Chapter

Country Surveys

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
September 1968
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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, wool, and cotton, and to 30 per cent of foreign exchange receipts of the Government for the financing of the salaries in afghanis of foreign experts. The official selling rate applies to foreign exchange payments by the Government. All other transactions take place at free market rates through either the banks or the bazaar. Subject to possible day-to-day deviations, the Afghanistan Bank maintains its free market rate within Af 2 per US$1 either side of the free market rate quoted in the bazaar. On December 30, 1967, the free market rate of the Afghanistan Bank was Af 76.00 buying, Af 76.50 selling, per US$1, and the free market rate in the bazaar was Af 77.75 buying, Af 78.25 selling, per US$1.

Administration of Control

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

Prescription of Currency

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

Imports and Import Payments

Imports of a few items (e.g., some drugs, liquor, arms, and ammunition) are prohibited 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. Some of the bilateral agreements, however, specify quotas for commodities to be traded, and the Government exercises control to ensure that trade conforms with the commitments undertaken in the agreements. On the whole, trade with these countries is carried out on a compensation basis, and usually both imports and exports are arranged by the same trader; imports against exports of cotton and wool are carried out by the Government or government agencies, or the proceeds of exports are allocated for repayment of government loans.

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

Payments for Invisibles

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

Exports and Export Proceeds

In general, control is exercised only over exports to bilateral agreement countries (see section on Imports and Import Payments, above). However, exporters of cotton are required to sell at least 20 per cent of their total exports to countries from which payments will be received in convertible currencies.2

Exchange receipts from exports of karakul, wool, and cotton must be surrendered at the official rate. Surrender requirements are also maintained for the proceeds of some other exports to bilateral agreement countries. With this exception, the proceeds of all exports other than karakul, wool, and cotton, irrespective of the currency in which they accrue, may be sold at free market rates or be used by the exporter to pay for imports.

Wool is subject to an export tax of 15.56 per cent. Cotton and cottonseed are subject to an export tax of 15.56 per cent when sold to bilateral countries and 8.22 per cent when sold to other countries. Walnuts are subject to an export tax of 9.5 per cent.

Proceeds from Invisibles

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

Capital

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 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 export duties for ten years after the approval of the investment; and (5) 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 prices 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 hold and acquire gold and silver coins in Afghanistan for numismatic or investment purposes. With this exception, residents other than the monetary authorities and authorized industrial users are not allowed to hold or acquire gold or silver in any form other than jewelry, at home or abroad. Imports and exports of gold or silver in any form other than jewelry require licenses issued by the Council of Ministers; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users. Commercial imports and 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, provided that settlement takes place through the free market. Customs duties are payable on imports and exports of gold and silver in any form, unless the import or export is made by or on behalf of the monetary authorities.

Changes during 1967

February 10. A new Foreign and Domestic Private Investment Law went into effect repealing and superseding the Law Encouraging the Investment of Private Foreign Capital in Afghanistan of 1958.

March. The export tax on cotton and cottonseed was reduced from 24.44 per cent to 15.56 per cent for exports to bilateral countries, and from 17.11 to 8.22 per cent for exports to other countries.

June. The policy was discontinued of not permitting imports of certain nonessential consumer goods from Japan unless equivalent Afghan goods were exported to Japan.

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, which is at par with the French franc, giving the relationship DA 4.93706 = US$1. The Central Bank of Algeria deals at par in French francs and the other French Franc Area currencies. Buying and selling rates for specified currencies of countries outside the French Franc Area 1 are fixed by the Central Bank of Algeria on the basis of the rates quoted on the Paris exchange market for these currencies. The exchange rates applicable to “agreement dollars” are those for the U.S. dollar in the Paris market.

Administration of Control

The Ministry of Finance has general jurisdiction over exchange control. The Central Bank of Algeria assists in the formulation of the exchange legislation and regulations and is responsible for their execution 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. The Office National de Commercialisation (ONACO), the Office Algérien Interprofessionnel de Céréales (OAIC), the Société Nationale des Tabacs et Allumettes (SNTA), the Société Nationale d'Edition et de Diffusion (SNED), the Société Nationale de Sidérurgie (SNS), 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 crude petroleum. 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.

Prescription of Currency

Algeria is part of the French Franc Area, and 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 others in U.S. dollars. 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 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. 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 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; with interest on the balances of Franc Area Accounts; and with payments for imports from countries in the French Franc Area. They may be debited freely for any payment in Algeria to a resident of any country in the French Franc Area (including Algeria); for any transfer to the credit of an account of a person residing in a country in the French Franc Area other than Algeria; and for any amount due to the bank with which the account is kept, for interest, commissions, or repayment of capital claims. Transfers between these accounts are free.

Final Departure Accounts may be opened, without 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; with proceeds accruing from the sale of stocks and other securities and from any income, amortization, and redemption in respect of securities, provided that the transactions are made through the intermediary of a bank; and with any other payments, up to DA 1,000. These accounts may be debited freely for all payments in Algeria on behalf of the account holder; balances of less than DA 5,000 may, subject to certain conditions, be transferred to other parts of the French Franc Area.

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

Imports and Import Payments

Imports from Israel, Portugal, and South Africa are prohibited. All imports from bilateral payments agreement countries require a license. A number of specified imports, listed under some 220 tariff headings, subheadings, or their parts, from all other countries are prohibited or are subject to either quantitative restriction or a special import procedure; the items include such commodities as butter, cattle, cement, cereals, clothing, coffee, fish, hides and skins, margarine, matches, meat, melons, milk, phosphates, sheep, soap, sugar, tea, television sets, tobacco, tomatoes, vegetables, wine, many types of textile piece goods, and passenger cars and other motor vehicles.

The Government has the monopoly over the importation of some of these items through its Office National de Commercialisation (ONACO), the Office Algérien Interprofessionnel de Céréales (OAIC), the Société Nationale des Tabacs et Allumettes (SNTA), the Société Nationale d'Edition et de Diffusion (SNED), the Service des Alcools, and the Société Nationale de Sidérurgie (SNS), while some of the 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 professionnel 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 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.

Imports that are not liberalized are licensed in accordance with an annual import program. The program comprises quotas for the French Franc Area, each payments agreement country, and the convertibility area, i.e., all other countries combined. In addition, there are annual quotas for imports from France of a few specified commodities.

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. Most liberalized imports whose value exceeds this figure are admitted on the basis of a declaration completed by the importer, but some require an administrative visa, which is stamped on an import attestation. Imports exceeding DA 10,000 in value, and all imports for which payment has to be made before the goods reach Algeria, must be domiciled (registered) 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. Payments for liberalized goods valued at DA 60 or over require the prior approval of the Central Bank.2

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 (registered) the import, open a documentary import credit payable upon presentation of the shipping documents.

Goods normally subject to import license and quota restriction may be freely imported in small parcels, provided that the value of the shipments does not exceed DA 5,000 for each shipment and the same addressee does not receive more than one parcel a day.

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, and (4) payments relating to government transactions with foreign companies. For other invisibles, 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 lower percentages of their salaries. 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. Furthermore, residents traveling by air or sea to a country within the French Franc Area are entitled to an allocation, in the currency of the country of destination, equivalent to DA 500 a person a trip, on presentation of travel documents certified by the authorized intermediary; children under 15 are entitled to DA 250. 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 1,200 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.

Exports and Export Proceeds

All exports to Israel, Portugal, and the Republic of South Africa are prohibited. Exports of certain livestock, firearms, ammunition, explosives, and certain radio equipment are prohibited. All exports to countries with which Algeria has bilateral payments agreements and some exports to all other countries require licenses. The export of specified products is reserved for certain state trading organizations.

With certain exceptions, exports must be domiciled (registered) with an authorized bank. Prior registration is not required for exports that are made on a firm sale basis, 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 and must thereafter be collected within 30 days. Foreign exchange proceeds may be used to make authorized payments abroad within three months from the date of their receipt. Companies holding mineral rights must repatriate to Algeria 50 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 hold export cards 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

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

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

Capital

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.

Decree-Law No. 63-277 of July 26, 1963 established a code for foreign investments in Algeria made after July 1, 1962. 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.

Gold

Residents may purchase, hold, and sell gold coins in Algeria 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 and industrial users. Commercial imports of jewelry and of other articles containing gold are severely restricted.

Changes during 1967

During the period under review a number of imports in addition to those mentioned below were added to the list of those that were subject to either quantitative restrictions or a special import procedure.

January 6. Foreign physicians and dentists practising in Algeria could transfer annually 25 per cent of their earnings after taxes.

February 8. Railroad travel in countries outside the French Franc Area could no longer be paid for in Algeria.

March 8. Nonresident travelers were permitted to re-export foreign exchange declared upon arrival, after deduction of DA 15 a day of their stay for summer visitors who slept in tents or youth hostels, DA 25 a day for summer visitors who stayed in private homes, and DA 35 a day for all others.

April 1. The general customs tariff was applied to goods originating in Hong Kong or Japan. Previously, import duties on imports from Hong Kong or Japan were one third of those of the general tariff.

April 27. The import of various ferrous and nonferrous products was reserved for the Société Nationale de Sidérurgie (SNS). The SNS monopoly was extended to further commodities on June 16.

June 2. Television receivers required an import license and became subject to quota.

June 7. Exports to the United States and the United Kingdom could no longer be domiciled with authorized banks. The ban was lifted on September 14.

June 9. Exports of oil and oil products to the United Kingdom and the United States were prohibited. The ban was lifted on September 14.

June 9. Authorized banks were prohibited from making payments for imports from the United Kingdom and the United States. The ban was lifted on September 14.

June 10. Payments for liberalized imports from all countries were made subject to prior approval (visa) by the Central Bank of Algeria. Exempt were imports settled through bilateral agreement accounts, public sector imports, and imports not exceeding DA 300 in value. The requirement was amended on November 2, 1967 (see below) and terminated on February 2, 1968.

June 12. All payments in U.S. dollars or pounds sterling required the prior approval of the Central Bank. This requirement was rescinded on September 14.

July 21. The value beyond which payments for c.o.d. postal parcels required prior authorization by the Central Bank was raised from DA 60 to DA 300.

July 21. The validity of the payments authorization required on June 10 for imports of liberalized commodities was extended from three to six months.

July 21. The domicilation requirement for imports was made applicable to transactions exceeding the value of DA 300 instead of DA 10,000, as previously.

July 26. Imports of many textiles became subject to quota.

July 29. The permissible value for each shipment of goods normally subject to import license and quota restrictions but imported by parcel post without an import license was raised from DA 60 to DA 300. Only one parcel a day could be received by the same addressee.

August 24. The Société Nationale pour la recherche, la production, le transport, la transformation et la commercialisation des hydrocarbures (SONATRACH) was given a monopoly over the import of crude petroleum.

August 24. The foreign oil companies in Algeria were required to make their entire local output of crude petroleum available for export.

August 30. SONATRACH was given a monopoly over domestic and foreign sales of crude petroleum and petroleum products.

September 22. Imports from all sources of linen and woolen piece goods required the prior visa of GADIT.

October 6. The Banque Extérieure d'Algérie was established.

October 6. Imports by c.o.d. parcel post were suspended. The suspension was continued on November 2 and was lifted on December 1.

November 1. A state monopoly was introduced over foreign financial transactions. International financial settlements could only be made through the Central Bank, three state-owned commercial banks, or the Postal Administration. Foreign banks in Algeria were restricted to local financial operations.

November 2. The amount up to which imports did not require a payments authorization from the Central Bank was reduced from DA 300 to DA 60.

November 2. The payments visa for license-free imports (see June 10, above) could for imports by c.o.d. parcel post be given by the Postal Administration, provided that the value of a parcel did not exceed DA 5,000.

November 22. Further textiles were made subject to import licenses.

December 5. The import monopoly of GITEXAL and GADIT was extended to additional textiles.

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 official exchange market, in which the selling rate on December 29, 1967 was M$N 350 per US$1. The Central Bank of Argentina deals with the commercial banks at M$N 350 per US$1, buying and selling. Exchange transactions are subject to a stamp tax of 310 of 1 per cent.

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, however, are restricted to import payments made under a documentary credit, bank collection, or bank guarantee (aval), and require a 40 per cent deposit in local currency for a period of 180 days. Forward contracts concluded as part of a swap transaction and forward transactions among authorized banks are exempt from the 40 per cent deposit. The 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). The Central Bank intervenes in the forward exchange market as a seller at a premium of 8 per cent per annum.

Administration of Control

Exchange transactions must be carried out through banks and institutions authorized expressly for this purpose; those of a purely financial character may be made by exchange houses. Purchases of banknotes and of travel exchange may also be made through authorized exchange agencies. The authority to make virtually all foreign payments has been delegated to the authorized institutions.

Prescription of Currency

Payments between Argentina and Chile, Colombia, Mexico, Paraguay, and Peru must be 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.1 Transactions with other countries must be settled in convertible currencies or externally convertible European currencies.

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 generally free of import and exchange licensing; exchange to pay for them may be purchased in the exchange market. Some import payments in respect of capital goods, however, require the specific approval of the Central Bank. Goods imported by official agencies require approval by the Central Bank and the Ministry of Economy if payment is extended over a period of more than 180 days. Imports of a number of products of the automotive industry are temporarily prohibited. All imports are subject to a tax of 4 per cent on the freight charges.

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 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$N 200 to M$N 2,000 a ton on imports of iron and steel. Import duties range from 5 per cent to 140 per cent.

An advance import deposit of 40 per cent of the peso equivalent of the c. & f. value is required on most imports from all sources; goods imported from LAFTA countries are exempt if the goods are included in Argentina's concession lists (including the special lists for Ecuador and Paraguay), and certain imports from Bolivia also are exempt. 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 forward exchange; or clearing goods through customs. The deposit is refunded after 180 days, provided that the goods have been cleared through customs.

Payments for specified capital goods valued at over US$10,000, with the exception mainly of those imported from LAFTA countries, 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. 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 imports by automobile manufacturers; nevertheless, payments by the automotive industry may be made without any restrictions. Foreign exchange for import payments may be purchased in the exchange market, subject in a few cases noted above to prior approval of the Central Bank. With minor exceptions, advance payments for imports other than capital goods are not permitted.

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; in certain cases, however, exports may be sold at prices lower than the minimum export prices. Exporters of most commodities are required to repatriate and sell in the exchange market the foreign exchange proceeds of their exports within 10 working days after shipment. Foreign exchange proceeds from exports of chilled meat to the United Kingdom in excess of their provisionally declared value must be surrendered within 90 days after shipment. Proceeds from exports of petroleum products must be surrendered within 180 days after loading. Proceeds from nontraditional exports for which payment is received within 180 days after loading, and which are covered by an irrevocable documentary credit or by drafts of similar duration, must be surrendered within 10 working days after the due date. The proceeds of exports to Chile (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. Exporters of malted barley and brewers' malt must surrender the export proceeds within 45 days after shipment. The collection period for exports of quebracho extract is 120 days from the date of shipment for exports to other LAFTA countries, and 90 days for exports to other destinations.

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 Advisory Commission on Export Values, on which the National Grain Board, the National Meat Board, the State Departments of Agriculture, Commerce, and Finance, and the Central Bank are represented. The principal export taxes are (1) 18 per cent for live animals, frozen and chilled meat, offal, cereals, oilseeds, rawhides, and greasy wool; (2) 12 per cent for special meat cuts, washed and carbonized wool, flour and wheat by-products, olive oil, raw cotton, and processed hides; (3) 8 per cent for canned meat, meat extract, sunflower seed oil and linseed oil, dairy products, combed wool, and tobacco. 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 charges.

Other taxes on exports are levied as follows: a 10 per cent sales tax on exports of linseed oil, oilseeds, logs, coal, certain wood extracts, and unprocessed cattle and horse hides, dried sheepskins, and live cattle; a 5 per cent sales tax on exports of wool (suspended until September 30, 1968), olive oil, and processed hides; 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; a 1 per cent tax, the proceeds of which are destined for the financing of road construction in connection with agricultural development, on exports subject to export taxes; a 1.5 per cent tax, the proceeds of which are destined for the National Grain Board, on certain agricultural products; a 1.5 per cent tax, the proceeds of which are destined for the Secretariat of Public Works, on the export of certain other agricultural products; a 0.3 per cent statistical tax on exports subject to export taxes; and a 5 per cent tax, the proceeds of which are destined for the Forestry Fund, on exports of tanning extracts (these are exempt, however, from all other charges and taxes).

Surcharges, customs and additional duties, and other charges paid on imports of raw materials or other products incorporated in exported articles are returned to exporters. Exporters of specified nontraditional manufactured goods receive a tax rebate either as a reimbursement of internal taxes on the materials used or as a rebate on income tax, or both.

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

Proceeds from Invisibles

Exchange derived from invisibles 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, houses, and agencies authorized to deal in foreign exchange, but the regulations permitting residents to buy gold coins and bars from these firms are in suspense. Residents may freely acquire, hold, and sell gold in the form of personal jewelry, which may also be freely taken into and out of the country. Authorized industrial users may freely buy and sell gold in Argentina (except gold coins). Imports and exports of gold coins are unrestricted. Imports and exports of gold in other forms (bars, jewelry, etc.) may also be made freely, without prior license from the Central Bank, on the same basis as imports of other commodities. The monetary authorities may buy, hold, and sell coined gold and gold bars, at home and abroad.

Changes during 1967

January 24. Decree No. 424 required grain exporters to pay an additional 1 per cent charge on the f.o.b. value to the National Grain Board.

February 15. The 16 per cent retention tax on exports of corn was abolished.

March 13. The spot exchange rate of the Argentine peso was established at M$N 350 buying and selling per US$1; the Central Bank's buying and selling rates would not be allowed to move more than 1 per cent either side of this rate. Previously, the Central Bank's limits were M$N 245 buying and M$N 255 selling per US$1. Outward transfers henceforth were freely permitted and banks could freely accept deposits in foreign currency. Residents were no longer required to surrender receipts from invisibles.

March 13. Most import restrictions were removed and all export subsidies were eliminated.

March 13. Law No. 17198 introduced export taxes on major exports of 16, 20, or 25 per cent ad valorem. These were levied on the official index value (aforo) or, in the absence of such values, on the f.o.b. value. The new export taxes replaced a system of retention taxes on exports.

March 13. Exports of linseed and linseed oil were made subject to taxes of M$N 9,500 and M$N 2,000, respectively, per ton.

March 13. The import levies (recargos) on most commodities were reduced sharply.

March 16. New minimum export values were established for many farm products.

March 22. Decree No. 1916 imposed a 10 per cent sales tax on exports of unprocessed cattle and horse hides, and raised the sales tax on exports of sheepskins from 5 per cent to 10 per cent.

May 8. Law No. 17267 provided for the creation of an export credit insurance system.

June 15. Circular R.C. 328, replacing Circular R.C. 196, reduced the prescribed minimum payment terms for imports of capital goods and contained a definition of capital goods.

June 19. Decree No. 4343 and Decree No. 4345 abolished the export taxes introduced by Law No. 17198 on tanned hides and on tung oil.

June 23. Import levies on more than 500 products were revised by Decree No. 4426. The changes included reductions in duties on many chemical products.

July 1. Institutions and agencies authorized to deal in foreign exchange were required, for statistical purposes, to submit to the Central Bank daily all details of their exchange transactions with the public sector and the private sector.

July 5. Law No. 17330 reduced from 90 per cent to 50 per cent of the sum to be remitted abroad the amount of interest, royalty, and profit remittances that was subject to a withholding tax of 38.4 per cent.

July 6. Law No. 17330 reduced the stamp tax on foreign exchange transactions from ⅗ to 310 of 1 per cent.

July 16. Decree 5364 established a Service for the Promotion of Foreign Investment.

July 18. Law No. 17352 revised certain tariff regulations and a large number of import levy rates. Import levies (recargos) were henceforth referred to as import duties (derechos de importación).

July 27. The Central Bank henceforth provided authorized institutions with certain foreign banknotes at the rate of M$N 350 per US$1. Authorized institutions were allowed to charge 110 of 1 per cent on resale to the public.

July 28. Decree No. 5435 exempted wool shipped between August 3, 1967 and September 30, 1968 from payment of the 10 per cent sales tax on exports.

August 2. The export tax on some specified cuts of beef was reduced from 25 per cent to 20 per cent.

August 2. The Central Bank began to intervene in the forward exchange market, selling foreign currency at a premium of 8 per cent per annum.

September 8. Circular R.C. No. 332 extended from 60 to 90 days the period after shipment within which exporters were required to collect the exchange proceeds corresponding to the difference between the provisional and the actual f.o.b. value of chilled beef exports to the United Kingdom.

September 14. New minimum surrender prices were announced for wool, lamb carcasses, and sheep and cattle offal.

September 21. Circular R.C. No. 333 exempted from the advance deposit of 40 per cent imports of raw materials and many products for industrial use, as well as all imports of semimanufactured goods and raw materials for re-export after processing. The list of exemptions included about 1,400 tariff items, mainly products for the chemical and metallurgical industries.

September 27. Decree No. 7207 reduced the export taxes established by Law No. 17198 (March 13, above) on various types of wool and sheep by-products by 7 or 8 percentage points; the new tax rate was 18 per cent for greasy wool and frozen mutton and 8 per cent for combed wool.

September 27. Law No. 17198 was amended to permit exporters to put up a bank guarantee instead of paying export taxes in cash before shipment. Exporters were also permitted, when necessary, to sell at prices below the official index values (aforos), although export taxes continued to be calculated on the latter.

October 10. Circular R.C. No. 336 clarified the terms set in Circular R.C. No. 328 for imports of capital goods.

October 11. Argentina became a full contracting party to the GATT.

October 19-20. The 20 per cent tax on exports of fresh fruit and the 16 per cent tax on exports of dried fruit were abolished.

October 23. Decree No. 7769 reduced export taxes on live cattle and pigs and on most types of meat from 25 per cent to 18 per cent; the export tax on certain processed beef products was reduced from 20 per cent to 12 per cent, and that on certain other processed meat and offal from 16 per cent to 8 per cent. The 10 per cent sales tax on exports of cattle hides and live cattle was abolished.

October 23. The export duty on fish products and that on tea were removed, and the export duty on certain sheepskins was reduced from 20 per cent to 12 per cent.

October 23. The temporary suspension of bread wheat exports, which had gone into effect on June 12, 1967, was terminated.

October 23. Decree No. 7924 granted substantial relief in respect of import duties to all mining activities.

October 27. The export taxes on wheat, oats, and barley were reduced from 25 per cent to 18 per cent, and those on wheat flour and other processed cereals from 20 per cent to 12 per cent.

November 8. Law No. 17529 empowered the Government to grant exporters of manufactured products a rebate of up to 10 per cent of the f.o.b. value on their income tax.

November 13. A sales tax of 5 per cent was levied on exports of olive oil in containers of more than five kilos; it replaced the 16 per cent export tax.

December 5. Decree No. 4105 provided for the duty-free importation, up to quantities to be specified later, of agricultural machinery not produced in Argentina.

December 29. Decree No. 9588 established that exporters of specified manufactured goods would be entitled to reimbursement of 12 per cent of the f.o.b. value as a reimbursement of internal taxes on the materials used.

December 29. Decree No. 9610 provided that exporters of specified manufactured products would be permitted to deduct the equivalent of 10 per cent of the f.o.b. value of their shipments from their income tax liabilities.

December 29. Decree No. 9612 provided for certain changes in the regulations governing gold. (The Decree was subsequently implemented by Central Bank Circular R.C. 345 of February 29, 1968, which permitted free importation of monetary gold and, subject to the general provisions governing imports, free importation of gold bars. Exports required the prior approval of the Central Bank.)

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 29, 1967 was US$1.1241 buying, and US$1.1174 selling, per $ A 1.

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. Transfers of funds to assist certain specified bodies in Viet-Nam are prohibited.

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; twine, rope, cordage, and cable of polyethylene and/or polypropylene; 2 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 a resolution of December 16, 1966 of the UN Security Council, selective mandatory sanctions have been applied against Rhodesia; the goods affected include tobacco, ferroalloys, chrome ores, and asbestos. 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, 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 conserve Australian resources, viz., iron ores, and assist the orderly marketing in respect of primary products. Exports to Rhodesia of arms and other military equipment and of certain other goods, such as aircraft and motor vehicles, are prohibited in accordance with the UN Resolution.

Proceeds from Invisibles

Proceeds from invisibles received in Sterling Area currencies may be disposed of freely. Proceeds from invisibles in other currencies do not have to be surrendered, but they must be reported and may be disposed of only with permission. 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. Wholly or substantially foreign-owned companies are requested by the Government to consult the Reserve Bank of Australia in connection with any proposals they may have to borrow funds in Australia.

Foreign securities owned by Australian residents need not be surrendered, but they must be reported. This obligation does not cover securities whose principal and interest are payable in a currency of the Sterling Area or certain securities expressed in Canadian dollars and registered in Australia, provided that the securities are held within the Sterling Area. The export of securities and practically all transactions in foreign securities are subject to approval. 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. 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 gold jewelry in excess of a total value of $A 22,000 or when the gold content value of any one article exceeds $A 250.

Changes during 1967

January 10. In accordance with UN Resolution No. 232/1966 of December 16, 1966, the embargo on imports from and exports to Rhodesia was extended to a wider range of products.

April 10. Restrictions were imposed on exports of uranium.

April 12. Funds invested by nonresidents of the Sterling Area in securities quoted on an Australian stock exchange could be repatriated in non-Sterling Area currency at official market rates of exchange; previously, in those cases where the securities had been purchased with “security” or “blocked” sterling, such proceeds could only be converted into non-Sterling Area currencies through the “security” sterling market.

April 21. Import licenses were required for used or secondhand four-wheel drive vehicles (excluding public-service type passenger vehicles).

September 9. It was made an offense to send or take money or goods to certain named bodies supporting forces opposed to Australian troops in or near Viet-Nam, or to similar bodies or classes of persons that may be proclaimed from time to time. The named bodies were the Government of North Viet-Nam, the communist party of North Viet-Nam, and the National Liberation Front of South Viet-Nam. It was provided, however, that it would not be an offense to contribute money or goods to the Australian Red Cross or for that body to transmit funds or send goods to the International Red Cross for use in North or South Viet-Nam.

December 19. Temporary protective quantitative restrictions were imposed on imports of certain knitted garments.

Austria1

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. 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 arrangements 2 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.3 Nearly all imports from European OECD countries, their associated territories, and many other countries 4 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 countries 5 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 Czechoslovakia, Hungary, Poland, or Rumania.

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.6 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. All payments to bilateral payments agreement countries for invisibles require licenses.

Residents traveling to countries with which Austria makes settlements in convertible currencies may buy exchange from authorized banks up to the equivalent of S 26,000 for each trip. 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, 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 foreign stock exchanges 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 thus defined; the Bank has granted a number of general permissions widely liberalizing the domestic gold trade. The Bank publishes a buying price for gold and buys gold coins at prices based on that rate. The Bank has authorized credit institutions and exchange offices to buy gold coins on its behalf, and publishes buying prices for those that are traded most frequently; these prices are based on the Bank's published buying price for unmanufactured gold. The Bank does not sell gold coins. 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 other than those that are legal tender and any gold medals or medallions. The acquisition of gold in other forms than coins, medals, or medallions, however, is reserved for the monetary authorities, authorized industrial users, dentists, and jewelers.

Where the Foreign Trade Law prescribes import licenses for gold imports (e.g., for gold sheets), the license is issued by the Ministry of Trade, Commerce, and Industry, and usually is granted to the monetary authorities and to industrial users. 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. Exports of gold in any form other than jewelry require authorization by the National Bank. 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 1967

January 1. Further commodities were freed from quantitative restriction when imported from and originating in GATT countries (except Cuba, Czechoslovakia, and Japan). The principal remaining restrictions on imports of industrial goods from such countries were global quotas for lignite, antibiotics, and motion-picture films.

January 1. A long-term trade agreement with Czechoslovakia went into effect. Austria henceforth applied an automatic licensing procedure to many nonagricultural imports of Czechoslovak origin.

January 1. Payment on the basis of a financial switch for commodities purchased in member countries of the International Monetary Fund was restricted to three types of transaction: (1) transit sales to clearing countries; (2) certain additional imports intended for incorporation in exports to be sold to clearing countries; and (3) imports of commodities originating in clearing countries.

April 26. A trade protocol with Rumania was signed which provided for an automatic licensing procedure for certain imports into Austria.

August 1. The Spanish peseta was quoted officially in Vienna.

October 1. A new antidumping law came into effect, replacing that of 1962.

Note.—The following change took place early in 1968:

January 1. New trade agreements with Hungary and Poland entered into force, under which Austria applied an automatic licensing procedure to the import of certain additional commodities when originating in these countries.

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.

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 29, 1967, the free market rates between banks for the U.S. dollar were BF 49.85 buying, BF 49.89 selling, per US$1.

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

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

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

Exchange Control Territory

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

Administration of Control

The ultimate responsibility for the administration of exchange control in the Belgian-Luxembourg Economic Union (BLEU) is exercised by the Institut Belgo-Luxembourgeois du Change. Exchange control powers for most payments and transfers are delegated to authorized banks. The BLEU Convention of May 23, 1935, 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, 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.

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.

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 Bilateral 3

Imports and Import Payments

Imports of sugar and tobacco 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, Rhodesia, 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). If the requirements are not fulfilled, the authorized bank submits a request to the central exchange control authority for special permission. Exchange control approval is also required to make payments for imports more than three months before or after the date of customs clearance.

Payments for Invisibles

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, and in exceptional cases the approval of the central exchange control authority 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 to Rhodesia of arms, ammunition, other military material, and oil and oil products is prohibited. Individual licenses are required for (1) all exports to Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Outer Mongolia, Poland, Rhodesia, 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.

Proceeds from Invisibles

Receipts in convertible currencies from invisibles connected with certain commercial transactions (Lists A and B—see section on Prescription of Currency, above) must, within eight days of receipt, be surrendered (i.e., sold in the official exchange market), or, alternatively, be credited to a Controlled Resident Account in Foreign Currency with an authorized bank if they are to be used later for current payments authorized to be made in these currencies. Receipts in convertible currencies from other transactions (Lists C and D) 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. 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 without limitation, and professional users are authorized to make payments through the official market.

Changes during 1967

January 1. The accounts in Belgian or Luxembourg francs opened by foreign civil servants appointed to listed international organizations established in the BLEU, which were previously assimilated to resident accounts, were transformed into Convertible Nonresident Accounts. Consequently, exchange control approval no longer was required for the transfer through the official market of savings from salaries.

April 26. A trade agreement between Benelux and Hungary was signed, which provided for the de facto liberalization of imports of many commodities of Hungarian origin.

May 25. A list was published of some 200 commodities that would in future qualify for export rebates.

June 22. Certain jute products were added to the list of commodities subject to import licensing.

July 12. Petroleum products were added to the list of commodities subject to export licensing.

July 20. Imports from all sources of certain vegetable oils, margarine, and certain other oils and fats were freed from quantitative restrictions.

August 22. A trade agreement between Benelux and Poland was signed, which provided for the de facto liberalization of imports of many commodities of Polish origin.

September 5. Imports from all sources of cane and beet sugar were freed from quantitative restrictions.

September 27. Certain textile products made of cotton, synthetic fibers, or other materials were added to the list of commodities subject to import licensing.

October 3-4. Eggs, poultry meat, rice, pork, and cereals were freed from import and export licensing in trade with other EEC countries.

October 27. A trade agreement between Benelux and Rumania was initialed, which provided for the de facto liberalization of imports of many commodities of Rumanian origin.

November 14. A decree was published establishing that public bids by foreign companies or individuals for the purchase or exchange of shares issued by Belgian companies required the prior approval of the Ministry of Finance. The decree went into effect on January 1, 1968.

November 15. A trade agreement between Benelux and Czechoslovakia was signed, which provided for the de facto liberalization of imports of many commodities of Czechoslovak origin.

December 15. A trade agreement between Benelux and Bulgaria was initialed, which provided for the de facto liberalization of imports of many commodities of Bulgarian origin.

Bolivia

Exchange Rate System

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

For operational purposes, the free market is divided into two sectors: the public sector and the private sector. The Monetary Department of the Central Bank of Bolivia operates in the public sector, buying foreign exchange from the Government and the official enterprises, including the Bolivian Mining Corporation (COMIBOL), 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 29, 1967 was $b 11.875 buying, and $b 11.885 selling, per US$1. All sales of foreign exchange to the private sector 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.1

Imports and Import Payments

All imports by public sector agencies require the prior authorization of the Ministry of National Economy. Private imports of certain commodities also require such prior authorization; these goods include live cattle, various foodstuffs, raw cotton, and petroleum and petroleum products. All other goods may be imported freely. Exchange to pay for imports may be purchased in the free market. All foreign credits, including suppliers' credits, are subject to authorization by the Stabilization and Development Council.

Payments for Invisibles

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

Exports and Export Proceeds

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

Proceeds from Invisibles

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

Capital

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. 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. 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 1967

February 8. Bolivia became a member of the Latin American Free Trade Association.

April 27. Supreme Decree No. 07975 prohibited imports of cigarettes.

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

September 15. The ban on imports of diesel-powered motor vehicles and machinery was lifted by Supreme Decree No. 8096.

December 29. The exchange tax on sales of foreign exchange to the private sector was reduced from 2 per cent to 1.6 per cent by virtue of Supreme Decree No. 08207.

Brazil1

Exchange System

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

The existing exchange arrangements have grown out of three foreign exchange markets: (1) the market of the monetary authorities, in which the Bank of Brazil carries out exchange operations for the account of the Central Bank, (2) the market of the authorized banks, and (3) the “manual market” where banknotes and travelers checks are negotiated. However, the policies pursued by the authorities have in practice unified the three markets. The Bank of Brazil intervenes in the exchange markets on behalf of the Central Bank of Brazil whenever this is called for by the monetary authorities' policy of maintaining uniformity of exchange rate quotations. On March 1, 1968, the buying and selling rates quoted by the monetary authorities to the public were NCr$3.20 and NCr$3.22 per US$1, respectively; those quoted by the authorized banks for transactions other than in banknotes or travelers checks were NCr$3.20 buying, and NCr$3.21 selling, per US$1, and the rates in the “manual market” were NCr$3.20 buying, and NCr$3.22 selling, per US$1. 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. (See Table of Exchange Rates, below.)

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 15 per cent contribution is levied on proceeds from exports of cocoa derivatives.

On the selling side, a different effective rate may arise from the arrangements whereby Petrobrás (national petroleum agency) concludes, at the beginning of each calendar quarter, an “open foreign exchange contract” with the Bank of Brazil for estimated requirements (as approved by the National Petroleum Council) during the corresponding calendar quarter of imports of petroleum and specified petroleum by-products; the exchange rate used is the free market rate, which is guaranteed for the quarterly operations of Petrobrás.

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) Authorized banks must surrender to the Bank of Brazil on behalf of the Central Bank (a) any foreign exchange in excess of a net position of US$25,000 at the close of the last working day of the week; (b) 70 per cent of the exporter's portion of the exchange proceeds of coffee exports; and (c) those exchange proceeds from coffee exports corresponding to the “contribution quota.” (2) 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. (3) 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. 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.

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 a sold position in excess of US$500,000 on the last working day of the week; included in this limit is their “manual market” position (banknotes and travelers checks). The banks are not permitted to sell foreign exchange to each other but transfers between branches of the same bank in different trading centers are allowed, subject to certain conditions. The “manual market” is conducted mainly by exchange houses, which are not permitted to maintain a sold position.

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. The Central Bank's exchange operations are handled by the Bank of Brazil.

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 export and import licenses, when required, as well as import certificates (guias de importação), and verifies price quotations, weights, measures, classifications, and types in export and import operations that are subject to license. The Customs Policy Council decides on changes in customs duties or in their application, subject in some cases to the approval of the Ministry of Finance.

The Sector 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.

Prescription of Currency

Prescription of currency is in principle related to the country of origin of imports or the country of final destination of exports, unless otherwise specifically prescribed or authorized. Settlements with payments agreement countries are made through the relevant agreement accounts. These accounts are maintained in clearing dollars with Bulgaria, Eastern Germany, Greece, Hungary, Israel, Poland, Rumania, the U.S.S.R., and Yugoslavia; in Danish kroner with Denmark;2 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. 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 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 regime applicable to General Category commodities.

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.

An importer must secure from CACEX an import certificate (guia de importação) 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. Clearance of the goods through customs may be made against presentation of the visaed import certificate and may take place before an exchange contract has been closed.

The following rules apply with respect to the closing of exchange contracts for payment for imports. 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 is normally charged on the portion of the forward contract not covered by a deposit.

Special procedures are applicable to certain imports (petroleum and petroleum products, wheat, and imports with foreign financing). For petroleum and specified petroleum by-products, Petrobrás concludes quarterly “open foreign exchange contracts” with the Bank of Brazil. An “open contract” provides that during the calendar quarter actual exchange contracts may be closed up to a specified amount, at the exchange rate prevailing on the day when the “open contract” was concluded. The exchange contracts are entered into by Petrobrás in accordance with the following arrangements made by the Bank of Brazil: 30 per cent of the value of a shipment must be paid no later than 8 working days after the week in which the shipment has taken place, and the remaining 70 per cent within 110 days after the date of shipment; for imports of liquid gas the remaining 70 per cent is to be paid within 140 days of shipment, with an option for advance settlement. The Bank of Brazil charges an interest rate of 1 per cent a month on the balance outstanding during the 110 days or 140 days.

In accordance with the provisions of a Decree of October 27, 1966, exchange contracts for the purchase of crude oil and major petroleum products from a single foreign supplier in excess of specified quantities and terms of delivery may be closed only if the foreign supplier assumes a commitment to use at least 20 per cent of the value of total imports contracted for one of the following purposes: (1) to arrange for exports of Brazilian products; (2) to finance exports of Brazilian products; (3) to invest in risk capital of companies domiciled in Brazil; (4) to finance Petrobrás in its exploration, refining, and production activities; and (5) other uses that may be approved by the National Council of Foreign Trade (CONCEX). CONCEX is responsible for determining periodically the products whose export should be promoted in this manner. In accepting tenders, preference is, moreover, given to those foreign suppliers, who, while quoting a competitive price, are willing to assume in respect of part of the value of the contract any of the obligations described above, even though the contract is for an amount below that for which a commitment is obligatory. Petrobrás must report to the Foreign Trade Department and the Exchange Department of the Bank of Brazil all purchases of crude petroleum and by-products and, when a supplier undertakes to use a specified proportion of the proceeds according to one of the ways set out above, all details relating to such an undertaking. Balances corresponding to the value of commitments undertaken are released only to the extent that such commitments have been fulfilled. Where the commitments are of the voluntary kind referred to above, balances corresponding to the value of a commitment required of the foreign supplier have in the past been released after a maximum period of 180 days, if within that period it proved impossible to use these balances for the purposes defined in the decree.

Payments for Invisibles

Payments for current invisibles related to income from foreign capital, royalties, and technical assistance are governed by the provisions of the Profit Remittance Law (see below). Authorized banks may sell foreign exchange freely up to the equivalent of US$500 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 made in the “manual market.” Such sales 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 rest. 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 Profit Remittance 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. With the following exception, remittances are permitted freely in respect of royalties for the use of patents of inventions or of industrial and commercial trademarks, as well as in respect of technical, scientific, administrative, or similar assistance. Such 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.

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$0.02 per pound for coffee exports of higher quality and may not be lower by more than US$0.03 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;3 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 bag 4 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$74.50, NCr$70.30, NCr$66.10, NCr$53.60, and NCr$47.30 for different grades and ports of shipment, and corresponding minimum registration prices per pound of US$0.375, US$0.365, US$0.355, US$0.325, and US$0.310, respectively, prevailing on March 1, 1968, and on the assumption that the foreign price obtained by the exporter was equal to the minimum registration price, the effective rates for proceeds from coffee exports on that date were NCr$ 1.505, NCr$ 1.459, NCr$ 1.410, NCr$ 1.249, and NCr$1.155 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.

In accordance with the provisions of various Resolutions of the Brazilian Coffee Institute, a price guarantee system for exports of Brazilian coffee has been maintained for specified periods of time5 (see section on Changes during 1967, below). 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. The guarantee system announced on January 10, 1968 covers coffee registered for export at the Brazilian Coffee Institute until February 29, 1968. The shipment dates and guarantee periods under this system are as follows:

Shipment DatesGuarantee Periods
January 6-31, 196860 days
February 1-29, 196845 days
March 1-31, 196830 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, starting on the date of shipment. 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 are to be made available after April 30, 1968, and must be used within 90 days from the date of issue. On March 1, 1968 the above guarantee system was extended to coffee shipments made until the last day of the current crop regulations. For these shipments the price guarantee covers a period of 30 days from the date of shipment, and 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 registration of the operation at the Brazilian Coffee Institute, and (2) the lowest similar price calculated on the basis of its moving average for periods of ten consecutive market days, starting on the date of shipment and ending on the thirtieth day after shipment. The credits to foreign importers are to be made available on the thirtieth day after publication of the new crop regulations for 1968/69.

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.

In accordance with the provisions of Law No. 5072 of August 12, 1966, which empowers the National Monetary Council to impose export taxes for the purpose of smoothing out the domestic impact of variations in international prices and of conserving export revenue, a 20 per cent tax is levied on exports of seven types of hide.6 The tax is applied on the difference between the sale price of the exports and the official “base” prices, when this difference exceeds 5 per cent of the established “base” prices. The tax proceeds are collected by the commercial banks through which the exchange transactions are made and are deposited by them on a special reserve account (“reserva monetária”) held by the Central Bank.

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

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.7 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 289 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 Profit Remittance 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 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 Profits Remittance 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.

Gold

Residents may freely purchase, hold, and sell in Brazil gold coins. Purchases of gold are 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. 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 per ounce; the other 80 per cent remains at the free disposal of the person concerned. The import of gold is subject to the issuance of an import certificate by CACEX. 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 March 1, 1968)8(New cruzeiros per U.S. dollar)
BuyingSelling
1.155-1.505 (Free Market Rate for Cruzeiro Payment a Bag and Minimum Registration Price)9

Coffee exports effected at a price equal to the minimum registration price, for payment at sight.
2.72 (Free Market Rate less 15% Contribution Quota)

Exports of cocoa beans and cocoa paste.
3.04 (Free Market Rate less 5% Contribution Quota)

Exports of cocoa derivatives.
3.20 (“Manual Market” Rate)

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

Foreign banknotes and travelers checks.
3.20 (Free Market Rate)

All other export proceeds. Other receipts.
3.22 (Free Market Rate)

Imports.10 Invisibles. Capital.

Changes during 1967

The Brazilian Coffee Institute raised the minimum registration price (f.o.b. Brazil, U.S. dollars per pound) for exports of washed coffee (despolpado) for payment at sight by US$0.01 for the period from June 13 to August 18, 1967, when it was reduced again by the same amount. On November 1, 1967, the minimum registration price was lowered for exports of all grades of coffee for payment at sight by US$0.01; on January 10, 1968, it was raised again by US$0.01 for exports of washed coffee to the level prevailing prior to November 1, 1967. The slightly higher minimum registration prices for exports shipped against 90-day bills were discontinued on November 1, 1967. The cruzeiro payment per bag (132 pounds) of the various grades of coffee was increased on three occasions (on February 13 and June 12, 1967, and again on January 10, 1968). The above measures changed correspondingly the effective exchange rates applicable to proceeds from coffee exports.

January 1. The stamp tax and other obligatory charges previously levied on most exchange transactions were eliminated.

February 1. The bilateral payments agreement with Czechoslovakia was terminated and payments between the two countries were made in convertible currencies. Imports covered by medium-term or long-term financing and already registered could be settled in agreement dollars up to June 30, 1967.

February 9. The buying and selling rates of the monetary authorities were changed from Cr$2,200 and Cr$2,220 to Cr$2,700 and Cr$2,715 per U.S. dollar, respectively.

February 13. A new monetary unit, the “new cruzeiro,” replaced the cruzeiro at a rate of 1 to 1,000, resulting in buying and selling rates of NCr$2.700 and NCr$2.715 per U.S. dollar, respectively.

February 14. Decree Law 169 reduced virtually all import duties by 20 per cent.

February 28. The name of the central bank was changed to the Central Bank of Brazil.

March 1. Decree Law 63 of November 21, 1966 was implemented. It provided for an over-all reduction of customs duties, notably on imports of raw materials and intermediate goods, and for the lowering of the highest tariff rate from 150 per cent to 120 per cent ad valorem.

March 1. Decree Law 264 of February 28, 1967 revoked Decree Law 169, except for imports from LAFTA countries of commodities on Brazil's National Concession List, and provided for further tariff reductions applicable to all duties except those of 10 per cent or less. The highest tariff rate was decreased from 120 per cent to 100 per cent ad valorem.

March 1. Imports of commodities listed under the Special Category became subject to the regulations applicable to the General Category.

March 10. Resolution 12 of the National Council of Foreign Trade eliminated the requirement of export licenses, except for a number of specified commodities.

April 20. The price guarantee system established in September 1965, whereby foreign importers of Brazilian coffee were compensated, under specified conditions, for any reduction in the price of Brazilian coffee or any fall of the International Coffee Agreement indicator price, was suspended.

May 11. The Central Bank of Brazil announced the elimination of the 30 per cent contribution quota that had applied to proceeds from exports of beef from the Central Zone of the country.

June 1. In accordance with Central Bank Circular 90, authorized institutions operating in the “manual market” were required to identify purchasers of foreign banknotes and travelers checks and were made subject to the penalties set out in existing laws for declaration of false identifications. Previously, such identification requirements and penalties were not enforced for transactions in the “manual market.”

June 8. An Exchange Stabilization Fund was established.

July 12. The Exchange Control Sector of the Central Bank (FICAM) was abolished and replaced by the Exchange Operations Department (GECAM).

August 16. The bilateral trade and payments agreement with Mainland China was terminated and all transactions with that country were settled in convertible currencies.

August 17. In accordance with Central Bank Resolution 62, sales of foreign exchange in the “manual market” to residents in the form of banknotes and travelers checks were restricted to amounts required for personal expenses connected with travel abroad and were made subject to the presentation of evidence showing compliance with income tax obligations. Foreign residents in transit in Brazil were permitted to purchase foreign exchange 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 they had previously sold required the approval of the Central Bank. The documentary evidence of compliance with income tax obligations was to be forwarded daily to the Central Bank, together with the records of the relative purchase and/or sales transactions signed by the customer.

August 17. The Brazilian Coffee Institute reintroduced a price guarantee system (see April 20) applicable to coffee exports shipped during the period August 17-September 30, 1967. According to this system, a foreign importer of Brazilian coffee was entitled to a compensation equal to the difference between the price of Santos 4 ex dock New York on the date of export registration at the Brazilian Coffee Institute and the lowest similar price occurring in the remainder of 1967. This compensation took the form of a credit entitling the importer to purchase coffee in Brazil in the amount of the compensation through normal commercial channels. The credits were to be made available at the beginning of 1968, and shipment of the coffee purchased with them had to take place within 90 days from the date of issue of such credits.

August 21. Central Bank Resolution 63 authorized banks to obtain foreign credits, under certain conditions, for relending to the domestic private sector to finance capital expenditures in Brazil.

August 29. The provision for the issue of certificates of authorization for a large number of remittances relating to foreign investments under a guarantee bond procedure (têrmo de responsabilidade) was discontinued. The system had been operative since early 1965 in order to eliminate the administrative barriers to such remittances which had developed as a result of the large backlog of applications for registration of foreign capital; under the têrmo de responsabilidade remittances could be made in advance of the completion of registration.

September 20. The monetary authorities ceased to provide exchange cover to authorized banks except for a number of specified transactions.

September 21. Central Bank Resolution 68 reduced from 90 per cent to 70 per cent the proportion of exchange proceeds resulting from coffee exports that commercial banks had to surrender to the Central Bank.

September 29. Agreements were signed with Mexico and Peru, providing for the extension of reciprocal credit lines within the framework of the LAFTA multilateral clearing system.

October 12. Decree Law 333 provided for an over-all increase in tariffs by 5 per cent effective January 1, 1968; exempt from this import surcharge were bound tariff rates when the resultant rate would exceed the amount agreed by treaty, and commodities already exempt from import duty.

November 1. A system of bonuses was introduced that changed the range of effective buying rates for coffee from NCr$1.06-1.38 to NCr$1.11-1.46. The system was terminated on December 31.

December 1. The Brazilian Coffee Institute provided for a guarantee system to foreign importers applicable to purchases of coffee made in Brazil and shipped in the period December 1, 1967-January 5, 1968. According to this system a foreign importer was entitled to a compensation equal to the difference between the price of Santos 4 ex dock New York on the date of the export registration at the Brazilian Coffee Institute and the lowest similar price calculated on the basis of its moving average for periods of 10 consecutive marketing days beginning on January 8 and ending on March 15, 1968. The compensation was to take the form of a credit entitling the importer to use it in payment for new direct purchases of coffee from Brazil. The credits are to be made available after March 15, 1968, and shipment of the coffee purchased with them had to take place within 90 days from the date of issue of such credits.

December 29. The Central Bank announced a change, effective January 4, 1968, in the official buying and selling rates from NCr$2.700 and NCr$2.715 per US$1, respectively, to NCr$3.20 and NCr$3.22 per US$1, respectively.

Note.—The following changes took place early in 1968:

January 1. The customs dispatch tax of 5 per cent on the value of imports was eliminated. Import duties were raised correspondingly (see October 12, 1967).

January 3. Central Bank Resolution 84 provided that sales of foreign exchange in the “manual market” to meet personal expenses connected with travel abroad were permitted up to US$1,000 or the equivalent in other currencies without the prior approval of the Central Bank, on specified terms. Applications for purchases of foreign exchange for travel abroad in excess of US$1,000 had to be submitted to the Central Bank. The Central Bank subsequently authorized such purchases in accordance with the merits of each case. The purchaser of the foreign exchange was no longer required to present evidence showing compliance with income tax obligations, but the requirement that each purchase transaction be registered and that the records of registration of these operations be delivered daily to the Central Bank continued to be in force (see June 1 and August 17, 1967).

January 3. Central Bank Resolution 82 provided that clearance of imports through customs was no longer subject to the prior closing of an exchange contract. Previously, an importer had to close an exchange contract in payment for imports (which could be closed forward for up to 180 days) prior to the clearance of the goods through customs. It was also provided that exchange contracts in payment for imports could only be closed against presentation of documentary evidence of a genuine import transaction.

In addition, Central Bank GECAM Announcement 42 changed the rules for the closing of forward exchange contracts in payment for imports. Forward contracts in payment for imports could henceforth be closed only when it was intended to open a letter of credit, or to pay for goods already shipped. A credit had to be opened within 5 working days from the date of the exchange contract. Previously, it was possible to enter into forward contracts without proving that a genuine import transaction was involved. The above two measures were designed to prevent purely speculative transactions.

January 3. Central Bank Resolution 83 revoked the right previously extended by SUMOC Instruction 289 to repurchase foreign exchange brought in under the provisions of this instruction on a forward basis.

January 3. Central Bank Resolution 84 obliged authorized banks to include their “manual market” operations in the calculation relating to their maximum allowable sold position. Exchange houses authorized to deal exclusively in “manual market” operations were not permitted to maintain sold positions.

January 10. The Brazilian Coffee Institute reintroduced a price guarantee system for coffee registered for export until February 29, 1968 (see December 1, 1967).

January 15. The compulsory use of brokerage firms previously prescribed for most foreign exchange operations was abolished. The measure eliminated the obligatory charge of a brokerage fee of 0.1875 per cent which was previously incurred on exchange transactions.

January 29. Agreement was reached between the Brazilian and Danish authorities to terminate the bilateral payments agreement between the two countries effective March 31,1968.

March 1. The Brazilian Coffee Institute extended the price guarantee system announced on January 10 to cover coffee exports shipped up to the last day of the 1967/68 crop year.

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 Union Bank of Burma.

Administration of Control

Exchange control is administered by the Exchange Control Board through the Exchange Control Department of the Union 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 of foreign nationality 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 considered by an Investment Committee, to ascertain whether the proposed enterprise will utilize domestic raw materials, increase domestic employment, conserve foreign exchange, and generally conform to the economic plans of the Government. However, since February 15, 1963, when the Government announced a new policy of nationalization, permission has not been granted for 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. Proceeds from the liquidation or sale of an enterprise may also be transferred abroad. All such transfers may be made at the official rate of exchange prevailing at the time of the transaction.

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

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

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

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 but not abroad. Imports and exports of gold other than jewelry are subject to the following arrangement, unless they are effected by or on behalf of the monetary authorities. Commercial imports and exports of gold in any form require a license from the Union Bank of Burma; such licenses are not at present being granted.

Changes during 1967

No significant changes took place during 1967.

Burundi

Exchange Rate System

The par value is 0.0101562 gram of fine gold per Burundi Franc or FBu 87.50 = US$1. This rate is applicable to all transactions. The official rates on December 31, 1967 were FBu 87.22 buying, and FBu 87.93 selling, per US$1. Authorized banks must carry out permitted exchange transactions at rates between the buying and selling rates fixed by the Bank of the Republic of Burundi for currencies quoted by that bank 1 and at rates fixed freely with their customers for certain other currencies.2

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 of these 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

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 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, called the Consumption Declaration, a copy of which is then sent to the central bank by the customs office.

Advance deposits calculated on the c.i.f. value are required 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 up to two thirds of net salaries and emoluments of foreign nationals are freely permitted upon proof of payment of taxes. For unincorporated businesses and professional persons, transfers are freely permitted of two thirds of income after taxes. Companies may freely transfer their full net income after taxes, or, if the stockholders or managers are resident foreign nationals, two thirds of income 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 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.

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 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. Imports and exports of gold require licenses and are normally made only by the monetary authorities.

Changes during 1967

September 6. A new Investment Code entered into force and replaced the Investment Code of August 6, 1963.

September 11. The 50 per cent advance deposit requirement previously applicable to specified imports was terminated.

Cambodia 1

Exchange Rate System

The Cambodian Riel is defined as a monetary unit containing 0.0253905 gram of fine gold. Exchange transactions in U.S. dollars and pounds sterling are carried out at parity rates based on the gold content of the riel and the respective currencies; these rates are CR 35 = US$1 and CR 84 = £1. The official parity for the French franc, however, is fixed at CR 10 = F 1; this rate is applicable to most settlements in French francs. Foreign tourists staying at all officially listed hotels are given coupons for CR 25 over and above the rate of CR 35 for each U.S. dollar sold (coupons for CR 2 over and above the rate of CR 10 for each French franc sold).

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

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

Administration of Control

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

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

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 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 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.

Permitted imports are classified in seven lists. The list of “financeable” imports contains those commodities subject neither to a compensation charge (péréquation) nor to a fixed resale price. Commodities in lists A and B are subject to compensation charges of CR 46 and CR 41.5 per U.S. dollar, respectively.2 For commodities in list C, the compensation charge is CR 35 per U.S. dollar.3 Commodities in list D require a compensation charge of 10-50 per cent of the c.i.f. price. List E contains the commodities that are sold by SONEXIM to local distributors at fixed prices. There is also a list of commodities that may be imported on a barter basis (“en échanges compenses”); most trade with Laos and the Republic of Viet-Nam is conducted on this basis, and certain imports from other sources are admitted mainly in compensation transactions.

Foreign exchange received from foreign travelers by approved hotels and surrendered by the latter to SONEXIM may be used by that organization to finance imports (see section on Proceeds from Invisibles, below). 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.

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 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 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 temporarily or permanently, are permitted to transfer abroad, up to prescribed limits, savings out of their salaries earned in Cambodia.

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

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

Cambodians studying abroad may receive monthly exchange allocations equivalent to 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.

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 (“en échanges compenses”). Export proceeds are surrendered to the National Exchange Office.

Proceeds from Invisibles

Proceeds from invisibles must be surrendered. Foreign tourists staying at all officially listed hotels are given coupons for CR 25 over and above the rate of CR 35 for each U.S. dollar sold (CR 2 over and above the rate of CR 10 for each French franc sold) for their room and restaurant charges. Foreign tourists receive this premium also on purchases of souvenirs in stores designated by the Ministry of Tourism and for their expenses in group travel arranged by the Société Khmère des Auberges Royales. Only authorized banks and approved hotels may purchase foreign exchange from travelers. Approved hotels must surrender to authorized banks the foreign exchange that they acquire from foreign travelers; the corresponding exchange may be credited to “Tourism SONEXIM Accounts.” Such accounts may be used by the holder to import commodities. 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 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 industrial users.

Changes during 1967

January 1. The system of barter or compensation trade (échanges compenses) was expanded; in trade with all countries, the proceeds of specified exports could be used entirely for the import of other listed commodities.

February 11. The import program for 1967 was announced. It envisaged total imports valued at CR 2.6 billion.

April 1. A tax ranging from CR 100 to CR 1,000 was levied on imports of radio and television sets.

April 19. Notice No. 1089-DCE/3B of the Ministry of Commerce amended the péréquation system for imports.

June 8. The compensation procedure in force for trade with the Republic of Viet-Nam became applicable also to trade with Laos.

July 31. Certain commodities were added to the lists of those admitted to the compensation procedure.

August 1. The supervision over imports of passenger automobiles outside the import program (“sans devises”) for personal use was tightened.

August 4. The compensation charge (péréquation) applying to imports in list C was reduced for some of these commodities, when settled in French francs, from CR 5 to CR 4 per U.S. dollar.

August. The premium of CR 25 per U.S. dollar sold (CR 2 per French franc sold) by foreign tourists staying at officially listed hotels was extended to their purchase of airline tickets from the Royal Air Cambodian Company for travel on domestic routes.

August 24. Decree No. 2053 established the rate for 1966 of the “exceptional equipment tax” (established annually by decree of the Minister of Finance). The tax was payable upon application for an authorization to transfer profits and dividends.

September 1. Additional imports valued at CR 42 million were permitted from the French Franc Area.

October 23. Nonresidents temporarily in Cambodia (including diplomats and tourists) were required to cover their local expenditures entirely through the sale on the Phnôm-Penh exchange market of currencies acceptable to the National Bank or the National Exchange Office; they continued to be able, however, to settle hotel bills and airline tickets with their foreign exchange.

Cameroon

Exchange Rate 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 246.853 = 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 include a commission. Forward exchange transactions, which are permitted in any currency and for any period, take place at freely negotiated rates. There are no restrictions on foreign exchange dealings, whether spot or forward, by residents or nonresidents, whether banks or nonbanks.

Settlements with Mali, with which Cameroon maintains a bilateral payments agreement, are subject to special provisions.2 In relations with other countries, there are no restrictions on payments and no prescription of currency requirements, although certain controls are applied to borrowing and lending abroad, to issues and sales of foreign securities in Cameroon, and to inward and outward direct investment (see section on Capital, below). In practice, settlements with countries outside the French Franc Area other than Mali are usually made through correspondent banks in France, either in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs; settlements with other countries of the Franc Area are usually made in currencies of that Area, in practice mainly in French francs.

The following is applicable to payments and transactions between Cameroon and all foreign countries except Mali.3 Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Cameroon or abroad at the choice of the holder. Accounts in CFA francs or in any foreign currency may be held in Cameroon by any nonresident. Balances on nonresident-held accounts may be transferred freely to any type of resident-held or nonresident-held account and used for any payment in Cameroon or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment, including any amount of interest. There are no restrictions on the physical importation or exportation of foreign or domestic securities. Imports and exports of gold (other than gold coins) require the prior approval of the Ministry of Commerce and Industry; this approval is given automatically.

Cameroon's control measures affecting inward and outward direct investment, borrowing and lending abroad, and issues and sales of foreign securities 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 Central African Customs and Economic Union (Central African Republic, Chad, Congo (Brazzaville), and Gabon); and (3) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Dahomey, Ivory Coast, the Malagasy Republic, Mauritania, Niger, Senegal, Togo, and Upper Volta).

Administration of Control

The Ministry of Commerce and Industry supervises borrowing and lending abroad, the issue or sale of foreign securities in Cameroon, and inward and outward direct investment; in the near future, an Office of Foreign Financial Relations will be charged with this supervision. The Ministry of Commerce and Industry also gives its visa on import and export declarations for gold coins and automatically grants its prior approval for imports and exports of gold in any other form. All payments and receipts between Cameroon and foreign countries that are made through Cameroonian 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. These data are collected by the BCEAEC for the preparation of the balance of payments only. All registered banks in Cameroon are permitted to carry out foreign exchange transactions. Import and export licenses are issued by the Directorate of Commerce and Foreign Economic Relations in the Ministry of Commerce and Industry.

Imports and Import Payments

Imports from Portugal, Rhodesia, and South Africa are prohibited. The import from all sources of certain goods (including wines, flour, rice, tobacco, beer, sugar, pharmaceutical products, bicycles, agricultural tools, sheet aluminum, matches, secondhand clothing, and certain textiles of Asian origin) is subject to restrictive licensing. Other imports from countries in the French Franc Area may be made freely. The import of a number of goods from EEC countries other than France is liberalized; licenses for these 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.

Separate global quotas are established for imports from EEC countries other than France and for imports from all other countries outside the French Franc Area. Under quotas established for imports from EEC countries, only goods originating in those countries may be imported. Under the quotas for other countries, goods originating in any country outside the French Franc Area except Mainland China and the U.S.S.R. may be imported. Separate quotas are established for Mainland China and the U.S.S.R.

Within the import program, there are special ceilings for imports of a few commodities from countries outside the Franc Area; these ceilings are subdivided into ceilings for EEC countries other than France, for low-wage countries, and for all other 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 this distribution, registered importers are classified according to the value of their annual imports, although exchange may also be made available, under certain conditions, to newly established importers and 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.

Payments for imports from any country may be made freely, at any time, and without any formality. Commodity futures may be dealt in freely, in Cameroon or abroad.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. In principle, resident and nonresident travelers may not take out domestic or foreign banknotes or coins (other than gold coins) to destinations other than France (and its Overseas Departments and Territories except the Territory of the Afars and Issas), Monaco, or the other Operations Account countries without prior declaration to the Ministry of Commerce and Industry; in practice, however, this declaration is not required.

Exports and Export Proceeds

Exports to Portugal, Rhodesia, and South Africa are prohibited. Exports to countries in the French Franc Area are free of license. All other exports require prior authorization or a declaration.

Exports are free of exchange control. The repatriation and surrender of export proceeds is not required. Exporters may grant credit for any period and are free to sell forward their anticipated export proceeds.

Proceeds from Invisibles

With minor exceptions, services performed for nonresidents do not require licenses. There are no restrictions on the receipt of payments for services rendered to nonresidents and the proceeds from invisibles need not be surrendered.

Travelers may bring in any amount of domestic or foreign banknotes, subject to prior declaration, which in practice is not required; however, the exchange of banknotes issued by the banks of issue of Guinea and Mali is prohibited or limited to certain amounts for each traveler. Travelers may also bring in freely, subject to prior declaration to the Ministry of Commerce and Industry and subject to customs declaration, up to ten gold coins, irrespective of denomination or face value.

Capital

Residents and nonresidents may import or export capital freely without a license, through banks or any other channel. Foreign and domestic securities of all types may freely be imported or exported physically, whether through the intermediary of a bank or not, and transactions between residents and nonresidents in domestic and foreign real estate (except when forming part of a direct investment) are unrestricted. Capital assets abroad of residents are not subject to repatriation and may (except when forming part of a direct investment) be freely disposed of.

Certain controls 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 Cameroon, but these controls relate to the transactions themselves, not to payments or receipts; 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, the other member countries of the Central African Customs and Economic Union, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account.

Direct investments abroad 4 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 Cameroon 5 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 Cameroon 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 are agreed for the operations of the company 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 gold in any form, at home or abroad. They are also free to acquire and dispose of gold in any form, at home or abroad. Imports and exports of gold require, in addition to a customs declaration, a license issued by the Ministry of Commerce and Industry. Exempt from the latter requirement are (1) imports and exports by or on behalf of the monetary authorities, and (2) imports and exports of gold coins, which are free, subject to prior declaration to the Minister of Commerce and Industry.

Changes during 1967

February 23. Decree No. 67/DF/81 established that, to be eligible for import licenses, importers were required to have had in 1966 an import turnover of at least CFAF 5 million or a domestic turnover of at least CFAF 15 million. Circular No. 21 of March 13, 1967 gave details of the application of the Decree.

July 1. Law No. 67/LF/22 of June 12, 1967 established the principle that financial relations with foreign countries were free. With minor exceptions, all existing legislation contrary to this principle was revoked. Previously, current and capital payments to French Franc Area countries already were not only unrestricted but were also free of supervision, as were inward transfers originating in French Franc Area countries.

Normally, the repatriation and surrender of claims, earnings, and proceeds accruing abroad would no longer be required. Import and export regulations were not affected, although the related exchange control formalities were abolished; these included the requirements that import licenses and import certificates be domiciled with an authorized bank, and that exporters sign a foreign exchange commitment in respect of all exports to countries outside the French Franc Area.

July 1. Decree No. 67/DF/365 of August 21, 1967 established the principal rules for the application of Law No. 67/LF/22. The decree defined the concept of “foreign countries” and indicated the types of capital transactions with foreign countries that would be subject either to declaration or prior approval. The decree ruled that Law No. 67/LF/22 was not applicable to relations with Portugal, Rhodesia, or South Africa; relations with those countries continued to be governed by Decrees Nos. 63/DF/211, 63/DF/212, and 65/DF/544, and by the notices issued for their application. It also provided that the import and export of gold in any form remained subject to the existing regulations, and that the import and export of domestic and foreign banknotes and coins (except gold coins) required prior declaration.

The decree also provided for the statistical registration of all inward and outward payments, created in the Ministry of Commerce and Industry a Balance of Payments Committee, and charged the Minister of Commerce and Industry with periodically constructing a national balance of payments. For this purpose, all banks and financial institutions as well as the postal administration were required to notify the BCEAEC or the Minister of Commerce and Industry, respectively, of all payments between Cameroon and foreign countries, all transactions in foreign currency, all transactions in CFA francs that affected financial relations with foreign countries, and all transactions in securities between residents and nonresidents. The BCEAEC was given authority to request any information required for the preparation of the balance of payments from physical and juridical persons, whether public agencies or not, that were customarily resident in Cameroon or had their head office in Cameroon.

Canada 1

Exchange Rate System

The par value is 0.822021 gram of fine gold per Canadian dollar or Can$ 1.08108 = US$1. Canada has no exchange restrictions on foreign payments. On March 25, 1952, Canada notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No prescription of currency requirements are in force.

Imports and Import Payments

Payments and transfers abroad may be made freely. Import licenses are required only for a few agricultural items, including certain cereals; for some of these 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 Soviet bloc countries and Mainland China are subject to control; certain nonstrategic goods, when of Canadian origin, may be exported to these destinations under general permit. All goods destined for Rhodesia require an export permit.

Payments for and Proceeds from Invisibles

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

Capital

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

Gold

Residents may freely purchase, hold, and sell gold in any form, at home or abroad. Exports of gold are subject to the following conditions: (1) the sale of gold to Soviet bloc 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 1967

February 20. A new Export Control List was issued under the Export and Import Permits Act.

June 6. Following the U.S. ban on silver exports, Canada extended export control to silver coins, silver and silver alloy in wrought or unwrought forms, chemicals, salts, and compounds of silver, and silver alloy scrap; export control was applied to all destinations, including the United States. Normal commercial shipments of these materials to the United States were continued under export permits. Furthermore, a general permit was granted to allow the export of silver coinage, not in excess of Can$5 a person, in the personal possession of individual travelers leaving Canada.

September 15. The Government announced that export credit insurance would be made available to cover exports to the United States.

December 16. The Bank of Canada requested Canadian banks and other financial intermediaries to refrain from extending credit on gold or on other security for the purchase of gold, and not to facilitate forward purchases of gold.

Note.—The following development took place in 1968:

January 28. The Bank of Canada announced that, following discussions with the chartered banks, it had been agreed that the banks would discourage the use of bank credit to facilitate abnormal transfers of funds abroad by Canadian subsidiaries of foreign companies, and would also discourage the use of bank credit by such companies to meet requirements in Canada that had in the past normally been met by parent 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 246.853 = US$ 1.1 Exchange transactions in French francs between the BCEAEC and commercial banks 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 include a commission. Forward exchange transactions, which are permitted in any currency and for any period, take place at freely negotiated rates. There are no restrictions on foreign exchange dealings, whether spot or forward, by residents or nonresidents, whether banks or nonbanks.

There are no restrictions on payments and no prescription of currency requirements, although certain controls are applied to borrowing and lending abroad, to issues and sales of foreign securities in the Central African Republic, and to inward and outward direct investment (see section on Capital, below). In practice, settlements with countries outside the French Franc Area are usually made through correspondent banks in France, either in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs; settlements with other countries of the French Franc Area are usually made in currencies of that Area, in practice mainly in Franch francs.

The following is applicable to payments and transactions between the Central African Republic and all foreign countries.2 Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in the Central African Republic or abroad at the choice of the holder. Accounts in CFA francs or in any foreign currency may be held in the Central African Republic by any nonresident. Balances on nonresident-held accounts may be transferred freely to any type of resident or nonresident-held account and used for any payment in the Central African Republic or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment, including any amount of interest. There are no restrictions on the physical importation or exportation of foreign or domestic securities. Imports and exports of gold are restricted; these require the prior authorization of the Ministry of Finance and National Economy.

The Central African Republic's control measures affecting inward and outward direct investment, borrowing and lending abroad, and issues and sales of foreign securities 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 Central African Customs and Economic Union (Cameroon, Chad, Congo (Brazzaville), and Gabon); and (3) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Dahomey, Ivory Coast, the Malagasy Republic, Mauritania, Niger, Senegal, Togo, and Upper Volta).

Administration of Control

The Office of Foreign Financial Relations in the Ministry of Finance and National Economy, under the direction of the Directorate of the Budget, supervises borrowing and lending abroad, the issuing or sale of foreign securities in the Central African Republic, and inward and outward direct investment. This Office also issues import and export licenses for gold. 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. These data are collected by the BCEAEC for the compilation of the balance of payments only. All registered banks in the Central African Republic are permitted to carry out foreign exchange transactions. Import and export licenses are issued by the Foreign Trade Office in the Ministry of Finance and National Economy.

Imports and Import Payments

Imports from South Africa are prohibited. 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 household utensils and matches 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. Most imports from EEC countries are liberalized. Imports from all countries outside the French Franc Area are subject to licensing in accordance with an annual import program. This program is determined by a joint French-Central African Committee.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the French Franc Area. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for other countries may be used to import goods originating in any country outside the French Franc Area. There are ceilings for imports of a few products from countries outside the French Franc Area other than EEC countries. There are special ceilings for imports of textile piece goods from low-wage countries.

Licenses for imports outside the program are granted for petroleum imports, for which a joint quota exists for the countries of the UDEAC, for imports of tobacco, and for certain imports by diamond and lumber companies.

For goods included in the annual import program, the Ministry of Finance and National Economy publishes each year a list of the allocations granted to each registered importer in accordance with, inter alia, his import business in the previous year. The importer submits to the Ministry an application for a license within the limits of the quotas that have been assigned to him. Import licenses are valid for 9 months and may be extended once for 3 months, i.e., the maximum period of validity is 12 months; in exceptional cases, mainly involving capital goods, a second extension for 3 months may be granted.

Payments for imports from any country may be made freely, at any time, and without any formality. Commodity futures may be dealt in freely, in the Central African Republic or abroad.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. Resident and nonresident travelers may take out any amount in domestic and foreign banknotes or coins (except gold coins).

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; exports to South Africa, however, are prohibited.

Exports are free of exchange control. The repatriation and surrender of export proceeds is not required. Exporters may grant credit for any period and are free to sell forward their anticipated export proceeds.

Proceeds from Invisibles

With minor exceptions, services performed for nonresidents do not require licenses. There are no restrictions on the receipt of payments for services rendered to nonresidents and the proceeds from invisibles need not be surrendered.

Travelers may bring in any amount of domestic or foreign banknotes and coins (excluding gold coins); however, the exchange of banknotes issued by the banks of issue of Guinea and Mali is prohibited or limited to certain amounts for each traveler.

Capital

Residents and nonresidents may import or export capital freely without a license, through banks or any other channel. Foreign and domestic securities of all types may be freely imported or exported physically, whether through the intermediary of a bank or not, and transactions between residents and nonresidents in domestic and foreign real estate (except when forming part of a direct investment) are unrestricted. Capital assets abroad of residents are not subject to repatriation and may (except when forming part of a direct investment) be freely disposed of.

Certain controls are maintained over borrowing and lending abroad, over inward and outward direct investments, and over the issuing, advertising, or offering for sale of foreign securities in the Central African Republic, but these controls relate to the transactions themselves, not to payments or receipts. 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, the other member countries of the Central African Customs and Economic Union, 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 and National Economy, 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 and National Economy, 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 Republic 4 must be declared to the Minister of Finance and National Economy, 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 and National Economy. 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 and National Economy. 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 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 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 and National Economy. 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 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, 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 Finance and National Economy, who is the Chairman of the Investment Commission which considers the application. If a positive decision has been given by the Commission, the proposed authorization is submitted to the Council of Ministers. Preferential treatments A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by an act of the Board of Directors of the Equatorial Customs Union upon the recommendation of the Council of Ministers.

Gold

Residents are free to hold gold in any form, in the Central African Republic or abroad. They also are free to acquire and dispose of gold in any form, at home or abroad. Imports and exports of gold require, in addition to a customs declaration, a license from the Ministry of Finance and National Economy, which grants such licenses restrictively. Exempt from the licensing 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).

Changes during 1967

January 1. Decree No. 66/71 exempted groundnuts and sesame from export tax.

January 23. Decree No. 67/043 lifted the prohibition on imports of specified foodstuffs but provided that these could not be imported from countries outside the UDEAC unless covered by an import license.

April 17. Decree No. 67/135 abolished the import levy on wheat flour imported from France and introduced an import levy on all wheat flour imported from sources other than a specified flour mill in Senegal.

April 25. Circular No. 0992 announced that with effect from June 1, 1967 imports of printed piece goods from low-wage countries would be reduced by 50 per cent, and that such imports would be discontinued from January 1, 1968.

May 31. Circular No. 1316/MEFEN/DCI made the import of certain paints from countries not belonging to the UDEAC conditional on the purchase in a specified ratio of similar domestic products.

July 1. Ordinance No. 67/54 of August 1, 1967 established the principle that financial relations with foreign countries were free. With minor exceptions, all existing legislation contrary to this principle was revoked, including Law No. 63/389 of April 13, 1963 concerning exchange control and Law No. 63/388 of April 13, 1963 concerning the creation of the Exchange Office administering the exchange controls. The ordinance also provided for the statistical registration of all inward and outward payments. Previously, current and capital payments to French Franc Area countries were already unrestricted; they were also free of supervision, as were inward transfers originating in French Franc Area countries.

Normally, the repatriation and surrender of claims, earnings, and proceeds accruing abroad would no longer be required. Import and export regulations were not affected, although the related exchange control formalities were abolished; these included the requirements that import licenses and import certificates be domiciled with an authorized bank, and that exporters sign a foreign exchange commitment in respect of all exports to countries outside the French Franc Area.

July 1. Decree No. 67/253 of August 1, 1967 established the principal rules for the application of Ordinance No. 67/54. The decree defined the concept of “foreign countries” and indicated the types of capital transactions with foreign countries that would be subject either to declaration or to prior approval. By formally revoking all exchange control regulations previously issued by the Exchange Office, it also provided that the export of banknotes and coins issued by the BCEAEC was free (the import of such banknotes and coins already was free).

July 1. Decree No. 67/254 of August 1, 1967 abolished the taxes previously levied on transfers to countries outside the French Franc Area and on imports from countries outside the French Franc Area.

July 1. Decree No. 67/255 of August 1, 1967 created a Balance of Payments Committee charged with periodically compiling a national balance of payments. For this purpose, all banks and financial institutions as well as the postal administration were required to notify the BCEAEC of all payments between the Central African Republic and foreign countries, all transactions in foreign currency, all transactions in CFA francs that affected financial relations with foreign countries, and all transactions in securities between residents and nonresidents. The BCEAEC was given authority to request any information required for the compilation of the balance of payments from physical and juridical persons, whether public agencies or not, that were customarily resident, or had their head office, in the Central African Republic.

September 18. Decree No. 67/285 created an Office of Foreign Financial Relations. This Office was to participate, together with the BCEAEC, in the centralization of information required for the preparation of the balance of payments. It would also examine applications for the authorizations, and receive the declarations, that were required by Decree No. 67/253.

November 6. Arrêté No. 441 established that declarations and applications for authorization in respect of those capital transactions that remained subject to control had to be addressed to the Office of Foreign Financial Relations in the Directorate of the Budget, Ministry of Finance and National Economy. (On February 7, 1968, the duties of the Office of Foreign Financial Relations were further defined by Arrêté No. 058.)

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.

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, and those for imports under an export incentive scheme are granted by the Commissioner of Commodity Purchase.

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 and with the United Arab Republic 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 on 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.

Imports and Import Payments

All imports of goods originating in or shipped from Rhodesia are prohibited. The value and composition of imports are established by an annual import program. Except for imports by the Food Commissioner's Department, direct imports by other government departments, and certain minor imports (such as trade samples, gifts, and books up to specified amounts), all imports require individual licenses3 and are divided into three groups—essential goods, less essential goods, and nonessential goods. Licenses to import goods in the first and second groups are issued up to the limits of quotas based on past imports. Imports of many nonessential or locally produced goods are either prohibited or considerably restricted.

The right to import is restricted to government-sponsored corporations and registered importers. Imports of specified commodities 4 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 quotas, applicants for import licenses are divided into three groups: (1) actual users of industrial raw materials, machinery, etc., (2) those who import other goods for their own use and not for resale, and (3) established importers who import goods for trading purposes.

In addition to the above arrangements, certain imports may be made under an export incentive system (see section on Exports and Export Proceeds, below).

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 and exchange control copy of the import license.

Most imports are subject to a 10 per cent customs surcharge on the existing rate of import duty; certain imports are also subject to customs surcharges of 5 per cent ad valorem or 20 per cent of the normal rate of duty.

Payments for Invisibles

All payments for invisibles require individual permits. The remittance of profits, dividends, and other investment income was, until July 31, 1964, freely permitted, but since then a moratorium, which subsequently was relaxed, has been applied to such remittances.5 Releases of accumulated arrears have been taking place since the latter part of 1965; since June 1966 they have been made at a rate of about Cey Rs 3.5 million a month.

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 tourist travel abroad is only granted for furloughs of foreign nationals. 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,6 exchange up to a maximum of Cey Rs 350 a month is allowed; for study in educational institutions in other countries, exchange is made available at £ stg. 60 a month for postgraduate studies and £ stg. 45 a month for undergraduate studies, plus actual fees and costs of books.

For travel and other expenses for medical reasons, exchange is authorized if a certificate is produced from a medical specialist in Ceylon 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 and £ stg. 55 for a child going to school, and £ stg. 25 for other children, 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 are entitled to travel exchange.

Exports and Export Proceeds

All exports to Rhodesia are prohibited. All exports to the Syrian Arab Republic require the prior approval of the Controller of Imports and Exports and that of the Controller of Exchange. For purposes of exchange control, licenses issued by the Controller of Exchange are required for all commercial exports; in addition, export licenses issued by the Controller of Imports and Exports are required for all commodities except 36 minor items. Licenses for exports to Albania, Austria, Bulgaria, Mainland China, the Republic of China, Czechoslovakia, Hungary, North Korea, the Republic of Korea, Poland, Rumania, the U.S.S.R., North Viet-Nam, and the Republic of Viet-Nam are issued only to registered Ceylonese traders. Exports of certain manufactured goods and re-exports of foreign manufactured articles are allowed only under special permit. 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 license for a commercial export when he is satisfied that payment representing fair value for the goods will be received in Ceylon under prescribed regulations and, usually, within four months from the date of shipment. Foreign exchange proceeds from exports must be surrendered.

An export incentive scheme is in force for all industrial goods the manufacture of which has been either approved by or registered with the Development Division of the Ministry of Industries and Fisheries and for specified nonindustrial exports (so far, only tobacco, mica, cocoa liquor, and some minor agricultural commodities have been declared eligible). Exporters of such commodities are granted transferable bonus vouchers in amounts equivalent to 20 per cent of the f.o.b. value of the goods exported, provided, for industrial exports, that the net foreign exchange earnings (i.e., the excess of earnings over the cost of imported inputs, excluding depreciation of machinery) are not less than 25 per cent of the f.o.b. value. The vouchers entitle the holder to obtain import licenses to the same face value for any commodity admitted for import by established traders (“trade quota items”), and for industrial raw materials, machinery, and essential spare parts. Applications for bonus vouchers cannot be submitted until the export proceeds have been collected and surrendered.

Proceeds from Invisibles

Foreign exchange proceeds from invisibles must be surrendered.

A traveler entering Ceylon must declare his holdings, including currency notes and coins. The amount of foreign funds that may be carried into Ceylon in the form of travel credit instruments is not restricted. The import of 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 in shares of public companies incorporated in Ceylon. Proceeds from the sale or liquidation of investments in approved projects may be repatriated, along with capital appreciation. Proceeds from the sale or liquidation of investments not approved by the Government may not be transferred abroad, but they may be reinvested in Ceylonese securities; the current income thereon is subject to the transfer moratorium.

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 registered with the Controller of Exchange, and the sale or transfer of such securities is allowed only with the permission of the Minister of Finance.

Emigrants are not permitted capital remittances except on grounds of dire hardship. Subject to prescribed limits, the transfer of their net income, other than investment income, is allowed for one year from the date of emigration, 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, other than investment income, may be transferred, within certain limits, even after one year.

Repatriates leaving Ceylon for residence in the country of their permanent domicile are permitted, at the time of their departure, to transfer assets representing their retirement funds and a reasonable amount of savings up to a maximum of Cey Rs 75,000 for the “Asian group” and Cey Rs 150,000 for other countries. However, for nationals of the “non-Asian group” 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. Special provisions, governed by an agreement between Ceylon and India, apply to Indian families returning to India.

Gold

Residents need permission to hold or acquire gold coins in Ceylon for numismatic purposes. 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 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. Commercial imports of jewelry and of other articles containing gold are severely restricted.

Changes during 1967

March 30. The export incentive scheme was applied to cocoa liquor; this product had been declared eligible for the scheme on December 1, 1966, but was not exported until March 30, 1967.

May 10. All applications for licenses to export to Libya had to be referred to the exchange control authorities for prior approval. This instruction was canceled on June 19, when tea exports to Libya were freely permitted, provided that letters of credit were established.

May 11. Customs duties were reduced on certain raw materials and machinery judged essential for economic development.

June 5. All settlements with Yugoslavia were put on a convertible currency basis.

July 12. Certain minor agricultural commodities were declared eligible for the export incentive scheme.

July 26. The fees payable on import licenses were increased for most goods.

July 27. The Foreign Exchange Budget for 1967 was published; it set the total size of the import program for 1967 at Cey Rs 2,231 million.

August 9. The fees for import licenses were further modified.

September 1. The floor price under the tea subsidy scheme was raised from Cey Rs 0.90 to Cey Rs 1.00.

November 22. The par value of the Ceylon rupee was changed from Cey Rs 4.76190 = US$1 to Cey Rs 5.95237 = US$1.

November 22. Export duties on all major exports, as well as on some minor exports, were increased. The scheme under which refunds of export duty on tea could be obtained was abolished.

November 26. Following the devaluation, the rupee value of import licenses outstanding was increased by 7.12 per cent for goods payable in sterling and by 25 per cent for goods payable in a foreign currency that had not been devalued.

December 31. The import monopoly for textiles was transferred from the Cooperative Wholesale Establishment to the Lanka Salu Sala Ltd.

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 246.853 = US$1.1 Exchange transactions in French francs between the Chadian agency of the BCEAEC and commercial banks in Chad 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 include a commission. Forward exchange transactions, which are permitted in any currency and for any period, take place at freely negotiated rates. There are no restrictions on foreign exchange dealings, whether spot or forward, by residents or nonresidents, whether banks or nonbanks.

There are no restrictions on payments and no prescription of currency requirements, although certain controls are applied to borrowing and lending abroad, to issues and sales of foreign securities in Chad, and to inward and outward direct investment (see section on Capital, below). In practice, settlements with countries outside the French Franc Area are usually made through correspondent banks in France, either in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs; settlements with other countries of the French Franc Area are usually made in currencies of that Area, in practice mainly in French francs.

The following is applicable to payments and transactions between Chad and all foreign countries.2 Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Chad or abroad at the choice of the holder. Accounts in CFA francs or in any foreign currency may be held in Chad by any nonresident. Balances on nonresident-held accounts may be transferred freely to any type of resident-held or nonresident-held account and used for any payment in Chad or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment, including any amount of interest. There are no restrictions on the physical importation or exportation of foreign or domestic securities. Imports and exports of gold are free; these require the prior visa of the Ministry of Finance, but the visa is given automatically.

Chad's control measures affecting inward and outward direct investment, borrowing and lending abroad, and issues and sales of foreign securities 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 Central African Customs and Economic Union (Cameroon, Central African Republic, Congo (Brazzaville), and Gabon); and (3) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Dahomey, Ivory Coast, the Malagasy Republic, Mauritania, Niger, Senegal, Togo, and Upper Volta).

Administration of Control

The Ministry of Finance exercises the supervision over borrowing and lending abroad, over the issue or sale of foreign securities in Chad, and over inward and outward direct investment; in the near future, the Office of Foreign Financial Relations (which has not yet been established) will be charged with this supervision. The Ministry of Finance also gives its visa on import and export declarations for gold. All payments and receipts between Chad and foreign countries that are made through Chadian 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. These data are collected by the BCEAEC for the preparation of the balance of payments only. All registered banks in Chad are permitted to carry out foreign exchange transactions. Import and export licenses are issued by the Foreign Trade Office in the Ministry of Economy. Import certificates for liberalized commodities are made out by the importer himself.

Imports and Import Payments

Imports from all sources of wheat, wheat flour, and sugar are prohibited. All other imports from countries in the French Franc Area may be made freely. With the exception of radios and petroleum products, other imports from EEC countries other than France may also 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. A special licensing procedure is applicable to the import of petroleum products.

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

For goods included in the annual import program, the Ministry of Economy publishes each year an announcement of the quota allotted to each registered importer based on, principally, his import business in the previous year. Import licenses are valid for six months and are automatically extended for another six months. Further extensions are not granted except, in unusual circumstances, for manufactured goods when evidence is presented concerning the time needed for their production.

Specified imports from neighboring countries not belonging to the French Franc Area (Libya and the Sudan) up to a value of CFAF 3 million a year for a single importer may be made through compensation transactions. Certain special regulations also apply to border trade with Nigeria.

Payments for imports from any country may be made freely, at any time, and without any formality. Commodity futures may be dealt in freely, in Chad or abroad.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. Resident and nonresident travelers may take out any amount in domestic and foreign banknotes. Travelers also may take out freely, without declaration to the Ministry of Finance but subject to customs declaration, up to ten gold coins, irrespective of denomination or face value.

Certain insurance transactions—but not the related payments—between residents and nonresidents are subject to restriction.

Exports and Export Proceeds

Exports to Rhodesia and South Africa are prohibited. With a few exceptions, all exports require licenses. Specified exports to Libya, Nigeria, and the Sudan may be made through compensation transactions.

Exports are free of exchange control. The repatriation and surrender of export proceeds is not required. Exporters may grant credit for any period and are free to sell forward their anticipated export proceeds.

Proceeds from Invisibles

With minor exceptions, services performed for nonresidents do not require licenses. There are no restrictions on the receipt of payments for services rendered to nonresidents and the proceeds from invisibles need not be surrendered.

Travelers may bring in any amount of domestic or foreign banknotes; however, the exchange of banknotes issued by the banks of issue of Guinea and Mali is prohibited or limited to certain amounts for each traveler. Travelers may also bring in freely, without declaration to the Ministry of Finance but subject to customs declaration, up to ten gold coins, irrespective of denomination or face value.

Capital

Residents and nonresidents may import or export capital freely without a license, through banks or any other channel. Foreign and domestic securities of all types may be freely imported or exported physically, whether through the intermediary of a bank or not, and transactions between residents and nonresidents in domestic and foreign real estate (except when forming part of a direct investment) are unrestricted. Capital assets abroad of residents are not subject to repatriation and may (except when forming part of a direct investment) be freely disposed of.

Certain controls 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, but these controls relate to the transactions themselves, not to payments or receipts; 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, the other member countries of the Central African Customs and Economic Union (UDEAC), 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, 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 Chad 4 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 UDEAC—Cameroon, the Central African Republic, Chad, Congo (Brazzaville), and Gabon. Preferential treatments A and B are granted for a period of up to 15 years. Preferential treatment C is reserved for enterprises of prime importance to the country's economic development; it provides for 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 is granted by a decision of the UDEAC upon the recommendation of the Council of Ministers.

Gold

Residents are free to hold gold in any form, at home or abroad. They are also free to acquire and dispose of gold in any form, at home or abroad. Imports and exports of gold require, in addition to a customs declaration, a prior declaration to the Ministry of Finance, which grants its visa automatically. Exempt from the latter requirement are (1) imports and exports by or on behalf of the Treasury or the BCEAEC, (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles), (3) imports and exports by travelers of gold articles (other than coins and bars) whose combined weight does not exceed 500 grams, and (4) imports and exports of up to ten gold coins, irrespective of denomination or face value.

Changes during 1967

April 1. The import program for the period to March 31, 1968 was announced. It made no provision for the importation of wheat, wheat flour, or sugar. All other imports from EEC countries other than France were unrestricted, with the exception only of radio receivers and petroleum products. The total of the quotas for non-EEC countries outside the French Franc Area showed a slight increase over that in the previous program.

July 1. Ordinance No. 16/F of July 5, 1967 established the principle that financial relations with foreign countries were free. With minor exceptions, all existing legislation contrary to this principle was revoked, including Ordinance No. 5/F of March 17, 1965 concerning the creation of the Exchange Department administering the exchange controls. The law also provided for the statistical registration of all inward and outward payments. Previously, current and capital payments to French Franc Area countries already were not only unrestricted but were also free of supervision, as were inward transfers originating in French Franc Area countries.

Normally, the repatriation and surrender of claims, earnings, and proceeds accruing abroad would no longer be required. Import and export regulations were not affected, although the related exchange control formalities were abolished; these included the requirements that import licenses and import certificates be domiciled with an authorized bank, and that exporters sign a foreign exchange commitment in respect of all exports to countries outside the French Franc Area.

July 1. Decree No. 165/F of July 5, 1967 established the principal rules for the application of Ordinance No. 16/F. The decree defined the concept of “foreign countries” and indicated the types of capital transactions with foreign countries that would be subject either to declaration or prior approval. It also provided that the import and export of gold were free, subject, with certain exceptions, to the prior visa of the Ministry of Finance on an import or export declaration, and that the import and export of banknotes and coins issued by the BCEAEC were free.

July 1. Decree No. 164/F of July 5, 1967 created a Balance of Payments Committee charged with periodically constructing a national balance of payments. For this purpose, all banks and financial institutions as well as the postal administration were required to notify the BCEAEC of all payments between Chad and foreign countries, all transactions in foreign currency, all transactions in CFA francs that affected financial relations with foreign countries, and all transactions in securities between residents and nonresidents. The BCEAEC was given authority to request any information required for the preparation of the balance of payments from physical and juridical persons, whether public agencies or not, that were customarily resident in Chad or had their head office in Chad.

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. The rates of exchange in both markets are fluctuating rates. Through the banking market pass government transactions, proceeds from exports, sales of exchange by the large mining companies, receipts from a few invisibles, and payments for imports and for some commercial invisibles. 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. Settlements for imports are subject to a compulsory deferment period of 60 days from the date of shipment. There is additionally some restriction on the availability of exchange in that the Central Bank sells exchange to the commercial banks only for forward delivery (82 days on December 29, 1967).

On December 29, 1967, the exchange rate in the banking market was E° 5.79 buying, E° 5.80 selling, per US$1; the rate in the brokers' market was E° 6.71 buying, E° 6.72 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.

Administration of Control

The Foreign Trade Department and the Department for the Control of Foreign Trade Transactions of the Central Bank of Chile are in charge of the operation of the exchange control system. Some functions of the former 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, Colombia, Mexico, Paraguay, Peru, 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.

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 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.

Importers may purchase forward exchange as soon as their import application has been approved, but they may not take delivery until the compulsory deferment period for import payments has been completed. 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. In all cases, however, the exchange cannot be remitted until 60 days after the date of the bill of lading.

About 20 per cent of total imports are subject to advance deposit requirements, which must be discharged in escudos at the time of registration. The principal rates of deposit are 10, 20, 50, 100, 200, and 10,000 per cent; one item is subject to a rate of 500 per cent.

The following imports are exempt from advance deposit requirements: imports by the Government, the municipalities, the universities, certain specified state enterprises, the large mining companies, and the fishing industry; imports financed by international organizations or under agreements for U.S. agricultural surpluses; imports on a deferred payment basis (con cobertura diferida); many capital 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 may be refunded any time after 90 days, against evidence of clearance of the respective goods through customs.

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 towns within 500 kilometers of the Chilean border, of US$250 a journey for travel elsewhere in Latin America, or of US$500 a journey outside Latin America; 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 subscriptions to periodicals, up to US$200 a person a year; and for insurance premiums, up to US$1,200 a person a year.1 Payments for medicine and pharmaceutical products may 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, are subject to a tax of 10 per cent. 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. Resident travelers may take out 10 per cent of their travel allowance in foreign banknotes when traveling to countries outside Latin America; for travel in Latin America, up to US$60 is available in foreign banknotes, or up to US$100 if the traveler agrees not to use the balance of his allowance.

Exports and Export Proceeds

With minor exceptions for humanitarian reasons, exports to Cuba, Rhodesia, and South Africa are prohibited. Additionally, exports of some items are prohibited or are subject to quota.

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, 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.

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. Normally, capital is subject to the same exchange market treatment on exit as on entry; this policy applies also to remittances of dividends and profits on the capital.

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

(1) Article 14 of Decree 1272 (September 7, 1962) stipulates that capital brought into the country in the form of foreign exchange may be 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.

(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

Gold bars may only be imported and exported by the Central Bank. The import of gold coins and of gold dust, leaves, and wire for industrial use is free of quantitative restriction but is subject to a 10,000 per cent advance deposit requirement. The Central Bank allocates gold for industrial use. It also makes gold available to industrial users in the form of Chilean gold coins.

Changes during 1967

During the year many changes were made in the List of Permitted Imports and in the amounts of advance deposit applicable to specific items; only the more important of these changes are recorded below.

January 4. A new customs tariff based upon the Brussels nomenclature was introduced consolidating all the import surcharges and other taxes previously levied through the customs.

January 6. Spices were made subject to a 10,000 per cent advance deposit.

January 6. Certain automobile and truck parts were added to the List of Permitted Imports.

January 10. The spot and futures rates in the banking market were unified at E° 4.46 (selling) per US$1; the rate in the brokers' market was depreciated to E° 5.08 (selling) per US$1.

January 16. The lists of import items for which exchange coverage had to be arranged within 60 days and 300 days of import registration were extended.

January 17. The authorization of import licenses for specified machinery, tools, and equipment was made subject to the approval of the Corporación de Fomento de la Producción (CORFO).

January 18. All letters of credit for imports were required to call for sight drafts.

January 19. Settlement for travel abroad was permitted with privately held foreign exchange.

January 30. Molasses, ethyl alcohol, and autobus bodies were added to the List of Permitted Imports, subject to a 10,000 per cent advance deposit; certain types of buses on the list were also made subject to the 10,000 per cent deposit.

January 30. When import registrations were given extended validities, importers could contract for foreign exchange within the term of the registration validity subject to a maximum of 210 days.

January 30. The permitted terms of shipment for imports, previously limited to c.i.f., were liberalized.

January 31. The tax on certain purchases of foreign exchange in the brokers' market was increased from 6 per cent to 10 per cent.

February 8. The compulsory deferment period for import payments was reduced from 70 to 60 days.

February 8. The Central Bank's selling rates in the banking and brokers' markets were depreciated to E° 4.56 and E° 5.18, respectively, per US$1.

February 9. All direct or indirect trade with Rhodesia was prohibited, with the exception of certain exports for humanitarian reasons.

February 9. The period in which foreign exchange cover for most imports had to be contracted was reduced from 70 to 60 days.

February 15. Hotels in Magallanes Province were permitted to exchange foreign currency.

February 17. Imports of rubber were made subject to a 100 per cent advance deposit.

February 27. Certain agricultural machinery imported under the agricultural mechanization program was exempted from advance deposit requirements.

March 6. Expenses entailed in dispatching merchandise for display at foreign fairs were permitted to be settled through the banking market.

March 7. The selling rates in the banking and brokers' markets were depreciated to E° 4.65 and E° 5.27, respectively, per US$1.

March 16. A maximum monthly foreign exchange quota of US$100 a person was introduced for travelers from Arica to Tacna (Peru).

March 16. Imports of specified parts for sewing machines were made subject to a 10,000 per cent advance deposit.

April 4. The selling rates in the banking and brokers' markets were depreciated to E° 4.75 and E° 5.37, respectively, per US$1.

April 7. In addition to approval by the Central Bank Import Registry Division, an industrial installation permit was required for imports of industrial equipment.

April 25. The maximum net annual rate of interest which banking institutions could add to collection documents was lowered from 9 per cent to 8 per cent.

May 2. As a result of the full utilization of AID credits, the Central Bank regulations covering AID imports were suspended until further notice.

May 5. The selling rates in the banking and brokers' markets were depreciated to E° 4.85 and E° 5.47, respectively, per US$1.

May 18. A new List of Permitted Imports related to the revised customs tariff was introduced; the number of categories of advance deposit was reduced to six.

June 2. All direct or indirect trade with South Africa was prohibited, with the exception of certain exports for humanitarian reasons.

June 6. The selling rates in the banking and brokers' markets were depreciated to E° 4.94 and E° 5.56, respectively, per US$1.

June 20. Authorized banks were permitted to sell forward exchange for import payments only if the goods were covered by a duly approved import registration.

June 20. The advance deposit requirement for imports of gold coins and other coins was raised to 10,000 per cent.

June 26. Special terms were offered for exchange contracts for import payment cover negotiated at the time of import registration. Provisional rates of exchange were applied to these contracts, the contracts being amended after the exchange settlement to give importers a rebate at the equivalent of 5 per cent per annum for the period of the obligatory deferment.

June 26. The advance deposit requirement on gold and platinum in the form of dust, leaves, and wire, for imports for dental and/or industrial uses was raised to 10,000 per cent.

June 28. The Central Bank raised its selling price for Chilean 100-peso gold coins from the equivalent of US$22.50 to that of US$30. The difference would go into a new fund for credits to the Empresa Nacional de Minería.

July 4. New regulations covering global credits from foreign suppliers of small and medium-sized Chilean industries required such credits to be for at least five years, each individual transaction to be not less than US$15,000 and the same provisions concerning cash payments and interest rates to apply to such transactions as the provisions in force for imports with deferred coverage. The Industrial Commission was required to approve each application for imports under this type of credit and to ascertain proper availability of service and spare parts for the imported machinery and equipment and to ensure that the imports were consistent with the industrial development program.

July 5. The selling rates in the banking and brokers' markets were depreciated to E° 5.04 and E° 5.66, respectively, per US$1.

July 8. The percentage of ad valorem customs charges on capital goods paid for out of the proceeds of foreign loans was reduced by 20 for goods imported before January 1, 1968. (Goods subject to 20 per cent charges or less were, therefore, free of such charges.)

August 1. Bills of lading covering imports under deferred exchange coverage had to be presented to the Central Bank within 90 days after the expiration date of the import licenses.

August 1. The selling rates in the banking and brokers' markets were depreciated to E° 5.16 and E° 5.78, respectively, per US$1.

August 3. Exchange derived from foreign credits and/or loans and capital investments under the terms of Article 16 of Decree No. 1272 or Decree-Law 258 and sold in the banking market had to be surrendered to the Central Bank.

August 30. The selling rates in the banking and brokers' markets were depreciated to E° 5.24 and E° 5.87, respectively, per US$1.

September 12. Delivery on sales of exchange by the Central Bank to the commercial banks, previously at 70 days, was extended to 72 days.

September 12. The requirement of a minimum cash payment (previously 20 per cent of the c.i.f. value) for imports under suppliers' credit was canceled.

September 13. The selling rates in the banking and brokers' markets were depreciated to E° 5.34 and E° 5.97, respectively, per US$1.

September 14. Exchange allowances for tourism were reduced. For visits to towns within 500 kilometers of the Chilean border, the allowance became US$100; for travel elsewhere in Latin America, US$250; and for travel outside Latin America, US$500.

September 22. Sunflower cake was added to the List of Permitted Imports, subject to a 10,000 per cent advance deposit.

October 5. The selling rates in the banking and brokers' markets were depreciated to E° 5.46 and E° 6.12, respectively, per US$1.

October 10. A reciprocal credit agreement was signed by the Central Banks of Chile and Venezuela.

October 23. The selling rates in the banking and brokers' markets were depreciated to E° 5.56 and E° 6.32, respectively, per US$1.

October 24. Delivery on sales of exchange by the Central Bank to the commercial banks was extended to 75 days.

October 25. The period in which foreign exchange cover for most imports had to be contracted was reduced from 60 to 50 days.

October 31. Delivery on sales of exchange by the Central Bank to the commercial banks was extended to 77 days.

November 7. Delivery on sales of exchange by the Central Bank to the commercial banks was extended to 80 days.

November 10. The selling rates in the banking and brokers' markets were depreciated to E° 5.65 and E° 6.45, respectively, per US$1.

November 14. Delivery on sales of exchange by the Central Bank to the commercial banks was extended to 82 days.

November 23. The selling rates in the banking and brokers' markets were depreciated to E° 5.71 and E° 6.57, respectively, per US$1.

December 7. All transactions in foreign securities were made subject to authorization by the Central Bank.

December 7. An advance deposit requirement of 500 per cent was introduced; it was applied to one commodity.

December 21. The selling rates in the banking and brokers' markets were depreciated to E° 5.79 and E ° 6.71, respectively, per US$ 1.

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.

Administration of Control

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

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

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, or U.S. dollars. Also, these are the foreign currencies that may be used by residents of other countries to finance investments in the Republic of China. Settlements with Spain are made in U.S. dollars through a bilateral account.

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

Nonresident Accounts

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

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

Residents may maintain accounts in U.S. dollars or Hong Kong dollars, as follows: Holders of foreign banknotes 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 Payments

All imports require individual licenses. For virtually all commodities, license applications are screened by the Foreign Exchange and Trade Commission. When purchasing exchange to import goods in excess of US$400, the importer must submit evidence that he has acquired “patriotic bonds” 2 corresponding to at least NT$1.25 for every U.S. dollar of the landed value of the goods; exempt from this requirement are educational equipment, aircraft parts, and machinery financed with self-provided exchange. Exchange settlement corresponding to 50 per cent of the landed value of imports (20 per cent for raw cotton and 50 per cent for beef tallow financed under the U.S. farm surplus program) must be made within 14 days of approval of the license. Provided that the foregoing requirement 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 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 usually 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 from time to time 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; 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; 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.

According to the intended utilization, goods may be imported by one of three main groups of importers: government trading agencies, qualified private traders, and end-users and manufacturers. Commercial imports handled by government trading agencies are confined to chemical fertilizers and crude oil. 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 FETC 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. 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 FETC.

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

Private importers (i.e., importers other than government agencies and public enterprises) handle 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. farm surplus 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 exempted 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 a defense surcharge equivalent to 20 per cent of the customs duty.

Payments for Invisibles

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

Foreign exchange for payments for certain other invisibles is allocated only up to established limits or on a percentage basis. Foreign technicians are allowed to remit to their dependents abroad up to 70 per cent of their basic monthly salary (year-end bonus, profit sharing, overtime pay, and insurance payments are excluded); remittances of larger amounts require special approval. Employees of the Government or of educational institutions may remit to their dependents in Hong Kong or Macao up to HK$150 a month. Membership fees to foreign institutions and certain payments for news services, books, and magazines (personal subscriptions for reference purposes) are approved 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$500 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 as liberally as possible, account being taken of the merits of submitted applications.

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

Exports and Export Proceeds

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

Quota limitations are maintained on the export of canned mushrooms, glutamic acid, and mono-sodium glutamate. The export of a few foodstuffs is restricted. There are also ceilings on the export of cotton textiles to Canada, Italy, the United Kingdom, and the United States. Minimum prices are established for exports of some ten commodities. The FETC is empowered to authorize exports at prices below the minimum export 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, namely, import duties, defense surtax on import duties, harbor dues, and commodity tax. Some preferential treatment is accorded to payers of income tax related to the production of goods for export, provided that the taxpayers submit satisfactory proof of such exports; complete exemption from the tax is not granted, however.

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.

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 FETC, must be surrendered to the banks, but earnings from private investments abroad that have not been financed by outward remittance 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 foreigners 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, liberally revised 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 foreign nationals must be made in enterprises conducive to the economic and social development of the country, such as mining, communications, and manufacturing for domestic needs. Preference is given to foreign investors who intend to produce goods for export or for replacing imports.

Foreign investors who intend to make investments in Taiwan stocks and wish to take advantage of privileges provided under foreign investment laws, as described above, must obtain approval from the Ministry of Economic Affairs. Purchases and sales of stocks by foreign investors must be made through the intermediary of registered brokers, such as the Trust Department of the Bank of Taiwan and the Trust 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 require permission to buy or sell gold or to use it as security for a loan. Producers of gold must surrender their output to the Central Trust of China to have its fineness reduced to below 0.875; the gold is then auctioned to registered goldsmiths, who are permitted to sell only ornamental gold of a fineness less than 0.875. The importation of gold for investment purposes is subject to special approval. Residents may freely take out gold in the form of jewelry, provided that its weight does not exceed 2 shih liang, i.e., 62.5 grams.

Changes during 1967

March 3. The ban on the import of wheat was lifted.

March 11. Motorcycles could no longer be brought in as personal effects of travelers.

May 8. The required prepayment for imports was reduced from 100 per cent to 50 per cent of the c.i.f. value.

August 11. Article II of the Regulations Governing Investment in Foreign Countries was revised. Investments outside the Republic of China could, subject to prior approval, be made in the form of outward remittances as well as in the form of technical know-how, semifinished products, and locally manufactured equipment.

August 18. Purchases of Chinese goods by the U.S. Army Procurement Agency became payable in U.S. dollars. Previously, they were settled in local currency.

November 3. The restriction that only end-users and factories could import machinery and equipment valued at over US$500 was terminated.

December 8. Thirty-one commodities were shifted from the controlled to the permissible import list.

December 29. The criteria for inclusion of import commodities in the controlled list were revised. The maximum price differential over comparable foreign products was reduced from 15 to 10 per cent, and the period during which any commodity could remain on the controlled list was shortened from three to two years.

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 two official markets—the exchange certificate market, in which the rate fluctuates, and the capital market, in which the rate is fixed. On December 28, 1967 the average selling rate in the certificate market was Col$ 15.82 per US$1, while the selling rate in the capital market was Col$16.30 per US$1. 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. The buying rate for proceeds from coffee exports is Col$12.14 per US$1, and that for most other exports is Col$18.12 per US$1. Most imports are paid for at the certificate market rate. Most payments and receipts in respect of current invisibles and capital take place at the capital market rate.

Administration of Control

All imports and exports require prior registration at the Exchange Registration Division of the Superintendency of Foreign Trade. 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 for the two exchange markets. It also establishes priorities within that budget for the delivery of exchange, after making the necessary reservations to cover the obligations of the Bank of the Republic and to service the external debt of the public agencies and the National Coffee Federation. Over-all import and export policy is determined by the Board of Foreign Trade. The Superintendency of Foreign Trade, through the Import Board, controls imports that are subject to prior licensing. 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 Exchange Control Prefecture, which is attached to the Ministry of Development, 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 Denmark,1 Eastern Germany, Hungary, Poland, Spain, and the U.S.S.R. for commercial transactions must be made through a clearing account in accordance with the provisions of the relevant bilateral payments agreement. Under the agreement with Denmark, goods originating in third countries and purchased in one of the agreement countries may be settled through the agreement account by mutual consent of the partners. The National Federation of Coffee Growers has concluded payments agreements with Bulgaria, Rumania, and Yugoslavia.

Payments between Colombia and Argentina, Chile, Ecuador, Mexico, and Peru are made through accounts maintained by the Bank of the Republic with the central banks concerned, within the framework of the LAFTA multilateral clearing system.

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 exchange 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

Legislation empowers the Board of Foreign Trade to classify imports as follows: goods whose import is prohibited; goods whose import is subject to prior licensing by the Superintendency of Foreign Trade; and goods that may be imported freely. However, in practice no goods may be imported freely other than specified goods imported from Ecuador or Paraguay.

Prior registration of the import transaction at the Exchange Registration Division is required for all imports other than those with an f.o.b. value of less than US$20 (or US$40 for books). The charge for import registration forms is Col$5.00 for imports valued at less than US$20.00 and Col$ 100.00 for other imports. Advance import deposits 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 the following rates, depending on the type of goods: 1 per cent, 5 per cent, 10 per cent, 30 per cent, 70 per cent, 95 per cent, 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 U.S. AID credits; 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 operations; 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 arid equipment coming under the tariff headings for the basic industries; goods of prime necessity imported by the National Institute of Supply (INA); scientific and literary books, newspapers, and reviews that make 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 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 at least 95 per cent of the exchange requested, calculated at a rate to be announced from time to time by the Ministry of Finance on the basis of the average exchange certificate price for the preceding month. Exempt are payments to cover the commitments of the Government, Departments, municipalities, and official agencies, remittances to students abroad, and payments for imports financed with foreign credits extended to the Bank of the Republic, goods for general consumption imported by the National Institute of Supply, and payment for the crude oil acquired by the national petroleum company (Ecopetrol) for refining in Colombia.

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 budget to compensate for the revenue loss from a reduction of 1 ½ per cent in the coffee export tax.

Payments for Invisibles

Payments abroad for invisibles are made at the exchange certificate rate for expenses of students engaged in studies abroad sponsored by the Colombian Institute for Technical Training Abroad (ICETEX); payments for contractual obligations sold to the Bank of the Republic before September 2, 1965 or registered therewith; and government, departmental, and municipal debt service payments. Other payments for invisibles are made at the capital market rate.

Exchange licenses for payments for invisibles are granted according to officially established priorities and within the limits set bimonthly in a foreign exchange budget by the Monetary Board. Transfers 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$50 a day and US$4,500 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, 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. 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 a personal guarantee in pesos (but without depositing any amount) corresponding to the full export 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 grant of registration; and (4) for other exports, within 90 days from the same date.

The Bank of the Republic is empowered to retain 10 per cent of the exchange proceeds surrendered by the exporters of products other than coffee to repay foreign debts contracted prior to June 30, 1965. All other exchange proceeds from exports, except those from the export of crude oil not produced by Empresa Colombiana de Petróleos, 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 and payments. These certificates, which are freely negotiable, are accepted at par after one year 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 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: (1) The surrender price (reintegro) is fixed at US$61.70 per 70-kilogram bag. (2) Exporters pay a tax at the rate of 23 per cent ad valorem on December 31, 1967. Of this tax, 4 percentage points are paid to the National Coffee Fund while the remainder provides revenue for the Special Exchange Account, of which the net product forms a contribution to the national budget. This tax is being reduced at the rate of ¼ per cent a month until December 1968. However, there will be no change in the 4 percentage points going to the National Coffee Fund. (3) Exporters must surrender in kind to the National Federation of Coffee Growers and without payment the equivalent of 19 per cent of the volume of Excelso coffee that they wish to export (retención).

Proceeds from Invisibles

All exchange receipts from invisibles must be surrendered; with minor exceptions, they are converted at the capital market buying rate of Col$16.25 per US$1.

Capital

All foreign investment in Colombia and the movement of capital previously imported must be registered with the Capital Division of the Exchange Office of the Bank of the Republic. Capital imports other than amounts of less than US$100,000 or capital imported for petroleum exploration or exploitation, or for mineral exploration, also require prior approval by the Planning Department. Capital registration entitles the debtor to export profits and to repatriate capital at the capital market rate on certain conditions. The transfer of profits is limited to 10 per cent2 of the net capital value in any one year, except for profits resulting from investments of outstanding importance or involving special risks in view of the circumstances prevailing in the international money market. Capital invested in the petroleum industry is subject to special rules and to contractual provisions.

Likewise, contracts involving royalties, commissions, trademarks, patents, and similar arrangements must be registered with the Exchange Office to enable the beneficiary to make transfers abroad through the capital market.

Colombian investors 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 capital market rate, or invest the product in “pro Colombia” bonds.

Proceeds from foreign loans granted to official bodies in Colombia and to be serviced through the certificate market are converted at the certificate market rate.

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, or export gold. The Bank of the Republic purchases the gold produced in the country at US$35.00 per fine 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 capital 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.

The Bank of the Republic makes sales of gold for industrial use either directly or through the Colombian Mining Association, on presentation of exchange licenses, at a price of US$35.00 per fine ounce, plus a charge of 5 per cent for refining and handling and 10 per cent for the Export Promotion Fund.

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

Table of Exchange Rates (as at December 31, 1967)(pesos per U.S. dollar)
BuyingSelling
9.00 (Fixed Rate)

Purchases of crude oil from foreign-owned companies for domestic refining.
12.14 (Certificate Market Rate less 23%)

Coffee exports.
15.76 (Certificate Market Rate, Fluctuating Rate)

Net proceeds from exports of crude oil and petroleum derivatives by Ecopetrol (Article 158 of Decree-Law No. 444).3 Exports of cattle hides. Loans to public entities.
15.82 (Certificate Market Rate, Fluctuating Rate)

Imports except those into free ports. Expenses of students sponsored by ICETEX. Official services. External public debt. Service on (1) private obligations in foreign exchange contracted at the free market rate prior to October 25, 1964 and registered in accordance with Article 28 and following of Decree No. 2322 of September 2, 1965, and (2) private loans whose proceeds were sold to the Bank of the Republic according to Article 33 of that decree.
16.25 (Capital Market Rate, Fixed Rate)4

Exports from free ports. Private loans. Invisibles. Exchange sales by foreign petroleum companies. Other foreign capital. Repatriation of Colombian capital and of profits accruing to Colombian capital abroad.
16.30 (Capital Market Rate, Fixed Rate)

Imports into free ports. Import freight. Other invisibles. Other foreign debt. Profit remittances and capital repatriation.
18.12 (Certificate Market Rate plus 15% Tax Credit Certificates)
All other exports except those from free ports.

Changes during 1967

During the year, a large number of changes were made in the regulations applicable to advance import deposits. Only the principal instances are listed below.

January 24. Decree No. 85 added a number of commodities to the Colombian National List of concessions granted to other LAFTA member countries.

January 25. All advance import deposits were increased by 50 per cent by Monetary Board Resolution No. 6.

February 15. The advance deposit requirements were practically restored to their September 1965 levels by Monetary Board Resolution No. 9. New rates of advance deposit (70, 95, and 130 per cent) were introduced.

February 22. The Bank of the Republic signed a trade and payments agreement with Poland, to replace the agreement between the National Federation of Coffee Growers and that country.

March 13. Law No. 6 gave the President of the Republic extraordinary powers to put into force new regulations on exchange and foreign trade.

March 22. Decree-Law No. 444 was published to embody regulations covering the whole field of exchange and foreign trade. It laid down rules for the negotiation and holding of foreign currencies; set up the exchange certificate market and the capital market; laid down regulations for the handling of the gold trade by the Bank of the Republic; set out rules for the export and import trade and established special incentive arrangements for exports; created the Export Promotion Fund; contained provisions for capital investments in Colombia and abroad; provided regulations for earnings and foreign debt service; introduced exchange regulations for the petroleum and mining industries; established new functions for the exchange and foreign trade agencies; and set up the Exchange Office and the Export Promotion Fund. Article 233 of the Decree-Law abolished the remittance tax previously levied on certain outward transfers of capital and capital earnings.

March 22. The Monetary Board issued Resolution No. 13 establishing the supply and demand in each of the exchange markets on the basis of the powers contained in the exchange law, fixed the rates of exchange for those markets, and issued other provisions to bring the new regulations into force.

April 4. Decree No. 569 laid down that the gradual reduction of ¼ per cent a month in the coffee tax, embodied in Decree-Law No. 444, could be accelerated if fiscal resources made this possible or the position on the world market made it desirable.

April 6. Monetary Board Resolution No. 17 set out the rules for the handling of the gold market operated through the Bank of the Republic. Foreign capital mining companies could remit abroad the foreign exchange they received as part payment for the gold sold by them, in order to meet certain expenses abroad, and to cover dividends, capital amortization, taxation, etc.

April 6. The Monetary Board issued Resolution No. 18 fixing at 5 per cent the prior deposit for imports of capital goods provided that certain conditions were previously met, such as that the minimum value of the imports of such goods should be US$250,000.

April 6. The Monetary Board issued Resolution No. 20 authorizing the Bank of the Republic to constitute foreign currency deposits in credit establishments up to an amount required to carry on its operations. The resolution also fixed time limits for using exchange licenses. The Bank of the Republic was empowered to use for paying off unfulfilled obligations up to 10 per cent of the exchange surrendered by exporters who had registered external debts. Rules were laid down for making foreign loans to individuals. Coffee exporters were required to purchase foreign currency on the capital market in order to make good any difference between the minimum surrender price fixed for coffee exports and the actual sales price abroad, when the latter was lower.

April 20. Decree-Law No. 688 modified certain aspects of the exchange system set up by Decree-Law No. 444.

April 20. Decree-Law No. 691 set up the Price Control Division within the Superintendency of Foreign Trade for the purpose of controlling the prices of imported commodities.

April 26. Monetary Board Resolution No. 21 laid down that, despite the ban of Decree-Law No. 444 on holding foreign currency deposits, it should be lawful for certain physical and juridical persons to hold such deposits and to use them for their normal operations. The Monetary Board would prepare every two weeks a budget for both exchange markets in which the necessary reserves would be included for paying the external debts of public bodies.

April 28. Decree No. 747 reduced the coffee export tax by 1 ½ percentage points.

May 2. Decree No. 813 clarified Decree No. 747 by explaining that the reduction of 1 ½ percentage points mentioned therein was only applicable to surrenders resulting from coffee contracts registered on and after April 28, 1967.

May 3. The minimum surrender price for coffee was changed to US$61.50 per 70-kilogram bag.

May 6. Decree No. 819 provided a subsidy of Col$4.50 per U.S. dollar to offset the increase of the amount of foreign debt of public bodies caused in 1967 by the difference between the exchange rate previously in force in the preferential market and the current exchange rate.

May 7. The Board of Foreign Trade issued Resolution No. 6 shifting certain commodities from the prohibited import list to the prior authorization regime.

May 9. The National Planning Council issued Resolution No. 1 defining what was meant by foreign capital investment in Colombia. The resolution also fixed a limit of 10 per cent of the net value of foreign investments for the profits that could be remitted each year, although the figure could be raised in certain cases by the Council. It was laid down that all foreign investment would require prior approval by the Planning Department, except in certain specified cases. The procedural rules for the approval of investment and for determining the net value of investments made in foreign currency were laid down, and the instances in which investors had the right to repatriate the principal sums were specified.

May 10. The Monetary Board issued Resolution No. 25 setting out the regulations for the Export Promotion Fund, including such points as its purpose, the maximum percentage of financing, the rate of interest, and time limits.

May 13. The Monetary Board issued Resolution No. 26 setting down rules for selling the foreign currency deposited in credit establishments within Colombia or abroad prior to November 29, 1966, or for investing the said currency in “pro Colombia” bonds. The resolution also laid down a time limit for selling to the Bank of the Republic any foreign currency imported through the capital market.

May 17. The Monetary Board issued Resolution No. 27 defining what was meant by “exchange operations” for the purpose of control by the exchange authorities. Tourists were empowered to acquire foreign currency up to US$60 on leaving the country.

May 26. Decree No. 970 laid down that imports made on the basis of 40-year loans should be exempt from the prior deposit requirement, but they would still require import licenses.

June 6. Decree No. 1065 laid down that the ¼ per cent a month reduction in the coffee export tax would apply to coffee sales contracts registered on and after July 1.

June 9. The Monetary Board issued Resolution No. 29 laying down rules for advance surrender of foreign currency arising from exports other than coffee. The resolution also authorized persons coming within the category of “temporary residents” to make free use of foreign currency and other securities they might own abroad.

June 12. The National Planning Council issued Resolution No. 2 defining the meaning of “Colombian capital abroad” and “repayment of Colombian capital abroad,” and laid down that prior approval by the Planning Department would be required for new investments abroad. The Council made it obligatory to surrender to the Bank of the Republic the proceeds from profits, interest, loan repayments, technical services, and the repatriation of capital from these investments.

June 19. Decree No. 1165 listed the tariff positions for imports entitled to enter the country under the “minor imports” arrangements, provided that their f.o.b. value was less than US$20, or US$40 for books.

June 19. Decree No. 1178 listed the commodities which might be imported without prior deposit.

July 5. The Bank of the Republic signed a trade and payments agreement with Eastern Germany, to replace a similar agreement signed by the National Federation of Coffee Growers.

July 12. The Monetary Board issued Resolution No. 39 altering the requirements to be met in order to benefit from the 5 per cent prior deposit arrangements on imports of capital goods, by reducing the minimum f.o.b. value of such imports to US$100,000. The National Institute of Supply (INA) was exempted from the 95 per cent deposit normally required for payments in respect of imports of essential consumer goods.

July 17. Decree No. 1339 added to the list of items that might be imported under the “minor imports” arrangements.

July 25. The Bank of the Republic signed a trade and payments agreement with the U.S.S.R., replacing a similar agreement previously signed by the National Federation of Coffee Growers.

August 16. The Monetary Board issued Resolution No. 44 laying down rules for the advance surrender of foreign currency arising from exports with a value of more than US$500,000.

September 6. The Monetary Board issued Resolution No. 48 fixing the rate of exchange applicable to the final settlement of advance surrender of foreign currency.

September 13. The Monetary Board issued Resolution No. 49 setting out the time limits, interest rates, and method of repayment of foreign loans to individuals in Colombia.

September 27. The minimum surrender price for coffee was reduced from US$61.50 to US$60.00 per 70-kilogram bag.

October 17. The Board of Foreign Trade issued Resolution No. 15 containing the new procedural regulations for the processing of import applications.

October 20. Decree No. 1938 extended to Venezuela the Colombian National List of concessions to LAFTA countries.

November 2. Decree No. 2008 laid down regulations governing petroleum. Permission was given to pay in foreign currency for crude oil to be refined in Colombia. This permission was not granted for the current output of Ecopetrol and 25 per cent of the output of other producers, which would have to be paid in Colombian currency.

November 10. The Monetary Board issued Resolution No. 58, which made the capital market rate applicable to purchases of exchange for the following operations in foreign currency: oil exploration on private property; payment for movement of oil products by public pipeline; costs of operation of private pipelines; oil exploration; transport and distribution of liquid petroleum gases; and payment for taxes, land use fees, and royalties.

November 15. The minimum surrender price for coffee was increased from US$60.00 to US$61.70 per 70-kilogram bag.

December 6. The Monetary Board issued Resolution No. 66 exempting Ecopetrol from the 95 per cent deposit on payments for the crude oil it purchased in foreign currency for refining in Colombia.

December 6. The Bank of the Republic signed a trade and payments agreement with Hungary, to replace one previously signed by the National Federation of Coffee Growers.

December 31. The bilateral payments agreement with Finland was terminated.

Congo (Brazzaville)

Exchange System

No par value for the currency of Congo (Brazzaville) has been established with the Fund. The unit of currency is the CFA Franc, which is officially maintained at the rate of CFAF 1 = 0.02 French franc, giving the relationship CFAF 246.853 = US$1.1 Exchange transactions in French francs between the BCEAEC and commercial banks 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 include a commission. Forward exchange transactions, which are permitted in any currency and for any period, take place at freely negotiated rates. There are no restrictions on foreign exchange dealings, whether spot or forward, by residents or nonresidents, whether banks or nonbanks.

For noneconomic reasons, all settlements with Rhodesia are prohibited and all payments to Portugal require prior authorization; settlements with Mainland China, with which Congo (Brazzaville) has concluded a bilateral payments agreement, must, in principle, be made through special accounts.2 With these exceptions, there are no restrictions on payments and no prescription of currency requirements, although certain controls are applied to borrowing and lending abroad, to issues and sales of foreign securities in Congo (Brazzaville), and to inward and outward direct investment (see section on Capital, below). In practice, settlements with countries outside the French Franc Area are usually made through correspondent banks in France, either in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs; settlements with other countries of the French Franc Area are usually made in currencies of that Area, in practice mainly in French francs.

The following is applicable to payments and transactions between Congo (Brazzaville) and all foreign countries 3 except Mainland China, Portugal, and Rhodesia. Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Congo or abroad at the choice of the holder. Accounts in CFA francs or in any foreign currency may be held in Congo by any nonresident. Balances on nonresident-held accounts may be transferred freely to any type of resident or nonresident-held account and used for any payment in Congo or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment, including any amount of interest. There are no restrictions on the physical importation or exportation of foreign or domestic securities. Imports and exports of gold require the prior approval of the Ministry of Finance.

Congo's control measures affecting inward and outward direct investment, borrowing and lending abroad, and issues and sales of foreign securities 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 Central African Customs and Economic Union (Cameroon, Central African Republic, Chad, and Gabon); and (3) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Dahomey, Ivory Coast, the Malagasy Republic, Mauritania, Niger, Senegal, Togo, and Upper Volta).

Administration of Control

The Office of Foreign Financial Relations in the Ministry of Finance supervises borrowing and lending abroad, the issue or sale of foreign securities in Congo (Brazzaville), and inward and outward direct investment. The Ministry of Finance issues authorizations for the import and export of gold and for payments to Portugal. All payments and receipts between Congo (Brazzaville) 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. These data are collected by the BCEAEC for the compilation of the balance of payments only. All registered banks in Congo are permitted to carry out foreign exchange transactions. Import and export licenses are issued by the Foreign Trade Office in the Ministry of Economic Affairs.

Imports and Import Payments

Imports from countries in the French Franc Area may be made freely. All imports of Portuguese or Rhodesian origin are prohibited. Imports from all other countries outside the French Franc Area are subject to licensing in accordance with an annual import program. This program is determined by a joint French-Congolese Committee. The import program does not include petroleum imports, for which a joint quota is determined for the countries of the Central African Customs and Economic Union.

Separate global quotas are established for imports from EEC countries (other than France) and for imports from all other countries outside the French Franc Area. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for the other countries may be used to import goods originating in any country outside the French Franc Area, including those in the Soviet countries and Mainland China. Licenses for liberalized commodities originating in EEC countries other than France are issued automatically; such liberalized imports are not included in the quotas for EEC countries. Imports of certain products from non-French Franc Area countries are subject to special ceilings, which are established in the import program separately for EEC countries other than France and for all non-French Franc Area countries. Imports of certain products from some low-wage countries of the Far East are limited by a special ceiling.

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

Imports of certain goods are not permitted unless the importer also buys a certain quantity of the local product.

The National Trading Office (Office National du Commerce or OFNACOM) has a monopoly over certain imports, including the importation from all sources of salt, cement, and rice.

Payments for imports from any country may be made freely, at any time, and without any formality. Commodity futures may be dealt in freely, in Congo or abroad.

Payments for Invisibles

All payments for invisibles may be made freely without individual license, except those to Portugal, which require the prior approval of the Minister of Finance, and those to Rhodesia, which are prohibited. Resident and nonresident travelers may take out any amount in domestic and foreign banknotes.

Exports and Export Proceeds

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).

Exports are free of exchange control, with the exception of exports to Mainland China, which must be settled through special accounts, and exports to Rhodesia, which are prohibited. The repatriation and surrender of export proceeds is not required. Exporters may grant credit for any period and are free to sell forward their anticipated export proceeds.

Proceeds from Invisibles

Services performed for nonresidents do not require licenses. Except in relations with Mainland China, Portugal, and Rhodesia, there are no restrictions on the receipt of payments for services rendered to nonresidents and the proceeds from invisibles need not be surrendered.

Travelers may bring in any amount of domestic or foreign banknotes; however, the exchange of banknotes issued by the banks of issue of Guinea and Mali is prohibited or limited to certain amounts for each traveler.

Capital

All capital movements between Congo (Brazzaville) and Rhodesia are prohibited, while those between Congo and Portugal require prior approval, and those between Congo and Mainland China must be made through special accounts. The situation in respect of other countries is as follows.

Residents and nonresidents may import or export capital freely without a license, through banks or any other channel. Foreign and domestic securities of all types may be freely imported or exported physically, whether through the intermediary of a bank or not, and transactions between residents and nonresidents in domestic and foreign real estate (except when forming part of a direct investment) are unrestricted. Capital assets abroad of residents are not subject to repatriation and may (except when forming part of a direct investment) be freely disposed of.

Certain controls are maintained over borrowing and lending abroad, over inward and outward direct investments, and over the issuing, advertising, or offering for sale of foreign securities in Congo (Brazzaville), but these controls relate to the transactions themselves, not to payments or receipts. 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, the other member countries of the Central African Customs and Economic Union, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account.

Direct investments abroad4 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 Congo 5 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 (Brazzaville) 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. 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 (Brazzaville) 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.

Lending by residents to nonresidents 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 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 (Brazzaville), whether domestic or foreign, is granted, under certain conditions, reduced duties and taxes on specified imports as well as exemption from direct taxes on specified income.

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

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

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 (Brazzaville) gold in the form of coins, art objects, or jewelry, but they require the prior authorization of the Minister of Finance to hold gold in any other form or to import or export gold in any form. 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).

Changes during 1967

July 1. Law No. 12/67 of June 21, 1967 established the principle that financial relations with foreign countries with which Congo maintained economic and financial relations were free. With minor exceptions, all existing legislation contrary to this principle was revoked, including Decree No. 62/255 of August 27, 1962 and Ordinance No. 62/15 of August 27, 1962. The law also provided for the statistical registration of all inward and outward payments. Previously, current and capital payments to French Franc Area countries already were unrestricted; they were also free of supervision, as were inward transfers originating in French Franc Area countries. The import and export of gold remained subject to prior authorization by the Minister of Finance. The commission of 0.6 per cent on transfers to countries outside the French Franc Area (0.1 per cent for petroleum and petroleum products) was abolished.

Normally, the repatriation and surrender of claims, earnings, and proceeds accruing abroad would no longer be required. Import and export regulations were not affected, although the related exchange control formalities were abolished; these included the requirements that import licenses and import certificates be domiciled with an authorized bank, and that exporters sign a foreign exchange commitment in respect of all exports to countries outside the French Franc Area.

July 1. Decree No. 67/150 of June 30, 1967 established the principal rules for the application of Law No. 12/67. The decree defined the concepts of “foreign countries,” “residents,” and “nonresidents,” and indicated the types of capital transactions with foreign countries that would be subject either to declaration or prior approval. It also provided that the import and export of gold and diamonds required the prior authorization of the Ministry of Finance (in accordance with Decree No. 66/236 of July 29, 1966), that the freedom of payments with foreign countries did not apply to countries with which Congo (Brazzaville) no longer maintained commercial and financial relations, and that all payments between Congo (Brazzaville) and foreign countries had to be notified to the Office of Foreign Financial Relations.

July 1. Decree No. 67/151 of June 30, 1967 created the Office of Foreign Financial Relations in the Ministry of Finance to replace the Exchange Office that had administered exchange control. It was entrusted with, inter alia, (1) the application of Law No. 12/67 and Decree No. 67/150, (2) the periodic compilation of a national balance of payments, (3) the collection of the necessary data for the latter purpose, and (4) the observation of foreign investments. Article 14 of the decree introduced a tax of 0.2 per cent on imports and exports that would be collected by the customs.

July 1. Arrêté No. 3242/MF of July 10, 1967 ruled that all declarations and applications for approval that were prescribed in respect of capital transactions by Law No. 12/67 and Decree No. 67/150 had to be submitted to the Office of Foreign Financial Relations.

The Arrêté also provided that payments to countries with which Congo (Brazzaville) no longer maintained commercial and financial relations required the prior approval of the Minister of Finance, to whom applications had to be submitted through the Office of Foreign Financial Relations; payments in respect of imports from such countries, however, were exempt from authorization, provided that evidence could be submitted of the entry of the commodities into Congo (Brazzaville).

Finally, the Arrêté ruled that all settlements between Congo (Brazzaville) and foreign countries had to be communicated to the Office of Foreign Financial Relations or the BCEAEC (depending on the manner in which settlements were made), that the latter was charged with the collection of the relevant data obtained by the banks and the postal administration, and that the BCEAEC should submit every month to the Office of Foreign Financial Relations a provisional balance of payments that the latter could use to prepare the general balance of payments.

July 18. Notice No. 3447 conferred on the National Trading Office (OFNACOM) a monopoly over the import under foreign credits, on behalf of government agencies, of certain cotton piece goods from Japan, certain other textiles from Mainland China, and certain other commodities (including rice) from all sources.

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 Zaϊre. The gold content of the zaϊre is 1.777432 grams and the official rate of exchange is Z 1 = US$2. The buying and selling rates for other currencies are fixed on the basis of official cross rates between each of those currencies and the U.S. dollar. The National Bank of Congo buys and sells foreign currencies against zaϊres at rates differing not more than 1 per cent from the official rate. It charges a commission of 210 of 1 Per cent on currencies it requisitions and of 1 per cent when foreign currencies are sold on the initiative of the authorized banks. The official buying and selling rates were Z 50 per US$100 on December 30, 1967. 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 Zaϊres and Nonresident Foreign Currency Accounts.

Nonresident Accounts in Záires 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.

All imports are subject to individual licensing, but licenses are granted freely. Applications for import licenses, whether requiring foreign exchange or not, are made initially to authorized banks in Kinshasa. This application and, where appropriate, the application for a foreign exchange authorization specifying the terms of payment are forwarded to the National Bank after certification. After approval of the application by the National Bank, the import license application is returned to the authorized bank for validation.

Import licenses are validated by the authorized banks within 15 days and remain valid for a period of six months dating from the prior approval for validation by the National Bank. Foreign exchange is made available for all licensed imports, the validated license constituting at the same time an exchange license. 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.

Payments for Invisibles

Policy related to payments for invisibles is formulated by the National Bank. Payments are subject to authorization by the National Bank, which is given or refused on a nondiscriminatory basis. 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. Transfers abroad of salaries of foreign nationals are authorized within the limits set out in agreements with their respective employers. 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. No exchange is presently made available for transfers of investment income.

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 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 licenses. Banks are normally authorized to grant these 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.

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

With minor exceptions, 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 Congo Government, against payment in zaϊres; gratuitous transfers of real estate are subject to approval by executive ordinance.

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.

Changes during 1967

February 28. A 10 per cent tax was introduced on the value of imports for which quotas had been or would be granted to importers in the first four months of 1967. The tax rate was scheduled to be increased to 15 per cent on imports for which quotas were to be granted in the second and third four-month periods of 1967.

March 20. An advance deposit of 40 per cent of the c.i.f. value was required for all imports when application for an import license was made; the deposits would be refunded upon customs clearance. This requirement was additional to that of the deposit of the Congo franc counterpart when letters of credit were opened abroad on behalf of importers.

April 24. The portion of export earnings to be placed at the disposal of export producers (other than the five largest mineral exporting companies) was increased from 22.5 per cent to 32.5 per cent; the additional 10 per cent portion was freely negotiable.

April 24. Fertilizers, seeds, insecticides, fungicides, and herbicides were added to the list of liberalized imports.

June 23. A new currency unit, the zaϊre, replaced the Congo franc at a rate of Z 1 = CF 1,000. The official exchange rate was established at Z 1 = US$2. In terms of Congo francs, the new unified rate substituted for the previous buying and selling rates of CF 150 and CF 180, respectively, per U.S. dollar was equivalent to CF 500 per U.S. dollar.

June 23. Authority over foreign trade and payments, including the authorization of imports, exports, and transfers, was delegated to the National Bank of Congo, with an announced policy of general liberalization of imports and current payments. The import quota system, the 10 per cent tax on imports under quotas, and the 40 per cent advance import deposit requirement were abolished. The system of retrocession of foreign exchange earnings and of exchange allocation agreements was discontinued, as was that of separate licenses for imports and import payments. The restrictions on payments to nonresidents for services supplied to the Democratic Republic were eliminated.

June 23. The limitations on the import and export of domestic and foreign banknotes by travelers were abolished. Imports and exports of domestic and foreign banknotes by banks were also freed from restrictions.

June 23. Payment in the Democratic Republic for tickets for travel abroad by Congolese nationals or by foreign nationals returning to the country of their nationality could take place in local currency.

July 6. A revised customs tariff was introduced that provided for the application of both customs duties and duties of a fiscal character.

December 28. The visa of the National Bank was no longer required on license applications for imports of raw materials and spare parts by the Government or by official and semiofficial agencies.

Costa Rica

Exchange Rate System

The par value is 0.134139 gram of fine gold per Costa Rican Colón or ¢ 6.625 = US$1. The Central Bank buys exchange derived from exports and other exchange tendered to it at a fixed rate of ¢ 6.62 per US$1. Exchange at the official rate is granted for listed essential imports, specified invisibles, and a few types of capital transfers. Official exchange is also granted for all imports originating in Central America or Panama when covered by the Central American free trade treaties or Costa Rica's special trade agreements with Panama, even when these commodities are not included in the list of those eligible for official exchange. All other sales and purchases may be made freely in a fluctuating free market, in which the rate is pegged from time to time. The buying and selling rates for the U.S. dollar in the free market were ¢ 7.77 and ¢ 7.80, respectively, per US$1 on December 29, 1967. Mixing rates arise from the fact that transfers at the official rate of interest and dividends on registered capital are limited to 10 per cent of the registered amount, while amounts in excess of that percentage can be transferred through the free market. Mixing rates also arise when the Central Bank allows exporters using raw materials that have been paid for in the free market to sell part of their export proceeds in the free market. 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 exchange controls are operated by the Central Bank of Costa Rica. Purchases and sales of official market exchange are made through the Central Bank or through commercial banks authorized for this purpose. The free exchange market is conducted by commercial banks and licensed exchange houses.

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 specified invisibles are made in Costa Rican colones and at the official rate 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 those current invisibles and capital transfers to which the regulations of the official exchange market apply. 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 that are eligible for access to the official market 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 Economy and Finance.

Exchange at the official rate is granted for the c.i.f. value of (1) specified essential commodities from any source, (2) all imports from Central American countries and from Panama that are covered by the provisions of regional integration agreements, and (3) goods imported prior to January 2, 1967. To be eligible for official exchange, imports of the specified essential commodities must be registered with the Central Bank within two months of arrival at a national port. Their registration serves as an application for official exchange. The Central Bank grants permission to purchase exchange cover in order of registration. All other goods may be freely imported, provided that they are paid for through the free market. Official exchange is not granted for commodities on the list of essential imports that are also produced in acceptable quality either in Costa Rica or Central America, provided that these commodities are available in satisfactory volume and at adequate prices; prior authorization by the Ministry of Industry and Commerce is required to purchase official exchange for the importation of any goods on the list that are also produced in Costa Rica.

Payments for Invisibles

Payments for invisibles may be made freely through the free market. Exchange at the official rate is only granted for freight and insurance on imports effected at the official rate; for dividends, interest, and amortization on registered foreign capital; servicing of debts contracted before January 2, 1967; indispensable payments of the Central Government; and normal expenses in foreign currency on export transactions settled through the official market. The allocation for interest and dividends is 10 per cent of the registered capital.

Exports and Export Proceeds

Exports to South Africa are prohibited. The Central Bank supervises exports to assure a supply of exchange to the official exchange 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 at the official rate; 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 must be surrendered at the official rate within 60 days of accrual, with the exception of the following, which may be retained or sold in the free market: diplomatic and similar salaries and expenses; tourist expenditures; family remittances and other personal remittances; settlements on insurance claims, provided that the premium was financed in the free market; and commissions received by agents of foreign firms.

Capital

Inward and outward transfers of capital through the free market 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. Incoming capital must be registered to become entitled to servicing at the official rate. Incoming capital may be sold freely in the free market if it is foreign capital that did not elect registration and surrender at the official rate or if it is national capital returning from abroad. The only outward transfers of capital permitted to be made at the official rate are repayments on certain private and public debts and amortization on registered foreign capital; for the latter, the amounts are determined individually by the Central Bank.

Gold

Only the Central Bank is permitted to deal in gold coins and gold bars in Costa Rica with persons or organizations that are not banks; any such transactions must be made direct with the buyer or seller, without the intermediary of commercial banks. 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. The Central Bank supplies unworked gold to licensed artistic and professional users. Imports of gold are made only by the Central Bank.

Changes during 1967

On many occasions during the year, commodities were added to or deleted from the list of essential imports entitled to exchange at the official rate.

January 2. The free exchange market was reactivated. The Central Bank ceased to sell official exchange, except for (1) the c.i.f. value of specified essential imports, (2) goods imported prior to January 2, (3) contractual remittances of interest, dividends, and amortization on past and future registered foreign capital investments, (4) payment of debts contracted with first-class foreign financial institutions prior to January 2, (5) indispensable payments of the Central Government, (6) normal expenses payable in foreign currency on export transactions settled through the official market, (7) imports of commodities originating in Central America and covered by the free trade treaties of that area, and (8) imports of products originating in Panama and covered by the trade agreements concluded with that country. The Central Bank was authorized to add goods to, and delete goods from, the list of essential imports. Access to the free market was unrestricted; any type of payment for which official exchange was not granted could be made through it.

Export proceeds were required to be surrendered within 60 days of exportation, or, if the goods were sold on credit, at the expiration of the term of the credit. All other receipts of foreign exchange had to be surrendered within 60 days of accrual, except the following, which could be retained or sold in the free market: (1) diplomatic and similar salaries and expenses, (2) tourist expenditures, (3) family remittances and personal remittances received by residents, (4) insurance claim settlements, provided that the premium had been financed in the free market, (5) incoming foreign capital that did not elect registration and surrender at the official rate, (6) national capital returning from abroad, (7) commissions received by agents for foreign firms, and (8) any other type of receipt that the Central Bank might determine.

January 2. Imports of the listed goods eligible for official exchange were required to be registered within two months of arrival of the goods at a national port, registration serving as an application for official exchange; authorization to purchase exchange cover would be granted in order of registration.

January 2. The Central Bank reminded the public that it was empowered to authorize exporters who imported their raw materials through the free market to sell part of their export proceeds in the free market.

January 2. Remittances at the official rate of interest and dividends together on foreign capital registered through the official market could not exceed 10 per cent a year on the registered amount. The maximum percentage for transfers at the official rate of amortization on such capital would be determined by the Central Bank on a case-by-case basis.

January 2. Persons owing debts abroad had to register these with the Central Bank. The Bank would grant official exchange to service these debts in the light of the availability of exchange and the prospects for the balance of payments.

January 2. Payments at the official rate to Central American countries had to be made in colones through the Central American clearinghouse. The Central Bank could permit payments at the official rate to Mexico to be made in colones through the clearinghouse.

January 18. For the first time, certain items were added to the list of essential imports entitled to official exchange.

January 18. It was announced that official exchange would not be granted for commodities that were also produced either in Costa Rica or in Central America in acceptable quality and were available in satisfactory volume at adequate prices. Prior authorization by the Ministry of Industry and Commerce was required to purchase official exchange for the importation of goods on the list of essentials if these were also produced in Costa Rica.

March 31. Decree No. 26 raised substantially the rates of the consumption tax on many commodities and made the tax applicable to a number of commodities that had been exempt. The rate of tax was fixed at ¢ 24,500 on automobiles with a weight of over 1,650 kilograms, ¢ 1,145 on refrigerators and freezers of over 10 cubic feet, and 25 per cent on radios.

April 25. The commercial banks were permitted to operate in the free market. They began to quote a uniform daily rate.

July 18. Law No. 3914 of July 17, 1967 replaced the consumption tax with a general sales tax. The general rate was 5 per cent, but for certain luxury goods the rate was 25 per cent.

October 14. Law No. 3914 was amended by the introduction of a 10 per cent rate of sales tax, in addition to the existing rates of 5 per cent and 25 per cent.

December 15. Law No. 4015 prohibited all imports from and exports to South Africa.

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, 1967 was US$2.40¾ buying, US$2.40⅝ 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 account.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 payments of a capital nature which, under the existing exchange control regulations, may not be transferred outside Cyprus. These accounts may be in the form of deposits with local banks earnings interest which may be freely transferred abroad.

Imports and Import Payments

All imports from Rhodesia and South Africa are prohibited. Most imports from other countries may be made freely under an open general license, which applies to all sources except Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Poland, Rhodesia, Rumania, South Africa, Tibet, the U.S.S.R., and North Viet-Nam. Individual import licenses are required for all goods originating in countries to which the open general license does not apply and for some 70 items from all sources (certain agricultural and textile products, a few metals, and most nonelectrical machinery); for a few of these items, no licenses are granted, while for most of the others licenses are granted freely. Individual import licenses are not required for bona fide gifts up to £C 10 in value and not to be sold, for returned goods, or for certain special import transactions.

Payments for all authorized imports may be made freely.

Payments for Invisibles

Payments for invisibles to residents of other Sterling Area countries may be made freely. All remittances to countries outside the Sterling Area require the approval of the exchange control authorities. Profits, dividends, and interest from 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 400 a year, and the upper limit is £C 1,400 a year; the amount allowed depends on the cost of living in the country concerned—e.g., for study in countries in the Middle East, £C450; in the United States and Canada, £C 1,400; in other countries, £C 850. 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 £C5 to £C25 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).

Proceeds from Invisibles

Receipts from invisibles in non-Sterling Area currencies must be sold to an authorized bank. Persons entering Cyprus may bring in any amount in foreign currency notes and Cyprus currency notes.

Capital

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

Foreign investments in Cyprus by residents of countries outside the Sterling Area require the prior approval of the exchange control authorities. In considering 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 1967

May 4. The open general license ceased to apply to imports from North Korea, Tibet, and North Viet-Nam.

May 18. All non-Sterling Area currencies were designated as specified currencies.

November 20. The par value was changed from £1 = US$2.80 to £1 = US$2.40.

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 246.853 = US$1.1 Exchange transactions in French francs between the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO) and commercial banks take place at rates resulting from the relation CFAF 1 = F 0.02, plus or minus a commission. Exchange rates for other currencies are based on the fixed rate for the French franc and the Paris exchange market rate for the currency concerned, and include a commission. Forward exchange transactions, which are permitted in any currency except the currencies of Portugal, Rhodesia, and South Africa, and for any period, take place at freely negotiated rates. The domestic negotiation of banknotes and coins that are legal tender in Guinea or Mali is prohibited, and both domestic and foreign transactions in the currencies of Portugal, Rhodesia, and South Africa are prohibited; otherwise there are no restrictions on foreign exchange dealings, whether spot or forward, by residents or nonresidents, whether banks or nonbanks.

With the exceptions noted below, there are no restrictions on payments and no prescription of currency requirements, although certain controls are applied to borrowing abroad, to issues and sales of foreign securities in Dahomey, and to inward and outward direct investment (see section on Capital, below). All settlements with Portugal, Rhodesia, and South Africa are prohibited for noneconomic reasons; settlements with Eastern Germany, Ghana, Hungary, and the United Arab Republic, with which Dahomey has concluded bilateral payments agreements, must in principle be made through special accounts, but in practice all payments agreements are inoperative. In practice, settlements with countries outside the French Franc Area are usually made through correspondent banks in France, either in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs; settlements with other countries of the French Franc Area are usually made in currencies of that Area, in practice mainly in French francs.

The following is applicable to payments and transactions between Dahomey and all foreign countries 2 except Portugal, Rhodesia, and South Africa. Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Dahomey or abroad at the choice of the holder. Accounts in CFA francs or in any foreign currency may be held in Dahomey 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 Dahomey or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment, including any amount of interest. There are no restrictions on imports or exports of foreign or domestic securities. Imports and exports of gold are controlled and restricted; these require prior approval by the Ministry of Finance.

Dahomey's control measures affecting inward and outward direct investment and borrowing abroad 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, Congo (Brazzaville), Gabon, and the Malagasy Republic), provided that they accord Dahomey reciprocity in respect of freedom of payments and transfers.3

Administration of Control

The Ministry of Finance, Economic Affairs, and Planning supervises borrowing abroad by residents, the issue, sale, or introduction of foreign securities in Dahomey, and inward and outward direct investment. The BCEAO is authorized to collect, either directly or through the intermediary of the banks and the postal administration, any information necessary to compile the balance of payments statistics. All banks in Dahomey are permitted to carry out foreign exchange transactions. Import and export licenses are issued by the Directorate-General of Economic Affairs in the Ministry of Finance, Economic Affairs, and Planning. Permission to import or export gold, however, is granted by the Minister of Finance personally, and 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.

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. 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; goods that have not been liberalized require a license, which is issued automatically. Certain imports are liberalized when originating in OECD countries other than Japan. 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 commodities4 are subject to individual ceilings within the global quotas when originating in non-EEC countries outside the French Franc Area. The quotas determine the limits up to which import licenses are issued for specified commodities to licensed traders and to industrial or agricultural producers. Certain textiles are licensed freely outside the import program.

Payments to Portugal, Rhodesia, and South Africa are prohibited. Payments for imports from all other countries may be made freely, at any time, and without any formality. Commodity futures may be dealt in freely, in Dahomey or abroad.

Payments for Invisibles

With the exception of payments to Portugal, Rhodesia, and South Africa, which are prohibited, all payments for invisibles may be made freely without individual license. Resident and nonresident travelers may take out any amount in domestic and foreign banknotes. However, persons normally resident in Dahomey, when traveling to a country that is not a member of the West African Monetary Union, must declare to the customs authorities at the point of exit the amount of BCEAO banknotes they are carrying if this amount exceeds CFAF 150,000. Travelers also may freely take out up to ten gold coins, irrespective of denomination or face value.

Exports and Export Proceeds

Exports to all countries are free of license, except those of gold and diamonds. 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. Holders of an exporter's card are entitled to receive licenses for certain imports still subject to restriction, provided that the goods are related to their export activities and are not resold in their original form; however, no exporters' cards have yet been issued.

Exports are free of exchange controls. The repatriation and surrender of export proceeds is not required. Exporters may grant credit for any period and are free to sell forward their anticipated export proceeds. Proceeds must not be received in or from Portugal, Rhodesia, or South Africa.

Proceeds from Invisibles

Services performed for nonresidents do not require licenses. Except in relations with Guinea, Mali, Portugal, Rhodesia, and South Africa, there are no restrictions on the receipt of payments for services rendered to nonresidents. The proceeds from invisibles need not be surrendered. Such proceeds must not be received in or from Portugal, Rhodesia, or South Africa.

Travelers may bring in any amount of domestic or foreign banknotes and coins other than Guinean and Malian banknotes and coins, whose import is prohibited. Travelers may also bring in up to ten gold coins, irrespective of denomination or face value.

Capital

All capital movements between Dahomey and Portugal, Rhodesia, and South Africa are prohibited. The situation in respect of other countries is as follows.

Residents and nonresidents may import or export capital freely without a license, through banks or any other channel. Foreign and domestic securities of all types may be imported or exported freely, whether through the intermediary of a bank or not, and transactions between residents and nonresidents in domestic and foreign real estate (except when forming part of a direct investment) are unrestricted. Capital assets abroad of residents are not subject to repatriation and (except when forming part of a direct investment) may be freely disposed of.

Certain controls are maintained over borrowing abroad, over inward and outward direct investment, and over the issuing, offering for sale, or introduction of foreign securities in Dahomey, but 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 Dahomey, the controls do not apply to relations with 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.

Foreign direct investments in Dahomey,5 and Dahomean direct investments abroad,6 must be declared to the Minister of Finance when they are being made, 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 total or partial liquidation of either type of direct investment is also subject to prior declaration to the Minister. Both the making and the liquidation of direct investments, whether these are Dahomean investments abroad or foreign investments in Dahomey, 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 in the capital of a company whose shares are quoted on a stock exchange.

The issuing, offering for sale, or introduction of foreign securities in Dahomey 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 Dahomean Government, and (2) shares similar to securities whose issue, offering, or sale in Dahomey has previously been authorized.

Borrowing abroad by physical or juridical persons, whether public or private persons, whose normal residence or registered office is in Dahomey, or by branches or subsidiaries in Dahomey 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, which are subject to prior declaration, 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 Dahomey and countries abroad or between foreign countries, in which these persons or firms take part; (3) loans contracted by registered banks; (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 notified to the Minister of Finance within 20 days, unless the total outstanding amount of all loans contracted abroad by the borrower is CFAF 500,000 or less.

Lending abroad is not subject to authorization or declaration. Banks in Dahomey may freely grant overdrafts on nonresident accounts for any period.

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 gold in any form, at home or abroad. They are also free to acquire and dispose of gold in any form in Dahomey. Imports and exports of gold require prior authorization by the Minister of 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), (3) imports and exports by travelers of gold articles (other than coins and bars) whose combined weight does not exceed 500 grams, and (4) imports and exports of up to ten gold coins, irrespective of denomination or face value. Both licensed and exempt imports of gold are subject to customs declarations.

Changes during 1967

March 22. Decree No. 96 created a Directorate-General of Economic Affairs in the Ministry of Finance, Economic Affairs, and Planning.

May 4. Dahomey signed the Protocol of Association for the establishment of a West African Economic Community.

May 25. Decree No. 160 established an Autonomous Stabilization and Price Support Fund for Export Products.

May 25. Ordinance No. 12 introduced stabilization and support taxes on certain imports and exports. The amounts of these taxes were fixed by Arrêté No. 389 of June 8.

June 1. By virtue of Ordinance No. 22 of July 6, 1967, persons and companies in all EEC member states were placed on an equal footing as regards the right of establishment and the performance of services.

July 1. Ordinance No. 17 of June 29, 1967 established the principle that financial relations with foreign countries were free. With minor exceptions, all existing legislation contrary to this principle was revoked, including Law No. 62-17 and Law No. 63-12. Previously, current and capital payments to all French Franc Area countries already were unrestricted; they were also free of control, as were inward transfers originating in French Franc Area countries. The ordinance also provided for the statistical registration of all inward and outward payments.

Normally, the repatriation and surrender of claims, earnings, and proceeds accruing abroad would no longer be required. Import and export regulations were not affected, although certain exchange control formalities were abolished; these included the requirements that import licenses and import certificates be domiciled with an authorized bank, and that exporters sign a foreign exchange commitment in respect of all exports to countries outside the French Franc Area.

July 1. Decree No. 219 of June 29, 1967 established the principal rules for the application of Ordinance No. 17. The decree defined the concept of “foreign countries” and indicated the types of capital transactions with foreign countries that would be subject either to declaration or prior approval. It also provided that the import and export of gold, with certain exceptions, required prior approval by the Minister of Finance and that the import and export of banknotes and coins issued by the BCEAO were free, with the proviso that residents traveling to countries outside the West African Monetary Union must declare to the customs any amount in BCEAO notes carried if that amount exceeded CFAF 150,000. The import and the negotiation in Dahomey remained prohibited of banknotes and coins that were legal tender in Guinea, and corresponding prohibitions were applied to currency that was legal tender in Mali. The Minister of Finance would issue the necessary instructions for the operation of the payments agreements with foreign countries.

July 1. Decree No. 220 of June 29, 1967 created a Balance of Payments Committee charged with periodically compiling a national balance of payments. For this purpose, all banks and financial institutions as well as the postal administration were required to notify the BCEAO of all payments between Dahomey and foreign countries, all transactions in foreign currency, all transactions in CFA francs that affected financial relations with foreign countries, and all transactions in securities between residents and nonresidents. The BCEAO was authorized to collect, either directly or through the intermediary of the banks and the postal administration, any information necessary to compile the balance of payments statistics.

July 1. Ordinance No. 18 of June 29, 1967 abolished the 0.5 per cent exchange tax on payments to countries outside the French Franc Area. It also increased the customs stamp tax from 3 per cent to 4 per cent.

July 1. The Exchange Office was abolished.

July 1. Arrêté No. 461 of June 30, 1967 formally abolished the exchange control procedures, formalities, and obligations in respect of imports and exports. No formality of any kind was normally required for liberalized imports and exports, while all other imports and exports were subject to license; importers were no longer required to complete an import certificate for liberalized commodities. Certain imports and exports could be subjected to a prior declaration, which was to be visaed either by the Directorate-General of Economic Affairs or by the competent ministry. Import and export licenses would be issued by the Directorate-General of Economic Affairs. Holders of an exporter's card could be granted licenses for imports still subject to license and related to their export activity, for up to 10 per cent of their exports made at the time of issuance of the card. Nothing was changed in the regimes applicable to trade with countries that had been accorded privileged treatment.

July 1. New import and export procedures went into effect in accordance with a Notice to Importers of June 30,1967.

October 2. Arrêté No. 37 created an office for the import and export of precious metals and precious mineral materials. Until further notice, the export duty on diamonds was fixed at 2.5 per cent of the real value of each export shipment. Two more such offices were established on October 21 and 24 by Arrêtés Nos. 43 and 44.

Denmark 1

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.2 Authorized exchange dealers may engage in arbitrage with one another and with their foreign correspondents in convertible and externally convertible currencies, including Danish kroner, both spot and forward for up to 12 months. Forward premiums and discounts are left to the interplay of market forces. Forward transactions with residents must have a commercial basis.

Pursuant to UN Security Council Resolution No. 232, restrictions for security reasons are applied to certain payments and transfers to, or for the benefit of, 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 exception to this rule is that payments to or from Eastern Germany must be settled through inconvertible krone accounts.

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. Within the first year after emigration, transfers abroad may be made up to DKr 40,000 a person, while certain payments to residents may be made freely from these accounts. One year after emigration the balances are made convertible.

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 virtually 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.” 3 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.” 4 Imports from countries outside the “Free List Area” require licenses; these are generally granted in accordance with bilateral trade agreements and traditional trade relations, and apply to the specific country concerned. Licenses are issued freely for a large number of commodities when these are imported from, and originate in, Bulgaria, Czechoslovakia, Poland, and Rumania. Imports of bread grain, feedgrain, and 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 for certain purposes (see section on Exchange Rate System, above) 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. The authorized exchange dealer may make payment before clearance of the goods, provided that the probable date of clearance lies within a year from the date of payment.

Payments for Invisibles

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

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

Exports and Export Proceeds

All exports to Rhodesia require licenses, and for many commodities no licenses are issued.

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 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 in Danish banknotes and coins, foreign banknotes, and other Danish or foreign means of payment.

Capital

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

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.

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 be sold freely to residents. Foreign securities held in Denmark and belonging to nonresidents may 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 but not to customs duty.

Changes during 1967

January 1. The import of a number of additional commodities was liberalized, provided that they originated in the “Free List Area”; these commodities included the last industrial goods that were subject to restriction when imported from that area.

January 1. The global import quotas for the first half of 1967 went into effect.

June 13. Royal Decree No. 195 of May 31, 1967, came into effect; it implemented UN Security Council Resolution 232 of December 16, 1966, which imposed mandatory economic sanctions on Rhodesia. The Decree prohibited the importation into or transport to Denmark of the following commodities originating in Rhodesia and exported therefrom after December 16, 1966: asbestos, iron ore, chromium, pig iron, sugar, tobacco, copper, meat and meat products, and hides, skins, and leather. The sale, transportation, or supply to Rhodesia of arms and ammunition, aircraft, motor vehicles, petroleum and petroleum products, and equipment and materials for the manufacture, assembly, or maintenance of any such goods were also prohibited, as were the manufacture or assembly in Rhodesia of aircraft or motor vehicles. Payments to or from Rhodesia in connection with the activities listed also were prohibited. Henceforth, all transit dealings involving the commodities or activities listed had to be submitted to the National Bank for decision.

July 1. Danish notes and coins became legal tender in Greenland; Greenland currency would gradually be withdrawn from circulation. The exchange control regulations in effect in continental Denmark were also applied in Greenland. The Danish exchange control definition of “residents” was amended to include residents of Greenland other than certain foreign nationals, firms, or juridical persons in Greenland.

July 1. The global import quotas for the second half of 1967 went into effect.

July 1. Paraguay was included for import control purposes in the “Free List Area.”

November 21. The par value of the Danish krone was changed from DKr 6.90714 = US$1 to DKr 7.50000 = US$1.

Note.—The following changes took place in 1968:

March 27. The bilateral payments agreements with Brazil and Colombia were terminated with effect from April 1, 1968.

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 normal banking commissions which result in effective rates within 1 per cent on either side of the par value. 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. Its Foreign Exchange Department establishes import quotas, which it allocates to customary importers of the commodities concerned.

Prescription of Currency

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

Imports and Import Payments

Imports of 40 categories of goods, including automobiles with an f.o.b. value in excess of RD$2,000, are temporarily prohibited. Imports of many other commodities are restricted by quotas. Specified commodities are exempt from quota when they are financed with the importer's own exchange; such imports are also exempt from advance deposits. 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.

Payments for many imports are settled on a draft for collection basis; when the draft is presented for collection, the importer pays the full amount in pesos to the commercial bank; the bank then transfers this deposit to the Central Bank which releases exchange for the remittance, sometimes after a certain delay. Other imports are paid for by letter of credit or a direct transfer of exchange. Except in respect of direct transfers, the commercial banks transmit daily to the Central Bank copies of importers' applications for exchange accompanied by the equivalent in local currency. The Central Bank authorizes the commercial banks to open letters of credit and, when these have been negotiated, it transfers foreign exchange to the banks; all letters of credit except those covering industrial machinery and raw materials imported against acceptance letters of credit with a maturity of 90 days or more must be paid in full by the importer upon the opening of the credit. When imports are paid for by direct transfer, the Central Bank makes exchange available upon receiving the request from the commercial bank, and charges the latter's account for the peso equivalent of the amount involved. In principle, exchange for import payments is made available within not more than five working days from the receipt of the application, but since the middle of May 1966 there have been delays in the provision of exchange. Importers of certain commodities are required to make payment by means of fully prepaid letters of credit. Imports in this group include automobiles, motorcycles, household appliances, finished textiles and clothing, and many consumer luxury goods. Importers of most of these commodities 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.

Virtually all imports are 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 51.5 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 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

The allocation of foreign exchange for tourist travel is suspended. For business travel, the Central Bank may approve applications on an individual basis. Airline tickets are subject to a tax of 10 per cent. All payments for other 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.

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. In some cases the transfer may be effected in monthly 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 the 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. Within 48 hours of receiving payment, exporters of Dominican products must surrender through the commercial banks to the Central Bank foreign exchange equal to 100 per cent of the f.o.b. value of their exports. 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. 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 1967

March 9. A number of consumer goods were added to the list of imports requiring financing under letter of credit.

March 22. Certain specialty foods were made subject to a 10 or 15 per cent ad valorem import tax. Furthermore, a deposit of 10 per cent of the f.o.b. value of such imports was to be lodged with the Central Bank for a period of six months, at the time of customs clearance.

May 11. Imports of raw material for industrial use and of capital equipment could be financed with letters of credit without depositing the equivalent amount in domestic currency with the Central Bank.

May 23. Government institutions were obliged to pay import duties, unless the goods were to be utilized in developing the industrial, educational, agricultural, or scientific sectors of the economy.

June 23. The Central Bank was authorized to fix minimum export prices.

July 10. Decree No. 1476, Decree No. 1482, and two Notices of the Monetary Board to Importers introduced the following measures. The importation of a number of goods, including automobiles valued at over US$2,000 f.o.b., was prohibited until the end of the year. Import quotas were established for a large number of goods, including household articles, consumer durable goods, cosmetics, and alcoholic beverages. The quotas allocated to each importer were 25 per cent of the value of goods he imported within the past 12 months. Imports financed with importers' own exchange were exempted from the import quotas but not from the import prohibitions. Additional imports had to be financed with letters of credit. The allocation of foreign exchange for tourist travel abroad (previously US$100 a person every 12 months) was suspended.

July 11. Advance import deposits were reduced to 50 per cent of previous levels, and the period during which they were blocked was reduced from six months to three months.

July 21. The Monetary Board was authorized to make certain imports financed with importers' own exchange subject to the existing quota restrictions.

August 30. By Decree No. 1613, specified imports financed with importers' own exchange were exempted from import restrictions and advance deposit requirements. In November, this decree was extended to certain other import commodities.

September 13. The Central Bank was authorized to fix maximum import and minimum export prices. Commercial exporters were required to register with the customs authorities.

November 8. Imports of chemical and pharmaceutical products were subject to a tax of 10 per cent.

November 13. Wharfage on imports had to be paid in U.S. dollars.

December 26. A resolution of the Monetary Board extended until June 30, 1968 the existing import prohibitions and import restrictions. Import quotas, however, were increased. The Central Bank would assign to the customary importers of goods subject to quotas a quota equivalent to 75 per cent of the imports of the commodity concerned during the 12-month period used as a basis for the calculation of the quotas assigned during the second half of 1967. For the first 6 months of 1968, one half of each quota could be utilized, but only in equal parts in the first two quarters.

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, to payments for most imports and related invisibles, to official transactions, to other essential invisibles, to registered capital, and to all contractual registered private foreign debt operations entered into after July 14, 1961. Exports of rice are subsidized. For all other transactions there is a free market, in which the rates on December 29, 1967 were S/19.96 buying, and S/20.02 selling, per US$1.

Administration of Control

The Monetary Board classifies transactions according to the exchange market through which they must be settled. Most transactions pass through the official market, which is under the control and supervision of the Central Bank of Ecuador. The Central Bank also issues import and export licenses. Exports of coffee to “new markets,” however, require in addition 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 mainly by exchange houses and several commercial banks—where such transactions are free of supervision by the exchange control authorities.

Prescription of Currency

Most settlements with Eastern Germany, Hungary, and Poland must take place through bilateral accounts. Payments between Ecuador and Colombia and Peru may 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.

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. 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 prohibited. Imports for which licenses are not required 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); the exchange for such imports must be obtained in the free market, or the goods must be financed abroad. 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 almost all private imports financed with official exchange. The exceptions are imports under the Agricultural Surplus Agreement with the United States, imports of certain goods to be used for the construction and equipment of hotels, all imports of List I commodities financed with foreign credit of more than a year, 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, 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 of part of the import duty. The rates for the advance deposit required are currently 35 per cent of the c.i.f. value for imports in List I (15 per cent for the same goods if covered by foreign credit of 180 days to one year), and 50 per cent, 70 per cent, 100 per cent, or 140 per cent for imports in List II. The 140 per cent requirement is reduced to 100 per cent for the same commodities when imported by public or semipublic agencies. The prescribed prepayment of import duty is 10 per cent of the duty on commodities in List I and 45 per cent of the duty on those in List II. Advance deposits are released pari passu with the making of the import payments.

Most imports are also subject to monetary stabilization surcharges and to additional import taxes. The surcharge is 10 per cent of the c.i.f. value for List I items and 20 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, and all imports originating in Paraguay. Most 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., insurance1); necessary expenses (i.e., travel, tuition, and living expenses up to US$100 a month) of Ecuadoran students abroad who are registered with the Central Bank; most payments of the Government and of official entities; payment of interest on registered foreign loans up to 7.5 per cent annually; or payments of profits and dividends on registered private foreign investments up to 12 per cent annually; and contractual private foreign debt operations entered into and registered after July 14, 1961. Other payments for invisibles may be made freely through the free market. Residents traveling abroad must pay a tax of S/ 400 for each exit visa, starting from the second visa in their passports.

Exports and Export Proceeds

All exports except those of mining companies with government contracts require licenses to ensure, among other things, the full surrender of the exchange proceeds; 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 bananas are subject to minimum export prices expressed in sucres. Exports of coffee, cacao, bananas shipped on the stem, 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, 21.4 per cent, 3.4 per cent, and 10 per cent, respectively.2 Export taxes are also levied on certain livestock and on fresh or frozen seafood. Exports of bananas in boxes are subject to a specific export duty expressed in sucres per pound (differentiated according to destination and province of origin). All exports of bananas are subject to certain additional specific taxes. Exports of coffee to “new markets” are exempt from export tax and all other taxes levied on exports. Exports of rice by the National Development Bank receive a subsidy equal to the difference between its cost to the National Development Bank and the f.o.b. price, up to a maximum of S/ 3.18 per U.S. dollar; the export proceeds, however, are surrendered at the official rate.

Proceeds from Invisibles

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

Capital

Receipts of private foreign capital must be surrendered to the Central Bank at the official buying rate 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 foreign capital if the investment is not considered to be in the interest of the Ecuadoran economy at that particular time. All unregistered private capital may enter without limitation through the free market. An Industrial Promotion Law provides for certain exemptions from import duties and import charges to three 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, 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 financing organizations are converted by the Central Bank at the official selling rate of S/ 18.18, instead of at the official buying rate of S/ 17.82, per US$1. In such instances, the Central Bank receives from the 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 in foreign exchange.

Gold

Residents are free to purchase, hold, and sell gold in Ecuador. They may export gold only in the form of filigree work whose gold content is not more than 25 per cent of its intrinsic value. Imports of gold are free, subject to the regular requirements for imports.

Changes during 1967

January 11. Monetary Board Resolution No. 487 amended Resolution No. 458 by providing that the refund of the 140 per cent advance deposit on List II commodities would be made in proportion to the exchange payments authorized by the Central Bank.

January 26. Monetary Board Resolution No. 489 exempted from advance import deposits commodities sent by foreign governments and agencies as gifts or donations to various types of institutions.

February 15. Monetary Board Resolution No. 491 reduced from 50 per cent to 35 per cent the advance import deposit required on List I goods (from 25 per cent to 15 per cent when imports of List I goods were financed with foreign suppliers' credits of between 180 days and one year). For certain commodities in List II, the advance import deposit requirement was reduced from 140 to 100 per cent or from 70 to 50 per cent.

February 16. Monetary Board Resolution No. 492 exempted from advance deposit requirements imports of machinery and equipment that were needed for the execution of public works.

April 14. Monetary Board Resolution No. 494 exempted from advance deposit requirements materials that were needed for the execution of public works.

April 17. A Government Resolution exempted certain religious missions from the 10 per cent or 20 per cent monetary stabilization surcharge on imports.

April 20. A bilateral payments agreement was signed with Hungary.

May 16. Monetary Board Resolution No. 496 reduced the advance import deposit requirement for liquified gas carriers from 140 per cent to 50 per cent, and that for calculating machines and electronic computers from 140 per cent to 100 per cent.

May 30. Decree No. 480 incorporated in Ecuador's National List the tariff concessions agreed at the fifth and sixth conferences of the contracting parties to the Treaty of Montevideo.

June 2. Decree No. 055 exempted from all taxes exports of coffee to “new markets,” provided that exporters met their quotas for exports to countries subject to quota.

June 15. Monetary Board Resolution No. 498 reduced the advance deposit requirement from 140 per cent to 100 per cent for imports of certain List II commodities when made by public or semipublic agencies.

June 15. Monetary Board Resolution No. 499 added to List II certain commodities when originating in and shipped from LAFTA countries. These were items whose importation temporarily was prohibited on April 21, 1966, when Regulation No. 463 of the Monetary Board deleted them from List II.

June 16. Monetary Board Resolution No. 500 prescribed the prior authorization of the Ministry of Industry and Commerce for all coffee exports to “new markets.”

June 16. Monetary Board Resolution No. 501 authorized the Central Bank to retain US$47.322 per 60-kilogram bag of coffee shipped to destinations other than “new markets” during the last quarter of the current coffee year.

June 30. Decree No. 113 terminated the tax exemptions for imports of goods on List II, except pharmaceutical products and medical instruments.

August 1. The Directorate-General for Bananas was granted exemption from the 10 and 20 per cent monetary stabilization surcharges.

August 24. Decree No. 3264 of the Ministry of Industry and Commerce put into force a revision of the Industrial Development Law.

October 6. A bilateral payments agreement was signed with Bulgaria; it did not enter into force during 1967.

October 10. A bilateral payments agreement was signed with Rumania; it did not enter into force during 1967.

El Salvador

Exchange Rate System

The par value is 0.355468 gram of fine gold per Salvadoran Colón or ¢ 2.50 = US$1. The rates of the Central Reserve Bank for transactions with the public are ¢ 2.49 buying, and ¢ 2.51 selling, per US$1. Exchange transactions by commercial banks with the public take place at or within these limits and are subject to a tax of ¼ of 1 per cent. 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 ¢ 100,000 the tax is levied at fixed amounts that may be slightly in excess of 110 of 1 per cent. There is also a banking commission of ¢ 0.50 on transactions not exceeding the equivalent of US$25 and involving U.S. dollars or Mexican pesos.

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

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

Imports and Import Payments

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 saccharine. Payments and transfers abroad require exchange licenses, which are granted freely, provided that (unless the goods are imported from other countries of the Central American Common Market) the terms of payment do not exceed certain maxima: (1) Imports of machinery or equipment for use in agriculture, stock raising, or industry and imports of fertilizers, insecticides, greases, lubricants, and spare parts for vehicles and for machinery are authorized by the Exchange Control Department when the terms of payment do not exceed 360 days from the date of entry of the merchandise into a customs warehouse. (2) Imports of raw materials and intermediate goods for use in agriculture, stock raising, or industry must be paid for within 270 days. (3) Imports of essential food products, of medicine, medical and surgical supplies, text books, and reference books must be paid for within 180 days. (4) Imports of all other commodities (except listed goods that are subject to a 100 per cent advance deposit) are authorized by the Exchange Control Department, provided that the terms of payment do not exceed 60 days. The Department has authority to permit terms of payment in excess of 360 days for those imports of machinery and equipment (except vehicles) that are ordered direct by the users and are not intended for resale or inventory.

For specified goods (including luxury foods, alcoholic beverages, cigarettes, perfumes and cosmetics, jewelry, watches, and all types of automobiles and buses, except jeeps and other vehicles with four-wheel drive), the Exchange Control Department does not permit importers to place orders abroad unless evidence is submitted that an advance deposit in colones equivalent to 100 per cent of the value has been lodged with the Central Reserve Bank, or, at the option of the importer, that an irrevocable letter of credit will be established on which a 100 per cent margin deposit is made. Imports of the same goods from other countries of the Central American Common Market are exempt from these requirements. Diplomatic imports are exempt from the 100 per cent advance deposit in colones, provided that payment is made through a nonresident account.

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 calculated on the value of the advance payment is required from the importer as a guarantee. The guarantee deposit varies according to the nature of the goods; it is 25 per cent on the items subject to the various maximum payment terms. For the goods that are subject to a 100 per cent advance deposit, the advance deposit serves at the same time as a guarantee deposit. These regulations are also applicable to goods imported from other countries of the Central American Common Market.

Advance deposits and guarantee deposits are refunded when the goods arrive in the country, provided that payment in full has been made to the exporter.

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) is granted by the Exchange Control Department up to the equivalent of US$2,000 a person a trip, on the basis of US$50 a person a day; for amounts in excess of US$800 a person a trip, a 20 per cent deposit in local currency must be lodged with the Central Reserve Bank. The Department also generally authorizes transfers of up to US$300 a month to each Salvadoran with permanent residence abroad; larger amounts may be authorized when the need therefor is shown. Students are allowed US$200 a month; those with families are allowed US$250 a month plus US$50 for each child. Foreign exchange in excess of the limits given above is seldom granted.

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 ¢ 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 ¢ 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.

The exchange control regulations do not limit the exportation of local currency by travelers.

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. The exchange control regulations do not limit the importation of local currency by travelers.

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) and (2) amortization payments and repatriation of the proceeds from the sale of the assets of the enterprise after payment of taxes (including, where appropriate, capital gains tax); the repatriation of registered foreign investments is not limited to the amount of the originally registered investment. Foreign investments made in El Salvador prior to June 1, 1961 must also be registered by the Ministry of Economy or the Exchange Control Department in order to enjoy the same facilities. For long-term foreign loans, the Exchange Control Department authorizes, without restriction, the remittance abroad of foreign currency for the payment of interest and amortization. The same treatment is granted to short-term foreign loans that have been approved by and registered with the Exchange Control Department.

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.

Changes during 1967

September 25. The utilization of foreign suppliers' credit was further restricted by a shortening of the permitted terms of payment for imports. A 100 per cent advance deposit or margin deposit was required on specified luxury imports. The guarantee deposits required for advance payments for imports were increased. The mandatory 10 per cent or 25 per cent deposit on import letters of credit was abolished.

September 25. The issuance of exchange licenses for imports became the sole responsibility of the Exchange Control Department of the Central Reserve Bank.

October 16. The Central Reserve Bank revoked the authority of the commercial banks to grant foreign exchange for travel purposes and for specified other invisibles, with the exception of the power to sell limited amounts of exchange for travel to other Central American countries.

October 16. The basic allowance for transfers to Salvadorans with permanent residence abroad was reduced from US$500 to US$300 a month.

December 15. New regulations governing exchange allocations for travel outside the Central American area went into effect.

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 foreign exchange appropriate to the country of the recipient or in U.S. dollars or sterling. The net proceeds of exports must be received in a foreign currency 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.

Imports and Import Payments

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

Payments for Invisibles

Payments for invisibles require exchange licenses. Invisibles connected with trade transactions are treated on the same basis as the goods to which they relate. Foreign nationals may remit 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 or with an autonomous government organization and who have an employment contract specifically entitling them to remit a percentage of their earnings. Ineligible persons may apply for exchange to meet expenses for maintenance of bona fide dependents, education of children, medical care, and premiums on insurance policies taken out before April 2, 1962. Subject to proper provision having been made for local taxation, foreign companies may remit dividends on their invested and reinvested capital in any currency.

Persons traveling abroad are allowed foreign exchange equivalent to Eth$100 a day for a maximum period of six weeks if the journey is made for business purposes, and up to the equivalent of Eth$ 1,050 a year for persons 16 years of age or over and Eth$735 a year for those under 16, if the journey is made for pleasure or vacation. Travelers may take with them a maximum of Eth$100 in Ethiopian banknotes.

Exports and Export Proceeds

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

Proceeds from Invisibles

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

Capital

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

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 1967

No significant changes took place during 1967.

Finland 1

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. Market rates for certain other currencies 2 vary between limits which result from combining the official limits for the U.S. dollar maintained by Finland and such limits in force in the country of the other currency concerned. Forward premiums and discounts are left to the interplay of market forces. Official, fixed 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 certain other convertible or externally convertible currencies.2 Forward transactions may be concluded freely for periods not exceeding 12 months; forward transactions with residents must have a commercial basis.

Administration of Control

The Bank of Finland operates the exchange control system, delegating authority to the authorized exchange dealers (mainly commercial banks). Import and export licensing is administered by an office subordinate to the Ministry of 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 markkas 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 markkas of convertible currencies sold to an authorized bank; with authorized remittances from residents of Finland to residents of convertible currency countries; with transfers from other Convertible Markka Accounts; with the value of Finnish banknotes received by an authorized bank from a bank in a convertible currency country; and with interest accrued on the account. They may be debited for authorized payments in Finland, including the purchase of foreign exchange; for remittances abroad; and for transfers to other Convertible Markka, Restricted Markka, or Capital Accounts.

3. Restricted Markka Accounts are held by residents of countries with which Finland has bilateral payments agreements (see footnote 3). They may be credited with 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 the travel and living expenses in Finland of the account holder and nonresident members of his family or, if the holder is a firm, members of its staff traveling at the firm's expense, up to Fmk 2,000 for each person for each period of ten days; for payments not exceeding Fmk 2,000 for support of a person in distress in Finland; for payments for expenses incurred by a bank in administering the assets of the account holder; for investment in shares and debentures quoted on the stock exchange and in bonds issued after August 31, 1939 that are not tied to any foreign currency 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

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 agreements), 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 1968 amounts to less than 2 per cent of total 1967 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. 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 related trade agreement. All other imports require individual licenses. For goods that do not require a license when imported from the bilateral area, the importer must file an import control declaration with the customs for statistical purposes.

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.

Payments for Invisibles

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 other transactions, with few exceptions, exchange licenses are granted liberally by the Bank of Finland. All contracts involving payments to nonresidents for which general permission has not been granted must be submitted to the Bank of Finland for approval.

A Finnish resident going abroad may purchase from commercial banks foreign exchange equivalent to Fmk 1,000 a trip, irrespective of his destination. Resident and nonresident travelers may take out Fmk 100 a trip in Finnish notes and coins and any reasonable amount in foreign notes and coins; travelers to neighboring countries making frequent trips to destinations not located beyond any municipality adjoining Finland's land boundary may take out Fmk 100 a person a month in Finnish notes and coins. The automatic exchange allocation for business travel is the equivalent of Fmk 120 a day.

Exports and Export Proceeds

Export licenses are required only for exports of metal scrap. Exports of other goods require only an export control declaration, which is approved automatically by the Licensing Office except in a few specified cases. 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. A number of commodities are subject to export taxes; the rates of tax are to be decreased progressively, and the act authorizing their imposition is to expire at the end of 1969.

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 by nonresident travelers and returning Finnish residents is unrestricted.

Capital

Most outward transfers of nonresident capital are subject to approval by the Bank of Finland. 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.

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

Nonresidents may purchase through an authorized bank, against convertible or externally convertible currencies or by debiting a Convertible Markka Account, bonds, 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 and debentures quoted on the stock exchange and of bonds issued after August 31, 1939, 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 markkas from a Convertible Markka Account, approval for their export can be obtained freely. The import of securities by nonresidents and returning Finnish residents is unrestricted.

The regulations concerning foreign investments are as follows. All incoming capital transactions must be approved by the Bank of Finland, which considers the foreign exchange aspect. The Bank grants permission liberally, 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.

Gold

Residents may freely hold, buy, and sell gold in any form at home; residents other than the monetary authorities and industrial users are not allowed to buy, hold, or sell gold abroad. Imports and exports of gold in any form other than jewelry require licenses issued by the Licensing Office; such licenses are not normally granted except for imports and exports by or on behalf of the monetary authorities and industrial users. Commercial imports and exports of articles containing gold require licenses issued by the Licensing Office; for most such articles, these are granted freely.

Changes during 1967

January 1. The import regulations for 1967 entered into force. Commodities under 30 tariff headings were removed from the global quota list and no longer required licenses when imported from the multilateral area; some of these goods also were freed from licensing when imported from bilateral countries.

January 15. Exchange allocations for travel services (other than transportation) included in the cost of a trip paid for in domestic currency before departure were limited to Fmk 400 a person a trip for travel in Scandinavian countries and Fmk 800 a person a trip for travel in other countries. Amounts in excess of Fmk 200 (for Scandinavian travel) or Fmk 400 (for other travel) were to be deducted from the standard exchange allowance for tourist travel.

January 19. The Government issued a policy statement encouraging foreign direct investment in Finland and appointed a commission to provide foreign entrepreneurs with information and to forward to the relevant authorities applications for new inward investments, together with the commission's views on the proposals.

March 12. The import duty on automobiles originating in EFTA countries and the U.S.S.R. was reduced by one half. Purchase tax on all new cars from all sources was increased by 5 percentage points; the minimum payable was 50 per cent of the landed value.

April 21. The list was extended of imports for which payment must be made or deposited in cash before the goods are either cleared through customs or admitted to customs warehouses or free ports.

July 1. Multilateral import treatment was extended, with minor exceptions, to the Republic of Korea.

September 18. Certain textile materials for the clothing industry were exempted from the requirement of cash payment or deposit before customs clearance or admission to free ports or customs warehouses.

September 21. The issuance of licenses for the import of passenger cars and delivery vans was suspended. Licenses already issued remained valid.

October 12. The par value was changed from Fmk 3.20 = US$1 to Fmk 4.19997 = US$1.

October 21. A temporary export duty of 14 per cent was levied on most products. The duty would be lowered gradually, to be abolished by the end of 1969.

October 27. It was announced that from January 1, 1968, Finnish importers would again be allowed to utilize up to six months' credit on imports of all commodities.

October 27. The 14 per cent export duty was abolished for a number of goods and reduced for certain other commodities to 5, 8, or 11 per cent.

November 15. Licensing of imports of passenger cars and delivery vans was resumed upon the enactment of a new tax on motor vehicles.

December 7. The export duty was eliminated or reduced for additional commodities.

December 31. The remaining quotas and customs duties (with the exception of specified fiscal duties) on industrial imports from EFTA countries were eliminated; as far as global quotas were concerned, this import liberalization was extended also to all other countries in the multilateral area.

December 31. The bilateral payments agreement with Colombia was terminated. Payments henceforth took place in convertible exchange, with the exception that one half of Finnish export proceeds would be applied to the settlement of Finland's bilateral debtor balance, until its liquidation. For import licensing purposes, Colombia was included in the multilateral area.

Note.—The following changes took place early in 1968:

January 1. The automatic allocation of exchange for tourist travel was increased to Fmk 1,000 a person a trip, irrespective of destination, from Fmk 400 a trip for travel to Scandinavian countries and Fmk 800 a trip for other countries. The additional exchange allocation for travel services (other than transportation) included in the cost of a trip paid for in domestic currency before departure was fixed at Fmk 1,000 a person a trip; amounts in excess of Fmk 500 were to be deducted from the standard tourist exchange allocation.

January 1. A number of changes were introduced in the regulations governing Capital Accounts. The maximum permitted amounts for certain outward capital transfers were revised. The minimum period over which the repatriation of nonresident-owned blocked funds must be spread was reduced.

January 1. The special regulation applicable to payments to Brazil were abolished.

January 1. The import regulations for 1968 entered into force.

January 1. All imports could again be paid for within six months of arrival in Finland.

France

Exchange System

The par value is 0.180000 gram of fine gold per French Franc or F 4.93706 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of F 4.90 buying, and F 4.9740 selling, per US$1. Market rates for Western European currencies and a few other currencies fluctuate between limits which result from combining the official limits for the U.S. dollar maintained by France and such limits in force in the country of the other currency concerned. Forward exchange transactions, which are permitted in any currency and for any period, take place at freely negotiated rates. There are no restrictions on foreign exchange dealings, whether spot or forward, by residents or nonresidents, whether banks or nonbanks.

Transfers between France and foreign countries are free. 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 France or abroad at the choice of the holder. Accounts in French francs or in any foreign currency may be held in France by any nonresident. Balances on nonresident-held accounts may be transferred freely to any type of resident-held or nonresident-held account and used for any payment in France or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment. There are no restrictions on imports or exports of foreign or domestic securities or of gold, but imports and exports of gold require prior notification to the Bank of France.

All payments to and receipts from foreign countries must be registered, for statistical purposes only; when amounts of F 10,000 or more are involved, the nature of the transfer must be indicated (for amounts of F 500 or more when payment is made through postal channels).

Foreign countries are defined as all countries other than France, i.e., other than continental France, Corsica, the Overseas Departments, and the Overseas Territories (except the French Territory of the Afars and the Issas); the Principality of Monaco is assimilated with France.1

Certain controls are maintained over direct investment and over borrowing abroad; these do not apply to relations with the following states, whose bank of issue is linked with the French Treasury by an Operations Account: Cameroon, Central African Republic, Chad, Congo (Brazzaville), Dahomey, Gabon, Ivory Coast, the Malagasy Republic, Mauritania, Niger, Senegal, Togo, and Upper Volta. Privileged treatment in respect of trade transactions is accorded to (1) the countries just mentioned and (2) Algeria, Cambodia, Guinea, Laos, Mali, Morocco, Tunisia, North Viet-Nam, Republic of Viet-Nam, and the Condominium of the New Hebrides.

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 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 construction. The Bank of France also gives its visa on import and export declarations for gold. The Directorate of Insurance of the Ministry of Economy and Finance has certain powers in respect of matters relating to insurance, reinsurance, annuities, etc., and the Ministry of Industry has certain powers in respect of licensing contracts and contracts relating to technical assistance. 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.

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

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 System, 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;2 (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 54 industrial products from countries in group (2) are restricted, and restrictions are applied to these 54 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, 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 require licenses, which are issued automatically.

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,3 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 countries in the Soviet bloc. Because of the high degree of import liberalization, and as a result of the abolition of exchange control, imports under these schemes now are of very slight importance.

Payments for imports may be made freely, at any time, in any manner, and without any formality. Commodity futures may be dealt in freely, in France or abroad.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. French and foreign notes and coins and other means of payment may be exported freely.

Certain transactions—but not the related payments—between persons or firms in France and abroad are subject to restriction; these include certain transactions relating to insurance, reinsurance, intellectual property rights, road and river transport, and motion-picture films.

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,4 require licenses if the commodities are those for which export licenses are required. Other exports are free of trade or exchange controls; when such exports exceed F 5,000 in value, certain financial information must be supplied together with the customs declaration for statistical purposes. The repatriation and surrender of export proceeds is not required. Exporters may grant credit for any period and are free to sell forward their anticipated export proceeds.

Certain goods purchased in France by persons not normally residing in France are considered as exports and are exempt from turnover taxes, even when paid for in French francs.

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

There are no restrictions on the receipt of payments for services rendered to nonresidents, and the proceeds from invisibles need not be surrendered. With minor exceptions for certain types of transaction, services performed for nonresidents do not require licenses.

Travelers may bring in any amount of bank-notes and coins in French francs, CFA francs, Malagasy francs, CFP francs, or any other foreign currency; however, the exchange of banknotes issued by Algeria, Morocco, and Tunisia is prohibited at the request of those countries.

Capital

Residents and nonresidents may import or export capital freely without a license, through banks or any other channel. Foreign and domestic securities of all types may be imported or exported freely, whether through the intermediary of a bank or not, and transactions between residents and nonresidents in domestic and foreign real estate (except when forming part of a direct investment) are unrestricted. Capital assets abroad of residents are not subject to repatriation and may be freely disposed of.

Certain controls 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 must be declared to the Minister of Economy and Finance when they are being made. 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 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. Insofar as the liquidation of direct investments is concerned, whether these are French investments abroad or foreign investments in France, the liquidation must be reported, and the report must be submitted within 20 days following each liquidation.

Foreign issues on the French capital market remain subject to prior authorization by the Minister of Economy and Finance, as do issues by French companies.5 Exempt from authorization, however, are operations in connection with (1) loans backed by a guarantee from the French Government, (2) shares similar to securities that already are officially quoted on a stock exchange in France, or (3) securities whose issue has previously been authorized.

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, require 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; (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 France and countries abroad or between foreign countries, in which these persons or firms take part; (3) loans contracted by banks; and (4) loans other than those mentioned above, when the total amount outstanding of these loans does not exceed F 2 million for any one borrower.

Banks in France may freely grant overdrafts on nonresident-held accounts for any period. Nonresidents are free to subscribe to French short-term securities.

Gold

Residents are free to hold, acquire, and dispose of gold in any form, at home or abroad. Imports and exports of gold are free and require only a prior notification to the Bank of France, which gives its visa automatically, on an import or export declaration form that must be presented to the customs. Exempt from prior declaration to the Bank of France, but not from customs declaration, are (1) imports and exports of gold made by or on behalf of 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) imports and exports of up to ten gold coins, irrespective of denomination or face value. Exempt from prior export declaration are collectors' items of gold and gold antiques that are exported under “02 licenses” granted with the approval of the Directorate of Museums. The import and export of certain gold objects that are considered merchandise, such as gold watches, is subject both to the regular import and export licensing arrangements and, unless covered by the exemptions listed above, to prior declaration to the Bank of France.

Changes during 1967

January 1. Imports from EEC countries of certain fruits and vegetables were freed from quantitative restrictions.

January 13. Imports from Eastern European countries and Mainland China of some 200 additional commodities were liberalized; most of these items were also liberalized when originating in and shipped from Eastern Germany.

January 31. Law No. 66-1008 dated December 28, 1966 and enforcement Decree No. 67-78 dated January 27, 1967 introduced far-reaching changes in the system governing France's financial relations with countries abroad, on and from January 31, 1967. (An Arrêté dated January 27 of the Minister of Economy and Finance and the Minister of Overseas Departments and Territories set out the authorization and notification requirements for the application of Decree No. 67-78.) Exchange control was abolished and complete freedom of transfers between France and foreign countries was restored, making the franc both internally and externally convertible. However, without prejudice to the convertibility of the franc, control was exercised by the Minister of Economy and Finance over a limited number of capital transactions. The distinction between residents and nonresidents was abolished, as were the system of nonresident accounts and the concept of an authorized bank (intermédiaire agréé). In contrast to the previous legislation, neither the law nor the enforcement decree contained any reference to the concept of the French Franc Area.

The concept of “foreign country” was extended to include all countries other than France, i.e., other than continental France, Corsica, the Overseas Departments, and Overseas Territories (except French Somaliland).6 The Principality of Monaco was assimilated with France. Nevertheless, the control measures affecting direct investment and borrowing abroad did not apply to relations with the states whose bank of issue at the time was linked with the French Treasury by an Operations Account.

For the purpose of the compilation of a national balance of payments, for the first time covering also the transactions with the other French Franc Area countries, all payments and receipts between France and foreign countries had to be notified to the Bank of France.

The exchange control procedures for exports and imports were abolished, including the domiciliation requirement for imports and the foreign exchange commitment for exports. Most of the details were announced in an Arrêté of the Director-General of Customs and Indirect Taxes dated January 30, 1967 and published as a Notice to Importers and Exporters dated January 31, 1967. Nothing was changed in the regimes applicable to trade with certain countries and territories that benefited from a privileged treatment. These were listed in Article 86 of the Arrêté, which article also stated that, for trading purposes, they were not considered foreign countries. Instructions dated February 6, 1967 and May 31, 1967, respectively, added North Viet-Nam and the Condominium of the New Hebrides to the list. Also unchanged were the trade regimes between France and the Overseas Departments and Territories. During February, exchange control was abolished in the French Overseas Territories (Comoro Islands, St. Pierre and Miquelon, New Caledonia, Wallis and Futuna Islands, and French Polynesia).

January 31. Decree No. 67-82 of January 27 concerning industrial property rights went into effect. For its implementation, an Arrêté was issued on March 6, 1967, which was followed by a circular of the Minister of Industry on April 13, 1967. All contracts, or changes in contracts, concluded with persons domiciled abroad or having their head office abroad that related to industrial property rights (patent, trademark, and know-how licensing, technical assistance agreements, etc.) were required to be submitted, two months before their entry into effect, to the Minister of Industry, who, within 40 days from the date of receipt of the contract, must give the resident party concerned his opinion on its final text. Previously, such contracts and all applications for payment of royalties were screened by the Bank of France.

February 1. A Notice to Importers provided that imports of North African wine would be suspended whenever the producer price was less than the minimum intervention price in France plus 2 per cent.

February 15. An agreement concerning monetary relations with Mali was signed. It came into force on May 6, 1967. Mali would create a new, jointly managed bank of issue. France would then ensure the free convertibility of Mali's currency. For that purpose, an Operations Account would be opened with the French Treasury. Subsequently, after a period to be agreed upon, Mali would resume membership in the West African Monetary Union.

February 22. New import and export procedures for gold were announced by Decision No. 67-101 of the customs administration.

February 25. The import of a number of products was prohibited when originating in or shipped from Rhodesia. These included asbestos; iron pyrite; chrome ore and its concentrates; hides and skins; and copper and copper alloys in various forms. Some of these imports already were prohibited, and the French tobacco monopoly had previously stopped its purchases of Rhodesian tobacco.

February 25. The export to Rhodesia of a number of products was prohibited. These included petroleum and petroleum products; tractors; automobiles, trucks, motorcycles, and bicycles; aircraft and helicopters; and arms and ammunition. Exports of petroleum products already were prohibited.

March 30. Decree No. 67-267 was issued which contained the charter for a bank of issue for New Caledonia, French Polynesia, and the Wallis and Futuna Islands. The note-issue privilege of the Banque de l'Indochine for these territories was terminated, effective April 1.

April 15. With minor exceptions, the various French import liberalization lists and regimes were also applied in the Overseas Departments (Guadeloupe, Guiana, Martinique, and Réunion).

July 1. The requirement of a French embassy visa for the entry of duty-free Moroccan commodities was limited to fish, canned fish, fruits and vegetables, wine, and fertilizer.

July 4. Exports of oil required a special license.

July 7. Most exports and re-exports of refined petroleum products had to be accompanied by certificates showing where the crude oil originated; an export license remained required.

July 20. Certain vegetable oils, margarine, and certain other oils and fats on the negative list for former OEEC countries, etc., were liberalized from all sources. Not included were groundnuts and groundnut oil.

August 7. All certificates of origin and quota certificates for duty-free Moroccan products required the visa of the French commercial counselor in Morocco. On October 24, this requirement was dropped for a number of products and for all imports outside the duty-free quotas.

August 17. The import into New Caledonia of all commodities other than automobiles, trucks, motor vehicles for special purposes, and matches was freed from quantitative restrictions when they originated in and were shipped from EEC countries other than France.

September 5. Imports from all sources of cane and beet sugar were freed from quantitative restrictions.

October 11. Decision No. 67-540 of the Director-General of Customs and Indirect Taxes provided that, with effect from January 1, 1968, the customs declarations for all imports and exports valued at F 10,000 or more, including those from or to countries with a privileged trade regime, must indicate the manner and terms of payment and the invoice value in French francs.

November 7. Foreign banks were admitted to the domestic mortgage market in France.

December 1. New regulations were applied to retail sales to persons not ordinarily residing in France. Discounts could be given irrespective of the currency of payment; previously, only nonresidents paying in non-French Franc Area currencies were entitled to such discounts.

December 19. Certain additional financial agreements were signed with Mali. These provided for free convertibility of the Mali franc by March 31, 1968 at the latest, on the basis of the existing exchange rate between the Mali franc and the French franc; and for the establishment by that date of a jointly managed bank of issue which would have an Operations Account with the French Treasury.

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 246.853 = US$1.1 Exchange transactions in French francs between the BCEAEC and commercial banks 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 include a commission. Forward exchange transactions, which are permitted in any currency and for any period, take place at freely negotiated rates. There are no restrictions on foreign exchange dealings, whether spot or forward, by residents or nonresidents, whether banks or nonbanks.

There are no restrictions on payments and no prescription of currency requirements, although certain controls are applied to borrowing and lending abroad, to issues and sales of foreign securities in Gabon, and to inward and outward direct investment (see section on Capital, below). In practice, settlements with countries outside the French Franc Area are usually made through correspondent banks in France, either in any of the currencies of those countries—provided that the currencies are quoted on the Paris exchange market—or in French francs; settlements with other countries of the French Franc Area are usually made in currencies of that Area, in practice mainly in French francs.

The following is applicable to payments and transactions between Gabon and all foreign countries.2 Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Gabon or abroad at the choice of the holder. Accounts in CFA francs or in any foreign currency may be held in Gabon by any nonresident. Balances on nonresident-held accounts may be transferred freely to any type of resident or nonresident-held account and used for any payment in Gabon or abroad, including the purchase of any foreign currency or gold, minted or in bars; these accounts may be credited freely with any payment, including any amount of interest. There are no restrictions on the physical importation or exportation of foreign or domestic securities. Imports and exports of gold are free; these require the prior visa of the Ministry of Finance, but the visa is given automatically.

Gabon's control measures affecting inward and outward direct investment, borrowing and lending abroad, and issues and sales of foreign securities 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 Central African Customs and Economic Union (Cameroon, Central African Republic, Chad, and Congo (Brazzaville)); and (3) all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Dahomey, Ivory Coast, the Malagasy Republic, Mauritania, Niger, Senegal, Togo, and Upper Volta).

Administration of Control

The Office of Foreign Financial Relations in the Ministry of National Economy, Trade, and Mines, under the direction of the Foreign Trade Office, supervises borrowing and lending abroad, the issue or sale of foreign securities in Gabon, and inward and outward direct investment. The Ministry of Finance gives its visa on import and export declarations for gold. All payments and receipts between Gabon 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. These data are collected by the BCEAEC for the compilation of the balance of payments only. All registered banks in Gabon are permitted to carry out foreign exchange transactions. Import and export licenses are issued by the Foreign Trade Office in the Ministry of National Economy, Trade, and Mines.

Imports and Import Payments

Imports from all sources of wheat, wheat flour, sugar, beer, meat preserves, and cotton are restricted. With minor exceptions, all other imports from countries in the French Franc Area may be made freely. All imports from 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. Many imports from EEC countries other than France, however, are free from quantitative restrictions; these do not require import licenses or import certificates. A special licensing 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).

Separate global quotas are established for imports from EEC countries other than France and for imports from all other countries outside the French Franc Area, except the U.S.S.R. and Mainland China, for each of which separate quotas are established. The quotas for EEC countries may be used only to import goods originating in those countries; the quotas for the other countries may be used to import goods originating in any country, except the U.S.S.R. and Mainland China. A few commodities in the program are subject to ceilings; there are separate ceilings for EEC countries other than France and for all countries outside the French Franc Area. In addition, specific ceilings apply to imports of certain goods from Far Eastern countries (taken as a group).

For goods included in the annual import program and for imports under quota from EEC countries other than France, the Ministry of National Economy publishes each year an announcement of the quota allotted to each registered importer based on, principally, his import business in the previous year. Import licenses are valid for six months but may be extended, provided that the importer presents valid reasons for requesting the renewal.

Payments for imports from any country may be made freely, at any time, and without any formality. Commodity futures may be dealt in freely, in Gabon or abroad.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. Resident and nonresident travelers may take out any amount in domestic and foreign banknotes. Travelers also may take out freely, without declaration to the Ministry of Finance but subject to customs declaration, up to ten gold coins, irrespective of denomination or face value. 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

With a few exceptions, 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 commodities outside the import program but related to their export activities, up to an amount corresponding to 10 per cent of the total value of their exports during the preceding year.

Exports are free of exchange control. The repatriation and surrender of export proceeds is not required. Exporters may grant credit for any period and are free to sell forward their anticipated export proceeds.

Proceeds from Invisibles

With minor exceptions, services performed for nonresidents do not require licenses. There are no restrictions on the receipt of payments for services rendered to nonresidents and the proceeds from invisibles need not be surrendered.

Travelers may bring in any amount of domestic or foreign banknotes; however, the exchange of banknotes issued by the banks of issue of Guinea and Mali is prohibited or limited to certain amounts for each traveler. Travelers may also bring in freely, without declaration to the Ministry of Finance but subject to customs declaration, up to ten gold coins, irrespective of denomination or face value.

Capital

Residents and nonresidents may import or export capital freely without a license, through banks or any other channel. Foreign and domestic securities of all types may be freely imported or exported physically, whether through the intermediary of a bank or not, and transactions between residents and nonresidents in domestic and foreign real estate (except when forming part of a direct investment) are unrestricted. Capital assets abroad of residents are not subject to repatriation and may (except when forming part of a direct investment) be freely disposed of.

Certain controls are maintained over borrowing and lending abroad, over inward and outward direct investments, and over the issuing, advertising, or offering for sale of foreign securities in Gabon, but these controls relate to the transactions themselves, not to payments or receipts. 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, the other member countries of the Central African Customs and Economic Union, and those other countries whose bank of issue is linked with the French Treasury by an Operations Account.

Direct investments abroad 3 must be declared to the Ministry of National Economy, Trade, and Mines, 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 of National Economy, Trade, and Mines, 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 Gabon4 must be declared to the Minister of National Economy, Trade, and Mines, 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 National Economy, Trade, and Mines. 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 National Economy, Trade, and Mines. The following are, however, exempt from this authorization: (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 Gabon and countries abroad or between foreign countries, in which these persons or firms take part; (c) loans contracted by registered banks; 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. The contracting of loans referred to under (d) 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 National Economy, Trade, and Mines. The following are, however, exempt from this authorization: (a) loans granted by registered banks; (b) 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 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 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 Gabon. 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). 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 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 A and C are granted by decree issued by the Council of Ministers. Preferential treatment B is granted by a decision of the Central African Customs and Economic Union 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 gold in any form, at home or abroad. Unworked gold may be exported only to France; with this exception, residents are free to acquire and dispose of gold in any form, at home or abroad. Imports and exports of gold (except exports of unworked gold, which require a license) require, in addition to a customs declaration, a prior declaration to the Ministry of Finance, which grants its visa automatically. Exempt from the latter requirement are (1) imports and exports by or on behalf of the Treasury or the BCEAEC, (2) imports and exports of manufactured articles containing a minor quantity of gold (such as gold-filled or gold-plated articles), (3) imports and exports by travelers of gold articles (other than coins and bars) whose combined weight does not exceed 500 grams, and (4) imports and exports of up to ten gold coins, irrespective of denomination or face value.

Changes during 1967

March 15. Notice No. 413 of the Exchange Office extended from 180 days to one year after arrival of the goods at their destination the period within which the proceeds from exports to countries outside the French Franc Area had to be surrendered.

March 15. Notice No. 414 of the Exchange Office abolished the deposit obligation in respect of non-French Franc Area currencies and non-French Franc Area securities held in Gabon.

March 23. The Investment Code of December 4, 1961 was amended by Ordinance No. 21/67, to conform more closely to the UDEAC investment convention; many of its provisions were made more liberal.

May 15. Arrêté No. 532/PR of May 2, 1967 established that export licenses for exports to countries outside the French Franc Area no longer were required for commodities other than rice, corn, cotton, tobacco, mining products (except sodium carbonate, manganese, and crude petroleum), and diamonds.

June 1. By virtue of Circular No. 25/MECM of May 12, 1967, the authorization to import coffee, irrespective of origin, was made conditional on the purchase of a certain quantity of local coffee; the prescribed ratio was one ton of locally produced coffee for three tons of imported coffee.

July 1. Ordinance No. 28-67 of June 29, 1967 established the principle that financial relations with foreign countries were free. With minor exceptions, all existing legislation contrary to this principle was revoked, including Law No. 41/61 of June 5, 1961 concerning exchange control and Law No. 46/61 of November 6, 1961 concerning the creation of the Exchange Office administering the exchange controls. The law also provided for the statistical registration of all inward and outward payments. Previously, current and capital payment to French Franc Area countries were already unrestricted; they were also free of supervision, as were inward transfers originating in French Franc Area countries.

Normally, the repatriation and surrender of claims, earnings, and proceeds accruing abroad would no longer be required. Import and export regulations were not affected, although the related exchange control formalities were abolished; these included the requirements that import licenses and import certificates be domiciled with an authorized bank, and that exporters sign a foreign exchange commitment in respect of all exports to countries outside the French Franc Area.

July 1. Decree No. 323/PR of June 30, 1967 established the principal rules for the application of Ordinance No. 28-67. The decree defined the concept of “foreign countries” and indicated the types of capital transactions with foreign countries that would be subject either to declaration or prior approval.

July 1. Decree No. 324/PR of June 30, 1967 created a Balance of Payments Committee charged with periodically constructing a national balance of payments. For this purpose, all banks and financial institutions as well as the postal administration were required to notify the BCEAEC of all payments between Gabon and foreign countries, all transactions in foreign currency, all transactions in CFA francs that affected financial relations with foreign countries, and all transactions in securities between residents and nonresidents. The BCEAEC was given authority to request any information required for the compilation of the balance of payments from physical and juridical persons, whether public agencies or not, that are customarily resident in Gabon or have their head office in Gabon.

July 1. Decree No. 325/PR of July 1, 1967 abolished the Exchange Office, which prior to that date had administered exchange controls, and created an Office of Foreign Financial Relations to take its place. This Office was to participate, together with the BCEAEC, in the centralization of information required for the preparation of the balance of payments. It would also examine applications for the authorization, and receive the declarations, that were required by Decree No. 67-323.

July 1. Decree No. 326/PR of July 1, 1967 abolished the import license or import certificate requirements for all commodities that already were liberalized when originating in EEC countries. The export licensing requirements were abolished except for the export or re-export to countries outside the French Franc Area of gold, diamonds, live animals, munitions, opium, and a few other commodities. Exporters could be granted licenses for imports of goods related to their export activities, up to 10 per cent of the value of their exports in the preceding year; this arrangement replaced the EFAC (Exportations-Frais Accessoires) regime that was terminated by the abolition of exchange control.

August 12. Notice No. 487/DAE formally terminated the requirement that import and export licenses be domiciled with a bank in Gabon.

October 1. Decree No. 438/PR of September 16 extended to September 30, 1968 the exemption from certain taxes on cocoa exports.

The Gambia 1

Exchange Rate System

No par value for the Gambian Pound has been established with the Fund. The official rate is £G 1 = £ stg. 1, corresponding to £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. Od. per £G 100. There is only one commercial bank and this deals with customers for spot transactions in sterling at the Currency Board's rates 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 bank 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 bank 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. 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 bank 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. It 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. 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 bank. 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 bank 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 1967

November 20. The official exchange rate was changed from £G 1 = US$2.80 to £G 1 = US$2.40.

Federal Republic of Germany

Exchange System

The par value is 0.222168 gram of fine gold per Deutsche Mark or DM 4.00 = US$1. The official limits established by the Deutsche Bundesbank for its dealings with banks are DM 3.97 buying, and DM 4.03 selling, per US$1. For 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 Germany 1 and such limits in force in the country of the other currency concerned. All other currencies are also admitted to market quotations in Germany. Premiums and discounts on forward exchange transactions are left to the interplay of market forces. There are no restrictions on foreign exchange dealings by residents or nonresidents.

There are no restrictions on payments and no prescription of currency requirements. Residents are not required to repatriate or surrender their foreign exchange earnings or holdings, which may be held in Germany or abroad at the choice of the holder. Accounts in deutsche mark or in any foreign currency may be held in Germany by any nonresident. Balances on 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. However, credit balances on nonresident accounts, except savings accounts of individual persons, may carry interest only if a special license has been granted. Such licenses may be obtained by all credit institutions for the payment of interest on customers' balances held as cover for letters of credit; otherwise, licenses are given in exceptional cases only.

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

Administration of Control

The administration of control in Germany in respect of imports and exports of goods and services is operated by the Federal Ministry of Economics, the Federal Office for Trade and Industry (Bundesamt für gewerbliche Wirtschaft), the 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 in charge of exchange control for certain capital transactions. All banks in Germany are permitted to carry out foreign exchange transactions.

Imports and Import Payments

Imports of virtually all commodities either originating in or purchased in Rhodesia are suspended. With this exception, quantitative restrictions are not applied to imports of most commodities purchased from and originating in countries other than Soviet countries and Mainland China (i.e., the countries included in country list C of the Foreign Trade Regulation); out of a total of some 8,100 items, 7,400 may be imported freely from those other countries (i.e., those in country lists A and B of the Foreign Trade Law).

In addition, some 235 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. Imports from all sources of about 190 tariff items (sugar, cereals, cattle, certain meat and meat products, milk, and edible fats) are controlled by virtue of the German Marketing Laws; since these items are also covered by EEC regulations, licenses are issued automatically and without limit for the import of all of them from EEC countries and for the import of some of them from any source. Imports from non-EEC countries of most products covered by the Common Agricultural Policy of the EEC (including cereals, rice, pork, eggs, certain oils and fats, cane sugar, 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, certain wines, olive oil, and specified fruits and vegetables.

De facto liberalization is extended to many industrial and certain agricultural commodities 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 free of quantitative restriction are not subject to licensing, and no prior control is exercised over such imports; however, an import declaration stamped by the Deutsche Bundesbank, which serves as documentation for customs control and for statistical purposes, is required. For imports still subject to quantitative restriction (with certain exceptions, such as books, maps, etc., and small parcels through the post), an individual import license is required. Applications are normally invited by tender (Ausschreibung) published in the Official Gazette. Import licenses may be allocated to importers either on a first-come, first-served basis, or account may be taken of conditions of price, delivery, quality, etc., or of the total value of applications in relation to the quotas established for specified commodities.

For manufactured goods, the period of validity of the license is usually six months, but it may be extended in certain cases (e.g., heavy machinery) to a period necessary for the production of the goods. For agricultural products the usual period is also six months; however, for seasonal imports, it may be shorter. No fees are charged for licenses to import manufactured goods.

Payments for imports are free, even if the underlying import transaction is still restricted. Commodity futures may be dealt in freely. Transit trade transactions may, in principle, be carried out freely; but when they involve certain countries, they are subject to certain conditions.

Payments for Invisibles

All payments for invisibles may be made freely without individual license. German and foreign notes and coins and other means of payment may be exported freely.

The following transactions—but not the related payments—between residents and nonresidents are subject to restriction: the chartering of foreign ships from residents of specified countries; the use of foreign boats in certain inland waterways traffic; transactions with specified countries (which do not grant reciprocal treatment) for hull and marine liability insurance and aviation insurance, except passenger accident insurance; the production of motion pictures in association with nonresidents; and certain contracts with nonresidents pertaining to motion-picture films.2

Exports and Export Proceeds

Certain 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—are subject to individual licensing. The customs authorities exercise control over export declarations and also check to see whether a license is required.

Foreign exchange proceeds from exports do not have to be declared or surrendered, and they may be used for all payments. Claims exceeding DM 10,000 that have been overdue for more than three months must be reported, for statistical purposes.

Proceeds from Invisibles

With few exceptions, services performed for nonresidents do not require licenses. However, licenses are required for transactions related to specific sea services, and for technical assistance through the delivery to residents of Eastern bloc countries of constructional drawings, materials, and instructions for manufacture, insofar as such assistance is for the production of goods whose export requires a license.

There are no restrictions on the receipt of payments for services rendered to nonresidents. However, receipts exceeding DM 500 on account of such services have to be reported.

German and foreign notes and coins and other means of payment may be imported freely.

Capital

Residents and nonresidents may import or export capital freely without a license. However, domestic money market paper (Treasury bills, etc.) and domestic fixed-interest-bearing securities—if in the latter case the contracts contain an obligation to reacquire the securities later at a definitely fixed price—may not be sold to nonresidents without an individual license. Securities of all types may be imported or exported freely. There are no limitations on the disposal of legacies located in Germany and inherited by nonresidents, or on legacies located abroad and inherited by residents.

Gold

Residents may freely hold gold in any form at home and abroad and negotiate gold in any form with residents or nonresidents at home and abroad. Imports require a license from the Federal Office for Trade and Industry when the gold is purchased in or originates in a country on country list C of the Foreign Trade Regulation (mainly Eastern European countries and Mainland China). 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 and other import charges; domestic gold sales, however, are subject to a 4 per cent sales tax.3 Commercial imports and exports of articles containing gold are subject to the regular foreign trade regulations and in most cases are liberalized.

Changes during 1967

January 11. It was announced that additional commodities would shortly be brought under the de facto import liberalization for specified state trading countries.

January 11. An agreement with Hong Kong was signed that provided for voluntary restraint on exports of specified cotton textiles to Germany.

February 14. Additional restrictions were imposed on trade with or relating to Rhodesia. These included a prohibition on direct or transit sales of oil and oil products, certain types of aircraft, and certain engine-driven vehicles. Imports for processing of the commodities whose import licensing was suspended on December 24, 1966 (asbestos, chromite, sugar, tobacco, etc.) became subject to import license, and all new contracts with nonresidents concerning the acquisition of these commodities for any purpose required authorization; the licensing of imports of all other commodities continued to be subject to the rule that their import should not exceed the normal volume of past years.

March 31. An agreement with Hong Kong was signed that provided for voluntary restraint on exports of specified woolen garments to Germany.

March 31. All liberalized imports of cotton textiles of Hong Kong or Macao origin required a certificate of origin.

March 31. Imports from EEC countries of certain fruits and vegetables were freed from quantitative restrictions.

May 3. The statistical control over imports of heavy fuel oil and intermediate distillates was extended to imports of crude oil. All new applications for import licenses for crude oil, fuel oil, and intermediate distillates were checked to determine whether the applicant's import volume was keeping within limits appropriate to a healthy development of the domestic energy market.

July 1. Imports from all sources of certain vegetable oils, margarine, and certain other oils and fats were freed from quantitative restrictions.

July 6. Export credit in excess of 180 days to the countries on country list C no longer required prior approval.

August 3. The de facto liberalization accorded to specified commodities when originating in Bulgaria, Hungary, Poland, or Rumania was extended to Czechoslovakia. Export credit guarantees for up to eight years could be extended to deliveries of capital goods to Czechoslovakia.

September 5. Imports from all sources of cane sugar were freed from quantitative restrictions.

November 3. A trade protocol with Rumania was signed, which provided for an expansion of the de facto import liberalization already accorded to that country and for an increase in a number of German import quotas.

December 14. The coverage of the de facto import liberalization applicable to specified state trading countries was expanded from 3,600 to 4,500 industrial commodities and from 172 to 230 agricultural commodities.

Ghana

Exchange Rate System

The par value is 0.870897 gram of fine gold per Ghanaian New Cedi or N¢ 1 = US$0.98. Exchange rates are based on the fixed rate for sterling, which is N¢ 1 = £0 8s. 2d. The Bank of Ghana quotas 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 subcommittee of the Economic Committee, under the chairmanship of the Governor of the Bank of Ghana, is responsible for drawing up an annual foreign exchange budget. This subcommittee also prepares the minimum import program and a reduced “operational” import program based upon the known available foreign exchange resources. The Ministry of Trade prepares an allocation of the reduced program to major commodity classifications for the approval of the Economic Committee of the National Liberation Council. The over-all import plan must correspond to the import ceiling set by the subcommittee in its reduced program. As foreign aid 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 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 the 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

A large part of the import trade is carried out by private importers who must be registered. 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 eight 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, and pharmaceutical products. 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. A license fee of 1 per cent is payable on the c. & f. value of all imports, whether under specific license or under open general license.

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.

Imports from Rhodesia, South Africa, South-west Africa, and the Portuguese Monetary Area are not permitted.

Exchange for payment of approved imports is granted freely by the Bank of Ghana. With minor exceptions, however, 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.

Many imports are subject to a levy of 11.5 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. Insurance on all imports shipped to Ghana on f.o.b. or c. & f. terms must be arranged in Ghanaian currency with local insurance companies.

Remittances of income by non-Ghanaian employees are limited to 50 per cent of their annual earnings, up to a maximum of £ 2,500 a year; this 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, in principle, permitted to transfer abroad freely their net profits, i.e., profits after payment of the prevailing 45 per cent tax on companies and of a 12½ per cent withholding tax; at present, however, profit transfers are being authorized only on a limited basis.2

The basic annual travel allowance for Ghanaians is N¢ 55 for each person 18 years of age or over and N¢ 25 for each person under that age. Foreigners resident in Ghana but domiciled elsewhere in the Sterling Area are allowed up to N¢ 512 a calendar year out of their personal remittance quota. Exchange for business travel is granted up to N¢ 30 a day,3 for a maximum of 7 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 Ghanaian currency notes and foreign currency notes (including CFA franc notes) together equivalent to N¢ 122.50, provided that not more than N¢ 24.50 is taken in any one currency. Ghanaian banknotes may be taken out by any traveler up to N¢ 24.50 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 Export 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 N¢ 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.

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 re-importation of notes taken out previously by the same traveler and recorded in his passport.

Capital

Foreign investment in Ghana requires prior approval if repatriation is to be guaranteed. The Capital Investments Act, which was promulgated in April 1963, provides for the granting of special benefits to specified existing investments as well as to new investments. Under the Act approval may be granted to investments that contribute to the development and utilization of productive capacity, the reduction of import requirements, the attainment of a high level of employment, or the acquisition of technical skills by citizens of Ghana. Investments granted “approved status” under this Act obtain a guarantee of the right to transfer profits and liquidation proceeds; tax holidays, initial capital allowances, etc., are also available for such investments. The Act also stipulates that the assets of foreign investors may not be expropriated and that, when approved enterprises are nationalized in the public interest, fair compensation is to be determined either by voluntary agreement of the parties or through arbitration by the International Bank for Reconstruction and Development. A Capital Investments Board, whose principal function is to decide which foreign investments qualify for benefits under the Act, has been established.

AH outgoing capital movements must be approved; applications for such transfers must be supported by documentary evidence and are considered on their merits. Transfers to beneficiaries under wills and intestacies are approved, provided that all local indebtedness has been paid. Requests for the transfer of funds representing personal assets of foreign residents in Ghana who retire and return to their home country are considered individually on their merits. Applications must be supported by appropriate documentation showing that the savings are genuine and that no illegal transfer of capital is involved. If the amounts involved are very large, their transfer may be authorized over a period of a few months. Proceeds from the liquidation of real assets of foreign nationals leaving Ghana may be directed to reinvestment in registered government stocks, treasury loans, or treasury bills; the interest accruing on such investments is transferable. Applications for the transfer abroad of funds by emigrants must be accompanied by appropriate documentation and are also considered on their individual merits.

Loan and overdraft facilities to resident companies controlled by nonresidents require the individual approval of the central bank.

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 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. The Bank of Ghana does not normally license imports of gold other than imports by or on behalf of the monetary authorities.

Changes during 1967

January 1. Special unnumbered licenses ceased to be issued for the importation of goods in commercial quantities.

January 21. Authorized banks were required to deposit at the Bank of Ghana the full cedi equivalent of amounts received from residents for the purpose of making subsequent transfers abroad.

January 23. Two additional open general licenses permitted the unrestricted importation from all sources of certain pharmaceuticals, fertilizers and other chemicals, tools, coke, and pig iron.

January 23. Further imports were severely restricted by inclusion in the List of Restricted Commodities. These included cocoa, lard, palm oil, coconut oil, travel goods, certain textiles, and phonograph records.

January 27. The import of cedi banknotes was prohibited.

February 17. The International Monetary Fund concurred in the replacement of the existing currency unit, the cedi, with a new unit called the new cedi. The new cedi was the equivalent of 1.2 old cedis. The move did not involve any appreciation or depreciation of Ghana's currency. The par value of new cedi 1 — US$1.40 replaced that of old cedi 1 = US$1.16667. The old cedi ceased to be legal tender on May 23,1967.

March 11. Formal trade sanctions were imposed against Rhodesia.

March 17. The Bank of Ghana announced further releases of exchange in respect of arrears. Additional releases were announced on June 16, September 22, and December 22.

April 28. Further imports were severely restricted by inclusion in the List of Restricted Commodities. These included grey unbleached cotton fabrics and transistor radios.

May 4. Ghana signed the Protocol of Association for the establishment of a West African Economic Community.

May 19. The Financial Administration Decree, 1967 came into force. Henceforth, no contract providing for the payment of any money by the Government would be considered valid unless it had been approved by the Finance Board.

July 1. The servicing of medium-term and long-term debts on suppliers' credit was resumed on the basis of the rescheduling arrangements made with the creditor countries.

July 8. The International Monetary Fund concurred in a change in the par value of the new cedi from N¢ 1 = US$1.40 to N¢ 1 = US$0.98.

July 8. The open general licenses for imports were extended to include many industrial and agricultural spare parts, chemicals, pharmaceuticals, and insecticides. Import duties and sales taxes on meats, fish, milk, rice, flour, sugar, gasoline, and kerosene were eliminated or greatly reduced. The advance import deposit requirement of 15 per cent was withdrawn.

July 8. The Government announced a policy of gradual liberalization of profit and dividend remittances. Certain allocations for invisibles were increased in terms of new cedis to maintain their size in terms of foreign currency.

August 5. The withholding tax on profits repatriated overseas was reduced from 20 to 12½ per cent, retroactive to July 1. The Government undertook to abolish this tax by July 1970, in three stages.

August 5. The export duty on diamonds was abolished, and export duties on timber were reduced.

August 18. The import licensing procedures for 1968 and the coverage of the eight open general licenses for that year were announced. With certain exceptions, all imports again had to be made on the basis of 180 days' credit.

October 19. The bilateral payments agreement with Eastern Germany 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 on account of merchandise transactions and invisibles are made on the basis of the origin or destination of the goods and services involved or in the currency and manner provided for by trade and payments agreements. Settlements with countries with which Greece has bilateral payments agreements are made through controlled accounts, with the U.S. dollar as the currency of account.1 Settlements with all other countries are made in any convertible currency or through Foreign Sight Deposit Accounts in drachmas.

Nonresident Accounts

Nonresidents are permitted to open with Greek banks convertible Foreign Sight Deposit Accounts in drachmas or convertible currencies. These accounts may be credited with convertible foreign exchange or the proceeds from sales of convertible currencies, with authorized payments by residents of Greece for imports or services payable in convertible currencies, and with transfers from other Foreign Sight Deposit Accounts. They may be debited for payments to residents for current transactions, for transfers to other Foreign Sight Deposit Accounts, and for the purchase and transfer abroad of any convertible currency. Any withdrawal from drachma accounts for use in Greece and any conversion of foreign exchange withdrawals into drachmas entail the loss of the conversion right of the sums withdrawn. The maximum rate of interest on such accounts is 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 5 per cent and 6 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 200 brought in by nonresident travelers must also be credited to a blocked account, as must certain income accruing in Greece to nonresidents of Greek nationality. Subject to the approval of the exchange control authorities, balances on blocked accounts may be used for such purposes as personal expenses in Greece up to Dr 30,000, purchases of securities officially listed on the stock exchange in Greece, and purchases of real estate in Greece. Amounts of up to Dr 60,000 may be released for remittance by each account holder, provided that his account had been opened before December 31, 1963, that the money deposited was derived from general revenue sources, and that the money was deposited in a blocked account during the current or prior calendar year; 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 may establish convertible foreign currency accounts with authorized banks in Greece. Balances on these accounts earn interest at 0.75 per cent per annum for sight deposits, 5.75-7.0 per cent per annum for time deposits, and 5.5 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 three years thereafter.

Imports and Import Payments

Imports of a few commodities from all sources and of all commodities originating in or shipped from Rhodesia are prohibited. Imports of cotton textiles from Hong Kong are suspended. All imports, other than 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 the allocation of appropriate foreign exchange. Apart from imports for which special licenses are required, two general import procedures (E and D) are applicable to private imports, mainly for statistical purposes. Under procedure E, the approval of an authorized bank is required (1) for imports from countries participating in the European Monetary Agreement (EMA) when payment is to be made in a convertible or externally convertible European currency; (2) for imports from Canada or the United States when payment is to be made in free dollars, i.e., not on the basis of procurement authorizations under U.S. aid; (3) for imports from countries with which Greece has concluded bilateral payments agreements when payment is to be made through the relevant clearing account; and (4) for imports from Cyprus when payment is made in free Cyprus pounds or through one of the EMA countries. No license is necessary under procedure E, but import applications which have been approved by an authorized bank are registered with the Bank of Greece. Under procedure D, an import approval issued by the Bank of Greece is required for imports financed by U.S. aid, for imports other than those covered by procedure E, and for imports for which the importer requests changes in the general provisions concerning the terms of shipment, method of settlement, terms of payment, etc. For all goods that do not require a special import license, prices must be approved and pro forma invoices visaed in Greece by a local Chamber of Commerce.

Special licenses are required for imports of commodities in List A (certain luxury items, textiles, automobiles and parts, and certain foodstuffs, including 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-3, P-6, F, F-50/1-3, and F-100/1-3). Payments for imports may be made by letter of credit, by cash against shipping documents, or by acceptance of time drafts (which is permitted only for goods in Lists P-3 and P-6, the time limit being three months for List P-3 and one year for List P-6, except for machinery and spare parts, for which the time limit is three years). The Ministry of Commerce may authorize longer payment periods and may also approve deferred payments for imports not included in any one of the nine lists. When time drafts are accepted, a personal written undertaking amounting to 4 per cent (List P-6) or 8 per cent (List P-3) of the amount of the draft is required as a guarantee that the payment will be made within the prescribed time limits.

When a letter of credit is opened, the importer is required to deposit in drachmas the whole amount of the credit with the intervening bank. In addition, for those imports included in Lists F-100/1-3, further cash deposits of 19-40 per cent of the c.i.f. value are required as security for import duties and other taxes. For imports under procedure E, this deposit must be made when the import approval is obtained; for imports under procedure D, the deposit must be made within 20 days of the import approval.

Advance deposits are not required for imports for which payment is to be made by acceptance of time drafts. When payments for imports are to be made against sight drafts, advance deposits in cash are required for private imports included in Lists F-50/1-3 and F-100/1-3.2 Advance deposits are the same for all countries. They are calculated on the c.i.f. invoice value and consist of two components: a prepayment required when applying for an import approval and an advance (security) against import duties and other taxes. 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-50/24514.559.5
List F-50/335742
List F-100/1100401403
List F-100/29029119
List F-100/3701484

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 two months from the date on which they were made.

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 List P-6, 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 45 days following the date of arrival at the first Greek port; however, settlement must take place within 90 days following the date of arrival for goods in List P-6, and within 60 days following the date of import approval for goods in Lists F-50/1-3 and F-100/1-3.

Payments for Invisibles

Payments for invisibles require approval, but this is granted freely for expenses incidental to authorized trade transactions and for certain other transactions. Transfers abroad on account of specified categories of insurance (shipping, aviation, merchandise transport, and fire) or reinsurance (accident and life) are authorized by the Bank of Greece up to specified percentages of the amounts owed.

Greek residents going abroad for family reasons, tourist travel, or business are entitled to US$200 for each trip and for any number of trips a year; 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 200 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 wine; such transactions are permitted only with Mainland China, Czechoslovakia, Eastern Germany, Hungary, Iran, Israel, Poland, and the U.S.S.R.

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 200 in Greek banknotes in denominations of Dr 50 and Dr 100 only. 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 to the Bank of Greece or to an authorized bank at the official price. Imports of gold against payment in foreign exchange require a special license issued by the Ministry of Commerce. 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 1967

May 1. In accordance with the Treaty of Association with the European Economic Community (EEC), a further (fourth) reduction by 10 per cent was made in the customs duties on manufactured goods imported from EEC countries which are not produced in Greece and are subject to the 12-year schedule adopted under the treaty. The advance deposit requirements for imports from all countries were reduced for the commodities affected by the tariff reduction, from 49 to 42 per cent for List F-50/3 and from 98 to 84 per cent for List F-100/3.

May 1. Greek enterprises required the prior approval of the Ministry of Industry to employ foreign experts or technicians, in order to be able to obtain foreign exchange allocations for their remuneration from the Bank of Greece.

May 11. Greek nationals, not including those normally resident abroad or crews of ships and aircraft on actual duty, were required, when leaving Greece, to declare all Greek and foreign currency, checks, securities, works of art, and other valuables they were taking out.

August 2. New legislation favoring the establishment of foreign enterprises in Greece became effective. Foreign firms and their foreign employees were granted certain tax and import duty privileges.

August 22. The authorities were empowered to introduce compensatory import levies on agricultural commodities.

September 16. Greek citizens employed abroad, including sailors, could open freely convertible accounts in foreign currencies with authorized banks in Greece. Balances on these accounts, and accrued interest, were freely transferable until three years after the return to Greece of the holder.

October 11. The house purchasing scheme for Greek nationals employed in specified European countries and remitting their savings to Greece was extended to include Greek seamen who receive their wages in foreign exchange.

October 21. Greek nationals residing abroad could transfer to their country of residence up to the equivalent of US$200 a month from pension payments received in Greece in Greek currency; amounts in excess of this limit had to be deposited in blocked accounts.

November 1. In accordance with the Treaty of Association with the EEC, a further (third) reduction by 5 per cent was made in the customs duties on goods subject to the 22-year schedule. The advance deposit required for goods on List F-50/2 was reduced from 63 to 59.5 per cent, and that for goods on List F-100/2 from 126 to 119 per cent.

November 28. Foreign tourists leaving Greece through Evzoni on the Yugoslav border could reconvert drachma notes up to Dr 2,000 each into foreign banknotes, upon declaration that they had brought in sufficient foreign exchange. At all other places of exit where branches of the Bank of Greece are established, they could reconvert up to Dr 3,000. Previously, nonresident travelers could not reconvert Greek banknotes upon exit through Evzoni.

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 currencies 1 on the basis of their rates in the New York market. On January 27, 1947, Guatemala notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange control is administered by the Bank of Guatemala (Exchange Department) under the direction of the Monetary Board. Foreign exchange transactions of the public sector are carried out exclusively through the Bank of Guatemala; those of the private sector are carried out through the medium of authorized banks for the account of the Monetary Stabilization Fund maintained by the Bank of Guatemala.

Prescription of Currency

All exchange transactions must be carried out through banks. Payments to Costa Rica, El Salvador, Honduras, and Nicaragua in respect of trade and invisibles are normally settled in Guatemalan quetzales through the Cámara de Compensación Centroamericana, a clearinghouse established by the central banks of Central America to foster the process of economic integration of their countries. The Exchange Department of the Bank of Guatemala, however, is empowered to authorize the sale of currencies of other Central American countries to make payments to the Central American area. There are no obligations prescribing the currency for payments to and from other countries.

Imports and Import Payments

Import licenses are not required except for imports of maps of Guatemala, explosives, poultry, and wheat flour. 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, 1967, 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.

Payment 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 are subject to a tax of 5 per cent; furthermore, such internal air passages (with the exception of those for travel within Central America) are subject to a tax of Q 3 for a one-way ticket or Q 5 for a round-trip ticket.

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.

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 ¢ 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 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 1967

January 1. In accordance with Legislative Decree No. 1627 of December 9, 1966, certain taxes were imposed that were to be levied during 1967 only. These included a withholding tax of 10 per cent on dividends, profits, and bonuses paid in 1967 by natural or juridical persons to persons resident abroad; a tax of 5 per cent on all international air passages sold in 1967; a tax of 5 per cent on the first sale in Guatemala in 1967 of an imported passenger automobile; and a tax of 15 per cent on the local list price of passenger automobiles of 1966 or 1967 models imported by private persons.

January 3. A limit of Q 50 for each day of planned foreign travel, up to a total of Q 2,500 a person a year, was imposed on foreign exchange sales for tourist travel abroad. The special allocations for travel to neighboring countries and the Caribbean area were abolished. A guarantee deposit was imposed in an amount equivalent to the value of the exchange purchased, to be made at the Bank of Guatemala at the time the exchange was purchased. The deposit was to be returned upon re-entry.

January 10. The 100 per cent guarantee deposit required on purchases of foreign exchange for travel abroad was waived for travel by delegations or groups that were organized with the support of airline companies or travel agencies.

February 18. The Bank of Guatemala requested that all Central American banks refrain from buying quetzales for conversion into U.S. dollars.

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 50 = 1 French franc and GF 246.853 = US$1. The official buying and selling rates are GF 247 and GF 255 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 1 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. All settlements with foreign countries, including payments for imports, require individual licenses from the Exchange Control Office.

Import and export licenses are issued, within the framework of an annual program, by the Ministry of Foreign Commerce and Banks (the Office of the Director of Foreign Trade) after applications have been screened by the National Economic Commission; licenses are subject to approval by 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.2 Settlements with other countries are made in convertible currencies.3

Nonresident Accounts

There are two types of nonresident accounts: Nonresident Transferable Accounts in Foreign Currencies and Nonresident Transferable 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 for the Seven-Year Plan, require individual licenses, which are issued by the Ministry of Foreign and Domestic Trade, after applications have been screened and approved by the National Economic 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 Foreign and Domestic Trade 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 Economic 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 Sifrag Company) and by foreign embassies—and goods for the Seven-Year Plan. All commercial imports other than those by the Fria Company and the Sifrag Company are made by state enterprises that specialize in various types of commerce.

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 30,000. 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 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. The export of Guinean currency is prohibited.

Exports and Export Proceeds

The Ministry of Foreign and Domestic Trade establishes an annual export program, which requires the approval of the National Economic 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 and the Sifrag 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 Sifrag 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

Residents may hold and acquire gold coins in Guinea 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 and industrial users.

Changes during 1967

March 29. Travelers were required to surrender all imported foreign currency within 24 hours of entry. Nonresident travelers could repurchase and re-export the amount surrendered, after deduction of their local expenditure, which was normally assumed to amount to the equivalent of at least US$20 a day.

April 13. The bilateral payments agreement with Rumania, which was signed on December 1, 1966, entered into force.

May 4. Guinea signed the Protocol of Association for the establishment of a West African Economic Community.

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; the Bank of Guyana charges a commission of 316 of 1 per cent for both buying and selling. The banks in Guyana base the rates for currencies other than sterling on the current London market rates. The central bank normally deals only in sterling 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, Shipping, and Civil Aviation.

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. 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 currency 1 for exports proceeds) or in sterling or Guyana dollars from an External Account. Special regulations apply to payments to and receipts from Rhodesia.

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 authorized payments, including the purchase of approved securities.

Imports and Import Payments

Imports of a few commodities are prohibited. 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, gold, diamonds and jewelry, firearms, grain-milling machinery, and appliances. The granting of individual licenses and the conditions attached thereto depend on current policy. Other goods may be imported under an open general license applicable to all countries of origin except the Soviet countries and Mainland China;2 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.

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), 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

Exports of rice may only be made by the Rice Marketing Board. 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 1), surrendered. Exchange control forms have to be completed only for exports exceeding G$2,000 in value.

Proceeds from Invisibles

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

Capital

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 Guyana or the balance of payments of the Sterling Area; 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.

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. Imports and exports of gold in any form require licenses issued by the Ministry of Trade, Shipping, and Civil Aviation; 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 1967

During the year, a number of commodities were added to the “negative list” of commodities subject to specific import licensing; the import of a few of these was prohibited with effect from January 1, 1968.

February 13. An initial par value for the Guyana dollar of G$1.71429 — US$1 was agreed with the International Monetary Fund.

April 10. The Bank of Guyana took over the administration of exchange control from the Ministry of Finance.

October 13. The 100 per cent cash margin deposit requirement for the opening of import letters of credit was abolished.

November 20. The par value of the Guyana dollar was changed from G$ 1.71429 = US$1 to G$2.00 = US$1.

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. Exchange transactions by commercial banks with the public are subject to small banking commissions. There are no controls or restrictions on foreign transactions. On December 22, 1953, Haiti notified the Fund that it was prepared to accept the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Prescription of Currency

No obligations prescribing the method or currency for payments to or from nonresidents are imposed.

Imports and Import Payments

Although the law provides for the imposition of quantitative restrictions on imports, none has so far been imposed. Imports of certain types of footwear and of a few other items are controlled for other than balance of payments reasons. Payments abroad may be made freely. 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.

Exports and Export Proceeds

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

Payments for and Proceeds from Invisibles

Payments for invisibles are not restricted. No exchange control requirements are applied to proceeds from invisibles. A regulation, which is seldom applied, prohibits the export and import of U.S. banknotes in denominations of over $20.

Capital

Incoming and outgoing capital payments by residents or nonresidents are not subject to exchange control. Under a decree of June 27, 1957, revising a law of August 14, 1952, private banks operating in Haiti are required to keep in the form of domestic assets up to 80 per cent of deposits collected from residents of Haiti.

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. 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. 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.

Changes during 1967

No significant changes took place during 1967.

Honduras

Exchange Rate System

The par value is 0.444335 gram of fine gold per Honduran Lempira, or Honduran Lempiras 2.00 = US$1. The official rates are L 1.98 buying, and L 2.02 selling, per US$1. Banknotes and coins in Costa Rican colones, Guatemalan quetzales, Nicaraguan córdobas, and Salvadoran colones are purchased at parity rates minus an official exchange commission of 1 per cent and sold at parity rates. 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 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.

Exports and Export Proceeds

Exports do not require licenses. The proceeds of exports are not subject to exchange control, and the foreign exchange may be retained or used for international transactions. Those wishing to negotiate their exchange in Honduras may do so only with the Central Bank or through the banking system for account of the Central Bank.

Payments for and Proceeds from Invisibles

These are not restricted.

Capital

Capital payments are not subject to exchange control.

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 and industrial users. Commercial imports and exports of articles containing gold require licenses issued by the Ministry of Economy; for most articles, these are granted freely.

Changes during 1967

May 2. The official exchange commission of ½ of 1 per cent was abolished on sales of banknotes and coins in Costa Rican colones, Guatemalan quetzales, Nicaraguan córdobas, and Salvadoran colones.

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, 1967, rates in the official market were Is. 41532d. sterling buying, and Is. 4⅜d. sterling selling, per HK$1, or HK$6.01½ buying, and HK$6.101136 selling, per US$1; rates in the free market on that date were HK$6.06 buying, and HK$6.07½ 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, which is normally granted. The basic allowance of exchange at the official rate for residents (for exchange control purposes) of Hong Kong traveling to countries outside the Sterling Area or beyond Macao is £250 or the equivalent for each individual journey. Applications for exchange in excess of this allowance to cover genuine travel expenses may be made to the exchange control. In any event, payments may be made freely through the free market by holders of Hong Kong dollars.

Exports and Export Proceeds

Exports to any destination of gold, certain strategic goods, and such commodities as textiles and garments are subject to restrictive licensing; exports of many textiles and garments to specified countries are restricted in accordance with bilateral agreements. For exports to countries outside the Sterling Area, Mainland China, the Republic of China, and Macao, the exporter must submit to the Department of Commerce and Industry, for approval, a declaration showing how the export proceeds will be collected. If payment is not being received within six months and in accordance with prescription of currency requirements, the circumstances must be reported to the exchange control. The U.S. dollar proceeds of exports to the dollar area or to the Republic of Korea of goods originating in Mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao are freely disposable to the extent of the f.o.b. value of the goods; proceeds from freight and insurance payments have to be surrendered to an authorized bank. The proceeds of exports must be obtained in accordance with the regulations (see section on Prescription of Currency, above).

Proceeds from Invisibles

Receipts exceeding £500, or the equivalent in other Sterling Area currencies, from other parts of the Sterling Area require permission. When freight and insurance on exports that have originated in Mainland China, the Republic of China, Hong Kong, the Republic of Korea, or Macao, and that have been financed in U.S. dollars, are paid in Hong Kong by the exporter in sterling or in Hong Kong dollars, the exporter must surrender the U.S. dollar proceeds of that freight and insurance at the official market rate. Other exchange receipts from invisibles need not be surrendered.

Capital

Licenses are required for transfers abroad of capital in currencies other than the U.S. dollar; these are granted at the official market rate only for approved purposes or, if the equivalent in U.S. dollars has been sold to an authorized exchange bank, at the discretion of the local control. Exchange for the repatriation of foreign capital is normally provided at the official market rate if the exchange control had given prior approval of the investment. Transfers of capital may be made freely in Hong Kong dollars through the free market. However, licenses are required for all receipts from, as well as transfers to, other parts of the Sterling Area which exceed £500 or the equivalent in other Sterling Area currencies; these licenses are granted for all bona fide transactions between Hong Kong and other parts of the Sterling Area.

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 1967

November 18. The par value of the Hong Kong dollar was changed from HK$5.71429 = US$1 to HK$6.66667 = US$1.

November 22. The par value was changed from HK$6.66667 = US$1 to HK$6.06061 = US$1.

Iceland

Exchange Rate System

The par value is 0.0155907 gram of fine gold per Icelandic Króna or IKr 57.00 = US$1. The official rates are IKr 56.93 buying, and IKr 57.07 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 57.00, buying and 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.

Foreign Accounts may be credited with the proceeds from the sale of foreign currency to authorized banks and with authorized payments due to nonresidents from residents. Balances on Foreign Accounts may be used for authorized payments to residents and may be converted into the currency of the country of residence of the account holder. These accounts are in practice seldom used, payments for international transactions generally being made in U.S. dollars, sterling, or other convertible currencies.

Special Accounts may be opened by agreement with an authorized bank. The most important of these accounts are those of foreign banks and foreign insurance companies. They may be credited freely, up to certain limits, with 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; about 89 per cent of total imports (1966 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.1 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 generally issued in accordance with bilaterally agreed quotas, but in practice they are granted freely for global quota items. Certain imports are only admitted under state trading; these include fertilizers, tobacco, alcoholic beverages, and perfumes.

Imports on a collection basis with deferred payment are subject to an advance deposit of 10 per cent. Imports under documentary credits are subject to minimum advance deposits of 10, 25, or 50 per cent, depending on the category of goods. 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 90 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 (30 per cent for jeep-type vehicles).

Importers of goods not requiring licenses do not have to obtain a foreign exchange permit prior to shipment from abroad, provided that the purchase is payable at sight. On the other hand, the goods will not be cleared by the customs unless payment has already been made or the importer has arranged with an authorized bank for the payment. An importer may either open a letter of credit or obtain a payment certificate which enables him at any time to buy foreign exchange to pay for the goods. For imports that require individual licenses, foreign exchange is granted in accordance with the terms stipulated in the license.

Payments for Invisibles

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

Most other outgoing payments are licensed freely on the basis of bona fide documents. The basic allocation for tourist travel is the equivalent of IKr 10,000 a person a year. Applications for exchange for repair of ships, repair of means of transport other than ships and aircraft, transactions and transfers in connection with direct insurance, and insurance business operations abroad are considered on their merits.

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. Exchange receipts accruing from exports must be surrendered without undue delay.

Proceeds from Invisibles

Exchange receipts from invisibles must be surrendered without undue delay. The owners of Icelandic ships and aircraft are, with the approval of the authorized banks, permitted to retain their foreign exchange receipts from freight, passenger tickets, or other charges, and to use them for operating purposes and for purchases of necessities for the homeward journey of the ship or aircraft. Icelandic insurance companies which reinsure abroad are permitted to retain foreign exchange earned from premiums and indemnities and to use it to pay reinsurance premiums, claims, and other regular expenditures of the insurance business in the country where the foreign exchange was earned.

Resident and nonresident travelers may bring in up to IKr 1,500 in Icelandic banknotes and coins. 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 of nonresidents in Iceland's joint stock companies may not exceed 49 per cent, and is not allowed in the fishing industry. Nonresident-owned foreign capital entering in the form of foreign exchange must be surrendered. Nonresidents may be authorized to open nonresident accounts for these funds, in which case their retransfer abroad may be permitted.

Residents are obliged to surrender foreign exchange accruing to them on account of capital transactions and payments. Without the approval of the Government, residents may not obtain loans abroad, including loans for financing imports, for periods exceeding one year. Applications for the contracting of financial credits and loans abroad for a period of less than one year are considered on their merits and approved only in exceptional circumstances. The contracting of commercial credits abroad for a period of between 3 and 12 months is also approved only in exceptional circumstances, e.g., in connection with the import of industrial raw materials for which the production process is lengthy, 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, 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.

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 1967

January 1. The bilateral payments agreement with Poland was terminated. It was replaced by an agreement providing that payments would be made in freely convertible currencies.

January 11. Further imports from all sources were liberalized; the main item affected was unroasted coffee. The global quotas for 1967 were announced. All feedgrains were exempted from the special regulations previously employed to ensure procurement from the United States under U.S. Public Law 480 arrangements; the authorized banks discontinued their control over such purchases of feedgrains but maintained it over P.L. 480 imports of wheat, wheat flour, and tobacco.

April 14. The import of radio receivers ceased to be a State monopoly.

September 1. The basic exchange allocation for a resident tourist traveling abroad was reduced from the equivalent of IKr 15,000 to that of IKr 10,000 a year. Persons participating in tours (including cruises) arranged by tourist bureaus were allowed the equivalent of IKr 6,000 in foreign currency, and the exchange allocation for tourist bureaus on account of expenses for such tourists was established at the equivalent of IKr 360 a day. The amount of Icelandic notes that resident and nonresident travelers are permitted to take with them or bring in was reduced to IKr 1,500 a person. The export of notes in denominations exceeding IKr 100 was prohibited.

October 30. The advance deposit requirements for imports were increased. For imports not on credit, a deposit of 15 per cent of the value was required at the time the foreign exchange is sold, for a period of three months. For goods imported on credit without a payment guarantee, a 15 per cent addition to the previously required deposit of 10 per cent was applicable, making 25 per cent in all; the deposit would be repayable at the expiry of the credit term, but not earlier than three months from the date of import. Exempt from these requirements were certain essential raw materials and foods as well as certain commodities for export production.

November 27. The par value was changed from IKr 43.00 = US$1 to IKr 57.00 = US$1.

November 27. The fee of ½ of 1 per cent that previously was charged on the krónur amount of foreign exchange sold by banks for purposes other than study abroad was abolished.

November 27. The license fee on the f.o.b. krónur price of passenger automobiles (other than jeep-type vehicles) was reduced from 125 per cent to 90 per cent.

November 27. The advance deposit requirements for imports were changed back to the levels applicable before October 30, 1967.

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 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 currencies 1 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, 1967, 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$13.40 buying, and US$13.25 selling, per Rs 100.

Administration of Control

Exchange control is administered by the Reserve Bank of India in accordance with the general policy laid down by the Government of India in consultation with the Reserve Bank. Much of the routine work of exchange control is delegated to certain commercial banks, which act as authorized dealers permitted to buy and sell foreign exchange for specified purposes under regulations laid down by the Reserve Bank.

Prescription of Currency

India is a member of the Sterling Area and has an exchange control system similar to that of the United Kingdom but adapted to suit local requirements. For prescription of currency purposes, countries are divided into three groups: Sterling Area countries, Bilateral Account countries (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 sterling 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 (other than 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 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; and proceeds from the sale of Indian Government securities and of units issued by the Unit Trust of India which were originally purchased from funds in the same nonresident account. These accounts may be debited without prior approval for such items as payments for premiums on life insurance policies of the account holder or his dependents; all taxes due from the account holder in India; 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. All other credits and debits require the prior approval of the Reserve Bank. Transfers are not normally permitted from nonresident accounts of individuals or firms to nonresident accounts of banks, unless the amounts originally credited to such accounts could have been transferred abroad.

Special regulations cover funds lodged in National Defence Remittance Scheme (Special) Accounts representing rupee proceeds of inward remittances for the acount of nonresidents and rupee proceeds from sales of certificates issued under the Scheme, which expired on May 31, 1966. Balances in such accounts cannot be remitted abroad; they may, however, subject in some cases to prior approval by the Reserve Bank, be invested domestically or be used for other expenditures in India.

There are also blocked accounts, to which are credited capital proceeds that are due to nonresidents and may not be remitted abroad. Balances in blocked accounts may be placed on fixed deposit or invested in approved Indian rupee securities; the income derived from such investments may be remitted to the owner's country, when the approval of the Reserve Bank has been obtained.

Imports and Import Payments

Specified raw materials required by certain industries and other importers may be freely imported under an open general license. Practically all other imports require individual licenses. Imports of specified commodities required by 59 priority industries, including small-scale industries, are licensed upon application, on a continuing basis, provided that previous licenses have been utilized to a specified extent. Licenses to actual users for imports of raw materials, components, and spare parts are not granted wholly against free foreign exchange, but partly against tied-aid credits from particular countries. Individual licenses may be issued ad hoc, or on the basis of quotas allocated to established importers in accordance with their imports in a base period, to actual users on the basis of their requirements, and to registered exporters in accordance with the import content of their exports. Generally, licenses may be used to import from any country except Portugal, Rhodesia, South Africa, and South-West Africa; imports from these countries are prohibited. Such licenses are referred to as General Area Licenses, as opposed to Specific Licenses, which are issued against tied aid and are available only for imports from the country providing the assistance. Single Country Licenses are issued for certain imports from countries with which bilateral trade or payments agreements are in force.

Licensing policy generally accords priority to foodstuffs, capital goods, raw materials, and other industrial requirements, while the import of other items is severely limited or prohibited. At the beginning of each financial year, an announcement on import control policy is made in the form of a Red Book, which gives in detail the policy for various categories of importers. Licensing is in most cases on an annual basis. Licenses in excess of Rs 8,000 issued to established importers are subject to the condition that remittances must not exceed 50 per cent of the amount of the license in the first six months of the validity period of the license. This condition is not imposed on actual users, to whom licenses are issued to cover their six months' or annual requirements. There are special procedures applicable to imports of capital goods, of heavy electrical plant, and of goods imported to fulfill government contracts and for irrigation projects. In licensing imports of a capital nature, their essentiality, their potential for earning or saving foreign exchange, and the availability of medium-term or long-term credits for financing such imports are taken into account.

Where a valid import license is held, the required exchange is released by an authorized bank on presentation of the exchange control copy of the license. License holders may make payments by opening letters of credit or by remitting against sight drafts. Advance remittances before shipping documents can be submitted are not normally allowed; but in special cases, e.g., imports of machinery and capital goods, where deposits have to be made with overseas manufacturers, the Reserve Bank grants special authorization for advance payment for a part of the value of the import.

Certain commodities, including foodgrains and most fertilizers, are only imported by the Government or two state trading enterprises—the State Trading Corporation and the Minerals and Metals Trading Corporation.

Payments for Invisibles

In general, payments abroad for invisibles require approval. Foreign exchange is granted freely for a few such payments, mainly for expenses incidental to trade transactions and transfers of recurring contractual obligations.

Premiums on insurance policies issued in foreign currency to residents may be paid in rupees or in the currency in which the policy is issued; but Indian residents are prohibited from taking out life insurance policies in foreign currencies.

There are no restrictions on the remittance of profits, dividends, and interest to nonresident beneficiaries (except any income accruing to beneficiaries of the National Defence Remittance Scheme), provided that all current tax and other liabilities in India have been cleared. However, remittances to Indian nationals who were granted exchange facilities for emigration on or after January 1, 1963 of dividends and interest on shares, securities, and deposits held in India require the prior approval of the Reserve Bank or are subject to any special directions given to the person concerned when he was granted emigration facilities; such remittances are subject to an over-all limit of Rs 20,000 a year.

Foreign employees are permitted to make reasonable remittances to their own countries to pay insurance premiums, for the support of their families, and for other expenses. Authorized dealers may allow such remittances by foreign nationals, other than nationals of Pakistan, to the extent of 50 per cent of net income, subject to a maximum of Rs 2,360 a month, or up to the foreign currency amount of the monthly average of remittances made by the person concerned during the last 12 months prior to June 6, 1966.

Applications for foreign exchange for travel or education abroad are considered on an individual basis; no exchange is granted for tourist travel. Travel agents and companies are not permitted to book passages abroad for persons resident in India (other than foreign nationals temporarily resident in India) unless the traveler has been granted travel exchange by the Reserve Bank or has been specifically granted permission by the Reserve Bank to book his passage.7

The export of Indian currency notes and coins except to Nepal is, in general, prohibited. The export to Nepal of Indian currency notes in denominations of Rs 100 or higher is also prohibited. However, deck passengers to Burma, Malaysia, Singapore, Persian Gulf ports, and East Africa, and travelers to Ceylon and Pakistan, may take with them Rs 20 a person at any one time. Residents may take out foreign notes and coins up to £3 10s. Od. or its equivalent a person; authorized money-changers at airports and seaports are permitted to sell foreign currency notes up to a value of £3 10s. Od. or its equivalent a person to all passengers, whether Indian or foreign, who have made payments for the fare in rupees in India, but not to deck passengers or travelers proceeding to Ceylon, Pakistan, Nepal, or Bhutan or any person with an international passport proceeding to Pakistan en route to some other country. Nonresidents may take out the foreign notes and coins which they declared on entry, less the amounts sold to authorized dealers in India.

Exports and Export Proceeds

Export licenses are required for only a few items, and most commodities may be exported without a license. Most of the controlled commodities are licensed freely to all shippers; a few may be exported through established shippers; and a few commodities are subject to export quotas. Exports of sugar are confined to specified countries in respect of which international commitments have been undertaken. Exports to Portugal, Rhodesia, South Africa, South-West Africa, and Tibet are prohibited.

Exchange control is exercised over the proceeds of exports to countries other than Bhutan and Nepal. An exporter must declare that the full export proceeds will be received and dealt with in accordance with the prescription of currency regulations.

Foreign exchange holdings, including the proceeds of exports, in most currencies 8 must be offered for sale against rupees to an authorized dealer, unless the holder has been authorized by the Reserve Bank to retain them, or the holdings are the balance on July 8, 1947 in a sterling account held by him, or he is not domiciled in India and the funds do not represent the proceeds of an export.

Some major exports, including tea and jute manufactures, are subject to export duties. Some exports receive cash assistance; they are mainly new manufactures, such as engineering goods.

Proceeds from Invisibles

Proceeds from invisibles in certain currencies 8 must be surrendered.

The import of Indian currency notes and coins is, in general, prohibited. However, deck passengers from Malaysia, Singapore, Persian Gulf ports, and East Africa, and travelers from Ceylon and Pakistan, may import into India Rs 20 a person against presentation of evidence that they previously had exported this amount from India. Persons coming to India from Burma are allowed to bring in Indian currency notes up to a value of Rs 50 for an adult and Rs 25 for a child between the ages of 12 and 18. Travelers from Nepal may bring in up to Rs 75 a person. Foreign currency notes may be brought into India without limit, provided that a declaration of the total amount brought in is made to the customs authorities upon arrival. Persons holding foreign currency notes may sell them to any authorized dealer in foreign exchange or to an authorized money-changer.

Capital

The inward movement of capital is practically free, except when it is to form part of an investment requiring the prior approval of the Indian Government. Banks in India may borrow freely from their branches and correspondents abroad, provided that borrowings in excess of Rs 2 million are utilized for the purchase of rupees from the Reserve Bank to finance their normal business operations in India and that they are repaid only when the debtor bank has no outstanding borrowings in India from the Reserve Bank or any other bank. Foreign investments once admitted are eligible for the same treatment that Indian enterprises receive. Repatriation of capital owned by persons residing in Sterling Area countries other than Pakistan, and by residents of Denmark, Norway, or Sweden, is authorized freely. Capital invested in approved projects after January 1, 1950 by residents of other countries, including capital appreciation on the original investment, may be repatriated at any time. The proceeds from liquidated foreign investments not eligible for repatriation are blocked (see section on Nonresident Accounts, above). Local borrowing by foreign-controlled corporate bodies is restricted. Prior permission by the Reserve Bank is required for foreign-controlled partnership firms or corporate bodies to accept appointment as agents or technical advisors.

Indian nationals (including persons domiciled in India) are not normally granted any foreign exchange facilities for emigration purposes. In exceptional cases, foreign exchange may be released up to a limit of Rs 20,000 at the time of emigration and in three subsequent annual installments of Rs 10,000 each. The remainder of an emigrant's assets are blocked; only income on such blocked assets is thereafter allowed to be remitted up to a limit of Rs 20,000 per annum. Foreign nationals who are resident but not domiciled in India are permitted at the time of their retirement to transfer to their own country the proceeds from the sale of their investments, subject to a limit of Rs 75,000 at the time of retirement and the remainder in annual installments not exceeding Rs 20,000 per annum, provided that the shares and securities concerned are quoted on recognized stock exchanges in India; in addition, they may transfer all their current remittable assets in India.

There are no restrictions on the import into India of Indian or foreign securities. The export of securities and their transfer to nonresidents require approval, as does also the sale, transfer, or other disposal of foreign securities. Persons resident in India are permitted to hold foreign securities that have been acquired in a manner not involving a breach of the Indian exchange regulations.

Gold

In India, detailed control is exercised over the manufacture, acquisition, possession, and disposal of gold in various forms through an organization headed by a Gold Control Administrator. There is a total ban on private possession of primary gold. Although there is no ban on possession of finished articles of gold (including coins) previously declared, there is restriction on their manufacture and fresh acquisition. There is no restriction on the manufacture, acquisition, disposal, or possession of gold ornaments, except that holdings of such ornaments above specified limits are subject to the requirement of declaration. The consumption of gold by industrial users is regulated through permits and authorizations. Control is exercised over the dealers and goldsmiths through a system of licensing. The gold refineries are subjected to strict government control with a view to eventually bringing them under State ownership. The refineries are required to manufacture primary gold only in the form of standard gold bars, for which strict specifications as to their fineness, weight, dimensions, and markings are prescribed.

Imports of gold in any form by residents other than the monetary authorities require special authorization from the Reserve Bank and are not normally permitted; established jewelers, however, are from time to time granted licenses to import gold of over 14-carat for the manufacture for export in their own workshops of jewelry of 14-carat or less.

Exports of gold in any form other than jewelry produced in India for export and jewelry constituting the personal effects of a traveler are prohibited unless the export is made by or on behalf of the monetary authorities.

Changes during 1967

February 2. Bauxite producers were no longer required to effect exports only through the intermediary of the Minerals and Metals Trading Corporation.

March 6. The redemption proceeds of “Gulf rupee” notes could no longer be credited to the nonresident accounts of banks in the Persian Gulf territories, except for notes received from banks operating in Muscat and Oman, where the “Gulf rupee” continued to be legal tender.

March 15. The Gold Control Rules were revised so as to prevent any person other than a licensed dealer or refiner from possessing primary gold. Within a period of six months from March 1, 1967, individuals were required to dispose of primary gold either by sale to dealers or refiners or by delivering it to a licensed dealer or certified goldsmith for conversion into ornaments. A further period of six months was provided for dealers and goldsmiths to convert such primary gold into ornaments of any purity.

April 1. Jute imports could no longer be effected under the open general license procedure.

April 4. The academic eligibility requirements for students going abroad for higher studies were raised, and the exchange allocation for students going to the United Kingdom and the continent of Europe was raised from £ stg. 600 per annum, inclusive of fees, to £ stg. 600 per annum plus actual fees.

May 1. Import restrictions on the maintenance imports of the 59 priority industries were virtually removed with the introduction of a continuous licensing practice under which import licenses were issued freely upon application if previous licenses were utilized to a specified extent. The open general license for the import of raw materials required by certain export industries was extended to September 1967. The list of commodities ineligible for import licenses because of sufficient domestic production or because of nonessentiality was amended by the addition of 80 items, including certain spare parts, machinery, chemicals, and pharmaceuticals.

May 26. The export duty on jute sacking was reduced by Rs 150 a ton.

May 26. Export duties were lowered for selected jute manufactures, and for certain categories of manganese and iron ore.

May 26. The flat rate export duty on tea was replaced by a graduated duty, which resulted in reduced effective tax rates for lower and medium qualities of tea.

June 8. Cash assistance for exports of selected engineering goods was increased by 5 to 10 per cent of the f.o.b. value.

July 6. With effect from May 2, 1967, the 25 per cent export subsidy on pig iron was abolished and the export subsidy on iron bars and rods was increased from 20 per cent to 25 per cent. (On January 11, 1968, the subsidy on pig iron was restored to 10 per cent for exports made on or after May 2, 1967.)

August 1. All direct and indirect trade between India and Portugal was prohibited.

September 1. Exchange allocations to students for certain preparatory courses abroad were discontinued.

September 4. It was announced that investments in private limited companies by nonresidents of Indian origin would in future be authorized beyond the previously imposed limit of 49 per cent of the capital, subject to certain undertakings by the investor.

September 4. It was announced that import entitlements would no longer be allowed to exporters of plain silver jewelry.

September 7-8. Increases in cash assistance to selected export industries were announced.

September 8. Import replenishment licenses for the production of a number of export commodities were granted more liberally.

September 20. Licenses for imports of raw materials, components, and spare parts by small-scale industries were partly granted against tied aid; previously, they were entirely financed with free foreign exchange.

October 4. Exports of sugar were restricted to destinations in respect of which India had accepted international commitments.

October 5. Cash assistance was extended to merchant exporters of rayon and synthetic textiles; previously, only manufacturers of such textiles had been eligible for cash assistance.

Indonesia 1

Exchange Rate System

No par value for the Indonesian Rupiah has been established with the Fund. There are two exchange markets in both of which the exchange rates fluctuate. The principal market is the BE (Bonus Export) market through which the greater portion of trade transactions are channeled. It is supplied mainly from export proceeds that are retained by exporters as transferable foreign exchange deposits (after payment of taxes in foreign exchange). On the demand side, the BE market is used for settling the greater part of private imports, all government imports and service payments, most transfers associated with foreign investment, and specific invisibles. BE exchange is traded on the Djakarta Bourse, where on February 2, 1968 BE exchange was quoted at Rp 264 per US$1. The other exchange market is the DP market, in which Complementary Foreign Exchange (Devisa Pelengkap) is negotiated. It is intended primarily for receipts and payments in respect of invisibles but it may be used to pay for private imports, including those which have access to the BE market. On February 2, 1968 the DP market rate was Rp 280 per US$1. The central bank 2 intervenes to maintain orderly conditions and to insure that the spread between the two market rates does not exceed 15 per cent.

In addition to the above, the following rates exist (see Table of Exchange Rates, below): (1) The special BE rate applies mainly to aid transactions. It is adjusted periodically by the central bank in line with movements in the BE market rate; the divergence between the two rates is not permitted to exceed 15 per cent. On February 2, 1968 the special BE rate was Rp 238 per US$1. (2) A separate exchange rate applies to transactions of the oil companies. This rate is based on the special BE rate. For administrative reasons it is only changed at the beginning of the month, when it is fixed at the level of the special BE rate on the last day of the preceding month; on February 2, 1968, the rate was Rp 240 per US$1, buying and selling.

Two additional buying rates result from a 10 per cent exchange tax on all exports, other than petroleum, and from an additional exchange tax of 15 per cent levied on nine major export commodities (excluding petroleum). The 10 per cent exchange tax is allocated as “ADO foreign exchange” to the regions, according to the origin of the commodities exported.

The Indonesian rupiah is not legal tender in Sabang, which is entirely outside the Indonesian exchange control system, or in West Irian (Irian Barat), which is not entirely outside the Indonesian exchange control system but has a currency of its own and has a measure of autonomy in respect of trade and exchange control. The exchange rate between the West Irian rupiah and the Indonesian rupiah is IBRp 1 = Rp 10. Payments for certain imports from Indonesia into West Irian, however, are subject to an excess profit levy of 25 or 50 per cent, and payments from West Irian to Indonesia for nontrade transactions are subject to a tax of 5 per cent; in Indonesia, the latter tax is applied to West Irian banknotes brought in by travelers, in lieu of enforcement in West Irian. The exchange rate of the West Irian rupiah in terms of currencies other than the Indonesian rupiah is IBRp 1 = US$0.10 or the equivalent for other currencies.

Administration of Control

The implementation of exchange and trade control is entrusted to Unit I of the Bank Negara Indonesia, the Bureau of Foreign Exchange Transactions (BLLD), the Ministry of Trade, authorized foreign exchange banks, and the customs authorities. Exchange control is administered by the BLLD.

Prescription of Currency

Payments and receipts must be effected through the authorized banks. Generally, payments are made in convertible currencies, but settlements with countries with which Indonesia has bilateral payments arrangements are made through special clearing accounts.3

Nonresident Accounts

No distinction is made between resident and nonresident accounts, as the 1964 Foreign Exchange Act only recognizes foreign nationals and Indonesian nationals. There are no restrictions on the opening by foreign nationals of accounts in Indonesia in rupiahs or foreign currencies.

Imports and Import Payments

There is a registry of authorized importers and an initial deposit is required for registration; registration is automatically authorized for exporters who also wish to establish themselves as importers. Import licenses are not required. Imports from Bulgaria, Mainland China, Hungary, Rhodesia, Rumania, and South Africa are prohibited. Imports are classified in three lists: (1) the BE list, which in turn is divided into three subgroups (“very essential,” and “semiessential”); (2) the DP list, which is a residual list covering all permissible items not on the BE list; and (3) the “negative” list of prohibited imports (passenger cars with an f.o.b. value exceeding US$2,000, television sets with 21-inch or larger screens, de luxe radio-record player consoles, and textiles with a batik design). Aid funds may only be used to finance items included in the “very essential” and “essential” subgroups of the BE list, and are usually restricted to use for purchases in the donor country. All items on this list may be financed through the BE or DP markets. Items on the DP list may only be financed through the DP market.

Import duties are calculated on the c.i.f. value of imports at a rate that is adjusted monthly in line with the BE market rate. On February 2, 1968, that rate was Rp 240 per US$1. Import duties are paid when goods are cleared through customs. Import surcharges of 75 and 200 per cent are applied to a number of items subject to import duty at a rate of 50 per cent or more. Excess profit levies ranging from Rp 10 to Rp 200 per U.S. dollar are applied to imports of goods competing with national products and to certain other items bearing low rates of import duty. An additional import fee of 1 per cent is levied on items that are subject to customs duties; it is calculated at the rate applicable for the calculation of import duty, i.e., at Rp 240 per US$1.

Payments for Invisibles

Open general licenses have been issued to the authorized banks enabling them to make payments through the BE market for specified invisibles (e.g., those connected with imports of goods on the BE list) without further authorization. Prior approval, however, is required for all other invisibles financed through the BE market. Payments for all invisibles may be made through the DP market without prior approval. A fee of 1 per cent is payable on payments in respect of invisibles.

Travelers may freely take out Rp 2,500 in Indonesian banknotes and the equivalent of US$500 in foreign banknotes. The export of additional foreign exchange by resident travelers requires the approval of the BLLD. Nonresident travelers may take out the same amount of foreign banknotes that they brought in, provided that it was duly noted in their passports upon entry.

Exports and Export Proceeds

Exports to Bulgaria, Mainland China, Hungary, Rhodesia, Rumania, and South Africa are prohibited. Except for a few commodities, such as soybeans, tapioca, cassava, and corn, which may only be exported with the approval of the regional authorities, exports are permitted without license. Exports may be made by private firms as well as by state trading firms.

All exporters except the petroleum companies and the state trading firms must require their buyers to open a bank letter of credit covering the “f.o.b.-net” value of the goods to be exported. Upon shipment of the goods, i.e., upon receipt of the export documents by the bank, exporters are credited in foreign currency with a certain portion, depending on the category of exports, of the full export proceeds calculated in accordance with the “f.o.b.-net prices”; such prices are announced for each of the principal export commodities (other than petroleum) at regular intervals. The portion of export proceeds credited as foreign currency is the “export bonus.” Not included in the “f.o.b.-net price” are any amounts needed to cover normal commercial expenses, such as commissions, rebates, and refunds. That part of the actual export proceeds in excess of the “f.o.b.-net price” is treated as proceeds from invisibles and, therefore, becomes DP exchange. For the purpose of determining the export bonus, exports (excluding petroleum) are grouped into two categories. Category A (rubber, copra, pepper, tin, coffee, diamonds, palm oil, palm kernels, and tobacco leaves) is subject to an exchange tax of 10 per cent, which is allotted as “ADO exchange” to the government of the region where the commodities originated, and to an additional exchange tax of 15 per cent that accrues to the Foreign Exchange Fund. Category B includes all other export products (except gold and silver); these are subject only to the 10 per cent exchange tax. The export bonus is valid for three weeks from the date it is credited to the exporter's account at an authorized bank. During this period it may either be used to pay for imports included on the BE list, or be sold at the prevailing market rate to an authorized importer or the central bank. If not used during the period of its validity, any bonus in the amount of US$20 or more must be surrendered to the central bank at the special BE rate.

No customs duties are levied on exports. However, a BLLD fee of 1 per cent of the “f.o.b.-net” value of the goods shipped is payable; the fee is calculated at a rate of Rp 240 per US$1.

Proceeds from petroleum exports of foreign oil companies operating within the scope of the Contract of Work Law of 1963 may be retained abroad. Rupiahs needed by those companies to cover local expenditure, such as operating costs and taxes, are exchanged at the oil rate of Rp 240 per US$1; this rate is adjusted each month to keep it in line with the special BE rate.

Agricultural commodities produced in border regions may be exported to Malaysia and Singapore in exchange for specified consumer goods, capital equipment, and raw materials. In this “border crossing trade,” the value of an import or export shipment must not exceed M$600.

Proceeds from Invisibles

Services provided by Indonesian residents to foreign countries or foreign nationals must generally be paid for in foreign exchange. All receipts from transactions in invisibles, including inward remittances by diplomatic missions, are settled in the DP market.

Resident and nonresident travelers may bring in any amount in foreign banknotes, but only Rp 2,500 in domestic banknotes.

Capital

The Foreign Investment Law of January 10, 1967 provides various incentives for the participation of foreign capital in Indonesian enterprises not engaged in a few specified fields of activity (including harbors, electric power, shipping, and railroads). The Investment Law specifies a system of investment priorities; it assigns the highest priority to enterprises generating foreign exchange followed by those that save foreign exchange. Enterprises that are wholly or largely operated in Indonesia as separate business units must be incorporated under Indonesian law and must have their domicile in Indonesia. The operation permit for foreign investment is valid for 30 years. Among the inducements offered are exemption from, or reduction in, corporate and dividend taxes for a certain number of years, provided that the sum involved is not less than US$2.5 million. Joint ventures by Indonesians and foreigners may benefit from similar tax incentives even if the investment involved is less than US$2.5 million. Other inducements include exemption from customs duties, accelerated depreciation allowances, and permission to offset initial losses against subsequent profits; foreign investments with a minimum capital of US$15 million may in the initial two years receive additional benefits. Transfer of profits (after taxes) is guaranteed at the BE rate, and guarantees are also given in respect of depreciation allowances and transfers relating to expenses connected with the employment of foreign persons in Indonesia. However, as long as investments benefit from tax relief, capital repatriation is not permitted. The law implicitly provides guarantees against wholesale nationalization of foreign investments. Equitable and mutually satisfactory arrangements are stipulated for resolving the issue of just compensation in the event of nationalization of any specific foreign investment.

A special regime applies to enterprises previously nationalized but now restored to the original owners. Such enterprises are allowed tax holidays for a period of three years on new capital in foreign currency brought into the context of rehabilitation and expansion programs. They are also allowed to transfer at the BE rate 50 per cent of their profits after taxes for a period of three years, and the full amount of such profits thereafter. The transfer of proceeds from the sale of the assets of those restored enterprises which ceased operations may take place with effect from January 1, 1972 at the rate of one fifth of the said proceeds a year, with a full guarantee as to their value in foreign currency. The transfer of proceeds from the sale of assets of enterprises whose period of operation has expired or whose operations have been terminated by the Government is allowed at the rate of one fifth a year effective from the time of the sale of assets. This transfer is also guaranteed as to its value in foreign currency.

In May 1967 a Debt Investment Conversion Scheme (DIGS) was promulgated for the benefit of foreign creditors holding nonguaranteed claims against Indonesia. Private creditors willing to accept the terms of the Scheme and prepared to make investments in Indonesia are paid in rupiahs at the prevailing BE market rate in settlement of their claims; these rupiahs are transferable to other potential investors in Indonesia. DICS rupiahs may be used, in projects approved under the Foreign Investment Law of 1967, for the purchase in the BE and DP markets of foreign exchange for the import of equipment, raw materials, and other commodities necessary for their establishment and operation.

Gold

Residents may freely purchase, hold, and sell gold and gold coins in Indonesia. Imports of gold and of gold coins are free of licensing and of import duty but are subject to an excess profit levy of Rp 25 per US$1; both are on the BE list. Exports of gold (other than jewelry constituting the personal effects of a traveler), unless made by or on behalf of the monetary authorities, require licenses issued by the central bank; export licenses are rarely granted.

Table of Exchange Rates (as at February 2, 1968)(rupiahs per U.S. dollar)
BuyingSelling
198.0 (BE Rate4 less 15% Exchange Tax and 10% ADO 5)

Nine major export commodities.6, 7
237.6 (BE Rate less 10% ADO 5)

Other export commodities (excluding petroleum).
238.0 (Special BE Rate, Adjusted Periodically)

Purchase of expired BE certificates by the central bank.
238.0 (Special BE Rate, Adjusted Periodically)

Imports paid for with aid funds.
240.0 (Oil Rate,8 Adjusted Monthly)

Exchange receipts from oil companies.
240.0 (Oil Rate,8 Adjusted Monthly)

Exchange payments by oil companies.
264.0 (BE Rate, Fluctuating)

Purchase of foreign exchange by the central bank, excluding exchange from invisibles. Capital transfers associated with approved foreign investment.
264.0 (BE Rate, Fluctuating)

Sales of foreign exchange by the central bank. All government imports and invisibles. Imports on BE list. Invisibles connected with trade and certain other specified invisibles. Capital transfers and invisibles associated with approved foreign investments.
280.0 (DP Rate,9 Fluctuating)

All receipts from invisibles, including diplomatic expenditures, and repatriated capital.
280.0 (DP Rate,9 Fluctuating)

Imports on the DP list. Other invisibles (this rate may also be used for other imports not on the negative list).

Changes during 1967

January 10. A new Foreign Investment Law (Law No. 1 of 1967) was enacted giving foreign investors full ownership and management rights and providing for liberal tax incentives and for repatriation of capital and profits.

January 27. The first implementing ordinance to the Foreign Investment Law of January 10, 1967 was issued. It specified the criteria for priority investments.

February 6. Foreign enterprises formerly under the control of the Government were permitted to invest their capital in Indonesia for a period of between 15 and 30 years, depending upon how long the enterprise had been established. The 15-year to 30-year period included the remainder of the period still available under the permit previously granted. For a period of three years, transfers of profits after taxes were limited for these enterprises to 50 per cent; no exemption from taxation was granted, except when additional capital was invested.

February 11. The exchange rate for oil transactions was changed from Rp 45 to Rp 85 per US$1.

February 21. Indonesia resumed membership in the International Monetary Fund.

February 22. The distinction between DP “A Accounts” and DP “B Accounts” was terminated. Both became DP accounts and could be used freely for all transactions.

February 27. All trade with Rhodesia was prohibited.

March 17. A Presidium decree abolished the requirement that 50 per cent of customs duties be paid in advance of importation.

March 28. By decision of the Monetary Council, export offices and banks were instructed to discontinue issuing licenses for exports to Bulgaria, Hungary, and Rumania.

March 28. The prohibition on exports to Singapore of Category I products was lifted.

March 28. The cost of importing goods with special export bonuses issued by the central bank for the use of foreign credits was reduced as the payment for these bonuses could be partially postponed: 75 per cent of the price could be settled 14 days after notification that the import documents have arrived; for raw cotton, fertilizer, and spare parts for vital transportation, 90 per cent of the payment could be delayed in this manner.

April 1. Foreign enterprises restored to their former owners were allowed tax holidays for a period of three years on new capital in foreign currency brought in within the framework of a rehabilitation and expansion program. These enterprises were exempted from the provision of the Foreign Investment Law that restricted tax holidays to investments of at least US$2.5 million. In addition, they were granted a one-year deferment of taxes owed at the time they were restored to the former owners.

April 1. Foreign enterprises formerly under the control of the Government were allowed to transfer 50 per cent of profits after tax for a period of three years, and the full amount thereafter. The transfer of proceeds from the sale of the assets of those enterprises ceasing their operations was to be permitted beginning in 1972, at the rate of one fifth of such proceeds a year, under guarantee as to their value in foreign currency; in the case of a sale of the assets of enterprises whose period of operation had expired or whose operations had been stopped by the Government, the transfer of the proceeds was allowed at the rate of one fifth a year beginning from the time of sale of the assets, under guarantee as to the value of the proceeds in foreign currency. These transfers could be made at the BE rate fixed by Unit I of the Bank Negara Indonesia.

April 1. Foreign estates and plantations which had not been purchased by the Government but only taken over could be returned to their former owners on a joint venture basis. Operating permits for 30 years were to be granted if the owner was prepared to undertake rehabilitation and a firm replanting program; operating permits for 15 years were to be granted if the owner did commit himself to do so.

April 3. The exchange rate of the West Irian rupiah was changed from IBRp i = US$0.2762 to IBRp 1 = US$0.10. The relationship between the West Irian rupiah and the Indonesian rupiah was set at IBRp 1 = Rp 10; previously, it was IBRp 1 = Rp 1.

April 3. The basis for the calculation of import duties was raised from Rp 75 to Rp 90 per U.S. dollar.

April 10. Surcharges of 50 and 100 per cent of current import duties were levied on a rather comprehensive list of imports. Excess profit levies were imposed on some additional imports.

May 10. Private creditors holding nonguaranteed claims against Indonesia, and who, therefore, were not covered by the terms agreed at the Debt Rescheduling Meeting of Paris, were offered the option of being paid in rupiahs under a Debt Investment Conversion Scheme. These rupiahs, referred to as DICS rupiahs, could be used for investment in Indonesia under the terms of the Foreign Investment Law of 1967 and were fully transferable between nonresidents, with the exception that they could not be transferred to nonresidents who had concluded special agreements with the Indonesian Government.

May 24. The exchange proceeds from sales of stocks and bonds and from dividends and interest thereon were declared DP exchange.

June 3. Contrary to the general provisions of the Foreign Investment Law, the Government by Instruction No. 36/U/IN/6/1967 of the Cabinet Presidium announced that it was granting tax holidays to joint ventures with a capital of less than US$2.5 million and that these enterprises could benefit from another year of tax exemption in addition to the normal three-year period of tax holiday.

June 23. The export of all commodities to Malaysia and Singapore was again permitted, except exports of tin waste and tin ore to Singapore.

July 25. The BLLD announced the procedures for the implementation of Foreign Investment Law No. 1 of 1967.

July 28. Exporters of major export commodities were required to surrender 15 per cent of exchange receipts as an export tax collected through the banking system. Moreover, all exporters were required to surrender, without rupiah reimbursement, 10 per cent of their exchange receipts as ADO exchange, which was to be allocated to regional authorities according to the origin of the export commodities.

July 28. The former various BE lists of imports were replaced by a single BE list of commodities importable on the basis of Export Bonus and ADO exchange. The new BE list was subdivided into Group I, nonconsumer goods, and Group II, consumer goods.

July 28. Regulation 10 of the Indonesian Government substantially simplified the import and export procedures by eliminating several documents. For exports, the Export Permit Certificate (SIP) and the Letter Notifying Agreement on Selling Commodities Abroad (SP3) were abolished. For imports, the requirement of an Import Statement (PI) was abolished, except for BE imports without cover. For both imports and exports, the requirement of a Foreign Exchange Contract (KV) was abolished.

July 28. The classification of export commodities was altered from three to two categories. Category A included the principal commodities, representing some 80 per cent of Indonesia's total exports, and Category B the remainder (except gold and silver). In addition, the amount of export bonus to be retained by the exporter was set at 75 per cent for Category A exports and at 90 per cent for Category B exports; for many exports this represented an increase in their entitlement to export bonus. The check price system based on the “f.o.b.-net price” was abolished for Category B.

July 28. The use of BE without cover for imports was restricted to the import of nonconsumer commodities in the new BE import list. In addition, the outstanding amount of BE without cover for imports was not at any time to exceed US$30 million. On July 28 this amount had been exceeded, authorized banks were not allowed to accept new Import Statements (PI) for BE imports without cover, until the issuance of a further announcement by the Bureau of Foreign Exchange Transactions.

July 29. The Bureau of Foreign Exchange Transactions issued regulations on the use of BE certificates for payments in respect of invisibles. No prior approval was required for the payment of freight connected with imports using BE, or for certain other specified invisibles: prior approval was required for all other payments financed through the BE market, such as insurance premiums on imports using BE, contributions to international organizations, and project survey expenses stipulated by the Government.

July 31. The valuation basis for the calculation of import duties was raised from Rp 90 to Rp 130 per U.S. dollar.

July 31. Aid BE's could be sold by any state-owned foreign exchange bank; previously, they were only sold by the Bank Negara Indonesia, Unit I.

August 3. A maximum period of 180 days was set for the repayment of the price of goods imported on the basis of BE imports without cover; after that period no payment with BE was allowed.

August 3. Import surcharges of 100 per cent were levied on specified food products, matches, various textiles, footwear, sheet glass, and certain other commodities. Surcharges of 50 per cent were levied on practically all commodities subject to 70 or 50 per cent import duty, and on some additional products. Excess profit levies of Rp 10 to Rp 200 per U.S. dollar were imposed on sugar, matches, various yarns, and porcelain tiles, and on gold, silver, and platinum in coins and bars. Levies of Rp 30 per U.S. dollar were imposed on television and radio sets, some textiles, batteries, drinking glasses, and passenger cars. A partial or full duty exemption was granted on some chemicals, some iron and steel products, some aluminum products, mechanical equipment, tractors, and certain types of trucks. These measures were applied with retroactive effect to April 10, 1967.

August 3. Ministry of Finance Decree No. 156/MENKEU/67 provided for exemption from import duties, retroactive to January 10, on machinery, equipment, and means of transport required for the establishment of new enterprises under the Foreign Investment Law, and on raw materials and semifinished and finished goods to be processed by these enterprises. These exemptions would apply for a period of two years. The decree also provided for exemption from duty on personal effects and consumer goods brought in by foreign employees. Finally, duty exemption could also be requested for office supplies and equipment and for construction materials.

August 6. Tin waste could again be exported to Singapore.

August 7. Within the framework of the preparation of the new Banking Law, the Government reduced the amount of working capital that foreign banks are required to bring into Indonesia from US$1 million to US$500,000.

August 7. Indonesia signed the Declaration of Bangkok creating the Association of Southeast Asian Nations (ASEAN).

August 14. The Ministry of Trade announced a ban on exports to Mainland China, Israel, and South Africa.

August 22. The amount of foreign banknotes that could be taken out by travelers was increased from the equivalent of US$100 to that of US$500 a person.

August 30. Tin ore shipments to Singapore were again permitted.

September 6. Claims of foreign private creditors not guaranteed by foreign governments and converted into DICS rupiahs were to be administered through DICS-rupiah accounts in the name of the owner with Unit I of the Bank Negara Indonesia. The conversion rate to be applied was the BE rate. DICS rupiahs were declared transferable and could be used for investment in Indonesia.

September 9. Imports from Mainland China were suspended.

October 4. By decree of the Cabinet Presidium, the requirement of a Certificate of Approval of Import (SPI) was abolished.

October 13. The export of cocoa kernel of quality C or lower was prohibited with effect from September 15.

November 14. A Ministry of Finance decree imposed import surcharges on items not included on the BE import list. The surcharge was 100 per cent on items subject to duties of 40, 50, 70, and 100 per cent; 50 per cent on items subject to duties of 5, 10, 20, or 30 per cent; and Rp 25 per U.S. dollar on duty-free items. The new surcharges were additional to those established on August 3, 1967.

November 20. A 100 per cent luxury tax was imposed on imports of such items as television sets, tape recorders, and cameras.

November 20. The import of rice by using BE imports without cover or against payment with an ADO guarantee was permitted, provided that this rice arrived at Indonesian ports before April 1, 1968. This measure became effective on November 8,1967.

November 28. The ban on the export of remilling or smokehouse rubber was temporarily suspended for producing regions without remilling or smokehouse factories or where the processing capacity of these factories was insufficient to absorp total production. The BE and ADO proceeds from such exports were to be used solely to finance the establishment, construction, or expansion of processing capacity of remilling or smokehouse rubber factories.

November 29. Announcement No. 16/Inv/BLLD/1967 of the Bureau of Foreign Exchange Transactions provided that sales of stocks denominated in foreign currency and owned by a foreign citizen or a foreign corporate body required prior application to the Foreign Exchange Transactions Bureau, through the intermediary of the bank where the stocks were deposited.

December 4. Purchases of aid BE's required cash payment of 100 per cent of rupiah counter-value and could be made by registered importers only.

December 6. Exporters were required to register their exports with their foreign exchange banks by submitting an Export Declaration form indicating the “f.o.b.-net price.” For Category A exports, the “f.o.b.-net price” to be indicated was the one fixed by the Department of Commerce; for Category B exports, exporters themselves could set the “f.o.b.-net price,” provided that it was in accordance with price levels in world markets.

December 30. The Banking Law was passed by Parliament. Foreign banks were allowed to open branches or start joint ventures in Indonesia.

Note.—The following changes took place early in 1968:

January 12. Travelers could not bring in or take out domestic banknotes in excess of Rp 2,500.

January 22. The exchange rate applied principally to foreign aid transactions, henceforth called the special BE rate, was depreciated from Rp 140 to Rp 240 per US$1. It was to be adjusted in line with the BE market rate, and it was made applicable also to purchases of export BE whose validity period had expired. Previously, the BE/BNI rate was applicable to both aid exports and government transactions; it was seldom changed and consequently did not reflect the movements of the BE market rate.

January 22. The DP rate was applied to expenditures by diplomatic missions; previously, these were effected at the BE/BNI rate.

January 27. Imports of gold no longer required a license.

January 27. All import commodities were grouped in three lists: a BE list, a DP list, and a negative list of prohibited items. The BE list was divided into three subgroups: “very essential,” “essential,” and “semiessential.”

January 29. The valuation basis for the calculation of import duties was raised from Rp 130 to Rp 240 per US$1.

February 1. The exchange rate applicable to oil transactions was set at Rp 240 per U.S. dollar. Previously, a rate of Rp 85 per U.S. dollar was applicable to such transactions.

Iran 1

Exchange Rate System

The par value is 0.0117316 gram of fine gold per Iranian Rial or Rls 75.75 = US$1. The official rates are Rls 75.00 buying, and Rls 75.175 selling, per US$1. Exchange rates for other currencies quoted by the central bank 2 are based on these buying and selling rates for the U.S. dollar, taking into consideration the exchange rates of the quoted currencies in the international exchange markets. Exchange rates for currencies not quoted by the central bank are determined by the authorized banks with due regard to the rates against the U.S. dollar currently quoted in the international exchange markets.

The following charges are levied by the authorized banks on the amount of exchange sold for imports: ½ of 1 per cent for sanitary services, and 110 of 1 per cent of the invoice amount for the Export Promotion Fund.

Administration of Control

Exchange control authority is vested in the Bank Markazi Iran (the central bank). All foreign exchange transactions must take place through authorized banks. The import and export of goods is governed by regulations issued annually by the Ministry of Economy under the approval of the Cabinet. Import policy is formulated within an over-all foreign exchange budget. Foreign trade relations with Albania, Mainland China, Eastern Germany, and North Korea are under the control of the Foreign Transactions Corporation within the Ministry of Economy.

Prescription of Currency

Payments and receipts are normally settled in sterling, U.S. dollars, or the currency of the country concerned, provided that the currency is one which is quoted by the central bank.

Transactions with the six countries with which Iran has bilateral payments agreements 3 must be conducted through agreement accounts denominated in U.S. dollars. Payments to and from Pakistan and Turkey relating to visible trade (excluding border trade and defense materials) are settled over clearing accounts maintained by the respective central banks in U.S. dollars. Proceeds from exports to India may be accepted in Indian rupees.

Nonresident Accounts

Foreign nationals are permitted to maintain accounts freely, in rials as well as in foreign currencies, with the authorized banks; rial accounts may be used only for payments in Iran. Foreign nationals may also maintain time deposits in foreign currencies in Iran. Foreign currency accounts of foreign nationals may be used for transfers abroad or for sales to authorized banks, provided that such funds originate abroad.

Iranian nationals may freely maintain time deposits in foreign currencies in Iran; they also may freely retain, on current accounts with domestic banks, all foreign exchange they receive other than export proceeds.

Imports and Import Payments

All imports into Iran are subject to control by the Government. The import policy is re-examined annually, and a new Import List, effective for the next Iranian year, is published by the Ministry of Economy. The Import List distinguishes between “authorized,” “unauthorized,” and “prohibited” goods. “Authorized” imports, consisting of nonluxury goods which either are not produced in Iran or are produced in Iran but not in quantities sufficient to meet domestic requirements, are divided into two main categories: (1) imports for which orders may be placed without prior approval by government agencies,4 and (2) imports that are subject to prior approval by government agencies before the import order is placed. “Unauthorized” imports include goods which have been shifted from the “authorized” list to the “unauthorized” list, as well as goods that may be permitted occasionally by the Ministry of Economy when the supply of the protected local product is considered insufficient. For “prohibited” goods, no authorizations are given.

Imports free of charge of “authorized” goods require prior approval by the Ministry of Economy and the central bank of Iran; however, permission is given for the following: imports destined for official charitable institutions or government organizations; machinery, spare parts, and raw or intermediate materials for productive institutions, up to US$500 a shipment; and all other imports of “authorized” goods up to US$150 a shipment.

Specified commodities, such as tobacco and cigarette paper, are imported under state monopoly. Gold may be imported only by the central bank.

Unless otherwise specifically authorized, payment for all commercial imports must be made through the official exchange market. Payments may be made either against bills for collection or documentary letters of credit. Payments against bills for collection may be made without authorization for goods (mainly capital goods and raw materials) listed in the Schedule attached to Circular No. 116 of August 3, 1965 (Iranian date 12.5.1344). Payments for imports of other goods required by domestic industries may also be made against bills for collection with special permission from the central bank. All other import payments must be made against documentary letters of credit. All orders for imports must be registered with the Bank Markazi Iran through an authorized bank; registration is effected against a pro forma invoice. The import of gifts is restricted to Rls 10,000 for each person a year.

Imports from Rhodesia are prohibited and special regulations apply to certain commodities originating in Hong Kong.

At the time of registration of imports, importers are required to pay Rls 3 per US$1 of the amount of the order as a registration fee. They must at the same time deposit with the Bank Markazi Iran, through an authorized bank, Rl 0.50 per US$1 of the amount of the import order for machinery eligible for payment against bills for collection, Rls 2 per US$1 for other goods eligible for payment against bills for collection, and Rls 10, Rls 30, and Rls 75.50 (depending on the essentiality of the goods) per US$1 for goods for which payment must be made against a documentary letter of credit. This deposit is liable to forfeiture up to Rls 3 per US$1 in the event that any misrepresentation by the importer is subsequently discovered but it is otherwise refundable upon presentation of the customs clearance certificate after the respective goods have been cleared through customs, or if and when the order is canceled.

Authorized banks make payments for permitted imports against the presentation of shipping documents. Approval of the shipping documents by the authorized banks represents approval of the foreign exchange transfer.

Almost all imports are subject to commercial profit taxes, in addition to tariffs, which are either specific or ad valorem. The ad valorem commercial profit tax ranges from 1 per cent to 225 per cent. Monopoly taxes are included in the commercial profit taxes. The authorities specify in the Import List the commercial profit taxes for each year. All taxes are paid to the customs before customs clearance. The clearance through customs is authorized upon the presentation of shipping documents approved by the authorized banks, specifying that payment has been made or will be made, and, when required, that the special import authorization has been received from government agencies prior to lading of goods in the country of origin.

Payments for Invisibles

Payments for invisibles related to imports are made on the same basis as payments for those imports. Exchange is granted to merchants for insurance of imports against bills for collection; for imports covered by documentary letters of credit, insurance must be taken out in Iran. Exchange is not granted to merchants for insurance of Iranian exports sold f.o.b. Foreign nationals working in Iran as technical assistants and whose employment has been recognized as necessary by the Government may take out in foreign exchange about 50 per cent of their net salaries. The annual travel allowance for Iranian nationals—which is limited to US$500 or its equivalent in other currencies for travel to Europe, the United States, or the Far East, and to US$100 for other countries—may be sold by authorized banks upon presentation of the traveler's passport. For children under 12 years of age the allowances are 30 per cent of the above amounts. In addition, authorized banks may sell foreign exchange up to the equivalent of US$120 for each written request to Iranian nationals for assistance to persons abroad without the submission of supporting documents, provided that the remittance is made in the form of a mail or telegraphic transfer. Iranian nationals may also freely make remittances abroad from domestic current accounts in which they retain foreign currencies received from sources other than exports; balances in such accounts are freely transferable. Purchases of foreign currency from the banks for payments in respect of noncommercial invisibles not mentioned above require licenses from the central bank.

Iranian nationals leaving the country are required to pay a travel tax of Rls 10,000 for each single-voyage exit permit, except for pilgrimage travel for which the tax is Rls 3,000. Lower rates apply to family members traveling on the same passport (wife and children from 7-18 years of age), viz., Rls 750 a person for pilgrimages and Rls 2,500 a person for other travel. Iranians resident abroad and students studying abroad but visiting home temporarily are exempt from payment of the tax; so are Iranian workers leaving the country when traveling in a group to a foreign assignment.

Travelers leaving Iran may take with them Rls 3,000 in Iranian banknotes. Travelers of foreign nationality may not export foreign currency in excess of the amount they imported less the amounts they have sold to authorized banks, as recorded in their passports; they may, however, convert rials up to the equivalent of US$50 into other currencies upon presentation of their visaed passports.

Exports and Export Proceeds

Exports of oil to Rhodesia are prohibited. Exports of some commodities require licenses. A commercial profit tax is imposed on a few exports, mainly consumer goods or raw materials. The commercial profit tax charged at the time of import on materials contained in goods for export may be returned to the exporter after the export has taken place. Under a system of export subsidies (that are announced semiannually), the Ministry of Economy allows the exporter 20 per cent of the f.o.b. value of exports of manganese ore and 7½ Per cent of the f.o.b. value of exports of lead ore. However, the actual rate paid to the exporter by the Ministry of Economy is 90 per cent of the percentage mentioned for ores; the remainder is put at the disposal of the Ministry of Economy to promote exports.

The exporter must offer for surrender the foreign exchange value of his exports, as appraised by the customs, within eight months after the goods have been exported. Authorized banks accept export proceeds only in specified currencies (see footnote 2) or, for exports to India, in Indian rupees.

Proceeds from Invisibles

Exchange receipts from invisibles may be retained in a foreign currency account with an authorized bank, where they remain at the free disposal of the account holder.

The import of Iranian currency by travelers to Iran is permitted in unlimited amounts. The repatriation of Iranian banknotes through the mail is not permitted. Travelers, during their stay in Iran, may sell their exchange only to an authorized bank at the bank's buying rate.

Capital

Iranian nationals may retain on domestic foreign currency accounts any capital receipts accruing in foreign exchange; transfers abroad from such accounts may be made freely, as may domestic transfers to other Iranian nationals. Transfers of capital abroad which would involve the purchase of foreign exchange from the banking system require the approval of the central bank; except as noted below, such approval is given only in exceptional circumstances.

In accordance with the law concerning the encouragement and protection of foreign capital investment in Iran (1955) and regulations implementing the law, foreign capital invested in approved development or productive activities in industry, mining, agriculture, or transport may be repatriated, together with net profits (in accordance with the provisions contained in the implementing regulations), in the form of foreign exchange and/or goods. Transfers of exchange must be made at the selling rate prevailing at the date of transfer. However, the central bank has the option of buying the exchange or accepting it as a deposit to be converted into rials at a rate mutually agreed upon in a separate agreement, and this rate is applicable to the funds when they are repatriated. Capital imported in the form of foreign exchange must be in currencies acceptable to the central bank; the exchange is converted into rials at the buying rate prevailing at the date of application for conversion. The law does not set up any limit of participation with respect to the ratio of foreign to domestic investment, but the Supervisory Board encourages participation by Iranians in the proposed investment.

Gold

Residents may freely and without license purchase, hold, and sell gold in any form in Iran; Iranian nationals are not permitted to hold gold abroad. Imports and exports of gold in any form, except jewelry constituting the personal effects of a traveler, require the prior approval of the central bank, unless the import or export is made by or on behalf of the monetary authorities; in practice, all imports are made by the central bank and exports are prohibited. The central bank from time to time releases unworked gold to domestic jewelers and other authorized industrial users. Commercial imports of articles containing a minor quantity of gold, such as watches, require licenses issued by the Ministry of Economy.

Changes during 1967

January 18. Banks were permitted to sell to Iranian nationals at any time foreign exchange equivalent to US$120 against a written request indicating the reason for the purchase; the transfers were limited to those made for assistance of persons abroad, i.e., mainly to family remittances and student remittances. The banks raised their commission on each application from Rls 4 to Rls 130. Only mail or telegraphic transfers could be purchased under this arrangement. The travel allowances were not affected.

February 9. A bilateral payments agreement was concluded with Bulgaria; settlements were to be effected through accounts denominated in U.S. dollars with the Bulgarian Foreign Trade Bank and with the Bank Markazi.

February 19. The registration of import orders and the opening of letters of credit for specified types of automobiles were no longer permitted.

March 7. Foreigners could, subject to prior approval by the central bank, maintain time deposits in foreign currencies in Iran. The minimum term was set at three months.

March 20. Imports from Rhodesia were prohibited.

March 20. The export subsidy on certain skins (salambore) was terminated.

March 21. The Import/Export Regulations for the Iranian year 1346 (March 21, 1967-March 20, 1968) came into effect. The protective policy for Iranian industry was maintained. Imports of a range of goods, including cars, tractors, rubber tires, fertilizers, and sheet glass, were made subject to the prior approval of the Government. The commercial profits tax was increased on a number of products including passenger vehicles, powdered milk, and woolens. Import duties on automobiles and a wide range of other commodities were increased.

April 8. Banks were authorized to accept from Iranian nationals time deposits in foreign currencies for a minimum term of three months; both principal and interest were transferable abroad upon maturity. Such accounts could also be held at the central bank.

April 9. The import of a range of machinery items was freed from the requirement of prior approval by the Ministry of Economy.

July 1. A regional payments agreement between Pakistan, Iran, and Turkey (the members of the Regional Cooperation for Development) came into effect. Fifty per cent of each payment for visible trade (other than defense materials and border trade) between members was to be settled through clearing accounts denominated in U.S. dollars which the three central banks maintained with each other, and the other 50 per cent in convertible currency.

July 30. A five-year tax relief program for exporters was announced. With the exclusion of specified goods, income from most minor exports was exempted from taxation with effect from March 21, 1967.

September 10. Imports of coffee, tea, pepper, and certain other agricultural commodities no longer required the prior approval of the Ministry of Agriculture.

September 16. Iranian nationals were permitted to retain all foreign exchange receipts, other than export proceeds, on current accounts with domestic banks. Transfers to and from these accounts within Iran, as well as transfers abroad to the debit of the accounts, could be effected freely.

October 29. The Bank Markazi's selling rate for the U.S. dollar was reduced from Rls 76.50 per US$1 to Rls 75.50 per US$1; selling rates for other currencies quoted by the Bank were correspondingly reduced.

October 29. The advance deposit requirements for imports were decreased. That for imports of machinery under bills for collection was reduced from Rls 3 to Rl 0.50 per US$1; for other goods imported under bills for collection, the requirement was reduced from Rls 3 to Rls 2 per US$1; and for goods imported under letters of credit previously requiring deposits of Rls 11.50, Rls 31.50, or Rls 76.50 per US$1 the rates of deposit were, respectively, reduced to Rls 10, Rls 30, and Rls 75.50 per US$1. A commission of Rl 1 per US$1 of the import value, payable to the Bank Markazi at the time of the import registration, was instituted for all imports.

Note.—The following changes took place early in 1968:

February 15. The Bank Markazi's selling rate for the U.S. dollar was reduced from Rls 75.50 per US$1 to Rls 75.175 per US$1.

February 15. At the time of registration of imports, importers were required to pay a registration fee of Rls 3 per US$1 of the amount of the import order; previously, this fee was Rl 1 per US$1.

Iraq

Exchange Rate System

The par value is 2.48828 grams of fine gold per Iraqi Dinar or ID 1 = US$2.80. Transactions in the official market are carried out in any of the listed currencies 1 or in Iraqi dinars through nonresident accounts in Iraq. The Central Bank of Iraq quotes official rates for the listed currencies for its transactions with authorized dealers. The official rates for the U.S. dollar on December 31, 1967 were US$2.80758 buying, and US$2.79288 selling, per ID 1. An exchange tax is levied on the Iraqi dinar equivalent of foreign exchange granted to a person who leaves Iraq or resides abroad, except on amounts transferred for the account of persons studying abroad, persons on official missions, and foreigners (other than those married to Iraqis). The tax is 8 per cent for the first ID 500 (with the exception of certain exempted amounts; see section on Payments for Invisibles, below) and 12 per cent on amounts above ID 500 (with the same exemptions) granted during any calendar year. There is a small free market (mainly in banknotes) in Iranian rials and Saudi Arabian riyals.

Administration of Control

The Board of Administration of the Central Bank of Iraq is entrusted with all powers and responsibilities in connection with exchange control; it has delegated this authority to the Foreign Exchange Committee, headed by the Governor of the Central Bank, to the Foreign Exchange Department of the Central Bank, and to the licensed dealers. Foreign exchange transactions must take place through a licensed dealer unless otherwise authorized by the Board of Administration. The Directorate-General of Imports and Exports in the Ministry of Economy is the licensing authority for imports and exports.

Prescription of Currency

Settlements must be made in any of the listed currencies,1 or, under bilateral payments agreements,2 in dinars or pounds sterling through the appropriate clearing account.

Nonresident Accounts

The opening of a nonresident account requires the approval of the exchange control authorities. Transactions permitted in convertible currencies may alternatively be settled in Iraqi dinars through nonresident accounts. Nonresident accounts are divided into ordinary nonresident accounts, which arise from transactions in respect of current payments, and special nonresident accounts, which arise from transactions in respect of capital transfers.

Imports and Import Payments

All imports from Israel, Rhodesia, and South Africa and all imports from Hong Kong other than certain capital goods are prohibited. Imports of 69 commodities are prohibited from all sources. Imports of jute, sugar, tea, olive oil, certain medical supplies, automobiles, and some other commodities are a government monopoly. All private imports except those of the oil companies are licensed in accordance with an annual import program. Quotas are distributed by the Directorate-General of Imports and Exports in accordance with its own criteria; each category of importer is limited to specified types of commodities. Imports of consumer goods generally are more heavily restricted than those of raw materials and construction materials for industrial use. Some commodities may only be imported by government agencies or state trading companies; other commodities may also be imported by registered private importers or by contractors who have entered into contracts with the Iraqi Government. New importers who meet the requirements may also be granted import privileges. Licenses for private imports are valid for 6 months from the date of issue and are automatically renewable for a similar period if a letter of credit has been opened. Licenses for imports by the Government or by official agencies are valid for 12 months from the date of issue.

Licensed dealers make exchange available upon presentation of the exchange control copy of the import license, except in some instances where reference has to be made to the Central Bank.

Payments for Invisibles

All payments for invisibles require permission. Exchange is usually granted for travel,3 educational and medical expenses abroad, freight on exports carried on a c. & f. basis, insurance premiums, royalties, etc. Exchange is not granted to merchants for the insurance abroad of their imports or exports. Licensed dealers are permitted to transfer up to ID 50 a month for family maintenance on behalf of foreign nationals 'resident in Iraq, provided that remittances do not exceed half of the resident's monthly income; it is necessary to refer to the exchange control authorities for amounts exceeding this limit.

There is a basic travel allowance of ID 100 a calendar year for each person 18 years of age or over, of ID 50 for persons aged between 5 and 18, and of ID 25 for children 5 years of age or younger, subject to a limit of ID 200 for each passport covering more than one person. Tourist travel exchange additional to the basic allowances is subject to ad hoc approval of the Central Bank. Travelers may take out ID 5 in Iraqi currency notes and the equivalent of ID 15 in foreign currency. Residents on a pilgrimage to Saudi Arabia are permitted to take out the equivalent of ID 150 in listed currencies or in Saudi Arabian riyals (ID 75 for persons over 5 and under 18, and ID 25 for children 5 years of age or younger).

An exchange tax is levied on the Iraqi dinar equivalent of foreign exchange granted to a person who leaves Iraq or resides abroad, except on amounts transferred for the account of persons studying abroad, persons on official missions, and foreigners (other than those married to Iraqis). The tax is 8 per cent on the first ID 500 granted during any calendar year and 12 per cent on amounts above ID 500, with the following exemptions: ID 150 for persons 18 years of age or over, ID 75 for persons aged between 5 and 18, and ID 25 for children 5 years of age or younger.

Travelers leaving Iraq must deposit with an authorized bank 10 per cent of the Iraqi dinar equivalent of the foreign exchange granted. The deposit is refunded upon the traveler's return to Iraq, subject to the fulfillment of certain formalities. The following are exempt from the deposit requirement: officials of government, semigovernment, and public utility departments, certain persons traveling for study purposes, foreigners except non-Iraqi wives of Iraqi nationals, and persons leaving on a pilgrimage.

Exports and Export Proceeds

All exports to Hong Kong, Israel, Rhodesia, and South Africa and exports of certain goods to all other countries are prohibited. The Ministry of Economy has authority to prohibit exports of agricultural products when supply falls short of domestic demand. All other exports are licensed freely. The re-export of such goods as cars and agricultural machinery is prohibited.

Exporters must generally undertake to repatriate their foreign exchange proceeds through a licensed dealer and to surrender them. Proceeds from exports of dates taken by sailing boats to countries of the Persian Gulf area (excluding Iran) and India are exempt from these requirements.

Proceeds from Invisibles

Foreign exchange receipts from invisibles must be surrendered to a licensed dealer. Travelers may bring in foreign exchange, including currency notes, in unlimited amounts, provided that they are declared to the Iraqi customs; foreigners may re-export any unused amount. Travelers may bring in ID 5 in Iraqi notes.

Capital

Nonresidents may import capital freely, but they must deposit it with a licensed dealer; such deposits may be converted into local currency at the official rate, and repatriation to the country of origin is permitted. With minor exceptions, foreign companies starting operations in Iraq must use Iraqi capital to the extent of at least 51 per cent of their total capital. One half of the profits after income tax of foreign service companies (companies rendering services only, including banking and insurance firms) is transferable. The transfer of profits net of income tax from foreign investments in other economic activities is limited to 10 per cent per annum of the paid-up capital for trading companies, and to 20 per cent of the paid-up capital for industrial companies. These percentages are applicable for each year separately. They also apply to profits on capital resulting from reinvestment of profits in excess of the transferable percentages. Arab capital invested in Iraq is exempt from these percentage limitations. Interest payments may be made freely, subject to administrative checking. Imports of capital from Israel are prohibited. All transfers of capital abroad by residents, whether Iraqis or foreigners, require exchange control approval.

Under the Industrial Development Law (No. 31 of 1961) and the Industrial Promotion Law (No. 164 of 1964), specified enterprises in Iraq are granted partial or total exemption during the first five years of operation from income tax, stamp duties, and customs duties on their profits up to 10 per cent of paid-up capital, provided that (1) the principal work of the enterprise is done by machine; (2) all workers and employees other than essential technicians or experts are Iraqi citizens or Arabs; (3) the value of machinery and tools required, excluding power-generating plant, exceeds ID 3,000; and (4) foreign non-Arab participation in the enterprise does not exceed 40 per cent. Similar exemptions for profits up to 5 per cent of paid-up capital are granted during the second five-year period of operation. The specified enterprises are those whose main purpose is to process raw materials into semimanufactured or finished products or to process semimanufactured products into finished products, including assembly. Under the Iraqization Law of June 1961, all branches of foreign firms and all foreign-owned firms (except banks)4 must have a majority of equity capital held by Iraqi nationals; this law does not cover export agencies and operations requiring special skills.

Gold

Residents may freely purchase, hold, and sell gold in Iraq. Imports and exports of gold in any form require the approval of the Central Bank. Gold may be brought into Iraq, provided that it is declared at the point of entry on a foreign exchange form.

Changes during 1967

January 1. In implementation of the third stage of the Arab Common Market Agreement, certain commodities were exempted from import and export restrictions in trade with the member states.

January 1. The import program for the public and private sectors for 1967 took effect. Imports (other than defense items and goods for industrial projects executed by foreign firms) would amount to US$336 million, compared with an initial ceiling of US$364 million under the 1966 program. The import of luxury items would remain severely restricted.

January 1. The basic travel allowance was reduced from the equivalent of ID 300 to that of ID 100.

January 1. The registration of new importers was restricted and the issuance of import permits was confined to firms actively engaged in foreign trade.

June 6. Exports of oil to specified destinations were suspended. On June 26, the ban was lifted for sales to France and Turkey, and in September 1967 for sales to other countries.

June 12. Travel abroad by residents was prohibited, with the exception of official travel. The ban was lifted on December 25 for travel in Arab countries and neighboring countries only.

June 14. The issuance of import licenses was suspended. Letters of credit could no longer be opened for licenses already issued. Some of these licenses were revalidated in August, when the issuance of import licenses was resumed.

June 15. The inoperative payments agreement with Lebanon was formally terminated.

July 27. A trade agreement with the United Arab Republic was signed, which provided for the reciprocal elimination of import duties. The swing under the bilateral payments agreement was increased to £ 1.5 million.

November. Certain commodities could be exported on the basis of compensation transactions.

Ireland

Exchange Rate System

The par value is 2.13281 grams of fine gold per Irish Pound or £Ir 1 = US$2.40. Transactions in sterling take place at parity. Exchange rates for other currencies are based on London market rates. Certain capital transactions involving investment currency or property currency (see section on Capital, below) take place at different effective rates. On February 15, 1961, Ireland accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement.

Administration of Control

Exchange control is operated by the Central Bank. Much of the authority for approving normal payments is delegated to commercial banks authorized for this purpose. Import licenses, where necessary, are issued by the Department of Industry and Commerce if the goods are of an industrial nature, or by the Department of Agriculture and Fisheries if the goods are agricultural in character. Import licensing is not used for exchange control purposes. Import and export controls are administered by the Revenue Commissioners.

Prescription of Currency

Ireland is a member of the Sterling Area, and payments to and from other parts of the Sterling Area may be made freely in any Sterling Area currency; certain insurance payments within the Sterling Area, however, may be made in non-Sterling Area currencies. Authorized payments to countries outside the Sterling Area other than Rhodesia may be made in Irish pounds or sterling through an External Account or in any non-Sterling Area currency other than Rhodesian pounds. The proceeds of exports to countries outside the Sterling Area other than Rhodesia must be received in Irish pounds or sterling through an External Account or in any non-Sterling Area currency other than Rhodesian pounds. The proceeds of permitted exports to Rhodesia must be received in non-Sterling Area currency other than Rhodesian pounds; payments to Rhodesia are subject to special regulations.

Nonresident Accounts

Accounts of persons resident in other countries of the Sterling Area are treated as resident accounts. Accounts of persons resident in countries outside the Sterling Area are treated as nonresident accounts and, with the exception of Rhodesian Accounts, are designated External Accounts. These may be credited with payments authorized for transfer to countries outside the Sterling Area other than Rhodesia, with transfers from other External Accounts in Irish pounds or in sterling, and with the proceeds in Irish pounds of any non-Sterling Area currency other than Rhodesian pounds sold by a resident of a country outside the Sterling Area to an authorized bank in Ireland. Balances on these accounts may be transferred freely to other External Accounts in Irish pounds or in sterling, used for payments to residents of the Sterling Area, or converted through an authorized bank in Ireland into any non-Sterling Area currency other than Rhodesian pounds.

Accounts held by or on behalf of residents of Rhodesia are designated Rhodesian Accounts. The opening of such accounts, and all debits and credits thereto, require the prior approval of the Central Bank.

Imports and Import Payments

All imports of commodities originating in Rhodesia require a special license. With this exception, the import of goods into Ireland is subject to two types of administrative control. Under one type, which covers only a limited range of commodities for protective and other nonbalance of payments purposes, imports of certain commodities are subject to quantitative restrictions which, in most cases, are on a world-wide basis. Individual import licenses are required for these goods and are used to limit the quantity of goods imported. In addition, special quota restrictions apply to certain textiles and yarns originating in any of 16 specified countries or territories.1 All other imports are free of import licensing. Under the other type of control, prior permission of the Central Bank is required before orders may be placed for goods originating outside the Sterling Area, if they are not to be used in Ireland or are to be delivered more than nine months after the date of the order.

For permitted imports, appropriate exchange or permission to credit Irish pounds or sterling to an External Account is granted automatically. Exchange control forms are required for import payments exceeding £2,000 to countries outside the Sterling Area.

Payments for Invisibles

Payments to other territories of the Sterling Area are not subject to exchange control unless they are for transactions outside the Sterling Area. Payments to residents of countries outside the Sterling Area require approval. Approval to make payments for most invisibles is given by the authorized banks; for other invisibles, it is given by the Central Bank.

For tourist travel outside the Sterling Area (other than to Rhodesia) there is a basic allowance for residents of the State of £250 a person for each trip. For business travel, up to £1,500 is allowed for each journey. Limits are also established for allowances for education and other purposes. Applications for larger amounts are approved, provided that no unauthorized export of capital is involved. Not more than £250 of a foreign currency allowance may be issued in the form of currency notes. Persons traveling to destinations outside the United Kingdom (other than to Rhodesia) may also take with them up to £25 in Sterling Area currency notes. Travelers who are resident outside the Sterling Area (other than in Rhodesia) may take with them any foreign currency notes that they brought into Ireland. There is no restriction on the amount of Irish or other banknotes that may be taken to the United Kingdom.

Exports and Export Proceeds

A system of export licensing is applied to a limited range of goods. There is a special restriction on the export of a number of items to Rhodesia. Exporters of goods to countries outside the Sterling Area must obtain payment for the goods within six months of shipment, if the value of the goods exceeds £100. When payment is received in non-Sterling Area currencies, the exchange must be offered for sale to an authorized bank. Exchange control forms are required for exports exceeding £2,000 to countries outside the Sterling Area.

Proceeds from Invisibles

There are no specific requirements governing exchange receipts from invisibles, but if non-Sterling Area currencies are received they must be offered for sale to an authorized bank or permission for their retention must be obtained. Any non-Sterling Area currency held by a person after his return from a trip abroad may be retained for three months from the date he received the exchange, for use on a subsequent trip abroad. There are no limitations on the import of Irish or foreign banknotes.

Capital

Exchange control approval is required for all transfers of capital to countries outside the Sterling Area. Applications for transfer of capital at the official market rate of exchange by residents of the State emigrating to countries outside the Sterling Area (other than to Rhodesia) are approved up to a limit of £5,000 a family. Where the total value of an emigrant's assets exceeds £5,000, the transfer of the excess amount outside the Sterling Area is restricted for a period of four years from the emigrant's redesignation as a nonresident, i.e., from the date of departure from Ireland. Thereafter, the assets would be treated in the same way as those of non-Sterling Area residents who had never been resident in Ireland. However, permission is given at any time after redesignation for the restricted funds to be transferred abroad through the investment currency market (see below) or invested in Sterling Area securities. Applications for the transfer of resident-owned capital for purposes other than emigration are considered on their merits.

There are no restrictions on the inflow of capital, but purchases of unquoted Irish securities by nonresidents of the Sterling Area require approval, and the purchase of nonurban land by foreign nationals in most cases requires approval by the Land Commission. Incoming capital received in non-Sterling Area currencies must be offered for sale to an authorized bank. However, investment currency, i.e., the foreign currency proceeds from the sale of non-Sterling Area securities 2 sold outside the Sterling Area, may be fully reinvested in non-Sterling Area securities, provided that the securities sold were held prior to April 7, 1965, or acquired by “switches” from securities so held, and that the investment is carried out within six months from the date of sale through a bank, a stockbroker, or a solicitor. Where the securities sold were purchased with investment currency on or after April 7, 1965, 25 per cent of the sale proceeds must be surrendered at the official rate. Investment currency may be invested temporarily in certificates of deposit with up to six months to run to final maturity, without incurring the need to comply with the 25 per cent requirement on resale, provided that the limit of six months for the holding of investment currency is not exceeded. In certain cases, the proceeds from the sale or liquidation of direct investments outside the Sterling Area are eligible for investment in non-Sterling Area securities, provided that 25 per cent of such proceeds is surrendered at the official rate. The foreign currency proceeds (referred to as property currency) from the sale outside the Sterling Area of property owned by residents, mainly houses and apartments, may be used, subject to individual permission, to purchase for personal use a house or apartment in a country outside the Sterling Area; payments for attendant expenses and improvements must also be made with property currency. Approval is normally limited to one property a family, and purchases of property currency are limited to reasonable amounts. Transactions in securities are controlled to ensure that capital is not transferred outside the Sterling Area. Dealings in Irish registered securities are permitted freely between residents of the Sterling Area. Specific approval is required for all dealings in securities payable in Rhodesian pounds.

Gold

Dealings in gold coin and gold bullion are restricted. Permission is normally granted to residents to acquire gold coins for numismatic purposes. There are no restrictions on the import of gold coin or bullion but the permission of the Central Bank is required for export. Such permission is not normally granted except to industrial users.

Changes during 1967

January 2. Export control on cement and watches was removed.

March 1. The export to Rhodesia of certain specified goods was prohibited except under and in accordance with a license issued by the Minister for Industry and Commerce.

April 24. Blocked Accounts were abolished. Following the abolition of Blocked Sterling Accounts in the United Kingdom and the unification of the market for blocked sterling with the official exchange market, Irish currency and sterling that previously had to be credited to Blocked Accounts in Ireland when accruing to nonresidents of the Sterling Area became normally eligible for credit to External Accounts, and Irish currency already held on Blocked Accounts could be transferred to External Accounts. However, restricted assets in excess of £ 5,000 of persons granted emigration facilities on or after August 18, 1966 were not affected. Persons who were granted emigration facilities before August 18, 1966 and whose assets in excess of entitlements were held subject to the rules in force before that date could have such assets or the proceeds from their sale credited to External Accounts.

May 18. All non-Sterling Area currencies were designated as specified currencies. The prescription of currency regulations applicable to Rhodesia were revised correspondingly.

May 27. The import of certain types of automobile tires of U.K. manufacture required a specific license.

June 30. Subject to prior approval by the Central Bank of Ireland, authorized banks could issue certificates of deposit in non-Sterling Area currencies. Permission would normally be granted for certificates denominated in U.S. dollars and with a maturity of not more than five years. Purchases of such certificates by residents other than banks could only be made with investment currency and through a bank, stockbroker, or solicitor; banks could freely use to purchase certificates of deposit any foreign currency balances held for their own account or held on behalf of customers, but the sales or maturity proceeds of such holdings could not be sold as investment currency. Transactions in certificates for and on behalf of residents of the United Kingdom could only be effected through U.K. authorized depositories, and transactions on behalf of residents of other Sterling Area territories required the prior approval of the Central Bank. The issue or sale of certificates to nonresidents of the Sterling Area was freely permitted, provided that payment was made in accordance with the prescription of currency regulations; for such transactions and for payment of sales or maturity proceeds, investment currency could not be used.

November 18. The par value was changed from £Ir 1 = US$2.80 to £Ir 1 = US$2.40.

November 30. The importation of all types of fertilizer manufactured or produced in, or consigned from, Eastern Germany was prohibited, except under and in accordance with a license issued by the Minister for Agriculture and Fisheries.

December 22. Ireland became a full contracting party to the GATT and invoked Article XXXV of the General Agreement in respect of Japan.

Israel

Exchange Rate System

The par value is 0.253906 gram of fine gold per Israel Pound or I£3.50 = US$1. All exchange transactions take place at rates based on the par value.

Administration of Control

Exchange control is administered by the Department of Foreign Exchange Control of the Ministry of Finance under the responsibility of the Controller of Foreign Exchange in cooperation with other government agencies, and is carried out through authorized banks.

Prescription of Currency

Payments and receipts must be effected in the currency and manner prescribed by the exchange control authorities. Settlements with countries with which payments agreements are in force1 are usually made in U.S. dollars or sterling as accounting units.

Nonresident Accounts

Nonresidents' funds are held either on foreign currency accounts or on local currency accounts. A nonresident abroad may use his foreign currency account freely; when in Israel, he may convert funds held on the account into local currency at the official rate. Local currency accounts of nonresidents are of two types: (1) Registered Accounts—for payments to and holdings of foreign aviation, shipping, insurance, and film companies and for holdings of former residents—may be established only with special approval. Aviation, shipping, and insurance companies may freely convert at the official rate of exchange any amounts held on these accounts which are surplus to requirements; film companies may do so under individual arrangements made with each company. Registered Account funds held by former residents may be used for investment in listed Israel securities, for purchase of real estate, for tourist expenses in Israel up to an amount of I £100 a day for the account holder and for each member of his family, for remittances of up to I £2,500 in support of relatives who are residents of Israel, for the settlement of taxes payable in Israel by the owner of the account, and for donations to public and charitable institutions. Ownership of Registered Accounts may not be transferred. (2) Blocked Accounts may be used to hold funds derived from former investments which are not eligible for transfer at the official rate and funds left behind in Israel by tourists. Balances may not be transferred from one nonresident to another, but the accounts may be liquidated by purchasing foreign securities against Israel pounds and selling them abroad against foreign exchange. Otherwise, Blocked Accounts may be used within Israel for the same purposes as Registered Accounts but no limit is placed on the amounts that may be withdrawn.

Imports and Import Payments

A few imports are prohibited from all sources. Importers of goods listed in the Free Import Orders (about one half of total imports in 1967) must be approved as importers by the Ministry of Commerce and Industry. These goods are free of all licensing and restriction. All other imports are subject to licensing. For commodities on the Automatic Approval List (about 40 per cent of total imports), licenses are issued automatically upon application. All individual import licenses must be countersigned by the Department of Foreign Exchange Control of the Ministry of Finance. The currency and method of payment are prescribed in each license; if a convertible currency is prescribed, payment may be made in any convertible currency. Six basic food products (frozen meat, milk powder, wheat, oilseeds, edible fats, and sugar) are imported exclusively by or for account of the Government of Israel.

Exchange to pay for items listed in the Free Import Orders or to pay for licensed imports is granted automatically. An import license may prescribe whether, if payment is to be made by documentary credit, the full amount of foreign currency required must be purchased at the time of opening the credit; in such cases, funds not transferred abroad immediately must be deposited in a special account with the Bank of Israel until transfer is made. Licenses are issued for imports of goods on consignment, provided that the recipient of the license imports goods valued at US$250,000 within three months and undertakes to deposit 10 per cent of the value of the goods in local currency with the Bank of Israel through an authorized bank. Each license is valid only for a single commodity, and an importer cannot receive more than two such licenses a year. The approval of the Department of Foreign Exchange Control is required for all imports effected under foreign credits.

Payments for Invisibles

Most payments abroad for invisibles require individual licenses. Each resident is allowed exchange equivalent to US$30-250, which is obtainable on demand, for certain purposes such as the purchase of books, membership dues, and registration in a university. For tourist travel abroad, there is an exchange allowance equivalent to US$350 a traveler for each journey. Not more than I£100 in Israel banknotes may be taken out by travelers. Foreign tourists leaving Israel are permitted to repurchase through authorized dealers part of the same foreign currency they previously exchanged into Israel pounds, but not more than the equivalent of I £1,050. Residents traveling abroad must pay a travel tax; the tax is I£255 plus 7.5 per cent of the price of the ticket for travel by sea, and I£290 plus 7.5 per cent of the price of the ticket for travel by air. Exporters doing more than US$100,000 of export business a year are exempt from travel tax on business trips.

Exports and Export Proceeds

Most exports do not require licenses if paid for in freely convertible currencies. For some commodities, however, export licensing is retained for the purpose of quality control. The Ministry of Commerce and Industry maintains a check on export transactions with a low value-added content which are made with bilateral partners: this is done to discourage switch transactions. Export proceeds in foreign currencies must be surrendered or held on a PAZAK account (see section on Proceeds from Invisibles, below).

Proceeds from Invisibles

Exchange proceeds from invisibles must, in general, be surrendered. Alternatively, they may be kept in foreign exchange on PAZAK accounts, balances on which may be exchanged into Israel currency at any time or used to make authorized payments.

One third of the foreign exchange received by residents of Israel as restitution payments, and as pensions by disabled soldiers who served in World War II, may be retained in TAMAM accounts (see section on Capital, below).

For ten years after entering Israel, new immigrants are exempt from surrendering their foreign exchange to the Treasury, and they may keep these currencies with authorized banks in Israel or with banks abroad.

Tourists visiting Israel are expected to bring with them the amounts of foreign currency that they will need during their stay. Not more than I£ 100 in Israel banknotes may be brought in by travelers. Tourists and others visiting Israel who are holders of Registered Accounts (see section on Nonresident Accounts, above) may draw upon such accounts to the extent of I £100 a day for themselves and the same amount for each member of their families; if they are holders of Blocked Accounts, they may draw on these without limit.

Capital

Foreign exchange representing incoming capital has to be surrendered at the official rate or held in a PAZAK account (see section on Proceeds from Invisibles, above). Capital brought into Israel for the purpose of investment may, subject to approval, be granted preferential treatment in accordance with the Law for the Encouragement of Capital Investments of August 16, 1959, which permits a nonresident who has made an “approved” investment in foreign currency to transfer all his profits abroad in the same currency at the official rate. Repayment and amortization of capital may also be transferred on the following terms: if the investment has been kept for less than five years, the capital may be withdrawn in five equal installments; if the investment has been kept for more than five years, it may be withdrawn immediately. Current policy is to grant “approved” status only to enterprises in selected fields of production that fulfill one of the following conditions: (1) that they are established in “priority areas”; (2) that they are export-oriented, i.e., either at least 50 per cent of output is exported or existing productive capacity is increased by at least 50 per cent while at least 50 per cent of the additional output is exported; or (3) that although for economic reasons the enterprise cannot be established in a priority area, its production is of the import-substitution type. Foreign investments made in Israel without taking advantage of the 1959 law do not benefit from these transfer privileges, but most old investments have in fact been recognized as “approved” investments. Interest and dividends on bonds or shares registered on the Tel Aviv stock exchange that have been purchased by nonresidents with exchange converted at the official rate may be transferred abroad in foreign currency at the official rate; this applies also to amounts received through sales of such shares.

Payments due to nonresidents and not permitted to be transferred abroad may be credited to Registered Accounts or Blocked Accounts, subject to prior approval by the Ministry of Finance.

Proceeds accruing from the repatriation or liquidation of foreign assets held by residents are treated in the same way as proceeds from invisibles. New immigrants may, for ten years from the date on which they first entered, retain their foreign assets and use them freely. Transfers abroad of a capital nature by residents other than new immigrants are generally not permitted.

Foreign securities may be purchased abroad only by holders of TAMAM accounts and holders of NATAD accounts; residents who do not hold either type of account may purchase foreign securities with Israel pounds from the holders of TAMAM or NATAD accounts. As a result, foreign securities are traded in Israel, against payment in Israel pounds, at premiums over their foreign prices.2 Holders of TAMAM accounts may use them to purchase abroad, for themselves or their families, securities denominated in convertible foreign currencies and quoted on certain official stock exchanges in the country of issue and, subject to submission of evidence to the authorized bank maintaining the account, for legal costs in respect of restitution payments, for travel expenses abroad exceeding the basic travel exchange allocation of US$350,3 and for certain other purposes. Foreign securities purchased by debiting a TAMAM account may be sold abroad for foreign currency and the proceeds again credited to a TAMAM account, or the securities may be sold to other residents against payment in Israel pounds or foreign currency. If the foreign securities purchased from a holder of a TAMAM account are sold to another resident for foreign currency, the proceeds are credited to a NATAD account. Holders of NATAD accounts may use them for the purchase of foreign securities both from nonresidents and from residents (including holders of TAMAM accounts), or may exchange the balances for Israel pounds at the official rate. Both TAMAM and NATAD accounts may also be used for purchases of gold, in Israel or abroad.

Gold

Residents, including private persons, may freely purchase, hold, and sell gold in any form either in Israel or abroad; purchases by private persons must be financed out of TAMAM or NATAD accounts, except for purchases of jewelry and articles containing a minor quantity of gold, such as watches. If the gold is held in Israel it must be deposited for safekeeping with an authorized bank, except for collectors' coins and personal jewelry. The import and export of gold in any form other than jewelry constituting the personal effects of a traveler, or coins, medals, and medallions, is subject to license issued by the Ministry of Finance; licenses are not normally issued except to the monetary authorities and authorized industrial users.

Changes during 1967

During the year on various dates import restrictions were further relaxed by the addition of commodities to the Free Import Orders or the Automatic Approval List and by deletion of commodities from the list of prohibited imports.

February 1. The foreign exchange allowance for foreign travel was reduced from the equivalent of US$500 to that of US$350 a traveler for each trip.

February 21. A foreign exchange allowance of the equivalent of US$250 was granted for membership dues paid by corporate bodies and for payments in respect of patent rights.

April 30. The bilateral payments agreement with Rumania was terminated.

June 23. The administration of exchange and trade controls was extended to the Old Sector of Jerusalem.

November 19. The par value was changed from I£3.00 = US$1 to I£3.50 = US$1.

November 19. Customs duties were reduced by 12.5 per cent, in order to maintain their amount in terms of local currency at the level existing before devaluation.

Italy

Exchange Rate System

The par value is 0.00142187 gram of fine gold per Italian Lira or Lit 625.00 = US$1. Market rates for spot exchange transactions in U.S. dollars are maintained between official limits of Lit 620.50 buying, and Lit 629.50 selling, per US$1. Market rates for certain other currencies 1 vary between limits which result from combining the official limits for the U.S. dollar maintained by Italy and such limits in force in the country of the other currency concerned. The monetary authorities may intervene in the forward exchange market from time to time; otherwise, forward premiums and discounts are left to the interplay of market forces. Authorized banks are allowed to engage in spot exchange transactions in any currencies, and in forward exchange transactions up to 180 days in U.S. dollars, Canadian dollars, and externally convertible European currencies. Transactions in foreign banknotes take place at freely negotiated rates.

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

Administration of Control

The exchange control system is operated by the Italian Exchange Office (Ufficio Italiano dei Cambi) on the basis of instructions issued by the Ministry of Foreign Trade. All sales and purchases of exchange pass through banks authorized for this purpose. Import and export licenses, when required, are issued by the Ministry of Finance at the request of the Ministry of Foreign Trade. Certain imports and exports require the prior visa of the National Foreign Trade Institute. Issues of securities by nonresidents require the prior approval of the Ministry of Foreign Trade and are subject to the rules governing the issuing in Italy of Italian securities. Payments to and from the Republic of San Marino or Vatican City are not subject to exchange control.

Prescription of Currency

Settlements with foreign countries may be made in U.S. dollars, Canadian dollars, or externally convertible European currencies, or in lire on Foreign Accounts.

Nonresident Accounts

The main types of accounts in Italian lire which nonresidents are allowed to maintain with authorized banks in Italy are Foreign Accounts and Capital Accounts. The use of these accounts, and of Special Accounts for certain investments, is described below.

1. Foreign Accounts may be credited with transfers from other Foreign Accounts, from Capital Accounts, and from Special Accounts Under Law No. 43, with authorized current and capital payments, with payments for approved investments abroad by residents of Italy, and with the proceeds from sales of U.S. dollars, Canadian dollars, and externally convertible European currencies. They may be debited for purchases of any of these currencies, for transfers to any other Foreign Account, Capital Account, or Special Account Under Law No. 43, for payments to residents of Italy for current and capital transactions, for payments due to residents of Italy on account of their disinvestments abroad, and for drawings in cash by the holder of the account or his delegates.

2. Capital Accounts may be credited with transfers from Foreign Accounts, from Special Accounts Under Law No. 43, and from other Capital Accounts, with Italian banknotes (in denominations other than Lit 50,000 or Lit 100,000) sent to Italy by banks abroad, and with the proceeds from the liquidation of foreign investments in Italy not made under the provisions of Law No. 211 of March 2, 1948 or Law No. 43 of February 7, 1956 (see below). They may be debited for transfers to any other Capital Account or to Foreign Accounts and for the purchase of investments not made under Law No. 43.

3. Special Accounts Under Law No. 43 of February 7, 1956 are accounts in the names of nonresidents who have invested in Italy convertible currencies or externally convertible European currencies in accordance with the above-mentioned law. These accounts may be credited with transfers from Foreign Accounts or from other Special Accounts and with the proceeds from sales of investments that have been made in accordance with Law No. 43. They may be debited for purchases of the same currency that was originally sold and for investments in Italy, and balances on them may be transferred to Foreign Accounts, Capital Accounts, or to any other Special Account Under Law No. 43.

Nonresidents may also maintain Foreign Accounts in foreign currencies.

Imports and Import Payments

All imports of Rhodesian origin require an individual license and most are prohibited. Practically all imports from other countries except Japan, Mainland China, North Viet-Nam, and the Soviet countries are free of quantitative restriction; all goods, however, require either a bank certificate for submission to the customs authorities or a license issued by the Ministry of Foreign Trade. Commodities that still require individual licenses when imported from these other countries are included in a negative list (Tabella A Import)2 which includes goods listed under some 50 tariff headings or their parts—of these, about 16 relate to agricultural products and foodstuffs. However, the general permission to import goods not included in the Tabella A Import applies to Somalia, the United Arab Republic, and Yugoslavia only if the goods both originate in and are shipped direct from the country concerned; in addition, in respect of imports from the United Arab Republic, the payee must reside in that country or in one of the European OECD countries.

A more extensive negative list (Tabella B Import) contains those commodities which require an individual license when originating in and imported from Albania, Bulgaria, Mainland China, Czechoslovakia, Eastern Germany, Hungary, North Korea, Mongolia, Poland, Rumania, the U.S.S.R., or North Viet-Nam. The list includes some 110 tariff items or subitems related to agricultural products and foodstuffs, and about 840 tariff items or subitems related to other goods. There is a special list of commodities whose importation is unilaterally and de facto liberalized when they both originate in and are shipped from Albania, Bulgaria, Czechoslovakia, Eastern Germany, Hungary, Poland, Rumania, or the U.S.S.R.

A separate negative list applies to Japan indicating the goods (listed under 96 tariff items or their parts) that are subject to restrictive import licensing when imported from that country. A special list contains those commodities of Japanese origin (at present comprising 100 tariff items or subitems) for which import licenses are issued freely. All other goods of Japanese origin may be imported freely without an individual license, irrespective of the country from which they are shipped.

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, most oils and fats, sugar, and specified fruits and vegetables.

For imports not exceeding Lit 1 million in value, no exchange control form is required; for imports from Lit 1 million to Lit 2 million in value, a form completed by the importer is required; for imports over Lit 2 million in value, an import document completed by an authorized bank is required. The importer must choose an authorized bank as his bank of domicile, through which he must carry out all payments operations related to his import transactions.

For all authorized imports, the authorized banks provide exchange or permit payment in Italian lire to a nonresident account, provided that appropriate payment terms are observed (see section on Capital, below). International postal money orders may be used to pay for imports not exceeding Lit 1 million in value, or any lower amount within the limits established for each country to which this service is provided; amounts in excess of Lit 1 million must be approved by the representative of the Italian Exchange Office at the branch of the Bank of Italy having jurisdiction for the area concerned.

Payments for Invisibles

In principle, payments abroad for invisibles require licenses issued by the exchange control authorities. Under general authorization, however, the authorized banks may sell foreign exchange freely, provided that the necessary documents are submitted. Exchange is granted freely for remittances of earnings on investments. Residents may use international postal money orders for financial payments in the currency and within the limits established for each country; for payments exceeding Lit 1 million, however, prior authorization