting evidence. The completion of an exchange control form is not required for payments not exceeding £250.

An allowance of up to £250 in foreign exchange is made available automatically to travelers, who may obtain additional funds upon authorization by the Bank of England. Not more than £50 in British banknotes may be taken out of the United Kingdom, except by persons traveling directly to the Irish Republic or the Channel Islands. Authorized banks may export sterling notes to nonresidents against payment in sterling from an External Account or any foreign currency.

Exports and Export Proceeds

Exports to countries outside the Sterling Area are permitted without specific exchange control approval, provided the proceeds are received in conformity with the prescription of currency regulations. The exchange control procedure is waived for exports (other than private gifts in kind) not exceeding £2,000 f.o.b. Exchange receipts in specified currencies (see footnote 1) must be offered to an authorized bank. Apart from the exchange control requirements, certain exports, mostly of a strategic character, require export licenses.

Proceeds from Invisibles

Exchange receipts from invisibles in specified currencies (see footnote 1) must be surrendered. Permission is given for foreign exchange to be retained in controlled accounts if it is required for operating purposes. There is no limit on the amount of British or foreign banknotes that may be brought into the United Kingdom.

Capital

Transfers of resident capital to countries outside the Sterling Area require approval, which normally is granted for commercial investment that promises to employ Sterling Area skills or techniques or to assist Sterling Area exports or the production of raw materials. Permission may be obtained to invest foreign currency capital receipts in marketable securities expressed in foreign currency, but any such receipts in a specified currency (see footnote 1) which have not been invested within six months must be sold to an authorized bank.

Foreign exchange or permission to credit sterling to an External Account is granted freely for repayments abroad due to a nonresident in respect of matured capital obligations; otherwise, the proceeds of nonresident-owned capital may be credited only to Blocked Accounts (see section on Nonresident Accounts, above). However, residents of Denmark, Norway, and Sweden may transfer their capital freely to their respective countries. Persons resident outside the Sterling Area who make direct investments in the United Kingdom must provide one of the specified currencies or sterling from an External Account. Capital directly invested by a nonresident after January 1, 1950 in projects approved by the exchange control authorities may be repatriated at any time, together with profits thereon.

Nonresidents may buy sterling securities on a recognized stock exchange in the United Kingdom against payment from an External Account or, if the securities cannot be redeemed under any contractual provision within five years from the date of purchase and are not optionally payable in dollars, with sterling from a Blocked Account.4 Nonresidents may sell sterling securities in the United Kingdom, provided the proceeds are credited to a Blocked Account or reinvested in a Sterling Area security having at least five years to maturity (special rules apply to residents of Denmark, Norway, and Sweden). Interest, dividends, etc., from such securities and the proceeds at maturity of any that are redeemable may be remitted to the country of residence of the owner or credited to any External Account.

Nonresidents may purchase officially quoted non-sterling securities with sterling from an External Account. Such securities may not be resold on a stock exchange in the United Kingdom but may be exported.

Residents may sell outside the Sterling Area a security expressed in foreign currency and reinvest the proceeds in other marketable securities expressed in foreign currency; however, if the security sold is a U.S. or Canadian dollar security, the securities purchased must be U.S. or Canadian dollar marketable securities. Any sale proceeds in a specified currency which have not been reinvested within six months must be sold to an authorized bank. Residents of the United Kingdom are required to obtain permission from the Treasury to acquire foreign currency securities from residents of other parts of the Sterling Area.

Banknotes

The authorized banks may buy and sell foreign notes and coins at market rates of exchange. They may buy foreign notes and coins from residents without limit. In transactions with nonresidents abroad, they may buy and sell foreign notes and coins against External Account sterling, against sterling notes to be exported or that have been imported, or against any other foreign currency in notes or any other form. The authorized banks may also purchase foreign notes and coins from nonresidents visiting the United Kingdom, against payment in sterling in cash or to the credit of an External Account. They may also sell foreign notes and coins for travel outside the Sterling Area, but without special permission a traveler may not take out of the United Kingdom foreign notes in excess of the equivalent of £250 or, if the traveler is a visitor, the amount he brought into the United Kingdom in foreign notes.

Changes during 1960

January 20. Exchange control forms were no longer required for payments not exceeding £500 (previously £250), or the equivalent in foreign exchange, by merchants in the United Kingdom to nonresidents for imports into other Sterling Area countries. The relaxation also covered payments for goods originating in countries outside the Sterling Area and bought from and sold to such countries.

February 1. The Anglo-American Film Agreement was terminated, and limitations on remittances to the United States of proceeds from the showing of U.S. films in the United Kingdom were removed.

February 1. Restrictions were lifted on imports from the dollar area of tobacco and tobacco manufactures (other than cigars), fresh, chilled, and frozen fish, synthetic rubber, and transistors.

February 24. It was announced that the United Kingdom no longer claimed balance of payments justification for the maintenance of import restrictions.

March 1. Overnight loans to foreign bank customers were again permitted, and usance credits were extended from 120 days to 180 days. Banks were also permitted to grant mail credit facilities and preshipment finance facilities to their nonresident customers, subject to the fulfillment of certain provisions, without prior authorization of the Bank of England. In addition, banks could grant personal loans and overdrafts, not exceeding £10,000 to any one nonresident account holder, for personal expenses in the United Kingdom.

March 2. Import licenses were no longer required for imports of dyes, dyestuffs, and intermediates from countries in the dollar area and Western Europe, Japan, and certain other countries.

March 16. Authorized banks in the United Kingdom were allowed to authorize transfers in respect of legacies and inheritances falling due to nonresident beneficiaries under the wills or intestacies of persons regarded at their death as resident in the United Kingdom, and in respect of distributions to nonresident beneficiaries of trusts set up under such wills or intestacies and under settlements inter vivos created before September 3, 1939 by persons then resident in the United Kingdom. Previously, such transfers had required Bank of England authorization. It was also announced that the Bank of England was prepared to consider requests for death distributions previously credited to a Blocked Account to be transferred to an External Account.

June 26. The Somaliland Protectorate was declared to be no longer a Scheduled Territory. Persons residing in that territory were considered, for purposes of the Exchange Control Act, as resident outside the Sterling Area and their sterling accounts were designated External Accounts.

September 1. The limit below which exports (other than private gifts in kind) could be made to countries outside the Sterling Area without the completion of an exchange control form, was raised from £500 f.o.b. to £2,000 f.o.b.

October 8. Residents of the United Kingdom were allowed to make cash gifts not exceeding a total of £250 in any calendar year (including 1960) to individuals and organizations resident in any country outside the Sterling Area. Applications by individuals to make cash gifts in excess of that sum on compassionate grounds, or for such purposes as wedding gifts, would be considered on an individual basis.

November 19. The sterling accounts of persons who, prior to August 31, 1954, took up permanent residence outside the Sterling Area and who were granted the treatment accorded to emigrants from the United Kingdom, were redesignated External Accounts, and securities owned by them could be dealt with in accordance with the regulations applying to nonresidents.

November 19. Power was delegated to the authorized banks to authorize payments to nonresidents in respect of a wide range of invisibles.

United States

Exchange Rate System

The par value of the United States dollar is 15521 grains of gold 910 fine, which is equivalent to US$35 per fine ounce, at which price (with allowance for handling charges and expenses) the Treasury buys gold from and sells gold to governments, central banks, and other official institutions of other countries. There are no restrictions on foreign payments, except on transactions involving the authorities or nationals of Mainland China or North Korea. The United States notified the Fund on December 10, 1946 that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Controls

The Treasury Department deals with license applications for transactions involving the authorities or nationals of Mainland China or North Korea, as specified under the Foreign Assets Control Regulations. The Bureau of Customs of the Treasury Department administers import quotas on certain commodities, including lead and zinc. Licenses required for dairy products and other agricultural commodities placed under import quota, pursuant to Section 22 of the Agricultural Adjustment Act, as amended, are issued by the Department of Agriculture. Licenses for the importation of crude petroleum products are issued by the Department of the Interior. For items subject to export control (see section on Exports and Export Proceeds, below), the Department of Commerce is, in general, the responsible authority.

Imports and Import Payments

Payments and transfers abroad may be made freely, with the exception of payments to or for the account of the authorities or nationals of Mainland China or North Korea, which are permitted only under license. Imports of merchandise known or believed to be of Chinese Communist or North Korean origin are subject to license. Certain import quotas are global; but quotas for such commodities as lead and zinc and certain agricultural commodities, including sugar, are on a country-of-production basis. Global quotas are imposed on imports of crude petroleum and petroleum products, except those imported overland (i.e., by pipeline, motor carrier, or rail), which are not restricted. Special import quotas apply to certain Philippine commodities under the Philippine Trade Agreement Revision Act of 1955.

Exports and Export Proceeds

Exports to countries in the European Soviet bloc, with the exception of designated nonstrategic goods, all exports to Mainland China, North Korea, and North Viet-Nam, and most exports to Cuba are subject to validated license. In general, exports of strategic materials to other countries also require validated licenses. The proceeds of exports are not subject to exchange control.

Payments for and Proceeds from Invisibles

These are not restricted, except where they involve Mainland China or North Korea.

Capital

Incoming or outgoing capital payments by residents or nonresidents are not subject to exchange control, except to the extent that the provisions referred to above regarding Mainland China or North Korea are involved.

Changes during 1960

October 20. The export to Cuba of all goods, except certain food-Stuffs, medicinal items, and certain medical supplies, was made subject to validated license.

Uruguay1

Exchange Rate System

The par value agreed with the International Monetary Fund is Uruguayan Pesos 7.40 = US$1. All exchange transactions take place in a free market with a fluctuating rate. The proceeds of most exports are subject to taxes (detracciones) and most imports are subject to surcharges. The rates in the free market on December 31, 1960 were Ur$11.00 buying, and Ur$11.03 selling, per US$1.

Administration of Control

Exchange transactions are carried out through the authorized banks and the Banking Department of the Bank of the Republic. The Bank of the Republic collects import surcharges and export taxes, holds the advance deposit required for some imports, and receives export and import registrations.

Prescription of Currency

Settlements with countries with which Uruguay has bilateral payments agreements or interbank compensation agreements are made through accounts maintained in U.S. dollars as the accounting unit.2 Settlements with other countries are made in U.S. dollars or other convertible currencies.

Imports and Import Payments

All imports are subject to declaration or prior registration. Imports are classified in four categories: goods in one category are not subject to surcharge; goods in the other three categories are subject to a surcharge of 40, 75, or 150 per cent. All goods not specifically listed in one of these four categories are subject to the 150 per cent surcharge. For imports subject to the 150 per cent surcharge, an advance deposit of 100 per cent is also required. The advance deposit must be made with the Bank of the Republic at the time of registration of the import; it is refunded 9 months later or, for imports of a few specified items and imports of all goods not specifically listed, 12 months later.

Payments for Invisibles

Payments for invisibles may be made freely through the fluctuating free market. There are no limitations on the export of foreign or domestic banknotes.

Exports and Export Proceeds

The proceeds of most exports are subject to taxes (detracciones), which are withheld by the Bank of the Republic. For some commodities, the tax (detracción) is stipulated in pesos by unit of export commodity; but it may not be more than 50 per cent or less than 5 per cent of the peso proceeds of the export, except that for exports of greasy wool the stipulated minimum is 25 per cent. These percentages may be adjusted at 60-day intervals. The exchange proceeds of exports subject to taxes (detracciones) must be surrendered to the Bank of the Republic, through banks authorized to deal in foreign exchange, not later than 10 working days after shipment has been authorized.

Proceeds from Invisibles

All proceeds from invisibles may be held, utilized, or sold in the fluctuating free market. There are no limitations on the import of foreign or domestic banknotes.

Capital

Inward and outward capital transfers by either residents or non-residents are free. The corresponding exchange transactions may take place freely in the fluctuating free market.

Changes during 1960

During the year, there were numerous additions to the various categories of imports resulting from combinations of different import surcharges and advance deposit requirements, so that by September 29, when the system was simplified, 14 different categories of imports had been established.

January 13. An export tax (detracción) for beef was established at 5 per cent.

February 3. All imports not listed in the decree of December 30, 1959 and all imports included in Categories II and III of the import regulations in force previous to December 17, 1959 were prohibited.

March 25. Settlements with Switzerland were placed on a convertible currency basis.

March 31. Export taxes (detracciones) for linseed oil, expellers, and meal and for salted and pickled hides were established in the form of specific rates per unit of weight.

April 12. The bilateral payments agreement with Finland was terminated.

May 5. The Executive Branch allowed the possibility of exempting from advance deposit requirements imports of industrial machinery financed by credits from abroad.

May 17. The bilateral payments agreement with France was terminated.

May 25. The bilateral payments agreement with Greece was terminated.

June 3. The bilateral payments agreement with Italy was terminated.

August 2. Export taxes (detracciones) for sunflower seed expellers and meal were established in the form of specific rates per unit of weight.

August 26. The export tax (detracción) for wool was lowered from Ur$54 to Ur$46 per 10 kilograms. Taxes on exports of wool products were lowered accordingly.

September 26. All government departments and autonomous agencies were permitted until February 28, 1961 to make use, at pre-December 1959 rates of exchange, of import permits that were valid on August 31, 1960.

September 29. By a revision of the decrees of December 1959, the following measures came into effect: (1) All import prohibitions were lifted. (2) The system of surcharges and advance deposit requirements was simplified by making only three surcharge categories, subject to 40, 75, or 150 per cent, and requiring an advance deposit (100 per cent) only for imports subject to the 150 per cent surcharge. (3) All imports not specifically listed were made subject to the surcharge of 150 per cent and the advance deposit of 100 per cent. (4) Advance deposits would be held for 9 months from the date of import registration, except those required for imports of automobiles, chassis and bodies for buses and trucks of less than two tons weight, and all commodities not specifically listed, for which the holding period would be 12 months. (5) Imports for official use would not be subject to advance deposit requirements. (6) Imports of industrial machinery, where the Ministry of Industry certifies that it is not produced in Uruguay, were exempted from surcharge; exemption from surcharge and from advance deposit could also be made where the competent ministry certifies the import to be necessary or useful for the public good. (7) Surcharges and advance deposits would be determined on the basis of c.i.f. Montevideo values, except where special aforo values had been established or where prices for exports to Uruguay were below world prices, in which case the latter were to be the basis for computing the surcharges and advance deposits. (8) A procedure was established by which imports could be prohibited temporarily on complaint from domestic industries that the imports were competitive.

October 7. An initial par value of Ur$7.40 per US$1 was agreed with the International Monetary Fund.

October 25. The complaint procedure (see item 8 under September 29, above) was revoked. Henceforth, import prohibitions would take effect only after a determination had been made by a special agency that the imports complained of were in fact competitive and after the Executive Branch had accepted that determination.

Note.—On January 1, 1961, the bilateral payments agreement with Paraguay was terminated.

Venezuela1

Exchange Rate System

The par value is Venezuelan Bolívares 3.35 = US$1. There are controlled market rates and “official free” market rates. The controlled market selling rate of Bs 3.35 per US$1 applies to payments for essential imports, certain invisibles, and registered capital. The corresponding buying rate of Bs 3.33 per US$1 applies to the proceeds of exports of iron ore and other noncombustible minerals and of re-exports of imports paid for at the controlled market rate, to government receipts of any kind, and to incoming registered capital. Exchange is purchased from the petroleum companies at special buying rates. Under certain conditions, preferential rates apply to the proceeds of coffee and cacao exports. Other exchange transactions take place at “official free” exchange rates; on April 18, 1961, these rates were Bs 4.635 buying, and Bs 4.65 selling, per US$1. There is also a small exchange market with a fluctuating rate, in which the commercial banks do not participate; the premium on the U.S. dollar in this market was approximately Bs 0.15 on April 18, 1961.

Administration of Control

The Ministry of Finance issues general directives for the operation of the exchange control system, which is supervised by the Central Bank of Venezuela directly and through its Office of Exchange Control. Under the terms of an agreement with the Government, the Central Bank has the responsibility for ensuring that the special exchange rates are applied to the appropriate transactions. Import licenses are issued by the Office of Exchange Control, in some cases after consultation with the Ministries of Development and Agriculture; export licenses, where required, are issued by these two Ministries. The Office of Exchange Control issues exchange licenses where these are required.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

Certain goods either are prohibited or may be imported only by the Government. A number of items are subject to import license for protective purposes. Import licenses for some products are issued on the condition that the importer has purchased domestic products equal to a prescribed percentage of the amount imported. All imports at the controlled market rate (mostly essential items) require import and exchange licenses. Imports through the “official free” market may require licenses, at the discretion of the Central Bank. The granting of an import license is not a commitment to provide exchange at the controlled market rate. Import licenses are not required for imports by air with an f.o.b. value under US$2,000 or its equivalent in other currencies, or for imports by any other means with a c.i.f. value under US$2,000 or its equivalent in other currencies.

The Central Bank has the power to require an advance deposit of up to 100 per cent of the local currency equivalent of imported goods, in bolívares for controlled market imports or in U.S. dollars for “official free” market imports.

Payments for Invisibles

Exchange at the controlled market rate is provided for the following: government payments; the servicing of capital registered and invested prior to November 8, 1960, or invested since that date and registered before April 15, 1961, or derived from foreign capital invested after April 15, 1961 provided that the incoming exchange has been sold to the Central Bank and the investment has been registered; expenses of university and advanced students abroad up to US$250 a month, or up to US$350 a month for postgraduate students; and freight and insurance on goods imported at the controlled market rate.

Exchange at the “official free” market rate is provided for the following: freight and insurance on imports of goods not imported at the controlled market rate; requirements of transportation and insurance companies; reasonable travel expenses up to US$5,000 a person, subject to adequate proof; family maintenance payments up to US$1,000 a month; royalties and technical service fees relating to approved contracts; duly substantiated debts to nonresidents; and the servicing of capital not eligible for controlled market exchange (sales are limited to not more than 1 per cent a month of the total investment).

Other transactions may be settled through the free market.

Exports and Export Proceeds

The export of strategic materials to certain countries is prohibited, and export licenses for some products essential to the domestic economy must be obtained from the Ministry of Development. The export of gold requires an export license issued by the Ministry of Finance. The petroleum companies must surrender export proceeds to the extent of their local currency requirements (including taxes) at a rate of Bs 3.09 per US$1; a rate of Bs 3.046259 per US$1 is applied to exchange surrendered by them in excess of the Central Bank’s sales of exchange to domestic buyers during any one year. The proceeds of exports of iron ore and other noncombustible minerals, of re-exports of imports paid for at the controlled market rate, and of government receipts of any kind, must be surrendered at the controlled market rate; the proceeds of other exports may be sold at the “official free” rate or in the free market.

The Central Bank purchases, but does not require surrender of, those portions of the proceeds of exports of coffee and cacao and their products which, depending on market prices for these two commodities and their products, carry a rate of Bs 4.80 (coffee), and Bs 4.25 (cacao), per US$1.

Proceeds from Invisibles

Exchange receipts from invisibles are freely disposable and may be sold at the “official free” rate or in the free market.

Capital

Incoming capital may be registered by the Central Bank if it is recognized as advantageous to the national economy. Registered capital is converted at the controlled market rate and may be repatriated at that rate. Other capital transfers may be made at the “official free” market rate or through the free market.

Table of Exchange Rates (as at April 18, 1961)2(bolivares per U.S. dollar)
BuyingSelling
3.046259 (Petroleum Company Rate)

Local currency requirements of petroleum companies in excess of the Central Bank’s foreign exchange sales during the given year.
3.09 (Petroleum Company Rate)

Local currency requirements of petroleum companies up to the limits of the Central Bank’s foreign exchange sales during the given year.
3.33 (Controlled Market Rate)

Exports of iron ore and other non-combustible minerals, and exports of coffee and cacao in a proportion depending on world prices, Government receipts. Registered capital.
3.35 (Controlled Market Rate)

Payments for essential imports and related invisibles. Advanced students’ expenses. Government payments. Registered capital.
4.635 (“Official Free” Market Rate)

Other export receipts.
4.65 (“Official Free” Market Rate)

All other imports and related invisibles. Travel expenses, other students’ expenses, family maintenance, etc. Unregistered capital.
4.80 (approx.) (Free Market Rate)

Other receipts.
4.81 (approx.) (Free Market Rate)

Other payments.

Changes during 1960

On various dates during the year, additions were made to the list of commodities subject to import license.

November 8. Executive Decree 390 introduced exchange controls and established a free market with a fluctuating rate for certain invisibles, export proceeds, and capital transactions. Government payments, payments for imports and expenditures incidental to them, payments for other invisibles, including various forms of insurance, students’ remittances, and family maintenance abroad, and registered capital and income therefrom continued to be entitled to official exchange. Incoming exchange from petroleum companies also continued to be subject to the existing exchange rate treatment. Proceeds from exports of iron ore and other noncombustible minerals and from registered incoming capital had to be negotiated at the official rate. All other exchange transactions could be negotiated in the free market.

November 9. Regulations were issued to implement Decree 390, prescribing formalities and documents to effect payments and transfers for current and capital transactions at the official rates. The authorized banks were given broad powers to operate the exchange control system within the framework of the Decree and Regulations.

November 10. Instructions were issued to authorized banks concerning the distribution of monthly exchange allocations to be received from the Central Bank for official market payments.

Note.—The following changes took place early in 1961:

March 17. By virtue of Executive Decree 480, the exchange system was modified. The official market became the controlled market, and a list of imports (mostly essential items), requiring import licenses and exchange licenses to benefit from the controlled market rate, was issued. Imports with a value under US$2,000 were exempted from licensing requirements. The Central Bank was empowered to require an advance deposit of up to 100 per cent of the bolivar equivalent of imports if the situation warranted it.

April 1. By virtue of Executive Decree 492, the exchange system was further modified. The determination of the controlled market selling rate was left to the Central Bank and the Ministry of Finance. Travel expenses were excluded from the controlled market. An “official free” market was established. An exchange stabilization fund was set up for the Central Bank’s foreign exchange operations.

April 17. The transactions eligible for the controlled market and the “official free” market were further defined, and the commercial banks were excluded from participation in the fluctuating free market.

Viet-Nam

Exchange Rate System

There is no agreed par value for the Vietnamese Piastre. The basic official rate is VN$35.00 per US$1, the buying and selling rates being VN$34.65 and VN$35.35, respectively, per US$1. These rates apply to imports financed with U.S. aid, some essential imports financed with Viet-Nam’s own resources, and certain transactions in invisibles. There is also an officially controlled free market, through which certain other invisibles may be settled; as at December 31, 1960, the rate in this market was VN$73.50 per US$1. An effective export rate of VN$48.13 per US$1 arises from the granting of a fixed premium of VN$13.48 per US$1 in addition to the official buying rate of VN$34.65; specific exports may receive export subsidies in addition to this export premium. An effective rate of VN$74.35 per US$1 applies to certain imports financed with Viet-Nam’s own resources and arises from the addition of a “stabilization” tax of VN$39 per US$1 to the official rate. An effective rate of VN$85.35 per US$1 applies to other imports financed with Viet-Nam’s own resources and arises from the addition of a “stabilization” tax of VN$50 per US$1 to the official rate. Rates for other currencies in each of the exchange markets are computed in accordance with official parities.

Administration of Control

Exchange control is administered by the National Exchange Office (a department of the National Bank of Viet-Nam) in accordance with the general policies of the Ministry of Finance. All remittances must have the prior approval of the National Exchange Office. Licenses for imports financed with U.S. aid are granted by the Directorate-General of Trade and are countersigned by the National Bank (American Aid Department). Licenses for imports financed with Viet-Nam’s own foreign exchange resources are granted by the Directorate-General of Trade and are countersigned by the National Exchange Office. However, for imports of a noncommercial character valued at less than VN$1,000, the National Exchange Office is authorized to grant licenses. Export licenses are issued by the Directorate-General of Trade but require also the approval of the National Exchange Office.

Prescription of Currency

Payments and receipts through the official market, and outgoing payments for certain invisibles authorized through the controlled free market, must be effected through the authorized exchange banks and in the currency stipulated in the license. In respect of other imports and of exports, settlements are made in convertible currencies.

Nonresident Accounts

Nonresidents may maintain accounts with banks, subject to the approval of the National Exchange Office. All transactions through these accounts require prior approval.

Imports and Import Payments

Imports are subject to prior license. Applications to import are sent through an authorized bank to the Directorate-General of Trade. In principle, the minimum amount for an import license application is VN$10,000. Licenses canceled, or less than 90 per cent used, are subject to a penalty of up to 20 per cent of the value of the commodities licensed. Imports are classified in 18 categories; no importer may be concerned with more than 3 categories. Licenses may not be transferred from one importer to another. Goods must be imported in accordance with the time limit, quantity, and quality specified in the import license. Importers must have storage facilities for the goods they import. Some imports financed with Vietnamese resources are subject to a “stabilization” tax of VN$39 per US$1, while others (mostly of a luxury nature) are subject to a “stabilization” tax of VN$50 per US$1, or equivalent amounts when payable in other currencies.

Payments for Invisibles

All outgoing payments require the prior approval of the National Exchange Office. For certain payments—such as government expenses, incidental charges on imports, certain insurance premiums and indemnities, students’ expenses, and savings of foreign technicians—exchange is granted at the official rate by the National Exchange Office. With the approval of the National Exchange Office and within prescribed limits, payments may be made through the controlled free market for such items as transfers of profits of foreign enterprises, personal savings of resident foreigners other than foreign technicians, medical expenses, family allocations, and foreign travel.

Travelers are permitted to take with them VN$400 in Vietnamese banknotes. Foreign banknotes and credit instruments not used by foreign travelers may be re-exported on the strength of a declaration to the customs supported by evidence that any utilized foreign exchange has been sold to an authorized bank at the appropriate rate.

Exports and Export Proceeds

All exports are subject to license and must be registered with an authorized bank, which is responsible for the repatriation of the foreign exchange. The exchange proceeds of exports must be surrendered. All exports receive a fixed premium of VN$13.48 per US$1 in addition to the official buying rate, and some may qualify for export subsidies in addition to the premium. The export of manufactured or semimanufactured products originally imported into Viet-Nam is prohibited.

Proceeds from Invisibles

Foreign exchange receipts from most transactions in invisibles may be sold at the controlled free market rate. Tourists, philanthropic organizations, and foreign governments may sell their foreign exchange in the controlled free market to cover their expenses in Viet-Nam.

There is no limitation on the amount of foreign exchange that may be brought into the country, but it must be declared to the customs upon entry. A traveler may not bring in more than VN$400 in Viet-namese banknotes. Foreigners traveling in Viet-Nam must record all purchases and sales of foreign exchange on entry-exit forms.

Capital

Capital may be imported without formalities, but foreign investors must register their capital with the Vietnamese authorities and agree on the terms of the investment in order to be able to repatriate their capital and to transfer profits. The rate, whether official or free, at which the foreign investments enter is regulated on a case-to-case basis. If a foreign enterprise requires exchange to pay for imported materials at the official rate, the capital concerned must be surrendered at that rate. Repatriation of capital takes place at the rate of entry, but profits are always transferred through the controlled free market. Capital held in nontransferable piastres by nonresident foreigners may be sold to other nonresident foreigners for foreign exchange at a negotiated rate without prior approval, provided that the purchaser surrenders the exchange and places the piastres so acquired in a capital account with an authorized bank. Piastres held in such accounts may be used only for investment in certain designated branches of economic activity and only with the approval of the National Exchange Office. The transfer of profits derived from agreed foreign investments is guaranteed in accordance with the regulations in force at the time, and repatriation is allowed to begin after five years in annual installments of 20 per cent of the initial investment.

Table of Exchange Rates (as at December 31, 1960)(piastres per U.S. dollar)
BuyingSelling
34.65 (Official Rate)

Government receipts and certain other invisibles.
35.35 (Official Rate)

Imports financed with U.S. aid. Some essential imports financed with Vietnamese resources. Government expenses and certain other invisibles.
48.13 (Official Rate plus VN$13.48 Premium)

Exports.
73.50 (Controlled Free Market Rate)

Tourist exchange. Sales of exchange by-foreign embassies.
73.50 (Controlled Free Market Rate)

Profits, some savings, travel exchange, and some other invisibles.
74.35 (Official Rate plus VN$39 “Stabilization” Tax)

Other essential imports financed with Vietnamese resources.
85.35 (Official Rate plus VN$50 “Stabilization” Tax)

Other imports.

Changes during 1960

January 1. Some import items of a less essential nature which previously were made at the official rate were transferred to the VN$85.35 per US$1 rate.

June 1. The mixing rate for exports was abolished, and a fixed export premium of VN$13.48 per US$1 was established instead.

September 19. A stabilization tax of VN$39 per US$1 was made applicable to the following imports: gasoline and heavy oil, plywood, glassware, most ceramic products, cement products (fibro-cement), office equipment (except typewriters and calculating machines), and tires and tubes.

Yugoslavia1

Exchange Rate System

The par value is Yugoslav Dinars 300.00 = US$1. However, most transactions take place at a unitary fixed rate of Din 750 per US$1, the exception being that, temporarily, a rate of Din 600 per US$1 is applied to receipts from tourism and from diplomatic and other foreign missions in Yugoslavia.

Administration of Control

The Federal Executive Council prescribes the general provisions governing foreign trade and exchange transactions. The Committee for Foreign Trade, by virtue of these general provisions, establishes rules and regulations and makes decisions governing exchange transactions of a commercial nature. The Federal Secretariat for Finance prescribes the provisions governing exchange transactions of a noncommercial nature. The Committee for Foreign Trade regulates exports and imports of goods and sets forth the conditions governing exports and imports of specified categories of goods. The National Bank is the operative organ of the exchange control, and in addition prescribes the methods for payments to and receipts from foreign countries. In principle, all foreign exchange transactions must be carried out through the National Bank and through the authorized banks (the Yugoslav Foreign Trade Bank, the Yugoslav Investment Bank, and the Yugoslav Agricultural Bank). The National Bank sells exchange to the authorized banks, government organs and institutions, and private persons. Exchange for imports of investment goods is sold by the Yugoslav Investment Bank; exchange for imports not covered by the investment program is sold by the National Bank, the Yugoslav Foreign Trade Bank, and the Yugoslav Agricultural Bank.

Prescription of Currency

Payments are made according to the method or channel of payment provided for in the payments agreement with the country concerned, or, if no agreement exists, settlement is usually made in a convertible currency. Yugoslavia has payments agreements requiring settlements through bilateral clearing accounts (1) in U.S. dollars with Afghanistan, Albania, Austria, Brazil, Bulgaria, Cambodia, Chile, Czechoslovakia, Finland, Eastern Germany, Greece, Hungary, Israel, Mongolia, Poland, Rumania, Spain, Tunisia, Turkey, the U.S.S.R., and Uruguay; (2) in sterling with Burma and Mainland China; and (3) in their respective currencies with India, Iraq, the Sudan,2 Switzerland, and the United Arab Republic (Egyptian Region). A certain degree of multilateralization with other currencies is provided in the agreements with Austria, Greece, Iraq, Turkey, and Switzerland.

Nonresident Accounts

Dinar accounts of nonresidents may be credited with the dinar countervalue of exchange transferred from abroad, as well as with dinar amounts realized in Yugoslavia, in accordance with existing regulations. These accounts may be debited for current payments in Yugoslavia, but balances may not be transferred abroad, except with special approval.

Foreigners resident outside Yugoslavia may open accounts in foreign currencies in Yugoslavia only with the approval of the National Bank. Balances on such accounts may be used for both commercial and noncommercial transactions.

Foreign missions and foreigners resident in Yugoslavia may open with the National Bank accounts expressed in foreign currencies or dinars. Payments to the credit of these accounts in foreign currencies may be made only by transfers of the foreign currency in which the account is expressed. These accounts may be debited for all noncommercial payments. Transfers from these accounts are allowed, and transfers from accounts in convertible currencies may be made to all countries.

Imports and Import Payments

All economic organizations wishing to engage in foreign trade must be registered. Goods may be imported by them and payment made under one of the following procedures: (1) They may import freely goods on a liberalized list and payment may be made freely through the authorized banks. (2) For goods on a liberal licensing list, licenses are issued automatically to economic organizations; exchange to pay for imports of these goods may be purchased by submitting a license directly to an authorized bank. (3) For imports of goods listed as subject to quotas, the economic organizations may purchase from the authorized banks foreign exchange within each individual quota, according to allocations made among the economic organizations themselves. (4) Foreign exchange allocated to the economic organizations under general licenses may be used to pay for imports of goods not included in any of the above three lists. In addition, there is a list of goods subject to restrictive licensing.

Compensation arrangements with foreign countries are permitted only as an exception and are subject to approval by the Committee for Foreign Trade and the Federal State Secretariat for Internal Trade. Approval is given only if the compensation arrangement assures the realization of the aims set forth in the respective regulations. The foreign trade organization carrying out such an arrangement must make a deposit in dinars equivalent to 5 per cent of the value of the proposed export. The deposit is forfeited if the arrangement is not carried through in accordance with the conditions stipulated.

Payments for Invisibles

Payments for invisibles related to merchandise transactions are treated in a manner similar to that accorded to payments for merchandise. All payments for invisibles by economic organizations, as well as by government organs and institutions, social organizations, and similar bodies, are negotiated at the rate of Din 750 per US$1, and exchange at this rate may be purchased from the authorized banks within quotas determined in advance for each year.

Exchange for private travel up to the equivalent of US$30 for each person annually, and for remittances for family maintenance up to US$20 a year, is also made available at the rate of Din 750 per US$1. Not more than Din 1,500 in Yugoslav banknotes, in denominations of Din 100 or less, may be taken out by travelers.

Exports and Export Proceeds

Exports of goods are free. Exceptionally, the authorities provide for individual export commodity quotas and certain goods are subject to export license.

All proceeds from exports must be surrendered to the National Bank. Exporters may purchase from the authorized banks foreign exchange proportionate to their export receipts for payments connected with their exports, for purchases of goods abroad, and for other payments intended to advance their own economic activities.

Exports of certain goods are temporarily subject to premiums, to facilitate the change-over from the multiple rate system previously in operation (for details, see Eleventh Annual Report on Exchange Restrictions, page 352) to the unified settlement rate.

Proceeds from Invisibles

Exchange received from tourists and from diplomatic and other foreign missions must be surrendered to the National Bank or to the authorized banks at the special rate of Din 600 per US$1. Proceeds from other invisibles must be surrendered to the authorized banks at the Din 750 per US$1 rate.

Residents importing from abroad foreign exchange derived from salaries, reimbursements of per diem expenses, and personal earnings during their stay abroad, as well as fees and, on approval, other receipts, may keep such foreign exchange in accounts with the authorized banks. Balances on such accounts may be used without limitation for payments abroad of a personal nature.

Not more than Din 1,500 in Yugoslav banknotes, in denominations of Din 100 or less, may be brought in by travelers.

Capital

All transfers of a capital nature by residents or nonresidents are subject to individual license. Authorization is seldom granted for foreign participation in domestic enterprises in Yugoslavia. However, foreign loans to Yugoslav enterprises are allowed on a more liberal basis. Unless specifically permitted to retain foreign exchange, residents are obliged to repatriate and surrender foreign exchange held abroad. Capital transfers abroad by residents are usually not approved. A Decision of the Yugoslav Federal Executive Council of October 14, 1955 requires the Yugoslav authorities to continue to permit the remittance of inheritances to citizens of the United States, provided that the remittance is requested within three years from the date of distribution of the estate.

Changes during 1960

January 13. Advance approval was no longer required for imports of consumer goods.

February 17. The foreign exchange allocation for private travel was increased from US$20 to US$30 for each person. Larger amounts could be authorized in special cases. The amount of dinar notes that could be taken in or out of Yugoslavia was reduced from Din 3,000 to Din 1,500 a person in denominations of Din 100 or less.

April 2. Bilateral payments agreements with Afghanistan and Cambodia came into effect, providing for settlements through clearing accounts maintained in U.S. dollars.

June 1. The discount of 1 per cent on the settlement rate for Finnish clearing dollars was eliminated.

July 1. The coefficient of 1.2 applicable to imports of equipment with exchange provided by the Yugoslav Investment Bank or the Yugoslav Foreign Trade Bank was reduced to 1.0, and import duties were established for these goods.

September 14. Following the termination of the bilateral payments agreement with Argentina on March 14, 1960, settlements with that country were placed on a convertible currency basis.

Note.—The following changes took place early in 1961:

January 1. Substantial changes in the trade and exchange system became effective: The multiple rate system was abolished. Practically all transactions in foreign exchange would take place at the unified settlement rate of Din 750 per US$1, the only exception being receipts from tourism, to which a special exchange rate would apply. The allocation of exchange for payments abroad was liberalized, and a new general customs tariff was announced.

January 14. It was announced that settlements with the Sudan would be placed on a convertible currency basis, with effect from March 1, 1961.

January 16. Settlements with France and Morocco were placed on a convertible currency basis.

February 15. The special rate for receipts from tourism and from diplomatic and other foreign missions was set at Din 600 per US$1.

These countries are Mainland China, Czechoslovakia, Poland, U.S.S.R., and Yugoslavia.

In view of certain changes introduced early in 1961 (see note at the end of this survey), this survey presents the position as at February 4, 1961.

The additional surcharge of 50 per cent on items in List 5 and on unlisted items is imposed temporarily, pending the establishment of the items to be included in a new List 7, which will be subject to a surcharge of 200 per cent.

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

Bulgaria, Czechoslovakia, Eastern Germany, Greece, Hungary, Poland, Rumania, Turkey, U.S.S.R., and Yugoslavia.

The Austrian Council of Ministers has authorized the Minister for Foreign Affairs to terminate the bilateral payments agreement with Greece with effect on May 10, 1961, and that with Turkey with effect on June 30, 1961. After these dates, settlements with these countries will be made in convertible currencies or externally convertible European currencies.

In view of certain changes that took place early in 1961 (see note at the end of this survey), this survey presents the position as at February 8, 1961.

Settlements with the Egyptian Region of the United Arab Republic may also be made in Egyptian pounds through the free market.

Bilateral Account of the country concerned.

Convertible as used here includes U.S. dollars, Canadian dollars, and externally convertible European currencies (Austrian schillings, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs).

Bilateral agreements (concluded prior to the coming into effect of the economic stabilization plan) requiring settlements through centralized accounts continue in effect with Chile, Spain, and Uruguay.

This surcharge, fixed periodically by the SUMOC, is based on the “cost of exchange,” i.e., the weighted average of the bonuses paid to exporters plus the official exchange rate.

This special surcharge is increased by 10 per cent at half-yearly intervals, in accordance with a plan adopted on February 15, 1958. Until August 14, 1960, the special surcharge was 50 per cent of the surcharge payable on other preferential imports. On that date, it was increased to 60 per cent.

The currencies of Austria, Belgium-Luxembourg, Finland, France, Federal Republic of Germany, Italy, Japan, Netherlands, Sweden, and United Kingdom.

See footnote 2.

No account is taken here of any difference in the effective rate which may result from the requirement that a part of these export proceeds must be invested in six-month notes of the Bank of Brazil (see section on Exports and Export Proceeds, above).

The premiums refer to auctions for U.S. dollars (150 days’ delivery) in Rio de Janeiro on December 27, 1960. The premium for General Category imports has been Cr$210 per US$1 since mid-July 1960 (see section on Changes during 1960, March 26, below).

This premium was gradually reduced, so that since mid-July 1960 it has been Cr$210 per US$1.

On April 5, 1961, the exchange rate applicable to exports of cocoa beans, cocoa butter, cocoa paste, and cocoa cake was established at Cr$210 per US$1.

Burma also has arrangements with India under which payments for all but a few commodities are channeled through a bilateral account in inconvertible Indian rupees (see section on Changes during 1960, June 10, below).

The specified currencies are listed as Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche mark, French francs, Indian rupees (notes and coins only), Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars.

Ceylon has bilateral payments agreements with Mainland China, Czechoslovakia, Poland, Rumania, and U.S.S.R.

Bolivia, Canada, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Philippines, United States and dependent territories, and Venezuela.

Albania, Austria, Bulgaria, Mainland China, China (Taiwan), Czechoslovakia, Eastern Germany, Federal Republic of Germany, Hungary, Japan, Poland, Rumania, Spain, U.S.S.R., and Yugoslavia.

Belgium, Denmark, France, Greece, Iceland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, and Turkey.

Afghanistan, Burma, India, Indonesia, Iran, Iraq, Malaya, Pakistan, and Saudi Arabia.

Brunei, Cambodia, Hong Kong, Israel, Jordan, Laos, Lebanon, North Borneo, Sarawak, Sudan, Thailand, Turkey, United Arab Republic, and Viet-Nam.

Chile has bilateral payments agreements with Bolivia, Brazil, Ecuador, Spain, and Yugoslavia. A bilateral payments agreement with Argentina was terminated on January 31, 1961.

In view of certain changes which became effective on January 1, 1961 (see note at the end of this survey), this survey presents the position as at that date.

This exchange rate for coffee export proceeds does not take account of the cost of purchasing exchange in the free market to cover the difference between the export price and the minimum surrender price, nor of the requirement of retention in kind. In the case of banana exports, no account is taken of the peso proceeds that may be acquired by the sale of part of the exchange receipts in the free market. Neither does the table take account of the adjustment necessary as a result of the fact that the 9 per cent tax is calculated on the current surrender price. (See section on Exports and Export Proceeds, above.)

The average free market rate of the preceding week.

The tax is calculated at the free market rate.

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

Brazil, Czechoslovakia, Eastern Germany, Rumania, and, for merchandise payments only, Colombia.

This arrangement will be liquidated as from the end of 1961.

With effect from January 5, 1961, this requirement was made applicable to all intended imports, regardless of their amount.

With effect from February 7, 1961, 50 per cent of the exchange proceeds of exports must be sold to a commercial bank in the Dominican Republic.

On March 7, 1961, advance deposits for imports were reintroduced: 25 per cent in sucres for goods in List 1 and 50 per cent in free market exchange for goods in List 2.

The effective exchange rate for bananas is calculated from the estimated f.o.b. price for a stem of bananas of S/ 29.60 and the average surrender requirement of US$1.30 per stem at the official rate. Banana earnings not repatriated to Ecuador are excluded from these calculations.

This rate is an approximate effective rate calculated on the basis of the surrender requirement of US$100 per ton and estimated export prices (7 per cent at the official rate and 93 per cent at the free market rate). The effective rate varies with the export prices and the free market rate.

Average free market rate in Quito and Guayaquil.

With effect from February 20, 1961, and for 30 days thereafter, the proceeds of cacao exports must be surrendered at a special rate of S/ 17.20 per US$1.

Since this survey was prepared, the following measures have been introduced: By Decree No. 107 of April 10, 1961, promulgated on April 11, the sale, conversion, or exchange of gold, foreign currencies, and shares was prohibited, pending the issue of new exchange control regulations. The foreign exchange proceeds of exports had to be sold to the Central Reserve Bank at the official exchange rate. On April 21, 1961, a “law of control on international transfers” was promulgated. It provided for the sale of exchange at the official exchange rate for current transactions. Import payments were made subject to license, and limits were placed on the amount of local currency that could be brought in or taken out.

With effect from April 11, 1961, the maximum advance deposit requirement of 150 per cent was reduced to 100 per cent, and advance deposit requirements of 100 and 125 per cent were reduced to 75 per cent.

In view of changes that took place on January 1, 1961 (see note at the end of this survey), this survey presents the position as at that date.

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

Finland has bilateral payments agreements with Bulgaria, Mainland China, Colombia, Czechoslovakia, Eastern Germany, Greece, Hungary, Israel, Poland, Rumania, Turkey, U.S.S.R., and Yugoslavia.

Residents are also permitted to hold accounts in foreign currency.

In view of changes that took place in January 1961 (see note at the end this survey), this survey presents the position as at January 25, 1961.

Bulgaria, Czechoslovakia, Eastern Germany, Hungary, and Rumania.

Afghanistan, Argentina, Australia, Bhutan, Burma, Bolivia, Brazil, Ceylon, Chile, China (Taiwan), Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Ethiopia, Guatemala, Haiti, Honduras, India, Indonesia, Iran, Israel, Japan, Korea, Liberia, Libya, Mexico, Nepal, New Zealand, Nicaragua, Pakistan, Panama, Paraguay, Peru, Philippines, Sudan, Thailand, Union of South Africa, Uruguay, Venezuela, and Yugoslavia.

Under the IMEX procedure, licenses are issued for imports of goods needed by French producers for the production of goods for export. Exports should be sent to the same monetary area as that of the imports or to a “better” monetary area. The lag between importation and exportation may not exceed six months. Under the EXIM procedure, exporters are assured of receiving import licenses for the subsequent importation of goods used in the production of their exports. The time lag between exportation and importation is six to nine months.

The highest percentage is accorded to holders of exporters’ cards, which are given to enterprises that have exported a certain percentage of their production.

Securities expressed in foreign currencies and issued by French companies or organizations are considered as foreign securities.

The trade and exchange control regulations established by the authorities of the Federal Republic of Germany are, for the most part, applied also in the British, French, and U.S. Sectors of Berlin. The term “Germany” is used in this survey as an abbreviation for the Federal Republic of Germany.

In view of certain changes which took place in 1961 (see note at the end of this survey), this survey presents the position as at March 6, 1961.

Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, French francs, Greek drachmas, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs.

Restrictions are applied only to the acquisition from nonresidents of rights to films that are to be shown in the original German-speaking version or in a German-synchronized version, the acquisition of rights to films of any kind originating in Eastern bloc countries, and the acceptance of film services from Eastern bloc countries.

The specified currencies are listed as follows: Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars.

This initial par value for the Greek drachma was agreed with the International Monetary Fund on March 29, 1961.

Besides payments agreements with several European Monetary Agreement countries (Austria, Norway, Portugal, Spain, and Turkey), Greece maintains bilateral payments agreements with Bulgaria, Chile, Czechoslovakia, Eastern Germany, Hungary, Israel, Poland, Rumania, U.S.S.R., United Arab Republic (Egyptian Region), and Yugoslavia.

The specified convertible currencies are deutsche mark, pounds sterling, Swiss francs, U.S. dollars, and currencies remitted through the bilateral accounts of European Monetary Agreement countries.

Australia, Borneo, Ceylon, Republic of the Congo (Leopoldville), Ethiopia, Finland, Hong Kong, India, Indonesia, Iran, Iraq, Madagascar, Federation of Malaya, Mexico, Morocco, Mozambique, Netherlands Antilles (except for gasoline and petroleum products), Pakistan, Philippines, Portugal, Somalia, Sudan, Thailand, United Arab Republic (Egyptian Region), United Kingdom, and Yugoslavia.

This is regarded as comprising Cambodia, Mainland China, China (Taiwan), Indonesia, Republic of Korea, Laos, Macao, Philippines, Thailand, and Republic of Viet-Nam.

The specified currencies are Canadian dollars, U.S. dollars, and externally convertible European currencies.

Export licensing in Hong Kong, as in some other areas, is not related to exchange control.

Originating in Mainland China, China (Taiwan), Hong Kong, Republic of Korea, or Macao, and received in U.S. dollars.

Bolivia, Canada, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Philippines, United States and dependent territories, and Venezuela.

A tax of 2½ per cent is levied on the f.o.b. value of exported commodities produced after February 15, 1960 and before December 31, 1960.

Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Panamanian dollars, Philippine pesos, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars.

Afghanistan, Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland, Rumania, U.S.S.R., United Arab Republic (Egyptian Region), and Yugoslavia. There are also bilateral accounts with two Sterling Area countries (Burma and Pakistan) for settlement of a part of their trade with India in specified commodities.

The currencies listed for this purpose are those of Austria, Belgian Monetary Area, Canada, Denmark and the Faroe Islands, Federal Republic of Germany, French Franc Area, French Somali Coast, Iraq, Italian Monetary Area, Netherlands Monetary Area, Norway, Panama, Philippines, Portuguese Monetary Area (excluding Portuguese territories in India), Sweden, Switzerland and Liechtenstein, and United States and territories under U.S. sovereignty.

These rates of the Bank Indonesia are based on the basic official rate of Rp 45.00, less ⅜ of 1 per cent on the buying side and plus ⅝ of 1 per cent on the selling side.

With effect from May 2, 1961, a subsidy of Rp 45 per US$1 was introduced for purchases of exchange from tourists at the official rate.

Iraq has bilateral payments agreements with Mainland China, Lebanon, Tunisia, U.S.S.R., United Arab Republic (Egyptian Region), United Arab Republic (Syrian Region), and Yugoslavia.

With effect from February 7, 1961, exchange control forms were no longer required for payments up to £2,000 for goods and the transport and insurance of goods.

In view of certain changes which took place early in 1961 (see note at the end of this survey), this survey presents the position as at February 15, 1961.

Israel has bilateral payments agreements with Brazil, Bulgaria, Ghana, Greece, Hungary, Norway, Poland, Portugal, Rumania, Turkey, Uruguay, and Yugoslavia.

Specifically, Angola, Cameroon, Republic of the Congo (Leopoldville), Gabon, Ghana, Guinea, Ivory Coast, Liberia, Nigeria, Senegal, and Sierra Leone.

Other effective rates arise from premiums ranging from I£0.36 to I£1.20 per US$1 given to export proceeds and to receipts from certain services on the basis of “net value added,” and from the requirement that certain payments, e.g., for travel abroad, must be met from the sale abroad of foreign securities held by residents.

These currencies are Austrian schillings, Belgian (Luxembourg) francs, Danish kroner, deutsche mark, French francs, Netherlands guilders, Norwegian kroner, pounds sterling, Swedish kronor, and Swiss francs.

With effect from March 13, 1961, settlements with the Portuguese Monetary Area may be made in convertible currencies, as a result of the termination of he clearing agreement.

Bolivia, Brazil, Canada, Chile, China (Taiwan), Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, French Somaliland, Guatemala, Haiti, Honduras, Korea, Lebanon, Liberia, Mexico, Nicaragua, Panama, Paraguay, Peru, Philippines, United Arab Republic (Syrian Region), United States and possessions, Uruguay, and Venezuela.

In view of certain changes which took place early in 1961 (see note at the end of this survey), this survey presents the position as at February 2, 1961.

In addition to yen, the designated currencies are Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, Swiss francs, and U.S. dollars.

Restricted industries include waterworks, railways and other transportation, electric and gas utilities, and banks.

In view of certain changes which took place early in 1961 (see note at the end this survey), this survey presents the position as at February 23, 1961.

On April 17, 1961, it was decided that goods imported from the Syrian Region of the United Arab Republic would be paid for in sterling at the official rate.

The Arab League countries are Iraq, Jordan, Lebanon, Libya, Morocco, Saudi Arabia, Sudan, Tunisia, United Arab Republic, and Yemen.

Cement, except white cement, carbonic acid, arak, nonalcoholic drinks, and cigarettes.

Wheat and flour, passenger cars and trucks, radios, recorders and gramophones, sulphur, lubricating oils, refrigerators, air conditioners, tinned cheese, space heaters, butane gas cookers, toilet soap, and firearms, including hunting guns.

On April 17, 1961, it was decided that all goods imported from the Syrian Region of the United Arab Republic would be paid for in sterling at the official rate.

This rate represents the rate for the Jordan dinar in Beirut converted on the basis of the free rate for the U.S. dollar in Beirut.

This selling rate does not include the fees payable on all import licenses (see section on Imports and Import Payments, above).

See footnote 6.

In view of the changes that took place early in 1961 (see note at the end of this survey), this survey presents the position as at February 16, 1961.

These countries are Czechoslovakia, Eastern Germany, Poland, Rumania, U.S.S.R., and United Arab Republic (Egyptian Region).

The agreement with Czechoslovakia expired on February 7, 1961.

In view of certain changes which took place early in 1961 (see note at the end of this survey), this survey presents the position as at February 10, 1961.

The agreement providing for an operations account between the State Bank of Morocco and the French Treasury lapsed on July 1, 1959.

Hungary and Rumania.

Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Guinea, Poland, Spain, U.S.S.R., and United Arab Republic (Egyptian Region).

Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche mark, Djibouti francs, Italian lire, Netherlands guilders, Norwegian kroner, pounds sterling, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars.

With effect from March 7, 1961, the par value was changed to f. 3.62 per US$1 and the official limits to f. 3.59 ¼ buying, and f. 3.64 selling, per US$1.

These are listed in the Netherlands regulations as Canadian dollars, U.S. dollars, and externally convertible European currencies (Austrian schillings, Belgian francs, Danish kroner, deutsche mark, French francs, Italian lire, Norwegian kroner, Portuguese escudos, pounds sterling, Swedish kronor, and Swiss francs).

K Accounts related to Bulgaria and Rumania are designated “exportable” or “nonexportable,” to indicate whether or not guilder securities purchased through such accounts may be exported. A similar designation applies to the securities purchased with such funds.

Prior to March 8, 1961, these rates were Ant. f. 1.885 buying, and Ant. f. 1.905 selling, per US$1.

The change in the par value of the Netherlands guilder from f. 3.80 per US$1 to f. 3.62 per US$1 on March 7, 1961 has been extended to the New Guinea guilder, giving the relationship NG f. 3.62=US$1.

With effect from January 1, 1961, import licenses are no longer required for refined beet and cane sugar.

In view of a change that took place on January 1, 1961 (see note at the end of this survey), this survey presents the position as at that date.

Nigeria became a member of the International Monetary Fund on March 30, 1961.

The specified currencies are listed as follows: Austrian schillings, Belgian francs, Canadian dollars, Danish kroner, deutsche mark, French francs, Italian lire, Netherlands guilders, Norwegian kroner, Portuguese escudos, Swedish kronor, Swiss francs, and U.S. dollars.

In view of certain changes which took place early in 1961 (see note at the end of this survey), this survey presents the position as at January 20, 1961.

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

Brazil, Bulgaria. Czechoslovakia, Eastern Germany, Hungary, Israel, Poland, Rumania, and U.S.S.R.

However, for