Chapter

Country Surveys

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1970
Share
  • ShareShare
Show Summary Details

Afghanistan

Exchange Rate System

The par value is 0.0197482 gram of fine gold per Afghani or Af 45.00 = US$1. The Afghanistan Bank (Da Afghanistan Bank, the central bank) charges commissions ranging from 110 of 1 per cent to ½ of 1 per cent on exchange transactions. The official buying rate applies to the proceeds of exports of karakul (which is exported only to the convertible currency area), wool (except cashmere wool exported to the convertible currency area), cotton, and natural gas (which is exported only to the U.S.S.R.); to 30 per cent of the foreign currency salaries of foreign employees of the Government, government enterprises, and domestic companies; and to purchases of bilateral agreement currencies for maintenance in Afghanistan of embassies and state trading organizations by the respective bilateral partner countries. Exchange subsidies are applied to the official buying rate as follows: Af 3.12 per US$1 for export proceeds from cotton when payment is received under a bilateral payments agreement; Af 10 per US$1 for proceeds in convertible currencies from exports of wool; Af 19 per US$1 for proceeds in convertible currencies from exports of cotton; and Af 20 per US$1 for proceeds from exports of karakul. The official selling rate applies to certain foreign exchange payments by the Central Government. All other transactions take place at free market rates through either the banks or the bazaar; proceeds from the export of walnuts received over bilateral payments accounts are subject to an exchange tax of 9.5 per cent. The Afghanistan Bank maintains its operational free market rate for the U.S. dollar within Af 2 per US$1 either side of the free market rate quoted in the bazaar. On December 31, 1969, the free market rate of the Afghanistan Bank was Af 75.75 buying, and Af 76.25 selling, per US$1, and the free market rate in the bazaar was Af 78.08 buying, and Af 78.58 selling, per US$1. The Afghanistan Bank also posts free market rates for deutsche mark, French francs, pounds sterling, and Swiss francs by applying their par values to the current free market rate for the U.S. dollar; free market rates for the Indian rupee and Pakistan rupee that are determined by demand and supply for the currencies are also quoted by the Bank. The Afghanistan Bank from time to time sells in the free market bilateral agreement dollars and bilateral agreement sterling resulting largely from loans for consumer goods under certain of Afghanistan’s bilateral payments agreements; most of this exchange is purchased by government commercial and industrial enterprises for their imports from the countries concerned. The selling rate for U.S.S.R. agreement dollars was Af 55.50 per US$1 on December 31, 1969, and that for mainland China agreement sterling was Af 176.20 per £ stg. 1.

Administration of Control

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

Prescription of Currency

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

Imports and Import Payments

Imports are not subject to license. Imports of a few items (e.g., some drugs, liquor, arms, and ammunition) are prohibited on public policy grounds or for security reasons; in some instances, however, special permission to import these goods may be granted. The importation of certain other goods (e.g., a few textiles, agricultural and food products, and selected nonessential consumer goods) also is prohibited. There are no quantitative restrictions on other imports. Most bilateral agreements, however, specify quotas (and sometimes prices) for commodities to be traded, and the Government facilitates the fulfillment of the commitments undertaken in the agreements. On the whole, trade with these countries is carried out on a compensation basis and usually both imports and exports are arranged by the same trader; imports against exports of cotton and wool are carried out by the Government or government agencies, or the proceeds of exports are allocated for the Government’s external debt servicing.

Exchange is provided at the official rate for imports by the Government. Payments for imports through the banking system may be made only under letters of credit, against which a deposit of 100 per cent of the value of the imports in afghanis calculated at the prevailing free market rate, or in foreign exchange, is required upon establishment of the letter of credit. Such deposits, if made at a commercial bank, may be used as collateral for loans. The Afghanistan Bank is authorized to refuse to sell foreign exchange for the importation of a group of consumer goods that are regarded as nonessential. However, exchange for these items may be purchased either from the commercial banks or in the bazaar.

Payments for Invisibles

Central government payments for foreign debt service and other invisibles are made at the official rate. All other payments are settled at free market rates. Travelers leaving Afghanistan may take out not more than Af 500 in Afghan banknotes.

Exports and Export Proceeds

Exports are not subject to license. Exports of a few commodities (e.g., cottonseed, opium, museum pieces) are prohibited. Otherwise, control is exercised only over exports to bilateral agreement countries (see section on Imports and Import Payments, above). However, exporters of cotton are required to sell at least 20 per cent of their total exports to countries from which payments will be received in convertible currencies. Karakul is not exported to payments agreement countries.

Exchange receipts from exports of karakul, wool, and cotton must be surrendered at the official rate, irrespective of destination. The net proceeds of all exports other than karakul, wool, and cotton, irrespective of the currency in which they accrue, must either be sold at free market rates to a domestic bank or be used by the exporter or a third party to pay for imports.

Export receipts from cotton are subject to an exchange subsidy at the rate of Af 19 per US$1 for convertible currency receipts and Af 3.12 per US$1 for exports settled under bilateral payments agreements. Convertible currency receipts from wool exports are paid an exchange subsidy at the rate of Af 10 per US$1 and those from karakul exports are paid an exchange subsidy of Af 20 per US$1.

Proceeds from the export of walnuts received over bilateral payments accounts are subject to an exchange tax of 9.5 per cent.

Proceeds from Invisibles

Thirty per cent of the foreign currency salaries of foreign employees of the Afghan public and private sectors must be converted into afghanis at the official rate, but the remaining 70 per cent may be remitted abroad or exchanged at the free market rate. Except in the case of India, receipts over bilateral payments agreement accounts from the embassies and state trading organizations of the countries concerned for their local expenses in Afghanistan are converted at the official rate. All other receipts from invisibles are sold at free market rates through either the banks or the bazaar. Travelers entering Afghanistan may bring in Afghan banknotes not exceeding Af 500.

Capital

Foreign investment in Afghanistan requires prior approval and is administered, as is domestic private investment, by an Investment Committee composed of five cabinet ministers. The Foreign and Domestic Private Investment Law (February 10, 1967) provides for a number of benefits, which include (1) income tax exemption for five years, beginning from the date of the first sales of products resulting from the new investment; (2) exemption from import duties on essential imports for five consecutive years after approval of the investment; (3) exemption from taxes on dividends for five years after the first distribution of dividends, but not more than eight years after the approval of the investment; (4) exemption from personal income tax and corporate tax on interest on foreign loans which constitute part of an approved investment; (5) exemption from export duties for ten years after the approval of the investment; and (6) mandatory purchases by government agencies and departments of their requirements from enterprises established under the law where such products are substantially competitive with imports in price and quality. The law also establishes that an investment approved by the Investment Committee shall require no further license to operate in Afghanistan.

Principal and interest installments on loans from abroad may be remitted freely to the extent of the legal obligation involved. Profits may be repatriated freely, and capital may be repatriated after five years at an annual rate not exceeding 25 per cent of the total registered capital. All the foregoing transfers are made through the free market. Joint ventures of foreign and Afghan capital are encouraged, but no specific percentages of domestic participation are prescribed and 100 per cent foreign-owned investments are not precluded by law.

Gold

Residents may freely purchase, hold, sell, and import gold in any form. Exports of gold and silver in any form other than jewelry require licenses issued by the Council of Ministers; such licenses are not normally granted except for exports by or on behalf of the monetary authorities and industrial users. Commercial exports of gold and silver jewelry and of other articles containing minor quantities of gold or silver do not require a license and may be made freely. Customs duties are payable on imports and exports of silver in any form, unless the import or export is made by or on behalf of the monetary authorities. The import duty on gold is 1 per cent.

Changes during 1969

March 21. The exchange subsidy for export receipts from karakul was raised from Af 10 per US$1 to Af 20, raising the effective export rate to Af 65 per US$1.

June 11. Export procedures and export duty requirements were liberalized for exports by travelers of specified domestic products.

August 22. A monopoly duty of Af 3 a kilogram was introduced on imports of tea.

September 9. The effective level of import duties was raised to bring in about Af 120 million a year in additional revenue.

September 9. Certain commodities whose import previously was prohibited could be imported freely.

Algeria

Exchange Rate System

No par value for the currency of Algeria has been established with the Fund. The official unit of currency is the Algerian Dinar. The exchange rate for the French franc is a fixed rate of DA 1 = F 1.12499, giving the relationship DA 4.93706 = US$1. The Central Bank of Algeria deals in French francs and the other French Franc Area currencies at fixed rates, free of commissions or charges. Buying and selling rates for specified currencies of countries outside the French Franc Area1 are established by the Central Bank of Algeria on the basis of the daily rates quoted on the Paris exchange market for these currencies. The exchange rate applicable to “agreement dollars” is the average rate for the U.S. dollar in the Paris market on the day preceding the entry on the clearing account. The predevaluation rate for the French franc and the prerevaluation rate for the deutsche mark are applied to certain payments or receipts in the respective currencies. The Central Bank charges on its transactions in non-Franc Area currencies a commission ranging from 0.2 per mill to 1.5 per mill, depending on the nature of the transaction, and a tax of 6 per cent on the amount of the commission. The foreign exchange reserves are centralized in the Central Bank; authorized banks must clear their foreign currency position with their correspondents in the French Franc Area at the end of each day but they are under certain conditions permitted to hold outside the French Franc Area cover for documentary credits. There are no forward exchange facilities.

Administration of Control

The Ministry of Finance and the Central Bank have general jurisdiction over exchange control. The Central Bank of Algeria assists in the formulation of the exchange legislation and regulations and is responsible for their execution and for their application by the authorized banks. In addition, three commercial banks and the Postal Administration have been given authority to carry out some of the detail of exchange control. Import and export licenses for all commodities are issued on the advice of the competent ministry by the Ministry of Commerce and require the visa of the Central Bank. The Office National de Commercialisation (ONACO), the Office Algérien Interprofessionnel de Céréales (OAIC), the Office National de Commercialisation des Produits Viti-vinicoles (ONCV), the Société Nationale des Tabacs et Allumettes (SNTA), the Société Nationale d’Edition et de Diffusion (SNED), the Société Nationale de Sidérurgie (SNS), the Société Nationale de Constructions Mécaniques (Sonacome), certain similar organizations, the Service des Alcools, and certain professional associations (groupements professionnels) have a monopoly over the import of certain commodities. The Société Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures (Sonatrach) has a monopoly over imports and domestic sales of petroleum and petroleum products. Investment of foreign capital in excess of DA 500,000 in Algeria requires approval by a National Investment Committee in order to obtain the benefits of the Investment Code. All foreign borrowing requires the prior approval of the Minister of Finance.

Prescription of Currency

Algeria has traditional ties with the French Franc Area, but the Central Bank of Algeria does not maintain an Operations Account with the French Treasury and Algeria applies exchange controls to transactions with the Area.2 Settlements with other countries in the French Franc Area are generally made in French francs. Settlements with countries with which Algeria has concluded bilateral payments agreements are made through special accounts under the terms of the agreements. Some of these accounts are denominated in Algerian dinars and other in U.S. dollars of account; under the agreement with Mali, the currencies of the two partner countries are used. Algeria has signed payments agreements with Albania, Bulgaria, mainland China, Cuba, Czechoslovakia, Guinea, Hungary, North Korea, Mali, Poland, Rumania, the U.S.S.R., the United Arab Republic, and Yugoslavia. Settlements with other countries are usually made through Paris in French francs, and sometimes in the currency of the country concerned.

Nonresident Accounts

For residents of countries outside the French Franc Area, the regulations pertaining to nonresident accounts are similar to those applied until early 1967 in France; most of these accounts are Foreign Accounts in Convertible Dinars or Internal Nonresident Accounts. For residents of other French Franc Area countries, there are three types of accounts in Algerian dinars: Individual Suspense Accounts, Franc Area Accounts, and Final Departure Accounts. Except as described below, all operations through these accounts are subject to authorization.

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

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

Final Departure Accounts may be opened, without prior authorization, in the name of any person residing in Algeria, but not of Algerian nationality, who intends to leave Algeria for another country in the French Franc Area. These accounts may be credited freely with an amount equivalent to the holdings at October 20, 1963 in the account of the person concerned; with proceeds from sales of real estate of the account holder, provided that the sales are made through the intermediary of a notary public; and with any other payments, up to DA 1,000. The Central Bank may authorize the crediting of other payments. These accounts may be debited freely for all payments in Algeria on behalf of the account holder; outward transfers require individual approval.

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

Imports and Import Payments

Imports from Israel, Portugal, Rhodesia, and South Africa are prohibited. Certain imports are prohibited regardless of origin. All imports from bilateral payments agreement countries require a license. Imports from all other countries of a large number of commodities, corresponding to about two thirds of total imports, are subject to either quantitative restriction or a special import procedure. Imports of firearms, ammunition, and explosives require an import license from the Ministry of the Interior (for civil and military firearms) or the Ministry of National Defense (for munitions and explosives). All other imports from countries with which Algeria does not maintain bilateral payments agreements may be made freely; some liberalized imports, however, require the prior visa of one of the import monopolies.

The Government has the monopoly over the importation of many commodities through ONACO, OAIC, SNTA, ONCV, SNED, SNS, Sonatrach, Sonacome, and certain similar organizations, while some other items may as a rule be imported only by professional associations (groupement professionnel des produits laitiers or GAIRLAC, groupement professionnel des bois or BOIMEX, groupement professionel de la chaussure or GIAC, groupement professionnel pour les textiles or GITEXAL, groupement professionnel des cuirs et peaux or GICP, and groupement professionnel d’achat de l’industrie textile or GADIT).

Imports that are not liberalized are in principle licensed in accordance with an annual import program which is based on global quotas.

Payments for liberalized imports, unless originating in a payments agreement country, do not require approval by the Central Bank. Liberalized imports not exceeding DA 10,000 in value require only the submission of an invoice to the customs when imported from a country with which no payments agreement is in force, but must subsequently be domiciled (registered) with an authorized bank. Liberalized imports exceeding DA 10,000 and all nonliberalized imports must prior to the transaction be domiciled with an authorized bank, to which the necessary import documents must be presented and through which all payments related to the transaction must be made. All imports for which payment has to be made before the goods reach Algeria must be domiciled with an authorized bank, and, unless the Central Bank approves otherwise, advance payments may not exceed DA 5,000 or 20 per cent of the import value, whichever is smaller. Payments for liberalized or nonliberalized imports may be approved by, and settled through, the Postal Administration up to an import value of DA 5,000. Import licenses require the visa of the Central Bank.

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

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

Imports from the French Franc Area are regulated by Notice ZF2 of October 23, 1963, which sets out a procedure similar to the procedure applied to imports from other countries.

Goods normally subject to import license and quota restriction may be freely imported in small parcels, provided that the value of a shipment does not exceed DA 60 and the same addressee does not receive more than one parcel a day and that the parcels he receives during the year do not exceed DA 240.

Payments for Invisibles

All payments for invisibles to all countries require the approval of the Central Bank. However, when supporting documents are presented, approval may be granted by authorized banks, or sometimes by the post office, either freely or up to specified limits for certain payments such as (1) those relating to approved trade transactions and maritime contracts, (2) travel expenses, (3) transfers of salaries and wages, (4) educational expenses, (5) advertising expenses, and (6) payments relating to government transactions with foreign companies. For payments for which the approval authority has not been delegated, the granting of exchange must be authorized by the Central Bank. All insurance must be concluded with Algerian companies.

Residents of other French Franc Area countries working in Algeria under the program for technical cooperation may transfer abroad a certain percentage of their net salaries: 50 per cent for single persons or married persons having their families in Algeria; 70 per cent for persons having their families abroad; and 100 per cent for employees who spend their vacations abroad (the transfer being limited to the duration of their absence from Algeria). For other workers from French Franc Area countries who have contracts with employers and hold the necessary employment documents, the amounts that may be transferred are 30 per cent, 50 per cent, and 100 per cent, respectively, for the groups enumerated above. Residents of other countries who are employed in Algeria are permitted to transfer abroad 25, 45, and 100 per cent, respectively. The payments must be transferred once a month on the basis of the remuneration for the previous month. Persons making such transfers of savings are not entitled to allocations for other personal transfers (e.g., for educational purposes).

For residents traveling by air or sea to other countries, including the French Franc Area, the foreign exchange allocation is equivalent to DA 700 a person a year (DA 350 for children under 15) and is issued on presentation of a valid passport and travel documents; for travel by means other than air or sea, the allocation is DA 50 a person a year for adults and DA 25 for children under 15. Furthermore, residents traveling by air or sea to a country within the French Franc Area are entitled to an allocation, in a convertible currency of a country of the French Franc Area, equivalent to DA 500 a person a trip, on presentation of travel documents; children under 15 are entitled to DA 250. These allocations for the French Franc Area are not applicable to persons living in border areas. Foreign exchange for business travel is subject to authorization by the Central Bank of Algeria. Funds in EFAC accounts (see section on Exports and Export Proceeds, below) may be used for business travel.

Pilgrims traveling to Saudi Arabia can obtain Saudi Arabian riyals up to the equivalent of DA 1,500 a person; the allocation can be taken up in the form of a check by those traveling by air or sea, and in banknotes by those traveling overland. Travelers may take out Algerian dinar banknotes up to DA 50 a person. Nonresident travelers may also re-export any foreign currency declared upon entry.

Exports and Export Proceeds

All exports to Israel, Portugal, Rhodesia, and South Africa are prohibited. Certain exports, including used equipment and machinery, livestock, firearms, ammunition, explosives, and certain radio equipment are prohibited regardless of destination. Some exports to the French Franc Area, all exports to countries outside the French Franc Area that are not included in the free export list, and all exports to countries with which Algeria has bilateral payments agreements require licenses. The export of specified products is reserved for certain state trading organizations.

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

The proceeds of exports, including those to the French Franc Area, may be the object of a 90-day credit. Foreign exchange proceeds may be used to make authorized payments abroad within three months from the date of their receipt. Petroleum companies holding mineral rights must repatriate to Algeria at least between 50 and 75 per cent of the proceeds from their exports of hydrocarbons. Certain percentages of the proceeds from exports may be kept in special EFAC (Exportations-Frais Accessoires) accounts. Exporters to the French Franc Area may retain 5 per cent of their export proceeds (up to DA 20,000 per export transaction), while those to the convertibility area (i.e., all other countries except those with which payments agreements are in force) may retain 12 per cent if they export to the United States or Canada and 8 per cent in all other instances. EFAC accounts are denominated in dinars and are held with the bank at which the export is registered. Certain payments may be made from these accounts without prior approval by the Central Bank. All other export proceeds must be surrendered.

Proceeds from Invisibles

Proceeds from invisibles must be repatriated and surrendered.

There are no restrictions on the import of foreign banknotes, coins (except gold coins), checks, and letters of credit, but foreigners must declare such holdings when they enter Algeria. Resident travelers may reimport Algerian dinar banknotes up to DA 50 a person. Nonresident travelers are not permitted to bring in Algerian banknotes.

Capital

Residents are obliged to repatriate and surrender capital assets (or the sales proceeds thereof) held or acquired outside Algeria. Capital transfers to any destination are subject to individual license; residents are not normally permitted to acquire capital assets outside Algeria. All borrowing abroad or from nonresidents is subject to prior approval by the Minister of Finance.

A new Investment Code, superseding that of 1963, was promulgated by Decree-Law No. 66-284 of September 15, 1966. It provides for state guarantees in respect of foreign investments of more than DA 500,000 in the industrial and tourist sectors. The new code provides for a retransfer guarantee in respect of the sale or liquidation proceeds of invested foreign capital, and establishes that profit remittances on such investments will be permitted up to 15 per cent annually of the foreign capital originally invested. Tax facilities may also be granted, and investments of more than DA 5 million may be given exclusive rights in a specified geographic area and may be accorded tariff protection.

Gold

Residents may purchase, hold, and sell gold coins in Algeria for numismatic purposes. Imports and exports of gold in any form require licenses issued by the Central Bank; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users, and licenses for imports for industrial use have not been issued for some time. Commercial imports of jewelry and of other articles containing gold are severely restricted.3

Changes during 1969

During the period under review a number of imports were included in the list of those subject to either quantitative restrictions or a special import procedure. A new type of import program based on global quotas was substituted for the system under which the program had comprised quotas for the French Franc Area, each payments agreement country, and the convertibility area (i.e., all other countries combined).

January 9. The travel allocation for pilgrims traveling to Saudi Arabia was increased from DA 1,200 a person to DA 1,500 a person.

February 25. Certain exemptions were granted from the monopoly of the SNS over imports of iron and steel products.

March 29. The export of fish and crustaceans was made subject to individual licensing by the Office of the Merchant Marine and Fishing.

April 3. Ordinance No. 69-18 created the Office des fruits et légumes d’Algérie (OFLA).

April 4. The import of medical and pharmaceutical products was reserved for the Pharmacie Centrale Algérienne (PCA).

April 21. The import of mechanical products was by Ordinance No. 69-23 reserved for the Société Nationale de Constructions Mécaniques.

May 22. The import of cinematographic films for commercial purposes was reserved for the Office National du Commerce et de l’Industrie Cinématographique (ONCIC).

June 3. The import of paper, cardboard, and office and school supplies was reserved for the Société Nationale d’Edition et de Diffusion. Certain public sector agencies and enterprises were exempt from the monopoly.

June 17. The import of construction materials was reserved for the Société Nationale de Matériaux de Construction (SNMC).

June 17. The import and export of materials used in the manufacture of paper were reserved for the Société Nationale des Industries de la Cellulose (SONIC).

June 19. All lighterage activities, the management of marine transportation, and the chartering of ships were reserved for the Compagnie Nationale Algérienne de Navigation (CNAN).

August 11. The fixed exchange rate for the French franc was changed from DA 1 = F 1 to DA 1 = F 1.12499.

August 11. Ordinance No. 69-66 of August 18, 1969 went into effect. Any physical or juridical person realizing, as a result of modifications in monetary parities, a profit on debts or claims created prior to such modifications, was required to pay these to the Treasury.

September 1. Instruction No. 17 prohibited authorized banks from holding export proceeds outside the French Franc Area for the account of exporters.

October 2. Ordinance No. 69-80 gave OFLA a monopoly over domestic and foreign sales of dates.

October 15. Ordinance No. 69-83 vested the monopoly over imports of all alcoholic beverages in the ONVC.

December 16. Ordinance No. 69-99 established the National Algerian Office for Oils and Fats (Office national algérien des produits oléicoles).

December 31. The Finance Law, Law No. 69-107, was published. It provided that all borrowing abroad or from nonresidents required prior approval by the Minister of Finance.

Argentina

Exchange Rate System

On January 9, 1957, a par value for the Argentine Peso was established by Argentina with the Fund. However, exchange transactions no longer take place at rates based on that par value.

All exchange transactions take place in the exchange market, in which the buying and selling rate on December 31, 1969 was M$N 350 per US$1.1 The Central Bank of Argentina deals with the commercial banks at M$N 350 per US$1, buying and selling. Within the limits of Buenos Aires City, exchange transactions between banks and individuals are subject to a stamp tax of 310 of 1 per cent.2

Forward exchange transactions may be concluded between individuals and authorized banks or among authorized banks at the fixed exchange rate of M$N 350 per US$1, subject to freely agreed premiums or discounts. Forward exchange purchases by the public are restricted to those concluded as part of a swap transaction, or to cover import payments made under documentary credit, bank collection, or bank guarantee. Swap operations designed to finance traditional exports may be concluded direct by authorized institutions. Other operations, such as the financing of non-traditional exports, and financial loans to industrial or commercial enterprises must be submitted to the Central Bank for prior consideration. Forward exchange purchases covering import payments require a 40 per cent deposit in local currency for a period of 180 days; this deposit may not be financed by local banks. Forward exchange contracts connected with imports may be extended for a period of up to 180 days from the date of their original maturity; those corresponding to exports may be extended only once, for a period of 30 days (or, where shipment is unavoidably delayed, for the period of the delay). Such contracts may be settled through clearing in the exchange market. The Central Bank intervenes in the forward exchange market as a seller of U.S. dollars at a premium which at the end of 1969 was 8 per cent per annum.

Argentina accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement with effect from May 14, 1968.

Administration of Control

All exchange transactions may be carried out through banks and institutions authorized expressly for this purpose; those of a financial character, including purchases and sales of travel exchange, may be made by exchange houses, in any amount. Exchange agencies may purchase banknotes and travelers checks only; they may sell these only to banks and authorized institutions.

Prescription of Currency

Transactions with other countries must be settled in convertible currencies. Virtually all payments between Argentina and Bolivia, Chile, Colombia, Mexico, Paraguay, and Peru are made through accounts maintained with each other by the Central Bank of Argentina and the central banks concerned, within the framework of the LAFTA multilateral clearing system.

Nonresident Accounts

Authorized banks may open accounts in pesos and in foreign exchange in the name of any nonresident. Balances on nonresident accounts may be used freely for any purpose, in Argentina or abroad. Transfers between accounts may be effected freely.

Imports and Import Payments

Imports are free of import and exchange licensing; exchange to pay for them may be purchased in the exchange market. Goods imported by official agencies require approval by the Central Bank and the Ministry of Economy and Labor if payment is extended over a period of more than 180 days. Furthermore, all public sector imports are screened by a special body, the Asesoría de Importaciones del Sector Oficial. Imports of some vehicles, tractors, and engines are temporarily prohibited. All imports are subject to a tax of 4 per cent on the freight.

Import taxes include the following: a consular fee of 1½ per cent payable in foreign currency on most import invoices; statistical taxes of 1½ per cent or 310 of 1 per cent applicable to all imports; taxes ranging from 4 per cent to 10 per cent on imports of paper products, certain types of timber and timber products, and forest products; and taxes ranging from M$N 2 to M$N 20 a kilogram on imports of iron and steel for the Steel Program. Import duties range from 5 per cent to 140 per cent. Many types of machinery, however, are exempt.

An advance import deposit of 40 per cent of the c. & f. value is required on many goods from all sources except when imported by the public sector, by some firms being established in the Province of Tucumán or by foreign experts and technicians up to certain amounts in specified fields; goods imported from LAFTA countries are exempt if the goods are included in Argentina’s concession lists (including the special lists for Bolivia, Ecuador, Paraguay, and Uruguay). The commodities that do not require an advance deposit include most raw materials and fuels, many capital goods, and many semimanufactured goods for the production of nontraditional exports. The deposit is payable in pesos and calculated at the current exchange rate in the exchange market. It must be lodged before any of the following actions can be undertaken: opening a letter of credit; withdrawing shipping documents from the intermediary bank; purchasing foward exchange; or clearing goods through customs. The deposit is automatically refunded after 180 days.

Payments for specified capital goods imported by private firms (with the exception mainly of those in lists applicable to LAFTA countries) when valued at over US$20,000 and purchased with foreign or domestic credit, must be made in installments over a period ranging from at least two years to at least five years after the date of shipment, depending on the total value of the goods. Payment in cash at the time of delivery is permitted, however, if the importer uses exclusively his own funds. The prior approval of the Central Bank is required when the terms of payment are not in accordance with the prescribed minimum terms or when the amount payable exceeds the equivalent of US$1 million. There are certain special arrangements relating to exemption from advance deposits for imports by automobile manufacturers; nevertheless, payments by the automotive industry may be made without any restrictions. Advance payments for imports other than capital goods are only permitted in exceptional circumstances.

Payments for Invisibles

The banks and institutions authorized to deal in foreign exchange are permitted to sell exchange for all categories of invisibles without limitation or documentary evidence.

Travelers may take out any amount in domestic or foreign banknotes and coins, except gold coins.

Exports and Export Proceeds

Exports are generally free of direct controls but minimum export prices are established for many agricultural and livestock exports as a basis for the payment of duties and the surrender of export proceeds. Exporters of most traditional commodities are required to repatriate and sell in the exchange market the foreign exchange proceeds of their exports within 10 working days after shipment. Proceeds from nontraditional exports may be surrendered after the due date of payment, which is freely negotiated between the exporter and the buyer. The proceeds of exports to Chile (except those of nontraditional exports) must be collected within 90 days of the bill of lading and surrendered within 10 working days after the due date.

Some products are subject to export taxes (derechos de exportación) calculated on the basis of the f.o.b. sales value or on the index values fixed by the State Department of Commerce upon the proposal of the Advisory Commission on Export Values, on which the National Grain Board, the National Meat Board, the Secretariats of Agriculture, Commerce, and Finance, and the Central Bank are represented. The principal export taxes are (1) 12 per cent for frozen and chilled beef and offal; (2) 10-15 per cent for live animals, mutton, and greasy wool; (3)8 per cent for corn, sunflower seed oil and processed linseed oil, and tobacco; and (4) 6 per cent for wheat. The tax must be paid before shipment of the merchandise or within the following 30 days when there is a bank aval that guarantees its payment.

All exports are subject to a 2 per cent tax on the freight. Certain other taxes on specific exports are also levied. These include a 1.5 per cent tax, the proceeds of which are destined for the National Institute for Agricultural Technology, on exports of agricultural and livestock products.

Import duties and any other charges paid on imports of raw materials or other products incorporated in exported articles are returned to exporters. Exporters of specified nontraditional manufactured or other goods receive a tax rebate of 12 per cent of the f.o.b. value as a reimbursement of internal taxes on the materials used, and a rebate of 10 per cent on income tax.

The Central Bank has established a system of special financing, to be granted to Argentine exporters through banks, with a view to promoting certain exports of goods and services. This system will provide financing for 80-90 per cent of their value, depending on the nature of the commodity or service, with terms of up to eight and one half years for capital goods, three years for durable and semidurable goods, and up to one and one half years for other goods. The same terms apply to the freight and insurance premiums involved, provided that Argentine means and services are used. The National Export Credit Insurance Commission provides credit insurance for exports of capital goods and consumer durable goods.

Proceeds from Invisibles

Exchange derived from invisibles may be used freely. Travelers may bring in freely any amount in domestic or foreign banknotes and coins.

Capital

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

Authorized banks may freely export resident-owned and nonresident-owned securities, whether domestic or foreign.

Gold

Residents may hold gold coins and gold in any other form in Argentina or abroad. They may sell gold in coins and bars in Argentina to institutions and houses authorized to deal in foreign exchange, but the regulations permitting nonbank residents to buy gold coins and bars from these firms are in suspense. Imports of gold coins are unrestricted and free of duty. Imports of gold bars are subject to the exchange regulations applicable to imports of other commodities; imports by industrial users are subject to a statistical duty of 310 of 1 per cent, and those by others are subject in addition to sales tax. Exports of gold may be carried out by institutions and houses authorized to engage in exchange transactions; they require the prior approval of the Central Bank and the proceeds must be received in convertible currencies.

Changes during 1969

January 15. A new banking law, Law No. 18061, was enacted.

January 21. Circular R.C. No. 370 raised, from US$10,000 to US$20,000, the value beyond which imports of capital goods are subject to special financing requirements.

January 21. Decree No. 194/69 provided exemptions from import duties and advance import deposit requirements to foreign experts and technicians in the field of agriculture, industry, mining, or fishing for imports of professional equipment and materials, provided that the value of such imports did not exceed M$N 18 million in each individual case and that the foreign experts and technicians took up residence in Argentina for a minimum period of three years.

January 30. The export tax on linseed oil was reduced from 25 per cent to 12 per cent, and a 10 per cent sales tax previously levied on linseed oil exports was eliminated (Decree No. 332/69). The tax on exports of sorghum, buckwheat, and millet was reduced from 18 per cent to 8 per cent (Decree No. 333/69).

January 31. Circular R.C. No. 371 revised and consolidated the list of commodities exempt from the 40 per cent advance import deposit requirement. It also provided for the automatic release of deposits after 180 days.

January 31. Decrees Nos. 400/69 and 401/69 eliminated withholding taxes on exports of medicinal plants, insecticides, and manufactured oils, other than those for industrial use.

March 12. Decree No. 893/69 provided that exports of beef would no longer be subject to guarantees submitted to the National Meat Board.

March 13. A new body, the Asesoría de Importaciones del Sector Oficial, was created by Decision No. 29/69 of the Ministry of Economy and Labor. It was charged with examining all import applications of public sector agencies.

March 14. Decree No. 1060/69 subjected imports of certain mineral and chemical fertilizers to duties of 20 per cent, and of certain other fertilizers to 40 per cent. Previously, fertilizers had been free of import duties.

March 28. Decree No. 662/69 supplemented Decree No. 1756/68 of April 5, 1968 and established a preferential 20 per cent rate of import duty on imports of capital goods designed to complete installations and modernize existing facilities in the following industries: lumber, plastics, rubber, glass containers, beer, machinery, electrical appliances and components, and paper (except paper pulp). Spare parts could be included up to 5 per cent of the total import value.

April 15. Law No. 18188 provided that the Central Bank would put into circulation a new currency unit, “Peso,” equal to 100 old pesos, on January 1, 1970.

April 21. Law No. 18189 and Decree No. 1871/69 implemented the provisions of Law No. 17267 and Decree No. 3040/67 of May 1967 and provided for the establishment of a National Export Credit Insurance Commission. The Commission would provide credit insurance for exports of capital goods and consumer durable goods.

April 23. Decree No. 1928 abolished the export tax on linen yarn, casein, and ramie and reduced that on linen fiber and ramie fiber from 12 per cent to 6 per cent.

May 12. Decree No. 2206 reimposed the sales tax on exports of linseed oil at a rate of 8 per cent.

May 15. Circular R.C. No. 376 added certain items, including various chemicals, electric motors, generators, and transformers, to those listed in Circular R.C. No. 371 of January 31, 1969 as exempt from the advance import deposit requirement.

June 15. Law No. 18250 provided that all imports of government, provincial, and official entities, those imported with government financing or government bank guarantees, and imports subject to tax benefits, must be shipped in Argentine-flag vessels. Argentine ships must also be granted priority in transporting exports of government enterprises and the Government would determine the inclusion of preferred goods exported by the private sector. Shipments of goods to and from countries with which Argentina maintains reciprocal agreements providing that 50 per cent of all goods be shipped in Argentine vessels were exempt from the provisions of this law.

August 7. Decree No. 4271/69 established new guidelines for the promotion of the petrochemical industry and provided, inter alia, for the reduction of customs duties on imports of various semimanufactured petrochemicals over a seven-year period, from a range of 35-80 per cent to a range of 10-20 per cent by the beginning of 1976. Imports of specified petrochemicals were also exempted from the 40 per cent advance import deposit requirement.

August 25. Decree No. 4764/69 exempted an additional number of items, including glucose, dextrin, and starches, from the advance import deposit requirement and temporarily reduced the import duties thereon to 5 per cent.

September 3. Circular No. B689/RC378 was issued concerning special facilities for the financing of exports subject to export promotion measures.

October 15. The Central Bank’s intervention rate in the forward market for U.S. dollars was changed; the limit on the discount of the peso in that market was moved from 4 per cent to 8 per cent per annum. (This limit had previously been changed from 6 per cent to 4 per cent per annum on May 15.)

October 15. Decree No. 6583 lowered the export tax on raw wool from 12 per cent to 10 per cent and that on washed wool and wool waste from 6 per cent to 4 per cent.

October 30. Circular No. B697/RC 379 reminded banks that the general permission for swap transactions between authorized institutions and their customers was restricted to the cover for financing needs in connection with exports of traditional export products, and that all other swap transactions required the prior approval of the Central Bank.

October 31. Circular No. B698 of the Central Bank contained new guidelines for bank credit. These were intended to restrict, inter alia, the financing of excessive stocks of domestic and imported goods and of foreign firms’ profit remittances, and the substitution of domestic bank credit for foreign financing.

December 12. Decree No. 7833 reduced export taxes on certain types of beef from 15 per cent to 12 per cent and from 10 per cent to 8 per cent.

December 31. Law No. 18526 provided that with effect from February 1, 1970 the existing tax on purchases and sales of foreign exchange would be applicable throughout the country.

Australia1

Exchange Rate System

The par value is 0.995310 gram of fine gold per Australian Dollar or $A 1 = US$1.12. Official rates are fixed for spot transactions in sterling: $A 2.1429 buying, and $ A 2.1514 selling, per £, stg. 1. The rates for spot transactions in other currencies quoted by the authorized banks are based on the closing buying and selling rates of the previous day in London and New York. The rate for the U.S. dollar on December 31, 1969 was US$1.213 buying, and US$1.1147 selling, per $A 1. Banks are permitted to extend forward cover up to six months in respect of most exchange risks arising out of trade transactions and invisible transactions of a noncapital nature.

Australia accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from July 1, 1965.

Administration of Control

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

Prescription of Currency

Australia is a member of the Sterling Area, and settlements between residents of Australia and residents of other Sterling Area countries may be made in sterling, in another Sterling Area currency, or in Australian currency through the account of a bank domiciled in any other country in the Sterling Area with a bank in Australia. Payments for imports from countries outside the Sterling Area may be made by crediting sterling to an External Account in the United Kingdom, in Australian currency through the account of a bank in the country or area of origin of the goods with a bank in Australia, or in any non-Sterling Area currency. Proceeds from exports to countries outside the Sterling Area may be accepted in sterling from an External Account in the United Kingdom, in Australian currency from an appropriate nonresident account, or in any non-Sterling Area 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 of the Sterling Area. Under current policy, the balance on an account held by a nonresident of the Sterling Area may be withdrawn in convertible currency. There are no blocked accounts containing funds ineligible for remittance overseas.

Imports and Import Payments

With the few exceptions mentioned below, goods may be imported freely without import licenses, and no restrictions are imposed on payments for imports, provided that the prescription of currency requirements are observed. Import licenses are required for unwrought, waste, and scrap aluminum and aluminum alloy; used equipment (and parts therefor) for earth-moving, excavating, and handling of materials; used or secondhand four-wheel drive vehicles (excluding public-service type passenger vehicles); and specified knitted garments. The licensing of the knitted goods is a temporary measure applied while the Tariff Board conducts inquiries as to the needs of local industries affected. In accordance with Resolutions of December 16, 1966 and May 29, 1968 of the UN Security Council, mandatory sanctions have been applied against Rhodesia. Import controls are maintained on certain goods, irrespective of origin, for reasons of health, morals, or security; import controls are maintained over certain other goods where it is considered necessary to enforce quality standards.

Payments for Invisibles

All payments for invisibles are subject to exchange control, but, with the exception of transfers to specified bodies in Viet-Nam and remittances to Rhodesia (except in certain circumstances), they are not restricted; the control operates primarily to prevent unauthorized capital transfers, although there are some restrictions maintained for security reasons. There is a basic exchange allowance of $A 4,000 in any 12 months for any kind of travel in any country; additional amounts may be obtained on application, provided that the exchange control is satisfied that the exchange is to be used for bona fide travel expenses and not for an unauthorized capital transfer. Limits are placed on remittances for family maintenance and gifts; however, applications for such transfers are treated liberally, and amounts beyond the normal limit for family maintenance are approved on application. Travelers who are not residents of Australia may take out any amount in foreign or domestic banknotes within 6 months of entry, provided that they brought the notes into Australia. Other travelers may take out up to $A 100 in Australian currency, without special authorization; of this amount, up to $A 4 may be coins.

Exports and Export Proceeds

The export of all commodities, unless specifically exempted, requires an export license in terms of the Banking (Foreign Exchange) Regulations, to ensure that the full proceeds are received in a currency and within a period approved by the Reserve Bank. To assist supervision, there is a further condition that all shipping documents, bills of lading, etc., must be drawn to the order of and delivered to the Reserve Bank or a trading bank acting as its agent. The Customs (Prohibited Exports) Regulations prohibit the export of specified goods either absolutely or subject to prescribed conditions. The purpose of the controls, inter alia, is to ensure adequate supplies to meet Australia’s domestic requirements (e.g., of copper and copper scrap and nickel-bearing scrap) and to assist the orderly marketing in respect of primary products. Exports to Rhodesia are prohibited in accordance with the UN Resolutions. To avoid the imposition of import quotas on beef and mutton by the United States, restraints are applied to exports of beef and mutton to that market.

Proceeds from Invisibles

Proceeds from invisibles received in Sterling Area currencies may be disposed of freely. Proceeds from invisibles in other currencies do not have to be surrendered, but may be disposed of only with permission. Travelers may bring in any amount in foreign or domestic banknotes.

Capital

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

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

Under the Government’s guidelines policy, all enterprises in which more than 25 per cent of the equity is held directly or indirectly by overseas interests are requested to consult the Reserve Bank in respect of proposals to borrow in Australia. The guidelines provide for reasonable access to Australian borrowings for financing normal requirements of funds for working capital and for approval to be readily given to borrowings to finance export transactions. The amount of local borrowings to finance capital investment permitted under the guidelines depends primarily on the amount of overseas funds invested in the enterprise and the share of the equity in the company held by Australians.

Foreign securities owned by Australian residents need not be surrendered. The export of securities and practically all transactions in foreign securities are subject to approval. Funds invested by residents of countries outside the Sterling Area in securities quoted on an Australian stock exchange can be repatriated under current policy in non-Sterling Area currency at official market rates of exchange.

Residents of Australia are permitted to sell in the investment currency or property currency market in the United Kingdom receipts in non-Sterling Area currencies that under the U.K. regulations are eligible for disposal in these markets.

Gold

Residents must surrender to the Reserve Bank of Australia all gold coming into their possession with the exception of gold coins the gold content value of which does not exceed $A 50 and gold lawfully acquired for use in a profession or trade. Newly mined gold acquired by the Reserve Bank is made available at its official buying price of $A 31.25 a fine ounce to an association of gold producers for sale at free market prices to local industrial users or overseas purchasers. Certain domestic gold production is subsidized under the Gold-Mining Industry Assistance Act, 1954-66. Imports of gold are not restricted but imported gold becomes subject to delivery to the Reserve Bank. Exports of gold require the approval of the Reserve Bank. Gold jewelry is not subject to acquisition by the Reserve Bank and imports of such items are unrestricted. Exports of gold jewelry exceeding $A 250 in value require the issue of an export license. Travelers require an export license if taking out of Australia certain specified goods, including gold jewelry, in excess of a total value of $A 2,000 or when the gold content value of any one article exceeds $A 250.

Changes during 1969

During the year, certain procedural changes were made in the exchange control field. These reduced the number of written applications required for most classes of remittances from Australia and for transactions in Australian securities on account of overseas residents. The authority of banks to approve applications for forward exchange cover without prior reference to the Reserve Bank was extended. The requirement that Australian residents should report holdings of foreign securities was discontinued.

January 1. Import licenses ceased to be required for twine, rope, cordage, and cable of polyethylene and/or polypropylene.

January 5. The Australian stock exchanges agreed to revise their listing requirements so that it would be possible for the shareholders of an Australian company to resist foreign take-overs by adjustments to the voting rights of different categories of shares.

January 6. The Government announced that restraint would be exercised to ensure that exports of beef and mutton to the United States would not exceed 505 million pounds or such higher figure as might be allocated to Australia in calendar year 1969.

January 31. Controls were imposed on exports to North Viet-Nam.

February 24. A further extension of the range of items from specified developing countries permitted to enter Australia at preferential rates of duty came into effect. Other items were added on September 19.

July 1. Restrictions were imposed on the import of additional knitted garments.

September 16. New guidelines were announced relating to borrowing in Australia by companies in which more than 25 per cent of the shares are held by overseas interests. They involved some modification and elaboration of existing policies. Formulas were specified to serve as a basis for determining the limits to access to borrowings in Australia.

November 4. Controls were imposed on the export of nickel-bearing scrap metals in order to conserve supplies of nickel for Australian industry.

November 13. As a result of a decision by the U.S. authorities, the restraint level on exports of Australian beef and mutton to the United States was increased by 14.8 million pounds, to 519.8 million pounds in calendar year 1969.

Austria

Exchange Rate System

The par value is 0.0341796 gram of fine gold per Austrian Schilling or S 26.00 = US$1. The official limits for the U.S. dollar are S 25.80 buying, and S 26.20 selling, per US$1—rates at which the Austrian National Bank will buy or sell. The rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates for other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Austria and such limits in force in the country of the other currency concerned. “Agreement dollars” are quoted at par with the U.S. dollar. Effective costs may deviate in switch transactions. Forward premiums and discounts are left to the interplay of market forces.

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

Administration of Control

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

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

Prescription of Currency

Settlements with the countries with which Austria maintains bilateral payments arrangements1 are made through clearing accounts expressed in U.S. dollars. Settlements with all other countries may be made either in convertible currencies or through Free Schilling Accounts.

Nonresident Accounts

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

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

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

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

Imports and Import Payments

All commodities not included in the Annex to the Foreign Trade Law are free of import licensing and may be imported from any country without quantitative restriction. All goods included in the Annex require licenses. Most of these goods are free of quantitative restriction. The liberalization depends on the group of countries from which they are imported; for such liberalized goods, licenses are issued by the customs at the time of clearance.2 Nearly all imports from European OECD countries, their associated territories, and many other countries3 are liberalized. Imports from Canada and the United States and its territories are liberalized to the same degree as those from the European OECD countries, except that slaughtered poultry is subject to quantitative restriction when imported from Canada or the United States. Imports from three other countries4 are treated in practically the same way as imports from European OECD countries. Many nonagricultural imports are admitted under an automatic licensing procedure when originating in Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland, or Rumania; in practice, this is true also when they originate in the U.S.S.R.

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

State trading covers tobacco in any form, salt, spirits, and various breadstuffs and feedgrains. Global quotas apply to specified imports from OECD countries and all other GATT countries, except Cuba, Czechoslovakia, and Japan. Discretionary individual licensing is applicable to all other private imports not covered by the procedures listed above. Licenses are usually granted if the imports concerned do not adversely affect domestic industries; in many cases, they are issued in accordance with quotas established in bilateral trade agreements.

Import licenses may not be granted for goods imported under compensation transactions, unless there is no other way of settling payments; at present, trade under such arrangements is negligible.

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

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

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

Payments for Invisibles

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

Payments on account of authorized invisibles to residents of countries with which Austria makes settlements in convertible currencies may be made freely, provided that no capital transfer is involved. Payments up to S 1,000 to such countries may be made freely, at any time, and without indication of purpose; payments up to S 1,000 to clearing countries may be made without a special license if they relate to imports or specified services. All other payments to bilateral payments agreement countries for invisibles require special licenses.

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

Exports and Export Proceeds

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

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

Proceeds from Invisibles

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

Capital

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

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

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

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

Residents are allowed to acquire participation rights in foreign companies, associations, and other enterprises, and to establish, acquire, or extend foreign agencies or individually owned firms; earnings accruing from such investment may be reinvested. Residents also are permitted to acquire real estate abroad (provided that it is intended for the personal use of the buyer within one year), to grant commercial or investment credits, and to grant credits secured by mortgages in Austria or abroad. Domestic insurance companies may conclude with nonresidents life insurance contracts in Austria.

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

Residents are allowed to purchase from nonresidents, without restriction, foreign securities quoted on stock exchanges6 and Austrian securities; for foreign securities and Austrian external bonds, the transactions must be carried out on a spot basis through authorized banks and, with certain exceptions (e.g., in the case of Austrian external bonds), the securities purchased must be kept with such banks. Payments for these purchases to residents of countries with which Austria makes settlements in convertible currencies may be made in those currencies, whereas payments to residents of countries with which Austria has bilateral payments agreements may be made only by crediting a Blocked Account. Residents may sell securities deposited in accordance with the afore-mentioned provision with Austrian authorized banks to nonresidents only on a spot basis against payment in convertible currencies and through authorized banks. The proceeds of the sale, as well as the foreign exchange obtained as a result of redemption of the foreign securities by the debtor, may be kept on account with an authorized bank.

Gold

Transactions in gold (excluding jewelry and medallions, which are considered jewelry) are governed by the Foreign Exchange Law. The Austrian National Bank is authorized by this law to deal in gold as defined therein; the Bank has granted a number of general permissions widely liberalizing the domestic gold trade, but does not itself buy or sell gold or gold coins, except in transactions with monetary authorities of other countries or with international financial institutions. The Bank has authorized credit institutions, exchange offices, and coin dealers to buy or sell gold coins that are not legal tender on their own behalf or on their customers’ behalf; the prices are based on those for coins and unmanufactured gold in free markets abroad. The Mint releases certain types of gold coins to authorized credit institutions for resale to the public. Residents may hold gold in any form, including bars, in Austria, and they may acquire in Austria any gold coins that are not legal tender and any gold medals or medallions; furthermore, domestic trading between residents in gold with a fineness of less than 0.585 is unrestricted. With the exception of coins, medals, and gold with a fineness of less than 0.585, the acquisition from residents of gold subject to the Foreign Exchange Law is reserved for the monetary authorities, authorized industrial users, dentists, and jewelers; the Mint, gold refiners, and jewelers are permitted to trade or exchange among themselves gold in any form.

Where the Foreign Trade Law prescribes import licenses for gold imports (e.g., for gold sheets), the license is either issued by the Ministry of Trade, Commerce, and Industry, which usually grants any license applied for by industrial users, or by the customs office concerned, which issues licenses automatically for certain gold imports within its competence. Where this law does not require an import license for imports (e.g., for the import of gold bars), the Foreign Exchange Law prescribes a license issued by the National Bank covering the purchase of gold; such licenses are issued after consideration of the merits of each case. Exports of gold in any form other than jewelry require authorization by the National Bank. The National Bank’s imports and exports do not require import, exchange, or export licenses. Commercial imports of jewelry and of articles containing a minor amount of gold, such as watches, are liberalized, licenses being issued automatically by the customs; commercial exports of a number of such articles, however, must be licensed by the Ministry of Trade, Commerce, and Industry.

Changes during 1969

During the year, restrictions on imports from Eastern European countries were relaxed further.

January 1. A new Foreign Trade Law came into effect, modifying that of 1956.

January 1. An increase from S 500 to S 1,000 took place in the amount up to which authorized banks could by virtue of a general permission freely make payments for any purpose on behalf of residents to recipients resident in countries with which payments take place in convertible currencies. The National Bank also issued a general permission authorizing payments up to S 1,000 by residents, through the appropriate bilateral account, to residents of payments agreement countries; this general permission only covered payments in respect of imports, incidental expenses, bank charges, commissions and agents’ fees, and assembling and repair costs.

January 1. The number of commodities subject to quota when of Japanese origin was reduced from 244 to 181.

February 14. The Austrian National Bank’s Notice No. 1/69 provided that shares of foreign investment funds would only be considered as listed on a stock exchange (a requirement for purchases under general license by residents from nonresidents) if all the securities held by the fund concerned were listed on a stock exchange. The above regulation was interpreted as requiring the statutes of the fund concerned to provide expressly that the fund’s investments could comprise no assets other than listed securities.

September 17. The National Bank reminded the public that entering into savings programs or capital accumulation programs with foreign investment funds required a special license from the National Bank and announced that such licenses were not being issued.

September 18. The Austrian National Bank by Notice No. 2/69 of September 16 revoked Notice No. 1 /69 and supplemented the first paragraph of Notice No. 3/62 (containing a general license for purchases of foreign securities by residents from nonresidents) as follows: “This general license does not apply to the purchase by residents from nonresidents of securities of a participating nature in whatever legal form (including shares) that are issued by foreign investment funds or by similar institutions of whatever kind which assemble assets for the purpose of risk-spreading.”7

September 24. The limitations on the financial terms for subsidized export credits favoring developing countries were removed. Previously, the maximum maturity was 12 years and the minimum interest rate had been fixed at 5.5 per cent.

October 7. For the purpose of verifying the genuineness of transactions or transfers in connection with the building or purchase of real estate abroad by residents, the Austrian National Bank adopted as its criterion that the building or purchase must be intended for the personal use of the buyer within one year.

November 15. A program of temporary measures was put into effect to contain domestic price increases following the revaluation of the deutsche mark. The measures included temporary import duty reductions on approximately 70 items, lowering of equalization levies, and more liberal licensing of specified durable consumer goods from Japan and certain Eastern European countries. Most of the measures were to remain in effect until July 1, 1970.

Belgium-Luxembourg

Exchange Rate System

The par values are 0.0177734 gram of fine gold per Belgian Franc and per Luxembourg Franc or BF 50.00 = US$1 and Lux F 50.00 = US$1. There are two exchange markets—the official and the free.

In the official exchange market, only authorized banks may carry out exchange transactions permitted in that market.1 The spot exchange rate for the U.S. dollar fluctuates within official limits of BF 49.625 buying, and BF 50.375 selling, per US$ 1; the rates for the other convertible currencies fluctuate between limits which result from combining the official limits for the U.S. dollar maintained by Belgium-Luxembourg and such limits in force in the country of the other currency concerned. Most exchange transactions are settled through the official market. For all outward payments in excess of BF 10 million through that market, supporting documents must be submitted to the Belgo-Luxembourg Exchange Institute (Institut Belgo-Luxembourgeois du Change or IBLC).

In the free exchange market, all currencies (including banknotes) may be bought and sold at freely fluctuating rates. Convertible currencies acquired through the free market may be sold in the official market, but no other direct connection between the two markets exists. On December 31, 1969, the free market rates between banks for the U.S. dollar were BF 50.15 buying, and BF 50.20 selling, per US$1.

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

Forward rates are left to the interplay of market forces. In the official market, authorized banks in Belgium-Luxembourg may deal with other authorized banks and with nonresidents in any of the convertible currencies. Nonbank residents may not acquire convertible currencies in the official spot market until a foreign payment is due. Nonbank residents may make forward purchases of convertible currencies in the official market through authorized banks, provided that the currencies thus acquired are used for the settlement of obligations within five working days from delivery; exchange not used within that period must be resold in the official market. Any resident or nonresident, banks included, may deal freely in any currency in the free market.

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

Exchange Control Territory

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

Administration of Control

The ultimate responsibility for the administration of exchange control in the Belgian-Luxembourg Economic Union is exercised by the Belgo-Luxembourg Exchange Institute. Exchange control powers for most payments and transfers are delegated to authorized banks. The BLEU Convention of May 23, 1935, revised with effect from August 1, 1965 by a Protocol of January 29, 1963, conferred on the Belgo-Luxembourg Administrative Commission the authority to license trade transactions; this Commission determines import and export policy, but has delegated the issuance of import and export licenses to the licensing offices of the BLEU, one of which is located in each country.

Prescription of Currency

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

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

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

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

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

Nonresident Accounts

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

1. Convertible Accounts. Balances on these accounts are equivalent to currencies negotiated on the official market, and these accounts may be opened in the name of any nonresident.4 They are not related to any country or monetary area. They may be used for settlements which either must or may be made through the official market, and may be credited with proceeds from the sale by a nonresident of convertible currencies in the official market to authorized banks in Belgium-Luxembourg. Balances on Convertible Accounts may be transferred freely to any nonresident account or be converted into any currency in the official or the free market. Mail credits on Convertible Accounts are subject to ceilings set by the IBLC; other advances are subject to authorization.

Summary of Permissible Methods of Settlement for Foreign Payments
Transaction ListCountry GroupForeign CurrencyExchange MarketNonresident Account in Francs
Outward Payments
A, B, and CConvertibleAnyOfficial or freeAny
DConvertibleAnyFreeFinancial
A, B, C, and DBilateralBilateral3
Inward Payments
A and BConvertibleConvertibleOfficialConvertible
C and DConvertibleConvertible OtherOfficial or free Free
Convertible or Financial
A, B, C, and DBilateralConvertibleOfficialConvertible or Bilateral3

2. Financial Accounts. These accounts may be opened only for residents in convertible area countries,5 and they are not related to any country or monetary area. They may be used for settlements which either must or may be made through the free market, and may be credited with proceeds from the sale by a nonresident of gold or any currency in the free market and of convertible currencies in the official market. Domestic banknotes and proceeds from the sale in the free market of foreign banknotes deposited with authorized banks by foreign travelers in Belgium-Luxembourg or by persons residing abroad may be credited freely to Financial Accounts. Transfers between Financial Accounts are free. Balances on these accounts may be used to purchase gold or any currency negotiated on the free market.

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

Imports and Import Payments

All imports of Rhodesian origin are prohibited. Individual licenses are required for (1) all imports from Albania, Bulgaria, mainland China, Czechoslovakia, Eastern Germany, Hong Kong, Hungary, Japan, North Korea, Outer Mongolia, Poland, Rumania, the U.S.S.R., and North Viet-Nam,6 (2) a few imports from Luxembourg into Belgium and vice versa, and (3) a number of imports from all other countries.7 The commodities for which individual licenses are required include many textile products, certain agricultural products and foodstuffs, and coal and kerosene. All other commodities, which constitute about four fifths of total imports, are free of license and quantitative restriction; only a simple form completed by the importer giving notification of the payment (payment declaration) is required when payment is made through an authorized bank. Many commodities subject to individual licensing are also admitted without quantitative restriction.

Imports from non-EEC countries of most products covered by the Common Agricultural Policy of the EEC (including cereals, rice, pork, eggs, and poultry meat) are subject to variable import levies which have replaced all previous barriers to imports; common EEC regulations are also applied to imports from non-EEC countries of beef, veal, dairy products, olive oil, most other oils and fats, sugar, and specified fruits and vegetables.

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) and that foreign exchange is not acquired until the import payment is due. If these requirements are not fulfilled, the authorized bank submits a request to the central exchange control authority for special permission. Prior examination of supporting documents by the IBLC is required for payments exceeding BF 10 million, and exchange control approval is required for payments for imports more than three months before or after the date of customs clearance.

Payments for Invisibles

Payments to convertible area countries for transactions included in Lists A, B, and C may be made through the official exchange market or by crediting Belgian or Luxembourg francs to a Convertible Account. Supporting documents must in that case be presented to an authorized bank; for payments exceeding BF 10 million and in other exceptional cases prior examination of the supporting documents by the IBLC is required. Payments to convertible area countries for all invisibles (including those in List D) may be made through the free market, by crediting Belgian or Luxembourg francs to a Financial Account, or in domestic or foreign banknotes. Payments to bilateral countries (see footnote 2) must be made by crediting Belgian or Luxembourg francs to a Bilateral Account related to the country concerned. Foreign and domestic banknotes may be exported freely.

Exports and Export Proceeds

The export of all goods to Rhodesia is prohibited in accordance with UN Security Council Resolution No. 253(68) of May 29, 1968. The export to Nigeria of arms, ammunition, and other military material is also prohibited. Individual licenses are required for (1) all exports to Albania, Bulgaria, mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Outer Mongolia, Poland, Rumania, the U.S.S.R., and North Viet-Nam, (2) a few exports from Belgium to Luxembourg and vice versa, and (3) specified exports to all other countries.8 All other exports are free of license; only a simple form completed by the exporter giving notification of the export is required.

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

Proceeds from Invisibles

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

Capital

All capital transactions with convertible area countries may be carried out freely through the free market, by settlement in Belgian or Luxembourg francs through the Financial Account of a nonresident, or in domestic or foreign banknotes. Direct investments by enterprises and some capital transfers by individuals, including gifts, family maintenance payments, remittances by emigrants of Belgian or Luxembourg nationality, and inheritances, but not transactions of a financial character, may also be made through the official market, subject to individual license. In addition, incoming capital may be received in convertible currencies through the official market or in Belgian or Luxembourg francs to the debit of a Convertible Account. The exchange control authorities may guarantee the repatriation of approved foreign investments made in Belgium-Luxembourg. In that case, capital brought in through the official market may be repatriated through that market. Also eligible for outward transfer through the official market are the amortization and redemption proceeds of bonds denominated in Belgian or Luxembourg francs, quoted on a stock exchange in the BLEU, and owned by residents of convertible area countries, provided that such securities had been held at least six months prior to the maturity date. All transactions in securities by residents or nonresidents are free, but the financial settlement of such transactions must conform to the general regulations. The prior approval of the Minister of Finance is required for issues of securities on the Belgian capital market by nonresidents. Public bids by foreign companies or individuals for the purchase or exchange of shares issued by Belgian companies require the prior approval of the Ministry of Finance. Inward payments for capital transactions with bilateral countries must be received in convertible currencies through the official market or in Belgian francs through Bilateral Accounts; outward payments for capital transactions with bilateral countries must be made only in Belgian francs through Bilateral Accounts.

Gold

Residents may freely purchase, hold, and sell gold in the form of coins or bars, at home or abroad. Imports and exports of gold in these forms by residents and nonresidents are unrestricted and free of license. Settlements in respect of gold transactions with convertible area countries may be made through the free market, through financial accounts in Belgian or Luxembourg francs, or in domestic or foreign banknotes. No customs duties or other charges are levied on imports or exports of gold, except on imports for industrial or handicraft purposes. Licenses are required for imports of semiprocessed gold; these are issued to professional users, who are authorized to make payment through the official market.

Changes during 1969

January 1. The preferential discount rate for export bills was discontinued for sales to EEC countries.

March 18. The monetary agreement with the Netherlands of October 21, 1943 became formally inoperative. Payments had already been placed on a convertible currency basis in 1958.

March 28. A new protocol to the trade agreement between Benelux and Bulgaria was signed. It provided for further liberalization of imports.

April 4. The IBLC instructed authorized banks to reduce by June 30 the sum of (a) their net spot position in foreign currencies relating to the official market, and (b) their advances on Convertible Accounts.

May 9. The authorization was revoked which had permitted nonbank residents to purchase convertible currencies in the official market up to 30 days before a payment abroad fell due, and meanwhile to deposit such currencies in Controlled Resident Accounts in Foreign Currency. Until further notice, foreign exchange required to settle foreign obligations could be acquired only when payments fell due.

June 4. A new protocol to the trade agreement between Benelux and Hungary was signed. It provided for further liberalization of imports.

July 1. The issuance of licenses to import raw diamonds against payment through the official market required an undertaking by the importer either to re-export within 30 days finished diamonds of equivalent value, or to sell such diamonds within the same period to another diamond dealer accepting a similar commitment. As previously, the export was subject to license and the export proceeds had to be sold on the official market.

July 10. A new law extended existing regulations concerning the public issuance of corporate securities to certain related areas. It also strengthened the penalties for illegal offerings.

July 31. The preferential discount rate for export bills was discontinued also for sales to non-EEC countries (see January 1, above).

July 31. A new trade agreement between Benelux and Japan was signed, providing for further liberalization of imports.

August 7. The payment of interest or any other remuneration for deposits on Controlled Resident Accounts in Foreign Currency was forbidden.

August 7. The period during which balances on Controlled Resident Accounts in Foreign Currency could be used for payments abroad after a change of parity was reduced from 6 months to 30 days; balances not used within 30 days after a parity change would have to be sold in the official market and any exchange profit in excess of BF 1,000 would have to be passed on to the IBLC, for the account of the Treasury.

August 7. The supporting documentation for payments abroad through the official market, when exceeding BF 10 million, was made subject to prior examination by the IBLC.

August 7. Payments through the official market in respect of transit transactions were made subject to the same documentation requirements (submission of contracts or invoices) as payments for imports. Previously, no documentation was required.

August 14. The National Bank of Belgium instructed commercial banks to tighten their granting of credits, especially those to nonresident customers.

September 1. The Finnish markka was added to the list of convertible currencies dealt with in the official exchange market.

September 9. Two Ministerial Decrees entered into effect which consolidated earlier decrees regulating the import and export licensing system.

September 10. The introduction of a value-added tax, which had been scheduled to replace the 7 per cent taxe de transmission on January 1, 1970, was postponed until the beginning of 1971.

October 1. An agreement between Benelux and Japan was signed in which Japan undertook to restrain exports of certain cotton textiles previously restricted by import quotas.

October 1. The IBLC instruction of April 4 was revoked. Separate, lower ceilings were established for each authorized bank (a) on the net spot position in foreign currencies relating to the official market, and (b) on mail credits on Convertible Accounts.

November 2. A Royal Decree specified technical criteria with respect to the public character of the issuance of securities.

November 28. It was announced that in the near future quotas for some restricted imports, particularly from Eastern European countries, would be increased and the turnover tax rebates granted to certain exporters would be reduced selectively.

Bolivia

Exchange Rate System

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

For operational purposes, the free market is divided into two sectors: the public sector and the private sector. The Monetary Department of the Central Bank of Bolivia operates in the public sector, buying foreign exchange from the Government, the official enterprises, including the Bolivian Mining Corporation (Comibol), and private export firms, and selling foreign exchange to the Banking Department of the Central Bank, the banks, and the Government and its official agencies. The exchange rate of the Monetary Department of the Central Bank on December 31, 1969 was $b 11.875 buying, and $b 11.885 selling, per US$1. All sales of foreign exchange are subject to a 1.6 per cent exchange tax and a 2 per mill stamp tax.

Bolivia accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from June 5, 1967.

Prescription of Currency

There are no prescription of currency requirements. Settlements are usually made in U.S. dollars or other convertible currencies. Payments between Bolivia and Argentina, Chile, Colombia, Mexico, and Peru may be made through accounts maintained with each other by the central banks.

Imports and Import Payments

All imports by public sector agencies require the prior authorization of the Ministry of National Economy; they are not permitted to import commodities also available in Bolivia. Private imports of certain commodities also require such prior authorization; these goods include live cattle, various foodstuffs, raw cotton, and petroleum and petroleum products. The import of cigarettes, cement, and certain other locally produced goods is prohibited. All other goods may be imported freely. Exchange to pay for imports may be purchased in the free market; commercial banks make exchange available the first business day after receipt of the application. All foreign credits, including suppliers’ credits, are subject to authorization by the Stablization and Development Council.

Most private sector imports are subject to a customs surcharge of 10 per cent ad valorem.

Payments for Invisibles

Payments for invisibles may be made freely through the free market; commercial banks make exchange available the first business day after receipt of the application. Buyers of foreign exchange in excess of US$100, however, must indicate the purpose of their purchases. Furthermore, private enterprises are required to deposit in banks, for a minimum period of one year, all dividends declared and profits accrued (net of income taxes), but the payment of profits and dividends to nonresident beneficiaries is not prohibited. Residents of Bolivian or foreign nationality must pay a travel tax when leaving the country. The tax is $b 150 for air travel to neighboring countries, $b 60 for overland travel to such countries, $b 300 for air travel to other Latin American countries, and $b 400 for air travel to countries outside Latin America.

Exports and Export Proceeds

Exports are not subject to licensing. All proceeds from exports of the public and private sectors must be sold to the Central Bank, with the exception of reasonable amounts deducted for foreign exchange expenditures undertaken to effect the export. Furthermore, private mining firms must, when surrendering the export proceeds, deposit in a Bolivian bank 1.5 per cent, 2 per cent, or 3 per cent of the value of their exports or foreign sales for a period of at least one year. The marketing of minerals is a state monopoly; in practice, Comibol exports its own production and the Mining Bank that of the small and medium-sized mines of the private sector.

Proceeds from Invisibles

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

Capital

Outward capital transfers by residents or nonresidents are free of control and may be made through the free market; inward capital transfers also may be made through that market. Commerical banks make exchange available the first business day after receipt of the application. Buyers of foreign exchange in excess of US$100 must indicate the purpose of the purchase. All foreign credits, including suppliers’ credits, to government agencies and autonomous entities, and official guarantees of such credits, are subject to prior authorization by the Stabilization and Development Council.

Foreign investments in Bolivia, except those involving petroleum and mining, are governed by the provisions of the Investment Law of October 19, 1965, which guarantees the free convertibility and repatriation of profits and amortized capital. Companies established before the passage of this law may also benefit from its provisions. The law is administered by the Institute for the Promotion of Investment in Bolivia (Inpibol). Investments in petroleum and mining are governed by the Petroleum Code and the Mining Code.

Gold

By virtue of Supreme Decree No. 07771 of August 2, 1966, imports and exports of gold and domestic trading in gold are subject to regulation by the Central Bank. The Decree also designated the Central Bank to purchase, for its use or for export in the form of gold bars, the total national production of gold. The Central Bank purchases gold from Comibol and one large mine, while the Mining Bank buys from the smaller producers on behalf of the Central Bank; the Central Bank’s purchases as well as those of the Mining Bank are made at the equivalent of US$35 an ounce. The Mining Bank is authorized to sell a specified quantity of gold annually to domestic jewelers and dentists and is obliged to sell the remainder to the Central Bank. Residents may freely purchase, hold, and sell gold in any form other than bars in Bolivia. Exports and imports of gold other than gold jewelry are not normally permitted.

Changes during 1969

January 1. A reciprocal credit agreement with Mexico went into effect.

February 26. Decree No. 08667 prohibited government departments and autonomous state agencies from importing goods that are available in the domestic market.

March 12. Supreme Decree No. 08315 of April 9, 1968, which had prohibited imports of passenger automobiles and station wagons until July 31, 1969, was revoked by Supreme Decree No. 08695. Such imports became subject to both ad valorem customs duties and minimum valuations. The range of ad valorem duties was raised from 100-155 per cent to 130-180 per cent.

March 12. The travel tax (a person a trip) imposed by Supreme Decree No. 08033 of July 5, 1967 was raised by Supreme Decree No. 08692 as follows: for air travel to neighboring countries from $b 50 to $b 150 ($b 60 for travel overland); for travel by air to other Latin American countries from $b 120 to $b 300; for travel by air to countries outside Latin America from $b 240 to $b 400. Exempt was travel by diplomats, personnel of international organizations, government officials, students, foreign tourists, and children under five years of age.

May 2. The consular invoice fee of 1 per cent of the c.i.f. value of imports was abolished. The consular legalization fee for invoices remained US$10 per bill of lading.

May 25. A Presidential Decree banned imports of cement.

June 27. Decree No. 08816 reduced import duties and established new minimum valuations on imports of passenger automobiles and station wagons.

October 22. All banking and foreign exchange operations were suspended until Monday, October 27, to prevent foreign exchange speculation.

October 25. A Presidential Decree provided, inter alia, for the following measures: (1) all proceeds from exports of the public and private sectors were to be surrendered to the Central Bank, with the exception of reasonable amounts deducted for foreign exchange expenditures undertaken to effect the export; (2) public and private sector entities were not to be granted new exemptions from import duties other than exemptions stipulated in international agreements and treaties; (3) private mining companies were required to deposit in banks, at the time of surrender of export proceeds, and for a minimum period of one year, from 1.5 to 3.0 per cent of the value of their total exports or foreign sales effected up to December 31, 1970; (4) enterprises other than mining and petroleum firms were required until March 31, 1970 to deposit in banks, for a minimum period of one year, either at once or in 12 monthly installments, 2 per cent of their paid-up capital plus reserves as at December 31, 1968; and (5) private enterprises were henceforth obliged to deposit in banks, for a minimum period of one year, all dividends and profits (net of income taxes) and to postpone their transfer to any foreign beneficiaries until the mandatory deposit period had expired.

October 25. Commercial banks were instructed not to sell foreign exchange to the public until the first business day after which applications were received.

November 6. Supreme Decree No. 08985 approved Bolivia’s participation in the Andean Group

December 10. Export taxes on minerals were raised by about 25 per cent to a range of approximately nil to 19 per cent.

December 10. A state monopoly over the marketing of minerals was established.

Botswana

Exchange System

Botswana’s currency is the South African Rand, the par value of which is 1.24414 grams of fine gold per rand or R 1 = US$1.40. Exchange rates are based on South Africa’s fixed rates for sterling against rand and the London market rates for sterling against other currencies.

Botswana is part of the Sterling Area and is regarded as forming part of the South African exchange control territory.1 The Ministry of Finance controls all external currency transactions. Transfers of funds within the Sterling Area are normally approved if the funds were generated in Botswana and the transferor is a bona fide resident of Botswana; where the export of funds to a country outside the Sterling Area is concerned, the approval is given in appropriate cases in agreement with the South African Reserve Bank. Inward capital transfers require exchange control approval, but certain types of such transfers are freely permitted by open general licenses. Botswana is a member of the Southern African Customs Union by virtue of the Customs Union Agreement of 1910,2 and there are no import restrictions on goods of South African origin. Furthermore, goods of domestic origin may move freely between Botswana and Rhodesia by virtue of a customs agreement of 1956, provided that they are not intended for re-export.3 Imports originating outside South Africa and Rhodesia are usually licensed along the lines of South Africa’s import regulations.

Changes during 1969

August 13. The Fund noted that the South African rand is the currency of Botswana, and that the par value of the South African rand, as established on February 14, 1961, is 1.24414 grams of fine gold per rand.

Brazil

Exchange System

On July 14, 1948, a par value for the Brazilian Cruzeiro1 was established by Brazil with the Fund. However, exchange transactions no longer take place at rates based on that par value. Brazil follows a flexible exchange rate policy.

Exchange transactions are carried out by the Central Bank, the Bank of Brazil, the authorized banks, and the exchange houses. The Central Bank operates in exchange in Rio de Janeiro, and the Bank of Brazil undertakes exchange transactions in the name of the Central Bank in other parts of the country. The exchange houses deal only in banknotes and travelers checks in a “manual market.” Uniformity between the rates quoted by the Bank of Brazil and the effective rates of the authorized banks is ensured by the practice of the monetary authorities of standing ready to purchase foreign exchange from the banks and to sell exchange to the banks on an adequate basis, for approved transactions; such purchases and sales are made at the official rate. On December 31, 1969, the buying and selling rates quoted by the monetary authorities to the public were NCr$4.325 and NCr$4.350 per US$1, respectively; those quoted by the authorized banks for transactions other than in banknotes or travelers checks were approximately the same (see Table of Exchange Rates, below). Exchange rates for other currencies (including “agreement currencies” used for settlements with bilateral agreement countries) are based on the U.S. dollar rates in Brazil and the dollar quotations for such currencies in international markets.

On the buying side other effective rates result from the following arrangements: (a) Special regulations apply to coffee exports (see section on Exports and Export Proceeds, below), (b) A 15 per cent contribution (“contribution quota” or quota de contribuição) is levied on proceeds from exports of cocoa beans and cocoa paste. (c) A 5 per cent contribution is levied on proceeds from exports of cocoa derivatives.

On the selling side, a different effective rate arises from the provision of the Foreign Investment Law (see section on Payments for Invisibles, below), which specifies that the sum of profits and dividends effectively remitted to persons and companies resident abroad is subject to a supplementary income tax when the average of actual remittances in any three-year period, from 1963 onward, is in excess of 12 per cent a year of registered capital and reinvestment.

The Bank of Brazil, acting on its own behalf or on behalf of the Central Bank, carries out a large proportion of all exchange transactions. The following arrangements assure the Bank of Brazil of a large portion of the country’s foreign exchange receipts: (1) Petrobrás surrenders its entire foreign exchange proceeds from certain exports of petroleum on the basis of an agreement that grants it special facilities for imports of crude oil and petroleum by-products. (2) Proceeds from exports of iron ore by the Vale do Rio Doce Company are surrendered to the Bank of Brazil, although there is no legal requirement that receipts from these exports be negotiated with or transferred to the Bank. All public sector agencies must carry out their exchange operations through the Bank of Brazil. Furthermore, exporters in regions not served by banks other than the Bank of Brazil sell their exchange proceeds to the Bank. The Bank of Brazil sells foreign exchange for the requirements of the Government at the exchange rate prevailing on the date when a transaction is made. Like the other commercial banks, the Bank of Brazil also sells foreign exchange for payments in respect of a large number of imports, including crude oil and petroleum products, wheat, newsprint, fertilizers, and the requirements of the Vale do Rio Doce Company. Moreover, the Bank of Brazil handles for the account of the Central Bank all exchange transactions in bilateral currencies (either direct or by transferring exchange to authorized banks or vice versa) and exchange transactions related to imports under U.S. aid. Finally, the Bank of Brazil, operating for the account of the Central Bank, supplies foreign exchange to authorized banks in amounts not exceeding those needed to eliminate an oversold position of up to US$500,000 and limited to 50 per cent of the exchange sold the previous day by the bank concerned to its customers.

All free market transactions in foreign exchange other than those undertaken by the Bank of Brazil are effected direct through authorized banks. They may not maintain an oversold position in excess of US$500,000 on any working day; included in this limit is their “manual market” position (banknotes and travelers checks). The banks are permitted to sell foreign exchange to each other, provided that they are situated in the same trading center; transfers between branches of the same bank in different trading centers are also allowed, subject to certain conditions. The “manual market” is conducted mainly by exchange houses, which are not permitted to maintain a sold position and are not entitled to obtain exchange cover from the monetary authorities.

Administration of Control

The National Monetary Council is responsible for the formulation of over-all foreign exchange policy. The control system is operated by the Exchange Operations Department of the Central Bank (GECAM) under the general direction of the Board of Directors of the Central Bank and the National Monetary Council. Coffee exports are regulated by the Brazilian Coffee Institute (IBC).

The National Council of Foreign Trade (CONCEX) formulates foreign trade policy. The Ministry of Foreign Affairs is the Council’s executive organ for dealing with foreign countries, while the Foreign Trade Department of the Bank of Brazil (CACEX) implements the Council’s decisions within Brazil. The Foreign Trade Department issues import licenses, when required, as well as export and import certificates (guias de exportação and guias de importação), and verifies price quotations, weights, measures, classifications, and types in import operations that are subject to license. The Customs Policy Council (CPA) decides on changes in customs duties or in their application, and is required to confirm or modify the minimum import values established for customs valuation purposes by CACEX.

The Department for the Control and Registration of Foreign Capital (FIRCE) in the Central Bank is in charge of processing the registration of foreign capital for the purpose of its repatriation and of the remittance of income therefrom; it also approves the terms of foreign financing for imports and authorizes capital inflows under the Foreign Investment Law.

Prescription of Currency

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

On the basis of provisions for the settlement with certain nonclearing countries of outstanding balances or transactions under bilateral agreements now terminated, a few payments with these countries are still settled in agreement dollars. All trade with Bolivia, except Brazilian exports of coffee and cocoa, is settled in cruzeiros under a border trade agreement. Settlements with other countries with which Brazil has no payments agreements or arrangements are made in U.S. dollars or other convertible currencies. Reciprocal credit agreements have been signed with Chile, Mexico, and Peru but are not yet in operation.

Imports and Import Payments

The import control legislation previously distinguished two categories of imports: (1) commodities in the General Category, which were free of quantitative restrictions and licensing, and (2) commodities in the Special Category, which required licenses and were subject to restrictions. Since March 1, 1967, however, all commodities listed in the former Special Category have been governed by the import control regime applicable to General Category commodities. Many of the former Special Category items have since been made subject to surcharges on the existing customs duties.

Special arrangements described below apply to certain commodities, and the import of new automobiles and recreational boats of a value over US$3,500 is prohibited. For all other imports, the administrative procedures are as follows.

Importers require one of two documents: (1) an import license for goods that benefit from special tariff concessions and goods imported with foreign financing or (2) an import certificate (guia de importação).

For the bulk of imports, an importer must secure from CACEX an import certificate which is issued subject to the presentation of data on the foreign price of the commodity and any other information CACEX may consider necessary. As a rule, import certificates are issued freely and without undue delay. The import certificate entitles the importer to obtain a visa from the Brazilian consular authorities abroad which is required for shipment of the goods. The import certificate is valid for 120 days.

The following rules apply with respect to the closing of exchange contracts for payment for imports. As a general rule, imports may be cleared through customs before an exchange contract is closed. However, the maximum period for which payments for imports may be delayed must not exceed 180 days from the date of shipment. This period may be extended to 360 days in exceptional circumstances at the discretion of the Central Bank. For imports listed in the Annex to Decree-Law No. 398 of December 30, 1968, and of automobiles and light utility trucks and station wagons, the conclusion of an exchange contract is obligatory prior to the issue of an import document; this provision is intended to discourage the use of foreign commercial credits for the financing of imports of commodities that are considered less essential. Spot contracts may be closed if the contract is intended to settle drafts, at sight or on maturity, and the appropriate shipping documents are presented. Spot exchange contracts must be settled within 2 working days. Forward contracts, for up to 180 days, may be closed when a letter of credit is being opened, or to pay for goods already shipped. Letters of credit must be opened within 5 working days from the date of the exchange contract. Commercial banks ordinarily require a guarantee deposit for their own protection for forward exchange contracts; the amount of the deposit varies with the credit standing of the customer. When the contracts are liquidated, guarantee deposits may be used for payment of the foreign exchange concerned. Interest at about 2 per cent a month is normally charged on the portion of the forward contract not covered by a deposit.

Special procedures are applicable to certain imports of petroleum and petroleum products and of wheat. For petroleum and specified petroleum by-products, Petrobrás concludes a “global foreign exchange contract” with the Bank of Brazil once every four months for its estimated requirements. The contract is concluded at the official market rate prevailing 10 days prior to the closing of the contract. At the same time, the Bank of Brazil concludes a foreign exchange contract with the Central Bank, to cover its position, for an amount equivalent to the value of the “global contract” at the exchange rate at which the Central Bank sells foreign exchange to commercial banks; the rate applicable is again the one prevailing 10 days prior to the conclusion of the “global contract.” Individual exchange contracts for petroleum shipments made during the life of the global contract are then closed at the exchange rate on which the latter is based. Payment by Petrobrás against such contracts is made in the following manner: 30 per cent of the value of an individual contract is deposited 15 days from the date of shipment, and the remaining 70 per cent 110 days after shipment. The liquidation of each individual contract 110 days after shipment is accompanied by the liquidation, up to an equivalent value, of the exchange contract signed by the Bank of Brazil with the Central Bank; the liquidation of this latter exchange contract also takes place at the exchange rate at which the contract was originally signed.

Certain imports are subject to customs surcharges imposed by Decree-Law No. 333 or Decree-Law No. 398.

Payments for Invisibles

Payments for current invisibles related to income from foreign capital, royalties, and technical assistance are governed by the provisions of the Foreign Investment Law. In addition to certain restrictions on remittances stipulated in that law, limits are placed, by virtue of an internal Central Bank measure of September 19, 1965, on remittances of all royalties and technical assistance fees (see below). Authorized banks may sell foreign exchange freely up to the equivalent of US$300 for personal remittances abroad. The sale of foreign exchange for travel abroad is subject to special regulations as described below. Payments for other current invisibles require the approval of GECAM, which authorizes remittances freely, subject to the presentation of supporting documents as evidence that a bona fide current transaction is involved.

Sales of foreign exchange to meet personal expenses connected with travel abroad are permitted up to US$1,000 a person a trip, without the prior approval of the Central Bank, on the following terms: (1) in banknotes up to US$100, and (2) in payment orders or travelers checks for the remainder. Applications for purchases of travel exchange in excess of US$1,000 must be submitted to the Central Bank, which considers each case on its merits. Amounts in excess of US$1,000, when authorized, may be taken up in the form of payment orders only. Foreign residents in transit in Brazil are permitted to purchase foreign currency up to the equivalent of the amount they sold during the period of their stay in Brazil; however, purchases in excess of 30 per cent of the amount previously sold require the approval of the Central Bank. Each purchase transaction is registered and the records of these operations, which must contain the name of the clients, are submitted daily to the Central Bank. The sale of tickets for international air travel to residents of Brazil is made against local currency upon presentation of valid passports.

Remittances abroad of foreign capital, income from foreign investments and reinvestments, and remittances in respect of royalties and technical assistance are governed by Decree No. 55762 of February 17, 1965, which contains the regulations implementing the Foreign Investment Law (Law No. 4131, as amended by Law No. 4390). Remittances are allowed only when the foreign capital concerned, including reinvestments, and the contracts for patents and trademarks, and for technical, scientific, and administrative assistance, are registered at FIRCE in accordance with the established rules (see section on Capital, below). Remittances are normally authorized in the currency of registration. Remittances of interest on loans and credits and of related amortization payments are permitted freely in accordance with the terms stipulated in the respective contract and recorded in the Certificate of Registration. A progressive supplementary income tax is levied on such remittances of earnings on foreign capital if their average over a three-year period exceeds 12 per cent of the registered capital and reinvestments. For foreign capital that produces goods or services for luxury consumption, remittances of profits are limited to 8 per cent per annum of registered capital. Remittances of royalties are not permitted by a branch or subsidiary established in Brazil to its head office abroad when at least 50 per cent of the local firm’s voting capital is directly or indirectly held by the foreign principal firm or when the majority of the firm’s capital in Brazil belongs to the recipients of the royalties abroad. Moreover, by virtue of an internal Central Bank measure of September 19, 1965, remittances of royalties by nonsubsidiary companies and of all technical assistance fees are limited to specified percentages, ranging from 1 per cent to 5 per cent of gross receipts from the sale or manufacture of given products (classified by type of production) for which royalty and technical assistance payments are incurred abroad. The percentages are the same as those used in determining the maximum deductions for such payments when determining taxable income under the taxation laws governing foreign investment income.

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

Travelers may take out domestic and foreign banknotes freely.

Exports and Export Proceeds

Under the provisions of Law No. 5025 of June 10, 1966, exports, with only minor exceptions, are free of licensing. Accordingly, exports are grouped into the following three categories: (1) free exports, (2) exports subject to control, and (3) prohibited exports. The first category includes the large majority of exports. The second category is limited to those goods that are considered to require control in the national interest. The commodities included in the third category are exceptional cases regulated by specific laws. Exports of coffee are subject to authorization by the Brazilian Coffee Institute.

The Brazilian Coffee Institute does not grant the authorization to export coffee unless the sale contract is based on a price per pound that is at least equal to the minimum registration price (in U.S. dollars per pound, f.o.b.) fixed from time to time by the Institute. The minimum registration price varies with the quality of the coffee and the port of shipment, and the actual contract price may not be lower by more than US$0.01 per pound for coffee exports of higher quality and may not be lower by more than US$0.015 per pound for coffee exports of lower quality. Exporters of coffee are required to surrender without compensation a portion (“contribution quota”) of their foreign exchange receipts;2 the cruzeiro equivalent of this portion is transferred to a Coffee Defense Fund. For the export proceeds in excess of the contribution quota, exporters receive (1) payment of a. fixed cruzeiro amount per bag3 determined from time to time by the Brazilian Coffee Institute and (2) payment of the full cruzeiro equivalent at the free market rate of any foreign exchange received in excess of the minimum registration price. To the extent that the foreign price obtained by the exporter is lower than the minimum registration price, the cruzeiro payment to the exporter is reduced; the reduction is calculated at the prevailing selling rate. Thus, the effective exchange rate for coffee exports depends on (i) the cruzeiro payment per bag, (ii) the minimum registration price, (iii) the actual price received (f.o.b. Brazil, in U.S. dollars per pound), and (iv) the free market rate. Based on payments per bag of coffee of NCr$ 146.40, NCr$ 135.50, NCr$130.00, NCr$113.50, and NCr$105.20 for different grades and ports of shipment, and corre-of US$0.445, US$0.445, US$0.435, US$0.405, sponding minimum registration prices per pound and US$0.390, respectively, prevailing on December 31, 1969, and on the assumption that the foreign price obtained by the exporter was equal to the minimum registration price, the effective rates for proceeds from coffee exports on that date were NCr$2.492, NCr$2.306, NCr$2.264, NCr$2.123, and NCr$2.043 per US$1. Proceeds of exports of soluble coffee are not subject to the contribution quota and the exporter receives his full proceeds converted at the prevailing free market rate. Exports of soluble coffee to the United States, however, are subject to an export tax expressed in cruzeiros and equivalent to US$0.13 a pound.

In accordance with the provisions of various Resolutions of the Brazilian Coffee Institute, a price guarantee system for exports of Brazilian coffee is maintained. Under these provisions a foreign importer of Brazilian coffee is entitled to compensation from the Institute, under specified conditions, for any reduction in the price of Brazilian coffee below the level at which the importer’s purchase took place. For any shipment date, the guarantee period at present is 30 days. The compensation to be received by the foreign importer is to equal the difference between (1) the price of Santos 4 ex dock New York on the date of export registration at the Brazilian Coffee Institute, and (2) the lowest similar price calculated on the basis of its moving average for periods of 10 consecutive market days, for the period starting on the date of shipment and ending on the day when the respective guarantee period terminates. The compensation takes the form of a credit that the importer may use in payment for new direct purchases of coffee from Brazil. The credits must be used within 90 days from the date of issue.

The proceeds from all other exports are also sold at freely negotiated exchange rates, but exporters of cocoa beans and cocoa paste are required to surrender without compensation 15 per cent of their exchange proceeds; and exporters of cocoa derivatives (butter, cake, and powder) are required to surrender without compensation 5 per cent of exchange proceeds. The cruzeiro equivalent of these deductions is used to finance a program of price support and plantation improvement for cocoa.

CACEX may, through the Fund for Export Financing (FINEX), finance exports of consumer durable goods and capital goods against payment at medium term and long term, provided that the suppliers’ credit does not exceed 80 per cent of the invoiced value. Credits granted for more than one year may be refinanced by CACEX for the full amount payable, provided that the exporter has given the necessary guarantees and that the maturity of the loan is considered compatible with the value of the exports and the terms for suppliers’ credits prevailing in world markets.

Proceeds from Invisibles

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

Capital

Capital inflows covered by Central Bank Resolution No. 63 or SUMOC Instruction No. 289 (see below) are subject to ceilings. Most other borrowing abroad must be approved by the Foreign Loans Commission (CEMPEX). Otherwise, inward transfers are unrestricted and free of control. For the purpose of repatriation and the remittance of income, however, foreign capital and the reinvestment of profits on foreign capital must be registered with FIRCE. Foreign capital is defined as (1) goods, machinery, and equipment which have entered the country without an initial corresponding expenditure of foreign exchange and which are to be used to produce goods or to render services, and (2) financial and monetary resources brought into the country for investment in economic pursuits, provided that, in either case, the owner is a person or firm resident or domiciled abroad or with headquarters abroad.

Foreign capital is classified, for purposes of registration, as direct investments or loans, whether imported in the form of money or goods, and it includes reinvested profits from foreign capital. Direct investment is defined as that foreign capital which constitutes part of corporate capital and participates directly in the risk inherent in an economic undertaking. Foreign capital that is not part of the corporate capital of any enterprise and that does not participate directly in capital risk is considered to be a loan. Any loan obtained to purchase capital goods abroad, whether conceded by the manufacturer himself or a third party, is considered to be financing (mostly suppliers’ credit). Loans are considered to be cash loans when monetary or financial resources are brought into Brazil.

To register foreign capital, it is necessary to prove that the capital has entered Brazil. The registration of capital is made in the currency in which it entered the country. For financed imports and for investments made in the form of goods, registration is made in the currency of the country of domicile of the creditor or investor (or of its head office) or, in special circumstances, in the currency of the country of origin of the goods or of the credit. To register loans that are made in foreign currency it is necessary to certify that the interest rate corresponds to that prevailing in the country of the lender, and that the prices of the imported goods correspond to the prices of comparable goods in the country of origin. If FIRCE approves the terms of financing, it issues a certificate of authorization to CACEX. The latter, in turn, examines the application in the light of the price and essentiality of the proposed import and of the availability of similares nacionais. If CACEX approves the application, it grants an import license.

The registration of direct investment is subject to the following rules: The capital that enters or has entered Brazil is registered in foreign currency. Reinvestments are defined as profits of companies established in Brazil and accrued to persons or companies resident or domiciled abroad; such profits must have been reinvested in the same companies that produced them or in another sector of the Brazilian economy. The registration of reinvested profits is made simultaneously in Brazilian currency and in the currency of the country to which the profits could have been remitted. The conversion is calculated at the average exchange rate prevailing between the date on which the profits were earned, or appeared on the balance sheet in the case of a company, and the date of their reinvestment.

To provide a more normal basis for the supply of working capital in Brazil by foreign investors, the Bank of Brazil under the provisions of SUMOC Instruction No. 289, and subject to certain ceilings, enters into repurchase arrangements which provide that the seller of foreign exchange may subsequently repurchase equivalent foreign exchange, free of restrictions, guarantee deposits, or financial charges, and that the procedure for registration to satisfy the requirements of the Foreign Investment Law will be both immediate and automatic. The repurchase must be a spot transaction in the free market with any authorized bank (or with the Bank of Brazil if it so elects) and does not involve an exchange rate guarantee; the repurchase rights may be exercised in whole or in part after 60 days but will expire after 360 days.

Moreover, to facilitate the use of foreign credits by Brazilian enterprises, Central Bank Resolution No. 63 authorizes private commercial and investment banks to take up foreign credits for relending to the domestic private sector for the purpose of financing fixed or working capital. The safeguards against excessive use of such credits include limitations on the foreign obligations that each bank may assume (related to the terms of the credit and the size of the bank) and the provision that the ultimate borrower must agree to assume the exchange risk involved in these transactions. The certificate of registration of the loan for the purposes of the Foreign Investment Law is furnished by FIRCE upon application.

Other transfers to foreign countries require authorization by GECAM, which considers applications on their merits. Exchange transactions concerning private capital are effected through an authorized bank or the Bank of Brazil at freely negotiated rates.

To provide coordination of borrowing abroad, Decree No. 65071 of August 29, 1969, created a Commission on Foreign Loans (CEMPEX), an interministerial body charged with examining requests for authorizations of loans from government agencies and international credit organizations, and of loans involving Brazilian public entities, states and municipalities, and mixed enterprises, and those with the direct or indirect guarantee of the Treasury. However, the procedures affecting registration and authorization of inflows of foreign capital had not by the end of 1969 been significantly affected.

Gold

Residents may freely purchase, hold, and sell gold coins in Brazil. Gold mining is ruled by Law No. 4425 of November 2, 1964. Residents other than the monetary authorities and licensed industrial users are not permitted to purchase, hold, or sell gold (other than alloys for dental use) abroad unless special permission is obtained from the Central Bank. SUMOC Instruction No. 27 stipulates that producers of gold must sell 20 per cent of their output to the National Treasury, through the Bank of Brazil, at the official market price, i.e., at US$35 an ounce; the other 80 per cent would remain at the free disposal of the person concerned. This provision has never been enforced, however, and the monetary authorities do not deal in gold. The domestic negotiation of newly mined gold, which takes place at free market prices, is subject to a mining tax of 8 per cent, a turnover tax of 17 per cent, and a consumption tax of 18 per cent. The import of gold is subject to the issuance of an import certificate by CACEX and is free of customs duty. Exports of gold coins and gold bars are prohibited and the export of gold in any other form (except jewelry constituting the personal effects of a traveler) requires an export license.

Table of Exchange Rates (as at December 31, 1969)(New cruzeiros per U.S. dollar)
BuyingSelling
2.043-2.492 (Official Market Rate for Cruzeiro Payment a Bag and Minimum Registration Price)4
Coffee exports effected at a price equal to the minimum registration price, for payment at sight.
3.68 (Official Market Rate less 15% Contribution Quota)
Exports of cocoa beans and cocoa paste.
4.11 (Official Market Rate less 5% Contribution Quota)5
Exports of cocoa derivatives.
4.325 (“Manual Market” Rate)

Foreign banknotes and travelers checks.
4.350 (“Manual Market” Rate)

Foreign banknotes and travelers checks.
4.325 (Official Market Rate)

All other export proceeds.6 Other receipts.
4.350 (Official Market Rate)

Imports. Invisibles.7 Capital.

Changes during 1969

During 1969 the cruzeiro payment per bag (132 pounds) of the various grades of coffee was changed on seven occasions (on March 21, May 9, June 20, September 10, October 1, October 17, and November 13) and the minimum registration prices were changed five times (on September 10, October 1, October 17, November 13, and December 17). The effective exchange rates applicable to proceeds from coffee exports were changed accordingly.

January 1. A new arrangement for payments in respect of petroleum imports became effective. Previously, the effective rate for imports by Petrobrás of petroleum and specified petroleum by-products was determined by quarterly contracts with the Bank of Brazil that guaranteed the application of the exchange rate prevailing at the beginning of each calendar quarter to all operations during the respective quarter.

January 11. Decree-Law No. 421 provided that only Brazilian nationals or foreign nationals permanently resident in Brazil could purchase rural property in Brazil. Limitations were also imposed on the acreage that foreign nationals could own.

February 4. The buying and selling rates of the monetary authorities were changed from NCr$3.805 and NCr$3.830 per US$1 to NCr$3.905 and NCr$3.930 per US$1, respectively.

February 6. CONCEX Resolution No. 46 simplified the export procedure by introducing the export certificate (guia de exportação) which was to be issued by CACEX in lieu of the guia de embarque previously issued by the Central Bank and the export license supplied by CACEX. Exports of coffee were exempt from the provisions of this regulation and continued to be governed by regulations of the Brazilian Coffee Institute. The prior approval of CACEX was still required for exports payable through bilateral accounts or in inconvertible currencies, those without exchange cover or on consignment, and re-exports. CACEX was authorized to establish the minimum prices that may be charged by exporters, and the date on which the Resolution would come into force.

February 27. C.B. Circular No. 5 consolidated the regulations governing cruzeiro accounts held by nonresidents.

March 5. Decree-Law No. 491 provided tax incentives for exports of manufactured products.

March 10. Decree-Law No. 494 prohibited the acquisition of rural property by any juridical or physical person of foreign nationality and not domiciled in Brazil.

March 12. GECAM Announcement No. 99 provided that, as a general rule, the remittance of interest on import drafts payable less than 180 days from the date of shipment would not be authorized. Remittances of interest on time drafts for periods of up to 360 days from the date of shipment were to be permitted only in respect of the period exceeding the initial 180 days. However, the remittance of interest on drafts maturing in less than 180 days from the date of shipment could be permitted at the discretion of CACEX in respect of certain imports. The Announcement also provided that the rates of interest could not be higher than those in effect on the date of issue of the import certificate or license in the country in whose currency the operation was carried out.

March 12. CACEX Announcement No. 264 made applications for exchange to settle time drafts in excess of a term of 180 days and up to 360 days from the day of shipment subject to the following provisions: (1) they were to be accepted only for imports of raw materials and parts and accessories for the importer’s own use and capital goods of which there is no similar national production; (2) interest would be counted as from the 181st day from the date of shipment; (3) applications were to be submitted along with the import certificate (or license); and (4) applications relating to import certificates or licenses during the period May 21, 1968, when Central Bank Resolution No. 91 was promulgated, and March 12, 1969 would be subject to re-examination.

March 12. GECAM Announcement No. 100 provided that payments contracted for under time drafts with a term of over 360 days from the date of shipment, and covered by import certificates, licenses, or declarations issued between January 3, 1968 and May 21, 1968 (the dates of Central Bank Resolutions Nos. 82 and 91), must be registered with FIRCE.

March 12. Central Bank Resolution No. 112 established a minimum maturity of commercial bank loans under Resolution 63 of August 21, 1967, at six months with no upper limit. Previously, the maximum limit had been one year without a lower limit.

March 19. The buying and selling rates of the monetary authorities were changed from NCr$3.905 and NCr$3.93 per US$1 to NCr$3.975 and NCr$4.00 per US$1, respectively.

March 26. GECAM Announcement No. 102 provided that payment of interest on time drafts of up to 360 days from the date of shipment would be permitted only if effected simultaneously with the settlement of the principal.

April 7. CACEX Announcement No. 265 of March 19 regulated the entry into force of CONCEX Resolution No. 46 of February 6, 1969, which had provided for the replacement of previously used documents for export with the export certificate or guia de exportação.

April 10. A Presidential Decree prohibited federal government agencies from signing contracts with foreign firms to supply technical services that could be provided by Brazilian firms.

April 30. Decree-Law No. 557 imposed an export tax equivalent to US$0.13 a pound on exports of soluble coffee to the United States. The amount of the tax, specified in cruzeiros, would be adjusted in accordance with movements in the exchange rate so as to maintain the tax at a constant level in terms of foreign exchange.

April 30. The bilateral payments agreement with the U.S.S.R. was terminated.

May 8. Decree-Law No. 569-69 granted tariff exemption for a period of 30 months for imports of raw materials, equipment, and components for the steel industry.

May 9. Oral instructions from the Central Bank to banking and commercial institutions placed limits on new capital inflows under Central Bank Resolution No. 63 of August 21, 1967, and SUMOC Instruction No. 289 of January 14, 1965. Under Resolution No. 63, capital inflows were not to exceed a level which would cause the level of maturities falling due in any one month to exceed US$25 million, and the value of new Instruction No. 289 operations in each week was not to exceed the average amount of liquidations of such transactions during the preceding four weeks. No restrictions were placed on capital inflows under Law No. 4131, since these do not require a Central Bank guarantee to cover repatriation of principal and interest at maturity.

May 13. The buying and selling rates of the monetary authorities were changed from NCr$3.975 and NCr$4.00 per US$1 to NCr$4.025 and NCr$4.05 per US$1, respectively.

June 25. Decree No. 64734 revoked Decree No. 59430 of October 27, 1966, which had required foreign suppliers of crude oil and major petroleum products, under specified conditions, to undertake to use a portion of proceeds from shipments to Brazil for exports from Brazil or for specified financing or investment activities, as a condition for obtaining permission from the Central Bank to close exchange contracts in excess of specified quantities and terms of delivery.

July 2. Decree-Law No. 666 required that goods imported by the Brazilian Government, by federal, state, or municipal agencies, by state and mixed enterprises, and goods imported under any governmental fiscal or tariff concessions or with government or external financing, be transported in Brazilian ships.

July 7. The buying and selling rates of the monetary authorities were changed from NCr$4.025 and NCr$4.05 per US$1 to NCr$4.075 and NCr$4.10 per US$1, respectively.

July 17. Decree No. 64833 regulated tax incentives for exports of manufactured products, with effect from March 6, 1969. The main provisions of the decree concerned deductions from the industrial products tax (IPI), and from the tax due on remittances abroad of royalties or interest on loans. The decree also specified the functions of CACEX and CONCEX.

July 18. Decree-Law No. 691 permitted the temporary employment of foreign technicians with salaries payable in foreign currency.

July 21. The Bank of Brazil could henceforth operate in the foreign exchange markets in the name of the Central Bank, while previously it was operating for the account of the Central Bank. Exchange transactions with authorized banks in Rio de Janeiro would be undertaken directly by the Central Bank rather than by the Bank of Brazil.

July 23. GECAM Announcement No. 115 provided that banks administering the assets of persons domiciled abroad could now freely remit up to US$300 a month, or its equivalent in other currencies, to those customers from income arising from their assets in Brazil. Previously, remittances could only be made to persons abroad who had domicile in Brazil.

July 25. Central Bank Resolution No. 120 established that exchange operations providing for prompt delivery of exchange must be liquidated within two days of the closing date.

August 5. Decree-Law No. 730 regulated the structure and functions of the Customs Policy Council (CPA), charging it with the main responsibility of formulating national tariff policy with a view to adapting the tariff structure to the needs of development and of protection of national industry. An Executive Commission of the CPA was created and charged with establishing pautas de valor mínimo (minimum import prices for customs valuation purposes) in accordance with priorities laid down by the CPA. The Executive Commission was required to examine the minimum values proposed by CACEX and within 180 days of their promulgation, to approve or modify them, thereby transforming them into pautas de valor mínimo.

August 5. Decree No. 64926 regulated the composition and functioning of the CPA in accordance with the provisions of Decree-Law No. 730.

August 18. Central Bank Resolution No. 122 provided additional rediscount facilities for financing the production of manufactured goods for export.

August 18. Central Bank Resolution No. 121 provided that import certificates for imports of products listed in the Annex to Decree-Law No. 398 of December 30, 1968, and of automobiles, including sports cars and light trucks of the utility and station wagon type, could be issued only upon prior conclusion of an exchange contract. Central Bank Resolution No. 94 of July 16, 1968, which required prior conclusion of an exchange contract for the issuance of import certificates relating to products subject to an import duty of 50 per cent or more, was revoked.

August 18. GECAM Announcement No. 116 provided that foreign exchange contracts for imports of products listed in the Annex to Decree-Law No. 398, and of automobiles, including sports cars, and light trucks of the utility and station wagon type, could have a maximum validity of 180 days; an exchange contract could be extended only once, for a maximum period of 30 days, provided that payment is made at sight and that the shipment is completed while the import certificate remains in force. GECAM Announcement No. 73 of July 23, 1968 was revoked.

August 25. CACEX Announcement No. 279 re-established minimum values on over 200 product categories in the tariff nomenclature, in accordance with Decree-Law No. 730.

August 27. The buying and selling rates of the monetary authorities were changed from NCr$4.075 and NCr$4.10 per US$1 to NCr$4.125 and NCr$4.15 per US$1, respectively.

August 29. Decree No. 65071 created an inter-ministerial body, the Commission on Foreign Loans (CEMPEX), and entrusted it with the examination of requests for authorization to take up, inter alia, foreign loans in respect of the following: (1) transactions with foreign government agencies and international credit organizations, irrespective of the nature of the proposed Brazilian debtor; (2) transactions to be entered into by Brazilian public entities, direct or indirect, including state and municipal organizations and mixed enterprises, irrespective of the nature of the proposed foreign creditor; and (3) all transactions involving the direct or indirect guarantee of the National Treasury.

September 12. Central Bank Resolution No. 125 subjected exchange contracts relating to loans contracted under Law No. 4131 to prior approval by the Central Bank, in accordance with the system already applied to transactions covered by SUMOC Instruction No. 289 of January 14, 1965 and by Central Bank Resolutions Nos. 63 and 64 of August 21 and August 23, 1967. FIRCE Communiqué No. 10 of the same date established the procedure for registration of these loans.

September 19. Decree No. 65199 permitted CACEX to grant benefits in the form of remission of import duties on goods used in the manufacture of products intended for export, in accordance with the provisions of Decree No. 53967 of June 16, 1964.

September. The quantitative controls imposed on capital inflows under SUMOC Instruction No. 289 were eased. Approvals for new loan transactions under the provisions of Instruction No. 289 were not to be granted on the basis of the amount of transactions maturing during a given month, regardless of whether they were effectively repaid or converted into normal foreign loans under the provisions of Law No. 4131. Previously, approvals for new transactions were limited to the average amount of maturities effectively repaid during the preceding four-week period.

October 3. The buying and selling rates of the monetary authorities were changed from NCr$4.125 and NCr$4.15 per US$1 to NCr$4.185 and NCr$4.21 per US$1, respectively.

October 10. Decree-Law No. 924 permitted foreign nationals and foreign-controlled Brazilian firms to acquire rural property in Brazil, provided that the property was purchased for the establishment of industrial projects approved by the authorities as being in the national interest.

October 16. Brazilian Coffee Institute Resolution No. 478 modified the amounts by which the registered sales price of green coffee could be lower than the applicable minimum registration price. The new limits were US$0.01 a pound for exports of coffee free of “Rio Zone taste” and US$0.015 a pound for exports of coffee with “Rio Zone taste.” Previously, these limits had been US$0.02 and US$0.03 a pound, respectively.

October 16. Brazilian Coffee Institute Resolution No. 480 extended the price guarantee system for coffee exports until March 31, 1970. Foreign importers were entitled, under certain conditions, to a compensation for any reduction during specified guarantee periods in the price of Santos 4 ex dock New York below the level at which the export was registered, under the terms of IBC Resolution No. 428 of January 10, 1968.

October 17. Brazilian Coffee Institute Resolution No. 479 established a quota system for exports of coffee to “traditional markets.” (The system was discontinued by virtue of IBC Resolution No. 490 of February 26, 1970.)

October 17. Central Bank Resolution No. 126 exempted the product derived from the processing of 250,000 bags (of 132 pounds each) of cocoa beans from the payment of the 5 per cent contribution quota.

October 21. Decree-Law No. 1060 provided for the compulsory registration with the Central Bank of all assets held abroad by physical or juridical persons.

October 23. Central Bank Resolution No. 127 exempted imports into the Manaus Free Zone from the provisions relating to the prior conclusion of the exchange contract established by Central Bank Resolution No. 121 of August 18, 1969. Such imports could be paid for only in the Free Zone and through banks authorized to carry out exchange transactions.

October 29. GECAM Announcement No. 122 was issued concerning the tax on exports of soluble coffee to the United States. The shipment of such coffee to other countries via the United States was prohibited.

October. An agreement was signed with Denmark, Norway, and Sweden which provided that 32½ per cent (initially 15 per cent) of export cargoes and 50 per cent of import cargoes must be carried in Brazilian-owned vessels.

November 14. The buying and selling rates of the monetary authorities were changed from NCr$4.185 and NCr$4.21 per US$1 to NCr$4.265 and NCr$4.290 per US$1, respectively.

November 17. The Bank of Brazil, operating for the account of the Central Bank, could supply foreign exchange to authorized banks in amounts not exceeding those needed to eliminate an oversold position of up to US$500,000 and limited to 50 per cent of the exchange sold the previous day by the bank concerned to its customers. Previously, the latter ratio had been 25 per cent.

November 19. The state governments of São Paulo, Minas Gerais, Paraná, and Espírito Santo agreed that the goods circulation tax (ICM) on raw coffee exports would be based on the cruzeiro equivalent of the official export price established by the IBC, irrespective of the price registered in U.S. dollars for the operation and of the quality or type of coffee. The ruling applied to unwashed coffee only.

December 1. A Commission for the Coordination of Policy with respect to Purchases Abroad was created. It was to coordinate the imports of official agencies and government-owned industries.

December 1. Decree No. 65761 authorized until December 31, 1970 the chartering of foreign-owned vessels for coastal shipping.

December 2. Additional functions were entrusted to the National Monetary Council. They related to national supply policies and included the protection of domestic production against similar foreign products.

December 10. GECAM Circular Letter No. 4 provided that the interbank transfers (repases) allowed under the provisions of GECAM Announcement No. 78 of August 24, 1968 could henceforth be settled by the delivery of checks in foreign currency issued by the transferring bank to the order of the purchasing bank and drawn on a bank abroad.

December 18. The buying and selling rates of the monetary authorities were changed from NCr$4.265 and NCr$4.290 per US$1 to NCr$4.325 and NCr$4.350 per US$1, respectively.

Burma

Exchange Rate System

The par value is 0.186621 gram of fine gold per Burmese Kyat or K 4.76190 = US$1. The buying and selling rates for sterling of the State Commercial Bank are Is. 9⅛d. and Is. 8⅞d., respectively, per K 1. The State Commercial Bank’s buying and selling rates for currencies other than the pound sterling are within the limits of the minimum buying and maximum selling rates fixed by the People’s Bank of Burma.

Administration of Control

Exchange control is administered by the Exchange Control Board through the Exchange Control Department of the People’s Bank of Burma. Exports are handled by the Myanma Export-Import Corporation (MEIC or Trade Corporation No. 22). The MEIC also imports goods for the use of the private sector. Government agencies and departments make imports of goods for their own use, including imports under loan and aid agreements in the name of the MEIC. Most payments and imports are made in accordance with an annual foreign exchange budget.

Prescription of Currency

Payments to other countries may be made in any foreign currency or by crediting kyats to an External Account in Burma. Receipts must be collected in convertible currencies or to the debit of an External Account in Burma.

Imports and Import Payments

An import program is drawn up annually as part of the foreign exchange budget. All imports are made by, or in the name of, the MEIC. All imports from Rhodesia and South Africa are prohibited. Also prohibited are imports of a few commodities from any source—principally opium and similar narcotics, monkeys, playing cards, and gold and silver bullion.

All payments for imports are made through the State Commercial Bank.

Payments for Invisibles

All payments for invisibles are subject to licensing. In general, payments for items connected with foreign trade are allowed automatically, and payments for most other purposes are considered on a case-to-case basis. Payments for membership fees to educational or technical institutions abroad and payments for subscriptions to certain foreign periodicals are as a rule allowed freely; the same applies to rental fees for motion-picture films that have been permitted to be exhibited. Family remittances are permitted only by foreign municipal workers or foreign technicians employed under contract by the Government. Remittances of income resulting from investment other than that guaranteed under the Investment Act have been temporarily suspended. The remittance of pension payments to retired government employees who served the Government as Burmese nationals but took up foreign citizenship before departure from Burma is not permitted. Most personal money order remittances to neighboring countries through post offices are not permitted.

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

Exports and Export Proceeds

All exports are effected by the MEIC. There is a list of prohibited exports: iron and steel, brass, copper and aluminum and scraps thereof, foreign manufactures, and commodities of domestic origin which it is desired to conserve for domestic requirements. All exports to Rhodesia and South Africa are prohibited. Export proceeds must be obtained in a manner satisfactory to the exchange control authorities; the exchange must be surrendered to the State Commercial Bank within six months from the date of shipment.

Proceeds from Invisibles

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

Capital

Foreign investments in Burma are governed by the provisions of the Union of Burma Investment Act, 1959 and the Investment Rules of February 25, 1960 issued under authority of the Act. Investment proposals are to be considered by an Investment Committee, to ascertain whether the proposed enterprise will utilize domestic raw materials, increase domestic employment, conserve foreign exchange, and generally conform to the economic plans of the Government. However, no private investments have been made under the Act; since February 15, 1963, when the Government announced a new policy of nationalization, permission has not been granted for any foreign private investment in Burma.

The investment law provides for the transfer abroad of profits after taxes and for the withdrawal of imported capital at any time after five years from the time of entry, in annual quotas not exceeding 25 per cent of its original value. In principle, proceeds from the liquidation or sale of an enterprise may also be transferred abroad. All such transfers may, subject to prior approval, be made at the official rate of exchange prevailing at the time of the transaction. However, transfers of capital proceeds from the voluntary liquidation of foreign companies have been suspended since July 1963.

All outward transfers of capital require prior approval. Residents are not permitted to remit funds abroad for investment. The repatriation of personal assets and the making of family remittances have been suspended, with minor exceptions, for foreign nationals employed in the private sector.

When the transfer abroad of payments in favor of nonresidents is not permitted, the authorities can allow such payments to be credited to kyat nonresident accounts. Certain debits and credits to such accounts require prior permission.

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

Gold

Residents may hold and negotiate gold jewelry, gold coins, and unworked gold in Burma. Licenses for imports and exports of gold are not granted unless they are effected by or on behalf of the monetary authorities of Burma. Jewelry for personal wear may be brought into Burma subject to customs declaration at the port of arrival. The export of personal jewelry is permitted under license, subject to the condition that the jewelry will be repatriated. No conditions are attached, however, to the taking out of personal jewelry that was declared to the customs when it was brought into Burma.

Changes during 1969

March 12. The Government assumed the sole right to prospect and mine precious stones. Only the Government could henceforth hold or negotiate unpolished gems.

November 1. The People’s Bank of Burma, which was designed by the People’s Bank Law of 1967 to become the only bank in Burma, began operations. It arose out of the merger of three government agencies and two banks, one of which was the Union Bank of Burma (previously the central bank).

Burundi

Exchange Rate System

The par value is 0.0101562 gram of fine gold per Burundi Franc or FBu 87.50 = US$1. The exchange rates for the Belgian franc quoted by the Bank of the Republic of Burundi are fixed at FBu 174.30 buying, and FBu 175.70 selling, per BF 100. For other specified currencies1 the Bank quotes buying and selling rates based on the fixed rates for the Belgian franc and their official market rates in Brussels. Authorized banks must carry out permitted exchange transactions at rates between the buying and selling rates established by the Bank of the Republic of Burundi for currencies quoted by that bank; they may agree rates freely with their customers for certain other currencies.2 The official rates for the U.S. dollar on December 31, 1969 were FBu 86.57 buying, and FBu 87.27 selling, per US$1.

Administration of Control

Control over foreign exchange transactions and foreign trade is vested in the Bank of the Republic of Burundi; authority to carry out some transactions is delegated to three authorized banks.

Prescription of Currency

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

Nonresident Accounts

Nonresident Accounts in Burundi Francs may be maintained, subject to the approval of the central bank, by (1) physical persons of foreign nationality who are temporarily established in Burundi and are not considered as residents, such as diplomats, and (2) juridical persons of foreign nationality with special status, such as foreign embassies and international organizations. These accounts may be credited freely with the proceeds of foreign currencies quoted by the central bank and they may be debited freely for withdrawals of Burundi francs, for any normal current payment in Burundi, and for conversion into foreign exchange (except banknotes). All other debits and credits require the prior approval of the central bank. These accounts cannot bear interest and must not be overdrawn.

Certain nonresidents may maintain Nonresident Accounts in Foreign Currencies with an authorized bank. The opening of such accounts requires the approval of the central bank and is restricted to (1) physical persons of foreign nationality who are resident abroad and (2) juridical persons having branches or subsidiaries abroad. These accounts may be credited freely with any foreign exchange that is received from abroad. They may be debited freely for (1) conversion into Burundi francs required to pay any expenses in Burundi and (2) payments abroad for travel and representation or for the purchase price of foreign goods. These accounts cannot bear interest and must not be overdrawn; the related bank charges and commissions may be settled in Burundi francs.

Imports and Import Payments

All imports from Portugal, Rhodesia, and South Africa are prohibited. All imports except trade samples and merchandise not intended for sale and valued up to FBu 20,000 require licenses; these are issued freely, except for certain used clothing. Applications for licenses must be submitted to the Bank of the Republic of Burundi on a form entitled Import License and Payment Authorization. The approval of such an application constitutes an authorization also to obtain foreign exchange. With certain exceptions, applications for amounts under FBu 100,000 are approved by the authorized banks. Import licenses must be presented to the customs officials when the goods are cleared through customs. The license is valid for a period of seven months starting at the end of the month following that of validation; in special cases, extensions may be granted by the central bank. The number and date of expiration must be entered on the customs clearance form, the Consumption Declaration, a copy of which is then sent to the central bank by the customs office.

Advance deposits calculated on the c.i.f. value are required for certain luxury goods from importers whose outstanding exchange commitments against import licenses are the equivalent of FBu 100,000 or over. The deposit on such commodities is 100 per cent; it is not required, however, when the goods are imported in small amounts, i.e., when the amount of the license is less than FBu 10,000. The deposit must be made at the time the import license application is approved; it is released when the import payment is made.

Payments for Invisibles

All payments for invisibles require approval. Transfers of earnings of foreign nationals are freely permitted upon proof of payment of taxes, up to 20-65 per cent of net annual income, depending on the amount of such income; this regime applies to earnings under a labor contract, to income earned in a profession, and to profits earned by any enterprise operated by an individual or a partnership. Private joint-stock companies may freely transfer their full net profits after taxes, or, if the stockholders are resident foreign nationals, two thirds of profits after taxes. Persons leaving Burundi permanently are authorized to transfer abroad their holdings of Burundi francs that consist of unremitted savings or of the proceeds of the sale of their personal effects. Transfer of income from rental properties to nonresident owners is permitted after payment of taxes and deduction of normal maintenance expenses; resident owners may remit two thirds of such income. Residents of Burundi nationality may purchase reasonable amounts of exchange for foreign travel; they may take out this exchange and up to FBu 2,000 in Burundi banknotes. In addition, residents may freely purchase foreign travel tickets up to certain limits against payment in Burundi francs.

Exports and Export Proceeds

All exports to Portugal, Rhodesia, and South Africa are prohibited. All exports valued at over FBu 3,000 are subject to a prior declaration entitled Declaration of Collection of Foreign Exchange. The Declarations must be presented for certification by the central bank through an authorized bank, with the exception of those for certain commodities exported on consignment (mainly coffee, cotton, and hides), which may be certified by authorized banks. Declarations are valid for a period of six months, but extensions may be granted by the central bank. Payments must be collected not later than 45 days after the goods have left the country when they are sold to neighboring countries, and not later than 90 days for goods shipped to other destinations. All exchange proceeds from exports must be surrendered to an authorized bank within 8 days from their collection. Exports of manufactured goods may receive a refund of 3 per cent of the f.o.b. value, provided that they incorporate raw materials on which import duty has been paid.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered to authorized banks. Travelers may bring in any amount of foreign banknotes and up to FBu 2,000 in Burundi banknotes.

Capital

The Investment Code of August 25, 1967 provides for fiscal and other benefits for domestic and foreign private investors. New investment that fulfills specified conditions as to amount and economic importance may be granted priority status to which specified privileges are attached, mainly in the form of exemptions from import duties and from taxes on income from the investment. Import duties and taxes may be reduced or suspended for goods and equipment needed for starting a particular project and, during a period of 5 years, for other merchandise needed for the manufacturing operation or for the upkeep of the original investment. Taxes on profits and real estate may be likewise reduced or suspended. Enterprises which are granted priority status may obtain protection against foreign competition, priority in the allocation of government contracts, and a guarantee from the central bank for the free transfer of profits and dividends as well as the repatriation of the invested capital. In addition to these privileges, companies undertaking investments that are considered to be of prime importance to Burundi’s economic development may be granted, under a separate convention, a guarantee that direct taxes on their activities will not be increased for a period of up to 15 years. An Investment Commission under the Minister of Planning is charged with examining requests for priority status and granting the necessary authorization.

Capital transfers by residents require individual authorization, which is rarely given, except in the case of foreign capital on which a repatriation guarantee has been granted. The guarantee is given to foreign exchange imported in Belgian francs or other specified currencies (see footnote 1) by resident enterprises for working capital purposes and is valid for one year from the date on which the exchange is surrendered to the central bank through an authorized bank. The guarantee provides for the transfer at the official rate of the original amount surrendered.

Gold

Dealings in gold coins must be carried out through authorized banks. All other private dealing in gold is prohibited. The central bank purchases unrefined, newly mined gold from domestic producers at FBu 95.00 per gram (corresponding to US$33.77 per troy ounce). After refining abroad, this gold is included in the official monetary reserves. Imports and exports of gold may be made only by the central bank, with the exception that private firms may be licensed to import gold for dental use.

Changes during 1969

April 25. The permission granted to authorized banks to agree rates freely with their customers for Angolan escudos, Rhodesian pounds, and South African rand was revoked.

April 25. Authorized banks were permitted to purchase against Burundi francs, at rates freely negotiated with their customers, banknotes in any foreign currency other than the Belgian franc or the currencies listed in footnote 1, above. Banks were also permitted to negotiate the banknotes so acquired against Belgian francs and the currencies of footnote 1 in any form (check, transfer, or banknote).

May 30. Transfers between Nonresident Accounts in Burundi Francs required the prior approval of the Bank of the Republic of Burundi. Previously, they were freely permitted.

Cambodia1

Exchange Rate System

No par value has been agreed with the Fund. The Cambodian Riel is defined as a monetary unit containing 0.016 gram of fine gold, corresponding to CR 55.54 per US$1. The National Bank of Cambodia maintains official quotations based on par values for 14 currencies2 and “indicative” quotations for 4 other currencies.3

Sales and purchases of foreign banknotes quoted on the Phnôm-Penh official market are made at the selling rate plus 2 per cent and at the buying rate minus 1 per cent, respectively. Rates for foreign banknotes quoted “indicatively” on that market are determined by the authorized banks on the basis of the average rates announced by the National Bank of Cambodia plus a commission of 1 per cent for purchases and of 4 per cent for sales. Authorized banks are empowered to negotiate for their own account, and at a rate mutually agreed with their customers, foreign banknotes other than those quoted officially or “indicatively” by the National Bank of Cambodia.

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

Forward exchange transactions for up to three months are permitted in respect of imports and exports. Contracts may be renewed once for a three-month period.

Administration of Control

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

All import and export transactions are effected by the National Import-Export Corporation (Société Nationale d’Exportation et d’Importation or Sonexim). The Ministry of National Economy is in charge of import and export controls, but it has delegated this authority to the Director of Foreign Trade. Import and export licenses are issued by Sonexim and must be domiciled with either of the two state banks, i.e., the Cambodian Bank of Commerce or the National Credit (Inadana Jati); the bank’s visa is required before licenses are presented to customs.

Prescription of Currency

Settlements with 8 countries with which Cambodia has bilateral payments arrangements are made through bilateral accounts. Those maintained for mainland China, Czechoslovakia, Eastern Germany, the U.S.S.R., and North Viet-Nam are denominated in pounds sterling, and those for Bulgaria, Poland, and Yugoslavia in U.S. dollars.

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

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

Nonresident Accounts

The following categories of account may be maintained for nonresidents: Foreigners’ Accounts in Riels, Capital Accounts, Nonresident Accounts, and Foreign Currency Accounts. In addition, Cambodian nationals staying abroad temporarily but not recognized as nonresidents, and foreigners staying in Cambodia but not recognized as residents, may maintain special Internal Accounts of Nonresidents. There are separate regulations concerning nonresident accounts that may be used to finance transactions in the free trade area of Sihanoukville.

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

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

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

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

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

Imports and Import Payments

The import of certain commodities is prohibited for reasons of health or security and that of certain other goods, such as beer and cotton yarn, for protective reasons.

An annual import program is prepared by the Ministry of Commerce. Twice a year, the National Bank of Cambodia places at the disposal of the Ministry a specific amount of foreign exchange to pay for the programed imports. Certain imports outside the import program (imports sans devises or imports without exchange) are permitted if no official exchange is requested; these include not only imports of a personal nature but also capital equipment and the like.

There is a list of commodities that may be imported on a barter basis, either in échanges compensés or as a troc taxé; most trade with Laos, the Republic of Viet-Nam, and Thailand is conducted on the latter basis, and most imports from other sources are made on the former basis.

All imports are effected by a state trading agency, Sonexim. Applications for goods to be imported may be submitted by industries and traders to Sonexim, which transmits them to a Special Board in the Ministry of Commerce for consideration. The Special Board allocates appropriate foreign exchange to Sonexim for those applications it approves. Foreign exchange received from foreign travelers by approved hotels and surrendered by the latter to Sonexim may be used by the hotels concerned, through the intermediary of that organization, to finance imports for their own use (see section on Proceeds from Invisibles, below).

Payments for Invisibles

All payments for invisibles require individual licenses.

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

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

Foreigners residing in Cambodia, when leaving the country permanently, are permitted to transfer abroad, up to prescribed limits, savings out of their salaries earned in Cambodia, provided that the savings have been regularly deposited with an authorized bank in Cambodia.

The transfer of the full net profits from nonresident investments made prior to May 31, 1956 is authorized, subject to proof that the investment was made with foreign currency other than the former Indochinese piastre; otherwise, the transfer of profits on pre-1956 investments is limited to 80 per cent and is permitted only if the investment is recognized as useful to the economic development of Cambodia.

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

Cambodians studying abroad may receive monthly exchange allocations equivalent to CR 6,000 for France; CR 5,500 for the United States and the United Kingdom; CR 5,000 for Switzerland; CR 4,500 for Belgium and Japan; and CR 4,000 for any other country. A Cambodian student granted a scholarship may receive a monthly allocation to cover the difference between the scholarship and the permissible exchange allocation. The allocation of foreign exchange for tourist travel and business travel has been suspended.

The export of Cambodian currency is prohibited and foreign tourists are not allowed to reconvert riels into foreign currency.

Exports and Export Proceeds

All exports are effected by Sonexim, in accordance with an annual export program prepared by the Ministry of Commerce. There is a special list of products that may be exported on a barter basis (échanges compensés or troc taxé). Export proceeds are surrendered to the National Exchange Office.

Proceeds from Invisibles

Proceeds from invisibles must be surrendered. Only authorized banks and approved hotels may purchase foreign exchange from travelers, and only in currencies that are officially quoted by the National Bank. Approved hotels must surrender to authorized banks the foreign exchange that they acquire from foreign travelers. Hotel bills may be remitted in riels by foreign citizens on official travel upon producing a statement issued by their embassy certifying the payment of these expenses through its own funds held in clearing accounts or from the sale of foreign currencies.

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

Capital

All capital transfers require individual licenses.

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

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

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

Gold

Residents may hold and acquire gold coins in Cambodia for numismatic purposes. With this exception, residents other than the monetary authorities, Sonexim, and authorized industrial users are not allowed to hold or acquire gold in any form other than jewelry, at home or abroad. Imports and exports of gold in any form other than jewelry require licenses issued by the National Bank of Cambodia; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and Sonexim.

Changes during 1969

January 31. A revised list of “financeable” imports was issued.

February 11. Modified lists of imports subject to compensation charges (péréquations) were issued. The range of compensation charges on list D goods was changed from 10-50 per cent to 20-50 per cent.

May 3. It was announced that authorized dealers could without limitation purchase foreign exchange from foreign tourists at the special tourist exchange rate. Previously, conversions were limited to the price of rooms, meals, excursion trips, and souvenirs purchased from specified shops. Riels purchased by tourists could not be reconverted into foreign exchange or exported.

July 24. Order No. 1846/69 continued the tourist exchange rate and made it applicable to all expenditures of foreign tourists. Conversion at the tourist rate was permitted only for means of payment denominated in currencies officially quoted by the National Bank.

July 29. The allocation of exchange for nonofficial travel was resumed. Residents’ purchases of exchange for travel and study purposes had to be made at the tourist exchange rate. The allocation for business travel, which previously had to be financed with funds on EFAC accounts, was CR 1,700 a day. The allocation for tourist travel, pilgrimages, and (upon departure) for education and medical purposes was the equivalent of CR 13,600 a person a trip for Southeast Asia, CR 21,500 a person a trip for the French Franc Area, and CR 17,000 a person a trip for other countries. Children were entitled to half these amounts. Periodic allocations for study abroad were also announced.

Officially listed hotels could use foreign exchange that they had purchased at the tourist exchange rate to import certain equipment and consumer goods. Applications to purchase foreign exchange for other purposes at the tourist rate could be submitted to the National Exchange Office.

August 4. The National Bank introduced an official quotation for the Malaysian dollar. The premium on the Malaysian dollar for tourists was maintained at CR 8.

August 18. The official parity of the riel was changed from 0.0253905 gram of fine gold (corresponding to CR 35 per U.S. dollar) to 0.016 gram of fine gold or CR 55.54 per U.S. dollar. The rate for the French franc remained unchanged at CR 10 = F 1. As a result, the broken cross rate for the French franc was eliminated. The special exchange rates of CR 60 = US$1 and CR 12 = F 1 for the conversion of foreign exchange by foreign tourists were abolished. Foreign exchange received from tourists could no longer be used for import purposes.

August 18. The compensation charges on imports were abolished. For most commodities subject to these charges, they had been lower for imports payable in French francs than for those payable in other currencies.

August 18. The exchange allocations for travel and study that had been introduced on July 29 were suspended.

August 18. A revised list was issued of commodities that could be imported or exported on a barter basis (troc taxé).

September. Imports of alcoholic beverages were suspended.

October 25. Imports of cotton yarn and liquid milk (canned or bottled) were prohibited.

November 4. The system of allocations for study abroad and for government officials taking training courses abroad was modified.

Cameroon

Exchange System

No par value for the currency of Cameroon has been established with the Fund. The unit of currency is the CFA Franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 277.710 = US$1.1 Exchange transactions in French francs between the Cameroonian agency of the BCEAEC and commercial banks in Cameroon take place at the fixed rate of CFAF 1 = F 0.02. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and in principle include a commission.

With the exception of those relating to gold, Cameroon’s exchange control measures do not apply to relations with (1) France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas) and Monaco; and (2) the other countries whose bank of issue is linked with the French Treasury by an Operations Account (Central African Republic, Chad, the People’s Republic of the Congo, Dahomey, Gabon, Ivory Coast, the Malagasy Republic, Mali, Mauritania, Niger, Senegal, Togo, and Upper Volta). Hence, all payments to these countries may be made freely. All other countries, except Cameroon itself, are considered foreign countries, and financial relations only with foreign countries are subject to exchange control.

Administration of Control

Exchange control is administered by the Directorate of Foreign Economic Relations and International Payments in the Ministry of Commerce and Industry, which also supervises borrowing and lending abroad, the issuing, advertising, or sale of foreign securities in Cameroon and inward and outward direct investment. The BCEAEC is authorized to collect, either directly or through the intermediary of the banks, any information necessary to compile the balance of payments statistics. All exchange transactions relating to foreign countries must be effected through authorized intermediaries, i.e., the Postal Administration and authorized banks. Import and export licenses are issued by the Ministry of Commerce and Industry; applications must be submitted to the Directorate of Foreign Economic Relations and International Payments.

Prescription of Currency

Cameroon is an Operations Account country of the French Franc Area, since the BCEAEC maintains an Operations Account with the French Treasury; settlements with France, Monaco, and the other Operations Account countries of the French Franc Area are made in CFA francs, French francs, or the currency of any other Operations Account country.2 Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs through Foreign Accounts in Francs. All settlements between Cameroon and Portugal, Rhodesia, and South Africa are prohibited.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France. The crediting to nonresident accounts of CFA banknotes, French banknotes, or banknotes issued by any other institute of issue that maintains an Operations Account with the French Treasury is prohibited.

Imports and Import Payments

Imports from Portugal, Rhodesia, and South Africa are prohibited. The import from all sources outside the Central African Customs and Economic Union of certain goods (including flour, rice, pharmaceutical products, and matches) requires a prior authorization (autorisation préalable); when these goods are imported from countries other than France or Operations Account countries of the French Franc Area, they require in addition an import license. Other imports from France and from member states and associated states of the EEC may be made freely, and the former do not require a license. Some commodities are liberalized from all sources. Moreover, imports from any country made by industrialists for use in their own enterprises are also liberalized. Licenses for liberalized commodities are issued without restriction. All other imports are subject to licensing in accordance with an annual import program. This program and the amount of foreign exchange required to implement it are determined by the Ministry of Commerce and Industry and are discussed in a joint French-Cameroonian Committee. The allocations of the program are subsequently subdivided into quotas for West and East Cameroon.

Under the global quotas established in the import program, goods originating in any country other than France, an Operations Account country of the French Franc Area, or an EEC country may be imported. However, there is a separate quota for textiles from Asian countries.

Import licenses are not issued until the importer has received his personal import quota from a technical committee headed by the Director of Commerce and Foreign Economic Relations. For purposes of his distribution, registered importers are classified according to the value of their annual imports from the French Franc Area and from foreign countries, although exchange may also be made available, under certain conditions, to newly established importers and to industrial enterprises that are not registered importers.

Import licenses for imports outside the import program, e.g., for gifts, items sent as guarantees, publicity articles, and supplies for foreign religious missions, may be approved, provided that the importer undertakes not to sell the goods and only to use them for his personal requirements.

All import transactions relating to foreign countries must be domiciled with an authorized bank when their value exceeds CFAF 25,000. Import licenses entitle importers to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank.

Payments for Invisibles

Payments for invisibles to France, Monaco, and the other Operations Account countries in the French Franc Area are permitted freely; those to other countries are subject to the approval of the Ministry of Commerce and Industry. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when the basic transaction has been approved. For tourist travel, residents traveling to countries other than France, Monaco, and the other Operations Account countries of the French Franc Area may obtain an exchange allocation of an amount equivalent to CFAF 100,000 a person a year; any foreign exchange remaining after return to Cameroon must be surrendered. For business travel to foreign countries, there is an allocation of the equivalent of CFAF 10,000 a day, subject to a maximum of CFAF 300,000 a trip. The transfer of rent from real property owned in Cameroon by foreign nationals is limited to 50 per cent of the income declared for taxation purposes. Remittances for current repair and management of real property abroad are normally limited to the equivalent of CFAF 200,000 every two or three years. The transfer of 20 per cent or 50 per cent of the salary of a foreigner working in Cameroon is permitted upon presentation of the appropriate pay voucher, provided that the transfer takes place within one month of the pay period concerned. Except in the case of foreigners working in Cameroon temporarily, payments to foreign countries of insurance premiums are not permitted if the same type of insurance is available in Cameroon. Travelers going to foreign countries may take out up to a maximum of CFAF 10,000 in BCEAEC banknotes, French banknotes, and banknotes issued by other Operations Account countries; if they avail themselves of this facility, their foreign exchange allocation is reduced correspondingly. Travelers to other countries may take out any amount in BCEAEC banknotes.

Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry.

Exports and Export Proceeds

All exports to Portugal, Rhodesia, and South Africa are prohibited. Export transactions relating to foreign countries must be domiciled with an authorized bank. Exports to countries in the French Franc Area are free of license. Proceeds from exports to foreign countries must be collected within a month of the date of arrival at their destination and proceeds received in currencies other than those of France or an Operations Account country must be surrendered within a month after collection.

Proceeds from Invisibles

Proceeds from transactions in invisibles with France, Monaco, and other Operations Account countries in the French Franc Area may be retained. All amounts due from residents of other countries in respect of services and all income earned in those countries from foreign assets must be collected within a month of the due date and surrendered within a month of collection if received in foreign currency. Resident and nonresident travelers may bring in any amount of banknotes and coins issued by the BCEAEC, the Bank of France, or a bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign banknotes and coins (except gold coins) of countries outside the French Franc Area.

Capital

Capital movements between Cameroon and France, Monaco, and other Operations Account countries in the French Franc Area are free of exchange control; capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are permitted freely. Emigrants to foreign countries may transfer abroad their full savings, provided that they have met their tax obligations.

Special controls (additional to any exchange control requirements that may be applicable) are maintained over borrowing and lending abroad, over inward and outward direct investment, and over the issuing, offering for sale, or introduction of foreign securities in Cameroon; these controls relate to the transactions themselves, not to payments or receipts. With the exception of those over the sale or introduction of foreign securities in Cameroon, the control measures do not apply to relations with France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas), Monaco, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account. The provisions of Decree No. 67/DF/365, which introduced these special controls, have been suspended insofar as they are contrary to Decree No. 68/DF/460, on which the present exchange controls are based. All foreign securities, foreign exchange, and titles embodying claims on nonresidents must be deposited with an authorized intermediary, whether they belong to residents or nonresidents.

Direct investments abroad3 require the prior approval of the Ministry of Commerce and Industry, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the full or partial liquidation of such investments only requires a report ex post to the Minister of Commerce and Industry, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment abroad. Foreign direct investments in Cameroon4 require prior declaration to the Minister of Commerce and Industry, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the Minister has a period of two months from receipt of the declaration during which he may request the postponement of the projects submitted to him. The full or partial liquidation of direct investments in Cameroon only requires reporting ex post to the Minister of Commerce and Industry, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment in Cameroon. Both the making and the liquidation of direct investments, whether these are Cameroonian investments abroad or foreign investments in Cameroon, must be reported to the Minister of Commerce and Industry within 20 days following each operation. Direct investments are defined as investments implying control of a company or enterprise. Mere participation is not considered as direct investment, provided that it does not exceed 20 per cent of the capital of a company whose shares are quoted on a stock exchange.

The issuing, advertising, or offering for sale of foreign securities in Cameroon requires prior authorization by the Minister of Commerce and Industry, and must subsequently be reported to him. Exempt from authorization, however, and subject only to an ex post report, are operations in connection with (1) loans backed by a guarantee from the Cameroonian Government, and (2) shares similar to securities whose issue, advertising, or offering for sale in Cameroon has previously been authorized.

Borrowing abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in Cameroon, or by branches or subsidiaries in Cameroon of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Commerce and Industry and must subsequently be reported to him. The following are, however, exempt from this authorization, and require only a report ex post: (a) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (b) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between Cameroon and countries abroad or between foreign countries, in which these persons or firms take part; (c) loans contracted by registered banks and credit institutions; and (d) loans other than those mentioned above, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one borrower, their duration does not exceed 2 years, and the rate of interest does not exceed 6 per cent a year.

Lending abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in Cameroon, or by branches or subsidiaries in Cameroon of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Commerce and Industry and must subsequently be reported to him. The following are, however, exempt from prior authorization and are subject only to a report ex post: (a) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (b) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between Cameroon and countries abroad or between foreign countries, in which these persons or firms take part; and (c) loans contracted by registered banks and credit institutions.

An Investment Code promulgated in 1960 and revised in April 1964 establishes four categories of fiscal and other benefits which may be granted to both foreign and domestic firms undertaking approved new industrial or agricultural projects in Cameroon. The scope and duration of the benefits vary depending on the size of the investment, the degree to which it helps implement the economic and social development plan, and its importance to national economic growth. Category A permits mainly duty-free entry of capital goods and raw materials required for manufacturing and processing. Under Category B, firms may be entitled to the benefits of Category A and also to exemption for 5 years from the tax on industrial and commercial profits and from various other taxes and fees. Under Category C, large companies may conclude an “establishment agreement” with the Government, under which special conditions for the operations of the company are agreed and the nature and extent of tax concessions are determined. Normally, an “establishment agreement” is valid for 25 years and defines also the legal, economic, and financial guarantees granted to the company, including the assurance of stable conditions for financial transfers and marketing of goods. Category D grants to firms making investments of particular significance to the national economy the benefits of Category C, as well as a guarantee of stability of taxation for up to 25 years.

Gold

Residents are free to hold, acquire, and dispose of gold jewelry in Cameroon. They require the approval of the Directorate of Mines to hold gold in any other form. Approval is normally given only to industrial users, including jewelers. Newly mined gold must be declared to the Directorate of Mines, which authorizes either its exportation or its sale to domestic industrial users; exports are made only to France. Imports and exports of gold require prior authorization by the Directorate of Mines and the Minister of Commerce and Industry, which is seldom granted for imports. Exempt from this requirement are (1) imports and exports by or on behalf of the monetary authorities, and (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles). Both licensed and exempt imports of gold are subject to customs declaration.

Changes during 1969

January 16. Circular No. 1 provided that payments for imports from foreign countries up to CFAF 25,000 could be made freely, even if no import license existed. Forward cover could be obtained only for import payments and would be prohibited until further regulations were issued. Spot exchange for imports could be obtained only for financing under letter of credit, and not earlier than eight days before payment was due or, if a letter of credit was opened, eight days before shipment. The general authorization given to approved intermediaries by Order No. 794/MINCI of December 11, 1968, to sell foreign exchange for a number of transactions could be exercised by them only subsequent to the verification and approval (visa) of the supporting documents by the staff of the Ministry of Commerce and Industry.

Resident and nonresident travelers could import any amount by means of payment denominated in foreign currency as well as any amount of BCEAEC banknotes and banknotes issued in Operations Account countries. Nonresident travelers departing from Cameroon were authorized to re-export the unused foreign currency they had previously imported and could reconvert into foreign currencies BCEAEC banknotes up to CFAF 50,000. In addition, resident and nonresident travelers could take out any other French Franc Area banknotes up to the equivalent of CFAF 10,000. An allowance of the equivalent of CFAF 100,000 a person a year was set for tourist travel to foreign countries. An allocation for business travel abroad was fixed at the equivalent of CFAF 10,000 a day, subject to a maximum of CFAF 300,000 a trip. Emigrants could transfer up to the equivalent of CFAF 500,000 a person. Rents could be transferred once a year. Profits could be transferred as shown in the balance sheet and other accounts.

January 16. Instruction No. 1 established procedures for the domiciliation of import transactions, payments for imports, the domiciliation of export transactions, and for controls over the repatriation of export proceeds. Forward purchases of foreign currency were limited to import transactions; the commodities for which cover could be obtained were to be specified by the Minister of Commerce and Industry.

January 16. Circular No. 2 established procedures for the establishment and operation by nonresidents of Foreign Accounts in Francs and foreign dossiers for securities. With minor exceptions, all overdrafts on the accounts mentioned and all advances to nonresidents required the approval of the Minister of Commerce and Industry.

January 16. Instruction No. 2 established standard allocations for the transfer abroad of wages and salaries earned by foreign workers in Cameroon. A bachelor could transfer 20 per cent of his monthly earnings, and a married man 50 per cent, provided that his family resided in his country of origin.

February 18. Circular No. 3 was issued concerning transfers of rents and of farmers’ income. It amended Circular No. 1.

February 18. Order No. 9 was issued concerning the control over means of payment carried by travelers.

April 22. The import program for 1969 was announced. The over-all amount of the quotas was fixed at CFAF 6.5 billion, compared with CFAF 7.1 billion for 1968. Five commodities were taken off the quota system and could henceforth be imported freely; these were beer, stockfish, ores, air conditioners, and motor vehicles (including trucks).

August 11. The exchange rate in terms of U.S. dollars was changed from CFAF 246.853 per US$1 to CFAF 277.710 per US$1. The fixed exchange rates for the French franc, the Malagasy franc, and the Mali franc remained unchanged.

Canada*

Exchange Rate System

The par value is 0.822021 gram of fine gold per Canadian Dollar or Can$1 = US$0.925. Canada has no exchange restrictions on foreign payments. On March 25, 1952, Canada notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No prescription of currency requirements are in force. In implementation of UN Security Council Resolution No. 253(68) of May 29, 1968, payments and transfers to Rhodesia are restricted.

Imports and Import Payments

Payments and transfers abroad may be made freely. Import licenses are required only for a few agricultural items, including certain cereals, for natural gas, and for material and equipment for the production or use of atomic energy; for some of the agricultural items, such as certain dairy products, licenses are generally not being issued. Commercial imports from any source of certain commodities are generally prohibited; these include oleomargarine, used automobiles, secondhand aircraft, certain periodicals, and goods of Rhodesian origin.

Exports and Export Proceeds

The surrender of the proceeds of exports is not required, and exchange receipts are freely disposable. For supply reasons, the export of a few commodities to all destinations is under export control. For security reasons, the export of certain specified commodities to all destinations except the United States is under export control. All exports to CMEA countries and mainland China are subject to control; certain nonstrategic goods, when of Canadian origin, may be exported to these destinations under general permit. The export of all goods to Rhodesia, other than medical supplies, news material, educational equipment and materials for use in educational institutions, and books, magazines, and periodicals, is prohibited.

Payments for and Proceeds from invisibles

No requirements are imposed on exchange payments for, or exchange receipts from, invisibles. Individual travelers leaving Canada may not take out more than Can$5 in silver coins.

Capital

No exchange control requirements are imposed on capital receipts or payments by residents or nonresidents. Certain guidelines issued in 1968 apply to chartered banks and financial institutions with respect to their foreign assets and liabilities and to companies incorporated in Canada with respect to transfers of capital to overseas countries.

Gold

Residents may freely purchase, hold, and sell gold in any form, at home or abroad. Under the Emergency Gold Mining Assistance Act of 1948, all mines receiving subsidies are required to sell their newly mined gold to the Royal Canadian Mint. This gold is disposed of in the free market to established wholesale dealers. Exports of gold are subject to the following conditions: (1) the sale of gold to CMEA countries and mainland China is subject to control and requires a license from the Department of Trade and Commerce; (2) gold that originated outside Canada may only be re-exported to a country other than the United States when covered by a permit issued by the Minister of Trade and Commerce under the authority of the Export and Import Permits Act; (3) owing to the general embargo on trade with Rhodesia, no gold may be imported from or exported to Rhodesia. Commercial imports of articles containing a minor quantity of gold, such as watches, are unrestricted and free of license.

Changes during 1969

January 1. New antidumping legislation entered into force. The main change was the introduction of the concept of “material injury” to replace that of “fair market value.”

March 17. The Government announced that, in response to similar prior initiatives in other producing countries, Canada would sell wheat at prices below the minimum levels established by the International Grain Agreement.

May 7. The Minister of Finance issued a statement clarifying some aspects of Canada’s guideline programs limiting certain overseas investments. He reiterated the March 1966 request to Canadian investors not to acquire securities of foreign issues denominated in Canadian or U.S. dollars that would be subject to the U.S. Interest Equalization Tax if purchased by U.S. residents. Henceforth this request would not apply, however, to shares of mutual or other investment companies resident or incorporated outside Canada and the United States, provided that such companies invested in Canada or the United States amounts at least equal to their sales in Canada.

July 16. The Bank of Canada requested each chartered bank to regard the existing level of its foreign currency swap deposits as a temporary ceiling for that type of deposit. They were defined as deposits representing funds converted into a foreign currency, usually U.S. dollars, which have been placed on term deposit with a bank and which the bank has undertaken through a forward contract to convert back into Canadian dollars at maturity. (This request was withdrawn on March 30, 1970.)

October 1. The Export Credits Insurance Corporation was replaced by the Export Development Corporation in an effort to provide more comprehensive financing facilities to Canadian exporters.

October 20. Legislation was introduced to prevent nonresidents henceforth from acquiring more than 25 per cent of the capital stock of Canadian sales finance companies.

December 5. Exports of nickel in all forms to all destinations were made subject to export permits.

December 19. The Government announced an embargo on exports of nickel scrap except, under permit, by primary producers. Export permits for other forms of nickel were to be issued only to nickel-producing companies.

Central African Republic

Exchange System

No par value for the currency of the Central African Republic has been established with the Fund. The unit of currency is the CFA Franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 277.710 = US$1.1 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique Equatoriale et du Cameroun (BCEAEC) and commercial banks take place at the rate of CFAF 1 = F 0.02, free of commission charges. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

An exchange tax of 2½ per cent (subject to a minimum of CFAF 500) is levied on most exchange transactions with, and payments to, countries other than France, Monaco, and the Operations Account countries. In addition to payments to the countries mentioned, the following are exempt: (1) transactions of less than CFAF 12,500; (2) all operations relating to foreign exchange receipts; (3) foreign currency allowances for travel to countries other than France, Monaco, or the Operations Account countries; (4) government expenditures in countries other than France, Monaco, or the Operations Account countries; (5) transactions of international organizations and embassies; and (6) transactions carried out with the member countries of the EEC.

With the exception of those relating to gold, the Central African Republic’s exchange control measures do not apply to (1) France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas) and Monaco; and (2) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Cameroon, Chad, the People’s Republic of the Congo, Dahomey, Gabon, Ivory Coast, the Malagasy Republic, Mali, Mauritania, Niger, Senegal, Togo, and Upper Volta). Hence, all payments to these countries may be made freely. All other countries, except the Central African Republic itself, are considered foreign countries, and in principle financial relations only with foreign countries are subject to exchange control.

Administration of Control

The Office of Foreign Financial Relations in the Ministry of Finance supervises borrowing and lending abroad, the issuing, advertising, or sale of foreign securities in the Central African Republic, and inward and outward direct investment. Exchange control is administered by the Minister of Finance, who has delegated some of his approval authority to the BCEAEC, to the authorized banks, and to the Postal Administration. All payments and receipts between the Central African Republic and foreign countries that are made through banks or postal channels are registered, for statistical purposes only, by the BCEAEC, through the intermediary of the institution executing the transfer; the BCEAEC also addresses inquiries to the principal firms and agencies concerning inward and outward payments made in other manners, particularly by the offsetting of claims and debts. All exchange transactions relating to foreign countries must be effected through authorized banks. Import and export licenses are issued by the Directorate of Foreign Trade in the Ministry of Foreign and Domestic Trade.

Prescription of Currency

The Central African Republic is an Operations Account country of the French Franc Area, since the BCEAEC maintains an Operations Account with the French Treasury; settlements with France, Monaco, and the other Operations Account countries of the French Franc Area are made in CFA francs, French francs, or the currency of any other institute of issue that maintains an Operations Account with the French Treasury. Settlements with all other countries are usually made in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs through Foreign Accounts in Francs.2

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France. The crediting to nonresident accounts of CFA banknotes, French banknotes, or banknotes issued by any other institute of issue that maintains an Operations Account with the French Treasury is prohibited.

Imports and Import Payments

The import of coffee, palm oil, groundnut oil, potatoes, butter, cheese, and eggs from countries other than the member states of the Central African Customs and Economic Union (UDEAC) is not authorized unless local production of these commodities is inadequate. Imports of enamelware from all sources, and imports of certain types of footwear and paints not originating in a member country of the UDEAC, may be made only in given ratios to purchases of the local product, and imports of alcoholic beverages from all sources require an import authorization from the Ministry of the Interior, for health reasons. Imports of firearms are prohibited from all sources. All other imports from countries in the French Franc Area may be made freely and without an import license. All other imports from EEC countries also are free from quantitative restrictions. Imports from all non-EEC countries outside the French Franc Area are subject to licensing within the framework of an annual import program of an indicative character, but are not normally restricted or subject to quota, import licenses being required for statistical purposes only. There are special ceilings for imports of textile piece goods from low-wage countries.

All import transactions relating to foreign countries must be domiciled with an authorized bank. The import license entitles importers to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank.

Payments for Invisibles

Payments for invisibles to France, Monaco, and the other Operations Account countries in the French Franc Area are permitted freely; those to other countries are subject to approval. For many types of payment the approval authority has been delegated to authorized banks. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when the basic transaction has been approved. Resident tourists traveling to countries other than France, Monaco, and the other Operations Account countries of the French Franc Area may obtain an exchange allocation of an amount equivalent to CFAF 50,000 a year for each person; any foreign exchange in excess of the equivalent of CFAF 5,000 remaining after return to the Central African Republic must be surrendered. For business travel to foreign countries, there is a special allocation of the equivalent of CFAF 10,000 a person a day, subject to a maximum of CFAF 100,000 a trip, for travel to certain listed countries; the allocation is CFAF 15,000 a day, up to CFAF 150,000 a trip, for business travel to any other foreign country. The transfer of the entire net salary of a foreigner working in the Central African Republic is permitted upon presentation of the appropriate pay voucher, provided that the transfer takes place within three months of the pay period. Travelers going to foreign countries may take out up to a maximum of CFAF 10,000 in BCEAEC banknotes, French banknotes, and banknotes issued by any other institute of issue maintaining an Operations Account with the French Treasury. Travelers to other countries may take out any amount in BCEAEC banknotes.

Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry; they may reconvert up to CFAF 50,000 in BCEAEC banknotes into foreign currency.

Exports and Export Proceeds

All exports of cotton, coffee, corn, tobacco, peanuts, palm oil, meat, and diamonds require a license. All other exports to countries in the French Franc Area may be made freely. All exports to countries outside the French Franc Area require licenses, which are issued freely.

Proceeds from exports to foreign countries must be collected and repatriated within one month from the due date; the latter generally must fall within 180 days of shipment. Export proceeds received in currencies other than those of France or another Operations Account country must be surrendered. All export transactions relating to foreign countries must be domiciled with an authorized bank.

Proceeds from Invisibles

Proceeds from transactions in invisibles with France, Monaco, and other Operations Account countries in the French Franc Area may be retained. All amounts due from residents of other countries in respect of services and all income earned in those countries from foreign assets must be collected within a month of the due date and, if received in foreign currency, surrendered within a month of the date of receipt. Resident and nonresident travelers may bring in any amount of banknotes and coins issued by the BCEAEC, the Bank of France, or any other bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign banknotes and coins (except gold coins) of countries outside the French Franc Area.

Capital

Capital movements between the Central African Republic and France, Monaco, and other Operations Account countries in the French Franc Area are free of exchange control; capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are permitted freely.

Special controls (additional to any exchange control requirements that may be applicable) are maintained over borrowing and lending abroad, over inward and outward direct investment, and over the issuing, advertising, or offering for sale of foreign securities in the Central African Republic; these controls relate to the transactions themselves, not to payments or receipts. With the exception of these over the sale or introduction of foreign securities in the Central African Republic, the control measures do not apply to relations with France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas), Monaco, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account.

Direct investments abroad 3 require the prior approval of the Ministry of Finance, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the full or partial liquidation of such investments also requires the prior approval of the Ministry of Finance unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment abroad. Foreign direct investments in the Central African Republic4 must be declared to the Minister of Finance unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the Minister has a period of two months from receipt of the declaration, during which he may request the postponement of the projects submitted to him. The full or partial liquidation of direct investments in the Central African Republic must also be declared to the Minister, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment in the Central African Republic. Both the making and the liquidating of direct investments, whether these are Central African Republic investments abroad or foreign investments in the Central African Republic, must be reported to the Minister within 20 days following each operation. Direct investments are defined as investments implying control of a company or enterprise. Mere participation is not considered as direct investment, provided that it does not exceed 20 per cent in the capital of a company whose shares are quoted on a stock exchange.

The issuing, advertising, or offering for sale of foreign securities in the Central African Republic requires prior authorization by the Minister of Finance. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the Central African Republic Government and (2) shares similar to securities whose issuing, advertising, or offering for sale in the Central African Republic has previously been authorized.

Borrowing abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in the Central African Republic, or by branches or subsidiaries in the Central African Republic of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Finance. The following are, however, exempt from this authorization: (1) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (2) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between the Central African Republic and countries abroad or between foreign countries, in which these persons or firms take part; (3) loans contracted by registered banks; and (4) loans other than those mentioned above, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one borrower. The contracting of loans referred to under (4) that are free of authorization, and each repayment thereon, must be reported to the Office of Foreign Financial Relations within 20 days of the operation, unless the total outstanding amount of all loans contracted abroad by the borrower is CFAF 500,000 or less.

Lending abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in the Central African Republic, or by branches or subsidiaries in the Central African Republic of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Finance. The following are, however, exempt from this authorization: (1) loans granted by registered banks and (2) other loans, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one lender. The making of loans that are free of authorization, and each repayment thereon, must be reported to the Office of Foreign Financial Relations within 20 days of the operation except when the amount of the loan granted abroad by the lender is less than CFAF 500,000.

Under Law No. 62/355 of February 19, 1963 (as amended by Ordinance No. 69/47 of September 2, 1969) and UDEAC Decision No. 18/65 of December 14, 1965, industrial, tourist, agricultural, and mining enterprises (both foreign and domestic) established in the Central African Republic are granted, under certain conditions, reduced duties and taxes on the import of specified equipment; in addition, certain enterprises receive exemption from direct taxes on specified income.

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

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

Gold

Residents are free to hold, acquire, and dispose of gold in any form in the Central African Republic. Imports and exports of gold from or to any other country require prior authorization, which is seldom granted. Exempt from this requirement are (1) imports and exports by or on behalf of the Treasury or the BCEAEC and (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles). Both licensed and exempt imports of gold are subject to customs declaration.

Changes during 1969

January 4. Circular No. 10/MF/CAB was issued containing detailed instructions concerning the domiciliation of import transactions and regarding import payments.

January 9. Circular No. 45/MF established procedures for the domiciliation of export transactions and for controls over the repatriation of export proceeds.

January 20. Circular No. 83/MF amended Circulars Nos. 10 and 45.

January 20. Circular No. 84/MF provided that monthly transfers of family remittances could be made as follows: for traders and independent businessmen up to one twenty-fourth of the profits declared during the last calendar year; and for nonsalaried private persons who cannot demonstrate such profits, CFAF 25,000 for each beneficiary.

January 23. Letter No. 80.331/DB-RFE was issued concerning study abroad. It established various allocations for this purpose. That for living expenses of unmarried nonboarding students was US$300 a month for the United States or the equivalent of CFAF 50,000 for other countries.

February 3. Order No. 42/MF/CT completed Order No. 209/MF/CT of December 18, 1968 by providing that transfers of foreign exchange could only be made through the intermediary of an authorized bank established in the Central African Republic.

March 25. Order No. 100/MECF/CAB revised the exchange allocations for travel to foreign countries. That for tourist travel was reduced from the equivalent of CFAF 100,000 a person a year to CFAF 50,000 a person a year. For business travel, the new allocation was CFAF 10,000 a day with a maximum of CFAF 100,000 a trip for specified listed countries, and CFAF 15,000 a day with a maximum of CFAF 150,000 a trip for all other foreign countries. The amount of BCEAEC banknotes, French banknotes, and banknotes issued by any other institute of issue maintaining an Operations Account that residents traveling to foreign countries could take out was reduced from CFAF 50,000 to CFAF 10,000 a person a trip.

March 25. Circular No. 303/MF provided that transfers abroad up to CFAF 12,500 a person a year, which could be made freely for any purpose, had to be deducted from the tourist travel allocation. The use abroad of credit cards was prohibited. Passports had to be marked for travel exchange granted. Exchange for business travel in excess of the basic allocations could be delivered upon special authorization issued by the BCEAEC. Travel expenses abroad paid through a travel agency were deducted from the travel allocations.

March 25. Circular No. 304/MF provided further details about the allocation of foreign exchange for travel.

July 1. Decree No. 69/211 submitted to control by the Minister of Finance all claims in CFA francs and in foreign currency that banks and financial institutions in the Central African Republic held on foreign countries. This control could be delegated to the BCEAEC. (This delegation took place on November 4, 1969 by Order No. 242/MECF/DGF.)

August 11. The exchange rate in terms of U.S. dollars was changed from CFAF 246.853 per US$1 to CFAF 277.710 per US$1. The fixed exchange rates for the French franc, the Malagasy franc, and the Mali franc remained unchanged.

September 2. Ordinance No. 69/47 amended Law No. 62/355, the Investment Code, to change the composition of the National Investment Commission.

September 19. Ordinance No. 69-48 created a national chartering office (Office National d’Affrètements).

October 18. A number of diamond companies were closed.

October 22. Decree No. 69-322 authorized the National Diamond Office to resume its activities.

November 11. The BCEAEC instructed banks to maintain vis-à-vis foreign countries a net foreign currency position that was either negative or nil. Their total claims in French francs and CFA francs on residents of foreign countries could not exceed the level of September 30, 1968.

Ceylon

Exchange Rate System

The par value is 0.149297 gram of fine gold per Ceylon Rupee or Cey Rs 5.95237 = US$1. Exchange rates are based on the fixed sterling-Ceylon rupee rate (Cey Rs 14.29 = £1) and the rates for other currencies against sterling in London. Another effective exchange rate of approximately Cey Rs 9.23 per US$1 arises from transactions in Foreign Exchange Entitlement Certificates (henceforth called certificates), which exporters of nontraditional exports (i.e., exports other than tea, rubber, and major coconut products but including instant tea) and certain other earners or recipients of foreign exchange are entitled to receive upon surrender of foreign exchange earned. Nonresident travelers when converting foreign exchange into Ceylon rupees at the official rate may also receive either corresponding certificates or their cash value in rupees. The certificates are denominated in Ceylon rupees and are issued in amounts equivalent at the official rate to the foreign exchange surrendered; they are transferable within 30 days of the date of issue. Additional certificates are sold by the Central Bank of Ceylon upon demand at a price of Cey Rs 55 per certificate with a face value of Cey Rs 100; such certificates are not transferable. Certificates with a face value corresponding at the official rate to the amount of foreign exchange required must be surrendered as supporting documents when purchasing foreign exchange for payments in respect of specified imports and invisibles. The Central Bank deals in certificates for up to four months forward, at Cey Rs 56 selling and Cey Rs 54 buying per Cey Rs 100 certificate; transactions are permitted only when relating to anticipated genuine payments and receipts in foreign exchange to which the certificate requirements or privileges are applicable.

Administration of Control

Exchange control is administered by the Department of Exchange Control of the Central Bank of Ceylon, as agent of the Government. A foreign exchange budget and an import program are drawn up annually. All remittances of foreign exchange in Ceylon must be made through banks authorized to carry out operations in foreign currencies in accordance with the exchange control regulations prescribed by the Controller of Exchange. Remittances may also be made through post offices, under permits issued by the Controller of Exchange. Import and export licensing is handled by the Controller of Imports and Exports, but licenses for certain industrial imports are issued by the Actual Users Division of the Ministry of Industries and Fisheries.

Prescription of Currency

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

Settlements with ten countries with which Ceylon has bilateral payments agreements,1 with the United Arab Republic, and (for certain transactions only) with Pakistan must be made through the relevant special accounts. Payments to all other countries except Rhodesia may be made by crediting sterling or Ceylon rupees to a sterling External Account or an External Rupee Account, or in the currency of the creditor country. Receipts from all other countries except Rhodesia may be accepted in sterling or Ceylon rupees from a sterling External Account or an External Rupee Account, in any specified currency 2 other than a Sterling Area currency, or in any nonspecified, non-Sterling Area currency marketable in the United Kingdom, i.e., freely exchangeable for sterling. Transactions involving deviations from the general regulations require the prior approval of the Controller of Exchange. Special regulations apply to settlements with Rhodesia.

Nonresident Accounts

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

Blocked Accounts are used for holding funds that may not be transferred abroad and that are owned by nonresidents, repatriates, and emigrants. Such funds, unless they originate from payments for imports, may be used for investment in Ceylon in prescribed securities. Proceeds from the liquidation of such investments must be credited to Blocked Accounts. Also retained in Blocked Accounts is a proportion of local currency earnings derived from exhibition of foreign-owned films, if the takings exceed the amount specified in the import license; such retained funds may be used by the owner for making films in Ceylon.

Moratorium Accounts are accounts opened with exchange control approval in the names of nonresidents to which may be credited all investment income that was subject to the 1964-68 moratorium on transfers of profits, dividends, interest, and other investment income. Existing balances on private nonresident accounts (other than Blocked Accounts) representing investment income that arose prior to the moratorium have also been transferred to Moratorium Accounts.

Imports and Import Payments

All imports of goods originating in or shipped from Rhodesia are prohibited. Except for imports by the Food Commissioner’s Department and certain minor imports (such as trade samples, gifts, and books up to specified amounts), imports require individual licenses unless they are covered by a general license.

Imports are divided into two groups—the A category and the B category. Imports in the A category broadly comprise basic necessities and certain specified imports of government departments and government corporations. The B category includes all remaining imports. It is subdivided into two groups: approximately 350 commodities (mainly raw materials and producer goods) may be imported under open general license; other imports are subject to quota restrictions and require individual licenses. The value and composition of imports in the A category and of imports under quota in the B category are established by an annual import program. Imports of many nonessential or locally produced items are either prohibited or considerably restricted.

The right to import is restricted to government-sponsored corporations and registered importers, although private individuals are allowed to import certain commodities for their own use, subject to special authorization. Imports of specified commodities 3 are restricted to government or state corporations, the Cooperative Wholesale Establishment, or Lanka Salu Sala Ltd.; these are referred to as “reserved items.” In order to allocate foreign exchange, applicants for import licenses are divided into three groups: (1) actual users of industrial raw materials, machinery, etc., (2) those who import other goods for their own use and not for resale, and (3) established importers who import goods for trading purposes.

An authorized dealer may approve an application to remit foreign exchange or to credit a nonresident account when the applicant furnishes, or undertakes to furnish, evidence of importation and of the cost of the goods together with a valid importer’s copy and an exchange control copy of the import license. Payment for imports in the B category requires, in addition to the rupee equivalent of the foreign exchange involved, surrender of certificates with a face value equal to the rupee payment;4 imports in the A category do not require the surrender of certificates. Imports under open general license are allowed only against letters of credit,5 and require a certificate forward purchase contract, or the surrender of certificates, to the full value of the letter of credit at the time of its opening. A downpayment of 25 per cent or 50 per cent is mandatory on opening letters of credit for the import of truck chassis.

Payments for invisibles

All payments for invisibles require exchange control permission and, with certain exceptions, require surrender of certificates corresponding to the full amount of the foreign payment. Exempt from surrender of certificates are (1) certain official and semiofficial travel expenditures abroad,6 (2) expenditures for certain approved courses of study abroad, (3) remittances abroad by nonnationals for family maintenance, (4) certain foreign exchange expenditures for tourist and export promotion, other than business travel, (5) expenditures for approved pilgrimages, (6) certain provident fund contributions and life insurance premiums, (7) pensions and the final remittance, on retirement, of provident and pension funds, (8) expenditures of foreign embassies, official international organizations, and foreign diplomatic personnel, and (9) other expenditures abroad specifically exempted from the certificate surrender requirement by the Controller of Exchange. Certain accumulated profits and dividends are being released for transfer abroad, over a two-year period, subject to surrender of certificates.

The remittance of life insurance premiums on policies in foreign currencies purchased by non-nationals residing temporarily in Ceylon is permitted, and such policies are considered as part of the assets available to them on retirement.

Foreign exchange for personal travel abroad is only granted for furloughs of nonnationals. Business travel is generally limited to travel for the promotion of traditional and industrial exports and of tourism, and exchange up to a maximum of £ stg. 10 a day for a maximum period of 21 days is allowed in such cases. Exchange for pilgrimages is granted on the basis of one pilgrimage in a lifetime.

Exchange for educational expenses is made available only for certain courses of study that will be of positive value to the country and that are not available in Ceylon. For study in educational institutions in “Asian group” countries,7 exchange up to a maximum of Cey Rs 750 a month is allowed. For study in the United Kingdom, foreign exchange is made available at £ stg. 45 a month for undergraduate studies, and £ stg. 60 a month for postgraduate studies, plus actual fees and cost of books. For study in educational institutions elsewhere (other than the United States and Canada), the maximum allowable is £ stg. 53 for undergraduate and £ stg. 70 for postgraduate studies; the maxima for the United States and Canada are US$225 and US$240 for undergraduate and postgraduate studies, respectively.

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

Indian and Pakistani nationals are permitted to remit for family maintenance a maximum of Cey Rs 750 a month or one third of their gross monthly income, whichever is less. Other foreign nationals are permitted to remit £ stg. 85 a month for a wife, £ stg. 60 for a child going to school, £ stg. 25 for other children, and £ stg. 45 a month less monthly income abroad for an employed child, up to a maximum of two thirds of the gross monthly income when dependents are direct ones. For other dependents, this ceiling is one third of the gross monthly income. When the amount claimed on this basis exceeds one third of the gross monthly income, the excess will be treated as an anticipatory transfer to be set off against the amount the repatriate is entitled to remit upon departure. Temporary residents on short-term contracts are allowed to remit up to two thirds of their gross monthly income. Ceylonese nationals are not granted exchange for family remittances.

Commissions up to 5 per cent of the c.i.f. value are allowed on export orders secured through agents abroad.

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

Exports and Export Proceeds

All exports to Rhodesia are prohibited. Permits issued by the Controller of Exchange are required for all commercial exports. The export of some items is banned, and that of certain others requires export licenses issued by the relevant government agency. Exports to 14 specified countries 8 are permitted to be made only by registered Ceylonese traders. Rubber exports to mainland China, Poland, Rumania, and the U.S.S.R., and tea exports to the United Arab Republic, are under state trading. Re-exports of nonmonetary gold, silver, and diamonds are allowed only in special circumstances.

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

Exporters of all goods other than tea (excluding instant tea), rubber, coconut oil, copra, dessicated coconut, and fresh coconuts are entitled to receive certificates with a face value in Ceylon rupees equal to the f.o.b. value of exports, upon surrender to an authorized bank of the foreign exchange actually earned. Exporters can use these certificates as supporting documents when buying foreign exchange for payment of imports, or for other payments abroad, which require the surrender of certificates. Certificates are freely transferable within 30 days from the date of issue; they have to be surrendered to an authorized bank before the expiry of that period. Certificates are not transferable thereafter, but the holders can use them when making foreign exchange payments within seven months from the date of issue; at the end of the seven-month period, the validity of the certificate lapses. Exporters of precious stones receive, in addition to certificates as indicated above, licenses to import raw materials (other than gold) for the jewelry industry corresponding to 25 per cent of their export receipts.

Proceeds from Invisibles

Foreign exchange proceeds from invisibles must be surrendered. Receipts under the following headings entitle the recipient to obtain certificates with a face value equivalent to the value of the foreign exchange surrendered to an authorized bank: (1) travel receipts; (2) insurance receipts; (3) investment income; (4) private transfers and donations; and (5) miscellaneous other inward remittances as determined, on a case-by-case basis, by the Controller of Exchange. Nonresident travelers are eligible to receive certificates corresponding to the amount of foreign exchange converted with authorized dealers; alternatively, these may pay the traveler, in addition to the rupee equivalent of the foreign exchange sold, the cash value of the certificate.

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

Capital

Investments of foreign capital are permitted in projects which are specifically approved by the Government, or, where the capital is drawn from a Blocked Account in Ceylon, in shares of public companies incorporated in Ceylon; capital transfers for direct investment in Ceylon are entitled to receive certificates upon conversion of the foreign exchange into rupees. Proceeds from the sale or liquidation of investments in approved projects may be repatriated, along with capital appreciation; transfers require surrender of certificates. Proceeds from sale or liquidation of investments not approved by the Government may not be transferred abroad, but they may be reinvested in Ceylonese securities; the current income thereon may be remitted abroad.

New foreign investments in Ceylon that are considered and approved by the Foreign Investment Approval Committee of the Ministry of Planning and Economic Affairs are also granted special facilities in respect of remittances and taxation. Investments abroad by residents are not normally permitted.

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

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

Repatriates leaving Ceylon for residence in the country of their permanent domicile are permitted, at the time of their departure, to transfer assets representing their retirement funds and a reasonable amount of savings up to a maximum of Cey Rs 75,000 for Indian and Pakistani nationals and Cey Rs 150,000 for other nationals. However, for persons other than Indian and Pakistani nationals who prior to 1965 had already accumulated amounts in retirement funds in excess of Cey Rs 150,000, special provision is made for transfers of amounts up to Cey Rs 250,000. For persons who have been in business in Ceylon, the capital they originally brought into the country plus a reasonable amount of savings are allowed to be transferred, subject to the above limits. Transfer of personal assets and of income thereon requires surrender of certificates; exempt are (1) balances on provident and pension funds held abroad and representing contributions in respect to contractual obligations entered into before May 6, 1968, (2) provident and pension funds held in rupees in Ceylon, and (3) the value of insurance policies held abroad and taken out before May 6, 1968. Special provisions, governed by an agreement between Ceylon and India, apply to Indian families returning to India.

Gold

Imports and exports of gold in any form require licenses issued by the Central Bank. Such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities. The People’s Bank is the sole importer of gold. It sells gold in small quantities to licensed craftsmen and jewelers at the equivalent of US$60 an ounce. Small quantities are also sold to hospitals. Commercial imports of jewelry and of other articles containing gold are severely restricted.

Changes during 1969

January 1. The import of foodstuffs was restricted to importers of Ceylonese nationality.

January 1. Private sales of tea, outside public auctions, were permitted also to Belgium, France, the Federal Republic of Germany, Ireland, Italy, Luxembourg, and the Netherlands. Previously, they were permitted only to Canada and the United States.

January 7. A protocol to the trade and payments agreement with mainland China was signed, setting trade targets for 1969 at Cey Rs 146 million each way.

January 16. The open general license list for imports was expanded by a number of items, the main ones being truck chassis and teak and other types of lumber for building.

January 28. The requirement of a letter of credit for imports on open general license was waived when the importer obtained interest-free credit not exceeding one year, provided that he had prior to May 5, 1968 obtained such interest-free credit and that the transaction was registered with an authorized bank.

January 30. A downpayment of 50 per cent was prescribed on letters of credit opened for the import of truck chassis. The requirement was limited to 25 per cent, however, for importers whose imports did not exceed 30 trucks a month.

March 1. Two foreign banks operating in Ceylon were again permitted to accept deposits from Ceylonese nationals. Foreign banks had been prohibited from doing so since 1961. Similar permission was given to six more banks later in the year.

March 19. Deferred payments for imports, when exceeding 12 months, required prior approval by the Controller of Exchange.

March 21. Exports of instant tea qualified for Foreign Exchange Entitlement Certificates.

May 5. The rebate of export duty on teas sold at Colombo auctions was increased from Cey Re 0.05 a pound to Cey Re 0.15 a pound for medium-grown and low-grown teas; that for high-grown teas remained at Cey Re 0.05 a pound.

June 9. The export duty rebate on teas sold at Colombo auctions was put on a sliding-scale basis, ranging from Cey Re 0.05 to Cey Re 0.20 a pound.

June 18. The spot selling price of the Central Bank for Foreign Exchange Entitlement Certificates was raised from Cey Rs 44 to Cey Rs 55 per certificate with a face value of Cey Rs 100.

June 18. All imports by government departments, other than food imports by the Food Commissioner’s Department, were made subject to specific import license.

July 11. It was announced that the financing of imports by government departments and corporations by suppliers’ credits with a maturity of less than five years would not be approved.

August 1. Private sales of tea, outside public auctions, were permitted to any country.

September 1. Insurance in respect of teas shipped from Ceylon for sale at London auctions had to be placed with the Insurance Corporation of Ceylon; foreign exchange would not be released for insurance of such cargoes abroad.

September 1. The license fee on imports under open general license, when financed under certain aid agreements, was raised from 20 per cent to 35 per cent.

October 1. Most foreign payments by government departments, local bodies, state corporations, research institutes, and statutory boards ceased to be exempt from the requirement to surrender Foreign Exchange Entitlement Certificates. Payments which remained exempt were specifically listed.

October 1. Shipping and airline agents were instructed to open bank accounts designated “Shipping/Airline External Account” with commercial banks in Ceylon for receipt and disbursement of funds on account of their overseas principals.

October 22. A protocol to the trade and payments agreement with mainland China set trade targets for 1970 of Cey Rs 174 million each way.

November 1. The total of cesses levied on the export of tea was increased from Cey Rs 9.30 to Cey Rs 10.30 per 100 pounds of tea exported, reflecting an increase in the export promotion cess of Cey Re 1.

November 1. The export duty on packeted tea was reduced from Cey Re 0.25 to Cey Re 0.24 a pound.

Chad

Exchange System

No par value for the currency of Chad has been established with the Fund. The unit of currency is the CFA Franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 277.710 = US$1.1 Exchange transactions in French francs between the Chadian agency of the Banque Centrale des Etats de l’Afrique Equatoriale et du Cameroun (BCEAEC) and commercial banks in Chad take place at the fixed rate of CFAF 1 = F 0.02, free of commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

With the exception of those relating to gold, Chad’s exchange control measures do not apply to (1) France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas) and Monaco; and (2) the other countries whose bank of issue is linked with the French Treasury by an Operations Account (Cameroon, the Central African Republic, the People’s Republic of the Congo, Dahomey, Gabon, Ivory Coast, the Malagasy Republic, Mali, Mauritania, Niger, Senegal, Togo, and Upper Volta). Hence, all payments to these countries may be made freely. All other countries, except Chad itself, are considered foreign countries, and in principle financial relations only with foreign countries are subject to exchange control.

Administration of Control

The Directorate-General of the Budget and the Public Accounts in the Ministry of Economy, Finance, and Transportation supervises borrowing and lending abroad, the issuing, advertising, or offering for sale of foreign securities in Chad, and inward and outward direct investment; it also issues import and export authorizations for gold. Exchange control is administered by the Minister of Economy, Finance, and Transportation, who has largely delegated his approval authority to the Directorate-General mentioned above and to the authorized banks. All payments and receipts between Chad and foreign countries that are made through banks are registered, for statistical purposes only, by the BCEAEC, through the intermediary of the institution executing the transfer; the BCEAEC also addresses inquiries to the principal firms and agencies concerning inward and outward payments made in other manners, particularly by the offsetting of claims and debts. All exchange transactions relating to foreign countries must be effected through authorized banks. Import and export licenses are issued by the Foreign Trade Office in the Ministry of Economy, Finance, and Transportation.

Prescription of Currency

Chad is an Operations Account country of the French Franc Area, since the BCEAEC maintains an Operations Account with the French Treasury; settlements with France, Monaco, and the other Operations Account countries of the French Franc Area are made in CFA francs, French francs, or the currency of any other institute of issue that maintains an Operations Account with the French Treasury. Settlements with the U.S.S.R. are made through special accounts established in accordance with a payments agreement. Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs through Foreign Accounts in Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France. The crediting to nonresident accounts of CFA banknotes, French banknotes, or banknotes issued by any other institute of issue that maintains an Operations Account with the French Treasury is prohibited.

Imports and Import Payments

Imports from all sources of wheat, wheat flour, and sugar require licenses. All other imports from countries in the French Franc Area and from EEC countries other than France may be made freely. All imports from non-EEC countries outside the French Franc Area are subject to licensing in accordance with an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Chadian Committee.

The import program contains global quotas for imports from non-EEC countries outside the French Franc Area and a special quota for imports of cotton textiles from countries with abnormal competitive advantages. Imports from Rhodesia and South Africa are prohibited.

Specified imports from neighboring countries not belonging to the French Franc Area (the Libyan Arab Republic, Nigeria, and the Sudan) up to a value of CFAF 3 million a year for a single importer may be made through compensation transactions.

All import transactions relating to foreign countries must be domiciled with an authorized bank. Import licenses entitle importers to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank. Forward cover for imports from foreign countries is only permitted for specified commodities and requires the prior approval of the Directorate-General of the Budget and the Public Accounts.

Payments for Invisibles

Payments for invisibles to France, Monaco, and the other Operations Account countries in the French Franc Area are permitted freely; those to other countries are subject to approval. For many types of payment the approval authority has been delegated to authorized banks. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when bona fide. For tourist travel, residents traveling to countries other than France, Monaco, and the other Operations Account countries of the French Franc Area may obtain an exchange allocation of an amount equivalent to CFAF 100,000 a person a year; any foreign exchange remaining after return to Chad must be surrendered. For business travel to foreign countries, there is a special allocation of the equivalent of up to CFAF 300,000 a person a trip; the Directorate-General of the Budget and the Public Accounts may issue exceptional allocations in excess of CFAF 300,000. Tourist and business travel allocations may not be combined. Travelers going to foreign countries may take out up to a maximum of CFAF 10,000 in BCEAEC banknotes. Travelers to other countries may take out any amount in BCEAEC banknotes. A resident going abroad for less than 24 hours may not take out more than CFAF 5,000 in CFA banknotes.

Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry, or, if no declaration has been made, up to the equivalent of CFAF 100,000; they may reconvert into foreign currency BCEAEC banknotes up to CFAF 25,000 that have been obtained from the sale of foreign means of payment that were declared upon entry.

Exports and Export Proceeds

Exports to Rhodesia and South Africa are prohibited. All exports to non-EEC countries outside the French Franc Area require licenses. Specified exports to the Libyan Arab Republic, Nigeria, and the Sudan may be made through compensation transactions.

Export transactions relating to foreign countries must be domiciled with an authorized bank when their value exceeds CFAF 50,000. Export proceeds received in currencies other than those of France or an Operations Account country must be surrendered. Export proceeds normally must be received within 180 days after the arrival of the commodities at their destination. The proceeds must be collected, and surrendered if received in a foreign currency, within two months of the due date.

Proceeds from Invisibles

Proceeds from transactions in invisibles with France, Monaco, and other Operations Account countries in the French Franc Area may be retained. All amounts due from residents of other countries in respect of services and all income earned in those countries from foreign assets must be collected, and if received in foreign currency surrendered, within two months of the due date. Resident and nonresident travelers may bring in any amount of banknotes and coins issued by the BCEAEC, the Bank of France, or any other bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign banknotes and coins (except gold coins) and other foreign means of payment.

Capital

Capital movements between Chad and France, Monaco, and other Operations Account countries in the French Franc Area are free of exchange control; capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are permitted freely. All foreign securities, foreign currency, and titles embodying claims on foreign countries or nonresidents that are held in Chad by residents or nonresidents must be deposited with authorized banks in Chad.

Special controls (additional to any exchange control requirements that may be applicable or suspended insofar as they would be contrary to the exchange control regulations) are maintained over borrowing and lending abroad, over inward and outward direct investment, and over the issuing, advertising, or offering for sale of foreign securities in Chad; these controls relate to the transactions themselves, not to payments or receipts. With the exception of those over the sale or introduction of foreign securities in Chad, the control measures do not apply to relations with France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas), Monaco, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account.

Direct investments abroad 2 require the prior approval of the Minister of Economy, Finance, and Transportation, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the full or partial liquidation of such investments also requires the prior approval of the Minister of Finance, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment abroad. Foreign direct investments in Chad3 require prior declaration to the Minister of Finance, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the Minister has a period of two months from receipt of the declaration during which he may request the postponement of the projects submitted to him. The full or partial liquidation of direct investments in Chad must also be declared to the Minister of Finance, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment in Chad. Both the making and the liquidation of direct investments, whether these are Chadian investments abroad or foreign investments in Chad, must be reported to the Minister of Finance within 20 days following each operation. Direct investments are defined as investments implying control of a company or enterprise. Mere participation is not considered as direct investment, provided that it does not exceed 20 per cent of the capital of a company whose shares are quoted on a stock exchange.

The issuing, advertising, or offering for sale of foreign securities in Chad requires prior authorization by the Minister of Finance. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the Chadian Government and (2) shares similar to securities whose issue, advertising, or offering for sale in Chad has previously been authorized.

Borrowing abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in Chad, or by branches or subsidiaries in Chad of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Finance. The following are, however, exempt from this authorization: (1) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (2) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between Chad and countries abroad or between foreign countries, in which these persons or firms take part; (3) loans contracted by registered banks; and (4) loans other than those mentioned above, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one borrower. The contracting of loans referred to under (4) that are free of authorization, and each repayment thereon, must be declared to the Minister of Finance within 20 days of the operation, unless the total outstanding amount of all loans contracted abroad by the borrower is CFAF 5 million or less.

Lending abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in Chad, or by branches or subsidiaries in Chad of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Finance. The following are, however, exempt from this authorization: (1) loans granted by registered banks; and (2) other loans, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one lender. The making of loans that are free of authorization, and each repayment thereon, must be declared to the Minister of Finance within 20 days of the operation, unless the amount of the loan is less than CFAF 500,000, provided, however, that the total outstanding amount of all loans granted abroad by the lender does not exceed CFAF 5 million.

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

The Code also provides for three categories of preferential treatment, in accordance with which certain fiscal and other privileges may be accorded to firms investing in specified new industries or in the expansion of existing ones. Preferential treatment A applies to enterprises whose activity and market are limited to the national territory of Chad. Preferential treatment B applies to enterprises whose activity and market include the territory of two or more states of the Central African Customs and Economic Union (UDEAC)—Cameroon, the Central African Republic, the People’s Republic of the Congo, Gabon, and, until 1969, Chad.4 Preferential treatments A and B are granted for a period of up to 15 years. Preferential treatment C is reserved for enterprises of prime importance to the country’s economic development; it provides for stabilization of their fiscal charges for up to 25 years.

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

Gold

Residents who are not producers of gold may not hold unworked gold unless they have obtained an authorization issued by the President on the advice of the Minister in Charge of Mines. Imports and exports of gold, whether unworked or refined, require prior authorization by the Directorate-General of the Budget and the Public Accounts and by the Directorate of Mines and Geology as well as the visa of the Directorate of Foreign Trade. Exports of unworked gold and of diamonds are usually made by approved Offices for Purchases, Sales, Imports, and Exports (BAVIE). Exempt from this requirement are (1) imports and exports by or on behalf of the monetary authorities and (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles). Unworked gold may be exported only to France. Both licensed and exempt imports of gold are subject to customs declaration.

Changes during 1969

January 1. Chad ceased to be a member of the Central African Customs and Economic Union (UDEAC).

January 13. Order No. 102/FET/F listed the types of payment that could be made freely, through an authorized bank, to foreign countries. The approval authority for all other payments was delegated to the Director-General of the Budget and Public Accounts. Nonresident accounts in Chad could not be credited with BCEAEC banknotes. All amounts subject to repatriation had to be collected within two months of the due date; any amounts collected in foreign currencies also had to be surrendered to authorized banks within two months of the due date. Such payments could not be collected in banknotes or to the debit of a postal checking account in Chad. The due date for export receipts had in principle to be within 180 days after arrival of the commodities at destination. The order also contained definitions of “foreign countries,” “residents,” and “nonresidents”; France and the Operations Account countries were not treated as foreign countries.

January 17. The Minister of Economy, Finance, and Transportation delegated to the Directorate-General of the Budget and the Public Accounts his approval authority in exchange control matters insofar as it had not already been delegated to the authorized intermediaries.

January 17. Order No. 189/F provided that resident and nonresident travelers could not take out more than CFAF 10,000 in Chadian banknotes (CFAF 5,000 for those going abroad for less than 24 hours). Imports by resident or nonresident travelers of Chadian banknotes, French banknotes, and banknotes of any institute of issue maintaining an Operations Account with the French Treasury would be free, as would be imports of any means of payment denominated in a foreign currency. An exchange allocation of the equivalent of CFAF 100,000 a person a year was introduced for tourist travel to foreign countries, and one of up to CFAF 300,000 a person a trip for business travel to foreign countries. The tourist travel allocation could not be combined with an allocation for business travel. The export of foreign banknotes by nonresident travelers was freely permitted up to the equivalent of CFAF 100,000; higher amounts could only be exported if declared upon entry. Nonresident travelers could reconvert BCEAEC banknotes up to CFAF 100,000 into foreign banknotes, provided that the former had been obtained by the sale of foreign means of payment that had been declared upon entry.

January 17. Order No. 190/FET required prior approval to send means of payment, titles to claims or property, and domestic or foreign securities to a foreign country through the mail or by parcel post. The authorized intermediaries were exempt from this prior approval.

January 17. By Order No. 192/F the Minister of Economy, Finance, and Transportation delegated to the BCEAEC the supervision over the positions in CFA francs and in foreign currencies vis-à-vis foreign countries of the banks and financial institutions in Chad.

January 27. Circular No. 1 established procedures for the domiciliation of import transactions relating to foreign countries and for payments in respect of the imports concerned.

January 28. Circular No. 2 established procedures for the domiciliation of export transactions relating to foreign countries and for controls over the repatriation of proceeds from exports to foreign countries.

January 28. Circular No. 4 established approval procedures for payments and transfers to foreign countries. Import and export authorizations for gold would be issued by the Directorate-General of the Budget and the Public Accounts. Payments up to CFAF 12,500 could be made freely, without indication of their purpose. The Circular also established the terms on which foreign exchange could be purchased forward. This would only be allowed for import payments but not until the detailed regulations were announced. The Circular also established procedures for payments for imports. Spot cover for imports in advance of the actual import payment could not be constituted unless the goods were financed by a documentary credit. Nonresident travelers could upon departure reconvert up to CFAF 25,000 into foreign currency. The tourist allowance could only be taken up by persons producing travel tickets. Foreign workers could transfer their entire net salary abroad, within three months of receipt.

January 28. Circular No. 5 was issued concerning Foreign Accounts in Francs and foreign dossiers for securities. All overdrafts on Foreign Accounts in Francs and in general all advances to nonresidents required prior approval.

January 29. Circular No. 6 provided that foreign exchange for import payments could be bought forward for listed commodities. Contracts could be for one month at most and required the prior approval of the Directorate-General of the Budget and the Public Accounts.

February 4. Letters Nos. 35-42 were issued concerning road transport, re-exports by travelers, delivery of means of payment to travelers, securities, living expenses for study abroad, granting of guarantees, salaries of officials stationed abroad, and Foreign Accounts in Francs.

February 12. Letters Nos. 84 and 85 were issued concerning the creation of an office for financial authorizations and concerning checks drawn in CFA francs and held by Chadian banks.

February 22. Order No. 536 was issued concerning the regulations on capital movements and infractions thereof.

February 22. Circular No. 120 was issued concerning payment for imports valued at less than CFAF 12,500. It was clarified that such payments had to be set off against the tourist travel allocation.

February 24. Order No. 551 was issued concerning the deposit requirements for foreign securities.

February 24. Order No. 552 was issued appointing three banks as authorized banks.

February 25. Circular No. 135 was issued concerning settlements in respect of insurance and reinsurance.

August 11. The exchange rate in terms of U.S. dollars was changed from CFAF 246.853 per US$1 to CFAF 277.710 per US$1. The fixed exchange rates for the French franc, the Malagasy franc, and the Mali franc remained unchanged.

Chile

Exchange Rate System

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

There are two exchange markets: the official market (known as the banking market) and the brokers’ market. Only the Central Bank, the State Bank, authorized commercial banks, and other persons or entities authorized by the Central Bank may operate in these markets; brokers are not at present permitted to operate in either market. In principle, the rates of exchange in both markets are fluctuating rates, but in practice the rates are set by the Central Bank and are adjusted from time to time. Outward transfers through both markets are controlled. Through the banking market pass government transactions, proceeds from exports, sales of exchange by the large mining companies, receipts from a few invisibles, and payments for imports and for some commercial invisibles. Most invisibles and most capital transactions pass through the brokers’ market. In general, capital transactions are entitled to the same exchange market treatment on exit as on entry. However, the servicing and withdrawal of some capital received through the brokers’ market may be effected through the banking market. Transactions in the banking market are for both spot and forward delivery at the same exchange rate; for imports of most commodities, forward exchange purchases are mandatory and export proceeds may be sold forward. For both types of transaction, settlement in escudos is effected at the time the exchange contract is negotiated. Transactions in the brokers’ market are for spot delivery only. There is some restriction on the availability of exchange in that the Central Bank sells exchange to the commercial banks only for forward delivery (68 days on December 31, 1969).

On December 31, 1969, the exchange rate in the banking market was E° 9.96 buying, and E° 9.98 selling, per US$1; the rate in the brokers’ market was E° 11.50 buying, and E° 11.52 selling, per US$1. Purchases of exchange in the brokers’ market for remittances that may be effected without specific authorization by the Central Bank are subject to a 10 per cent exchange tax;1 this tax is also applied to the retransfer of certain foreign capital less than a year after entry and to the interest and profits thereon.2

Administration of Control

The Foreign Trade Department and the Department of International Transactions of the Central Bank of Chile are in charge of the operation of the exchange control system. Some functions of the Foreign Trade Department have been delegated to local commissions in important cities, and the supervision of copper exports and all imports of the copper industry has been delegated to the Copper Corporation, which is supervised by the Central Bank and the Superintendency of Banks. Imports for the public sector are supervised by the interministerial Import Committee for the Public Sector, on which the Central Bank is also represented.

Prescription of Currency

The proceeds of exports by the large copper companies must be received in U.S. dollars or other currencies specifically authorized by the Copper Corporation; these companies must pay their taxes and cover the local costs of their production in U.S. dollars. Settlements with Argentina, Bolivia, Colombia, Mexico, Paraguay, Peru, Uruguay, and Venezuela must be made through accounts maintained with each other by the Central Bank of Chile and the central bank of the country concerned, within the framework of the LAFTA multilateral clearing system. All other transactions with other countries may be settled in any currency, provided that import payments are made in the currency of the contract, irrespective of the country of origin of the goods. Most payments and transfers to South Africa are prohibited.

Imports and Import Payments

Imports from Cuba, Rhodesia, and South Africa are prohibited.

All imports, except those of the large mining companies and imports of defense materials, must be registered with the Central Bank. There is a List of Permitted Imports; commodities not appearing on it are prohibited unless imported through a “free port” zone (see below) or unless on Chile’s National List negotiated within LAFTA, when such goods may be imported from within the area. Certain other commodities may be considered as effectively prohibited for private importation since, although on the List of Permitted Imports, they are subject to an advance deposit requirement of 10,000 per cent. Goods may normally be imported in any amount. The Central Bank, however, is empowered to reject import applications (registrations), except those for goods covered by special laws, for any item on the permitted list if the total value of applications for imports in the previous month exceeds by more than 5 per cent the average monthly registrations for imports during the past 12 months; when applications are so rejected, the Central Bank must reject registration for all commodities listed under the same customs tariff heading. This power has not been invoked since January 1966. Imports of goods not on the permitted list that are imported into “free port” zones, such as Arica, Magallanes, Aysén, and Chiloé, may not be shipped to other parts of the country unless they are first processed or assembled in the “free port” zone. Certain commodities (including automobiles and most trucks) may only be imported into a “free port” zone for use in that zone.3

Importers may purchase forward exchange as soon as their import application has been approved. For specified commodities, importers must, within 50 days after shipment, purchase forward exchange corresponding to the full registered value of the import against immediate cash payment in local currency; this requirement now applies to about 80 per cent of private sector imports. For supplementary lists of imports there are extended mandatory exchange cover periods of 120, 240, and 360 days.

Many commodities are subject to advance deposit requirements, which must be discharged in escudos at the time of registration. The rates of deposit are 15, 30, 50, and 10,000 per cent.

The following imports are exempt from advance deposit requirements: imports by the Government, the municipalities, the universities, certain specified state enterprises, the large mining companies, the Chemical and Mining Company of Chile (Soquim), and the fishing industry; imports financed by international organizations or under agreements for U.S. agricultural surpluses; imports on a deferred payment basis (con cobertura diferida); goods financed by the U.S. AID; imports into the “free port” zones; imports of foods into the principal mining area; imports to replace machinery and equipment damaged or destroyed in the 1960 earthquake; household and personal effects of travelers; personal effects of certain immigrants; household goods of returning Chileans and resident foreigners; imports not of a commercial character and valued at less than US$100; and imports that originate in other member countries of LAFTA and are included either in Chile’s National List for LAFTA countries or in Chile’s List of Special Concessions extended to Paraguay and Ecuador. These exemptions do not apply to items subject to the 10,000 per cent deposit, except for imports from LAFTA countries of goods on the Chilean National List, unless a specific exemption is granted by the Executive Committee of the Central Bank. The deposits are refunded upon customs clearance.

Imports are subject to a registration tax of 3 per cent on the c.i.f. value.

Payments for Invisibles

All payments for invisibles are subject to exchange control. Payment through the banking market is permitted for a few commercial invisibles; all other invisibles are settled through the brokers’ market. Payments through the brokers’ market may be effected up to established limits for the following purposes: for tourist travel (in addition to fares), up to the equivalent of US$100 a person a journey to destinations within 500 kilometers of the Chilean border, of US$360 a journey for travel elsewhere in Latin America (defined as including Curaçao, Jamaica, and Puerto Rico),4 or of US$720 a journey outside Latin America;5 for family remittances (including remittances to students), up to US$200 a month for each beneficiary; for books, up to US$100 a person a month (for juridical persons only); for subscriptions to periodicals, up to US$200 a person a year (for juridical persons only); up to US$100 a person a month for medicine; and up to US$50 a person a year for student registration fees. Transfers of insurance premiums require the approval of the Central Bank, which acts on the advice of the Superintendent of Insurance Companies. Payments for medicine and pharmaceutical products may only be made provided that the product in question is not available in Chile. Transfers in excess of these limits, and those in respect of other transactions, require the prior authorization of the Central Bank. All purchases of exchange in the brokers’ market, except those for which the Central Bank has approved a transfer application (solicitud de giro), are subject to a tax of 10 per cent,6 the only documentation required for such invisibles is an application form (carta petición). Residents of Chilean nationality and residents of foreign nationality who have spent more than a year in Chile, when traveling to countries outside Latin America, are required to pay a travel tax of E° 360 a trip. Travelers may take out any amount in Chilean banknotes.

Exports and Export Proceeds

With minor exceptions for humanitarian reasons, exports to Cuba and Rhodesia are prohibited. Exports of arms and related equipment to South Africa also are prohibited. Additionally, exports of some items are prohibited or are subject to quota irrespective of destination.

All exports must be registered with the Foreign Trade Department of the Central Bank and the sale proceeds of exports other than those of the large mining companies are subject to surrender requirements. The large mining companies sell exchange to the Central Bank only to the extent needed to meet their local requirements to cover costs of production and tax liabilities.

Most export proceeds subject to surrender requirements must be repatriated within 90 days from the date of shipment, and surrendered within 10 days thereafter, but for specified goods this period is extended to between 120 days and 480 days. Export proceeds sold on a spot basis must be transferred to the Central Bank; other proceeds may be sold forward between 60 days before shipment and 10 days before expiration of the obligatory surrender period.

By virtue of Law No. 16528 of 1966, many minor exports receive refunds of taxes and other charges included in their cost of production; these refunds amount to up to 30 per cent of the f.o.b. or c.i.f. value of such exports, depending on the product.

Proceeds from Invisibles

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

Capital

Capital may be brought into Chile through either exchange market; no capital can flow out freely through either market. Normally, capital is subject to the same exchange market treatment on exit as on entry; this policy applies also to remittances of dividends and profits on the capital.

Foreign capital may enter Chile under one of three different arrangements, depending on the purpose and the type of the investment.

(1) Article 14 of Decree 1272 (September 7, 1962) stipulates that capital brought into the country in the form of foreign exchange (aporte de capital) may be sold freely in the brokers’ market through authorized banks when the investor (individual or corporation, national or foreign) has registered with the Central Bank. To this end, the Central Bank issues a nontransferable certificate which also permits the free outward transfer of the capital through the brokers’ market. The remittance of profits or interest on this capital requires the authorization of the Central Bank. If the capital is retransferred within a year of entry, it is subject to the 10 per cent exchange tax 7 levied on certain brokers’ market transfers; the same is true of interest and profits on such capital.

(2) According to Article 16 of the above Decree, the investor may enter into a loan agreement with a Chilean individual or corporation, or into an agreement with a national enterprise with a view to capital participation. In these cases, the investor has an option between the banking market and the brokers’ market; the Central Bank guarantees access to the exchange market chosen for the entry of the capital, both for the servicing of loans and the re-export of capital, and for the remittance of interest and profits. The guarantee is given subject to certain conditions, one of which is a minimum investment period of 3 years. As an application and extension of Article 16, the Executive Committee of the Central Bank on November 3, 1963 took a decision to create an additional regime to further foreign investment in Chilean export industries. Under this regime, capital brought in for the promotion of exports of agricultural, industrial, and mining products may be sold in the brokers’ market, while its repatriation may take place in the banking market, provided that the amount repatriated is financed from the increase in the volume of exports resulting from the investment. The regime is implemented through individual investment agreements in accordance with Article 16. Repatriation of the invested capital may start 2 years after entry and may amount to 12½ per cent annually of the invested capital. In addition, the remittance of interest or profits is permitted annually up to 7 per cent of the invested capital. The repayment of capital, and the transfer of interest or profits thereon, may be effected through the banking market, provided that the amount does not exceed 50 per cent of the amount of exchange resulting from the volume increase in exports. If this criterion prevents the transfer of the full amount of amortization, interest, and profits through the banking market, the transfers may be completed through the brokers’ market. The above privileges are only granted to firms that will not purchase foreign exchange in the banking market to acquire abroad any machinery, equipment, or capital goods on a cash payment basis. In a further extension of the regime under Article 16, on June 2, 1966, the Central Bank announced that it would guarantee the foreign exchange for repatriation of, and earnings on, imported capital, provided that certain conditions were met. These were that (a) the investment must be deemed to be of importance to the Chilean economy; (b) it must amount to at least US$100,000 or the equivalent in other currencies; (c) the capital must remain in the country for at least 3 years, and subsequent repatriation must not be more than 20 per cent a year, on a noncumulative basis; (d) the exchange must be sold in the banking market; and (e) the interest rate on credit to Chilean firms must not be higher than that in the domestic market.

(3) The most important law governing foreign investment is Decree-Law 258 of 1960, which establishes a regime both for foreign exchange transfers and long-term capital investment. A Foreign Investment Committee studies the proposal and the Ministry of Economy approves by decree the particular investment; the Committee establishes both guarantees regarding withdrawal of capital and remittances of interest and profits and may also give special guarantees regarding exemption from payment of certain import surcharges, customs duties, and taxes. Such privileges may be granted for a period of 10 years, with extension to 20 years in special cases. Remittances are effected in the same market (normally the banking market) through which the capital was brought in, and the investor has the right to use the exchange resulting from the export proceeds of his investment.

Gold

Newly mined gold is purchased from the producers by ENAMI (Empresa Nacional de Minería), which, after refining, sells it at US$35 an ounce to the Central Bank. The latter has this gold coined at the Mint. The Central Bank makes gold available to industrial users in the form of Chilean gold coins at the equivalent of US$50.97 per ounce. Gold bars may only be imported and exported by the Central Bank. The import of gold coins and of gold dust, gold leaf, and gold wire for industrial use is free of quantitative restriction but is subject to a 10,000 per cent advance deposit requirement.

Changes during 1969

During 1969 a comprehensive program of import liberalization was begun. Prior import deposit requirements were reduced across the board. In addition, for commodities representing about 90 per cent of the total value of imports subject to prior deposit, the requirement was abolished; the number of goods subject to the 10,000 per cent deposit requirement was reduced by two thirds; the mandatory deferment period for import payments was eliminated; and the forward delivery period for foreign exchange to cover import payments was reduced from 78 to 68 days. Import duties were raised on certain goods for which the deposit requirements were abolished.

January 1. The advance deposit rates of 10, 20, 50, 100, and 200 per cent of the c.i.f. value of imports were reduced to 5, 15, 40, 90, and 180 per cent, respectively. The registration tax on imports was increased from 2 per cent to 3 per cent of the c.i.f. value.

January 16. The selling rates in the banking and brokers’ markets were depreciated from E° 7.67 to E° 7.80 and from E° 8.71 to E° 8.84, respectively, per US$1.

January 31. The selling rates in the banking and brokers’ markets were depreciated to E° 7.92 and E° 8.96, respectively, per US$1.

February 14. The selling rates in the banking and brokers’ markets were depreciated to E° 8.05 and E° 9.09, respectively, per US$1.

March 6. The selling rates, in the banking and brokers’ markets were depreciated to E° 8.18 and E° 9.22, respectively, per US$1.

March 20. The minimum waiting period of 30 days from the date of shipment for transfers of foreign exchange in payment for imports was removed.

March 27. The selling rates in the banking and brokers’ markets were depreciated to E° 8.31 and E° 9.35, respectively, per US$1.

April 15. The selling rates, in the banking and brokers’ markets were depreciated to E° 8.44 and E° 9.48, respectively, per US$1.

April 19. Interest payments included in payments for imports were limited to the interest rate prevailing in the exporting country and could under no circumstance exceed the prevailing New York prime rate by more than 1.5 per cent.

April 28. The selling rates in the banking and brokers’ markets were depreciated to E° 8.57 and E° 9.61, respectively, per US$1.

May 8. The selling rates in the banking and brokers’ markets were depreciated to E° 8.71 and E° 9.76, respectively, per US$1.

May 23. Advance import deposits were refunded upon customs clearance. They could still be used to settle import duties and other fees.

May 23. Exchange allocations for remittances through the brokers’ market were revised. That for travel to Latin American countries was raised from US$250 to US$360 a person a trip and that for travel to countries outside Latin America from US$500 to US$720 a person a trip. Payments for medicine, which previously were permitted without limitation, became subject to an allocation of US$100 a person a month. A facility of US$50 a person a year was introduced for payments of student registration fees. Remittances of insurance premiums became subject to prior approval by the Central Bank acting on the advice of the Superintendent of Insurance Companies; previously, there was an allocation of US$ 1,200 a person a year.

May 23. Some 38 tariff items subject to the 10,000 per cent advance import deposit requirement were exempted from advance deposit.

May 23. The selling rates in the banking and brokers’ markets were depreciated to E° 8.85 and E° 9.91, respectively, per US$1.

May 23. The Central Bank’s forward delivery period for foreign exchange was reduced from 78 to 77 days.

May 26. The Andean Agreement for subregional economic integration was signed by Bolivia, Chile, Colombia, Ecuador, and Peru.

June 9. The selling rates in the banking and brokers’ markets were depreciated to E° 8.99 and E° 10.05, respectively, per US$1.

June 10. The Central Bank’s forward delivery period for foreign exchange was reduced to 76 days.

June 18. Advance repayments under suppliers’ credit agreements expiring before December 31, 1969 were authorized.

June 26. The selling rates in the banking and brokers’ markets were depreciated to E° 9.13 and E° 10.21, respectively, per US$1.

July 1. A reciprocal credit agreement between the Central Banks of Uruguay and Chile went into effect.

July 11. The selling rates in the banking and brokers’ markets were depreciated to E° 9.26 and E° 10.35, respectively, per US$1.

July 17. Some 26 tariff items subject to the prior import deposit requirement of 10,000 per cent became exempt from advance deposit.

July 21. The Central Bank’s forward delivery period for foreign exchange was reduced to 75 days.

July 25. The Central Bank’s forward delivery period for foreign exchange was reduced to 74 days.

July 25. The selling rates in the banking and brokers’ markets were depreciated to E° 9.39 and E° 10.50, respectively, per US$1.

July 25. A wide range of goods on the permitted import list became exempt from the advance import deposit requirement.

August 19. The selling rates in the banking and brokers’ markets were depreciated to E° 9.53 and E° 10.68, respectively, per US$1.

August 29. The advance import deposit rates were reduced as follows (in per cent of c.i.f. value): from 15 to 0, from 40 to 30, from 90 to 60, and from 180 to 120. In addition, advance import deposit requirements were abolished entirely for a number of goods.

September 5. The selling rates in the banking and brokers’ markets were depreciated to E° 9.64 and E° 10.88, respectively, per US$1.

September 24. The selling rates in the banking and brokers’ markets were depreciated to E° 9.73 and E° 11.07, respectively, per US$1.

September 30. The tax drawback rates on exports of certain products were reduced by 4 to 11 percentage points.

October 10. The selling rates in the banking and brokers’ markets were depreciated to E° 9.82 and E° 11.22, respectively, per US$1.

November 4. The advance import deposit rate of 120 per cent was reduced to 90 per cent.

November 10. The Central Bank’s forward delivery period for foreign exchange was reduced to 73 days.

November 17. The Central Bank’s forward delivery period for foreign exchange was reduced to 71 days.

November 21. The selling rates in the banking and brokers’ markets were depreciated to E° 9.90 and E° 11.37, respectively, per US$1.

November 24. The Central Bank’s forward delivery period for foreign exchange was reduced to 70 days.

December 12. The advance import deposit rates were reduced as follows: from 30 to 15 per cent, from 60 to 30 per cent, and from 90 to 50 per cent.

December 16. The selling rates in the banking and brokers’ markets were depreciated to E° 9.98 and E° 11.52, respectively, per US$1.

December 16. The Central Bank’s forward delivery period for foreign exchange was reduced to 69 days.

December 23. The Central Bank’s forward delivery period for foreign exchange was reduced to 68 days.

Republic of China

Exchange Rate System

No par value for the New Taiwan Dollar has been established with the Fund. The official buying and selling rates for the U.S. dollar are NT$40 and NT$40.10, respectively. Buying and selling rates for certain other currencies are also officially fixed, on the basis of the buying and selling rates for the U.S dollar and the par values of the currencies concerned.1 Currencies for which rates are not officially fixed may be accepted by appointed banks, and the rates are calculated in accordance with the foreign market quotations. With certain exceptions, earners of foreign exchange must sell it at these rates to banks appointed by the Central Bank of China. Different effective rates may arise from an export incentive scheme (see section on Exports and Export Proceeds, below).

Administration of Control

The Executive Yuan is responsible for policies concerning foreign exchange and trade controls. Foreign exchange and trade matters are entrusted to the Ministries of Finance and Economic Affairs and the Central Bank of China. The Ministry of Finance has general jurisdiction over foreign exchange laws and regulations, and is in charge of government remittances. The Foreign Exchange Department of the Central Bank of China is responsible for the over-all management of foreign exchange, for the determination of the official buying and selling rates of exchange, and for the supervision of the authorized banks, of which the Bank of Taiwan is the most important. The Central Bank also licenses private remittances and capital movements. The Board of Foreign Trade of the Ministry of Economic Affairs coordinates industrial and trade policies, including those relating to the import regime and export promotion, and is in charge of the issuance of import licenses. By delegation, the Application Receipt and Dispatch Center at the Board of Foreign Trade screens applications for import licenses and issues import licenses. Export applications are screened, and export permits issued, by the Bank of China, the Bank of Communications, the Farmers’ Bank of China, the Bank of Taiwan, and the Central Trust of China. Most foreign exchange transactions are conducted through authorized banks.

Prescription of Currency

Export receipts must be obtained in Australian dollars, Canadian dollars, deutsche mark, French francs, Hong Kong dollars, Italian lire, Malaysian dollars, pounds sterling, Swiss francs, or U.S. dollars (certain exports to Viet-Nam are settled under tied letters of credit in U.S. dollars which may be used only to finance imports from the United States other than agricultural surplus commodities that must be exported under the barter program of the Commodity Credit Corporation). Also, these are the foreign currencies that may be used by residents of other countries to finance investments in the Republic of China. The currency and method for making payments to residents of foreign countries are not prescribed.

Nonresident Accounts

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

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

Residents may maintain accounts in U.S. dollars or Hong Kong dollars, as follows: Holders of foreign banknotes or travelers checks may have these credited to Foreign Currency Accounts, and recipients of remittances from abroad or of money orders drawn on foreign banks may have the proceeds credited to Foreign Exchange Accounts. Balances in Foreign Currency Accounts may be withdrawn in the original currency or in new Taiwan dollars, after conversion at the official buying rate. Balances in Foreign Exchange Accounts may be withdrawn in new Taiwan dollars; they may also be remitted abroad freely, with the exception that foreign exchange that originated in the United States may not be remitted to Hong Kong. Foreign Exchange Accounts are subdivided into interest-bearing time deposits and passbook accounts (which do not bear interest).

Imports and Import Payments2

All imports require individual licenses. For virtually all commodities, license applications are screened, and import licenses are issued, by the Application Receipt and Dispatch Center at the Board of Foreign Trade. Exchange settlement corresponding to 25 per cent of the f.o.b. or c. & f. value of imports (20 per cent for raw cotton financed under the U.S. P.L. 480 program) must be made within 14 days of approval of the license for all imports not taking place on a deferred payment or consignment basis, i.e., for all imports under letter of credit. Provided that the foregoing requirement of a so-called performance deposit has been met, the holder of an import license is entitled to obtain the necessary foreign exchange from an appointed bank. Imports from communist countries are prohibited. The Chinese authorities license and check imports from Hong Kong in order to induce importers to obtain certain imports direct from the country of production and to control effectively imports from mainland China; for similar reasons, certain commodities are not permitted to be imported from Hong Kong and Macao. Certain commodities which still can be financed with U.S. aid funds (including P.L. 480 funds) can be imported only from the United States.

Imports are divided into three groups: (1) prohibited, (2) controlled, and (3) permissible. The prohibited imports comprise not only narcotics and some other goods excluded by most countries from importation but also a wide range of pharmaceuticals and a number of luxury goods and less essential items, such as certain Chinese luxury foods, cigarettes, cigars, liquor, jewelry, certain medicines, tea, sugar (and its substitutes), and molasses. Liquor and cigarettes are imported by a government monopoly organization, which is also responsible for domestic distribution of these commodities. The controlled list contains three types of goods: some consumer luxury items,3 certain goods that are also produced locally of good quality and in sufficient quantity to meet domestic demand and whose ex-factory prices are not more than 10 per cent higher than the landed, duty-paid prices of comparable imported goods; and goods subject to regulation and allocation. The first two types are licensed restrictively;4 goods of the third type are often imported by government agencies, which offer them for sale either by allocation or by auction. Imports on the permissible list are licensed liberally and can be made by both end-users and traders. The importation of items on the controlled list is permitted only to factories and end-users.

Special regulations apply to 13 commodities normally imported in bulk shipments and imports of which exceed 40,000 metric tons a year.5 They are subject to annual quotas and priority must be given to Chinese-flag vessels for their importation.

According to the intended utilization, goods may be imported by one of the three main groups of importers: government trading agencies, qualified private traders, and end-users and manufacturers. Commercial imports handled by government trading agencies include chemical fertilizers, tinplate, crude oil, and automobiles. The Central Trust of China is the main government trading agency. It handles imports for government and military organizations, public enterprises, and other customers. Another government trading agency is the Taiwan Supply Bureau, which is in charge of imports for the Taiwan Provincial Government, some local industries, and certain other customers.

Firms that wish to operate as authorized (“registered”) importers must obtain approval (“registration”) from the Board of Foreign Trade and be registered by the Taiwan Provincial Department of Reconstruction or the Reconstruction Department of Taipei City; the firms must be operating in accordance with certain laws and have a minimum capital of NT$200,000 and an “export record” equivalent to more than US$50,000 for the last two years. Traders licensed to operate on a commission basis may act only as agents for traders or foreign suppliers. They also must be approved by the Board of Foreign Trade.

End-users and manufacturers are permitted to import raw materials, machinery, and replacement equipment needed for their factories. In granting licenses to this category of importer, the licensing authorities take into account such criteria as production capacity and equipment. In processing applications for licenses to import capital equipment for the construction of new plants, the licensing authorities consider the feasibility of the project and its priority from the. point of view of the economic needs of the country. When the capital goods concerned are available from domestic sources, import licenses usually are not issued. Imports to be used for processing or producing goods for export are licensed up to requirements (e.g., raw cotton, wool, and wood for the production of plywood).

Private importers (i.e., importers other than government agencies and public enterprises) handle more than 70 per cent of the imports paid for with currencies provided from official exchange reserves.

According to the methods of financing, imports may be divided into two broad categories: (1) imports for which exchange is allocated directly out of official exchange reserves, and (2) imports which are made without recourse to official exchange reserves and which comprise (a) those made under the U.S. P.L. 480 program and (b) those paid for with self-provided exchange or exchange supplied by foreign investors, foreign lenders, or overseas Chinese. Imports obtained with self-provided exchange are those financed by importers out of their own foreign exchange obtained by them prior to their coming to the Republic of China or originating from exchange receipts exempt from the surrender requirement.

With the exception of machinery and equipment imported by a productive enterprise for its own use, imports from all sources are subject to an import surcharge equivalent to 26-30 per cent of the applicable customs duty, depending on the commodity. The surcharge is 20 per cent on raw materials imported for processing for export, and is refunded upon exportation.

Payments for Invisibles

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

Foreign exchange for payments for certain other invisibles is allocated only up to established limits or on a percentage basis. Foreign technicians are allowed to remit to their dependents abroad up to 70 per cent of their basic monthly salary (bonuses, profit shares, overtime pay, and insurance payments are excluded); remittances of larger amounts require special approval. Employees of the Government or of educational institutions may remit to their dependents in Hong Kong or Macao up to HK$150 a month. Membership fees of foreign institutions and certain payments for news services, books, and magazines (personal subscriptions for reference purposes) are approved up to certain limits. Receipts from local subscriptions to, and sales of, imported newspapers and periodicals are remittable up to certain limits. Up to 70 per cent of the net amount of motion-picture film rental and of foreign entertainers’ earnings may be transferred abroad; the remainder is to be used for local expenses and investment in the Republic of China. A maximum of US$2,400 a year is provided for tuition and living expenses during the first academic year of students studying abroad. Individual approval is required if their total tuition and expenses exceed the US$2,400 limit. Residents are granted an exchange allowance equivalent to US$300 a trip (US$150 for each accompanying dependent under the age of 12) for any approved type of travel. For business travel, an allowance equivalent to US$700 a month for up to three months is granted for living expenses. All travel allocations are net of fares and tickets. Applications for exchange to pay for certain other types of invisibles are approved on their merits.

Persons leaving the Republic of China may take with them no more than NT$ 1,000 in domestic banknotes and coins and the equivalent of US$200 6 in foreign currencies. Those travelers who have stayed in the Republic less than six months may take with them any unspent portion of the foreign currency which they registered upon entry, and may in addition convert local currency into foreign currency up to the equivalent of US$200.7

Exports and Export Proceeds8

All exports require licenses, mainly in order to ensure the surrender of foreign exchange. Licenses may be issued only for exports to non-communist countries. The re-exportation of imported goods is permitted after they have been processed. Exports of sugar, rice, and salt are handled by government trading agencies.

Quota limitations are maintained on the export of canned mushrooms. The export of a few foodstuffs, including bananas and sugar, also is restricted. There are also ceilings on the export of cotton textiles to Canada, Italy, the United Kingdom, and the United States. Floor prices are established for exports of citronella oil and canned pineapple. The Board of Foreign Trade is empowered to authorize exports at prices below the floor price.

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

With minor exceptions, exporters are required to surrender exchange earnings accruing from exports immediately after their collection. Most exports to any permitted destination may be made on a consignment or collection basis, provided that payment is not deferred for more than 180 days from shipment. Subject to approval, bona fide gifts and commodity samples up to the value of US$100 may be sent abroad. When leaving the Republic of China, tourists are allowed to take out domestic products valued up to US$100 without providing evidence that they have surrendered foreign exchange.

Under the rules laid down in 1956 to promote industrial exports, export manufacturers may register part of the foreign exchange derived from processed exports with the Board of Foreign Trade. Foreign exchange thus registered may be used for the import of raw materials, supplies, and machinery and equipment needed by the industry concerned or it may be transferred to other manufacturers. The registered foreign exchange scheme entitles manufacturers to import for their own use, through a more convenient procedure, commodities on the controlled list, and on rare occasions commodities on the prohibited import list. The scheme is also extended to domestic producers of raw materials required by the same export processing industries.

Proceeds from Invisibles

Exchange surrender requirements applicable to proceeds from invisibles are generally similar to those applicable to export proceeds. Interest, earnings, and profits on investments made by Chinese investors outside the country, and originally approved by the Central Bank of China, must be surrendered to the banks, but earnings from private investments abroad that have not been financed by outward remittances may be retained. Private inward remittances may be retained by the recipients for deposit on a foreign exchange account, from which they may be transferred freely.

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

Capital

Investments by nonresidents (including overseas Chinese) may be made in capital equipment or raw materials, or through the transfer of foreign currency to the Republic of China. In accordance with the Foreign Investment Law of July 14, 1954, as amended in 1959, and the Statute for Encouragement of Investment, enacted in 1960 and revised in 1965, new foreign investments approved by the authorities are guaranteed (1) unrestricted transfer of net annual profits or earned interest; (2) repatriation of capital, including reinvested earnings, 2 years after completion of the investment plan, at an annual rate not exceeding 15 per cent, calculated in relation to the originally invested funds; (3) the right to re-export invested capital in its original form; (4) favorable treatment in respect of rezoning and requisition of agricultural land for industrial use; (5) certain benefits with respect to business income tax and import duties; and (6) compensation for expropriation where the foreign investment constitutes less than 51 per cent, and immunity from expropriation for 20 years where the foreign investment constitutes at least 51 per cent, of the total investment. In addition, foreign investments are granted treatment at least as favorable as that accorded to new domestic investments. Laws for the encouragement of foreign investments provide for additional benefits in specific cases.

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

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

Subject to approval, direct investments may be made outside the Republic of China in the form of technical know-how, semifinished products, locally manufactured equipment, and remittances of foreign exchange. Portfolio investment abroad by residents who are private persons is not normally permitted.

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

Gold

Residents may hold gold in any form, but they may sell it only to the Central Bank of China, at the official price of NT$448.00 per 10 grams of fine gold. They may not use it as collateral for loans. Producers of gold must surrender their output to the Central Trust of China to have its fineness reduced to 0.875. Gold of this fineness is then auctioned to registered goldsmiths,9 who are permitted to sell only ornamental gold of a fineness less than 0.875. The importation of gold for investment purposes, etc., is subject to the approval of the Central Bank of China and both its importation and auctioning must be handled by the Central Trust of China. Travelers may bring in any amount of gold. Residents may freely take out gold in the form of jewelry, provided that its weight does not exceed 2 shih Hang, i.e., 62.5 grams.

Changes during 1969

January 1. The Foreign Exchange and Trade Commission was abolished. Its functions were taken over by the Ministries of Finance and Economic Affairs and by the Central Bank of China. A Foreign Exchange Department was established in the Central Bank of China to assume the management of foreign exchange. A Board of Foreign Trade, within the Ministry of Economic Affairs, was charged with the screening of import applications and the issuing of import licenses; these functions were delegated to an Application Receipt and Dispatch Center. The screening of export applications and the issuing of export licenses were entrusted to the Bank of China, the Bank of Communications, the Farmers’ Bank of China, the Bank of Taiwan, and the Central Trust of China.

February 20. Floor prices for exports other than citronella oil and canned pineapple were suspended.

March 3. Imports of 13 bulk commodities (commodities, imports of which exceed 40,000 metric tons a year and which lend themselves to bulk transportation in shiploads) were subjected to annual volume quotas and monthly spacing of bulk cargo entry. These commodities were soybeans, wheat, corn, rapeseed, raw cotton, artificial fertilizers, iron ore, bauxite, phosphate rock, sulphur, gypsum, and logs. Joint procurement for each commodity, either through a procurement agency or a procurement committee set up under trade associations was stipulated for imports by private enterprises as end-users. The nonagricultural items were previously confined to government procurement, and for these items the designated volume corresponded to the budgeted value of imports. For the agricultural items, permitted imports would be coordinated with domestic production, in view of the rapid increase in imports of soybeans, wheat, and corn. Priority was to be accorded to Chinese-flag vessels in the shipment of these commodities.

May 22. Exports of cement were restricted and certain imports of cement were temporarily permitted.

July 1. The export surcharge on bananas, mushrooms, and asparagus was reduced from 5 per cent to 3 per cent.

July 24. Importation on a documents against payments or documents against acceptance basis was permitted to end-users for machinery and equipment and to registered importers for machinery, equipment, and raw materials for chemical products, provided that no interest charge is included in the price. Previously, documents against acceptance and documents against payment terms were restricted to private industrial and mining firms and were limited to their imports of raw materials for which the foreign suppliers had already designated agents or established branches in China.

August 11. Official buying and selling rates were set for the Swiss franc.

August 18. Importation on a consignment basis was permitted to registered importers. Previously it was restricted to end-users.

August 18. The deposit requirement for the opening of import letters of credit was reduced from 50 per cent to 25 per cent.

October 1. The exchange allowance for business travel was raised from US$500 to US$700 a month.

November 14. The restrictions on the export of cement were removed.

December 9. The bilateral payments arrangement with Spain was terminated. Settlements had already been on a convertible currency basis for several months.

December 13. Imports of certain truck chassis were suspended.

Colombia

Exchange Rate System

On December 17, 1948, a par value for the Colombian Peso was established by Colombia with the Fund. However, exchange transactions no longer take place at rates based on that par value. All exchange transactions are effected through the Bank of the Republic or the authorized banks in the official market—the exchange certificate market, in which the rate fluctuates. On December 31, 1969 the average selling rate in the certificate market was Col$ 17.93 per US$1. The peso equivalent of the Government’s exchange receipts from the export tax on coffee is credited to the Treasury’s Special Exchange Account at the central bank’s accounting rate of Col$ 17.60 per US$1; the Government purchases exchange for all public debt payments at the same exchange rate. There are also certain other effective exchange rates. The different exchange rates and the types of transaction to which they apply are set out in the Table of Exchange Rates, below. On December 31, 1969, the fluctuating buying rate for proceeds from coffee exports (after taking into account a 20 per cent exchange tax) was Col$ 14.28 per US$1, and that for most other exports Col$20.51 per US$1. All imports are paid for at the certificate market rate. All payments and receipts in respect of current invisibles and capital also take place at that rate.

Administration of Control

All imports and exports require prior registration at the Institute of Foreign Trade (Incomex). Exchange for payments must be purchased through the Bank of the Republic or the commercial banks, with an approved exchange license issued by the Exchange Office of the Bank of the Republic. The Monetary Board periodically draws up a foreign exchange budget. It also establishes priorities within that budget for the delivery of exchange, after setting aside the amounts necessary to cover the obligations of the Bank of the Republic and to service the external debt of the public agencies and the National Federation of Coffee Growers. Over-all import and export policy is determined by the Foreign Trade Council. The Institute of Foreign Trade, through its Import Board, controls imports that are subject to prior licensing. The National Council for Economic and Social Policy issues directives concerning direct investment in Colombia to the Exchange Office and the National Planning Department, which evaluates new projects. The Exchange Office of the Bank of the Republic keeps an accounting record both of foreign investment in Colombia and of debts abroad, and controls the movement of foreign capital as well as the transfer of profits, dividends, commissions, and royalties for trademarks and patents. The Superintendency of Exchange Control, which is an autonomous agency reporting direct to the Presidency of the Republic, enforces control and supervision over exchange transactions and is responsible for applying penalties for violation of the exchange regulations currently in force.

Prescription of Currency

Payments and receipts related to international transactions are normally effected in U.S. dollars. Settlements with Eastern Germany, Hungary, Poland, Spain, and Rumania for commercial transactions must be made through a clearing account in accordance with the provisions of the relevant bilateral payments agreement. The National Federation of Coffee Growers has concluded payments agreements with Bulgaria and Yugoslavia.

Payments between Colombia and Argentina, Bolivia, Chile, Ecuador, Mexico, Peru, and Venezuela are made through accounts maintained within the framework of the LAFTA multilateral clearing system.1, 2

Nonresident Accounts

Credit establishments are authorized to receive short-term deposits in foreign currency from physical or juridical persons not resident in Colombia, and these deposits are freely available to the holders, but any foreign currency deposits that they may wish to convert into Colombian currency must be sold to the Bank of the Republic. Before releasing the accounts of nonresidents, banks must obtain prior authorization from the Exchange Office.

Imports and Import Payments

Imports are classified as follows: goods whose import is prohibited; goods whose import is subject to prior licensing by the Institute of Foreign Trade; and goods that may be imported freely without license. In this last category, there is a global free list applicable to all countries and a National Free List applicable to LAFTA countries only; the latter contains all commodities that are on the global free list as well as some additional ones. These liberalized imports corresponded to about 18 per cent of 1969 reimbursable imports; they comprise mainly certain raw materials and some types of machinery. All import registrations by public sector agencies are screened by the Institute of Foreign Trade to determine whether local substitutes are available. The prohibited list comprises mainly such items as arms and habit-forming drugs, certain foodstuffs, such as corn and milk, certain textiles and garments, jewelry, and a number of other consumer goods; imports of goods on this list are licensed from time to time.

Prior registration of the import transaction at the Institute of Foreign Trade is required for all imports other than those with an f.o.b. value of less than US$20 (or US$40 for books and pharmaceuticals). The charge for import registration is Col$ 100.00 (in some cases Col$5.00) plus a consular invoice tax of 1 per cent. Advance import deposits in Colombian currency must be made with the Bank of the Republic before import registration is permitted; the deposit is returned 90 days after the goods have cleared customs. The advance import deposit is payable at one of many rates, depending on the type of goods; those important in practice are the rates of 1, 5, 10, 30, 70, and 130 per cent.

The following imports are exempt from prior deposits: nonreimbursable imports (i.e., goods for which no foreign exchange is required); imports brought into Colombia under special import-export arrangements (Vallejo Plan); goods included in the Colombian National List and the special lists granting concessions to LAFTA countries; goods financed with credits having a maturity of at least 40 years,3 noncommercial capital goods and components imported by the Government, Departments, municipalities, official undertakings, semiofficial bodies, and public service agencies, and noncommercial goods when intended for mineral exploration or exploitation; goods imported by the National Federation of Coffee Growers for its own use; goods exempt by virtue of an international agreement; capital goods, components, and raw materials imported by firms sponsored and supported by the Government, and firms holding foreign commitments backed by the Government; machinery and equipment coming under the tariff headings for the basic industries; goods of prime necessity imported by the Institute of Agricultural Marketing (Idema); most imports by universities and other nonprofitmaking educational institutions; scientific and literary books, newspapers, and reviews that made a contribution to the culture of the Colombian people, together with capital goods for the production of such items; and sacramental wine. The advance deposit is calculated on the f.o.b. value of the goods, at the average selling rate for exchange certificates for the previous month.

A prior exchange license is required for all payments for imports; licenses are granted by the Exchange Office, provided that it is satisfied that the goods have been cleared through customs and that payment is due. At least 20 days prior to filing an application for an exchange license, the importer must provide a peso advance deposit equivalent to 95 per cent of the exchange requested, calculated at a rate announced monthly by the Ministry of Finance on the basis of the average exchange certificate price for the preceding month. Exempt are import payments by the Government, Departments, municipalities, and official agencies, and payments for imports financed with foreign credits extended to the Bank of the Republic, goods for general consumption imported by the Institute of Agricultural Marketing, payment for the crude oil acquired by the national petroleum company (Empresa Colombiana de Petróleos—Ecopetrol) for refining in Colombia, imports financed by U.S. AID credits, and payments made by letters of credit charged to the bilateral accounts maintained with certain European countries.

Import duties are calculated at the effective exchange rate applicable to the advance surrender of export proceeds from commodities other than coffee. In addition to customs duties, there is an ad valorem tax on imports equal to 3 per cent of the c.i.f. value. Of the amounts collected, 50 per cent goes to the Export Promotion Fund, while the remaining 50 per cent goes to the National Coffee Fund. Exempt from this tax are imports by public entities, goods of LAFTA origin, and imports under the Vallejo Plan.

Importers of goods financed by the U.S. AID are required to ship at least 50 per cent of the total volume of shipments on Colombian flag ships.

Payments for Invisibles

Payments for invisibles are made at the exchange certificate rate. All payments for invisibles are subject to exchange licenses, which are granted according to officially established priorities determined by the Monetary Board. No advance payment deposit is required for invisibles, except for travel allowances, for which a 50 per cent prior deposit in local currency is required,4 and for payments of interest on certain loans, for which the prescribed deposit is 95 per cent. Payments for travel abroad are limited to US$30 a person a day, not to exceed US$1,350 a person a year; this limit may be raised to US$70 a day and US$6,300 a year when the travel may be especially beneficial to the country; transfers to professionals and technicians undertaking courses abroad are restricted to US$450 a month for up to 12 months, while for other students the ceilings vary from US$120 to US$200 a month, depending on the cost of living in the country concerned. Foreign tourists who have stayed in Colombia for a period not exceeding three months may, on leaving the country, purchase foreign currency not exceeding US$60 on presentation of their boarding pass.

Colombian nationals and resident foreigners are required to pay a travel tax of Col$500 whenever they leave the country.

Exports and Export Proceeds

Exports of Colombian products may be made freely, except when the law provides otherwise. There is a list of exports that are either prohibited or are subject to special requirements. Prior application for registration is required for all exports except crude oil, samples, and Colombian products in noncommercial quantities. If the application meets all legal requirements, approval is stamped on the application form, i.e., registration is granted. When registering an export transaction, the exporter must provide either a personal guarantee in pesos (but without depositing any amount) corresponding to the full export value or a bank guarantee (usually for 30 per cent of the same value), to ensure that the proceeds will be surrendered to the Bank of the Republic. The periods for surrendering export proceeds are as follows: (1) for coffee exports, within 20 days from the date of registration of the sale contract, if the said contract is used with shipping documents inside the country, and within 10 days from the date of the bill of lading if the contract is used with that document; (2) for banana exports, 60 per cent of the value must be surrendered within 10 days following the registration of the export, and the remaining 40 per cent within 60 days after the registration; (3) for exports of products containing imported raw materials, 180 days from the granting of registration; and (4) for other exports, generally within 90 days from the same date.

The Bank of the Republic is empowered in certain cases to retain a portion of the exchange proceeds surrendered by the exporter of any product to repay old foreign debts incurred by the exporter concerned. All exchange proceeds from exports, except those from the export of crude oil not produced by Ecopetrol, must be surrendered to the Bank of the Republic.

On surrendering their export proceeds to the Bank of the Republic, exporters of commodities other than coffee, petroleum and petroleum products, and cattle hides receive tax credit certificates in an amount of 15 per cent of the total earnings surrendered, converted at the exchange rate used for import deposits. These certificates, which are freely negotiable and are quoted on the stock exchange,5 are accepted at par one year after issuance by tax offices for the payment of income tax, additional taxes, customs duties, and sales taxes.

The surrender of foreign currency earned by exports is carried out by exchanging the foreign currency for exchange certificates that are negotiable in the bankers’ market. The certificates have a validity of 5 days to 10 days, after which they must be surrendered to the central bank at 90 per cent of the lowest certificate rate quoted by the Bank in the preceding week.

The surrender price for exports other than coffee varies with fluctuations in prices in the world market. Coffee exports are subject to the following additional regulations: (a) A minimum surrender price (reintegro) is fixed, after deduction for freight and insurance, at US$83.60 per 70-kilogram bag. (2) Exporters pay a tax in foreign exchange at the rate of 20 per cent ad valorem. Of this tax, 4 percentage points are paid to the National Coffee Fund while the remainder provides revenue for the Treasury’s Special Exchange Account, of which the net product forms a contribution to the national budget. The Special Exchange Account is credited at the Bank of the Republic’s accounting rate of Col$ 17.60 per US$1. (3) Exporters must either surrender in kind to the National Federation of Coffee Growers and without payment the equivalent of 25 per cent of the volume of excelso coffee that they wish to export (retención) or pay the Federation the peso equivalent. (4) Exports of coffee are subject to an additional tax of 6 per cent ad valorem (pasilla tax); the tax must be paid, either in kind or in pesos, to the Federation. (5) A committee composed of the Ministers of Finance and Agriculture and the Managing Director of the Federation establishes domestic buying prices for the various grades, expressed in pesos per arroba of 12.5 kilograms. (6) Whenever the domestic support price, net of taxes and freight, exceeds a level of about Col$ 1,300 per 125 kilograms of parchment coffee, corresponding to a spot New York price of US$0.57 a pound, the excess (net of taxes and levies) is shared among producer, Coffee Fund, and local producers’ committees in a ratio of 35:30:35; in that event, the retención is to be increased and the proceeds of the increase are paid to the Coffee Fund and the producers’ committees.

Anticipated export proceeds from coffee may be provisionally surrendered in advance of actual surrender (when prefinanced by foreign buyers) provided that the latter takes place within 120 days of the provisional surrender, at a provisional exchange rate of Col$ 15.50 per US$1. Advance surrender of anticipated export proceeds from products other than coffee may be made at the average rate of exchange certificates for the previous month, as determined by the Ministry of Finance, provided that the actual surrender takes place within 12 months of the provisional surrender, or within 24 months if the export value exceeds US$500,000. The payment to the exporter is subsequently adjusted for the effective exchange rate applicable on the day of actual surrender.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered; they are converted at the certificate market buying rate.

Capital

All inward and outward capital transfers are effected at the certificate market rate.

All foreign investment in Colombia, all new foreign loans,6 and the movement of capital previously imported (except loans previously registered under Decree No. 2322 of September 2, 1965) must be registered with the Exchange Office of the Bank of the Republic.7 Capital imports in amounts of US$100,000 or more and capital imported for petroleum exploration or exploitation, or for other mineral exploration, also require prior approval by the National Planning Department in accordance with directives issued by the National Council for Economic and Social Policy; capital for the petroleum industry or for other mineral exploration in addition requires approval by the Ministry of Mines and Petroleum. Capital registration entitles the investor to export profits and to repatriate capital at the certificate market rate on certain conditions specified in Resolution No. 9 of 1968.8 The transfer of profits is limited to 14 per cent of the net capital value in any one year (starting with profits earned in 1968), except for profits resulting from investments of outstanding importance or involving special risks in view of the circumstances prevailing in the international money market. If in any year the earnings remitted are less than 14 per cent, the balance may be remitted in subsequent years, provided that the additional remittances do not exceed 3 per cent a year. New investments may be granted exemptions from import duty and from advance deposit and import license requirements. Capital invested in the petroleum industry is subject to special rules and to contractual provisions.

Contracts involving royalties, commissions, trademarks, patents, and similar arrangements must be registered with the Exchange Office to enable the beneficiary to make transfers abroad. They require approval by the Royalties Committee before they can be registered.

Colombian nationals who have invested abroad must surrender to the Bank of the Republic not only the interest, profits, commissions, and royalties but also the proceeds of the sale or liquidation of the principal investment at the prevailing certificate market rate. Exports of capital by residents are restricted and such exports by private individuals are not normally permitted.

A peso advance deposit corresponding to 95 per cent of the exchange requested is required for repayments of principal and payment of interest on certain private loans and on private suppliers’ credits.

Gold

Physical and juridical persons may trade in Colombia in gold coins for collection purposes only. With this exception, only the Bank of the Republic is entitled to purchase, sell, hold, import, or export gold. The Bank of the Republic purchases the gold produced in the country at US$35 an ounce and is empowered to pay up to 50 per cent in foreign currency on presentation by foreign capital mining companies of exchange licenses entitling them to make payments abroad for services, dividends, capital repayments, taxes, etc. The remaining 50 per cent and all payments to the small producers are paid in pesos at the certificate market exchange rate. On selling their gold to the Bank of the Republic, the producers receive tax credit certificates equivalent to 15 per cent of the value of the gold sold. The certificates held by the small producers are bought by the Bank of the Republic in Colombian pesos at their nominal value. When the Bank sells newly mined gold abroad at market prices in excess of US$35 an ounce, it reimburses the producer for the difference.

The Bank of the Republic makes domestic sales of gold for industrial use either direct or through the Colombian Mining Association, on presentation of licenses issued by the Superintendency of Exchange Control, at a price equivalent to the average quotation in the free external gold markets during the previous month plus a sales tax of 15 per cent; this price is translated into pesos at the prevailing selling rate of exchange certificates on the date of sale. The Bank’s exports of gold are made at world market prices and the excess over its purchase price of US$35 is paid out to the producers who have supplied the gold. Imports of gold also are a monopoly of the Bank of the Republic; imports of nonmonetary gold are not normally undertaken.

The assay and refining houses and the mining companies producing gold are under the supervision of the Superintendency of Exchange Control. In addition, the mining companies must obtain a license from the Superintendency in order to carry on their operations.

The Bank of the Republic from time to time strikes commemorative gold coins which are legal tender. Residents and nonresidents may freely buy such coins, but export licenses are not normally granted.

Table of Exchange Rates (as at December 31, 1969)(pesos per U.S. dollar)
BuyingSelling
9.00 (Fixed Rate)

Purchases of crude oil from foreign-owned companies in Colombia for domestic refining.12
14.28 (Certificate Market Rate less 20% Exchange Tax, Fluctuating Rate)

Coffee exports.9
17.60 (Accounting Rate of Bank of the Republic) Conversion of Government’s receipts from exchange tax on coffee exports.17.6O (Accounting Rate of Bank of the Republic) Government’s purchases of exchange for servicing of public debt, diplomatic expenses, etc.
17.85Certificate Market Rate, Fluctuating Rate)

Net proceeds from exports of crude oil and petroleum derivatives (Article 158 of Decree-Law No. 444).10 Exports of cattle hides. Exports from free ports. All receipts from invisibles and capital transfers.
17.93 (Certificate Market Rate, Fluctuating Rate)

All other transactions.13
20.51 (Average Certificate Market Rate of Previous Month plus 15% Tax Credit Certificates, Fluctuating Rate)
All other exports.9, 11

Changes during 1969

During the year, the authorities continued to reduce, on many occasions, the advance deposit requirements for imports by shifting commodities to groups subject to a lower rate of deposit; these reductions in deposit rates affected about 270 tariff positions. There were relatively few changes in the import free list. The amount of import licenses issued was considerably larger than in 1968. The minimum surrender price for coffee exports was changed frequently, rising from US$61.50 to US$83.60. The selling rate in the certificate exchange market was gradually depreciated from Col$16.95 to Col$17.93 per U.S. dollar.

January 1. The Bank of the Republic based its domestic sales of gold for industrial use on the world market price instead of US$35 an ounce, as previously.

January 29. The peso advance deposit equivalent to 95 per cent of the value of exchange applications was not required for transactions involving payments for diplomatic services abroad, contributions to international organizations, and for payments on public debt and other obligations of the Government and public entities; debt service payments by the Bank of the Republic and the National Federation of Coffee Growers; and servicing of external loans guaranteed by the Government or the Bank of the Republic or of contracts with international financial organizations or official foreign credit institutions.

January 31. Import prohibitions applicable to the following goods were lifted: packing containers of paper or paperboard; various sieves; mirrors; trailers; television sets; gramophone records; cleaning agents for iron and steel products; prepared animal feedstuffs; soup extracts and edible oils; evaporated milk; and preparations of vegetables.

February 5. The advance surrender of export proceeds from products other than coffee could take place at Col.$ 16.50 per U.S. dollar.

March 5. It was announced that, with effect from January 1, 1969, the import duties on petrochemical products specified in concession lists and imported from Bolivia, Chile, Ecuador, Paraguay, and Peru were to be reduced annually by 20 per cent of the original rate. These commodities remained subject to the consular invoice tax of 1 per cent, but were exempt from advance deposit requirements and payment of the ad valorem tax of 3 per cent of the c.i.f. value of imports.

March 7. Imports of crude soya oil, certain coated and oiled fabrics, and certain equipment for manufacturing gramophone records were prohibited. The prohibition to import certain prepared vegetables, dried grapes, soups and broths, and a few organic chemicals was lifted.

March 21. The minimum surrender price for coffee exports was reduced from US$61.50 to US$60.25 per 70-kilogram bag.

April 11. Decree No. 518 defined the internal organizational structure of the Superintendency of Exchange Control and the functions of its branch offices.

April 18. The retention quota (retención) was raised from 20 per cent to 23 per cent of the volume of intended exports of excelso coffee.

April 18. The minimum surrender price for coffee exports was reduced from US$60.25 to US$58.70 per 70-kilogram bag.

April 21. Exchange Office Resolution No. 1 required all residents holding securities or real estate abroad to register these assets by October 20, 1969.

April 23. The Bank of the Republic was authorized to contract the minting of gold coins commemorating the 150th anniversary of the Battle at Boyacá, up to an amount of 1,100 kilograms of fine gold. With effect from August 7, 1969, these coins were freely sold to residents and nonresidents.

May 7. The maximum permitted effective interest rate for loans taken up abroad with maturities of up to one year was raised from 8½ per cent to 9 per cent per annum.

May 14. All existing and future liabilities in convertible currencies to nonresidents were required to be registered with the Bank of the Republic, provided that their maturity was not less than three years. Transfers of amortization and interest payments were subsequently to be made in the registered currency.

May 22. The Andean Agreement for subregional economic integration was signed by Bolivia, Chile, Colombia, Ecuador, and Peru.

May 29. The local currency deposit required in respect of exchange applications by residents wishing to travel abroad was reduced from 100 per cent to 50 per cent of the foreign currency purchased.

May 30. Establishments other than banks, such as hotels, exchange houses, and tourist agencies and stores situated in airports or frontier regions, which regularly receive foreign exchange, were required to register with the Superintendency of Exchange Control within 30 days.

June 11. The maximum permitted effective interest rate for credit taken up abroad with maturities of up to one year was raised to 10 per cent per annum, whereas the corresponding maximum rate for loans with longer maturities was raised from 9½ per cent to 10½ per cent per annum.

June 19. Domestic gold sales by the Bank of the Republic for industrial use were to be undertaken at a price equivalent to the average quotation in the free external gold markets during the previous month, without any additional charges except for a sales tax.

June 19. The advance surrender of export proceeds from products other than coffee was to take place at an exchange rate equal to the average buying rate for exchange certificates in the previous month, as determined by the Ministry of Finance on a monthly basis.

July 21. It was announced that at least 50 per cent of the volume of exports shipped from and imports shipped to Colombia should be carried by Colombian flag ships, provided that the respective routes were served by such vessels. The decree took effect on October 9. It was applied only to goods financed by the U.S. AID.

August 20. The exchange rate applicable to the payment of the local currency deposit required in respect of exchange applications by residents wishing to travel abroad was defined as the average price for exchange certificates for the previous month, as determined by the Ministry of Finance.

August 23-November 7. In view of the steep rise in the international price of Colombian coffee, the minimum surrender price for coffee exports was gradually raised, on eight occasions, from US$58.70 to US$83.60 per 70-kilogram bag.

September 10. Resolution 48 clarified certain procedural aspects relating to the local currency deposits for travelers’ exchange applications. Within six months after the approval of an exchange license, travelers were required to properly document their stay abroad and the utilization of the exchange license; on application, this period could be prolonged by 90 days by the Exchange Office. In case such documentation was not presented in due time or if improper use of the license was proved, the full deposit, or a part thereof, was to be transferred to the Treasury.

October 1. A reciprocal credit agreement with Venezuela entered into effect.

October 22. The Exchange Office could not register loans taken up abroad in convertible currencies other than U.S. dollars unless their maturity was at least three years and the half-yearly repayments on such loans did not exceed one sixth of the principal. Debt service on such loans was to be effected in the same currency as the one in which the loan was received.

October 22. Exchange licenses were issued freely for subscriptions to foreign newspapers and scientific or technical journals, for membership fees in scientific and technical societies, and for books mailed direct to the addressee, provided that the value of such books did not exceed US$40 and that they did not constitute fractional imports.

October 23. The retention quota (retención) was raised from 23 per cent to 25 per cent of the volume of intended exports of excelso coffee.

November 3. It was announced that if the domestic support price for coffee (net of taxes and freight) should exceed a level of about Col$ 1,300 per 125 kilograms of parchment coffee, corresponding to a spot New York price for Colombian coffee of US$0.57 a pound, the excess, net of existing taxes and levies, would be distributed as follows: 35 per cent to the producer, 30 per cent to the National Coffee Fund, and 35 per cent to local producers’ committees for infrastructure investments and credits in coffee areas.

November 5. The maximum travel allowance for purposes that might be especially beneficial to the country was raised from US$50 to US$70 a day and from US$2,250 to US$6,300 a year. The local currency deposit requirement for such exchange applications remained at 50 per cent (see May 29).

November 26. Monetary Board Resolution No. 70 established that foreign credits could be negotiated in any freely convertible currency provided that the first repayment did not fall due earlier than 180 days after surrender of the proceeds to the Bank of the Republic. The maximum permitted effective interest rate on external loans was increased from 10 per cent to 10¼ per cent per annum for credits with maturities of up to one year, whereas it remained at 10½ per cent per annum for credits with longer maturities. The requirement that maturities of credits in currencies other than U.S. dollars must be of at least three years was abrogated (see October 22). Interest payments and amortization had to be made in the currency in which the credit had been granted.

December 18. The accounting rate for the Bank of the Republic’s international reserves was changed from Col$ 16.30 per U.S. dollar to Col$ 17.60 per U.S. dollar.

Democratic Republic of Congo

Exchange Rate System

No par value for the currency of the Democratic Republic of Congo has been established with the Fund. The official unit of currency is the Zaïre. The gold content of the zaïre is 1.777432 grams. The official rate of exchange for the Belgian franc is Z 1 = BF 100, which corresponds to Z 1 = US$2. The buying and selling rates for currencies other than the Belgian franc are based on the fixed rate for the Belgian franc and the official market rates for these other currencies in Brussels. However, the National Bank of Congo buys and sells most foreign currencies against zaïres at rates differing not more than ¾ of 1 per cent from the cross rates resulting from the official par values. It charges a commission of 210 of 1 per cent. The official buying and selling rate for the U.S. dollar was Z 49.7600 per US$100 on December 31, 1969. Forward exchange transactions are prohibited.

Administration of Control

The National Bank of Congo has regulatory authority over all foreign trade and payments. Specifically, the Bank has discretionary power to authorize payments and receipts in foreign exchange by residents of the Democratic Republic, and to permit the importation, exportation, and transit of goods.

Prescription of Currency

Payments from nonresidents must be received in listed convertible currencies.1 Special authorization for the acceptance of other currencies may only be given in respect of currencies that can be exchanged freely without a discount. Payments to nonresidents must be made in the listed currencies.

Nonresident Accounts

There are two categories of nonresident accounts: Nonresident Accounts in Zaïres and Nonresident Foreign Currency Accounts.

Nonresident Accounts in Zaïres may only be debited for settlements in the Democratic Republic.

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

Imports and Import Payments

The importation of a number of goods is prohibited on grounds of public policy; these are mainly arms, ammunition, narcotics, and juke boxes.

Only imports on a list A (jewelry, precious stones, and precious metals) or on a list B (certain types of machinery and vehicles, when valued at over Z 10,000) are subject to individual licensing; licenses are granted freely for goods on list B. All other commodities are free from prior licensing requirements. The National Bank has issued a general import and payments license for these goods which guarantees the availability of foreign exchange when payments fall due, provided that the importer files an import declaration with his bank following the actual placing of the order.

Applications for import licenses, whether requiring foreign exchange or not, are made initially to authorized banks in Kinshasa. Applications are forwarded to the National Bank after certification. After approval of the application by the National Bank, which is given in the form of a visa, the import license application is returned to the authorized bank for validation.

Import licenses are validated by the authorized banks without undue delay and remain valid for customs clearance during a period of six months starting from the first day of the month following that in which validation by the commercial bank takes place. Foreign exchange is made available for all licensed imports, the validated license constituting at the same time an exchange license; for payments purposes, the license remains valid as long as the relevant payments have not been completed. Where the exporter requires full or partial payment upon shipment, the authorized bank must not validate the license unless it receives a deposit in local currency corresponding to the full c.i.f. cost of the merchandise.2 The counterpart of the value of goods imported under the U.S. import support program and the agricultural aid program must be deposited within 180 and 120 days, respectively, after their shipment.

Payments for Invisibles

Policy related to payments for invisibles is formulated by the National Bank. Certain payments are subject to authorization by the National Bank, which is given or refused on a nondiscriminatory basis; the approval authority for other current payments has been delegated to the authorized banks. The Bank will not authorize exchange for the payment of commissions in favor of shippers or purchasing agents or, except for imports payable on arrival, for insurance on imports. All other payments for services performed by nonresidents are in principle authorized. Transfers abroad of salaries of foreign nationals are freely authorized, provided that at least Z 100 a month is deducted for local living expenses and that all taxes have been paid. Transfers in respect of certain administrative expenses abroad by enterprises, interest on private loans, and certain portions of insurance premiums are, as a rule, authorized. Net profits of firms with foreign capital participation are transferable up to an amount proportionate to that participation.

Fares for travel abroad may be paid in the Democratic Republic in local currency; for resident foreign nationals, however, the fare must not exceed the price of a return trip by a direct route to the country of their origin. Congolese nationals traveling abroad may buy foreign exchange in amounts depending on the duration of the journey, up to the equivalent of Z 400 a trip; applications exceeding this amount are subject to individual approval by the National Bank.

There are no limitations on the amount of domestic or foreign banknotes that travelers may take out.

Exports and Export Proceeds

All exports require individual licenses, with the exception of exports covered by the general licenses granted to Gecomin and Metalkat, the principal mining companies. Banks are normally authorized to grant licenses to exporters who submit a declaration in which they undertake to collect the exchange proceeds. The declaration must specify the nature of the merchandise to be exported, the price, and the currency in which payment is to be received. Export licenses are normally valid for three months; within this period, the proceeds must be received and surrendered. Most exports of minerals are subject to special regulations to take into account the time required for processing abroad. For mineral products, a provisional payment of about 70 per cent of the shipment’s estimated value has to be surrendered within 8 days after embarkation. For diamond exports, two thirds of the value established at a preliminary examination in the Democratic Republic has to be surrendered before the shipment is dispatched. Export proceeds from coffee have to be surrendered within 45 days after shipment. Receipts from other agricultural exports must generally be repatriated within three months of shipment. The export proceeds of Gecomin must be surrendered to the National Bank.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered. There are no limitations on the import of domestic or foreign banknotes by travelers.

Capital

The repatriation of new foreign capital brought in under the provisions of the Investment Code of June 26, 1969 is guaranteed, as is the transfer of profits and dividends on such capital. With minor exceptions, other transfers abroad of capital owned by residents or nonresidents are not permitted. The sale of real estate located in the Democratic Republic can only be made to the Congolese Government, against payment in zaïres; gratuitous transfers of real estate are subject to approval by executive ordinance. When the local currency part is paid by the debtor, amortization on foreign loans can be transferred in accordance with the terms of contracts that the National Bank has endorsed to guarantee the availability of exchange for such transfers. The foreign currency assets of the authorized banks are not permitted to exceed their short-term liabilities in foreign currencies.

Gold

Residents other than the monetary authorities, producers of gold, and industrial users are not allowed to purchase, hold or sell gold in any form other than jewelry, at home or abroad. The import and export of gold in any form, except jewelry constituting the personal effects of a traveler, require the prior approval of the National Bank; licenses for imports are not normally issued. Producers are required to sell 10 per cent of their production at the official price of US$35 an ounce to the National Bank.

Changes during 1969

January 1. The control over the invoicing of imports was relaxed further. The intervention of the foreign correspondents of the Société Congolaise de Surveillance was limited to the checking of quality and quantity. The checking of prices was henceforth undertaken by the National Bank and limited to random spot checks.

January 1. The transfer of profits by companies with foreign participation was resumed, as permitted by a circular of December 24, 1968.

April. The National Bank’s arrangements with banks in Belgium, France, and Switzerland were tightened under which Congolese nationals traveling in these countries could sell up to Z 100 in Congo currency every two weeks, which was then repurchased by the National Bank at the official rate. While previously the traveler merely had to present a valid passport, he was now required to submit a currency card (carte de change) issued by the National Bank of Congo. (Subsequently, the currency card facility was discontinued and the repurchase of zaïre banknotes from banks abroad was restricted further.)

May 14. A progressive complementary export duty was levied on exports of copper and specified copper products; the duty was applicable when export prices exceeded a specified level.

June 6. The requirement of an import license and/or a prior visa of the National Bank was abolished for virtually all commodities still subject to such requirements. The commodities not covered by this measure were mainly capital goods, but for these the prior visa of the National Bank, which enables the authorized bank to validate the import license, was given automatically. For the goods that were henceforth fully liberalized, importers could by virtue of a general import and payment license enter freely into purchase contracts, and the National Bank guaranteed the delivery of the necessary foreign currency when payments were due. Upon concluding a purchase contract, importers had to sign an import declaration and present it to their bank for registration for statistical purposes.

June 26. An Investment Code applicable to both domestic and foreign investments in Congo went into effect (Ordinance Law No. 69/032).

October 22. Export duties on tea and groundnuts were abolished and those on certain other agricultural products were reduced.

December 1. Imports from any country could be made without a certificate of origin. Previously, only imports of EEC origin were exempt.

People’s Republic of the Congo

Exchange System

No par value for the currency of the People’s Republic of the Congo has been established with the Fund. The unit of currency is the CFA Franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 277.710 = US$1.1 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique Equatoriale et du Cameroun (BCEAEC) and commercial banks take place at the rate of CFAF 1 = F 0.02 free of commission charges. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission. All purchases of foreign currency and all amounts credited to Foreign Accounts in Francs are subject to a commission which is payable to the Office of Foreign Financial Relations.

With the exception of those relating to gold, the exchange control measures of Congo do not apply to (1) France and its Overseas Departments and Territories (except the French Territory of the Afars and Issas) and Monaco; and (2) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Cameroon, the Central African Republic, Chad, Dahomey, Gabon, Ivory Coast, the Malagasy Republic, Mali, Mauritania, Niger, Senegal, Togo, and Upper Volta). Hence, all payments to these countries may be made freely. All other countries, except Congo itself, are considered foreign countries, and in principle financial relations only with foreign countries are subject to exchange control.

Administration of Control

The Office of Foreign Financial Relations in the Ministry of Finance and the Budget supervises borrowing and lending abroad, the issuing, advertising, or sale of foreign securities in Congo, and inward and outward direct investment. Exchange control is administered by the Minister of Finance and the Budget, who has delegated his approval authority to the Office of Foreign Financial Relations and the authorized banks. All payments and receipts between Congo and foreign countries that are made through banks are registered, for statistical purposes only, by the BCEAEC, through the intermediary of the institution executing the transfer; the BCEAEC also addresses inquiries to the principal firms and agencies concerning inward and outward payments made in other manners, particularly by the offsetting of claims and debts. All exchange transactions relating to foreign countries must be effected through authorized banks. Import and export licenses are issued by the Foreign Trade Office in the Ministry of Economic Affairs, except those for gold, which are granted by the Office of Foreign Financial Relations.

Prescription of Currency

The People’s Republic of the Congo is an Operations Account country of the French Franc Area, since the BCEAEC maintains an Operations Account with the French Treasury; settlements with France, Monaco, and the other Operations Account countries of the French Franc Area are made in CFA francs,- French francs, or the currency of any other institute of issue that maintains an Operations Account with the French Treasury. Settlements with mainland China are made through special accounts established under a bilateral payments agreement.2 Settlements with all other countries are usually made in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs through Foreign Accounts in Francs. All payments to Portugal require the prior approval of the Ministry of Finance and the Budget. All settlements between Congo and Rhodesia are prohibited.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France. The crediting to nonresident accounts of CFA banknotes, French banknotes, or banknotes issued by any other institute of issue that maintains an Operations Account with the French Treasury is prohibited.

Imports and Import Payments

Imports of virtually all commodities from countries in the French Franc Area and from EEC countries other than France may be made freely. All imports of Portuguese or Rhodesian origin are prohibited. Imports from all non-EEC countries outside the French Franc Area are subject to licensing in accordance with an annual import program; the program also includes indicative quotas for a few commodities from EEC countries other than France. This program is determined by a joint French-Congolese Committee. The import program does not include petroleum imports, for which a joint quota is set for the countries of the Central African Customs and Economic Union (UDEAC). The quotas for non-EEC countries may be used to import goods originating in any country outside the French Franc Area. Licenses for liberalized commodities originating in EEC countries other than France are issued automatically. Imports of certain products from non-EEC countries outside the French Franc Area are subject to special ceilings. Furthermore, imports of certain products from some low-wage countries of the Far East are limited by a special ceiling.

Imports from non-UDEAC countries of certain goods are not permitted unless the importer also buys a certain quantity of the local product (jumelage).

The National Trading Office (Office National du Commerce or Ofnacom) has a monopoly over certain imports, including hardware, rice, and salted fish from all sources, certain cotton piece goods from Japan, and certain other textiles from mainland China.

All import transactions relating to foreign countries must be domiciled with an authorized bank. Licenses for imports from foreign countries require the visa of the Foreign Trade Bureau and that of the Office of Foreign Financial Relations. The approved import license entitles importers to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank.

Payments for Invisibles

Payments for invisibles to France, Monaco, and the other Operations Account countries in the French Franc Area are permitted freely; those to other countries are subject to approval. For many types of payment the approval authority has been delegated to authorized banks. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when the basic transaction has been approved. Resident tourists traveling to countries other than France, Monaco, and the other Operations Account countries of the French Franc Area may obtain an exchange allocation of an amount equivalent to CFAF 100,000 a year for each person (CFAF 50,000 for children under ten); any foreign exchange remaining after return to Congo must be surrendered. For business travel to foreign countries, there is a special allocation of the equivalent of CFAF 10,000 a person a day, subject to a maximum of CFAF 300,000 a trip. Additional amounts of foreign exchange for business travel may be authorized in appropriate cases. The travel allocations obtained by residents must be recorded in a personal foreign exchange booklet (carnet de change). The transfer of the entire net salary of a foreigner working in Congo is permitted upon presentation of the appropriate pay voucher, provided that the transfer takes place within three months of the pay period. Travelers going to foreign countries may take out up to a maximum of CFAF 10,000 in BCEAEC banknotes, French banknotes, and banknotes issued by any other institute of issue maintaining an Operations Account with the French Treasury. Travelers to other countries may take out any amount in BCEAEC banknotes.

Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry or, if no declaration was made, up to the equivalent of CFAF 25,000; they may reconvert up to CFAF 25,000 in BCEAEC banknotes into foreign currency.

Exports and Export Proceeds

Exports to Rhodesia are prohibited. With the exception of cotton and minerals, exports to countries in the French Franc Area may be made freely; exports to all destinations of coffee, cacao, palm oil, groundnuts, bananas, cotton, gold, and diamonds are subject to individual license. All other exports are free of individual license. Certain agricultural commodities are exported by an official agency, the National Marketing Office for Agricultural Products (Office national de commercialisation des produits agricoles or ONCPA).

Proceeds from exports to foreign countries must be collected and repatriated, generally within 180 days of arrival of the commodities at their destination. Export proceeds received in currencies other than those of France or another Operations Account country must be surrendered within a month of the due date. All export transactions relating to foreign countries must be domiciled with an authorized bank.

Proceeds from Invisibles

Proceeds from transactions in invisibles with France, Monaco, and other Operations Account countries in the French Franc Area may be retained. All amounts due from residents of other countries in respect of services and all income earned in those countries from foreign assets must be collected, and if received in foreign currency surrendered, within a month of the due date. Resident and nonresident travelers may bring in any amount of banknotes and coins issued by the BCEAEC, the Bank of France, or any other bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign banknotes and coins (except gold coins).

Capital

All capital movements between Congo and Rhodesia are prohibited. Capital movements between Congo and France, Monaco, and other Operations Account countries in the French Franc Area are free of exchange control; capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are permitted freely. All foreign securities, foreign currency, and titles embodying claims on foreign countries or nonresidents that are held in Congo by residents or nonresidents must be deposited with authorized banks in Congo.

Special controls (additional to any exchange control requirements that may be applicable) are maintained over borrowing and lending abroad, over inward and outward direct investment, and over the issuing, offering for sale, advertising, or introduction of foreign securities in Congo; these controls relate to the transactions themselves, not to payments or receipts. With the exception of those over the sale or introduction of foreign securities in Congo, the control measures do not apply to France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas), Monaco, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account.

Direct investments abroad 3 require the prior approval of the Minister of Finance and the Budget, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the full or partial liquidation of such investments also requires the prior approval of the Minister, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment abroad. Foreign direct investments in Congo4 require prior declaration to the Minister of Finance, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the Minister has a period of two months from receipt of the declaration, during which he may request the postponement of the projects submitted to him. The full or partial liquidation of direct investments in Congo must also be declared to the Minister, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment in Congo. Both the making and the liquidation of direct investments, whether these are Congolese investments abroad or foreign investments in Congo, must be reported to the Minister within 20 days following each operation. Direct investments are defined as investments implying control of a company or enterprise. Mere participation is not considered as direct investment, provided that it does not exceed 20 per cent in the capital of a company whose shares are quoted on a stock exchange.

The issuing, advertising, or offering for sale of foreign securities in Congo requires prior authorization by the Minister of Finance. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the Congolese Government and (2) shares similar to securities whose issue, advertising, or offering for sale in Congo has previously been authorized.

Borrowing by residents from nonresidents requires prior authorization by the Minister of Finance and the Budget. The following are, however, exempt from this authorization: (1) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (2) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between Congo and countries abroad or between foreign countries, in which these persons or firms take part; (3) loans contracted by registered banks; and (4) loans other than those mentioned above, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one borrower. The contracting of loans referred to under (4) that are free of authorization, and each repayment thereon, must be reported to the Office of Foreign Financial Relations within 20 days of the operation.

Lending by residents to nonresidents requires prior authorization by the Minister of Finance and the Budget. The following are, however, exempt from this authorization: (1) loans granted by registered banks and (2) other loans when the total amount outstanding of these loans does not exceed CFAF 50 million for any one lender. The making of loans that are free of authorization, and each repayment thereon, must be reported to the Office of Foreign Financial Relations within 20 days of the operation.

Under the Investment Code of June 1961, as amended on December 29, 1962, any enterprise established in Congo, whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports as well as exemption from direct taxes on specified income.

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

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

Gold

By virtue of Decree No. 66/236 of July 29, 1966, as amended by Decree No. 66/265 of August 29, 1966, residents are free to hold in Congo gold in the form of coins, art objects, or jewelry, but they require the prior authorization of the Minister of Finance and the Budget to hold gold in any other form or to import or export gold in any form from or to any other country. Exempt from the latter requirement are (1) imports and exports by or on behalf of the Treasury or the BCEAEC and (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles). Both licensed and exempt imports of gold are subject to customs declaration. The agency Sogarem has a monopoly over the export of newly mined gold.

Changes during 1969

January 30. Decree No. 69/35 introduced new exchange control regulations applicable in relations with foreign countries and amending the exchange controls introduced on June 4, 1968. It revoked and replaced Decree No. 68/150 of June 4, 1968 and suspended any contrary provisions of Decree No. 67/150 of July 1, 1967 and of the regulations issued for its implementation. All import and export transactions relating to foreign countries had to be domiciled with authorized banks. The decree prohibited, except with the prior approval of the Minister of Finance, all payments and transfers by residents to foreign countries, or within Congo in favor of a nonresident; all imports and exports of gold, means of payment, and securities; and all transactions and transfers leading to the constitution of assets abroad by a resident, or to the holding of foreign means of payment in Congo by a resident. All claims on foreign countries or nonresidents resulting from exports, earnings, or income had to be collected and, where appropriate, surrendered. All foreign securities, foreign exchange, and titles representing claims on foreign countries had to be deposited with an authorized bank, whether they were held by residents or nonresidents.

January 30. Order No. 0248 listed the types of payment that could be made freely, through an authorized bank or the Postal Administration, to foreign countries. Payments up to CFAF 12,500 could be made freely, without indication of their purpose. Nonresident accounts in Congo could not be credited with BCEAEC banknotes, French banknotes, or banknotes issued by any other institute of issue maintaining an Operations Account with the French Treasury. All amounts subject to surrender had to be collected, and if received in foreign currencies surrendered to authorized banks, within a month of the due date. Such payments could not be collected in banknotes or to the debit of a postal checking account in Congo. The due date for export receipts had in principle to be within 180 days after arrival of the commodities at their destination. The deposit of foreign securities, etc., had to be made within a month. The order also contained definitions of “foreign countries,” “residents,” and “nonresidents.” Foreign countries were defined as all countries other than Congo, France, Monaco, and the other Operations Account countries. The order revoked and replaced Order No. 2155/MF/B&M of June 4, 1968.

January 30. Decree No. 69/34 submitted to control by the Minister of Finance all claims and liabilities in CFA francs and in any foreign currency that banks in Congo had vis-à-vis foreign countries. This control could be delegated to the Office of Foreign Financial Relations.

February 14. Order No. 0353 required the prior approval of the Office of Foreign Financial Relations to send means of payment, titles to claims or property, and domestic or foreign securities to a foreign country through the mail or by parcel post. The authorized banks were exempt from this prior approval.

February 14. Order No. 0354 provided that resident and nonresident travelers leaving for a foreign country could not take out more than CFAF 10,000 in BCEAEC banknotes (CFAF 5,000 in CFA banknotes or foreign banknotes for those going abroad for less than 24 hours). Imports by resident or nonresident travelers of French banknotes and of banknotes issued by any institute of issue maintaining an Operations Account with the French Treasury would be free, as would be imports of any means of payment denominated in a foreign currency. An exchange allocation of the equivalent of CFAF 100,000 a person a year (CFAF 50,000 for children under ten) was introduced for tourist travel to foreign countries, and one of up to CFAF 10,000 a day (subject to a maximum of CFAF 300,000 a trip) for business travel to foreign countries. Allocations in excess of CFAF 300,000 a trip for business travel could be issued by an exceptional authorization of the Office of Foreign Financial Relations. A personal foreign exchange booklet (carnet de change) was introduced in which all travel allocations had to be recorded. Nonresident travelers could take out, in addition to CFAF 10,000 in BCEAEC banknotes, any foreign currency declared upon entry or, if no declaration was made, foreign currency up to the equivalent of CFAF 25,000.

February 14. Circular No. 021/MF established approval procedures for payments and transfers to foreign countries. Payments up to CFAF 12,500 could no longer be made freely; any resident could make payments abroad up to CFAF 12,500 a year without indication of their purpose, but such payments had to be recorded in his foreign exchange booklet and were deducted from his tourist travel allocation. The circular also established the terms on which foreign exchange could be purchased forward. This would only be allowed for import payments but not until the detailed regulations were announced. The circular also prescribed procedures for payments for imports. Import licenses for goods from foreign countries required the visa of the Foreign Trade Bureau and that of the Office of Foreign Financial Relations. Nonresident travelers could upon departure reconvert up to CFAF 25,000 into foreign currency. No resident or nonresident traveler could take out more than the equivalent of CFAF 10,000 in BCEAEC banknotes. Residents could not take out more than half their tourist travel allocation in the form of foreign banknotes. Foreign workers could transfer their entire net salary abroad, within three months of receipt. Purchases of foreign currency and amounts credited to Foreign Accounts in Francs remained subject to the commission payable into the account of the Office of Foreign Financial Relations with the Treasury; the rate of commission is fixed annually by the Minister of Finance and the Budget.

February 14. The Office of Foreign Financial Relations issued Circular No. 022/MF to the authorized banks, concerning Foreign Accounts in Francs and foreign dossiers for securities. All overdrafts on Foreign Accounts in Francs and in general all advances to nonresidents required prior approval.

June 6. Circular No. 161/MF&B established special nonresident accounts for expenditures and receipts of foreign ships in Congo and of Congolese ships abroad (Comptes d’escale).

June 6. Circular No. 162/MF&B was issued concerning emergency transfers to foreign countries.

June 6. Circular No. 163/CIRC was issued concerning the control of the banks’ foreign currency position and their position in CFA francs on foreign accounts.

August 11. The exchange rate in terms of U.S. dollars was changed from CFAF 246.853 per US$1 to CFAF 277.710 per US$1. The fixed exchange rates for the French franc, the Malagasy franc, and the Mali franc remained unchanged.

Costa Rica

Exchange Rate System

The par value is 0.134139 gram of fine gold per Costa Rican Colón or Ȼ 6.625 = US$1. The Central Bank buys exchange derived from exports and other exchange tendered to it at a fixed rate of Ȼ 6.62 per US$1. Exchange may be purchased freely by the public in a market in which the Central Bank maintains the rate at Ȼ 6.65 per US$1. Costa Rica has no exchange restrictions on current or capital payments. Costa Rica accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from February 1, 1965.

Administration of Control

The controls over export receipts are operated by the Central Bank of Costa Rica. Purchases and sales of exchange are made through the Central Bank or through commercial banks acting as its agents.

Prescription of Currency

In practice, nearly all exchange transactions in Costa Rica are expressed in U.S. dollars. Payments to Poland may be made through special U.S. dollar accounts established under a payments agreement with that country. Payments to El Salvador, Guatemala, Honduras, and Nicaragua in respect of trade and invisibles may be made in Costa Rican colones through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries; the documents must be expressed in colones and require approval by the Central Bank, which is given for payments for all imports of Central American origin and for all current invisibles and capital transfers. The central banks of these four countries may also engage in transactions in Costa Rican notes and coins, up to the equivalent of US$40,000 a month for Nicaragua and up to the equivalent of US$10,000 a month for each of the other countries. Payments to Mexico in respect of trade and invisibles may also be made in Costa Rican colones through the clearinghouse, in accordance with the Agreement on Clearing and Reciprocal Credits between the Bank of Mexico and the member banks of the clearinghouse; the documents must be expressed in colones and require the prior approval of the Central Bank. There are no transactions with Mexico in Costa Rican notes and coins.

Imports and Import Payments

Imports from South Africa are prohibited. There is no system of import licensing and all payments may be made freely. Some imports, however, are made on a barter basis; these require a barter license (licencia de trueque) issued by the Ministry of Industry and Commerce.

In addition to any applicable customs duty, there are levied on imports (1) a stamp tax of 3 per cent of the customs duty on commodities not covered by the common external tariff of the Central American Common Market; and (2) a sales tax with a range of 5-25 per cent ad valorem, from which certain essential items are exempt.

Payments for Invisibles

Payments for invisibles are not controlled, and exchange may be purchased freely. All passages for foreign travel are subject to a tax of 5 per cent.

Exports and Export Proceeds

Exports to South Africa are prohibited. The Central Bank supervises exports to assure a supply of exchange to the market. Export licenses from the Central Bank are necessary for the physical exportation of merchandise, and the license is granted if the exporter agrees to surrender the exchange proceeds; the Bank may require the exporter to provide a guarantee in this respect. In addition to the export license issued by the Central Bank, other export licenses are required as follows: (1) strategic materials, such as armaments, munitions, scrap iron, and scraps of nonferrous base metals, require export licenses from the Ministry of Industry and Commerce; (2) sugar requires an export license from the Ministry of Industry and Commerce in order that shipments under the sugar quotas may be controlled; (3) lumber and root of ipecacuanha require export licenses from the Institute for Lands and Colonization; (4) beans, rice, potatoes, onions, cotton, meat, and purebred and other cattle require export licenses from the National Council of Production; (5) airplanes require export licenses from the Civil Aviation Board; (6) Indian art objects made of gold, stone, or clay require export licenses from the National Museum; (7) tobacco requires an export license from the Tobacco Defense Board; (8) certain livestock and animals and plants of forest origin require a permit from the Ministry of Agriculture and Livestock; and (9) coffee requires a sales contract approved by the Coffee Office, in order to control exports under the coffee quotas, and when there is a lien on the coffee in favor of a bank, that bank’s approval is required before the Central Bank grants an export license.

The exchange proceeds of all exports must be surrendered within 60 days of exportation or, if the goods were sold on credit, upon expiry of the term of the credit. Foreign-owned banana companies that have contracts with the Government must surrender their net export proceeds calculated by deducting from their gross export proceeds (1) profits obtained during the year from their transactions in Costa Rica; (2) a sum equivalent to the depreciation on their investments in Costa Rica that is acceptable to the U.S. Internal Revenue Service; (3) the export tax on bananas payable in foreign currency; and (4) the cost of imports made during the year that were necessary for their normal business in Costa Rica. There are export taxes on bananas, sugar, and coffee.

Proceeds from Invisibles

Exchange receipts from invisibles may be retained or sold freely.

Capital

Inward and outward transfers of capital may be made freely by residents and nonresidents. The Organic Law of the Central Bank provides that foreign capital entering through the official market may be registered with the Central Bank in order to be ensured access to that market for the transfer of interest, profits, and amortization.

Gold

Only the Central Bank is permitted to purchase or sell gold. Any physical or juridical person who has or acquires gold coins or gold bars must sell these to the Central Bank within 60 days from the date on which they became his property; exempt are small amounts in coin collections, jewelry, or family keepsakes. Imports and exports of gold are made only by the Central Bank. The Central Bank does not supply gold to artistic or professional users.

Changes during 1969

On certain occasions prior to the unification of the exchange rate structure (December 24, 1969), commodities were added to or deleted from the list of essential imports entitled to exchange at the official rate. Payments arrears were gradually cleared during that period, and the spread between the official and free market rates narrowed progressively.

March 9. Importers were required to apply for exchange at the time of registration of the import transaction. Previously, they could apply for exchange at any time after registration.

March 9. The local currency deposit required of importers applying for forward exchange certificates in respect of registered imports payable at the official rate was raised to 100 per cent. Previously, 10 per cent had to be deposited when applying for exchange and 90 per cent within 5 days thereafter. (Forward facilities for importers had been introduced in April 1968.)

September 2. Law No 4412, a law to control exports of cattle, went into effect.

September 20. Certain changes in the application of the 5 per cent tax on tickets for foreign travel were introduced by Decree No. 46.

December 14. The Central Bank reduced the free market buying rate from Ȼ 6.92 to Ȼ 6.62 per U.S. dollar, i.e., to the level of the official buying rate.

December 24. The Central Bank ceased to apply Article 97 of its Organic Law. The dual exchange market was unified through the abolition of the free exchange market. Henceforth, all exchange transactions again took place at buying and selling rates based on the par value. The official buying and selling rates were maintained at Ȼ 6.62 and Ȼ 6.65, respectively. The existing exchange restrictions were removed.

Cyprus

Exchange Rate System

The par value is 2.13281 grams of fine gold per Cyprus Pound or £C 1 = US$2.40. Exchange rates are based on the fixed rate for sterling, with which the Cyprus pound is at par, and London market rates for sterling against other currencies. The rate for the U.S. dollar on December 31, 1969 was US$2.401316 buying, and US$2.40116 selling, per £C 1.

Administration of Control

Exchange controls are administered by the Central Bank of Cyprus; trade controls, by the Ministry of Commerce and Industry. Certain authority to approve applications for the allocation of foreign exchange within the scope of instructions issued by the Central Bank of Cyprus has been delegated to the authorized banks. Authority to introduce, adapt, and supervise controls on exports of potatoes has been delegated to the Cyprus Potato Marketing Board, while exports of cereals are licensed by the Cyprus Grain Commission.

Prescription of Currency

Cyprus is a member of the Sterling Area, and settlements between residents of Cyprus and residents of other Sterling Area countries may be made freely in sterling or another Sterling Area currency. Settlements with countries covered by bilateral payments arrangements must be made through the appropriate clearing account denominated in pounds sterling.1 Payments to other countries except Rhodesia may be made by crediting sterling or Cyprus pounds to an External Account, or in any non-Sterling Area currency other than Rhodesian pounds; the proceeds of exports to such countries may be received in sterling or Cyprus pounds from an External Account or in any non-Sterling Area currency except Rhodesian pounds. Settlements with Rhodesia are subject to special regulations; payments for exports to Rhodesia must be received in a non-Sterling Area currency other than Rhodesian pounds.

Nonresident Accounts

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

Rhodesian Accounts are held by residents of Rhodesia. They may be credited with (1) payments from External Accounts, (2) payments by residents of the Sterling Area that are made by check, bill, or draft drawn on or before November 11, 1965 or under irrevocable credits opened on or before that date, (3) the proceeds of sales by, or on behalf of, the account holder to an authorized dealer of non-Sterling Area currencies other than Rhodesian pounds, and (4) transfers from other Rhodesian Accounts. Rhodesian Accounts may be debited for (1) payments to residents of any country made by check, bill, or draft drawn on or before November 11, 1965 or made under an irrevocable credit opened on or before that date by a bank in Cyprus or Rhodesia, (2) payments to residents of the Sterling Area for goods that had been delivered or shipped to Rhodesia on or before November 11, 1965, (3) living expenses in Cyprus of the account holder or his family, (4) insurance premiums payable to companies in the Sterling Area on personal policies taken out prior to November 11, 1965 by the account holder or his family, (5) bank charges due to authorized dealers in Cyprus, (6) sterling travelers checks and personal letters of credit issued by banks in Rhodesia and encashed in Cyprus, and (7) transfers to other Rhodesian Accounts.

Blocked Accounts are maintained in the name of a nonresident for certain funds of a capital nature which, under the existing exchange control regulations, may not be transferred outside Cyprus. Blocked funds may either be held as deposits or invested in government securities or government-guaranteed securities. Income earned on blocked funds so invested may be remitted to the nonresident beneficiary or credited to an External Account without prior reference to the Central Bank, but cannot be credited to the Blocked Account. Funds can be released from Blocked Accounts in the following circumstances. On application by the authorized bank concerned acting on behalf of the nonresident account holder, the Central Bank may authorize the release of blocked funds for (1) reasonable educational expenses in Cyprus of the account holder’s children; (2) reasonable living expenses of the account holder while on a visit to Cyprus; and (3) donations to charitable institutions in Cyprus. In addition to any releases under (1), (2), and (3), amounts up to a level determined from time to time may become eligible for release. At present, the Central Bank is prepared to permit the release to each nonresident holder of blocked funds of up to £C 1,000, as well as a further amount of up to £C 5,000 in any calendar year, provided that the amount applied for in respect of the latter release represents the proceeds of redemption or sale of securities that were held for account of the nonresident beneficiary for a continuous period of at least four years.

Imports and Import Payments

All imports from Rhodesia and South Africa are prohibited. Imports of virtually all commodities may be made freely from any other country except Albania, Bulgaria, mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Poland, Rumania, Tibet, the U.S.S.R., and North Viet-Nam. Certain goods may not be imported freely (some agricultural and textile products, footwear, metal manufactures, and industrial machinery); for a few of these items, no licenses are granted, while for most of them licenses are granted liberally. Imports from Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland, Rumania, and the U.S.S.R. are permitted in accordance with the terms of bilateral trade and payments agreements. With respect to Albania, mainland China, North Korea, Tibet, and North Viet-Nam, no trading arrangements exist.

Individual import licenses are not required for bona fide unsolicited gifts up to £C 10 in value (not to be sold), for returned goods, or for certain special import transactions.

Payments for all authorized imports may be made freely, but advance payments in respect of imports from countries outside the Sterling Area are not normally permitted.

Payments for Invisibles

Payments for invisibles to residents of other Sterling Area countries may be made freely. All remittances to countries outside the Sterling Area require the approval of the exchange control authorities. Profits, dividends, and interest from approved foreign investments may be transferred abroad, after payment of any charges and taxes due. Insurance premiums due to foreign insurance companies are remittable after deduction of all expenses and contingencies in respect of any claims. Maintenance remittances are allowed on application accompanied by documentary evidence of hardship. For certain categories of payments, limits are imposed mainly for the purpose of preventing illicit capital outflow. For study abroad, the lower limit is £C 500 a year, and the upper limit is £C 1,700 a year; the amount allowed depends on the cost of living in the country concerned—e.g., for study in countries in the Middle East, £C 550; in the United States and Canada, £C 1,700; in other countries, £C 1,050. Higher amounts for student allowances may be granted on production of sufficient documentary evidence. For tourist travel, the limit is £C 250 a person annually; for business travel £C 5 to £C 25 a day is granted in addition to the tourist allowance. The basic tourist allowance is not available for travel to Rhodesia. Resident travelers may take out Cyprus notes up to £C 10 and foreign currency notes up to the equivalent of £ stg. 50. Nonresident travelers may take out £C 10 in Cyprus notes and any amount of foreign currency notes that they brought into Cyprus.

Exports and Export Proceeds

Exports of potatoes are subject to control by the Cyprus Potato Marketing Board, and those of wheat and barley to control by the Cyprus Grain Commission. Exports to Sterling Area countries, with minor exceptions, are free from licensing, irrespective of their amount; exports to other countries are free from licensing when the f.o.b. value does not exceed £C 75. Goods destined for countries outside the Sterling Area are subject to a further control to ensure repatriation of the sales proceeds in an appropriate manner (see section on Prescription of Currency, above). Export proceeds in non-Sterling Area currencies must be surrendered within one month of receipt.

Proceeds from Invisibles

Receipts from invisibles in non-Sterling Area currencies must be sold to an authorized bank within one month of receipt. Persons entering Cyprus may bring in any amount in foreign currency notes and Cyprus currency notes.

Capital

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

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

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

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

Gold

Residents may hold and acquire gold coins in Cyprus for numismatic purposes. With this exception, residents other than the monetary authorities, authorized dealers in gold, and industrial users are not allowed to hold or acquire gold in any form other than jewelry, at home or abroad. Authorized dealers in gold are only permitted to import gold for the purpose of disposing of it to industrial users. The export of gold requires the permission of the exchange control authorities.

Changes during 1969

No significant changes took place during 1969.

Dahomey

Exchange System

No par value for the currency of Dahomey has been established with the Fund. The unit of currency is the CFA-Franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 277.710 = US$1.1 Exchange transactions in French francs between the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO) and commercial banks take place at the rate of CFAF 1 = F 0.02, free of commission charges. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission. The domestic negotiation of the currencies of Portugal, Rhodesia, and South Africa is prohibited.

Dahomey’s exchange control measures do not apply to relations with (1) France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas) and Monaco; (2) the other member countries of the West African Monetary Union (Ivory Coast, Mauritania, Niger, Senegal, Togo, and Upper Volta); and (3) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Cameroon, Central African Republic, Chad, the People’s Republic of the Congo, Gabon, the Malagasy Republic, and Mali). Hence, all payments to these countries may be made freely. All other countries, except Dahomey itself, are considered foreign countries, and in principle financial relations only with foreign countries are subject to exchange control. For the purpose of certain capital controls, however, the countries listed above are also considered foreign countries.

Administration of Control

Exchange control is administered by the Directorate-General of Economic Affairs in the Ministry of Economy and Finance, which also supervises borrowing abroad, the issuing, advertising, or offering for sale of foreign securities in Dahomey, inward direct investment, all investment in foreign countries, and the solicitation of funds in Dahomey for placement in foreign countries. The BCEAO is authorized to collect, either direct or through the intermediary of the banks and the Postal Administration, any information necessary to compile the balance of payments statistics. All exchange transactions relating to foreign countries must be effected through authorized intermediaries. Import licenses are issued by the Directorate-General of Economic Affairs in the Ministry of Economy and Finance, except those for gold, which are granted by the Minister of Economy and Finance personally. Exports of diamonds require the prior approval of the Directorate of Mines. There are three special offices for the import and export of precious metals and precious mineral materials. Import certificates for liberalized commodities from non-EEC countries are made out by the importer himself and approved by the Directorate-General of Economic Affairs.

Prescription of Currency

Dahomey is an Operations Account country of the French Franc Area, since the BCEAO maintains an Operations Account with the French Treasury; settlements with France (including its Overseas Departments and Territories, except the French Territory of the Afars and the Issas), Monaco, and the other Operations Account countries of the French Franc Area are made in CFA francs, French francs, or the currency of any other Operations Account country. Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs through Foreign Accounts in Francs.2 All settlements with Portugal, Rhodesia, and South Africa are prohibited.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France. The crediting to nonresident accounts of CFA banknotes, French banknotes, or banknotes issued by any other institute of issue that maintains an Operations Account with the French Treasury is prohibited.

Imports and Import Payments

All imports originating in or shipped from Portugal, Rhodesia, or South Africa are prohibited. Certain imports, such as narcotics, are prohibited from all sources, and imports of rice and sugar are subject to license, irrespective of their origin. Imports of all other goods from countries in the French Franc Area may be made freely without an import license. Imports of all other goods from EEC countries other than France may also be made freely; these goods require a license, which is issued automatically. Certain imports are liberalized when originating in OECD countries other than Japan and only require an import certificate made out by the importer himself. Imports of nonliberalized commodities from OECD countries, all imports from Japan, and all imports from non-OECD countries are subject to licensing; they are admitted in accordance with an annual import program, which is determined each year in a joint French-Dahomean Committee, as provided for by the Economic Cooperation Agreement with France. Under this program, global quotas are established for imports from all countries outside the French Franc Area except EEC countries. A few specified commodities3 are subject to individual ceilings within the global quotas when originating in non-EEC countries outside the French Franc Area. Certain French textiles processed elsewhere are licensed freely outside the import program.

All imports from foreign countries when valued at more than CFAF 20,000 must be domiciled with an authorized bank. The import licenses or import certificates entitle importers to purchase the necessary exchange, but not earlier than eight days before shipment if a documentary credit is opened or eight days before the payment is due if the commodities have already been imported.

Payments for Invisibles

Payments to Portugal, Rhodesia, and South Africa are prohibited. Payments for invisibles to France, Monaco, and the other Operations Account countries in the French Franc Area are permitted freely; those to other countries are subject to the approval of the Directorate-General of Economic Affairs. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted. For tourist travel, residents traveling to countries other than France, Monaco, and the other Operations Account countries of the French Franc Area may obtain an exchange allocation of an amount equivalent to CFAF 50,000 a year for each person (CFAF 25,000 for children under ten); any foreign exchange remaining after return to Dahomey must be surrendered. For business travel, there is a special allocation of the equivalent of CFAF 10,000 a day, subject to a maximum of CFAF 100,000 a trip, for travel to specified countries 4 or CFAF 15,000 a day, subject to a maximum of CFAF 150,000, for travel to any other foreign country. The transfer of the entire net salary of a foreigner working in Dahomey is permitted upon presentation of the appropriate pay voucher, provided that the transfer takes place within three months of the pay period. Travelers going to foreign countries may take out up to a maximum of CFAF 10,000 in BCEAO banknotes, French banknotes, and banknotes issued by other Operations Account countries. Travelers to other countries may take out any amount in BCEAO banknotes, but if going to a country that is not a member of the West African Monetary Union they must declare to the customs the amount taken out if it exceeds CFAF 150,000. Resident travelers must have their purchases and sales of foreign currency marked in a personal foreign exchange booklet (carnet de change).

Nonresident travelers may take out any unutilized foreign banknotes and coins up to the amount declared by them on entry or the equivalent of CFAF 50,000 if they have made no declaration; they may reconvert CFA banknotes up to CFAF 50,000 into foreign means of payment.

Exports and Export Proceeds

All exports to Portugal, Rhodesia, and South Africa are prohibited. Exports to all foreign countries must be domiciled with an authorized bank when valued at over CFAF 50,000. Exports to all countries are free of license, except those of gold and diamonds, but require an export application visaed by the Directorate-General of Economic Affairs. Exports of gold require the prior approval of the Minister of Finance personally, and those of diamonds must be authorized by the Directorate of Mines. Export proceeds received in currencies other than those of France or another operations Account country must normally be collected within 180 days of the arrival of the commodities at their destination and surrendered by sale on the foreign exchange market within two months of collection.

Proceeds from Invisibles

Proceeds from transactions in invisibles with France, Monaco, and other Operations Account countries in the French Franc Area may be retained. All amounts due from residents of other countries in respect of services, and all income earned in those countries from foreign assets must be collected and surrendered. Resident and nonresident travelers may bring in any amount of banknotes and coins issued by the BCEAO, the Bank of France, or a bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign banknotes and coins (except gold coins) of countries outside the French France Area; resident travelers must within eight days surrender any foreign banknotes and foreign currency travelers checks they bring in and, if they represent the unutilized portion of an exchange allocation, they must have their travel exchange booklet marked accordingly by the authorized bank to which the foreign currency is sold.

Capital

Transfers of capital between Dahomey and Portugal, Rhodesia, and South Africa are prohibited. Capital movements between Dahomey and France, Monaco, and other Operations Account countries in the French Franc Area are free of exchange control; capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are permitted freely.

Special controls (additional to any exchange control requirements that may be applicable) are maintained over borrowing abroad, over inward direct investment and all outward investment, and over the issuing, advertising, or offering for sale of foreign securities in Dahomey; these controls relate to the transactions themselves, not to payments or receipts. With the exception of those over foreign securities in Dahomey, the control measures do not apply to France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas), Monaco, the other member countries of the West African Monetary Union, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account. Special controls are maintained also over imports and exports of gold, over the soliciting of funds for deposit or investment with foreign private persons and foreign firms and institutions, and over all publicity aimed at placing funds abroad or at subscribing to real estate building operations abroad; these special controls do apply also to France, Monaco, and the Operations Account countries.

All investment abroad by residents of Dahomey requires prior authorization by the Minister of Economy and Finance.5 Foreign direct investments in Dahomey6 must be declared to the Minister of Economy and Finance before they are made. The Minister has a period of two months from receipt of the declaration during which he may request the postponement of the projects submitted to him. The full or partial liquidation of either type of investment also requires declaration. Both the making and the liquidation of investments, whether these are Dahomean investments abroad or foreign investments in Dahomey, must be reported to the Minister of Economy and Finance within 20 days following each operation. Direct investments are defined as investments implying control of a company or enterprise. Mere participation is not considered as direct investment, provided that it does not exceed 20 per cent in the capital of a company whose shares are quoted on a stock exchange.

The issuing, advertising, or offering for sale of foreign securities in Dahomey requires prior authorization by the Minister of Economy and Finance. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the Dahomean Government, and (2) shares similar to securities whose issuing, sale, or offering for sale in Dahomey has previously been authorized.

Borrowing by residents from nonresidents requires prior authorization by the Minister of Economy and Finance. The following are, however, exempt from this authorization: (1) loans constituting a direct investment, which are subject to prior declaration, as indicated above, and (2) loans contracted by authorized banks. The repayment of any foreign borrowing, whether authorized or exempt from authorization, requires the prior authorization of the Minister; exempt from this requirement are loans constituting a direct investment, loans taken up by authorized banks, and any loans exempted by the Minister.

Lending abroad is subject only to exchange control authorization.

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

Gold

Residents are free to hold, acquire, and dispose of gold in any form in Dahomey. Imports and exports of gold from or to any other country require prior authorization by the Minister of Economy and Finance, which is seldom granted. Exempt from this requirement are (1) imports and exports by or on behalf of the Treasury or the BCEAO; (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles); and (3) imports and exports by travelers of gold articles up to a maximum weight to be determined by the Minister. Both licensed and exempt imports of gold are subject to customs declaration.

Changes during 1969

January 14. Circular No. 5 established procedures for the domiciliation of imports and for payments for imports.

January 14. Circular No. 6 established procedures for the domiciliation of exports and for controls over the repatriation of export proceeds.

January 20. Circular No. 15 was issued concerning Foreign Accounts in Francs and foreign dossiers for securities. The former were defined as comprising accounts in CFA francs, French francs, or the currency of any institute of issue maintaining an Operations Account with the French Treasury. With minor exceptions, all overdrafts on such accounts and all advances to nonresidents required the approval of the Ministry of Economy and Finance.

January 23. The control over the banks’ position vis-à-vis foreign countries in CFA francs and foreign currencies was delegated to the BCEAO by Order No. 100/MEF/CAB.

January 28. The BCEAO, by Instruction No. 1 to Banks, requested the banks to provide monthly data on their foreign position. For this purpose, all countries other than Dahomey were to be considered foreign countries.

February 21. Order No. 173/MEF/AE/DG introduced an exchange allocation of the equivalent of CFAF 50,000 a person a year for tourist travel by residents to foreign countries (CFAF 25,000 for children under ten). For business travel, a special allocation was fixed of the equivalent of CFAF 10,000 a day, subject to a maximum of CFAF 100,000 a trip, for travel to specified countries, and the equivalent of CFAF 15,000 a day, subject to a maximum of CFAF 150,000 a trip, for travel to other foreign countries. Resident and nonresident travelers could take out up to CFAF 10,000 in banknotes issued by the BCEAO, the Bank of France, and the institutes of issue of other Operations Account countries. Resident travelers were required to obtain a personal foreign exchange booklet (carnet de change) in which all purchases and sales of foreign exchange must be marked. Residents had to surrender any foreign currency brought in. Nonresident travelers could take out freely foreign banknotes up to the equivalent of CFAF 50,000 and any other means of payment established in their name abroad; in addition, they could take out foreign banknotes in excess of CFAF 50,000 to the extent that they could show that these had been declared upon entry or, up to CFAF 50,000, had been acquired by conversion of CFA francs in Dahomey.

February 21. Circular No. 33 established procedures for the issuance and use of foreign exchange booklets.

April 18. Circular No. 60 listed the import commodities for which forward exchange cover could be obtained. Contracts were limited to one month or three months and were not renewable.

April 18. Instruction No. 2 of the BCEAO requested the banks to provide monthly data on their forward liabilities in foreign currencies.

April 18. Instruction No. 3 of the BCEAO amended Instruction No. 1.

May 12. Circular No. 71 modified Circular No. 5 and permitted payment for imports into Dahomey to be made by an authorized bank established in France or one of the Operations Account countries.

June 11. The BCEAO issued Instruction No. 4 concerning the control over external claims and liabilities.

June 19. Ordinance No. 69/19 suspended until further notice the importation of textile bags and of materials made of jute and other textile fibers for the manufacturing of bags.

August 11. Circular No. 122 was issued concerning Suspense Accounts (Comptes d’attente) and suspense dossiers for nonresidents.

August 11. Circular No. 123 was issued concerning the opening of foreign accounts and foreign securities dossiers for persons who, having been residents, become nonresidents.

August 11. Circular No. 125 was issued concerning expenses and receipts of foreign ships in Dahomey and of national ships abroad. Special accounts for these purposes were introduced (Comptes d’escale).

August 11. The exchange rate in terms of U.S. dollars was changed from CFAF 246.853 per US$1 to CFAF 277.710 per US$1. The fixed exchange rates for the French franc, the Malagasy franc, and the Mali franc remained unchanged.

September 17. Circular No. 142 was issued concerning family remittances. The approval authority delegated to the banks was set at CFAF 20,000 a month for each applicant. The transfers concerned had to be marked in the latter’s exchange booklet but were not deducted from his tourist travel allocation.

September 17. Circular No. 143 was issued concerning living expenses of persons studying abroad. Authorized banks were empowered to grant foreign currency up to specified amounts; these were, for nonboarding unmarried students, US$300 a month for the United States and the equivalent of CFAF 60,000 a month for other countries.

September 17. Circular No. 144 was issued concerning the transfer of wages earned in Dahomey by foreign workers. The net remuneration could be transferred in full, within three months of the relevant pay period.

September 17. Circular No. 145 was issued concerning the transfer of salaries to officials stationed abroad.

September 17. Circular No. 146 was issued concerning the banks’ reporting requirements with respect to transfers received from foreign countries and to payments to residents made by debit to a Foreign Account in Francs.

September 17. Circular No. 147 was issued concerning the issuance of foreign currency to travelers in special cases.

September 17. Circular No. 148 was issued concerning current payments to foreign countries that could be approved by authorized banks when specified conditions were met. This delegated authority was set at CFAF 250,000 a person for transfers by emigrants and for transfers of dowries.

September 19. Circular No. 151 was issued concerning insurance and reinsurance.

December 2. Decree No. 69-296 was issued concerning certain financial transactions with foreign countries. For purposes of this Decree, foreign countries were defined as all countries other than Dahomey. It revoked Decree No. 67-219 of June 29, 1967 and Decree No. 68-193 of July 13, 1968, which had modified the former.

The prior authorization of the Minister of Finance was required for: (1) the issuing, advertising, or sale of any type of securities of foreign states, foreign public organizations or companies, and international institutions; (2) the soliciting in any way of funds for deposit with foreign private persons and foreign firms or institutions; (3) any publicity with a view to the placing of funds abroad or subscribing to real estate building operations abroad. Exempt from special or general permission, however, were the various activities mentioned above when relating to loans guaranteed by the Dahomean Government or relating to shares similar to securities whose issuing or offering for sale in Dahomey had previously been authorized.

The import and export of gold required the prior approval of the Minister. Exempt were (1) imports and exports by the Treasury or the BCEAO; (2) imports and exports of manufactured articles containing a minor quantity of gold; and (3) imports and exports by travelers of gold objects up to a maximum weight to be announced by the Minister.

Residents traveling to France, Monaco, or Operations Account countries outside the West African Monetary Union were required to declare to the customs the amount of BCEAO banknotes they were carrying if that amount exceeded CFAF 150,000.

December 2. Decree No. 69-297 was issued concerning certain investment and borrowing transactions with foreign countries. It modified the capital controls introduced by Decree No. 67-219 of June 29, 1967; Articles 3 to 14 of that Decree were revoked. For purposes of investment and borrowing transactions, foreign countries continued to be defined as in Decree No. 381/PR/MEF of December 20, 1968, i.e., as countries other than France, Monaco, and the Operations Account countries. All payments received from foreign countries by an authorized bank for the account of a resident had to be declared to the Minister of Finance. All payments and receipts relating to the transactions mentioned below had to be channeled through authorized banks.

Henceforth all investments made abroad by residents required the prior authorization of the Minister; previously, direct investments required only prior declaration to the Minister, after which the latter had two months to request postponement. The liquidation of investments abroad continued to be subject to prior declaration. These provisions also applied to the making and liquidation of investments abroad by nonresident companies directly or indirectly controlled by persons in Dahomey or so controlled by branches abroad of residents.

Direct investment in Dahomey remained subject to prior declaration, after which the Minister could during a two-month period request postponement. The proceeds of the liquidation by a nonresident of direct investments or other investments could be transferred abroad after submission of supporting documents to the Minister.

Borrowing abroad remained subject to prior authorization by the Minister. The exemptions from this requirement were redefined. The reporting requirements for amounts borrowed or repaid were revised. The repayment of any foreign borrowing, whether authorized or exempt from authorization, required the prior authorization of the Minister; exempt from this requirement were loans constituting a direct investment, loans taken up by authorized banks, and any loans exempted by the Minister.

Denmark

Exchange Rate System

The par value is 0.118489 gram of fine gold per Danish Krone or DKr 7.50000= US$1. The official limits for the U.S. dollar are DKr 7.44375 buying, and DKr 7.55625 selling, per US$1, at which rates the exchange authorities stand ready to intervene; the rate for the U.S. dollar fluctuates in the exchange market between these limits. Market rates are quoted daily for the 16 currencies that are used most often.1 Authorized exchange dealers may engage in arbitrage both spot and forward for up to 12 months with one another and with their foreign correspondents in all currencies, including Danish kroner (other than Danish kroner on East German accounts). Forward premiums and discounts are left to the interplay of market forces. Forward transactions with residents must cover contractual payments for goods and services or payments on authorized loans and credits, the payments covered being due not more than two years from the date of the forward contract.

Pursuant to UN Security Council Resolution No. 253 (1968), restrictions for security reasons are applied to virtually all payments and transfers to, or for the benefit of, Rhodesia, and to certain receipts from Rhodesia.

Denmark accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement, as from May 1, 1967.

Exchange Control Territory

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

Administration of Control

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

Prescription of Currency

Payments to or from foreign countries may be made in any foreign currency or in Danish kroner. The only exceptions to this rule are that payments to Eastern Germany must be settled through inconvertible krone accounts and that virtually all payments in favor of residents of Rhodesia must be credited to a Capital Account. Payments from Eastern Germany are normally settled through inconvertible krone accounts, but may also be settled otherwise.

Nonresident Accounts

Nonresident krone accounts are convertible. The only exceptions are Capital Accounts and Foreign Accounts, which play only an insignificant part in settlements with foreign countries, and East German accounts.

Krone Accounts may be opened by authorized banks for foreign banks, insurance companies, and shipping lines. They may also be opened for other nonresidents, if it is agreed with the account holder that amounts in excess of DKr 75,000 are to be transferred abroad automatically at the end of each quarter; this limitation is not applicable to persons who are or have been of Danish nationality.

Capital Accounts are kept for nonresidents by authorized exchange dealers for holding capital, income from capital, pensions, and other funds owned by or accruing to Danish emigrants, to the extent that the amounts exceed the exchange allowance of DKr 40,000 available to each person during the first year after emigration. Certain payments to residents may be made freely from these accounts and one year after emigration the balances are made convertible. Capital Accounts are also kept for residents of Rhodesia; balances in these accounts are inconvertible.

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

Imports and Import Payments

The import of all commodities of Rhodesian origin is prohibited. All goods not on a restricted list containing mainly nonindustrial goods may be imported without license from the “Free List Area.” 2 For imports from the “Free List Area” of commodities on the restricted list, licenses are issued on the basis of global (regional) quotas and may be used for any country in the “Free List Area.” 3 Imports from countries outside the “Free List Area” require licenses; these are partly granted in accordance with bilateral trade agreements or traditional trade relations with the specific country concerned and partly issued freely for a large number of commodities when these are imported from, and originate in, the country concerned.4 Imports of bread grain, feedgrain, and certain grain products are subject to equalization charges representing the difference between specified minimum import prices and the lowest prices payable for grain c.i.f. Danish ports.

The transfer of funds to, or for the benefit of, Rhodesia is prohibited. With this exception, payments for imports and the related shipping expenses may be made freely within two years from the end of the month in which the goods were cleared through customs, or within five years for imports of ships, aircraft, large machines, and major plants, provided that payments of debts are not made more than 14 days before the day stipulated as the latest in the contract (or before the latest customary date in the trade). However, commercial credits with the latest day of payment within 90 days from inward clearance can be paid at any time within that period if any savings are achieved as a result. The authorized exchange dealer may make payment before clearance of the goods, provided that the probable date of clearance lies within two weeks from the date of payment. For ships, aircraft, heavy machinery, and major installations, advance payments cannot be made more than 14 days before the date stipulated as the latest permissible date in the contract, and not more than one year before the expected inward clearance of the goods (or the recording in a Danish ship register). All other advance payments for imports require prior approval by the National Bank; they are approved when the payment is genuine and in accordance with the traditions of the trade.

Payments for Invisibles

The National Bank has delegated to authorized exchange dealers the authority to permit payments for most invisibles to be made freely, provided that payments of debts are not made more than 14 days before the day stipulated as the latest in the contract (or before the latest customary date in the trade); only in a few cases is approval from the Bank required. Transfers of up to DKr 2,000 for any permitted purpose may be made without delivery of forms. Foreign exchange for travel is allocated freely and may be obtained for travel to any country, but not earlier than two weeks before the trip if the amount applied for exceeds the equivalent of DKr 2,000. Foreign exchange in banknotes and coins may be purchased from agencies or individuals other than the authorized exchange dealers, provided that the amount does not exceed DKr 2,000 for each transaction.

Payments of any kind to Rhodesia, except payments for pensions, for strictly humanitarian, medical, or educational purposes, or for the purchase of news material, are prohibited.

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

Exports and Export Proceeds

Exports to Rhodesia are prohibited, with the exception of products intended for strictly medical purposes, educational material or other equipment for schools and the like, publications, and news material.

Exports to any country of major agricultural and fishery products require export licenses issued by the Ministry of Agriculture or the Ministry of Fisheries. Exports of poultry, bacon, and cheese are licensed in view of import quotas established by certain other countries. Exports of a few industrial products to the “Free List Area” and of all products to other countries require licenses issued by the Ministry of Commerce, the primary purposes of the regulations being to safeguard the fulfillment of bilateral obligations, to avoid excessive credits to importing countries, and to serve strategic purposes.

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

Proceeds from Invisibles

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

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

Capital

Residents have an obligation to repatriate proceeds realized from the sale or liquidation of assets abroad. Transfers abroad may be made by residents to pay interest on, or to redeem upon maturity, or to repurchase the transferor’s own bonds (insofar as bonds wholly or partly denominated in foreign currencies are concerned, only to the extent necessary for current amortization purposes), to lend amounts not exceeding DKr 200,000 in a calendar year to subsidiary companies, branches, etc., or to a member of the resident’s family, and to buy foreign securities that do not represent direct investments in foreign commercial or industrial enterprises, provided that the securities are acquired on the basis of a subscription right to shares or the like owned by the resident concerned or provided that the resident furnishes proof that he has repatriated a corresponding amount within the last 12 months from the sale of foreign securities to a nonresident. The National Bank has granted a general permission to authorized exchange dealers to make transfers abroad, within certain limits, for account of their resident customers in connection with direct investments or with the private acquisition of real estate abroad. The authority is limited to DKr 40,000 a year for each foreign enterprise for direct investments and to DKr 40,000 a person for private acquisition of real estate. Permission from the National Bank is required for most other transfers abroad of a capital nature by residents. Direct investments abroad by residents are normally approved, but portfolio investment abroad is generally not allowed. Loans and credits involving nonresidents and made in connection with commercial transactions are normally permitted, subject to certain limitations.

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

Direct investment in Denmark by nonresidents may be made without any special license if the transaction concerns industry, commerce, handicrafts, hotel business, or transportation, and if the investment does not increase total direct foreign investment in the enterprise concerned by more than DKr 40,000 in each calendar year. Other direct investment by nonresidents requires permission from the Ministry of Commerce, which is granted liberally in accordance with Denmark’s obligations as a member of the Organization for Economic Cooperation and Development. The purchase by a nonresident of real property in Denmark usually requires a special license from the Ministry of Justice. A nonresident who is or has been a Danish national may freely purchase or subscribe to securities expressed solely in Danish kroner which do not represent direct investment. Other nonresidents may purchase or subscribe to bonds that are quoted daily and are expressed solely in Danish kroner, when the funds have been obtained from the liquidation of investments in Denmark. They may purchase or subscribe to shares that are quoted daily, are expressed solely in Danish kroner, and do not represent direct investment, when the funds have been obtained from the liquidation of Danish shares, or when the acquisition is made on the basis of subscription rights to shares. Nonresidents may grant credits within certain limits to residents to finance purchases of commodities abroad and to finance the granting of credits for exports. They may, further, grant loans of DKr 100,000 to DKr 1 million per borrower in a calendar year to finance the borrower’s own enterprise in the fields of agriculture, industry, trade, handicrafts, hotel business, or transportation, provided that the activity in question does not exclusively or essentially consist in financing, trading in real estate, or building and construction activities, and provided that the maturity is at least five years. Finally, they may grant loans up to DKr 200,000 per borrower in a calendar year to subsidiary companies, branches, etc., and to members of the nonresident’s family.

Municipalities and public utility companies may as a rule issue debenture loans abroad without special permission of the National Bank, but their foreign borrowing is subject to control by the competent executive department of the Government.

Transfers of proceeds from the sale or liquidation of all types of investments and transfers of all other liquid funds in Denmark owned by nonresidents other than newly emigrated Danish nationals are permitted freely, irrespective of when and how the original investment was acquired. Interest and repayment of principal on authorized loans, credits, and deposits received from persons and firms who are nonresidents at the time of receipt may be paid freely, with the proviso that loans and credits obtained from a nonresident must not be amortized or repaid in full more than 14 days before the amortization payment or repayment is due, or before the customary date in the trade; commercial credits for which the latest permissible date of payment under the contract lies within 90 days from inward clearance may be repaid at any time within that period if it results in any savings.

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

Imports and exports of securities are subject to regulations, the details of which are established by the National Bank, or, when exports of specified multiple currency Danish bonds are concerned, by the Ministry of the Interior. 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, with certain exceptions, be sold freely to residents. Foreign securities held in Denmark and belonging to nonresidents may with certain exceptions, be sold to residents only with the permission of the National Bank. Foreign securities held in Denmark may be negotiated freely between residents, provided that the exchange control regulations concerning emigrants are not circumvented.

Gold

Residents may freely buy, hold, and sell gold coins in Denmark. Residents other than the monetary authorities and authorized industrial users are not allowed to acquire gold abroad. Imports and exports of gold normally require licenses issued by the Ministry of Commerce; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users. Imports of gold in bars or coins, unless made by or on behalf of the monetary authorities, are subject to turnover tax at a rate of 12.5 per cent but not to customs duty.

Changes during 1969

During the year, restrictions on imports originating in Eastern European countries were relaxed further.

January 1. Brazil and Colombia were included in the “Free List Area.”

January 1. The global import quotas for 1969 went into effect.

January 1. Imports of additional agricultural commodities were liberalized, provided that they originated in the “Free List Area.”

February 13. The National Bank granted a general permission to authorized exchange dealers to make transfers abroad, within certain limits, for account of their resident customers in connection with direct investments or with the private acquisition of real estate abroad. The authority was limited to DKr 40,000 a year for each foreign enterprise for direct investments and to DKr 40,000 a person for the private acquisition of real estate. Previously, the National Bank had already been giving individual permissions along the same lines.

February 13. Exchange dealers were reminded by the National Bank that their own foreign currency holdings with foreign correspondents (other than those set aside to cover commitments falling due at a later date) could not be placed at more than seven days’ notice.

February 20. The National Bank requested the authorized banks to reduce their foreign assets to the average for the first half of 1968.

May 9. Foreign exchange fixing and dealings of the National Bank were suspended.

May 10. Residents were forbidden, except with the permission of the National Bank, to make advance payments for imports of commodities or services or to make payments of interest and amortization on foreign debts before the date stipulated at the time of contracting of the debt as the latest date of payment. Advance payments for imports were generally permitted by the National Bank, provided that the payment did not take place more than 30 days before the inward clearance of the goods.

May 10. It was prohibited for nonbank residents to make deposits by transfers from Denmark into accounts with foreign banks or foreign postal Giro systems, or to make deposits within Denmark in foreign currency accounts that were, with the permission of the National Bank, maintained by residents with Danish authorized exchange dealers.

June 9. More detailed regulations replaced the prohibition on advance payments of May 10. The main new rules were:

(1) For agreements entered into on or before May 10, 1969 (excluding commodities mentioned under (3) below), advance payments could not be made more than 14 days before the date stipulated as the latest permissible date in the contract, and, in any case, not earlier than one year before the expected date of inward clearance of the goods (or the performance of the services).

(2) For agreements entered into after May 10, 1969 (excluding commodities mentioned under (3) below), advance payments could not be made more than 14 days before inward clearance of the goods (or the performance of the services).

(3) For agreements concerning deliveries of ships, aircraft, heavy machinery, and major installations (whether entered into before or after May 10, 1969), advance payments could not be made more than 14 days before the date stipulated as the latest permissible date in the contract, and not more than one year before the expected inward clearance of the goods or the recording on a Danish ship register. It was required, moreover, that the terms of payment be customary in the field in question.

(4) Payments of debts relating to imports of goods and services and of interest and amortization on any loans and credits could not be made more than 14 days before the day stipulated as the latest day of payment in the contract (or before the customary date in the trade). However, commercial credits with the latest day of payment within 90 days from inward clearance could be paid at any time within that period if any savings (in the form of rebate, etc.) were achieved as a result. Applications for permission to accelerate payments of interest and installments on debt to nonresidents were refused by the National Bank only when such payments were considered to be not normal.

June 9. Exchange dealers were forbidden to deliver travel exchange in excess of the equivalent of DKr 2,000 a transaction earlier than two weeks before the start of the trip. Payments abroad for rental of means of transportation, hotel accommodation, and the like, could be made only for a period of up to 90 days at a time and at the earliest two weeks before the period to which the payment related.

June 9. Payments related to the purchase or construction of, or the acquisition of long-term user’s rights to, real estate abroad for noncommercial use could only take place if the payor was going to the property for vacation purposes or the like within one year from the date of payment.

July 1. Imports of additional agricultural commodities were liberalized, provided that they originated in the “Free List Area.”

July 1. The “Free List Area” was extended to include the Syrian Arab Republic and the United Arab Republic.

July 9. The repurchase abroad by resident institutions of their own securities denominated either in foreign currencies or in both Danish kroner and foreign currencies that have not been devalued against the Danish krone since the date of issue was restricted. The only repurchases allowed were those of bonds bought by the institutions that had issued them, and then only to the extent necessary to meet their current amortization commitments.

October 8. Proposals were adopted by the Government for a substantial relaxation of remaining import restrictions, particularly those on commodities originating in CMEA countries.

Dominican Republic

Exchange Rate System

The par value is 0.888671 gram of fine gold per Dominican Peso or RD$1.00 = US$1. Exchange transactions in U.S. dollars between the Central Bank of the Dominican Republic and other banks take place at the par value, plus a commission of 132 of 1 per cent. Exchange transactions by commercial banks with the public also take place at the par value, subject to banking commissions of ¼ of 1 per cent buying and ½ of 1 per cent selling. With the exception of payments for imports made with the importer’s own foreign exchange, all payments abroad must be made through banks, and all exchange received must be sold to banks. The commercial banks are required to transfer to the Central Bank all exchange purchased.

On August 1, 1953, the Dominican Republic notified the Fund that it accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange and trade control policy is made by the Monetary Board. Foreign exchange control is administered by the Central Bank. The Monetary Board establishes import quotas, which are administered and controlled by the Foreign Exchange Department of the Central Bank.

Prescription of Currency

Imports from the United States that are financed by the U.S. AID must be effected under special letters of credit. Certain import commissions must be paid in local currency only. Otherwise no obligations are imposed on importers, exporters, or other residents in respect of the method to be followed or the currency to be used for payments to or from nonresidents.1

Imports and Import Payments

Imports of 79 categories of goods, including automobiles with an f.o.b. value in excess of RD$2,000, are prohibited. Imports of certain other commodities are restricted by quotas. Specified commodities are exempt from quota and prohibition when they are financed with the importer’s own foreign exchange; such imports are also exempt from advance deposits and from prepayment of import taxes and surcharges. Licensing controls are maintained over a few other commodities for reasons of health or security. All payments for imports require the approval of the Central Bank, except those made with the importer’s own exchange.

Commodities subject to quantitative restrictions can be imported and settled with official exchange only against a letter of credit. The same requirement applies to some other goods, including alcoholic beverages, certain construction materials, some perfumes and cosmetics, and some spices. All letters of credit, except those covering imports of industrial machinery and materials, medical products, and certain transportation equipment, must be prepaid in full by the importer. The commercial banks transmit to the Central Bank each day a list of applications for all imports against letters of credit. After the Central Bank approves an application and the importer (where necessary in accordance with Decree No. 239) prepays import duties and surcharges, the letter of credit may be opened. For prepaid letters of credit the Central Bank debits the account of the commercial bank for the peso equivalent at the time of opening the letter of credit. The peso equivalent of other letters of credit is forwarded to the Central Bank after they have been negotiated and exchange is requested by the commercial bank. Importers of most commodities subject to the prepaid letter of credit obligation are also required to prepay 80 per cent of the estimated value of customs duties and surcharges on the goods prior to the opening of the letter of credit.

In principle, exchange for import payments is made available within not more than five working days from the receipt of the application, but since May 1966 there have been delays in the provision of exchange.

Most imports are subject to an internal consumption tax of 20 per cent ad valorem. Virtually all imports are also subject to customs surcharges (impuestos internos) ranging from 20 per cent to 200 per cent of the f.o.b. value; for most imports, however, they are 56.6 per cent. Imports of automobiles are subject to a further surcharge of RD$700 per unit. Imports of agricultural and industrial machinery and equipment and spare parts are subject to a single import tax (including customs duties) of 5 per cent. Certain foodstuffs are exempt from import taxes and others are relieved under special arrangements in times of seasonal shortage.

Advance import deposits of 10 per cent, 20 per cent, or 40 per cent of the f.o.b. value are required for many imports, unless the goods are paid for with the importer’s own foreign exchange. The advance deposits are collected by the Customs Administration prior to the clearance of the goods, and are lodged in the Central Bank for a period of three months. A number of goods are exempt, including certain foodstuffs, medical supplies, industrial and agricultural machinery and spare parts, commercial vehicles, industrial raw materials and packing materials, and petroleum products.

Payments for Invisibles

All payments for invisibles require the prior approval of the Central Bank, which is only given after careful examination of the application and if the transaction is considered genuine and essential. The allocation of foreign exchange for travel, family remittances by Dominican nationals, medical expenses abroad, and insurance other than insurance on merchandise imports is suspended. Airline tickets are subject to a tax of 15 per cent when the price of the ticket is over RD$200 or from RD$5 to RD$25 when the price is RD$200 or less.

Nonresidents working in the Dominican Republic may remit up to 60 per cent of their salaries abroad for any purpose. For students pursuing approved courses, exchange requests for monthly maintenance allowances are approved up to US$150 for studies in Latin America, Puerto Rico, and Spain, and up to US$200 for studies in the United States (except Puerto Rico), Canada, and other European countries. Exchange is also sold for remittances to authorized students to meet expenses for tuition, books, and other fees.

Applications for exchange for contractual payments, such as interest and amortization payments on loans registered with the Central Bank, are approved in conformity with the terms of the contract. Transfers of profits and dividends on foreign investments are approved on presentation of a balance sheet which has been agreed with the tax authorities, provided that taxes due on these earnings have been paid, including an 18 per cent tax on dividends remitted or credited to nonresidents. In some cases the transfer may have to be effected in monthly or quarterly installments.

In principle, exchange for payments for invisibles is made available within five days from receipt of the application, but there have been delays.

Travelers may take out foreign currency notes up to the amount of any travel allocation they have obtained. Travelers are not permitted to take with them any domestic currency.

Exports and Export Proceeds

Export licenses are required for sugar, in connection with the operation of export quotas established under the International Sugar Agreement, and for coffee, cocoa, and tobacco. Within two working days of receiving payment, exporters of Dominican products must surrender through the commercial banks to the Central Bank foreign exchange equal to 100 per cent of the f.o.b. value of their exports. Exporters may not extend credit for more than 90 days from the date of embarkation without authorization by the Central Bank.

Proceeds from Invisibles

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

Capital

There are no restrictions on the inward movement of capital by either residents or nonresidents. Inward capital remittances must be registered with the Central Bank and must be converted into pesos at that Bank. Registration may cover the value of machinery and equipment, as well as intangible assets such as licenses and patents. Applications for approval of outward capital remittances must be submitted through the commercial banks to the Central Bank. Withdrawals of capital by foreigners leaving the Dominican Republic are authorized in reasonable amounts, sometimes with provision for the transfer to be effected in annual installments. Applications by residents to transfer capital abroad to make portfolio investments, purchase real estate, etc., are not normally approved.

Gold

Residents may purchase, hold, and sell gold coins in the Dominican Republic for numismatic purposes. With this exception, residents other than the monetary authorities and authorized industrial users are not allowed to hold or acquire gold in any form other than jewelry, in the Dominican Republic or abroad. Imports and exports of gold in any form other than jewelry constituting the personal effects of a traveler require licenses issued by the Central Bank; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users.

Changes during 1969

January 1. By virtue of Law No. 394 of December 31, 1968, the 20 per cent internal consumption tax levied on most imported commodities was extended for one year.

January 1. Decree No. 3164 of December 27, 1968 extended until December 31, 1969 the system of import controls established in 1967 and already extended to June 30, 1969. Importers of items under quota would in 1969 receive foreign exchange allocations equivalent to 60 per cent of imports of these items during the base period (the 12 months prior to July 10, 1967).

May 6. Law No. 432 went into effect. It regulated trade and exchange transactions within industrial free zones.

August 18. Commissions due to domestic representatives or agents of foreign firms in respect of import shipments could be paid in Dominican pesos only.

December 1. The system of import controls was further extended until June 30, 1970.

Ecuador

Exchange Rate System

The par value is 0.0493706 gram of fine gold per Ecuadoran Sucre or S/ 18.00 = US$1. The official rates are S/ 17.82 buying, and S/ 18.18 selling, per US$1. These rates apply to all exports except bananas, to payments for imports and related invisibles, to official transactions, to other essential invisibles, to registered capital, and to all operations with respect to private foreign debt registered after July 14, 1961. Minimum surrender prices result in different effective rates for exports of bananas. For all transactions not made at the official rate there is a free market, in which the rates on December 31, 1969 were S/ 21.14 buying, and S/ 21.21 selling, per US$1. Purchases and sales of exchange in the free market between the public and authorized agencies are subject to an exchange tax of ½ of 1 per cent on each side of the transaction.

Administration of Control

The Monetary Board has extensive powers with respect to import policy. Most transactions pass through the official market, which is under the control and supervision of the Central Bank of Ecuador. The Central Bank also issues import and export licenses. Exports of coffee to “new markets,” however, require the prior authorization of the Ministry of Industry and Commerce. Transactions that do not qualify for the official market may enter the free market conducted by exchange houses and commercial banks.

Prescription of Currency

Most settlements with Bulgaria, Eastern Germany, Hungary, Poland, and Rumania must take place through bilateral accounts. Payments between Ecuador and Colombia and Peru must be made through accounts maintained with each other by the Central Bank of Ecuador and the other central banks concerned, within the framework of the LAFTA multilateral clearing system. Exchange proceeds from other countries must be received in convertible currencies. Whenever possible, import payments must be made in the currency stipulated in the import license.

Imports and Import Payments

Permitted imports are divided into two categories: List I, consisting of essential and semiessential goods, and List II, consisting of less essential and luxury goods. All goods not included in these two lists are prohibited, except books, newspapers, periodicals, and printed or recorded music, which may be imported freely without a license. Prior import licenses are required for all permitted imports exceeding a value of US$100, with the exceptions specified below. A few goods may only be imported from LAFTA countries, and some only from Paraguay, with these exceptions, import licenses are issued freely irrespective of the origin of the goods, provided that the appropriate advance deposits, monetary stabilization surcharges, and additional import taxes have been paid and that the required prepayments of import duties have been made. The licenses automatically entitle the holders to obtain exchange at the official rate to cover the c.i.f. value of the imports upon presentation of the shipping documents; advance payments for imports and payments under letters of credit are generally prohibited. Imports for which licenses are not required (goods valued at US$100 or less) are paid for with exchange purchased in the free market. For some goods, import licenses are issued which do not entitle the importer to foreign exchange at the official rate (“no exchange licenses,” licencias sin divisas, or permisos de importación no reembolsables); these are issued for gifts and for goods financed by foreign credits. Imports which enter the country as part of a direct investment and imports by foreign enterprises which have contracts with the Government (mainly petroleum and mining enterprises) require an authorization from the Ministry of Finance and the Central Bank instead of an import license. The Monetary Board is authorized to shift items between Lists I and II and to prohibit the import of goods or lift import prohibitions when the economic situation of the country and the balance of payments situation so require.

The advance deposit requirement applies to most public and private imports financed with official exchange. The main exceptions are imports under the agricultural surplus agreements with the United States, grants from foreign governments and organizations, imports of certain goods to be used for the construction and equipment of hotels, all imports of List I and List II commodities financed with foreign credit of more than five years, all imports from Paraguay, imports of capital goods financed by international organizations or by suppliers’ credit for at least one year after arrival, imports of medical supplies and equipment made by official health or social service institutions, imports by the universities and polytechnical schools, and imports of machinery, equipment, and materials needed for public works. The advance deposit must be made in sucres by the importer when applying for an import license; the importer must at the same time lodge with the Central Bank a prepayment in local currency of part of the import duty. The rates for the advance import deposits are determined in accordance with three factors: (1) the type of good imported, (2) the terms of payment, and (3) the daily average net foreign reserves of the Central Bank in the preceding month. There are 5 categories of imports, one in List I and four in List II, 7 ranges of payment terms, and 11 ranges of the reserve level, giving a possible total of 385 advance deposit rates. They range from zero to 700 per cent of the c.i.f. value, but for imports by the Government or by official agencies they cannot exceed 100 per cent of the c.i.f. value. At the end of 1969, the advance deposit rates for imports to be paid within 90 days were 25 per cent for List I goods and from 50 per cent to 230 per cent for List II goods; no advance deposits were required for List I or List II goods with more than five years’ financing. The prescribed prepayment of import duty is 15 per cent of the duty on commodities in List I and 70 per cent of the duty on those in List II.1 Advance deposits are released pari passu with the making of the import payments. That part of the deposits which exceeds 100 per cent of the c.i.f. value is released at the time of customs clearance.

Most imports are also subject to monetary stabilization surcharges and to additional import taxes. The surcharge is 11 per cent of the c.i.f. value for List I items and 22 per cent for List II items. Surcharges must normally be paid in sucres to the Central Bank when application is made for an import license. Surcharges on List I items financed with suppliers’ credit of a year or more after arrival of the goods may be paid when the final import payment is made. Exempt from surcharges are diplomatic imports, imports financed by loans from foreign governments or international organizations, imports by certain religious orders, imports by the official banana shipping company (Flota Bananera Ecuatoriana), certain imports of the State Railways, all imports of the Ministry of National Defense, and all imports originating in Paraguay. Certain goods on List II are subject to an additional import tax of 10 per cent or 15 per cent of the c.i.f. value, payable in sucres; the others are exempt. Exempt from this tax are diplomatic imports and imports financed by foreign governments or international organizations.

Payments for Invisibles

Payments for transactions in invisibles that may be made through the official market require an exchange license from the Central Bank; the license is granted freely for all authorized transactions. These transactions include certain invisibles connected with trade (e.g., freight and insurance2); necessary expenses of Ecuadoran students abroad who are registered with the Central Bank; most payments of the Government and of official entities; payment of interest on registered foreign loans up to 7.5 per cent annually; payments of profits and dividends on registered foreign investments up to 12 per cent annually; and contractual operations relating to foreign debt registered with the Central Bank after July 14, 1961. Other payments for invisibles may be made freely through the free market. Residents traveling abroad must pay a tax of S/ 400 for each exit visa, starting from the second visa in their passports. Tickets for foreign travel are taxed at the rate of 8 per cent on tickets for departure from Ecuador and 4 per cent on tickets for the return trip to Ecuador. The cost of freight of imports is subject to a 4 per cent tax.

Exports and Export Proceeds

All exports require licenses to ensure, among other things, the full surrender of the exchange proceeds to the Central Bank; licenses are issued freely. Minimum surrender prices (aforos) are established for exports of bananas (according to port of shipment, destination, and season); they differ for bananas shipped on the stem and those shipped in boxes. Exchange corresponding to those prices must be surrendered at the official rate, while any excess receipts may be sold in the free market. Exports of coffee, cacao, sugar, and gold and silver filigree work are subject to export taxes of 9.4 per cent (washed, or 9.6 per cent unwashed), 10 per cent, 0.75 per cent, and 10 per cent, respectively. Export taxes are also levied on certain livestock and on certain fishery products. Exports of bananas in boxes are subject to a specific export duty expressed in sucres per pound.3 All exports of bananas are subject to certain additional specific taxes, except those carried out through ports in Esmeraldas Province. Exports of coffee to “new markets” are exempt from export tax and all other taxes levied on exports.

Proceeds from Invisibles

Receipts from invisibles related to trade and all receipts of the Government and of official entities have to be sold to the Central Bank at the official rate. Other receipts from invisibles (including those from tourism) need not be surrendered and may be sold in the free market.

Capital

Receipts of private foreign capital must be surrendered to the Central Bank at the official buying rate if registration with the Central Bank is desired. This also applies to foreign exchange sold by foreign companies for the purpose of obtaining local currency for salaries, taxes, and other local expenses. Foreign capital entering in the form of machinery and equipment may also be registered with the Central Bank. The Central Bank can refuse to register private foreign capital if the investment is not considered to be in the interest of the Ecuadoran economy. All unregistered private capital may enter without limitation through the free market. An Industrial Promotion Law provides for certain exemptions from import duties to certain categories of industrial investment.

Foreign exchange at the official rate may be obtained for the withdrawal of registered foreign investment from Ecuador five years after the date of registration. Exchange at the official rate is also granted for profit remittances up to 12 per cent a year on registered capital in nonbanking investments, up to 10 per cent a year for branches of foreign banks, and for interest up to 7.5 per cent on registered foreign loans. Contractual repayments of registered foreign loans may also be made at the official rate. All other capital remittances, either by residents or nonresidents, may be made through the free market.

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

Commercial banks are permitted to hold up to 10 per cent of their capital and reserves as assets in the form of their own holdings of foreign exchange.

Gold

Residents other than the Central Bank may export gold only in the form of filigree work whose gold content represents not more than 25 per cent of its market value. Imports of monetary gold are reserved for the Central Bank; they are treated as List I imports and are free of advance deposit and stabilization surcharge. Imports of nonmonetary gold in bars may be made either by the Central Bank or any other resident and are treated as List II imports subject to advance deposit and a 22 per cent stabilization surcharge. Gold bars are exempt from import duty, while that on semiworked gold is 55 per cent ad valorem.

Changes during 1969

January 3. Ministry of Industry and Commerce Decision No. 6388 set the special levy on sugar exports at US$1.43 per quintal.

January 6. Resolution No. 529 of the Monetary Board exempted imports of monetary gold from the advance deposit requirements; previously, they were already exempt from import duty and monetary stabilization surcharge. Imports of nonmonetary gold in bars were made subject to a 20 per cent advance deposit and a 20 per cent stabilization surcharge.

January 14. Private persons were permitted to import nonmonetary gold.

February 4. Regulation 532 of the Monetary Board changed the advance import deposit scheme. The new rates were as follows: For List I commodities, 35 per cent on goods financed with foreign credits with a maturity of up to 270 days (previously up to 180 days); 15 per cent on goods financed with foreign credit with a maturity of between 270 days and one year (previously between 180 days and one year); no advance deposit if the goods were financed abroad for longer than a year. For List II goods, the advance deposits were raised as follows: for group (a) from 50 per cent to 70 per cent; for group (b) from 70 per cent to 100 per cent; for group (c) from 100 per cent to 130 per cent; and for group (d) from 140 per cent to 190 per cent.

February 5. The requirements for advance payment of import duties were raised from 10 per cent to 15 per cent for List I imports, and from 45 per cent to 70 per cent for List II imports.

February 6. Ministry of Finance Decision No. 31 reduced the export tax on bananas by 50 per cent, originally for 30 days, but with the proviso that the reduction could be extended for a longer period. The old rate was 21.4 per cent.

March 10. A trade agreement was signed with the U.S.S.R. Payments would take place in convertible currencies. The agreement entered into force on July 16, 1969.

April 29. Regulation 535 of the Monetary Board exempted the universities and polytechnical schools from advance deposits on their imports.

May 6. Law No. 69-12 imposed a tax of 1 per cent on the local currency equivalent of purchases and sales in the free exchange market between the public and authorized agents.

Article 3 of the same law modified the tax of January 30, 1946 on ship and plane passages. The tax was increased to 4 per cent on tickets for a return trip to Ecuador and to 8 per cent on tickets for departure from Ecuador. For students and for persons traveling for health reasons the rates would be 2 per cent and 3 per cent, respectively.

Article 3 also raised the freight tax on imports from 2 per cent to 4 per cent.

May 6. Ministry of Finance Decision No. 96 suspended for 30 days (May 6-June 4) all fiscal taxes on banana exports from Esmeraldas Province (other than the obligatory contributions to sanitary campaigns).

May 13. Imports of cotton were suspended.

May 14. Decision No. 6991 of the Minister of Industry and Commerce imposed, for the year 1969, a tax on sugar producers amounting to 50 per cent of the profit gained by exporting sugar under the preferential U.S. quota. At the time of obtaining export licenses, the sugar producers concerned were required to deposit 10 per cent of the f.o.b. value with the Central Bank, as provisional payment of the tax. Final settlement would take place at the end of the sugar year (October 31). The tax of US$1.43 a quintal on sugar exports was abolished.

May 26. The Andean Agreement for subregional economic integration was signed by Bolivia, Chile, Colombia, Ecuador, and Peru.

May 27. Regulation 536 of the Monetary Board raised the advance import deposit requirements for goods in List II as follows: On group (b) from 100 per cent to 130 per cent; on group (c) from 130 per cent to 170 per cent; and on group (d) from 190 per cent to 250 per cent. The deposit for group (a) remained unchanged at 70 per cent.

Article 2 of the same Regulation established that only that part of the deposits exceeding 100 per cent of the c.i.f. import value would be released on the date of arrival of the goods at customs; the remaining 100 per cent would be retained for 90 days from that date.

June 5. Regulation 538 of the Monetary Board provided that import licenses for goods in List I would only be granted if the imports were financed by foreign credits of at least 90 days. For List II goods credits of at least 180 days would be required. Article 2 of Regulation No. 536 was revoked.

June 11. Ministry of Finance Decision No. 139 suspended fiscal taxes on banana exports from ports in Esmeraldas with effect from June 11. The suspension did not apply to obligatory contributions for the financing of sanitary campaigns. The Decision was revoked on December 17 by Decision No. 326. The latter, in turn, was canceled on December 24 by Decision No. 330.

July 17. Executive Decree No. 1477 provided that the 1 per cent tax of May 6 (see above) would be applied in the form of a levy of ½ of 1 per cent each on purchases and sales of exchange.

August 8. The authorization of the Minister of Industry and Commerce was required to clear imported cotton from customs.

October 23. Law 69-39 increased the monetary stabilization surcharge on imports from 10 per cent to 11 per cent for List I, and from 20 per cent to 22 per cent for List II.

October 23. Monetary Board Regulation No. 544 changed the advance import deposit requirements. The new scheme determined the rate of the advance deposit in accordance with three factors: (1) the type of good imported, (2) the terms of payment, and (3) the level of the net foreign reserves of the Central Bank (their daily average in the preceding calendar month). The requirement for minimum payment terms, which was introduced on June 5, 1969, was abolished for all List I and List II imports.

December 23. Executive Decree No. 2178 standardized all boxes used for banana exports. Four types were established, with an officially assumed average weight of either 28 or 43 pounds. (Interministerial Decision No. 48 of January 28, 1970 added a new type of box with an official weight of 26 pounds, for exports to Japan only.)

December 31. Decision No. 8133 of the Ministry of Industry and Commerce amended Decision No. 6991 of May 14, 1969, with effect from January 1, 1970. The payment to be made by sugar producers exporting under the U.S. preferential quota was set at 8 per cent of the f.o.b. value.

El Salvador

Exchange Rate System

The par value is 0.355468 gram of fine gold per Salvadoran Colón or Ȼ 2.50 = US$1. The rates of the Central Reserve Bank for transactions with the public are Ȼ 2.49 buying, and Ȼ 2.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at or within these limits. A stamp tax of 110 of 1 per cent is applicable to all sales of exchange as well as drafts and other documents embodying a right to exchange; on amounts below Ȼ 100,000 the tax is levied at fixed amounts that may be slightly in excess of 110 of 1 per cent.

On November 6, 1946, El Salvador notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange control authority is exercised by the Central Reserve Bank of El Salvador through its Exchange Control Department. Authority to approve certain payments is delegated to the commercial banks. Exchange licenses for imports are issued by the Exchange Control Department. The Central Reserve Bank is also empowered to license exports, but this power has not been exercised. Exports of a number of commodities require licenses issued by the Ministry of Economy or of Agriculture. Exports of coffee are supervised by the Salvadoran Coffee Company and require licenses issued by the Ministry of Finance.

Prescription of Currency

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

Nonresident Accounts

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

Imports and Import Payments

Imports from all countries except those of the Central American Common Market must be registered with the Central Reserve Bank before orders are placed. Import licenses are required for airplanes, firearms, ammunition, military equipment, dynamite, liquors, cotton for industrial use, jute sacks, skins, leather, some chemical and pharmaceutical products, coffee for seeding, sugar, and saccharin. Payments and transfers abroad require exchange licenses, which are granted freely, provided that the terms of payments do not exceed certain maxima (counted from the date of entry of the merchandise into a customs warehouse): (1) Imports of raw materials for industry, iron and steel products for the construction industry, various spare parts, greases, and lubricants are authorized by the Exchange Control Department when the terms of payment do not exceed three years.1 (2) Imports of staple food products, medicinal products, and medical and surgical supplies must be paid for within one year.2 Imports of the following goods are not subject to maximum credit terms: machinery and equipment for agriculture and industry, semiprocessed goods for industrial production, surgical equipment, research and educational equipment, scientific and technical books, fertilizers, and insecticides. A prior import deposit in local currency, equivalent to 100 per cent of the c.i.f. value, is applied to specified nonessential food products, confectionery, alcoholic beverages, tobacco products, perfumes, cosmetics, watches, and jewelry. All goods not mentioned previously in this paragraph may be imported only against payment before customs clearance.

The commercial banks are authorized to provide exchange for import payments not exceeding US$6,000 for imports from Central American countries and US$2,000 for imports from all other countries; larger amounts have to be approved by the Central Reserve Bank. When suppliers abroad request payment in advance for commodities valued at over US$200, a prior deposit of 25 per cent calculated on the value of the advance payment is required from the importer as a guarantee, but industrial and agricultural firms may be exempted. These regulations are also applicable to goods imported from other countries of the Central American Common Market. Guarantee deposits are refunded when the goods arrive in the country, provided that payment in full has been made to the exporter.

Imports originating outside the Central American Common Market are subject to an import surcharge of 30 per cent of the applicable import duty; the surcharge is not applied to industrial equipment and raw materials that are duty-free by virtue of the Industrial Incentives Law.

Payments for Invisibles

Payments for current invisibles require exchange licenses, which are granted freely for most items, although for certain payments only up to specified limits. Net profits may generally be remitted up to a limit of 10 per cent a year of the registered capital; higher transfers require the authorization of the Ministry of Economy. Permission to purchase exchange for travel outside the Central American area (interpreted to mean the Central American Common Market) for tourism, business, or health reasons is granted by the Exchange Control Department up to the equivalent of US$400 a person a trip, on the basis of US$40 a person a day; for amounts in excess of US$400 a person a trip, up to US$1,000, a 100 per cent guarantee deposit in local currency (20 per cent for travel for health reasons) must be lodged with the Central Reserve Bank which is released upon the traveler’s return.3 The Department also generally authorizes transfers of up to US$150 a month to each adult Salvadoran with permanent residence abroad; larger amounts may be authorized when the need therefor is shown. Students also are allowed US$150 a month, in addition to an installation allowance, tuition, and other expenses.

For nationals traveling to Central American countries, the commercial banks have been delegated authority to provide exchange as follows: for travel to Costa Rica, Honduras, and Nicaragua, the equivalent of Ȼ 500 a trip in Costa Rican colones, lempiras, or córdobas; for travel to Guatemala, Guatemalan currency notes up to Q 1,000 a trip, or a cashiers check in Salvadoran colones up to the equivalent of (Ȼ 2,500 a trip (for payment in Guatemala through the Cámara de Compensación Centroamericana). Requests for larger amounts must be submitted to the Central Reserve Bank.

Insurance and reinsurance premiums may be paid for in foreign exchange, provided that the insurance contract was registered with the Exchange Control Department at the time it took effect. Alternatively, insurance companies may receive premiums in colones and periodically obtain from the Exchange Control Department authorization to purchase the foreign currencies they are obliged to transfer abroad. Foreign currencies derived from insurance or reinsurance contracts must be surrendered to the Central Reserve Bank or to an authorized commercial bank.

Travelers may take out (Ȼ 200 in domestic notes and coins. This limit is subject to modification, however, to facilitate border trade with other Central American countries.

Exports and Export Proceeds

Export licenses are not required except for a number of foodstuffs and other items of which the authorities wish to ensure an adequate local supply, but the proceeds of all exports must be received through a bank in El Salvador and the foreign exchange must be surrendered to the Central Reserve Bank or an authorized commercial bank. Export transactions must be declared to the Exchange Control Department within 15 days of shipment. The collection terms normally must not exceed 90 days, but longer credit terms may be authorized by the Exchange Control Department. With the exception of sales to “new markets,” exports of coffee are subject to an export tax.

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered to the Central Reserve Bank or an authorized commercial bank. Travelers may bring in Ȼ 200 in domestic notes and coins. This limit is subject to modification, however, to facilitate border trade with other Central American countries.

Capital

All exchange receipts resulting from capital transactions must be surrendered. Payments abroad representing capital movements require exchange licenses; such licenses are not granted for resident-owned capital except for investments in Costa Rica, Guatemala, Honduras, and Nicaragua. The entry of capital in the form of foreign investment may be registered with the Ministry of Economy. Registration ensures (1) the remittance of net profits up to a limit of 10 per cent a year of the registered capital (larger amounts may be authorized in special cases by the Ministry of Economy; (2) amortization payments, subject to exchange control approval, and repatriation of the proceeds from the sale of the assets of the enterprise (after payment of taxes) in an amount not exceeding the registered value of the investment;4 and (3) with respect to loans, interest, and amortization as determined at the time of registration. Foreign investments made in

El Salvador prior to June 1, 1961 must also be registered by the Ministry of Economy or the Exchange Control Department in order to enjoy the same facilities. The Exchange Control Department authorizes, without restriction, the remittance abroad of foreign currency for the payment of interest and amortization on short-term loans from abroad that have been approved by and registered with the Exchange Control Department. The Central Reserve Bank controls the short-term foreign indebtedness of the commercial banks through a system of individual quotas.

Decree No. 279 of March 27, 1969 sets certain minimum capital requirements for businesses that are owned by foreign nationals and for those in which foreign nationals have a share-holding interest. For purposes of this Decree, foreign nationals are defined as persons who are not citizens of one of the five countries of the Central American Common Market.

Gold

Residents may hold and acquire gold coins in El Salvador for numismatic purposes. With this exception, residents other than the monetary authorities and authorized industrial users are not allowed to hold or acquire gold in any form other than jewelry, at home or abroad. Imports and exports of gold in any form other than jewelry require licenses issued by the Central Reserve Bank; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users. In practice, imports of nonmonetary unworked gold are made only by a jewelers’ cooperative acting on behalf of its members and other users.

Changes during 1969

March 27. Decree No. 279 set minimum capital requirements for direct investments owned by foreign nationals as follows: in commercial enterprises Ȼ 100,000; in industrial enterprises (including service industries) Ȼ 50,000. In the case of participation through shareholding, the capital of the businesses must be double the above amounts. A foreign national was defined as anyone who is not a citizen of one of the five countries of the Central American Common Market.

September 16. New and longer maximum payment terms were set for specified imports as follows, counting from the date of entry of the merchandise into a customs warehouse: 3 years in the case of imports of raw materials for industry, iron and steel products for the construction industry, various spare parts, greases, and lubricants; and 1 year for imports of staple food products, medicinal products, and medical and surgical supplies. These terms were extended to 4 years and 18 months, respectively, for imports of the first and second group when originating in countries with which El Salvador had a favorable balance of trade in 1968, from which it receives loans with a maturity of at least 20 years, or with which an integration treaty is in force or with which El Salvador has economic ties.

Imports of the following goods were no longer subject to maximum credit terms: machinery and equipment for agriculture and industry, semiprocessed goods for industrial production, surgical equipment, research and educational equipment, scientific and technical books, fertilizers, and insecticides.

Advance deposit requirements were reintroduced for all imports of specified luxury goods; a local currency deposit equivalent to 100 per cent of the c.i.f. value of the goods was prescribed for specified nonessential food products, confectionery, alcoholic beverages, tobacco products, perfumes, cosmetics, watches, and jewelry.

All other commodities could be imported only against payment before customs clearance.

September 16. The exchange allowances for travel were reduced from US$50 to US$40 a person a day, from a basic amount of US$800 a trip to US$400, and from a maximum of US$2,000 a trip to US$1,000.

September 16. The guarantee deposit required for certain travel exchange was increased from 20 per cent to 100 per cent.

September 16. The exchange allowances for family remittances and for study abroad were reduced from US$300 to US$150 a person a month.

September 16. Regulation No. 260 imposed an additional consumption tax on both imported and locally refined gasoline.

Equatorial Guinea 1

Exchange System

The currency of Equatorial Guinea is the Equatorial Guinean Peseta which is issued by the Central Bank of the Republic of Equatorial Guinea and is defined as equivalent to 0.0126953 gram of fine gold, corresponding to Ptas EG 70.00 = US$1. The Spanish peseta, which previously was legal tender, is being withdrawn from circulation. No par value has been established for the Equatorial Guinean peseta. The currency is at par with the Spanish peseta. Rates for other currencies are based on those in the Madrid exchange market.

All settlements between Equatorial Guinea and foreign countries are subject to exchange control. Settlements with Spain are made through clearing accounts and settlements with other countries may be made in convertible currencies. Exchange transactions must be carried out through authorized banks. All payments and transfers to foreign countries require the prior approval of the Central Bank, and all receipts in foreign currencies must be surrendered to the Central Bank. All imports and exports require individual or global licenses issued by the Directorate-General of Foreign Commerce in the Ministry of Commerce; import licenses also require the approval of the Central Bank.

Foreign investments in Equatorial Guinea are governed by the General Law on Foreign Investments in Equatorial Guinea.

Changes during 1969

May 19. A bilateral payments agreement was signed with Spain. It came into effect on October 12.

October 12. The Central Bank of Equatorial Guinea was established.

October 12. Equatorial Guinea issued the Equatorial Guinean peseta to replace the previous currency, the Spanish peseta, which ceased to be legal tender.

October 12. Decree-Law No. 1 on Exchange Control and Foreign Trade went into force. Exchange control was established over the entire national territory. All purchases and sales of minted gold, gold bars, and foreign exchange were centralized in the Central Bank, which was placed in charge of exchange control. All receipts of foreign exchange by residents had to be sold to the Central Bank for national currency. All foreign payments required the prior approval of the Central Bank. All imports and exports required the prior approval of the Directorate-General of Foreign Commerce in the Ministry of Commerce. Import licenses would not entitle the importer to the necessary foreign exchange until they had been approved by the Central Bank. The Central Bank could designate banks or other institutions as authorized to effect transactions in foreign exchange.

October 13. The Central Bank issued certain exchange control instructions: (1) Transfers abroad of wages and salaries by foreign workers were permitted up to 60 per cent of gross earnings. (2) Transfers of rents from real estate were permitted up to 60 per cent of net rent receipts. (3) Remittances of profits were permitted in monthly installments up to 25 per cent in any one year of net liquid profits over the previous year. (4) Nationals of Equatorial Guinea temporarily abroad and foreign nationals could withdraw from their savings accounts and remit abroad up to Ptas EG 5,000 a month. (5) The sales proceeds of real estate could be remitted up to 50 per cent of proceeds net of taxes and duties. The balance could be remitted in 24 monthly installments. (6) Any traveler could take out with him Ptas EG 3,000 in banknotes issued by the Central Bank. (7) Travelers could settle in Equatorial Guinean pesetas in Equatorial Guinea their foreign travel passages, both single tickets and round-trip tickets, provided that the journey commenced in Equatorial Guinea. (8) Residents could obtain foreign exchange up to the equivalent of Ptas EG 10,000 a person a calendar year for tourist travel abroad, subject to recording in their passport. (9) For business travel, the exchange allocation was the equivalent of Ptas EG 2,000 a person a day for the duration of the journey, up to the equivalent of Ptas EG 50,000 a person a trip. (10) For study abroad, exchange would be granted for tuition and living expenses; for nonboarding students, the allocation for living expenses was up to Ptas EG 5,000 a month. (11) For travel for health reasons, exchange would only be granted to cover expenses proved by original bills.

Ethiopia

Exchange Rate System

The par value is 0.355468 gram of fine gold per Ethiopian Dollar or Eth$2.50 = US$1. The official rates are Eth$2.475 buying, and Eth$2.525 selling, per US$1.

Administration of Control

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

Prescription of Currency

Outgoing payments are normally made in convertible foreign exchange appropriate to the country of the recipient or in U.S. dollars. The net proceeds of exports must be received in a foreign currency that is freely convertible, or in any other foreign currency acceptable to the Exchange Controller.

Nonresident Accounts

Nonresidents may hold nonresident accounts either in Ethiopian dollars or in foreign currencies at authorized banks. Balances in these accounts may be freely transferred abroad. Transfers between nonresident accounts require prior approval, except those between foreign currency accounts.

Imports and Import Payments

All imports from Portugal, Rhodesia, and South Africa are prohibited. No import licenses are required. However, payments abroad for imports require exchange licenses; these licenses are granted freely in the currency appropriate to the country of origin, or in any convertible currency that may be requested. Goods ordered through a third country must be supported by evidence of original cost. Payment is normally authorized by letter of credit, mail transfer, telegraphic transfer, or cash against documents at sight or on an acceptance basis; however, goods which were previously subject to advance deposit requirements or are currently subject to such requirements may only be imported on “documents against payment” terms. Advance import deposit requirements at present apply to 104 import items, virtually all of which are consumer goods. The rate of the deposit is 25 per cent of the c.i.f. value.1 The deposits must be made in local currency by the importer before placing an order abroad and before applying to the central bank for an exchange license. They are kept in an “Import Blocked Account” at an authorized bank and cannot be released until the exchange license is presented to the central bank for cancellation.

Payments for Invisibles

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

Persons traveling abroad are allowed foreign exchange equivalent to Eth$75 a day for a maximum period of six weeks in any one calendar year if the journey is made for business purposes, and up to the equivalent of Eth$600 a year for persons 16 years of age or over and Eth$420 a year for those under 16, if the journey is made for pleasure. Travelers may take with them a maximum of Eth$100 in Ethiopian banknotes.

Exports and Export Proceeds

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

Proceeds from Invisibles

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

Capital

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

Gold

Residents may hold and acquire in Ethiopia gold coins of a special commemorative issue, as provided in Legal Notice No. 318 of 1966. The ownership of personal jewelry and articles of adornment of which gold or platinum forms a part also is permitted. Unless specifically authorized by the Minister of Finance, the possession or custody, in a quantity in excess of 10 ounces, of raw or refined gold or platinum or of gold or platinum in the form of nuggets, ores, or bullion constitutes an offense. Imports and exports of gold in any form other than jewelry require licenses issued by the Ministry of Finance; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users.

Changes during 1969

February 17. The advance import deposit requirement was reduced from 100 per cent to 25 per cent.

September. Payments for imports subject to advance import deposits could only be made on “documents against payment” terms.

Finland

Exchange Rate System

The par value is 0.211590 gram of fine gold per Finnish Markka or Fmk 4.19997 = 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.1 Market rates for certain other currencies2 vary between limits which result from combining the official limits for the U.S. dollar maintained by Finland and such limits in force in the country of the other currency concerned. Forward premiums and discounts are left to the interplay of market forces. Official, fixed buying and selling rates are applied to the U.S.S.R. ruble and the U.S. dollar when used as a unit of account on bilateral clearing accounts. Authorized banks may deal among themselves, with their Finnish customers, and with foreign authorized banks, in U.S. dollars and other convertible or externally convertible currencies. Forward transactions may be concluded freely for periods not exceeding 12 months; forward transactions with residents must have a commercial basis.

Administration of Control

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

Prescription of Currency

For prescription of currency purposes, countries are divided into two groups: the bilateral countries 3 and the convertible currency countries (all others). Settlements with the bilateral countries must be made in the currency of the agreement or in Finnish markkaa through Restricted Accounts. Settlements with the convertible currency countries may be made in any convertible currency or through Convertible Accounts. One half of the proceeds from exports to Colombia is set off against Finland’s bilateral debtor balance.

Nonresident Accounts

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

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

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

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

4. Capital Accounts comprise all other nonresident accounts. They may be credited with funds available for credit to a Foreign Exchange Account, a Convertible Markka Account, or a Restricted Markka Account; with proceeds from the sale to a resident of any asset held by a nonresident; with interest on the account; with income from nonresident-held assets; and with sums obtained from the redemption of bonds and debentures. 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 noncommercial current expenses in Finland of and for account of the account holder; for investment in shares and in those bonds and debentures that are denominated in Finnish markkaa, provided that the securities are quoted on the stock exchange and are purchased by a bank on behalf of the holder; for transfers to the Capital Account of a bank located in the same country as that of the account holder; and for monthly transfers abroad up to Fmk 2,000 to an account holder who has resided abroad during the last calendar year, and continues to do so, provided that he is destitute in his country of residence. Other transfers between Capital Accounts and other transfers abroad of funds deposited in Capital Accounts require the specific permission of the Bank of Finland.

Imports and Import Payments

All imports from Rhodesia are prohibited. Most goods may be imported free of license from the multilateral area or license-free area (i.e., nearly all countries with which Finland does not have bilateral payments agreements5), provided that the goods are purchased from and originate in that area. Certain other goods may be imported from the multilateral area under a global quota system, which provides for import licenses to be issued at least up to the amounts of certain value quotas for specified commodity groups; no industrial goods are restricted by global quotas. The total value of the global quotas for 1969 amounted to 0.5 per cent of total 1969 imports. All remaining goods require an individual license when imported from the multilateral area and are set out in a negative list, the discretionary licensing list, which comprises only agricultural commodities and petroleum products. The only commodities still subject to quantitative restriction for the multilateral area are certain agricultural commodities, certain fuels, certain fertilizers, and gold and silver.

Import licenses are not required for most commodities originating in and shipped from the U.S.S.R., and for many commodities originating in and shipped from the other bilateral countries; all commodities liberalized for import from the bilateral area are among those already liberalized for import from the multilateral area. Other imports from the bilateral countries are admitted under licenses up to quotas provided for under the relevant trade agreement. All imports of commodities originating in countries classified neither in the multilateral area nor in the bilateral area require individual licenses. The State Granary is the sole agency for the import of wheat, rye, barley, oats, and products of these grains for human consumption. There is a state monopoly also for imports of alcoholic beverages.

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. Payment for imports must be made within six months after the arrival of goods in the country. For imports on credit of over six months, the credit must be authorized by the Bank of Finland. Such credit is approved provided that it is considered normal in the traditions of the trade.

Payments for Invisibles

With the exception of premiums payable to foreign life insurance companies, payments and transfers in respect of current invisibles to Fund member countries are not restricted. The authorized banks have general permission to effect payments for most current invisibles, subject in some cases to a maximum allowance or other conditions; for amounts in excess of the standard allowances and for other transactions exchange licenses are granted freely by the Bank of Finland, provided that no capital outflow appears to be involved. 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 (except for border travel) may purchase from commercial banks foreign exchange equivalent to Fmk 3,000 a trip, irrespective of his destination. Nonresident travelers may take out Fmk 3,000 a trip in Finnish notes and coins and any amount in foreign notes and coins declared upon entry. Resident travelers may take out foreign or domestic currency, or any combination of these, up to the amount of their travel allowance; travelers to neighboring countries making frequent trips to destinations not located beyond any municipality adjoining Finland’s land boundary may take out Fmk 200 a person a trip in Finnish notes and coins. For all types of travel, bona fide applications for additional amounts of foreign exchange are approved by the Bank of Finland.

Exports and Export Proceeds

All exports to Rhodesia are prohibited. Export licenses are required only for exports of metal scrap. Exports of other goods require only an export control declaration, which is approved automatically by the Licensing Office except in a few specified cases. Certain exports to countries not in the multilateral area are restricted. Foreign exchange acquired through commodity exports must be surrendered to the Bank of Finland or an authorized exchange dealer. However, exporters are permitted to keep a part of their export proceeds in foreign exchange accounts with Finnish banks or with banks abroad. The accounts may be used by the exporter to pay for incidental expenses related to exports and for authorized imports of raw materials, equipment, and machinery. The Bank of Finland may at any time claim the accounts against payment at the official rate.

Proceeds from Invisibles

With the exception of freight earnings, foreign exchange receipts derived from current invisibles do not have to be surrendered. The authorized exchange dealers and shipping firms are allowed to maintain their own working balances in foreign exchange, under the supervision of the Bank of Finland. The import of Finnish and foreign means of payment is unrestricted.

Capital

Most outward transfers of nonresident capital are subject to approval by the Bank of Finland. Inheritances are in most cases transferable without limitation and, subject to certain conditions, are generally transferred automatically up to Fmk 100,000 for each beneficiary. Nonresidents who have resided outside Finland for the last calendar year and continue to do so are permitted to repatriate their blocked funds within three years (1) by annual installments of Fmk 12,500 for amounts not exceeding Fmk 50,000, or (2) by four equal annual installments for amounts exceeding Fmk 50,000. To the annual installments may be added interest accrued on the account calculated in conformity with the ordinary rate of bank interest paid on deposits. Moreover, persons who have resided abroad since September 1, 1939 and foreign corporate bodies that have maintained an account with a Finnish monetary institution since that date are permitted to repatriate their balances freely. Nonresidents whose funds in Finland during the last three years have been invested in domestic securities quoted on the stock exchange or in direct investments may have these funds transferred abroad, provided that the owner was a nonresident when the investment was made and that he has continuously resided abroad since that time.

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

The regulations concerning foreign direct investments are as follows. All incoming capital transactions must be approved by the Bank of Finland, which considers the foreign exchange aspect. The Bank grants permission liberally, unless the investment is judged to be exceptionally detrimental to the national interest or to be of a purely financial character. Repatriation of direct investments made by means of import of capital is free. Foreign investments that involve a participation of more than 20 per cent in the capital of an enterprise require, in certain cases, the approval of the State Council. This approval, when required, is usually granted liberally. The primary reason for the 20 per cent limit is concern for the protection of natural resources, mainly forests. Direct foreign investments in the forest and mining industries are not normally permitted.

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

Finnish emigrants are granted an exchange allowance of up to Fmk 50,000 a person, in addition to the basic tourist travel allowance.

Gold

Residents may freely hold, buy, and sell gold in any form at home, but residents other than the monetary authorities and industrial users are not allowed to hold, buy, or sell gold abroad. Imports of gold in any form other than jewelry require licenses issued by the Licensing Office; such licenses are not normally granted except for imports by or on behalf of the monetary authorities and industrial users. Commercial imports of articles containing gold require licenses issued by the Licensing Office; for most such articles, these are granted freely. Exports of gold are subject to the same regulations as exports of other commodities, i.e., an export control declaration approved by the Licensing Office is usually sufficient.

Changes during 1969

January 1. The Multilateral Trade and Payments System of the Helsinki Club, which had been introduced on October 1, 1957, was terminated. Under this system, Finland had in annual protocols committed itself to maintain the level of liberalization for imports originating in the other participating countries at, as a minimum, 80 per cent, calculated on the basis of 1954 imports, and to apply nondiscriminatory global quotas to the restricted sector of imports.

January 1. The import regulations for 1969 entered into force. The amount of the global quota program was reduced by nearly one half from the level of 1968 as a result of further liberalization of agricultural products. Virtually all nonagricultural goods except fuels and fertilizers were henceforth unrestricted when imported from the multilateral area.

January 26. Most export taxes were reduced by 3 percentage points. The maximum rate now was 3 per cent.

January 28. Finland became a member of the OECD.

March 23. Restrictions on installment credit for imported automobiles were relaxed.

April 29. The export taxes introduced in October 1967 were eliminated.

July 1. All restrictions on the allocation of foreign exchange for tourist travel were abolished. The basic allowance for tourist travel was raised from Fmk 1,000 to Fmk 3,000 a person for each trip, and all bona fide requests for additional exchange for such travel were granted. The entire travel allowance could be taken out in foreign currency, in Finnish banknotes, or in any combination of foreign and domestic currency. For visits across the land frontier extending no further than the border communities, no travel allowances were granted, but the permitted export of Finnish currency was increased from Fmk 100 a person a month to Fmk 200 a person a trip. The amount of Finnish currency that nonresident travelers could take out was raised to Fmk 3,000. Previously, the export of domestic currency by resident and nonresident travelers, other than those going to border communities, was limited to Fmk 100 a person a trip.

October 29. Agreement was reached with Poland that during 1970 all settlements would take place in convertible currency.

November 13. Agreement was reached with Czechoslovakia that during 1970 all settlements would take place in convertible currency.

France

Exchange Rate System

The par value is 0.160000 gram of fine gold per French Franc or F 5.55419 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of F 5.5125 buying, and F 5.5960 selling, per US$1. Market rates for Western European currencies and a few other currencies fluctuate between limits which result from combining the official limits for the U.S. dollar maintained by France and such limits in force in the country of the other currency concerned. Forward exchange transactions take place at freely negotiated rates, i.e., without any official intervention in the market. Authorized banks in France and in Monaco, which may also act on behalf of banks established abroad or in Operations Account countries (see section on Exchange Control Territory, below), are permitted to deal spot or forward in the exchange market in France. Authorized banks may also deal with their correspondents in foreign markets in all currencies. However, restrictions have been imposed on the credit in francs that banks may grant to nonresidents, and each bank’s exchange position and foreign currency position is subject to limitation. Residents other than banks may conclude forward exchange contracts in respect of imports only for specified commodities, but forward sales of foreign currency are free.

There is also a market in which foreign exchange representing mainly the proceeds from the sale abroad by residents of certain French securities held abroad and of certain foreign securities may be negotiated at freely determined rates. These funds are available for the purchase abroad of French and foreign securities. The exchange rate in this market was about F 6.25 per U.S. dollar on December 31, 1969.

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 exchange control regulations are applicable in all territories of the French Republic except the French Territory of the Afars and the Issas, i.e., in continental France, Corsica, the Overseas Departments (Guadeloupe, Martinique, Guiana, and Réunion), and five of the six Overseas Territories (Comoro Islands, St. Pierre and Miquelon, New Caledonia, Wallis and Futuna Islands, and French Polynesia). No exchange control is applied in relation to the Principality of Monaco or the Operations Account countries (Cameroon, the Central African Republic, Chad, the People’s Republic of the Congo, Dahomey, Gabon, Ivory Coast, the Malagasy Republic, Mali, Mauritania, Niger, Senegal, Togo, and Upper Volta);1 payments between France and these countries are free of restriction. All other countries are considered foreign countries for exchange control purposes; all payments between France and foreign countries are subject to exchange control. The Condominium of the New Hebrides is considered a foreign country for exchange control purposes. For imports and exports of gold, however, the Operations Account countries are also considered foreign countries.2

Certain controls that are independent of the exchange control regulations are maintained over inward and outward direct investment and over borrowing abroad; these do not apply to relations with the Operations Account countries or Monaco. Privileged treatment in respect of trade transactions is accorded to (1) the Operations Account countries and (2) Algeria, Cambodia, Guinea, Laos, Morocco, Tunisia, North Viet-Nam, Republic of Viet-Nam, and the Condominium of the New Hebrides.3

Administration of Control

The Directorate of the Treasury of the Ministry of Economy and Finance is the coordinating agency in the field of financial relations with foreign countries. It is in charge of exchange control and of all matters relating to inward and outward direct investment and to borrowing abroad. The Directorate also evaluates the balance of payments, together with the Bank of France, which collects the data for its compilation. Certain exchange control powers have been delegated to the Bank of France, including the authority to license imports and exports of gold. Other exchange control powers have been delegated to the Directorate-General of Customs and Indirect Taxes and in the Overseas Departments and Territories to the Caisse Centrale de Coopération Economique. The Directorate of Insurance of the Ministry of Economy and Finance has certain powers in respect of matters relating to insurance, reinsurance, annuities, etc. The material execution of all transfers has been delegated to authorized banks and stockbrokers and to the Postal Administration. The Directorate-General of Customs and Indirect Taxes establishes import and export procedures and controls within the framework of commercial policy directives established by the Directorate of Foreign Economic Relations; the Directorate-General also issues import and export licenses. Technical visas required for certain imports and exports are issued by the competent ministry or by the Directorate-General of Customs and Indirect Taxes. The Ministry of Industry has certain responsibilities in respect of licensing contracts and contracts relating to technical assistance.

Prescription of Currency

Settlements with Operations Account countries may be made in French francs or the currency issued by any institute of issue that maintains an Operations Account with the French Treasury.4 Settlements with all other countries may be made in any of the currencies of those countries, or through nonresident Foreign Accounts in Francs (see section on Nonresident Accounts, below).

Nonresident Accounts

A nonresident account in francs may be opened by an authorized bank for nonresidents, including French nationals (other than French officials) who have been residing abroad for at least two years. All overdrafts on nonresident-held franc accounts are subject to general or specific permission; overdrafts corresponding to normal mail delays that are granted by authorized banks to their foreign correspondents are covered by a general permission.

Foreign Accounts in Francs may be freely credited with the following: (1) The franc proceeds of the sale of foreign currencies on the French exchange market by a nonresident. (2) The franc proceeds of the sale of foreign banknotes to an authorized bank by a nonresident, provided that a customs declaration evidencing their importation is submitted; foreign banknotes are defined as excluding those issued by an institute of issue that maintains an Operations Account with the French Treasury (see footnote 4). (3) The franc equivalent of an authorized bank’s arbitrage in foreign currencies on a foreign market, provided that the regulations of the country concerned allow the transaction. (4) Transfers from another Foreign Account in Francs. (5) Amounts resulting from French securities held in a foreign dossier (interest, dividends, liquidation proceeds, etc.). (6) Interest, dividends, and amortization on foreign securities held in a foreign dossier (but not the proceeds of their sale on the French securities market.) (7) The proceeds of the liquidation by a nonresident of a direct investment, provided that the liquidation itself has taken place in accordance with the relevant provisions (those of Decree No. 67-78 of January 27, 1967, as amended on March 21, 1969). (8) The proceeds of the sale, through the intermediary of a notary public, of real estate belonging to a nonresident. These accounts may also be credited with any authorized payment by a resident to a foreign country. French banknotes and banknotes of institutes of issue which maintain an Operations Account with the French Treasury may not be credited to nonresident accounts.

Foreign Accounts in Francs may be freely debited for the following: (1) The purchase by a nonresident of any foreign currency on the French exchange market. (2) The purchase by a nonresident of foreign banknotes from an authorized bank. (3) The equivalent in francs of arbitrage abroad in foreign currencies by an authorized bank, provided that the regulations of the country concerned allow the transaction. (4) Transfers to another Foreign Account in Francs. (5) Any payment to a resident.

If French francs accruing to a nonresident are not transferable, or not immediately transferable, they may be credited to a Suspense Account in Francs in the name of the beneficiary.

Imports and Import Payments

Goods originating in and shipped from other parts of the French Franc Area or from certain other countries that are accorded privileged treatment in respect of trade transactions (see section on Exchange Control Territory, above) are generally admitted free of quantitative restriction and individual license. Imports of goods which originate in other countries and are not covered by French import liberalization require individual licenses. Some imports from EEC countries and some other imports from non-EEC countries are subject to minimum prices; these require an administrative visa and sometimes, exceptionally, an import license.

For import control purposes, countries outside the French Franc Area are divided into four groups according to the extent of import liberalization: (1) the former OEEC countries, their dependent territories and certain former dependent territories, Andorra, Canada, Finland, the United States, and Yugoslavia; (2) 49 specified countries;5 (3) the Eastern European countries (Albania, Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, and the U.S.S.R.) and mainland China; and (4) certain other countries not included in any of the foregoing groups. Eastern Germany occupies an intermediate position between categories (3) and (4). Imports from all countries of certain agricultural items and certain raw materials are free of quantitative restrictions. Commodities that may be imported free of quantitative restrictions from one group of countries include all the commodities that may be freely imported from the next group of countries plus some other specified commodities. Goods covered by the import liberalization arrangements applicable to one country may be imported freely from another country, provided that the country of origin and the country of shipment both benefit from the liberalization.

Imports of practically all industrial products from countries in group (1) are free of quantitative restrictions, but such restrictions are applied to a number of agricultural products; there is relatively little difference between the lists of goods which may be imported freely from different countries in this group, these differences relating mainly to Canada, the United States, Hong Kong, and Macao. Imports of about 50 industrial products from countries in group (2) are restricted,6 and restrictions are applied to these and to certain additional industrial products from group (3) countries. For some commodities, there are global quotas that are allocated semiannually and apply to all countries other than those having the benefit of privileged treatment.

Imports from non-EEC countries of most products covered by the Common Agricultural Policy of the EEC (including cereals, rice, pork, eggs, and poultry meat) are subject to variable import levies that have replaced all previous barriers to imports; common EEC regulations are also applied to imports from non-EEC countries of beef, veal, dairy products, olive oil, most other oils and fats, sugar, and specified fruits and vegetables.

Liberalized imports are not subject to trade control formalities other than the domiciliation of the import transaction, only a customs document that constitutes the customs declaration being required. For some liberalized imports, an administrative visa issued by the central customs administration or by the competent technical ministry is required on an import declaration. Imports of the products of the European Coal and Steel Community (ECSC) require licenses, which are issued automatically for most of these commodities when originating in EEC countries.

Other imports generally require individual import licenses. These are granted up to quotas determined on an individual commodity basis or for a group of commodities and applicable to specified countries or areas in accordance with trade agreements or an import plan drawn up for a definite period. Moreover, licenses may be issued under the IMEX and EXIM procedures,7 which provide for the importation of raw materials and other goods needed to produce goods for export, or under the compensation transaction procedure, which applies mainly to agricultural items from Eastern European countries. Because of the high degree of import liberalization, imports under these schemes now are of very slight importance.

Import transactions relating to foreign countries and exceeding F 250 in value must be domiciled (registered) with an authorized bank, to which the necessary import documents must be presented and through which all payments related to the import must be made. Unless advance payments have been authorized, the importer can buy his foreign exchange (1) if a documentary credit8 is opened, when he submits proof that the commodities will be shipped to France within eight days, or (2) if the goods have been imported, upon submission of the customs declaration, but at the earliest eight days before the import payment falls due. The import payment itself can be made (1) if a documentary credit has been opened, upon receipt of advice from the bank’s foreign correspondent bank that the shipping documents (showing direct shipment either to the French customs territory or to a nearby port, such as Antwerp or Rotterdam) have been submitted to it; (2) if a draft accompanied by shipping documents (effet documentaire, remise documentaire) is presented to the authorized bank, when the bank has verified that the documents cover the goods concerned and that they have been shipped (to the customs territory or a neighboring port); or (3) in all other cases, if the importer submits the customs declaration (unless he already did so when purchasing his foreign currency). Advance payments for imports require a special authorization from the Customs Administration which must be submitted to the authorized bank before it can make the corresponding payment.

Forward cover for import payments can be obtained only for the import of specified raw materials and specified foodstuffs (unroasted coffee, corn, rice, etc.) and is subject to prior approval by the Customs Administration, which is empowered to request all details needed to assure itself that the transaction is genuine and to ascertain whether the forward cover requested does not exceed the applicant firm’s normal needs. Forward cover can only be taken in the currency of invoicing prescribed in the commercial contract and cannot exceed a period of one month or, for some commodities, three months.

Payments for Invisibles

The allocation of exchange for travel to foreign countries is restricted. Payments for other current invisibles to foreign countries are controlled but not restricted.

If justifying documents are presented and certain exchange control requirements are met, authorized banks are permitted to approve applications for payments without any limitation for many categories of current invisibles, and up to established limits for certain other categories of current invisibles. Applications for other payments for invisibles are referred to the Bank of France to prevent unauthorized capital transfers. Any resident may make remittances abroad up to the equivalent of F 250 a person a year without indicating their purpose; the amounts concerned are deducted, however, from the annual tourist allowance and must be recorded by an authorized bank in the remitter’s foreign exchange booklet (see below).

Payments which may be authorized without limitation include those related to approved trade transactions; to income accruing to nonresidents in the form of profits, dividends, and royalties; to banking commissions, patent tees, and specified categories of taxes; to specified insurance payments; to fees to medical doctors, lawyers, etc.; to alimony in accordance with court decisions; and to net salaries of foreigners employed in France, provided that the transfer takes place within three months from the date of payment.

Irrespective of the exchange control regulations, certain transactions between persons or firms in France and abroad are subject to restriction; these include certain transactions relating to insurance, reinsurance, and road and river transport.

The exchange allocation for tourist travel to foreign countries by residents (defined for this purpose as including residents of Operations Account countries) is the equivalent of F 1,000 a person a year (F 500 for children under ten). The allocation for business travel is the equivalent of F 200 a person a day, subject to a maximum of F 2,000 a trip, for travel to Algeria, Austria, Belgium, Cyprus, Denmark, Finland, the Federal Republic of Germany, Greece, Iraq, Ireland, Israel, Italy, Jordan, Lebanon, the Libyan Arab Republic, Luxembourg, Malta, Morocco, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the Syrian Arab Republic, Tunisia, Turkey, the United Arab Republic, the United Kingdom, and Yugoslavia. For business travel to all other foreign countries it is the equivalent of F 300 a person a day, subject to a ceiling of F 3,000 a trip. Applications for exchange in excess of the basic allowances for business travel are considered on their merits by the Bank of France. Exchange allocations for tourist and business travel must be registered by authorized banks in a personal foreign exchange booklet (carnet de change). If a traveler makes use of the facility allowing a resident to make payments abroad up to F 250 a year without indicating the purpose of the remittance, then the amount transferred must be recorded in the exchange booklet and is deducted from the annual allowance for tourist travel. Family remittances made by the holder must also be marked in the booklet but are not deducted from the tourist allowance. Any unutilized foreign currency in excess of the equivalent of F 100 must be surrendered upon return to France. Applications for travel exchange cannot be submitted earlier than one month before departure. The use of credit cards abroad is prohibited. All fares may be paid in francs in France.

Resident travelers going to foreign countries may take out F 200 in French banknotes, or F 50 if they go abroad for less than 24 hours. These banknotes may be spent abroad. Nonresident travelers may take out F 200 in French banknotes and may reconvert into foreign currency any French banknotes up to F 500 obtained by conversion of foreign means of payment that they declared upon entry or obtained by debit to a Foreign Account in Francs; any remaining French banknotes must be deposited with the customs against issuance of a receipt.

Resident travelers may freely take out the equivalent of F 100 in foreign notes and coins; or, if they are leaving on a business trip, the equivalent of F 250; upon presentation of their foreign exchange booklet, however, resident travelers may take out half of their travel exchange allowance in foreign notes and coins. Nonresident travelers may not, in principle, take out more than the equivalent of F 500 in foreign banknotes unless they were declared upon entry and the annotated declaration form shows that the amount to be taken out does not exceed that imported minus any amounts exchanged for francs plus any reconversions of francs into foreign currencies. However, nonresident travelers may also freely take out any other means of payment established in their name abroad, as well as, subject to the submission of an authorized bank’s declaration, any amount in foreign banknotes or foreign currency travelers checks acquired in France from an authorized bank by conversion of foreign exchange, by debit to a Foreign Account in Francs, or by debit to a foreign currency account.

Exports and Export Proceeds

Certain goods on a prohibited export list may only be exported if a special license is issued. Some other exports also require individual licenses; but if the total value does not exceed F 500, these exports may be permitted without any formality, subject to certain exceptions. Regardless of their value, exports under the IMEX or EXIM procedures, or through compensation transactions with certain countries,9 require licenses if the commodities are those for which export licenses are required.

Exports to foreign countries are subject to exchange control. The repatriation 10 and, where appropriate, the surrender of proceeds from exports to foreign countries is required, normally within one month of the date on which the payment falls due. The due date of the commercial contract cannot, except with special authorization, be more than 180 days after arrival of the goods at their destination. Such proceeds must not be received in French banknotes or banknotes issued by an institute of issue maintaining an Operations Account with the French Treasury, or by debit to a postal checking account in France. All export transactions relating to foreign countries and valued at F 1,000 11 or more must be domiciled with an authorized bank.12

Certain goods purchased in France by persons not normally residing in France are considered as exports even when paid for in French francs, and are exempt from taxes.

Holders of exporters’ cards, which are issued to enterprises that export a certain percentage of their production, are entitled to obtain every year import licenses for any commodity still subject to quota and related to their export activity, up to a value corresponding to 10 per cent of their export proceeds in foreign currencies received in the previous year.

Proceeds from Invisibles

Proceeds from transactions in invisibles with Monaco and the Operations Account countries may be retained. All amounts due from residents of other countries in respect of services and all income earned in those countries from foreign assets must be repatriated and, where appropriate, surrendered, within one month from the due date. With minor exceptions for certain types of transactions, services performed for nonresidents do not require licenses.

Resident and nonresident travelers may bring in any amount of banknotes and coins (except gold coins) in French francs, CFA francs, Malagasy francs, CFP francs, or any foreign currency; however, the exchange of banknotes issued by Algeria, Morocco, and Tunisia is prohibited at the request of those countries.

Capital

Capital movements between France and Monaco and the Operations Account countries are free of exchange control; capital transfers between France and all other countries are subject to exchange control approval. Outward transfers of resident-owned capital generally are restricted; capital receipts from foreign countries generally are permitted freely, provided that the foreign exchange proceeds are surrendered (but see below for special controls over borrowing abroad and over inward direct investment). Capital assets abroad of residents are not subject to repatriation. Residents are not normally permitted to purchase real estate abroad for personal use. The transfer abroad of nonresident-owned funds in France, including the sales proceeds of capital assets, is not restricted; as an exception, although nonresident-owned foreign securities may be exported, they cannot be sold in France. French and foreign securities held in France by nonresidents can be exported, provided that they have been deposited with an authorized bank in a foreign dossier (dossier étranger de valeurs mobilières); French securities held under a foreign dossier can be sold in France and their proceeds can be transferred abroad, but foreign securities held under a foreign dossier can only be exported.

Foreign securities held in France by residents must be deposited with a bank or broker, as must any securities held in France by or on behalf of a nonresident (foreign securities may only be deposited with an authorized bank).

The exportation for the account of residents of French securities held in France is prohibited. French or foreign securities held abroad by residents prior to November 25, 1968, and foreign securities so held in France prior to the same date, provided in all cases that they are held under the control of an authorized bank, can be dealt with in one of the following ways: (1) if they were held abroad prior to the date mentioned, they may be kept abroad, under the control of an authorized bank; (2) they may be sold abroad, in which case the sales proceeds must, within a month of receipt, either be sold on the French exchange market or be used—either by the seller himself or, through the intermediary of an authorized bank, by another resident—to purchase French or foreign securities abroad (which may then be imported); and (3) if they were held abroad, they may be imported through the intermediary of an authorized bank.

Purchases of French or foreign securities abroad by residents cannot be financed with foreign currency acquired on the French exchange market but are freely permitted under the following arrangement. The foreign currency received by a resident from the sale abroad of (1) French or foreign securities held abroad under the control of an authorized bank prior to November 25, 1968, or (2) foreign securities held in France prior to that date, as well as any foreign exchange held by a resident with a French bank on November 25, 1968 (provided that it was not subject to surrender), may be sold freely to other residents for the purchase of French or foreign securities abroad. The foreign exchange involved is unofficially referred to as devises-titres (security currency). Purchases may be made freely, and the French or foreign securities thus acquired may be imported, but foreign securities must be placed under the control of an authorized bank. The foreign exchange resulting from amortization of foreign securities is available for the same purpose as that resulting from the sale abroad of French or foreign securities. French securities held abroad by nonresidents cannot normally be sold on the French stock market except under these arrangements; however, if such securities are not quoted on any foreign stock exchange, they may be deposited in a nonresident dossier, subject to prior approval by the Bank of France, and may then be sold freely against French francs.

Special controls (additional to any exchange control requirements that may be applicable) are maintained over borrowing abroad, over capital issues on the French market, and on inward and outward direct investment, but these controls relate to the transactions themselves, not to payments or receipts. With the exception of the controls over capital issues in France, the control measures do not apply to relations with countries whose bank of issue is linked with the French Treasury by an Operations Account.

Foreign direct investments in France and French direct investments abroad require prior declaration to the Minister of Economy and Finance. Direct investments are defined as investments implying control of a company or enterprise. Mere participation is not considered as direct investment, provided that it does not exceed 20 per cent of the capital of a company whose shares are quoted on the stock exchange. The Minister has a period of two months from receipt of the declaration, during which he may request the postponement of the projects submitted to him. Unless the amount involved is less than F 1 million, documentary evidence must be submitted to the Directorate of the Treasury before the liquidation proceeds of foreign direct investments in France may be transferred abroad and the liquidation itself must be reported to the Minister within 20 days after it takes place. The liquidation of French investments abroad requires prior declaration, and postponement may be requested by the Minister during two months after the declaration.

French direct investment abroad must normally be financed abroad, and foreign direct investment in France must generally be financed in part with an inflow of foreign exchange.

Foreign issues on the French capital market remain subject to prior authorization by the Minister of Economy and Finance.13 Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the French Government, and (2) shares similar to securities that already are officially quoted on a stock exchange in France.

Borrowing abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in France, or by branches or subsidiaries in France of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Economy and Finance. The following are, however, exempt from this authorization: (1) loans constituting a direct investment, which are subject to prior declaration, as indicated above, and whose postponement may be requested by the Minister up to two months after receipt of the declaration; (2) borrowing by industrial firms for the execution of works abroad; (3) borrowing by any type of firm to finance imports or exports; (4) loans related to certain international merchanting transactions; (5) loans contracted by banks expressly permitted to borrow abroad (these include all authorized banks); and (6) loans other than those mentioned above, when the total amount outstanding of these loans does not exceed F 2 million for any one borrower, provided that the interest rate is a “normal” market rate, that the borrowing is not for the purpose of a direct investment, and that the foreign exchange proceeds are surrendered.

Lending abroad is subject only to exchange control authorization and is restricted. Nonresidents are not permitted to borrow in France to acquire real estate. With minor exceptions, all overdrafts on Foreign Accounts in Francs and all advances to nonresidents require prior approval.

The Bank of France has imposed limits on the foreign exchange positions14 and foreign currency positions 15 of the authorized banks and on their claims in francs on foreign countries. Banks are prohibited from making, extending, or renewing the following loans in French francs: loans to foreign banking correspondents to finance transactions between foreign countries, loans to other nonresident customers for operations not linked to French exports, and loans to foreign correspondents or customers in the form of swaps against foreign currencies. Nonresidents are free to subscribe to French short-term securities.

Gold

Residents are free to hold, acquire, and dispose of gold in any form in France. They may continue to hold abroad any gold they held there prior to November 25, 1968. There is a free gold market for bars and coins in Paris, to which residents have free and anonymous access. Imports and exports of gold into or from the territory of continental France require prior authorization by the Bank of France, which is not normally granted. Exempt from this requirement are (1) imports and exports of gold addressed to or shipped by the Bank of France; (2) imports and exports of manufactured articles containing only a minor quantity of gold, such as gold-filled and gold-plated articles; (3) imports and exports of gold objects (other than coins and bars, but including both personal and other jewelry) whose combined weight does not exceed 500 grams; and (4) collectors’ items of gold and gold antiques that are exported under “02 licenses” granted with the approval of the Directorate of Museums. Both licensed and exempt imports of gold are subject to customs declaration. The import and export of certain gold objects that are considered merchandise, such as gold watches, is subject to both the regular import and export licensing arrangements and to licensing by the Bank of France.

In domestic trading, purchases of monetary gold (bars and coins) are not subject to value-added tax. Imports of monetary gold are exempt from customs duty and value-added tax.

Changes during 1969

January 1. The exchange allocations for foreign tourist and business travel during 1969 went into force. The tourist allocation was the equivalent of F 1,000 a person, and the basic allowance for business travel was the equivalent of F 200 a day for travel to specified European and Mediterranean countries and F 300 a day for all other foreign countries. All travel exchange had to be recorded in a foreign exchange booklet. Residents were no longer permitted to make any number of remittances up to F 250 to foreign countries freely and without indicating the purpose; this facility was limited to F 250 a person a year and the amounts so transferred were deducted from the tourist travel allowance.

January 1. Resident border workers were required to repatriate and surrender 60 per cent of their earnings; if their monthly remuneration exceeded F 2,000, the amount exempt from repatriation was limited to F 800 a month.

January 1. The preferential rediscount rate for export credits was raised from 2 per cent to 3 per cent.

January 1. The temporary import restrictions introduced by Notices to Importers of June 30 and July 7, 1968, as amended by subsequent Notices, were revoked. Those imposed by Decree No. 68-600 of July 7, 1968, relating to iron and steel products, also were revoked.

January 1. The facilities of the “economic risk” insurance procedure under which exporters can cover themselves against abnormal increases in their costs were reduced to their pre-June 1968 levels.

January 1. The customs clearance charge of 1 per cent on imports and exports was abolished.

January 17. Authorized banks were informed that residents of Operations Account countries were entitled to take up in France the tourist travel allocation of F 1,000 a person for the year 1969.

January 17. The technical visa requirement was abolished for imports of those commodities that had been made subject to it on June 30, 1968.

January 19. Certain commodities were added to the list of imports eligible for forward cover and, for some items on the list, contracts could be concluded for three months instead of one month, as previously.

January 20. The banks’ net foreign currency position vis-à-vis nonresidents was brought under control. Banks for which this position was negative on January 31, 1969 had to maintain henceforth a negative position of at least the same amount, and those whose position on that date was positive could only maintain a negative or balanced position. Banks having excessive positions had to make renewable one-month deposits in U.S. dollars at the Bank of France. Those having a positive position on January 31, 1969 would have three months to bring it back to the permissible level.

January 20. Special regulations were issued concerning cruise travel by ship or airplane. The individual traveler’s tourist allowance in foreign currency would be reduced by: (a) all local expenses in foreign countries for their stay and excursions; and (b) if the cruise was organized by a foreign shipping company, by 20 per cent of the cruise fare.

January 23. Imports of flax and raw cotton became eligible for forward cover.

January 31. The temporary export subsidy that had been granted since June 30, 1968 on exports to foreign countries of most goods other than agricultural commodities and fuel was abolished.

February 12. Under the terms of the 1968 trade protocol, France agreed to eliminate quantitative restrictions on a number of additional goods of Japanese origin, with effect from April 1.

February 20. Transfers of freight owed to foreign river and canal shippers operating in France were in principle limited to 70 per cent of the freight.

February 27. Special nonresident accounts were introduced for expenditures and receipts in France of foreign ships and of French ships abroad (Comptes d’escale). The regulations were amended on June 3.

February 27. The authorized banks were empowered to permit the transfer of family remittances up to F 400 per applicant per month. The transfers had to be noted in the applicant’s foreign exchange booklet. Amounts in excess of F 400 could only be granted by the Bank of France. Previously, the approval authority was not delegated.

March 9. Imports of certain textiles, certain footwear, certain cutlery, and certain optical goods from 49 specified countries (see footnote 5) were liberalized.

March 13. A circular was issued concerning transactions by residents and nonresidents on commodity markets in France. A new type of nonresident account, the “Commodity Futures Account” (Compte terme marchandises), was introduced for this purpose.

March 27. Decree No. 69-264 of March 21, 1969 modified Decree No. 67-78 of January 27, 1967, and an order modified the implementing regulations issued in connection with the latter decree.

Two circulars, also of March 21, 1969, were published which summarized (1) the principal changes introduced since November 1968 in the regulations governing direct investments, as a result of both the reimposition of exchange control and the amendments to Decree No. 67-78 and its implementing order; and (2) the regulations, whether of an exchange control character or not, that were currently applicable or would henceforth be applicable to borrowing by residents from nonresidents and to the corresponding repayments. The requirements and procedures for foreign direct investment in France remained unchanged. The principal changes resulting from these various texts were the following:

(1) The scope of the exemptions from prior approval for borrowing abroad was reduced. Henceforth, the only exemptions were for borrowing constituting a direct investment,16 borrowing by authorized banks, borrowing by any type of firm for the financing of imports into or exports from France, borrowing by industrial firms for the execution of works abroad, loans related to certain international merchanting transactions, and loans not exceeding F 2 million when the total amount outstanding of these loans did not exceed F 2 million for any one borrower (provided, moreover, that the latter were obtained at a “normal” interest rate and that the proceeds were sold on the exchange market). All loans still had to be received through an authorized bank, unless the Treasury permitted otherwise. All repayments had to be made through an authorized bank and notified ex post to the Treasury (previously, such notification ex post was required only for taking up and amortizing loans up to F 2 million). The exemption for borrowing by banks henceforth was restricted to banks expressly authorized to borrow abroad; all authorized banks were so designated.

(2) The liquidation of French investments abroad became subject to prior declaration to the Minister of Economy and Finance, who during the next two months could request its postponement; previously, it only had to be reported within 20 days after the fact.

(3) The transfer abroad of the liquidation proceeds of nonresident-owned or nonresident-controlled direct investments in France had to be supported by documentary evidence, which must be submitted to the Treasury before the outward transfer could be made.

(4) The declaration of a direct investment to be undertaken in France or abroad had to indicate the authorized bank through which all related payments would be made; in the case of inward investments, the banks were obliged to surrender the foreign exchange immediately by selling it on the exchange market or by debiting a Foreign Account in Francs.

April 11. Resident travelers returning from abroad had to surrender all foreign means of payment in excess of F 100. They were no longer entitled to take up as part of their travel allocation the amounts in foreign banknotes that they had surrendered unutilized upon return from previous trips abroad.

April 18. For wheat and barley exported to member countries of the EEC, the maximum duration of the contract, and therefore the due date permitted, was reduced from 180 to 60 days. On July 18, this was also made applicable to contracts concluded before April 18. On August 5, the 60-day period for soft wheat was changed to the date of arrival at destination, and somewhat similar measures were taken for malt and wheat flour. All of these measures were revoked on August 16.

April 18. Imports of certain textiles, certain toys, sewing machines, and certain optical equipment of Hong Kong origin were liberalized.

April 21. Resident border workers were required to repatriate and surrender 50 per cent (previously 60 per cent) of their earnings. The amount not subject to surrender could not exceed F 900 per month; previously, for those whose monthly remuneration exceeded F 2,000, the exemption was F 800.

May 6. French insurance and reinsurance companies could maintain foreign currency accounts abroad; previously, they could open such accounts only with authorized banks in France.

May 9. The preferential rediscount rate for short-term export credits was raised from 3 per cent to 4 per cent. That for medium-term export credits remained at 3 per cent.

May 20. A law went into effect which provided that maritime transport “of national interest” must be effected by shipowners of French nationality.

May 24. Imports of many additional industrial products from Eastern Germany were liberalized.

June 9. Regulations went into effect which created Suspense Accounts for nontransferable francs accruing to nonresidents (Comptes d’attente) and suspense dossiers for nonresident-owned securities that were not eligible for a foreign dossier.

June 13. The preferential discount rate for short-term export credits was raised from 4 per cent to 5 per cent.

June 17. By virtue of a circular of June 13, authorized banks were permitted, without awaiting the response of the Ministry of Economy and Finance, to sell foreign currency or credit Foreign Accounts in Francs for the liquidation proceeds of foreign direct investments in France when their amount was less than F 1 million.

July 1. Export transactions under which the final payment would be due more than a year after arrival of the goods at destination were required to be domiciled with an authorized bank before rather than after exportation.

July 7. The purchase of forward exchange in respect of transit trade could not normally take place more than 90 days prior to the delivery date for the foreign currency sold forward at the same time (previously no limitation). As before, the proceeds from transit sales to foreign countries normally had to be received within 180 days after the arrival of the goods at their destination.

July 7. The validity of existing licenses for imports from non-ECSC countries of many iron and steel products was suspended. These commodities were struck from the liberalization list and became subject to global quotas.

August 10. The par value was changed from F 4.93706 per US$1 to F 5.55419 per US$1.

August 11. A market was created in France in which residents (including authorized banks and brokers when acting for their own account) could freely negotiate (1) the foreign currency proceeds of the sale abroad of French securities held abroad or of foreign securities held in France or abroad under the control of an authorized bank or broker, and (2) those foreign currency holdings of nonbank residents with banks in France on November 25, 1968 that were exempt from surrender.17 Security currency acquired in this market, if not used within a period of one month for the purchase of French or foreign securities abroad, had to be surrendered at the official rate on the French exchange market.

Previously, the only facilities for dealing in foreign securities by residents were those of the par contre system. This permitted dealing in foreign securities between residents on a French stock exchange against payment in francs and also allowed a resident to sell French or foreign securities abroad for foreign currency (provided that they had been held abroad under the control of an authorized bank prior to November 25, 1968) and use the proceeds himself to purchase other French or foreign securities abroad; these foreign currency proceeds were not negotiable between residents. Prior to August 11, the direct negotiation between residents of either French or foreign securities held abroad was prohibited if they were held under the control of an authorized bank.

August 12. EEC Regulation No. 1586-69 of August 11 temporarily permitted France (a) to reduce its intervention prices and purchase prices for agricultural products on the internal market by 11.11 per cent (or less, at the option of the French authorities); and (b) to subject imports and exports of agricultural commodities, both in trade with EEC countries and third countries, to subsidies and charges.

August 12. The preferential discount rate for short-term export credits was raised from 5 per cent to 7 per cent, and that for medium-term credits from 3 per cent to 4 per cent.

August 21. Most of the 1969 import liberalization measures became effective also in the French Overseas Departments.

August 23. Retroactive to August 11, the preferential specific import duties on Algerian and Tunisian wine were increased to reflect the devaluation of the franc.

September 1. Imports of supplies for French export industries could until the end of the year be imported free of import duty and value-added tax. The privilege was limited to products corresponding to 10 per cent of the value of the export commodity involved.

September 9. Decree No. 69-831 of September 8 provided that the export charges (montants compensatoires) and import subsidies (versements compensatoires resulting in prélèvements réduits and éléments mobiles réduits) on agricultural products would be announced in the Official Gazette and become effective on the date of publication.

September 11. A Notice to Importers and Exporters provided that the import subsidies and export charges on agricultural products would be applicable in trade with all countries, and would be payable at the time of importation or exportation. For each product, the amount of the import subsidy was equal to that of the export charge. These amounts were specified in the Notice, which applied (with certain exceptions for some dairy products, for oil seeds, and for olive oil) to all sectors covered by the EEC’s common agricultural policy or by EEC regulations of equivalent effect.

September 25. Law No. 69-872 required all physical and juridical persons who had between May 31, 1968 and November 23, 1968 undertaken financial transactions with foreign countries, and who during that period had had the benefit of credits guaranteed by the State or of specified other advantages, to show that these credits, etc., had been used in accordance with the purpose for which they had been granted.

October 2. A number of tariff quotas were reduced. The commodities affected included certain silk and cotton piece goods from all sources and various textiles of Turkish origin.

October 15. The discount rate for short-term export credits was raised from 7 per cent to 8 per cent, i.e., to the level of the general discount rate; that for export credits with maturities in excess of 18 months remained unchanged at 4 per cent.18

October 15. A circular concerning the direct or indirect granting of guarantees to foreign countries prescribed prior declaration for guarantees given by nonresidents to their branches or affiliates in France, or by residents to their branches or affiliates abroad; in either case, guarantees for less than F 2 million generally were exempt.

October 18. Decree No. 69-969 and an order of the same date revoked the provisions with respect to the origin of overseas products and the direct transportation between the country of origin and France that were contained in Decree No. 56-650 of June 28, 1956 and its implementing order of October 30, 1958.

October 22. Each of the EEC countries signed a one-year cotton trade agreement with Japan, effective from October 1. The EEC countries would eliminate their unilateral quota restrictions on Japanese cotton textiles, while Japan would subject exports of these goods to voluntary controls. The target for exports to France was set at 2,650 tons.

November 26. It was announced that the tourist travel allowance for 1970 would be the same as that for 1969 and that it could be taken up with effect from December 8, 1969.

November 27. The Bank of France issued additional instructions to authorized banks concerning the direct or indirect granting of guarantees to foreign countries.

November 27. Exports of nickel and certain products containing nickel were restricted.

November 28. The tariff preferences accorded to Morocco and Tunisia were revised in view of the association of these countries with the EEC.

December 6. The scope of the technical visa requirements for liberalized imports was reduced. A consolidated list, subdivided by geographic liberalization areas, was issued of the liberalized commodities that remained subject to technical visa.

December 17. It was announced that payment for exports to Andorra, being exports to a country outside the French Franc Area, could with effect from January 1, 1970 be received only in foreign currency or by debit to a Foreign Account in Francs.

December 20. Law No. 69-1139 revoked with effect from January 1, 1970 the obligation for French and foreign insurance companies to transfer to the Caisse Centrale de Réassurance part of the premiums relating to their transactions in France (including its overseas territories).

December 23. The amount of foreign banknotes that residents leaving on a business trip could take out was raised from F 100 to F 250.

December 23. The special definition of “residents” for the purpose of allocating travel exchange was abolished. The validity of foreign exchange booklets ceased to be limited to the year of issue.

December 23. In addition to the amounts of foreign banknotes and foreign currency travelers checks made out abroad that nonresident travelers could previously take out of France, they could take out any amount in foreign banknotes or foreign currency travelers checks or other means of payment established in their name that they had acquired in France from an authorized bank by conversion of foreign exchange, by debit to a Foreign Account in Francs, or by debit to a foreign currency account.

December 24. Law No. 69-1161 revised the rates of value-added tax with effect from January 1, 1970 to 7.5, 17.6, 23, and 33⅓ per cent.

December 31. Additional imports from CMEA countries were liberalized. A new negative list was issued of liberalized imports from Albania, Bulgaria, mainland China, Hungary, Poland, Rumania, Czechoslovakia, and the U.S.S.R. Some items on the list were not liberalized when of mainland Chinese origin.

December 31. It was announced that after March 31, 1970 receipts from exports to foreign countries would have to be recorded on a “surrender notice” (attestation de rapatriement).

Gabon

Exchange System

No par value for the currency of Gabon has been established with the Fund. The unit of currency is the CFA Franc, which is officially maintained at the rate of CFAF 1 = 0.02 French Franc, giving the relationship CFAF 277.710 = US$1.1 Exchange transactions in French francs between the Gabonese agency of the Banque Centrale des Etats de l’Afrique Equatoriale et du Cameroun (BCEAEC) and commercial banks in Gabon take place at the fixed rate of CFAF 1 = F 0.02, free of commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission.

With the exception of those relating to gold, Gabon’s exchange control measures do not apply to (1) France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas) and Monaco; and (2) the other countries whose bank of issue is linked with the French Treasury by an Operations Account (Cameroon, the Central African Republic, Chad, the People’s Republic of the Congo, Dahomey, Ivory Coast, the Malagasy Republic, Mali, Mauritania, Niger, Senegal, Togo, and Upper Volta). Hence, all payments to these countries may be made freely. All other countries, except Gabon itself are considered foreign countries, and in principle financial relations only with foreign countries are subject to exchange control.

Administration of Control

The Office of Foreign Financial Relations in the Ministry of Finance and the Budget supervises borrowing and lending abroad, the issuing, advertising, or sale of foreign securities in Gabon, and inward and outward direct investment. Exchange control is administered by the Minister of Finance and the Budget, who has delegated his approval authority for current payments to the authorized banks and that with respect to the external position of the banks to the BCEAEC. All payments and receipts between Gabon and foreign countries that are made through banks are registered, for statistical purposes only, by the BCEAEC, through the intermediary of the institution executing the transfer; the BCEAEC also addresses inquiries to the principal firms and agencies concerning inward and outward payments made in other manners, particularly by the offsetting of claims and debts. All exchange transactions relating to foreign countries must be effected through authorized intermediaries, i.e., the Postal Administration and authorized banks. Import and export licenses are issued by the Foreign Trade Office in the Ministry of National Economy, Trade, and Mines.

Prescription of Currency

Gabon is an Operations Account country of the French Franc Area, since the BCEAEC maintains an Operations Account with the French Treasury; settlements with France, Monaco, and the other Operations Account countries of the French Franc Area are made in CFA francs, French francs, or the currency of any other institute of issue that maintains an Operations Account with the French Treasury. Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs through Foreign Accounts in Francs.

Nonresident Accounts

The regulations pertaining to nonresident accounts are based on those applied in France. The crediting to nonresident accounts of CFA banknotes, French banknotes, or banknotes issued by any other institute of issue that maintains an Operations Account with the French Treasury is prohibited.

Imports and Import Payments

Imports from countries in the French Franc Area and from member countries of the EEC other than France may be made freely. All imports from non-EEC countries outside the French Franc Area are subject to licensing in accordance with an annual import program. This program and the amount of foreign exchange required to implement it are determined by a joint French-Gabonese Committee. A special lidensing procedure is applicable to the import of petroleum products. Exporters may obtain licenses for certain imports outside the import program (see section on Exports and Export Proceeds, below).

Global quotas are established for imports from all non-EEC countries outside the French Franc Area. The global quotas may be used to import goods originating in any of these countries. A few commodities in the program are subject to ceilings for all non-EEC countries outside the French Franc Area.

All import transactions relating to foreign countries must be domiciled with an authorized bank. Import licenses entitle importers to purchase the necessary exchange, provided that the shipping documents are submitted to the authorized bank.

Payments for Invisibles

Payments for invisibles to France, Monaco, and the other Operations Account countries in the French Franc Area are permitted freely; those to other countries are subject to approval. For many types of payment the approval authority has been delegated to authorized banks. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when the basic transaction has been approved. For tourist travel, residents traveling to countries other than France, Monaco, and the other Operations Account countries of the French Franc Area may obtain an exchange allocation of an amount equivalent to CFAF 100,000 a person a year (CFAF 50,000 for children under ten); any foreign exchange remaining after return to Gabon must be surrendered. For business travel to foreign countries, there is a special allocation of the equivalent of CFAF 20,000 a day, subject to a maximum of CFAF 300,000 a trip; the Minister of Finance and the Budget may issue exceptional allocations in excess of CFAF 300,000. Tourist and business travel allocations may not be combined. Travelers going to foreign countries may take out up to a maximum of CFAF 10,000 in BCEAEC banknotes; the amount taken out is deducted from the travel allocation. Travelers to other countries may take out any amount in BCEAEC banknotes.

Nonresident travelers may take out foreign banknotes and coins up to the amount declared by them on entry. Gabonese nationals traveling abroad must lodge a deposit (repatriation guarantee) with the Treasury; exempt are persons traveling on official business, government-sponsored students, and persons taking up salaried professional employment abroad.

Exports and Export Proceeds

Exports to countries in the French Franc Area are free of license. Exports to other countries of rice, corn, tobacco, cotton, diamonds, and mining products (except sodium carbonate, manganese, and crude petroleum) require licenses. Gold and uranium may be exported only to France. Exporters may obtain import licenses for additional quantities of commodities included in the import program and essential to their export activities, up to an amount corresponding to 10 per cent of the total value of their exports during the preceding year.

Export transactions relating to foreign countries must be domiciled with an authorized bank. Export proceeds received in currencies other than those of France or an Operations Account country must be surrendered. Export proceeds normally must be received within 180 days after the arrival of the commodities at their destination. The proceeds must be collected, and surrendered if received in a foreign currency, within one month of the due date.

Proceeds from Invisibles

Proceeds from transactions in invisibles with France, Monaco, and other Operations Account countries in the French Franc Area may be retained. All amounts due from residents of other countries in respect of services, and all income earned in those countries from foreign assets must be collected, and if received in foreign currency surrendered, within a month of the due date. Resident and nonresident travelers may bring in any amount of banknotes and coins issued by the BCEAEC, the Bank of France, or any other bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign banknotes and coins (except gold coins) of countries outside the French Franc Area.

Capital

Capital movements between Gabon and France, Monaco, and other Operations Account countries in the French Franc Area are free of exchange control; capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are permitted freely. All foreign securities, foreign currency, and titles embodying claims on foreign countries or nonresidents that are held in Gabon by residents or nonresidents must be deposited with authorized banks in Gabon.

Special controls (additional to any exchange control requirements that may be applicable) are maintained over borrowing and lending abroad, over inward and outward direct investment, and over the issuing, advertising, or offering for sale of foreign securities in Gabon; these controls relate to the transactions themselves, not to payments or receipts. With the exception of those over the sale or introduction of foreign securities in Gabon, the control measures do not apply to France and its Overseas Departments and Territories (except the French Territory of the Afars and the Issas), Monaco, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account.

Direct investments abroad 2 must be declared to the Ministry of Finance and the Budget, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the full or partial liquidation of such investments also requires declaration to the Ministry unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment abroad. Foreign direct investments in Gabon 3 must be declared to the Minister, unless they take the form of a capital increase resulting from reinvestment of undistributed profits; the Minister has a period of two months from receipt of the declaration during which he may request the postponement of the projects submitted to him. The full or partial liquidation of direct investments in Gabon must also be declared to the Minister, unless the operation involves the relinquishing of a participation that had previously been approved as constituting the making of a direct investment in Gabon. Both the making and the liquidation of direct investments, whether these are Gabonese investments abroad or foreign investments in Gabon, must be reported to the Minister within 20 days following each operation. Direct investments are defined as investments implying control of a company or enterprise. Mere participation is not considered as direct investment, provided that it does not exceed 20 per cent in the capital of a company whose shares are quoted on a stock exchange.

The issuing, advertising, or offering for sale of foreign securities in Gabon requires prior authorization by the Minister of Finance and the Budget. Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the Gabonese Government and (2) shares similar to securities whose issue, advertising, or offering for sale in Gabon has previously been authorized.

Borrowing abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in Gabon, or by branches or subsidiaries in Gabon of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Finance and the Budget. The following are, however, exempt from this authorization: (1) loans constituting a direct investment abroad for which prior approval has been obtained, as indicated above; (2) loans directly connected with the rendering of services abroad by the persons or firms mentioned above, or with the financing of commercial transactions either between Gabon and countries abroad or between foreign countries, in which these persons or firms take part; (3) loans contracted by registered banks; and (4) loans other than those mentioned above, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one borrower. The contracting of loans referred to under (4) that are free of authorization, and each repayment thereon, must be declared to the Office of Foreign Financial Relations within 20 days of the operation, unless the total outstanding amount of all loans contracted abroad by the borrower is CFAF 5 million or less.

Lending abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in Gabon, or by branches or subsidiaries in Gabon of juridical persons whose registered office is abroad, requires prior authorization by the Minister of Finance and the Budget. The following are, however, exempt from this authorization: (1) loans granted by registered banks; (2) other loans, when the total amount outstanding of these loans does not exceed CFAF 50 million for any one lender. The making of loans that are free of authorization, and each repayment thereon, must be declared to the Office of Foreign Financial Relations within 20 days of the operation, except when the total outstanding amount of all loans granted abroad by the lender does not exceed CFAF 5 million.

Under the Investment Code of December 4, 1961, as amended on March 23, 1967, any enterprise to be established in Gabon, whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports, as well as exemption from direct taxes on specified income.

The Code provides for five categories of treatment. Three of these apply to enterprises established in Gabon and whose activity is limited to the national territory of Gabon (categories IA, IB, and II, according to the economic importance of the enterprise). The other types of treatment apply to enterprises established in Gabon whose market includes the territory of two or more states of the Central African Customs and Economic Union—UDEAC—(categories III and IV, depending on the importance of the enterprise). Preferential treatments IA and IB are granted for a period of up to 10 years. Preferential treatment II is reserved for enterprises of prime importance to the country’s economic development and involving exceptionally high investments; it provides for stabilization of their fiscal charges for up to 25 years. Preferential treatment III includes special import privileges and treatment IV includes, in addition to the privileges mentioned above, the advantage of a founding agreement (convention d’établissement).

Requests for approval for preferential treatment must be submitted to the Minister of National Economy, Trade, and Mines, who, after examining the documents, transmits them to the Investment Commission. After an opinion has been given by that Commission, the project is submitted to the Council of Ministers. Preferential treatments IA, IB, and II are granted by decree issued by the Council of Ministers. Preferential treatments III and IV are granted by a certification of the UDEAC upon the recommendation of the Council of Ministers.

In addition to fiscal privileges, eligible companies may receive protection against foreign competition and may be given priority in the allocation of imports, of public credit, and of government contracts.

Gold

Residents are free to hold, acquire, and dispose of gold in any form in Gabon. Imports and exports of gold require prior authorization by the Minister of Finance and the Budget, which is seldom granted. Exempt from this requirement are (1) imports and exports by or on behalf of the monetary authorities and (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles). Unworked gold may be exported only to France. Both licensed and exempt imports of gold are subject to customs declaration.

Changes during 1969

February 17. Decree No. 149/PR was issued to implement Ordinance No. 30/PR of June 5, 1968. It contained definitions of “foreign countries,” “residents,” and “nonresidents,” listed the types of payments that could be made freely, through an authorized intermediary or the Postal Administration, to foreign countries, and introduced new exchange allocations for travel to foreign countries. The export by travelers to foreign countries of BCEAEC banknotes was limited to CFAF 10,000 a person a trip, and the amount of such banknotes taken out was deducted from the travel allocation. Payments of less than CFAF 12,500 could be made freely for any purpose. All payments between Gabon and foreign countries had to be made through the Postal Administration or authorized banks. All amounts subject to repatriation had to be collected, and if received in foreign currency surrendered to an authorized bank, within one month of the due date; the due date for export receipts had in principle to be within 180 days after the arrival of the goods at their destination. Nonresident accounts in Gabon could not be credited with CFA banknotes or French banknotes. The approval authority for payments that could not be made freely was delegated to the BCEAEC. Residents and nonresidents holding in Gabon foreign securities, foreign currency, or any title representing a claim on foreign countries had to deposit these with an authorized bank within 15 days. Decree No. 280/PR of June 5, 1968 was revoked.

The travel allocations were as follows: For tourist travel to foreign countries, residents could obtain foreign currency up to the equivalent of CFAF 100,000 a person a year (CFAF 50,000 for children under ten). For business travel, they could obtain a special allocation up to the equivalent of CFAF 20,000 a day, subject to a maximum of CFAF 300,000 a trip; exceptional allocations in excess of CFAF 300,000, however, could be authorized by the Minister of Finance and the Budget. Tourist and business travel allocations could not be combined.

February 17. Decree No. 150/PR subjected to control by the Minister of Finance and the Budget the claims and liabilities in francs and foreign currencies of banks and financial institutions established in Gabon. This control could be delegated to the BCEAEC.

April 23. Circular No. 1124 was issued concerning payments by residents for real estate acquired abroad before November 26, 1968.

April 23. Circular No. 1125 was issued concerning the transfer abroad of salaries of officials stationed abroad.

April 23. Circular No. 1126 was issued concerning the transfer abroad of wages of foreign workers in Gabon. The full net wages could be transferred within three months of the pay period concerned.

April 23. Circular No. 1127 was issued concerning family remittances to foreign countries. The authorized banks could approve transfers up to CFAF 40,000 a month for each applicant. The Minister of Finance could authorize additional amounts.

April 23. Circular No. 1128 was issued concerning profit remittances abroad by nonresident traders and craftsmen.

April 23. Circular No. 1128 was issued concerning the allocation of travel exchange to residents participating in a convention or seminar abroad. In addition to the tourist allowance, such persons could be granted the equivalent of CFAF 10,000 a day up to a maximum of CFAF 100,000 a trip, or the equivalent of CFAF 15,000 a day up to a maximum of CFAF 150,000, depending on the country involved.

April 23. Circular No. 1131 was issued concerning settlements effected by foreign airline companies.

April 25. Circular No. 1130 was issued concerning expenses and receipts of foreign ships in Gabon and of national ships abroad. Special accounts for these purposes were introduced (Comptes d’escale).

August 11. The exchange rate in terms of U.S. dollars was changed from CFAF 246.853 per US$1 to CFAF 277.710 per US$1. The fixed exchange rates for the French franc, the Malagasy franc, and the Mali franc remained unchanged.

The Gambia

Exchange Rate System

The par value is 2.13281 grams of fine gold per Gambian Pound or £G 1 = US$2.40. The currency-issuing authority is the Gambian Currency Board; subject to minimum transactions, the Board is statutorily required to issue currency against sterling at a rate of not more than £. stg. 100 15s. Od. per £G 100 and to redeem currency against sterling at a rate of not less than £ stg. 99 5s. 0d. per £G 100. The commercial banks deal with customers for spot transactions in sterling at rates which are within 1 per cent of the par value and in other currencies at rates determined by the prevailing market rate for the currency concerned in London against sterling.

Administration of Control

Exchange control policy is made by the Ministry of Finance. The commercial banks may authorize sales of currencies of countries outside the Sterling Area for permitted imports from outside the Area and, up to the amount of the basic travel allowance, for travel outside the Sterling Area. All other sales of non-Sterling Area currencies are subject to the authorization of the Ministry of Finance, which is also responsible for the issue of import and export licenses.

Prescription of Currency

The Gambia is a member of the Sterling Area, and settlements with other Sterling Area countries may be made and received freely in sterling or in any other Sterling Area currency. Settlements with countries outside the Sterling Area may be made and received in any non-Sterling Area currency other than Rhodesian pounds.

Nonresident Accounts

While there is legal provision for the commercial banks in The Gambia to maintain designated nonresident accounts (including Blocked Accounts) for residents of countries outside the Sterling Area, in fact all accounts are maintained as resident accounts irrespective of the residential status of the account holder. Consequently, nonresident account holders may freely use their accounts for settlements within The Gambia and the Sterling Area, but settlements outside the Area are subject to the same controls as apply to residents of The Gambia; there are no restrictions on credits to such accounts.

Imports and Import Payments

The import of certain specified goods is prohibited from all sources, predominantly on social, health, and moral grounds. The import from any country of rice and wheat flour is subject to specific licensing in order to ensure the adequacy of such imports and their fair domestic pricing; the import of rice is in the hands of a consortium of import trading companies under the control of the Government and acting on its behalf. All other imports are freely permitted under an Open General License if imported from the following countries, but are subject to specific licensing if imported from other countries: (1) all countries within the Sterling Area; (2) Austria, Belgium, Canada, Denmark, France, the Federal Republic of Germany, Greece, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, and the United States, together with the overseas territories of these countries; and (3) Argentina, Brazil, Chile, Iran, Iraq, Lebanon, Mali, Morocco, Paraguay, Peru, Senegal, the Syrian Arab Republic, Thailand, the United Arab Republic, Uruguay, Venezuela, and Yugoslavia.

Imports from Sterling Area countries may be paid for freely in Gambian pounds or in any currency of the Sterling Area. Settlement for imports from outside the Sterling Area requires exchange control authorization, which is freely given without evidence of importation for any commodity that is covered by a valid specific import license or that does not require a specific license; payment may be effected in any non-Sterling Area currency other than Rhodesian pounds.

Payments for Invisibles

Payments to Sterling Area countries may be made freely. The commercial banks may authorize payments for invisibles in currencies of countries outside the Sterling Area for transactions related to external trade when such payments are properly due outside the Area. They may also authorize a basic exchange allowance of the equivalent of £G 50 a person a calendar year for residents for travel outside the Sterling Area; of this amount, £G 25 may be taken in currency notes of countries outside the Sterling Area.1 The basic allowance may be accumulated up to three years. Application for permission to effect other payments for invisibles in currencies of countries outside the Sterling Area are dealt with administratively but liberally by the Ministry of Finance. Irrespective of destination, each traveler leaving The Gambia may take out £G 15 in Gambian currency notes. Visitors to The Gambia may also take out with them on departure any other currency notes declared by them when entering the country.

Exports and Export Proceeds

Because of needs for local consumption, the export to any destination of charcoal, firewood, and crustaceans is subject to specific licensing, as is the export of all goods to Bulgaria, mainland China, Czechoslovakia, Eastern Germany, Hungary, Poland, Rumania, the U.S.S.R., and Yugoslavia. The export of all other goods to any other destination is freely permitted under. Open General License. Payment for exports to countries outside the Sterling Area must be received within six months from the date of export in a non-Sterling Area currency other than Rhodesian pounds or in a Sterling Area currency from the account of a nonresident of the Sterling Area, i.e., from an External Account held anywhere in the Sterling Area or from an account held in The Gambia.

Proceeds from Invisibles

Receipts from invisibles in currencies of countries outside the Sterling Area must be offered for sale to the commercial banks. There is no restriction on the import of Gambian or other currency notes.

Capital

Inward transfers of capital are not controlled. Outward transfers may be effected freely to countries within the Sterling Area but are subject to control to countries outside the Area. At the time of making investments in The Gambia, nonresident investors may apply for an undertaking as to the authorization of applications for the subsequent remittance of profits and repatriation of capital. All other applications to transfer capital outside the Sterling Area are dealt with administratively by the Ministry of Finance. Loans and advances by the commercial banks to nonresidents are subject to the authorization of the Ministry of Finance; such authorization is normally given freely for the purpose of providing working capital to companies registered outside The Gambia for their operations in The Gambia.

Gold

The import of gold coins minted in the United Kingdom requires licensing by the Ministry of Finance; otherwise, gold coins and bullion may be imported freely. All internal dealings in gold and the export of gold require the permission of the Ministry of Finance.

Changes during 1969

No significant changes took place during 1969.

Federal Republic Of Germany

Exchange System

The par value is 0.242806 gram of fine gold per Deutsche Mark or DM 3.66 = US$1. The official limits established by the Deutsche Bundesbank for its dealings with banks are DM 3.63 buying, and DM 3.69 selling, per US$1. For banks’ transactions with their customers, these rates are considered as middle rates which can be exceeded by buying or selling margins. The rate for the U.S. dollar fluctuates in the exchange market between these margins. Market rates for certain other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Germany1 and such limits in force in the country of the other currency concerned. All other currencies are also admitted to market quotations in Germany. Premiums and discounts on forward exchange transactions are left to the interplay of market forces. There are no restrictions on foreign exchange dealings by residents or nonresidents.

There is an almost total prohibition of payments and transfers to Rhodesia and of trade and capital transactions involving Rhodesia. Otherwise, there are no restrictions on payments and no prescription of currency requirements. Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Germany or abroad at the choice of the holder. Accounts in deutsche mark or in any foreign currency may be held in Germany by any nonresident. Balances on nonresident accounts may be transferred freely to any type of resident or nonresident account and used for any payment in Germany or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment.

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

Administration of Control

The administration of control in Germany in respect of imports and exports of goods and services is operated by the Federal Ministry of Economics, the Federal Ministry of Transportation, the Federal Office for Trade and Industry (Bundesamt für gewerbliche Wirtschaft), the Federal Office for Food and Forestry (Bundesamt für Ernährung und Forstwirtschaft), Import and Storage Agencies (Einfuhr- und Vorratsstellen), and the Land Ministries of Economics. The Deutsche Bundesbank is primarily the authority that would be in charge of any exchange controls that might concern capital transactions. All banks in Germany are permitted to carry out foreign exchange transactions. A voluntary coordinating body within the banking system, the Central Capital Market Committee, formulates recommendations with regard to the timing and the terms of bond issues.

Imports and Import Payments

Imports and transit purchases of virtually all commodities originating in Rhodesia are suspended. All commodities originating in countries included in country list C of the Foreign Trade Regulation 2 are subject to license. Out of a total of some 8,300 statistical items, about 7,600 may be imported free of license from all other countries (i.e., those in country lists A and B of the Foreign Trade Law).3

In addition, 285 items are liberalized when originating in European OECD countries and their associated or dependent territories. Certain solid fuels are liberalized only when purchased and imported from other member countries of the European Coal and Steel Community; imports of coal from other sources are limited to a global quota. Furthermore, licenses are issued automatically and without restriction as to quantity or country for some 200 items that are covered by the Common Agricultural Policy of the EEC. The remaining some 270 items covered by that Policy do not require a license when imported from countries in country lists A and B, while licenses for imports of those commodities from list C countries are issued without quantitative limitation. When imported from non-EEC countries, however, most commodities covered by the Common Agricultural Policy of the EEC are subject to variable import levies which have replaced all previous barriers to imports. Many agricultural imports, whether covered by EEC regulations or not, are subject to German Marketing Laws; about half of these items may be imported free of license from list A and list B countries.

De facto liberalization is extended to many industrial and certain agricultural commodities (about 4,650 items) when originating in and purchased in Bulgaria, Czechoslovakia, Hungary, Poland, or Rumania. Under these arrangements, import licenses are issued automatically upon application, provided that domestic production and prices are not affected adversely.

Imports not subject to licensing require only an import declaration stamped by the Deutsche Bundesbank, which serves as documentation. For imports still subject to quantitative restriction (with certain exceptions, such as books, maps, etc., and small parcels through the post), an individual import license is required. Applications are normally invited by tender (Ausschreibung) published in the Federal Official Gazette. Import licenses may be allocated to importers either on a first-come, first-served basis, or on the basis of the total value of applications in relation to the quotas established for specified commodities.

For manufactured goods, the period of validity of the license is usually six months, but it may be extended in certain cases (e.g., heavy machinery) to a period necessary for the production of the goods. For agricultural products the usual period is also six months; however, for seasonal imports, it may be shorter.

Payments for imports are free, even if the underlying import transaction is still restricted. Commodity futures may be dealt in freely. Transit trade transactions may, in principle, be carried out freely; but when they involve specified countries, they are subject to certain conditions.

Payments for Invisibles

Virtually all payments to Rhodesia are suspended. Otherwise, all payments for invisibles may be made freely without individual license. German and foreign notes and coins and other means of payment may be exported freely.

The following transactions—but not the related payments—between residents and nonresidents are subject to restriction: the chartering of foreign ships from residents of specified countries; the use of foreign boats in certain inland waterways traffic; transactions with specified countries (which do not grant reciprocal treatment) for hull and marine liability insurance and aviation insurance, except passenger accident insurance; the production of motion pictures in association with nonresidents; and certain contracts with nonresidents pertaining to motion-picture films.4

Exports and Export Proceeds

Virtually all exports and transit sales to Rhodesia are suspended. With few exceptions, other export transactions may be carried out freely. For all goods, only an export notification, for statistical purposes, is required. Certain exports—mostly strategic goods and agricultural commodities subject to EEC regulations—are subject to individual licensing. The customs authorities exercise control over export declarations and also check to see whether a license is required.

Foreign exchange proceeds from exports do not have to be declared or surrendered, and they may be used for all payments. Both claims that have been overdue for more than three months and prepayments must be reported, for statistical purposes, when they exceed DM 10,000.

Proceeds from Invisibles

With few exceptions, services performed for nonresidents do not require licenses. However, licenses are required for transactions related to specific sea services, and for technical assistance through the delivery to residents of list C countries (see footnote 2) of constructional drawings, materials, and instructions for manufacture, insofar as such assistance is for the production of goods whose export requires a license.

There are no restrictions on the receipt of payments for services rendered to nonresidents. However, receipts exceeding DM 500 on account of such services have to be reported.

German and foreign notes and coins and other means of payment may be imported freely.

Capital

Virtually all payments and transfers to Rhodesia and capital transactions involving Rhodesia are suspended. Otherwise, residents and nonresidents may import or export capital freely without a license. Foreign and international bond issues on the German capital market do not require official approval. However, a system of voluntary coordination of banks is operated by the Central Capital Market Committee. Securities of all types may be imported or exported freely. There are no limitations on the disposal of legacies located in Germany and inherited by nonresidents, or on legacies located abroad and inherited by residents.

Gold

Residents may freely hold gold in any form at home and abroad and may negotiate gold in any form with residents or nonresidents at home and abroad. There is a free gold market in Frankfurt. Imports require a license from the Federal Office for Trade and Industry when the gold is purchased in or originates in Rhodesia or a country on country list C of the Foreign Trade Regulation (see footnote 2). With this exception, imports and exports by residents and nonresidents of gold in any form are unrestricted and free of license; a customs declaration, however, is required. Imports of unworked gold and gold alloys are free of customs duty but are subject to value-added tax at a rate of 11 per cent. Imports of monetary gold by the Bundesbank and imports of gold coins that are legal tender, including sovereigns, are exempt from this tax and from customs duty. Domestic purchases of gold (alloys and coins that are not legal tender) are subject to value-added tax at a rate of 11 per cent. Commercial imports and exports of articles containing gold are subject to the general foreign trade regulations and in most cases are liberalized.

Changes during 1969

During the year, the Bundesbank changed on many occasions the conditions on which it made swap facilities in U.S. dollars available to authorized banks. Most of these changes involved an adjustment of the discount on forward dollars and/or a modification of the minimum period of swap contracts. After September 29, however, the Bundesbank did not conclude any new forward contracts in U.S. dollars with German banks.

January 9. A list was published of the commodities that did not fall under the general embargo on exports to Rhodesia.

February 6. The minimum reserve requirements in respect of the commercial banks’ increases in liabilities to nonresidents were eased. From February 1, the banks could calculate their reserve obligation (100 per cent on new foreign funds) from the over-all increase in external liabilities subject to reserve requirements, rather than from the increase in each type of liability separately. Furthermore, the banks were given the option of basing their calculation either on the increase in liabilities since November 15, 1968 or on that since January 15, 1969.

February 27. The Sixteenth Ordinance Amending the Foreign Trade and Payments Ordinance revoked the Fourteenth Ordinance of November 22, 1968, by virtue of which the prior approval of the Bundesbank was required for the acceptance of new deposits from nonresidents and for the raising of new loans and credits from nonresidents by German financial institutions, and under which approval was also required for the payment of interest on newly opened savings accounts of nonresident individuals. The pre-November 22, 1968 text of Article 53 of the Aussenwirtschaftsverordnung was restored. The minimum reserve requirements on new foreign funds were maintained.

March 15. A new export financing procedure (Forfaitierung) went into effect whereby banks could make direct purchases of government-guaranteed medium-term and long-term suppliers’ credit claims on developing countries from exporters. A special guarantee fund of DM 250 million was established for this purpose. The arrangements would be in effect until March 31, 1970.

March 20. It was announced that additional import opportunities were to be created by quota increases for industrial goods and volume increases under agreements on voluntary restraint of exports to Germany. As a rule, all quotas were increased by 33 per cent. Structural and regional problems of some branches were taken into account, however, by limiting particular quota increases to 20 per cent. The increases applied to all countries whose exports to Germany were still subject to quota, but no improvement was granted to Rhodesia. In total, the measures resulted in an increase in import opportunities of about DM 500 million. In July, additional quota increases of DM 350 million were considered. However, due to a lack of export capacity in state trading countries, it was not to be expected that these facilities would be used up.

April 1. The Central Capital Market Committee announced a voluntary spacing-out in 1969 of foreign bond issues in deutsche mark. In April, such issues would be kept to a minimum; after April, their volume in any one month would remain below the average for the first three months of the year (DM 500 million).

April 28. The Bundesbank revoked an April 17 decision that the 100 per cent reserve requirement against new foreign funds would be terminated at the end of April. With effect from May 1, the 100 per cent minimum reserve ratio on additions to German banks’ liabilities vis-à-vis nonresidents was to be calculated on the basis of the level of such liabilities as at April 15 (on May 8, the basis became either April 15 or April 30, 1969, at the option of the bank concerned).

May 7. The Bundesbank suspended its swap transactions in U.S. dollars with German banks. Transactions were resumed on May 21.

May 8. The Bundesbank introduced limitations on the amounts of deutsche mark that it would supply in official exchange markets abroad.

May 14. The Government proposed to extend the Law Concerning Measures for Foreign Trade Safeguards (Absicherungsgesetz) 5 which was due to expire on March 31, 1970; the amendment took effect on July 3. The Government also proposed to amend Article 16 of the Bundesbank Law so as to permit the imposition of reserve requirements of up to 100 per cent on banks’ total liabilities to nonresidents. This amendment took effect on July 25.

May 22. With effect from June 1, 1969 the Bundesbank increased the rates of the minimum reserve ratios to be maintained by banks by 15 per cent for domestic liabilities and by 50 per cent for external liabilities. The 100 per cent reserve against new foreign funds was unchanged.

June 23. Under the policy of self-restraint by importers of heavy heating oils, it was agreed that such imports in 1969 could be estimated to exceed those of 1968 by 7 per cent rather than 4-6 per cent as estimated previously.

June 25. After the EEC authorities had granted Germany permission to raise its 1969 quota for imports of iron and steel products from state trading countries by 65,000 tons, import applications were invited.

June 28. Imports of coke from all sources other than Rhodesia were liberalized.

July 17. With effect from August 1, 1969, the Bundesbank increased the rate of the minimum reserve ratios to be maintained by banks against domestic and foreign liabilities by about 10 per cent.

August 1. New directives for the insurance companies allowed for the first time some investment in shares of foreign companies.

August 22. Certain tax facilities for outward direct investment were introduced by the Taxation Amendment Law for 1969.

August 28. Banks’ external liabilities from interest-arbitrage deals henceforth were exempt from minimum reserve requirements only if they were expressed in foreign currency and provided that the interest-arbitrage deal was not associated with any swap transaction with the Bundesbank.

September 1. By virtue of a decision of the Bundesbank of August 14, the application of the 100 per cent reserve requirement on additions to liabilities to nonresidents ceased to be limited by the former proviso that for each credit institute the legal maxima for reserves against different kinds of liabilities could not be surpassed.

September 25-26. The German official exchange markets were closed. The markets were also closed on September 29 and were reopened on the next day.

September 29. With effect from September 30, the Government announced that in the prevailing conditions it would not ensure that rates for exchange transactions involving the deutsche mark within their territory would be confined within the limits hitherto observed. The Government also authorized the Bundesbank temporarily to cease any intervention in the spot exchange market by application of the officially established upper and lower limits for the U.S. dollar, recommended that the Bank apply higher reserve requirements against nonresident-owned funds (under amended Article 16 of the Bundesbank Law), and undertook to ensure that German agriculture would not be discriminated against as a result of the floating exchange rate. The Bundesbank decided not to conclude any new forward contracts in U.S. dollars with German banks.

September 30. A temporary levy that would vary with the floating rate of the deutsche mark was introduced on agricultural imports. The Government applied to the EEC for permission to introduce subsidies on agricultural exports.

September 30-October 26. There was a fluctuating exchange rate for the deutsche mark. During this period, the Bundesbank stood ready to supply U.S. dollars spot at specified selling rates equal to or slightly below market quotations. The spot rate for the deutsche mark against the U.S. dollar appreciated gradually, until on October 24 the middle rate spot was quoted in Frankfurt at 8 per cent over the official par value. The last free market middle rate was DM 3.70 per US$1.

October 1. The EEC Commission refused permission to apply import levies or export subsidies on agricultural commodities but allowed a temporary closure of the German border for some agricultural products.

October 8. The Commission of the EEC authorized the German Government to impose a temporary import levy on those agricultural commodities for which an intervention or buying price had been established in accordance with EEC market regulations, as well as on processed products whose price depended on the prices of these basic commodities. The permission was originally valid until the German authorities reestablished an effective par value. Germany was also authorized to grant special export subsidies at the same rate and on the same range of commodities, but only in exceptional cases for exports to third countries. The permissible import levy was initially set at 5 per cent of the intervention or buying price, but provision was made for subsequent adjustment by the EEC Commission if the difference between the official parity and the arithmetic mean of official spot exchange rates during any one week should be smaller than 4 per cent or larger than 6 per cent. On October 21, an authorization to increase the import levy to 6 per cent was issued.

October 8. The 4 per cent special turnover tax levied under the Law Concerning Measures for Foreign Trade Safeguards on most exports and the special bonus (import compensation) of 4 per cent or 2 per cent on most imports were suspended until December 1, 1969, subject to the approval of the EEC authorities; such approval was granted on October 9, and the measure took effect on October 11.

October 22. An agreement between Germany and Japan was signed in which Japan undertook to restrain exports of certain cotton textiles previously restricted by import quotas.

October 26 (October 27, Central European Time). With effect from this date, the par value was changed from DM 4.00 = US$1 to DM 3.66 = US$1. The Bundesbank’s maximum spread in the spot market for the U.S. dollar, the single intervention currency, was maintained at 3 Pfennige either side of par (middle rates that can be exceeded in either direction by the buying or selling margin).

October 28. The Law Concerning Measures for Foreign Trade Safeguards was suspended sine die, with effect from October 28.

October 30. The EEC Commission permitted Germany (until December 7, 1969) to increase the import levy on agricultural products subject to Common Market regulations from 6 per cent to 8½ per cent and to pay a subsidy of 8½ per cent on exports of agricultural products subject to the same regulations. These levies and subsidies were applied mainly to cereals, beef, pork, and milk and to secondary products containing more than 2½ per cent of the foregoing products.

November 1. The law concerning sales of certificates and shares issued by the foreign investment funds (Auslandsinvestmentgesetz of July 28, 1969) entered into force and the Law on Investment Companies of April 16, 1957 was amended. Certain notification requirements were introduced, but foreign investment companies did not need formal authorization for their sales in Germany.

November 6. The 100 per cent minimum reserve ratio on additions to German banks’ liabilities to nonresidents was abolished and the minimum reserve ratios to be maintained by banks on existing liabilities to nonresidents were brought back in line with those against liabilities to residents. All remaining minimum reserve ratios were lowered by 10 per cent. These measures took effect retroactively from November 1.

November 17. The temporary system of import levies and exports subsidies on agricultural products was extended until the end of 1969. These temporary arrangements were replaced on January 1, 1970, with the approval of the EEC, by compensatory measures against losses to agriculture resulting from the revaluation.

December 1. The Japanese yen was officially quoted in Frankfurt.

December 4. Banks were requested to exercise restraint in lending at home and abroad and to repatriate maturing foreign placements. However, in order to alleviate seasonal strains on bank liquidity, the Central Banking Council also decided to lower by 10 per cent the reserve requirements on all liabilities subject to minimum reserve requirements.

December 5. The German issuing houses decided to work toward reducing over-all foreign bond offerings to under US$100 million a month.

December 8. The Federal Association of German Banks requested its members to report to the Bundesbank all nonbonded loans (Schuldscheindarlehen) of more than DM 20 million to nonresidents.

December 20. Exports of nickel required a license. Five petroleum products were freed from import license. Transit imports of Japanese cotton textiles required an import license.

December 20. Articles 52, 53, and 54 of the Foreign Exchange Decree (Aussenwirtschaftsverordnung) were revoked. This action abolished all restrictions on the payment of interest on nonresidents’ deposits (previously, only savings accounts of individual persons were exempt) and on the sale of domestic money market paper to nonresidents (including repurchase agreements for domestic fixed-interest securities).

December 22. The restriction of August 28 on certain interest-arbitrage deals (including “roundabout transactions”) was revoked in part.

Ghana

Exchange Rate System

The par value is 0.870897 gram of fine gold per Ghanaian New Cedi or NȻ 1 = US$0.98. Exchange rates are based on the fixed rate for sterling, which is NȻ 1 = £ 0 8s. 2d. The Bank of Ghana quotes rates for the pound sterling and certain other currencies; it deals in sterling at the fixed rate plus or minus a foreign exchange commission of ½ of 1 per cent. For other currencies, the commercial banks in Accra base their rates on the current London market rates plus or minus 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 arrange exchanges of Ghanaian currency for any foreign currency and engage in arbitrage in all currencies, spot or forward, but they do not maintain foreign exchange balances, receiving their requirements from the Bank of Ghana on a day-to-day basis.

Administration of Control

A committee under the chairmanship of the Governor of the Bank of Ghana is responsible for drawing up an annual foreign exchange budget. This committee also prepares the minimum import program and a reduced “operational” import program based upon the known available foreign exchange resources. The over-all import plan must correspond to the import ceiling set by the committee in its reduced program. If additional foreign aid not taken into account in the original foreign exchange budget is received, import licenses are issued for the gap between the minimum program and the reduced program. The Controller of Imports and Exports at the Ministry of Trade is empowered, on behalf of the Ministry of Trade, to prohibit or regulate the import and export of all goods. Open general licenses, other import licenses, and other export licenses are granted by the Controller of Imports and Exports.

Applications by the industrial sector and certain state agencies for individual import licenses must be channeled through the appropriate ministry or government agency for endorsement.

Applications that have been endorsed by the competent ministry or agency are then forwarded to the Controller of Imports and Exports at the Ministry of Trade. Applications by the commercial houses for the import of consumer and investment goods are submitted direct to the Ministry of Trade.

The Exchange Control Department of the Bank of Ghana administers the allocation of exchange for payments for invisibles and capital. Permitted foreign exchange transactions must be made through authorized banks. All contracts providing for the payment of any money by the Government require the approval of the Finance Board.

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 new cedis through Sterling Area Accounts, in sterling, or in other Sterling Area currencies. Authorized payments, including payments for imports, by residents of Ghana to residents of countries outside the Sterling Area other than Rhodesia may be made in new cedis to the credit of a Foreign Account, in sterling to the credit of an External Account, or in any non-Sterling Area currency. Receipts from residents of countries outside the Sterling Area other than Rhodesia may be obtained in new cedis from a Foreign Account, in sterling from an External Account, or in any non-Sterling Area currency. However, settlements related to transactions covered by bilateral trade and payments agreements are made through clearing accounts maintained by the Bank of Ghana and/or the central or state banks of the countries concerned.1

Nonresident Accounts

Accounts in new cedis held by residents of countries within the Sterling Area other than Ghana are designated Sterling Area Accounts. These accounts may be credited with authorized payments by residents of Ghana, with transfers from Foreign Accounts and from other Sterling Area Accounts, and with the proceeds from sales of Sterling Area and non-Sterling Area currencies. They may be debited for payments to residents of Sterling Area countries, for transfers to other Sterling Area Accounts, and for purchases of Sterling Area currencies.

Accounts in new cedis held by residents of countries outside the Sterling Area other than Rhodesia with authorized banks in Ghana are designated Foreign Accounts. The opening of these accounts is subject to approval by the Bank of Ghana. The accounts may be credited with authorized outward payments by residents of Sterling Area countries, with transfers from other Foreign Accounts, and with the proceeds from sales of non-Sterling Area currencies other than Rhodesian pounds. They may be debited for inward payments to residents of the Sterling Area, for transfers to other Foreign Accounts, and for purchases of Sterling Area and non-Sterling Area currencies other than Rhodesian pounds.

Nonresident accounts maintained under the provisions of bilateral payments agreements are called “Official Accounts” or “Territorial Accounts.” These accounts may be credited with authorized outward payments by residents of Sterling Area countries, with transfers from Foreign Accounts, with payments received through the Bank of Ghana for settlements with bilateral payments agreement countries, and with proceeds from sales of non-Sterling Area currencies other than Rhodesian pounds. They may be debited for authorized inward payments to residents of Ghana, for transfers to other Official Accounts related to the same country, and for transfers to the related clearing account at the Bank of Ghana.

Blocked Accounts are nonresident accounts of another category, the purpose of which is to receive funds that are not placed at the free disposal of nonresidents, e.g., certain types of capital proceeds. These may be debited for authorized payments, including the purchase of approved securities.

Imports and Import Payments

Imports from Rhodesia, South Africa, South-West Africa, and the Portuguese Monetary Area are not permitted. A large part of the import trade is carried out by private importers who must be registered and have to pay a flat registration fee of NȻ 50 a year. Other imports are made by state agencies. Imports of most goods produced in Ghana, as well as certain other commodities of a luxury character, are severely restricted; these are specified in a List of Restricted Commodities. There are ten open general licenses which permit any registered importer to import freely from any country the commodities specified in the relevant license. These commodities include most chemicals, spare parts, fertilizers, certain electric machinery, mineral manufactures, paper and paperboard, certain foodstuffs, and pharmaceutical products. For some of these, importers must obtain an OGL Commitment form from the Controller of Imports and Exports before placing orders; for other listed commodities, the Bank of Ghana must be informed at least two weeks before payment is to be made. All other imports require individual licenses, which are issued within the limits of an annual import program. Individual licenses are of two kinds: specific and special unnumbered licenses. All goods not covered by an open general license must be covered by a specific license, but where satisfactory evidence can be produced to the effect that payment for such goods has been made and therefore no transfer of foreign exchange is involved, they can be imported under “special unnumbered licenses”; these are not issued for imports in commercial quantities.

Import licenses do not specify the country from which the commodity has to be imported; they merely specify whether payment is to be made in convertible or inconvertible currency. Licenses are issued on a c. & f. basis and are endorsed to the effect that insurance must be covered in Ghana.

Exchange for payment of approved imports is granted freely by the Bank of Ghana. However, with the exception of rice, sugar, jute,2 aid imports, imports under bilateral payments agreements, and certain other imports for which exemption has been granted by the Ministry of Trade in consultation with the Bank of Ghana, imports must be made on 180 days’ credit. Commercial banks usually require importers to make downpayments on the opening of letters of credit for all categories of imports.

Imports of most commodities under open general license are subject to a surcharge of 5 per cent of the c.i.f. value unless imported by or for the use of the Government of Ghana. Many imports are subject to a levy of 11½ per cent on the combined amount of c.i.f. value, import duty, and other import charges.

Payments for Invisibles

All payments for invisibles require specific approval of the Exchange Control Department of the Bank of Ghana, and documentary evidence must support all applications.

The following categories of payments are normally authorized in connection with the importation of goods: (1) the buying commission—this must be duly endorsed on the import license and the amount of the authorized commission is deducted from the value of the import license; (2) the transfer of normal bank charges payable to overseas bankers for import payments, provided that the amount of the bank charges and the buying commission combined do not exceed 4 per cent of the c.i.f. value of the goods; and (3) the transfer of funds to cover interest on bills up to 6 per cent per annum. Freight charges must be paid to the local shipping agents; the transfer of funds to cover such charges is normally permitted, provided that the applications are properly documented. With few exceptions, insurance on all imports shipped to Ghana on f.o.b. or c. & f. terms must be arranged in Ghanaian currency with local insurance companies.

Remittances of income by non-Ghanaian employees are limited to 40 per cent of their annual earnings, up to a maximum of NȻ 3,000 a year, and are permitted only to persons having an annual disposable income of at least NȻ 1,000; this personal remittance quota is intended to cover all personal and family requirements and commitments outside Ghana, including leave expenses, travel for health purposes, education, gifts, insurance premiums, subscriptions, and donations. Applications for remittances of income by non-Ghanaian self-employed persons are considered on their individual merits by the Exchange Control Department of the Bank of Ghana.

Nonresident companies are, with the exception of companies financed with locally raised capital, permitted to transfer abroad freely their net profits, i.e., profits after payment of the prevailing 50 per cent tax on companies and of a 7½ per cent withholding tax; at present, however, profit transfers are being authorized only on a limited basis. The transfer of profits by companies that are either foreign-owned or owned or controlled by nonresidents and that have been financed with locally raised capital is not permitted.

The basic annual travel allowance for Ghanaians is NȻ 55 for each person 18 years of age or over and NȻ 25 for each person under that age. Foreigners resident in Ghana but domiciled elsewhere in the Sterling Area are allowed up to NȻ 490 a calendar year out of their personal remittance quota (if any). Exchange for business travel is granted up to NȻ 37 a day, for a maximum of seven days; not more than two journeys a year are allowed. All residents may buy round-trip tickets in Ghana to the country of destination, subject to approval by the Bank of Ghana. Residents of any nationality (except children under 2 years of age, diplomats, and UN personnel) who, for any purpose, are leaving Ghana by air or sea, whether temporarily or not, must pay a travel tax of 10 per cent of the price of the round-trip ticket.

Persons leaving Ghana may take with them foreign currency equivalent to NȻ 122.50, provided that not more than the equivalent of NȻ 24.50 is taken in banknotes in any one currency. Ghanaian banknotes may be taken out by any traveler up to NȻ 20 but may be spent only on Ghanaian aircraft and ships. Nonresident travelers may take out any unutilized foreign currency imported and declared upon entry.

Exports and Exports Proceeds

Exports to Rhodesia, South Africa, South-West Africa, and the Portuguese Monetary Area are prohibited. There are three open general licenses for exports, covering such articles as trade samples, advertising materials, postage stamps, gifts up to NȻ 20 in value, and luggage. All other exports require specific licenses from the Controller of Imports and Exports prior to shipment. Cocoa and certain other agricultural products are exported through the Cocoa Marketing Board.

Exporters are required to collect proceeds from their exports within 60 days of shipment; export proceeds in foreign exchange must be surrendered to a commercial bank in Ghana.

Proceeds from Invisibles

All receipts from invisibles must be sold to an authorized bank. Foreign currency notes may be imported freely, provided that their exportation is not prohibited by the issuing country. The import of Ghanaian currency notes is prohibited, with the exception of the reimportation of notes taken out previously by the same traveler and recorded in his passport.

Capital

Foreign investment in Ghana requires prior approval. The Capital Investments Act, which was promulgated in April 1963, provides for the granting of special benefits to specified existing investments as well as to new investments. Under the act approval may be granted to investments that contribute to the development and utilization of productive capacity, the reduction of import requirements, the attainment of a high level of employment, or the acquisition of technical skills by citizens of Ghana. However, certain retail, wholesale, and transportation operations are not open to foreigners. Investments granted “approved status” under this act obtain a guarantee of the right to transfer profits and liquidation proceeds; tax holidays, initial capital allowances, etc., are also available for such investments. The act also stipulates that the assets of foreign investors may not be expropriated and that, when approved enterprises are nationalized in the public interest, fair compensation is to be determined either by voluntary agreement of the parties or through arbitration by the International Bank for Reconstruction and Development. A Capital Investments Board decides which foreign investments qualify for benefits under the act.

All outgoing capital movements must be approved; applications for such transfers must be supported by documentary evidence and are considered on their merits. Transfers to beneficiaries under wills and intestacies are approved, provided that all local indebtedness has been paid. Requests for the transfer of funds representing personal assets of foreign residents in Ghana who retire and return to their home country are considered individually on their merits. Applications must be supported by appropriate documentation showing that the savings are genuine and that no illegal transfer of capital is involved. If the amounts involved are very large, their transfer may be authorized over a period of a few months. Proceeds from the liquidation of real assets of foreign nationals leaving Ghana may be directed to reinvestment in registered government bonds, treasury loans, or treasury bills; the interest accruing on such investments is transferable. Applications for the transfer abroad of funds by emigrants must be accompanied by appropriate documentation and are also considered on their individual merits.

Loan and overdraft facilities to resident companies controlled by nonresidents require the individual approval of the central bank. Such companies, when financed with locally raised capital, are not permitted to transfer profits or dividends abroad.

Transactions in securities are controlled to ensure that capital is not transferred abroad without express permission. In respect of portfolio investments, residents have to obtain approval for any switch in their holdings of securities issued by nonresidents.

Gold

Residents may hold and negotiate in Ghana gold obtained domestically by washing or mining according to indigenous methods, gold coins that are collectors’ pieces, and gold jewelry. Other domestic transactions in gold, as well as imports and exports, may be authorized by the Ministry of Trade in collaboration with the Bank of Ghana, and certain domestic sales may be carried out by permit under the Gold Mining Products Protection Ordinance. With these exceptions, no Ghanaian resident other than an authorized dealer may buy or borrow any gold from, or sell or lend any gold to, any person other than an authorized dealer. Imports of gold other than imports by or on behalf of the monetary authorities are not normally licensed; imports for industrial use are very small, a specified commercial bank being the sole importer. The import duty on bullion and partly worked gold is 10 per cent, and that on other gold is 50 per cent. The gold mines export their entire output in semi-refined form. Exports are free of duties or taxes; the mining corporations are subject to a minerals tax based mainly on profits.

Changes during 1969

January 1. The scope of the open general license lists was extended by inclusion of cane and beet sugar, certain chemicals, a wide variety of manufactured articles, some electrical and medical apparatus, and textbooks.

January 1. The 1 per cent license fee levied on the c. & f. value of imports was abolished.

January 1. Foreign nationals whose business establishments in Ghana are financed with capital raised locally could no longer remit their profits.

January 1. It was decreed that taxi service operations, small-scale businesses with under 30 employees and/or with an investment of under NȻ 1,000, retail trade businesses with an annual sales volume of less than NȻ 500,000, wholesale trade businesses with an annual sales volume of less than NȻ 1 million, and the representation of overseas manufacturers would be reserved for Ghanaians. No new foreign enterprise would be licensed in the five protected fields. Non-Ghanaian business enterprises properly registered and operating in protected fields would be permitted to continue operation if they immediately started training programs to prepare Ghanaians to replace foreigners, refrained from employing expatriates except working proprietors, and took steps to show that they were “Ghanaianizing.”

February 13. Agreement was reached with Yugoslavia on the termination of the payments agreement with that country as from December 31, 1969. Settlements would thereafter take place in convertible currencies.

February 13. Commodities imported under the open general license procedure were made subject to a 5 per cent surcharge calculated on the c.i.f. value. Exempt were goods imported by or for the use of the Government of Ghana, certain medicinal and pharmaceutical products, school textbooks, other books and magazines, as well as the personal effects of travelers.

February 20. Industrial companies were allowed to transfer profits and dividends declared for the years ended June 30, 1965; commercial companies those declared for the years ended June 30, 1963; and all other companies (except mining companies, for which separate arrangements were made) were permitted to transfer profits and dividends for the years ended June 30, 1964.

February 20. Remittances of income by non-Ghanaian employees were limited to 40 per cent of their annual earnings, up to a maximum of NȻ 3,000 a year. Previously, remittances of 50 per cent of earnings were allowed, up to £ stg. 2,500 a year. Henceforth, such remittances could not be made by persons having an annual disposable income of less than NȻ 1,000.

June 27. Imports of rice, sugar, and jute could be made on sight draft terms. Previously, suppliers’ credit for 180 days was required.

July 1. The bilateral payments agreement with Mali was terminated.

July 15. Income tax deductions were proposed for export-oriented industries, except manufactures of wood and metal products. The deductions, with a maximum of 50 per cent, would be graduated in accordance with the percentage of total output being exported by the producer firm. The proposals were enacted on August 5.

July 16. Import duties on automobiles and trucks were reduced from 250 per cent to 100 per cent.

July 22. OGL Commitment forms were no longer required for items on open general license lists 1, 2, 3, 4, 5, and 8. Importers of these items, however, were henceforth required to inform the Bank of Ghana at least two weeks before payment was to be made.

August 22. Imports under special unnumbered licenses of textile fabrics and related products were banned.

September 5. The import regulations for the first half of 1970 were published. For licensing purposes, the 1969 import year was extended to June 30, 1970 and it was announced that thereafter the import year would run from July 1 to June 30, coinciding with the fiscal year. Applications for import licenses for the period January 1 to June 30, 1970 were to be filed by October 31, 1969. The special procedures for importing by the members of the Small Ghanaian Importers’ Association were eliminated, and such importers could in future import either direct or through other specified registered importers.

September 15. The List of Restricted Commodities was extended to include, inter alia, gramophone records, cigarettes, toothpaste, transistor radios, cement, ballpoint pens, palm oil, matches in boxes, cotton thread and cotton towels, and woolen and synthetic suitings, as well as fresh or frozen fish not caught by Ghanaian vessels. Coffee was removed from the list.

October 6. An Export Promotion Council was established.

December 12. The Controller of Imports and Exports announced that without his special permission no special unnumbered license, open general license, or specific import license could be used to import certain specified goods; these were textile yarn, three types of textile prints, radios, radiophonographs, television sets, tape recorders, record players, and passenger automobiles with engine capacity exceeding 1,700 c.c.

December 15. The export of banknotes to Ghana through postal channels was prohibited, except through registered letter packages mailed by one bank to another bank.

December 31. The bilateral payments agreement with Yugoslavia was terminated.

Greece

Exchange Rate System

The par value is 0.0296224 gram of fine gold per Greek Drachma or Dr 30.00 = US$1. The official rates are Dr 29.90 buying, and Dr 30.10 selling, per US$1. Market rates for other currencies vary between limits which result from combining the official limits for the U.S. dollar maintained by Greece and such limits in force in the country of the other currency concerned.

Administration of Control

Controls are administered on the policy level by the Ministry of Coordination, the Ministry of Trade, the Currency Committee, and the Foreign Trade Board. Exchange control is implemented and applied, and import approvals are granted, by the Bank of Greece and authorized commercial banks. Import and export licenses are issued by the Bank of Greece, authorized banks, and the Ministry of Commerce and, in some cases, require the prior approval of the competent ministry.

Prescription of Currency

Settlements with countries with which Greece has bilateral payments agreements are made through controlled accounts, with the U.S. dollar as the currency of account.1 Settlements with all other countries are made in any convertible currency or through Foreign Sight Deposit Accounts in drachmas.

Nonresident Accounts

Nonresidents are permitted to open with Greek banks convertible Foreign Sight Deposit Accounts in drachmas or convertible currencies. These accounts may be credited with convertible foreign exchange or the proceeds from sales of convertible currencies, with authorized payments by residents of Greece for imports or services payable in convertible currencies, and with transfers from other Foreign Sight Deposit Accounts. They may be debited for payments to residents for current transactions, for transfers to other Foreign Sight Deposit Accounts, and for the purchase and transfer abroad of any convertible currency. Any withdrawal from drachma accounts for use in Greece and any conversion of foreign exchange withdrawals into drachmas entail the loss of the reconversion right of the sums withdrawn. The maximum rate of interest on such accounts is 1.50 per cent per annum.

Nonresident investors enjoying the privileges of Legislative Decree No. 2687/53 (see section on Capital, below) may also establish time deposits, for a minimum period of six months and with a minimum deposit in convertible currencies equivalent to US$10,000; balances on these accounts earn interest of between 6 per cent and 7 per cent, and principal and interest are freely transferable at maturity in the currency of the deposit.

All drachma assets of nonresidents other than those in Foreign Sight Deposit Accounts must be declared and are held in blocked accounts. Domestic banknotes in excess of Dr 750 brought in by nonresident travelers must also be credited to a blocked account, as must certain income accruing in Greece to nonresidents. Subject to the approval of the exchange control authorities, balances on blocked accounts may be used for such purposes as personal expenses in Greece up to Dr 30,000 a visit, purchases of securities officially listed on the stock exchange in Greece and purchases of real estate in Greece. Amounts of up to Dr 60,000 may be released for remittance by each account holder, provided that the funds were held before December 31, 1963; amounts of up to Dr 30,000 may be released semiannually for remittance by each account holder, from accounts opened after January 1, 1964, provided that the money deposited was derived exclusively from rents. Other amounts of balances on blocked accounts may also be transferred abroad with the prior approval of the Bank of Greece. Blocked balances may be deposited with a commercial bank, where they earn interest at current rates for sight deposits.

Greek citizens (including seamen) who are employed abroad and certain Greek societies and associations operating abroad may establish, with funds originating abroad, convertible foreign currency accounts with authorized banks in Greece. Merchant seamen may deposit their wages and salaries in these accounts, provided that the funds originate abroad and, if they are received in drachmas, that they are obtained through the intermediary of a shipping firm established in Greece. Balances on these accounts earn interest at 3 per cent per annum for sight desposits, 6¾-7¾ per cent per annum for time deposits, and 6¼ per cent per annum for savings bank deposits. Balances on these accounts, including accrued interest, are freely convertible into foreign exchange as long as the holder continues to work abroad, or to serve at sea, and for five years thereafter.

Imports and Import Payments

Imports of all commodities originating in or shipped from Rhodesia are prohibited and imports of cotton textiles from Hong Kong are suspended. All other imports, except those with an invoice value c.i.f. of the equivalent of US$100 or less for which payment will be made through an authorized bank, require approval. For most imports, prior approval is required; however, for certain commodities, mainly machinery and raw materials, imports may be effected without prior approval. The granting of an import license implies that appropriate foreign exchange will be made available. Apart from imports for which special licenses are required, two general import procedures (E and D) are applicable to private imports, mainly for statistical purposes. Under procedure E, the approval of an authorized bank is required (1) for imports from countries participating in the European Monetary Agreement (EMA) other than Sweden when payment is to be made in a convertible or externally convertible European currency; (2) for imports from Canada or the United States when payment is to be made in free dollars, i.e., not on the basis of procurement authorizations under U.S. aid; and (3) for imports from countries with which Greece has concluded bilateral payments agreements when payment is to be made through the relevant clearing account. No license is necessary under procedure E, but import applications which have been approved by an authorized bank are registered with the Bank of Greece. Under procedure D, an import approval issued by the Bank of Greece is required for imports financed by U.S. aid, for imports other than those covered by procedure E, for all imports from Sweden, and for imports for which the importer requests changes in the general provisions concerning the terms of shipment, method of settlement, terms of payment, etc. For all goods that do not require a special import license, prices must be approved and pro forma invoices visaed in Greece by a local Chamber of Commerce.

Special licenses are required for imports of commodities in List A (gold, certain luxury items, textiles, automobiles and parts, and certain foodstuffs, including special-quality rice) and List B (certain types of machinery and spare parts). Special regulations govern imports of petroleum products similar to those produced by Greek refineries and imports of certain other items, such as goods under monopoly control, medicines, narcotics, wheat and flour, sulphur, and motion-picture films, as well as barter transactions based on clearing agreements.

For purposes of applying regulations concerning payments for imports and advance deposit requirements, all private imports are classified in nine lists (P-6, P-12, F, F-50/1-3, and F-100/1-3). Payments for imports may be made by letter of credit, by cash against shipping documents, or by acceptance of time drafts (which is permitted only for goods in Lists P-6 and P-12, the time limit being six months for List P-6 and one year for List P-12, except for machinery and spare parts, for which the time limit is three years). The Ministry of Commerce may authorize longer payment periods and may also approve deferred payments for imports not included in the P lists. When time drafts are accepted, a personal written undertaking amounting to 4 per cent of the amount of the draft is required as a guarantee that the payment will be made within the prescribed time limits.

When a letter of credit is opened, the importer is required to deposit in drachmas the whole amount of the credit with the intervening bank. In addition, for those imports included in Lists F-100/1 and F-100/2, further cash deposits of, respectively, 40 per cent and 19 per cent of the c.i.f. value are required as security for import duties and other taxes. For imports under procedure E, this deposit must be made when the import approval is obtained; for imports under procedure D, the deposit must be made within 20 days of the import approval.

Advance deposits are not required for imports for which payment is to be made by acceptance of time drafts. When payments for imports are to be made against sight drafts, advance deposits in cash are required for private imports included in Lists F-50/1-3 and F-100/1-3.2 Advance deposits are the same for all countries. They are calculated on the c.i.f. invoice value and consist of two components: a prepayment required when applying for an import approval and an advance (security) against import duties and other taxes. Security deposits, however, are not required for capital goods and spare parts that are exempt from import duty by virtue of the laws governing investment of foreign or domestic capital. The rates of deposit for each list of imports are set out below.

PrepaymentSecurityTotal
In per cent of invoice value
List F-50/1502070
List F-50/242 ½1759½
List F-50/3251035
List F-100/1100401403
List F-100/28534119
List F-100/3502070

For goods imported and cleared through customs in the Dodecanese Islands, the advance against import duties and other taxes is reduced to one half of the above-mentioned percentages. When imports are financed with U.S. aid funds, a further deposit of 10 per cent must be made in cash or by bank guarantee and in favor of the Greek State, in addition to any deposit as specified above. All deposits must be made with the intervening bank (1) at the time the import approval is obtained, for imports under procedure E, and (2) within 10 days (for Athens and the Piraeus area) or 20 days (for the provinces) of obtaining the import approval, for imports under procedure D. Upon delivery of the shipping documents, the importer’s bank issues a permit for the customs clearance of the goods, and advance deposits are refunded; however, for goods included in Lists F-50/1-3 and F-100/1-3 the deposits must be retained by the commercial bank for a period of four months from the date on which they were made for a range of specified imports covering fabrics, electrical household appliances, and passenger motor vehicles and for a period of two months for other imports.

Certain companies, public agencies, and organizations that have been designated as public service institutions are exempt from the advance deposit requirements.

Advance payments may be made to foreign suppliers for all imports against delivery of shipping documents or against a letter of undertaking issued by a foreign bank. Special regulations govern imports by state agencies, public entities, and public utility companies. Except for goods in Lists P-6 and P-12, which may be shipped prior to approval, goods must be shipped within six months and arrive in Greece within nine months after the date of import approval. Final settlement of the value of imported goods must take place within 60 days following the date of arrival at the first Greek port; however, settlement must take place within 120 days following the date of arrival for goods in Lists P-6 and P-12.

Most imports are subject to a stamp tax of 2-5 per cent of the c.i.f. duty-paid and tax-paid value.

Payments for Invisibles

Payments for invisibles require approval, but this is granted freely for expenses incidental to authorized trade transactions and for certain other transactions. Transfers abroad on account of specified categories of insurance (shipping, aviation, merchandise transport, and fire) or reinsurance (accident and life) are authorized by the Bank of Greece up to specified percentages of the amounts owed.

Greek residents going abroad for family reasons, tourist travel, or business are entitled to the equivalent of US$200 for each trip and for three trips a year; instead of this allowance, tourists participating in group tours are granted an amount based on a cost declaration submitted by the travel agency. Exporters and manufacturers are allowed US$20 a day for a maximum of 45 days when they travel to the United States, Canada, or the Far East; for all other countries the allowance is US$15 a day for a maximum of 30 days. Requests for larger amounts or from other businessmen, commercial representatives, etc., are submitted to the Foreign Exchange Subcommittee.

Persons traveling abroad may take with them a maximum of Dr 750 in Greek banknotes. Greek nationals, not including those resident abroad, are required to declare all domestic and foreign banknotes and other valuables taken with them upon leaving Greece; no declaration is required from holders of foreign passports.

Exports and Export Proceeds

Exports to Rhodesia are prohibited. All exports require individual licenses, but most exports are free of quantitative limitation. Export proceeds must be surrendered within 150 days from the date of export of the goods; in special cases, however, the authorities are empowered to extend this period up to two years for manufactures and up to one year for other commodities. The Ministry of Commerce may license barter transactions involving the export of tobacco, certain types of fruit, or wines; such transactions are permitted with mainland China, Czechoslovakia, Eastern Germany, Hungary, Iran, Israel, Poland, and the U.S.S.R. In addition, any commodity may, subject to individual authorization, be exported on a barter basis to Albania, mainland China, the Republic of China, and Iran.

Proceeds from Invisibles

Exchange receipts representing payments for services must be surrendered. Exchange proceeds from shipping are exempt from the surrender requirement, but shipowners have to pay for supplies, repairs, etc., and any taxes and fees, and must cover their disbursements and expenses in Greece in local currency obtained through the sale of foreign exchange to the Bank of Greece.

Travelers may bring in a maximum of Dr 750 in Greek banknotes. Any surplus is deposited in a blocked account with the Bank of Greece; subject to prior approval by the Bank, the surplus may be taken out on departure or spent in Greece on personal financial requirements. Greek residents returning to Greece must declare the foreign exchange in their possession. Nonresident travelers of foreign nationality may import any amount of foreign currency and need not declare it at the time of entering the country, and nonresidents holding Greek passports are required to declare their foreign exchange only if they intend, when leaving Greece, to take out again foreign exchange in excess of US$500 or its equivalent.

Capital

Commercial banks and investment banks may freely borrow convertible currencies abroad, provided that they lend corresponding amounts as foreign currency loans for periods of at least five years to productive enterprises established in Greece. All other investments in Greece by nonresidents are subject to approval. Such approval is automatic for purchases of real estate for personal use. Under Legislative Decree No. 2687/53, approved foreign investments which aim at the promotion of national production or otherwise contribute to the economic advancement of Greece may be granted preferential treatment. Under Law No. 4171/61, as amended by Legislative Decree No. 4256/62, further privileges are provided for foreign capital participating in investment projects in Greece exceeding Dr 60 million in value. Moreover, Legislative Decree No. 4256/62 provides additional repatriation facilities for foreign investments which promote exports.

Repatriation facilities are as follows: (1) Approved investments according to the provisions of the legislation mentioned above may not be repatriated before one year from the date the enterprise begins to operate productively and in no case before one year from the date the capital was imported. (2) The repatriation of foreign capital may not exceed 10 per cent a year of the amount of capital imported. The repatriation of dividends on equity capital and of interest on loan capital may not exceed 12 per cent a year and 10 per cent a year, respectively. (3) Under the provisions of Law No. 4171/61, profits on approved foreign investments may be transferred abroad in amounts not exceeding 6 per cent a year of the repatriated portion of the capital, provided, however, that the amount of profits transferred shall not exceed 8 per cent of the foreign exchange earnings of the enterprise from the sale of its products abroad. (4) For investments made under Legislative Decree No. 2687/53 that are not covered by Law No. 4171/61, the transfer of profits is related to the residual capital remaining in Greece, and the transfer privilege expires as soon as all capital has been repatriated. (5) Under the provisions of Legislative Decree No. 4256/62, the repatriation of capital and profits of foreign investments approved under the provisions of Legislative Decree No. 2687/53 can exceed the rates specified in (2) above, up to 70 per cent of the foreign exchange earnings of the enterprise from the sale of its products abroad. Also, foreign loans approved under Legislative Decree No. 2687/53 can be repatriated at an annual rate of up to 20 per cent, provided that the amount of the loan does not exceed double the value of the share capital and that the amounts repatriated do not exceed 70 per cent of the foreign exchange earnings of the corporation.

Deviations from the general regulations may be approved for foreign capital imported to develop exports of agricultural and mining products or invested in enterprises of special importance to the economy. Specified foreign short-term investment may also be granted preferential treatment in respect of the repatriation of capital and the transfer of interest.

Transfers of capital abroad by residents require approval.

Gold

Residents may freely purchase specified gold coins (mainly sovereigns) from the Bank of Greece, through licensed stockbrokers, at prices set by the central bank; purchasers must sign a statement to the effect that the coins will only be resold to the Bank of Greece or to licensed stockbrokers. Holders of gold coins acquired in the free market that existed prior to December 22, 1965 may sell these anonymously and without formality only to the Bank of Greece or to an authorized bank and at the official price. Residents may deal freely, however, in bullion. Imports of gold against payment in foreign exchange are on Import List A and require a special license issued by the Ministry of Commerce; licenses are normally issued to reputable importers for distribution to recognized users, such as jewelers and dentists. Gold bars and gold coins may be imported freely by commercial banks and other residents when no payment in foreign exchange is involved.

Changes during 1969

January 25. Special controls were imposed on imports from France. These were lifted on February 10.

March 4. The requirement of a four-month retention period for advance import deposits on passenger automobiles, which had been established on July 4, 1968 for eight months, was extended until October 2, 1969.

March 6. The US$200 travel allowance (for tourist and business travel as well as travel for family reasons), which previously could be taken up for any number of trips a year, could henceforth be used only for three trips a year.

March 6. The amount of domestic banknotes that travelers could bring in or take out was raised from Dr 200 to Dr 750, irrespective of the denomination of the notes.

June 28. The range of the stamp tax levied on most imports was raised from 1-2 per cent to 2-5 per cent in order to bring it into line with the stamp tax levied on similar items produced locally.

June 30. The bilateral payments agreement with Israel was terminated.

July 24. Certain specified television parts were transferred to Import List A.

August 8. New regulations were introduced to encourage investment by nonresident Greek nationals. All interest and redemption proceeds on government bonds purchased after that date by such persons would be remittable, while interest and dividends on other securities eligible for special treatment and listed in Athens would be remittable up to Dr 150,000 a person a year. Purchases of property in Greece would qualify for a reduction in the rates of conveyance duties, and income from such property would be remittable up to Dr 60,000 a person a year; applications for additional amounts would be considered on their merits.

September 2. In order to reduce the Greek creditor position under the payments agreement with the United Arab Republic, the Currency Committee enabled the Bank of Greece to extend interest-free credit for purchases of raw cotton from that country.

September 27. Law No. 306 provided that construction firms could finance public works projects in Greece with funds obtained from banks or financial institutions abroad.

October 1. The range of persons and institutions living or operating abroad that were entitled to establish convertible foreign currency accounts with banks in Greece was widened. The permissible interest rates on the deposits were raised for sight deposits from 1¼ per cent to 3 per cent per annum; for time deposits from 6¼-7½ per cent to 6¾-7¾ per cent; and for ordinary savings deposits from 6 per cent to 6¼ per cent. Greek merchant seamen could, in addition to foreign exchange, deposit in foreign currency accounts their salaries and wages originating abroad and received in drachmas through the intermediary of shipping firms established in Greece. The accounts could be denominated in a currency different from the one deposited, and remittances abroad could be made in a currency different from that in which an account was kept.

October 2. The requirement of a four-month retention period for advance import deposits on passenger automobiles was extended until April 2, 1970.

December 16. The import of television frames was prohibited.

Guatemala

Exchange Rate System

The par value is 0.888671 gram of fine gold per Guatemalan Quetzal or Q 1.00 = US$1. The official rates are Q 1.00 buying, and Q 1.01 selling, per US$1. The Bank of Guatemala quotes exchange rates for certain other currencies1 on the basis of their rates in the New York market. On January 27, 1947, Guatemala notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange control is administered by the Bank of Guatemala (Exchange Department) under the direction of the Monetary Board. Foreign exchange transactions of the public sector are carried out exclusively through the Bank of Guatemala; those of the private sector are carried out through the medium of authorized banks for the account of the Monetary Stabilization Fund maintained by the Bank of Guatemala.

Prescription of Currency

All exchange transactions must be carried out through banks. Payments to Costa Rica, El Salvador, Honduras, and Nicaragua in respect of trade and invisibles are normally settled in Guatemalan quetzales through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries. The Exchange Department of the Bank of Guatemala, however, is empowered to authorize the sale of currencies of other Central American countries to make payments to the Central American area. There are no obligations prescribing the currency for payments to and from other countries.

Imports and Import Payments

Import licenses are not required except for imports of maps of Guatemala, explosives, poultry, wheat flour, and used trucks and trailers. Within 8 days after confirmation, importers must register with the Exchange Department any firm order to import merchandise. (Imports originating from Central American countries and included in the General Treaty for Central American Economic Integration are exempt from this requirement.) Importers must effect their registered imports during the 90-day validity of the registration.

All remittances abroad to pay for imports require exchange licenses, which are granted freely by the Exchange Department; the exchange is granted by the authorized banks upon submission of the registration form and the shipping documents. Checks denominated in quetzales are authorized freely for payment for specified imports from Central American countries. Payments for imports which have to be fully or partially prepaid must be made by letter of credit. When it is impossible to establish a letter of credit and the prepayment exceeds Q 1,000, a deposit equal to 25 per cent of the amount of foreign exchange requested must be made with the Bank of Guatemala or an authorized bank in cash or in government bonds by importers who are not established importers in the country or who are unable to provide sufficient proof of the nature of the transaction; the deposit is refunded when the goods arrive in Guatemala. Importers of merchandise for which payment must be made in cash or in installments, and importers of merchandise on consignment, must present the original shipping documents usually required by the Guatemalan customs for the clearance of goods.

Authorizations to withdraw imports from customs must be obtained from the Exchange Department or an authorized bank, except for imports whose value does not exceed Q 50, household goods, samples, printed advertising material, and those imports originating in Central American countries and included in the General Treaty for Central American Economic Integration. The Exchange Department and the authorized banks issue such authorizations without delay. The customs officials may refuse clearance of goods if discrepancies are found between the information contained in the authorization issued by the Exchange Department and in the import documents. For the specified imports from Central American countries, the importer must complete, at either the Exchange Department or the customs office, a special form required by the Exchange Department, giving a description of the merchandise to be imported and the date on which he made the advance payment or the date on which he undertook to pay in the future. If these forms are completed at the customs office, they must be forwarded daily to the Exchange Department.

A surcharge of 100 per cent of the customs duty may be applied to products originating in or imported from countries with which Guatemala has an unfavorable trade balance. On December 31, 1969, this surcharge applied to certain imports from 28 countries.2 This surcharge is waived if the goods are transported in Guatemalan ships. Moreover, all imports from other areas which are included in the agreed uniform tariff list of the countries participating in the General Treaty for Central American Economic Integration are exempt from the surcharge.

Imports originating outside the Central American Common Market are subject to an import surcharge of 30 per cent of the applicable import duty.

Payments for Invisibles

All transfers abroad on account of current invisibles require authorization by the Exchange Department, mainly for the purposes of checking capital transactions. Payments of up to Q 1,000 to El Salvador or up to Q 200 to Costa Rica, Honduras, and Nicaragua do not require authorization by the Exchange Department.

Requests for foreign exchange for payments for current invisibles must be supported by such documents as may be required by the Exchange Department to verify that the operation is genuine. The sale of foreign exchange for most categories of current invisibles, including remittances of income from and repayments of registered foreign loans and investments, is authorized freely. For certain payments for current invisibles, exchange is sold up to established limits; in some cases, requests in excess of these limits are approved. There is an exchange allowance equivalent to a maximum of Q 2,500 a person in any one year for tourist travel abroad. Minors not traveling alone are entitled to half the adult allowance. The exchange allocation for travelers on business is Q 750 a person for journeys to British Honduras and the Mexican border towns, and Q 2,500 for journeys to other parts of the world. Subject to the Q 2,500 annual limit, exchange is granted up to the equivalent of Q 50 for each day of planned tourist travel abroad; exchange in excess of this daily maximum is granted when an additional allotment is considered justified. To ensure that both limits are observed for tourist travel, the traveler, when purchasing travel exchange, must lodge with the Bank of Guatemala a guarantee deposit in quetzales equivalent to the foreign exchange purchased; the deposit is refunded upon return to Guatemala, provided that the traveler either submits proof of having stayed abroad for at least the number of days for which he purchased the exchange or returns foreign exchange corresponding to the number of days of the shortfall. All international air passages (with the exception of those for travel within Central America) are subject to a tax of 10 per cent.3

The exchange allocation for remittances abroad for family maintenance is Q 250 a month for each relative (Q 200 for those under 18 years of age), up to a maximum of Q 700 a month for each beneficiary family. Foreign technical personnel employed in Guatemala may remit abroad up to two thirds of their salaries if their families reside abroad, or up to one third if their families reside in Guatemala. Foreign technicians leaving the country permanently may, subject to individual approval, transfer their savings up to the full amount of their earnings in Guatemala. Limits are also imposed on remittances for students’ expenses abroad.

The export of Guatemalan banknotes and coins is not prohibited; however, Guatemalan banknotes and coins received from abroad are not converted by the Bank of Guatemala unless they come from Costa Rica, El Salvador, Honduras, or Nicaragua. For these countries, the Bank of Guatemala guarantees monthly conversions into U.S. dollars up to the following limits: Costa Rica, Q 125,000; El Salvador, Q 400,000; Honduras, Q 300,000; and Nicaragua, Q 125,000. There are no regulations prohibiting the export of foreign banknotes.

Exports and Export Proceeds

All exports require an export license from the Exchange Department of the Bank of Guatemala. Exports to Central American countries of goods included in the General Treaty for Central American Economic Integration are exempt from this requirement; for these goods, the exporter must complete a special form required by the Exchange Department presenting evidence that the export proceeds have been sold to an authorized bank. The application for an export license must be accompanied by a full description of the nature of the transaction, including the terms and method of payment. The Exchange Department issues licenses only if certain conditions have been met: (1) for exports paid for in advance or in cash, it requires evidence that the export proceeds have been sold to an authorized bank; (2) for exports on credit, it requires an undertaking to sell the relevant exchange to an authorized bank within 90 days of the date the license is issued; and (3) for exports on consignment, it requires the exporter’s certified declaration showing the estimated value of the export and his undertaking to sell the relevant exchange to an authorized bank within a period not exceeding 180 days after the issuance of the license. Export industries financed with foreign loans, however, are permitted to retain a portion of export proceeds abroad to cover amortization of the loans. Exports of meat to the United States are subject to voluntary restraint.

Proceeds from Invisibles

Foreign exchange proceeds from invisibles must be declared and surrendered. The import of Guatemalan and foreign banknotes is not restricted. The purchase of Salvadoran banknotes by authorized banks is limited to Ȼ 500 a person.

Capital

All foreign capital investments in Guatemala must be declared and registered with the Exchange Department of the Bank of Guatemala. All investment by foreign, domestic, or foreign-controlled companies in the construction of private housing in Guatemala requires the prior approval of the Ministry of Economy; such investment may be limited to a specified over-all amount a year, it must meet certain minimum quality and financing standards, and the sales value of a housing unit must not exceed Q 6,000. All outgoing capital payments require exchange licenses, which, like those for the transfer of profits and dividends, are granted freely for remittances of registered foreign investments and amortization of foreign loans. Transfers abroad of resident-owned capital are not permitted, with the exception of transfers for the purpose of investing in, or financing of, commercial, agricultural, or industrial firms in Costa Rica, El Salvador, Honduras, and Nicaragua.

Gold

Residents may freely hold gold in any form in Guatemala. Residents other than banks may sell gold coins and gold bars only to the Bank of Guatemala or to banks licensed for this purpose by the Monetary Board. The Bank of Guatemala is obliged to purchase all gold offered to it. The Bank also sells domestic and imported gold to domestic artistic and industrial users, in accordance with directives of the Monetary Board. Gold is imported only by the Bank of Guatemala.

Changes during 1969

March 18. Decree No. 305 of June 6, 1955, which prohibited trade with communist countries, was revoked.

September 23. Meat exports were restricted by quotas.

October 25. Imports of used trucks and trailers required an import license.

Guinea

Exchange Rate System

No par value for the currency of the Republic of Guinea has been established with the Fund. The unit of currency (introduced on March 1, 1960) is the Guinean Franc, defined as a monetary unit containing 0.0036 gram of fine gold. It corresponds to GF 44.44 = 1 French franc and GF 246.853 = US$1. The official buying and selling rates are GF 246 and GF 272 per US$1, respectively. These rates apply to all transactions and include a bank commission. Clearing account transactions under bilateral payments agreements are carried out on the basis of GF 246.853 per US$1.

Administration of Control

The Central Bank of the Republic of Guinea is the only authority in exchange control matters; this authority is carried out through the Exchange Control Office of the Bank. The Bank has not delegated any of its exchange control powers to any other bank or institution. The Minister of Financial Affairs is charged with supervision over the Central Bank. All settlements with foreign countries, including payments for imports, require approval by the Exchange Control Office.

Import and export licenses are issued, within the framework of an annual program, by the Ministry of Commerce (State Secretariat of Foreign Trade) after applications have been screened by the National Distribution Commission in the Exchange Office.

Prescription of Currency

Settlements on account of transactions covered by bilateral payments agreements are made in currencies prescribed by, and through accounts established under, the provisions of the agreements.1 Settlements with other countries are made in designated convertible currencies.2

Nonresident Accounts

There are two types of nonresident accounts: Nonresident Transferable Accounts in Foreign Currencies and Nonresident Accounts in Guinean Francs. The opening of a nonresident account is subject to the prior approval of the Exchange Control Office.

Imports and Import Payments

There is no list of prohibited imports, but certain imports are not being licensed. All imports, other than those under the Seven-Year Plan, require individual licenses, which are issued by the Ministry of Commerce, after applications have been screened and approved by the National Distribution Commission. Once an import license has been issued, authorization for the corresponding payment is granted by the Exchange Control Office. Imports by foreign concession holders require import licenses for statistical purposes only and are not restricted.

Most imports into Guinea are made within the framework of an annual import program. This program is prepared by the Ministry of Commerce on the basis of the country’s import needs, the domestic production possibilities of import substitutes, and experience with the previous year’s import program. The program requires the approval of the National Distribution Commission, which takes into consideration the sources of imports and the availability of convertible currencies and of balances under payments agreements.

Certain items are imported outside the import program. These are goods for which foreign exchange is derived from sources other than the exchange reserves of Guinea—e.g., imports made by foreign concession holders (the Fria Company and the Sifra Company) and by foreign embassies—and goods for the Seven-Year Plan. All commercial imports other than those by the Fria Company and the Sifra Company are made by state enterprises that specialize in various types of commerce.

All commodities are subject to import surcharges, except when imported by the Fria Company.

Payments for Invisibles

All payments for invisibles require the authorization of the Exchange Control Office, irrespective of the country to which the payment is to be made.

Payments for freight and insurance in connection with imports are authorized as part of the import license. No exchange is granted for other types of insurance with companies abroad. There is no basic allocation for tourist travel; each application is considered individually. There is a basic allocation for business travel expenses (other than transportation) of GF 15,000 a trip. Government officials on official missions are permitted an allowance of GF 2,000 a day if they travel in Africa and GF 2,500 a day if they travel outside Africa. Pilgrims are granted exchange up to the equivalent of GF 60,000 for each pilgrimage and, in addition, up to GF 190,000 to pay for fares connected with the pilgrimage. In cases of serious illness, provided that a doctor’s certificate is submitted, Guinean nationals are granted foreign exchange for medical care abroad or are permitted to transfer exchange for the care of relatives receiving medical treatment abroad. Individual authorization is required for the payment in Guinea of all fares for foreign travel.

Payments for family support may be made up to GF 10,000 a month for each beneficiary, whether child or adult. For officially recognized study abroad, the student’s relatives may transfer the equivalent of the amount of a government scholarship, i.e., GF 22,500 a month. Students starting their studies abroad are granted an additional foreign exchange allowance of up to GF 40,000. The Foreign Investment Law guarantees that at least 20 per cent of the net annual profits of approved foreign investments may be transferred abroad; the percentage actually permitted to be transferred abroad depends on the agreement concluded between the enterprise concerned and the Government. In addition to transfers under other regulations, foreign planters are permitted to transfer abroad GF 4 per kilogram of pineapples exported, GF 3 per kilogram of bananas exported, and GF 2 per kilogram of citrus fruit exported. Expatriate workers employed by the public sector in Guinea may transfer abroad 30 per cent of their net monthly salaries if they are married and 20 per cent if they are single. In practice, however, many expatriate workers employed by the public sector are permitted to transfer up to 40 per cent of their net monthly salaries. Expatriate workers employed by the private sector may transfer abroad 25 per cent of their net monthly salaries if married and 15 per cent if single; in practice, the transfer of 30 per cent is often permitted. The export of Guinean currency is prohibited.

Exports and Export Proceeds

The Ministry of Commerce establishes an annual export program, which requires the approval of the National Distribution Commission.

All exports require individual licenses in order (1) to assure the implementation of the export program (particularly in respect of commitments under bilateral trade agreements); (2) to permit the Treasury to levy certain duties (e.g., mining companies must pay export taxes of 6 per cent on the value of ores exported); (3) to prevent shortages of goods needed for domestic consumption; and (4) to prevent the export of capital. Special authorization from designated agencies is required in addition to the export license for the following commodities: wild animals (dead or alive), edible animals, articles of historical or ethnographical interest, jewelry, articles made of precious metals, and plants and seeds. An export license is granted only when the exporter assumes the obligation to surrender the proceeds immediately after they are collected.

Exports other than those effected by the Fria Company are made by a state institution, Guinexport. Foreign planters are granted special transfer privileges related to the quantity of pineapples, bananas, or citrus fruits exported (see section on Payments for Invisibles, above).

All export proceeds must be surrendered; however, the Fria Company and the Sifra Company are allowed to retain 66⅔ per cent and 25 per cent, respectively, of their export earnings.

Proceeds from Invisibles

Exchange proceeds accruing to residents in respect of invisibles must be surrendered. The import of foreign banknotes and travelers checks is permitted freely, subject to declaration on entry, but both must be surrendered within 24 hours after entry. Nonresident travelers may repurchase and re-export the foreign exchange declared upon entry, after deduction of their local expenditures; this deduction cannot be less than the equivalent of US$20 for each day of their stay, unless evidence can be produced to show that actual expenditure was less. The import of Guinean currency is prohibited.

Capital

All capital transfers require authorization. Outward capital transfers by Guinean nationals are prohibited.

The Foreign Investment Law (Law No. 50/AN/62) of April 5, 1962, which replaced a more restrictive one of May 1960, provides guarantees against nationalization for foreign investments in the industrial and mining sectors; it also provides for preferential tax and customs treatment applicable to foreign investments and for the transfer of profits, interest, amortization, and proceeds accruing from the liquidation of such investments. Small and medium-sized enterprises in which at least GF 150 million is invested over a 3-year period may receive exemptions for a period of 7 to 10 years; exemptions for up to 25 years may be granted on long-term investments of particular importance to the Guinean economy. The actual conditions under which foreign investments may be made are subject to negotiations within the terms of this law.

Gold

Guinea has issued four commemorative gold coins which are legal tender. Furthermore, residents may hold and acquire gold coins in Guinea for numismatic purposes. With these exceptions, residents other than the monetary authorities and authorized industrial users are not allowed to hold or acquire gold in any form other than jewelry, at home or abroad. Imports and exports of gold in any form other than jewelry require licenses issued by the Central Bank; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users.

Changes during 1969

July. Commemorative gold coins of GF 1,000, GF 2,000, GF 5,000, and GF 10,000 were issued. The coins were legal tender.

August 12. Decree No. 361/PRG introduced an import surcharge of 100 per cent of the applicable customs duty; on imports of certain capital goods and raw materials for the Department of the Plan the surcharge was 50 per cent of the import duty. Imports by the Fria Company were exempt.

September. Private imports of automobiles became subject to duties of up to 150 per cent ad valorem.

December 29. Decree No. 610/69/PRG established supplementary fiscal charges on specified imports. These included certain flour-milling products, certain alcoholic beverages, caustic soda, and caustic potash.

Guyana

Exchange Rate System

The par value is 0.444335 gram of fine gold per Guyana Dollar or G$2 = US$1. The Guyana dollar has a fixed relationship to sterling of G$4.80 = £1 and is freely convertible into sterling at this rate, subject to banking commissions; in its dealings with commercial banks, the Bank of Guyana charges a commission of 116 of 1 per cent on inward transfers and 716 of 1 per cent on outward transfers (⅛ of 1 per cent, buying and selling, for Jamaica dollars and Trinidad and Tobago dollars). The banks in Guyana base the rates for currencies other than sterling, Trinidad and Tobago dollars, and Jamaica dollars on the current London market rates. The central bank normally deals only in Canadian dollars, Jamaica dollars, pounds sterling, Trinidad and Tobago dollars, and U.S. dollars.

Guyana accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement as from December 27, 1966.

Administration of Control

Exchange control authority is vested in the Governor-General and the Minister of Finance, who have entrusted its administration to the Bank of Guyana. Authority for approving normal import payments and providing allocations of foreign exchange for other current payments is delegated to the banks authorized for this purpose; certain payments in respect of current invisibles of a personal nature, however, require the approval of the Bank of Guyana. Import and export licensing is the responsibility of the Ministry of Trade.

Prescription of Currency

Guyana is a member of the Sterling Area and maintains prescription of currency requirements broadly similar to those of the United Kingdom.1 Authorized settlements with residents of other parts of the Sterling Area may be made in any Sterling Area currency. Authorized payments, including payments for imports, by residents of Guyana to residents of countries outside the Sterling Area other than Rhodesia may be made in any non-Sterling Area currency, in sterling to the credit of an External Account in any other part of the Sterling Area, or in Guyana dollars to the credit of an External Account in Guyana. Receipts from countries outside the Sterling Area other than Rhodesia may be obtained in any non-Sterling Area currency (in any specified currency2 for export proceeds) or in sterling or Guyana dollars from an External Account.

Nonresident Accounts

Residents of other parts of the Sterling Area may maintain accounts in Guyana dollars in Guyana. These are treated in the same way as the Guyana dollar accounts of residents of Guyana; thus, no exchange control permission is required for transfers within the Sterling Area. There are two categories of accounts for persons who are not residents of Guyana or other parts of the Sterling Area: External Accounts and Blocked Accounts.

External Accounts may be opened, with exchange control approval, for nonresidents of the Sterling Area. They may be credited with all authorized payments by residents of Guyana to nonresidents of the Sterling Area and with transfers from other External Accounts; other credits require approval. They may be debited for payments for any purpose to residents of the Sterling Area, for transfers to other External Accounts, and for withdrawals by the account holder while he is in Guyana; other debits require approval.

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

Imports and Import Payments

All imports from Rhodesia and South Africa are prohibited. Imports of a few commodities are prohibited; for some goods, the prohibition is not applicable when they originate in other countries of the Caribbean Free Trade Association. Imports subject to individual licensing are specified in a “negative list”; they include coffee, sugar, certain vegetables, cereals, meat, poultry, dairy products, fats, copra, vegetable and animal oils, petroleum products and other fuels, building materials, certain chemicals, detergents, gold, diamonds and jewelry, firearms, grain-milling machinery, radios, and appliances. The granting of individual licenses and the conditions attached thereto depend on current policy; some goods are subject to quota while the others are licensed freely. Other goods may be imported under an open general license applicable to all countries of origin except Albania, Bulgaria, mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Poland, Rumania, and the U.S.S.R.; import quotas for commodities originating in these countries are based on the value of imports from them in 1964. For certain garments, the open general license is not applicable to Japan.

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

Imports of all commodities not exempt from import duty are subject to a defense levy of 3 per cent ad valorem.

Payments for Invisibles

Payments for invisibles to other countries of the Sterling Area are permitted freely without limit. All payments for invisibles to countries outside the Sterling Area require approval, which is given freely, provided that no illegal capital transfer seems to be involved. Standard allocations are applied to certain payments of a personal nature on an annual basis, e.g., for travel abroad (G$666)3, for education at schools abroad (G$3,360 for each child), for education at universities and comparable institutions (G$4,800 for each student), and for family maintenance (G$4,800).

Travelers going abroad may take with them Guyana currency notes not exceeding G$100; these notes do not form part of any allotment of exchange for travel. In addition, Sterling Area or non-Sterling Area currency notes to the value of G$50 may be taken out as part of any travel exchange allowance.

Exports and Export Proceeds

All exports to Rhodesia and South Africa are prohibited. Exports of rice to non-Caribbean countries may only be made by the Guyana Rice Corporation. Most exports are free of export license, but are supervised by the authorized banks and the Customs and Excise Department to ensure that the exchange proceeds are repatriated and, if obtained in specified currencies (see footnote 2), surrendered. Exchange control forms have to be completed only for exports exceeding G$2,000 in value.

Proceeds from Invisibles

Specified currencies received on account of invisibles must be sold to an authorized bank, but other currencies may be retained by the recipient. Travelers may bring in any currency notes freely.

Capital

Residents of the Sterling Area may freely invest in Guyana and repatriate their capital at any time in a Sterling Area currency. Nonresidents of the Sterling Area must obtain “approved status” for new investments at the time of investment in order to be able to repatriate capital. Such approval is normally given for direct investments in new projects that would benefit the balance of payments or the economy of Guyana; it carries with it an assurance that profits may be remitted and that upon liquidation of the investment the proceeds, including any capital increments, may be repatriated in full in non-Sterling Area currency.

The export of capital to non-Sterling Area countries by residents is not normally permitted. Specified currencies obtained by residents through capital transactions must be surrendered to an authorized bank, but other currencies may be retained by the recipient.

Gold

Residents may hold and acquire gold coins in Guyana for numismatic purposes. Residents other than the monetary authorities, authorized dealers, producers of gold, and authorized industrial users are not allowed without special permission to hold or acquire gold in any form other than jewelry or coins for numismatic purposes, at home or abroad. Neither the Bank of Guyana nor any other official institution purchases gold to supply domestic industry. Imports and exports of gold in any form require licenses issued by the Ministry of Trade; such licenses are not granted except for imports and exports by or on behalf of the monetary authorities, authorized dealers, producers of gold, and industrial users.

Changes during 1969

January 1. All imports other than those currently exempt from customs duty were made subject to a 3 per cent defense levy.

February 28. Import duties on many consumer durable goods, certain textiles, jewelry and gems, and certain foodstuffs were increased.

March 5. The Central Bank revised its charges for inward and outward transfers from 316 of 1 per cent for both buying and selling to 116 1 per cent buying and 716 of 1 per cent selling.

April 22. Table and household plastic articles were made subject to specific import licensing.

July 8. Radio apparatus for television and other purposes was made subject to specific import licensing.

July 22. Imports of detergents from Carifta countries required a specific license and those from other countries were put on the prohibited list.

November 1. The Guyana Rice Corporation was established. It took over from the Rice Marketing Board the sale of rice outside the Caribbean markets.

December 1. An intraregional settlements agreement between the central banks of Guyana, Jamaica, and Trinidad and Tobago came into effect.

December 1. The Central Bank commenced purchasing and selling Trinidad and Tobago dollars and Jamaica dollars.

Haiti

Exchange Rate System

The par value is 0.177734 gram of fine gold per Haitian Gourde or G 5.00 = US$1. This rate is applicable to all transactions. In addition to the gourde, the U.S. dollar is legal tender. Exchange transactions by commercial banks with the public are subject to small banking commissions; those by the National Bank with the commercial banks and specified customers are free from such commissions but are subject to a stamp tax of 210 of 1 per cent. Certain payments arrears have arisen; in principle, there are no other controls or restrictions on foreign transactions. On December 22, 1953, Haiti notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from nonresidents are imposed.

Imports and Import Payments

Although the law provides for the imposition of quantitative restrictions on imports, import licenses are not required. Imports from member countries of the Council for Mutual Economic Assistance and Japan, however, require prior authorization by the Ministry of Commerce and Industry. Imports of certain types of footwear and of a few other items are controlled for other than balance of payments reasons; the prior approval of the Ministry of Finance and Economic Affairs is required to withdraw these commodities from customs. In principle, payments abroad may be made freely, but certain payments are in arrears. Importers opening letters of credit at the National Bank are usually required to make cash deposits of up to 100 per cent of the amount of the letter of credit. Certain imports are subject, in addition to the applicable import duty, to surcharges of 4, 5, or 6 per cent of the c.i.f. value; goods subject to the 4 per cent or 6 per cent tax are also subject to an additional tax of 2 per cent.

Exports and Export Proceeds

All exports except coffee require prior authorization from the Ministry of Commerce and Industry. Coffee exports are shipped through the Federation of Haitian Coffee Exporters. Export authorization is usually granted freely but may be withheld when domestic supplies are low. In order to ensure the quality of exports of essential oils, these are restricted to 450 barrels a year. Gold coins, bullion, etc., may be exported only by the National Bank of the Republic of Haiti. The proceeds of exports are not subject to exchange control.

Payments for and Proceeds from Invisibles

In principle, payments for invisibles are not restricted, but certain arrears exist at present. 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

In principle, incoming and outgoing capital payments by residents or nonresidents are not subject to exchange control, but certain arrears have arisen in recent years. Foreign investments in Haiti are regulated by a law of 1949 and a decree of March 13, 1963 and require the approval of the Ministry of Commerce and Industry. Permission is not usually granted to nonresidents for investments in handicraft industries. 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 a minimum of 80 per cent of deposits collected from residents of Haiti.

Gold

Residents may hold and acquire gold coins in Haiti for numismatic purposes. With this exception, residents other than the monetary authorities and authorized industrial users are not allowed to hold or acquire gold in any form other than jewelry, at home or abroad. By virtue of a law of August 31, 1942, the National Bank has the exclusive right to purchase domestically and export gold in the form of coin, mineral, dust, or bars. Imports and exports of gold in any form other than jewelry carried as personal effects by travelers may be made only by the National Bank; exports require in addition prior authorization by the Ministry of Finance, while imports for industrial use require prior authorization by the Ministry of Commerce and Industry and the Ministry of Finance as well as an endorsement by the Ministry of Commerce and Industry before customs clearance. Commercial imports, however, of articles containing a limited amount of gold, such as gold watches, are freely permitted and do not require an import license or other authorization. A limited number of gold coins were issued in 1967 and sold mostly to nonresidents; these coins are legal tender.

Changes during 1969

May 12. The tax on coffee for export was reduced by US$3 a bag until August 12. (On February 2, 1970, the tax was increased by US$1.20 a bag.)

Honduras

Exchange Rate System

The par value is 0.444335 gram of fine gold per Honduran Lempira, or L 2.00 = US$1. The official rates are L 2.00 buying, and L 2.02 selling, per US$1. Banknotes and coins in Costa Rican colones, Guatemalan quetzales, Nicaraguan córdobas, and Salvadoran colones are purchased at parity rates minus an official exchange commission of 1 per cent and sold at parity rates. Honduras has no exchange restrictions on foreign payments. Exchange may be purchased from local banks without restrictions; 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 on July 1, 1950.

Prescription of Currency

No obligations prescribing the method of currency for payments to or from nonresidents are imposed. Payments to Costa Rica, El Salvador, Guatemala, and Nicaragua in respect of trade and invisibles may be settled in Honduran lempiras through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries. Payments to Mexico may also be settled in Honduran lempiras through the clearinghouse.

Imports and Import Payments

Import licenses are required for a few items. Payments and transfers abroad may be made freely; however, for statistical purposes, buyers of exchange are required to file an application stating how the exchange will be used. Imports originating outside the Central American Common Market are subject to a surcharge of 30 per cent of the applicable import duty.

Exports and Export Proceeds

Exports other than gold do not require licenses. The proceeds of exports are not subject to exchange control, and the foreign exchange may be retained or used for international transactions. Those wishing to negotiate their exchange in Honduras may do so only with the Central Bank or through the banking system for account of the Central Bank.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

Capital payments are not subject to exchange control. Foreign mutual funds and similar financial institutions require permission to collect funds in Honduras for deposit or investment abroad. The commercial banks and other credit institutions require the approval of the Central Bank to contract any foreign indebtedness.

Gold

Residents may hold and acquire gold coins in Honduras for numismatic purposes. With this exception, residents other than the monetary authorities and authorized industrial users are not allowed to hold or acquire gold in any form other than jewelry, at home or abroad. Imports and exports of gold in any form other than jewelry require licenses issued by the Central Bank; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities, industrial users, and producers of gold. All locally produced gold is exported in the form of ore for refining. Commercial imports and exports of jewelry and other articles containing gold require licenses issued by the Ministry of Economy; for most articles, these are granted freely.

Changes during 1969

March 21. An import surcharge of 30 per cent of the applicable customs duty was imposed on imports originating outside the Central American Common Market.

April 1. Presidential Decree No. 2 went into force. Foreign investment funds, mutual funds, and real estate funds were prohibited, unless special permission was obtained from the Minister of Economy and Finance, from selling or advertising shares or certificates in Honduras and from collecting funds for deposit.

Hong Kong

Exchange Rate System

The par value is 0.146631 gram of fine gold per Hong Kong Dollar or HK$6.06061 = US$1. The exchange rate system comprises official rates and free market rates; as far as rates for the U.S. dollar are concerned, these are, in practice, within 1 per cent of the par value. On December 31, 1969, rates in the official market were HK$14.530 buying, and HK$14.614 selling, per £ stg. 1, or HK$6.026 buying, and HK$6.096 selling, per US$1; rates in the free market on that date were HK$6.0738 buying, and HK$6.075 selling, per US$1. The official market rates are those of authorized banks, based on the sterling-Hong Kong dollar rate (agreed informally by the three note-issuing banks with the Hong Kong Exchange Fund) and the sterling-foreign currency rates in the London foreign exchange market.

The official rates apply to all transactions in Hong Kong dollars against sterling, to the proceeds in U.S. dollars of exports not of local or neighboring origin, and to most authorized nondollar transactions. The free market rates apply to other transactions.

Administration of Control

Exchange control authority is vested in the Financial Secretary of the Colony. Some 50 banks are authorized to conduct exchange transactions within the framework of the local regulations and subject to specific or general approval of the local control. These authorized banks are permitted to conclude exchange transactions only at the official market rates. The free market is operated by other banks and financial institutions. Import and export licensing is carried out by the Director of Commerce and Industry.

Prescription of Currency

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

Settlements for exports to and imports from other parts of the Sterling Area may be made in any Sterling Area currency. Licenses are required, however, for all payments made from Hong Kong to, or received in Hong Kong from, residents of other parts of the Sterling Area, except that authorized banks may freely make or receive such payments in respect of the following: (1) bona fide trade between Hong Kong and other Sterling Area territories; (2) payments between authorized banks or their branches in the Sterling Area for the purpose of transferring banking funds to an authorized bank or for the settlement of the exchange transactions of an authorized bank; (3) bulk payments in favor of banks or recognized dealers in Hong Kong when the payments are for bona fide family remittances and no individual payment exceeds HK$8,000; and (4) other payments not exceeding £500 or the equivalent in other Sterling Area currencies.

Payment in Hong Kong dollars for exports to mainland China, the Republic of China, and Macao is permitted; imports from these territories may be paid for in Hong Kong dollars (but not to the credit of an External Account; see section on Nonresident Accounts, below) without exchange control approval. The proceeds of exports to all other countries outside the Sterling Area must be received in Hong Kong dollars from an External Account, in sterling from an External Account held with an authorized bank in the Sterling Area, in a foreign currency emanating from outside Hong Kong and freely exchangeable for sterling or Hong Kong dollars (the foreign currency must be surrendered to an authorized bank), or by international money order issued outside the Sterling Area. However, U.S. dollar proceeds of exports to the dollar area or to the Republic of Korea of goods originating in mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao may be sold in the free market to the extent of the f.o.b. value of the goods; proceeds from freight and insurance payments have to be surrendered to an authorized bank. Payment for imports from countries outside the Sterling Area (except mainland China, the Republic of China, and Macao, as noted above) may be made by crediting sterling or Hong Kong dollars to an External Account or in any foreign currency.

For merchanting transactions by Hong Kong firms in goods bought from and sold to countries outside the Sterling Area, outgoing payments may be made in a Sterling Area currency to the credit of an External Account or in any foreign currency, provided that the incoming payment is received in a Sterling Area currency from an External Account or in a foreign currency from outside Hong Kong that is freely exchangeable for sterling or Hong Kong dollars. Subject to certain requirements, including the submission of evidence that the local regulations of the country of destination have been complied with, authorized banks may, on application by merchants in Hong Kong undertaking a transaction in goods for their own account, make payment to nonresidents of the Sterling Area for direct imports into other territories of the Sterling Area of goods originating outside the Sterling Area. Such payments may be made in sterling or Hong Kong dollars to an External Account or in any non-Sterling Area currency, provided that such currency has not been acquired in the Hong Kong free market.

Nonresident Accounts

The treatment of nonresident accounts distinguishes between those of residents of other parts of the Sterling Area (their accounts being treated in the same manner as accounts of residents of Hong Kong), those of recognized banks situated outside the Sterling Area (External Accounts), and those of other nonresidents outside the Sterling Area.

The accounts of companies and individuals resident outside the Sterling Area are treated in the same way as the accounts of residents, except that, without exchange control permission, they may not be overdrawn or be debited for any payment outside Hong Kong.1

The accounts of recognized banks situated outside the Sterling Area are termed External Accounts. These may be credited with permitted payments from residents of the Sterling Area, with transfers from other External Accounts, and with the proceeds from sales of foreign currencies to authorized banks. They may be debited freely, but they may not normally be overdrawn, and an order for the purchase of foreign currency may be executed only by an authorized bank.

Imports and Import Payments

Except for gold and certain dutiable or dangerous commodities, imports are free of license. If the prescription of currency requirements are fulfilled, and if related shipping documents are presented when the value of the consignment exceeds £250, the authorized banks may freely make payments to residents of countries in the Sterling Area for imports from the Sterling Area, and to residents of other countries for individual shipments not exceeding £ 10,000 in value from those countries.2 To make payment or establish letters of credit through an authorized bank for imports from the dollar area for local consumption or for re-export to mainland China, the Republic of China, or Macao, the importer must surrender to an authorized bank U.S. dollars or Canadian dollars in amounts equivalent to the value of the imports; these currencies may be purchased in the free market. Imports from mainland China, the Republic of China, or Macao are normally paid for in Hong Kong dollars (but not to the credit of an External Account), and exchange control approval is not required.

An exchange control form must be submitted for prior approval for payments for imports not covered by the regulations described above. These include (1) imports for which documents are not presented, payment is required in advance of shipment,3 and payment is not in accordance with the usual prescription of currency requirements; (2) goods imported specifically for re-export, and (3) all imports of diamonds, ships, and boats.

Payments for Invisibles

Payments made through authorized banks and not exceeding £500, or the equivalent in other Sterling Area currencies, to other parts of the Sterling Area do not require approval; for larger amounts, exchange control permission is necessary. The authorized banks have power to approve payments to nonresidents for most invisibles up to certain limits (no exchange control form is required when the payment does not exceed £100 or the equivalent). Payments for invisibles above these limits need the approval of the exchange control authorities, which is normally granted. The basic allowance of exchange at the official rate for residents (for exchange control purposes) of Hong Kong traveling to countries outside the Sterling Area or beyond Macao is £250 or the equivalent for each individual journey. Applications for exchange in excess of this allowance to cover genuine travel expenses may be made to the exchange control authorities. In any event, payments may be made freely through the free market by holders of Hong Kong dollars.

Exports and Export Proceeds

Exports to any destination of gold and certain strategic goods are subject to restrictive licensing; there are also a number of bilateral agreements with specified countries under which the export of certain textiles is restricted. For exports to countries outside the Sterling Area, mainland China, the Republic of China, and Macao, the exporter must submit to the Department of Commerce and Industry, for approval, a declaration showing how the export proceeds will be collected. If payment is not being received within six months and in accordance with prescription of currency requirements, the circumstances must be reported to the exchange control authorities. The U.S. dollar proceeds of exports to the dollar area or to the Republic of Korea of goods originating in mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao are freely disposable to the extent of the f.o.b. value of the goods; proceeds from freight and insurance payments have to be surrendered to an authorized bank. The proceeds of exports must be obtained in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

Receipts exceeding £ 500, or the equivalent in other Sterling Area currencies, from other parts of the Sterling Area require permission. When freight and insurance on exports that have originated in mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao, and that have been financed with U.S. dollars, are paid in Hong Kong by the exporter in sterling or in Hong Kong dollars, the exporter must surrender the U.S. dollar proceeds of that freight and insurance at the official market rate. Other exchange receipts from invisibles need not be surrendered.

Capital

Licenses are required for transfers abroad of capital in currencies other than the U.S. dollar; these are granted at the official market rate only for approved purposes or, if the equivalent in U.S. dollars has been sold to an authorized exchange bank, at the discretion of the local control. Exchange for the repatriation of foreign capital is normally provided at the official market rate if prior exchange control approval for the investment has been given. Transfers of capital may be made freely in Hong Kong dollars through the free market. However, licenses are required for all receipts from, as well as transfers to, other parts of the Sterling Area which exceed £500 or the equivalent in other Sterling Area currencies; these licenses are granted for all bona fide transactions between Hong Kong and other parts of the Sterling Area.

Gold

There is a free market for gold in which nonresidents who are not resident in Sterling Area countries may freely deal among themselves in bars and coins; settlements must take place in Hong Kong dollars or U.S. dollars through the free exchange market. Imports and exports of gold in any form other than jewelry, unless made by or on behalf of the monetary authorities, require licenses issued by the Financial Secretary. Imports and exports of gold jewelry not constituting the personal effects of a traveler require licenses issued by the Director of Commerce and Industry. Unless an import license has been granted, residents other than the monetary authorities are not permitted to purchase gold outside Hong Kong; export licenses are granted only for gold, other than jewelry, in transit. Residents may hold gold in any form in Hong Kong but not outside.

Changes during 1969

January 2. The exchange banks started quoting rates for sterling in decimals rather than in fractions.

March 11. Exchange quotations in decimals were extended to all foreign currencies.

May 20. The exchange banks suspended all forward buying of sterling and other foreign exchange. The suspension was lifted in July.

December 28. It was announced that with effect from January 15, 1970 the Hong Kong gold market would shift its quotations from a fineness of 94.5 per cent to one of 99 per cent.

Iceland

Exchange Rate System

The par value is 0.0100985 gram of fine gold per Icelandic Króna or IKr 88.00 = US$1. The official rates are IKr 87.90 buying, and IKr 88.10 selling, per US$1. Rates for other currencies are based on these rates and the dollar rates for such currencies in other countries. Rates for settlements through clearing accounts are fixed; the buying and selling rates maintained for the currencies concerned by the Central Bank of Iceland differ from their parities by 0.12 per cent either side for clearing sterling, or by 0.12 per cent buying and 0.14 per cent selling for clearing krónur. The rate for clearing dollars is IKr 87.90 buying and IKr 88.10 selling. The authorized banks are permitted to carry out exchange transactions among themselves and to engage in arbitrage in foreign markets.

Administration of Control

The Ministry of Commerce, after consulting the Central Bank, has the ultimate decision on matters concerning import and export licensing and on payments for invisibles. The Central Bank of Iceland is responsible for the regulation of foreign exchange transactions and of exchange control, including capital controls, and for ensuring that all foreign exchange due to residents is surrendered to the authorized banks and that such exchange is disposed of as authorized. The two largest Icelandic banks, the National Bank of Iceland and the Fisheries Bank, are the only banks, other than the Central Bank, that are authorized to deal in foreign exchange. In addition, they issue import and exchange licenses in consultation with the Ministry of Commerce. Export licenses are issued by the Ministry of Commerce.

Prescription of Currency

Iceland is a member of the Sterling Area. All settlements with the five countries with which Iceland maintains bilateral payments agreements must be made exclusively through clearing accounts, denominated as follows: with Rumania and the U.S.S.R., in Icelandic krónur; with Brazil and Hungary, in sterling; and with Eastern Germany, in U.S. dollars. As a general rule, exchange receipts from other countries must be obtained in convertible currencies. In practice, settlements with countries in the dollar area are made in U.S. dollars; with countries in the Sterling Area and some other countries, in sterling; and with all other countries, in their respective currencies.

Nonresident Accounts

There are two categories of nonresident krónur accounts: Foreign Accounts and Special Accounts. The opening of nonresident accounts requires individual approval.

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 freely for payments to residents and may without a license be converted into the currency of the country of residence of the account holder. These accounts are in practice seldom used, payments for international transactions generally being made in U.S. dollars, sterling, or other convertible currencies.

Special Accounts in krónur or foreign currency 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 approved payments from residents.

Imports and Import Payments

All goods not included in the restricted list or subject to state trading (see below) may be imported freely (and, with minor exceptions, without an import license) from any country;1 about 91 per cent of total imports (1967 basis) is liberalized. Some 50 commodities or groups of commodities are included in the restricted list and are subject to quantitative restriction. Most of these goods are admitted, subject to individual license, under global quotas that apply to all countries with which Iceland does not maintain bilateral payments agreements.2 The remaining goods on the restricted list are admitted from the same countries on the basis of individual licenses issued on a discretionary basis (“other licensing”). The principal items involved are gasoline, gas oil, and fuel oil; they are imported mainly from Rumania and the U.S.S.R. All goods on the restricted list require individual licenses when imported from bilateral payments agreement countries; licenses in this case are in principle issued in accordance with bilaterally agreed quotas, but in practice they are granted freely upon application for global quota items. Certain imports are only admitted under state trading; these include fertilizers, tobacco, matches, and alcoholic beverages. Furthermore, fresh vegetables and potatoes are imported under the auspices of the Agricultural Production Board in accordance with a government authorization. None of these commodities, however, is subject to quantitative restriction.

Imports on a collection basis with deferred payment are subject to an advance deposit of 10 per cent. Depending on the category of goods, imports under documentary credits are subject to minimum advance deposits of 10, 25, or 50 per cent when settled in convertible currency, and to rates of 10 and 25 per cent when settled under bilateral payments agreements. Except for imports of automobiles, a fee of ½ of 1 per cent (minimum IKr 10.00) is charged as a license fee on the krónur amount of the import license when the license is issued. This fee is not charged on licenses for imports from countries with which Iceland maintains bilateral payments agreements. A fee of 60 per cent (in addition to customs duties) is charged as a license fee on the f.o.b. krónur price of passenger automobiles from all sources (15 per cent for jeep-type vehicles and certain taxis and instruction vehicles and 45 per cent for other taxis and instruction automobiles).

Importers of goods not requiring licenses do not have to obtain a foreign exchange permit prior to shipment from abroad, provided that the purchase is payable at sight. On the other hand, the goods will not be cleared by the customs unless payment has already been made or the importer has arranged with an authorized bank for the payment. An importer may either open a letter of credit or obtain a payment certificate which enables him at any time to buy foreign exchange to pay for the goods. For imports that require individual licenses, foreign exchange is granted in accordance with the terms stipulated in the license.

Importers may freely accept suppliers’ credit for up to 3 months from the date of arrival at an Icelandic port, except for specified nonessential goods. Credit in excess of 3 months and not exceeding 12 months requires permission by an authorized bank, while foreign credit in excess of 12 months is subject to government authorization.

Payments for Invisibles

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

Most other outgoing payments are licensed freely on the basis of bona fide documents. The basic allocation for tourist travel is the equivalent of IKr 17,600 (US$200) a person a year and IKr 8,800 for children. Applications for exchange for major repair of ships, repair of means of transport other than ships and aircraft, transactions and transfers in connection with direct insurance, and insurance business operations abroad are considered on their merits. The chartering of foreign ships usually is not allowed when Icelandic vessels are available for charter on normal terms.

Resident and nonresident travelers may take out up to IKr 1,500 in Icelandic banknotes and coins, in denominations not exceeding IKr 100. Nonresident travelers may re-export any foreign exchange they brought in upon entry.

Exports and Export Proceeds

All commercial exports require licenses. The shipping documents must be lodged with an authorized bank. Exchange receipts accruing from exports must be surrendered without undue delay. Export charges of 4.4-9.7 per cent are levied on the f.o.b. value of all fish products.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered without undue delay. The owners of Icelandic ships and aircraft are, with the approval of the authorized banks, permitted to retain their foreign exchange receipts from freight, passenger tickets, or other charges, and to use them for operating purposes and for purchases of necessities for the homeward journey of the ship or aircraft. Icelandic insurance companies which reinsure abroad are permitted to retain foreign exchange earned from premiums and indemnities and to use it to pay reinsurance premiums, claims, and other regular expenditures of the insurance business in the country where the foreign exchange was earned.

Resident and nonresident travelers may bring in up to IKr 1,500 in Icelandic banknotes and coins, in denominations not exceeding IKr 100. There are no limitations on the import of foreign banknotes and coins.

Capital

All investments by nonresidents in Iceland are subject to individual approval. The participation by nonresidents in Iceland’s joint stock companies may not exceed 49 per cent, and is not allowed in the fishing industry. Nonresidentowned foreign capital entering in the form of foreign exchange must be surrendered. Nonresidents may be authorized to open nonresident accounts for these funds, in which case their retransfer abroad may be permitted.

Residents are obliged to surrender foreign exchange accruing to them on account of capital transactions and payments. Without the approval of the Government, residents may not obtain loans abroad, including loans for financing imports, for periods exceeding one year. Applications for the contracting of financial credits and loans abroad for a period of less than one year are considered on their merits and approved only in exceptional circumstances. The contracting of commercial credits abroad for a period of between 3 and 12 months is also approved only in exceptional circumstances, e.g., in connection with the import of industrial raw materials for which the production process is lengthy, the import of construction materials, etc. The authorities permit the use of suppliers’ credit of up to 90 days, except for the financing of a number of specified imports, including motor vehicles for personal use (when imported from convertible currency countries),3 various household appliances, specified foods, various types of clothing, precious and semiprecious stones, watches and clocks, toys, and portland cement. Transfers of capital abroad by residents require approval, which is granted only in exceptional cases. However, direct investment abroad for the purpose of assisting the marketing of Icelandic products is normally permitted. Portfolio investment abroad by residents is prohibited. Outward transfers of inheritances, legacies, and emigrants’ assets are considered on their merits and are restricted.

Nonresidents may acquire Icelandic securities and other assets with imported funds; the transfer abroad of the proceeds from the sale of these assets and securities requires authorization. Securities held in Iceland by nonresidents must be registered, and all transactions and operations concerning them are subject to licensing. The import and export of securities by residents are subject to the approval of the Central Bank.

Gold

Residents may hold and acquire gold in Iceland, subject to certain legal requirements. Imports and exports of gold in any form other than jewelry require licenses issued by the Central Bank; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users.

Changes during 1969

January 17. Global import quotas amounting to about IKr 98 million for 1969 were announced.

March 1. The permitted length of suppliers’ credit for imports of automobiles from Eastern European clearing countries was reduced from six to three months.

March 7. A reduction in license fees on imports of motor vehicles was announced. The new rates were 60 per cent for private passenger automobiles; 15 per cent for four-wheel drive utility vehicles with a wheel base not exceeding 101 inches, and motorcars used full time as taxis or full time for driving instruction; and 45 per cent for motorcars used part time as taxis or part time for driving instruction. Previously, the fee was 90 per cent for private passenger automobiles, 60 per cent on passenger automobiles used part time as taxis or for driver training, and 30 per cent for jeep-type vehicles and taxis. The new fees were retroactive to January 1, 1969.

July 1. By virtue of Law No. 41/68 all business firms in Iceland were made subject to individual licensing; only Icelandic nationals qualified for a license. (On February 13, 1970 the law was amended to the effect that licenses could be issued irrespective of nationality.)

July 1. Imports of perfumes and essences ceased to be state traded.

September 12. A new trade agreement with Poland was signed which provided that payments would continue to take place in convertible currencies.

December 19. Parliament authorized Iceland’s accession to EFTA.

India

Exchange Rate System

The par value is 0.118489 gram of fine gold per Indian Rupee or Rs 7.50000 = US$1. Transactions in foreign exchange are conducted through authorized dealers, as follows: in sterling, at rates fixed by the Foreign Exchange Dealers Association in consultation with the Reserve Bank of India; in other currencies, at rates fixed on the basis of market conditions, subject to spot transactions being done at or between the London market rates for sterling against the other currency concerned. Authorized dealers are permitted to cover their requirements of non-Sterling Area currencies in the London market and to cover their permitted transactions in certain currencies1 against sterling, rupees, or any one of these currencies, either spot or forward for periods not exceeding six months, with authorized banks in any country outside the Bilateral Account group.2 On December 31, 1969, market rates for telegraphic transfers on London were £ stg. 5.5605 buying, and £ stg. 5.5280 selling, per Rs 100 and for telegraphic transfers on New York they were US$13.36 buying, and US$13.23 selling, per Rs 100.

Since 1959 the Reserve Bank has issued currency notes denominated in Indian rupees for circulation in the Persian Gulf area. These are known as Gulf notes or Gulf rupees. At present such Gulf notes are in circulation only in Muscat and Oman.

Administration of Control

Exchange control is administered by the Reserve Bank of India in accordance with the general policy laid down by the Government of India in consultation with the Reserve Bank. Much of the routine work of exchange control is delegated to certain commercial banks, which act as authorized dealers permitted to buy and sell foreign exchange for specified purposes under regulations laid down by the Reserve Bank. Applications to make direct investments in India are reviewed by the Foreign Investment Board.

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 (see footnote 2), and the Convertible Account group (all other countries).

Payments to and from Sterling Area countries may be made in sterling or any Sterling Area currency, except Indian rupees, through the account of a resident of any Sterling Area country except India, or in Indian rupees through the account of a bank in any Sterling Area country except India.3 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 any other Sterling Area currency to the credit of the account of a resident of any country in this group 4 or in any listed currency.5 Receipts from the Convertible Account group may be obtained in any listed currency, in rupees from the account of a bank in any country in this group, or in sterling from an External Account in the United Kingdom.

Nonresident Accounts

The accounts of residents of Bhutan and Nepal are treated as resident accounts.6 Accounts related to all other foreign countries are treated as nonresident accounts. The treatment of these accounts distinguishes between those of banks and of others.

The accounts of banks are classified in three groups corresponding to the division of countries for prescription of currency purposes, i.e., Sterling Area Accounts, Bilateral Accounts, and Convertible Accounts. These accounts may be credited with payments for imports, interest, dividends, and other authorized purposes, with authorized transfers from the nonresident accounts of private firms or persons, with proceeds from sales of the currency of the country or monetary area of the account holder, and with proceeds from sales of sterling from the appropriate nonresident sterling account in the United Kingdom. They may be debited for payments for exports and for other payments to residents of India. These accounts may also be debited for transfers to nonresident accounts of persons and firms (including banks), provided that both the transferor and transferee accounts are of countries in the Sterling Area, or when the transferor account is of a country in the Convertible Account group and the transferee account is of a country either in the same group or in the Sterling Area. 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, with the exception of debits by way of payments to residents, 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, shares, and deposits; refunds of amounts previously debited or overcharged; proceeds of remittances in appropriate foreign currency or transfers from appropriate nonresident banks’ rupee accounts (see section on Prescription of Currency, above); proceeds from checks issued by the Life Insurance Corporation in respect of maturity or death claims and surrendered value of policies held by nonresidents, provided that the Corporation certifies that premiums had been received in India in an approved manner and that actuarial reserves are held in India; proceeds of checks, provided that the aggregate of such credits during a month does not exceed Rs 2,000 and no individual credit is in excess of Rs 750. Where the nonresident account holder is an Indian national, maturity proceeds of all types of securities as well as sale proceeds of securities sold on the stock exchange may be freely credited to his account. Where the account holder (in the case of a joint account, any of the account holders) is a foreign national, authorized dealers may freely credit sale and maturity proceeds of all types of securities, provided that the securities had been originally purchased either out of proceeds held in the account or by remittance from abroad, and in the case of sale proceeds, that the sale was made at the stock exchange. Ordinary private nonresident accounts, as well as blocked accounts maintained by persons of Indian nationality or origin who are resident abroad, with a balance of Rs 50,000 or less on October 1, 1968, may be freely debited for local payments. Other ordinary private nonresident accounts may be debited without prior approval for such items as payments for premiums on life insurance policies of the account holder or his dependents; all taxes due from the account holder in India; contributions to the National Defence Fund, the Prime Minister’s National Relief Fund, or any government-sponsored charity; allowances not exceeding Rs 1,000 a month to relatives and dependents in India; investment in Indian Government securities and in units issued by the Unit Trust of India; and for checks up to Rs 1,000 a week drawn in favor of beneficiaries resident in India or in favor of the account holder while temporarily resident in India. For ordinary nonresident accounts of Indian nationals or persons of Indian origin with balances in excess of Rs 50,000, as well as blocked accounts of such persons, the holders may draw up to Rs 2,000 a week during their stay and, in addition a lump sum of up to Rs 10,000 annually may be debi