Currency Restrictions

Currency Restrictions

 

in capitalist states the aggregate of quota rules directed at restricting operations (business deals) with national and foreign currency, gold, and other monetary values. These rules, issued legislatively or administratively, establish a system of procedures for the organization and execution of currency control by the competent body; these operations chiefly serve to ensure the balancing of currency receipts and payments in international accounts. The introduction of currency restrictions is associated with the unfavorable balance of payments and the exhaustion of currency and gold reserves and is one of the characteristic manifestations of the currency policy of capitalist countries in the period of the general crisis of capitalism. With the imposition of currency restrictions, exporters and other organizations and persons are obliged to give up to banks or other authorized bodies the foreign currency that they receive as a result of export and other transactions; the exporters must present a declaration of sold goods to the currency bodies; and restrictions are introduced on the sale and purchase of foreign currencies and gold, on the export of securities, and also on transactions associated with the export and import of capital.

Currency restrictions were introduced for the first time in individual capitalist countries during World War I; in the following years they were put into effect in almost all capitalist states with the exception of the USA, Switzerland, and a number of countries of Latin America. After World War II, a partial relaxation took place in the 1950’s in the systems of currency control in many Western European countries: for example, in France, free trade in gold within the country and the influx of francs from abroad were permitted, and the limit on the free outflow of francs taken abroad both by French citizens and by foreigners gradually increased. In 1959, France introduced the convertibility of the franc into dollars for current transactions by nonresidents (as a rule, foreigners), and Great Britain introduced the convertibility of the pound sterling into dollars for all persons living outside the sterling zone. Following France’s lead, West Germany, Belgium, the Netherlands, and Italy also announced the partial convertibility of their currencies into dollars and into other currencies. Similar measures were enacted by Sweden, Norway, Denmark, Finland, Austria, Ireland, and Portugal. In West Germany the full convertibility of the national currency was established; that is, both residents and nonresidents were granted unlimited freedom to take out, bring in, or transfer to the accounts of foreigners German marks on accounts in any transaction and also to exchange these marks freely for the currency of any other country.

In spite of measures carried out by the countries of Western Europe aimed at the weakening of currency restrictions, the currency control exercised by capitalist states over transactions involving monetary values continues to operate and to retain its importance in the system of state monopoly capitalism. The state resorts to the system of currency restrictions whenever a financial complication arises. For example, in France at the beginning of 1967 a law was enacted abolishing the currency regulation that permitted one to take out of or bring into the country any personal currency, French or foreign, and also to bring in or take out gold by presenting a declaration with a visa from the Bank of France to the customs authorities. However, controls remained in effect on foreign loans made in France and on French loans made abroad, on foreign capital investment in France and French investment made abroad, and also on transactions involving the exchange of patents and licenses with foreign firms. The law of 1967 stipulated the right of the French government to restore currency control over all transactions involving currencies if required for the protection of national interests. During the currency crises of 1967 and 1968 the French government used this right and again introduced restrictive measures on many currency transactions. Thus, in accord with the decree of Nov. 24, 1968, French banks are prohibited from buying from foreign banks banknotes issued by the Bank of France; the outflow of French francs taken out by French citizens is restricted; and French banks are prohibited from granting certain kinds of credit to nonresidents without special permission from the Bank of France.

REFERENCE

Radushinskii, I. G., Valiutnoe zakonodatel’stvo kapitalisticheskikh gosudarstv. Moscow, 1963.

A. B. AL’TSHULER

References in periodicals archive ?
the effect of economic factors, including inflation and fluctuations in interest rates and foreign currency exchange rates, as well as the designation of Venezuela as a highly inflationary economy and the devaluation of its currency, the availability of various foreign exchange systems including limited access to SICAD II or the introduction of new exchange systems in Venezuela, foreign exchange restrictions, particularly foreign currency restrictions in Venezuela and Argentina, and the potential effect of such factors on our business, results of operations and financial condition;
Dafza's numerous business and investment incentives will be highlighted to F&B companies as well - including 100 per cent tax exemption, 100 per cent foreign ownership, zero currency restrictions, and a very business-friendly regulatory environment.
Business incentives The official from SEZAD also said that the port town offers a range of investment incentives, such as 100 per cent foreign ownership, zero corporate tax, zero personal income tax, exemption from taxes for 30 years, no currency restrictions and trading, no minimum capital requirement, exemption from import and export duties, lease period of up to 50 years and quick approval procedures through One Stop Shop services.
Global Banking News-January 19, 2015--Central bank says Argentina to keep currency restrictions
Like the rest of the eased trade, travel and currency restrictions announced last week, the rum rules will take effect when official revise and publish the regulations -- perhaps weeks away.
The Freezone provides an integrated portfolio of investment incentives and facilities, including a strategic location in the centre of the city and near the Dubai International Airport, modern infrastructure, full tax exemption, 100 per cent foreign ownership, and no currency restrictions.
DAFZA is hosting seminars in Germany to reveal how the Freezone offers numerous investment incentives such as a unique geographical location, 100 per cent tax exemption, 100 per cent foreign ownership, and zero currency restrictions.
Nevertheless, in line with Fitch's criteria, the agency assumes significant correlation between the risk of foreign currency and local currency restrictions being imposed in a particular country, and therefore will rarely assign a Long-term Local Currency IDR more than one notch above the Long-term Foreign Currency IDR.
He asked whether there will be currency restrictions while entering the CU.
The deal with Sudan comes at a time when airlines consider cutting back flights because of currency restrictions banning them repatriating profits.
LATAM revenue declines 6% as Venezuela foreign currency restrictions negative ly impact $72 million of service revenue recognition in the first quarter; company gross margins negatively impacted by 2%
CAIRO (TAP) - Egypt announced on Tuesday voters had approved overwhelmingly a constitution drafted by President Mohamed Morsi's Islamist allies, and the government imposed currency restrictions to cope with an economic crisis worsened by weeks of unrest.