Instruction No. 205 on Filling Out Reporting Form No. 1-AM "External Financial Operations of Foreign Economic Activity Subjects"

Registered with the Ministry of Justice of the Republic of Tajikistan No. 740 on June 9, 2014. Approved by Resolution No. 69 of the Board of the National Bank of Tajikistan dated April 22, 2014. Amendments and additions registered with the Ministry of Justice of the Republic of Tajikistan No. 7401 on January 21, 2020. Amendments and additions approved by Resolution No. 167 of the Board of the National Bank of Tajikistan dated December 25, 2019. Amendments registered with the Ministry of Justice of the Republic of Tajikistan No. 7402 on February 1, 2023. Amendments approved by Resolution No. 153 of the Board of the National Bank of Tajikistan dated December 30, 2023. Amendments registered with the Ministry of Justice of the Republic of Tajikistan No. 7403 on November 4, 2024. Amendments approved by Resolution No. 36 of the Board of the National Bank of Tajikistan dated September 19, 2024.

Instruction No. 205 on Filling Out Reporting Form No. 1-AM "External Financial Operations of Foreign Economic Activity Subjects" Instruction No. 205 on Filling Out Reporting Form No. 1-AM "External Financial Operations of Foreign Economic Activity Subjects" (hereinafter referred to as the "Instruction") has been developed in accordance with Articles 85 and 86 of the Law of the Republic of Tajikistan "On the National Bank of Tajikistan" and defines the procedure for preparing reports on external financial operations of foreign economic activity subjects, including actual and forecast data on balances and transactions with financial assets and liabilities between residents of the Republic of Tajikistan and non-residents, for the purpose of compiling the balance of payments, international investment position, and external debt of the Republic of Tajikistan.

CHAPTER 1. GENERAL PROVISIONS

1. The following main terms are used in this Instruction:

• foreign economic activity accounts – a consolidated expression of economic relations between residents and non-residents of the country;
• international investment position (IIP) – a report reflecting the value of financial assets of residents over a specific period, representing claims on non-residents or gold bullions stored as reserve assets, and liabilities of residents to non-residents;
• balance of payments – a statistical report summarizing economic transactions between residents and non-residents over a specific period;
• accounts of other changes in financial assets and liabilities – a report reflecting other flows, distinct from transactions between residents and non-residents, driven by economic events (e.g., changes caused by revaluation, exchange rate fluctuations, etc.);
• residents: a) legal entities and organizations not being legal entities, established in accordance with the legislation of the Republic of Tajikistan, located within the Republic of Tajikistan; b) branches and representative offices of legal entities and organizations not being legal entities of foreign states, located within the Republic of Tajikistan and conducting business activities in the Republic of Tajikistan; c) diplomatic and other official representations, consular institutions of the Republic of Tajikistan located outside the Republic of Tajikistan; d) individuals, citizens of the Republic of Tajikistan residing in the Republic of Tajikistan; citizens of the Republic of Tajikistan residing abroad for less than 12 months; citizens of the Republic of Tajikistan working in organizations specified in sub-paragraph c) of this paragraph; e) individuals, citizens of the Republic of Tajikistan who have gone abroad for study or treatment, regardless of the duration of stay; f) individuals, citizens of foreign states residing in the Republic of Tajikistan for 12 months or more, except for citizens of foreign states located in the Republic of Tajikistan for study, treatment, and work in diplomatic and consular institutions of foreign states; g) the Republic of Tajikistan, its administrative-territorial units participating in relations regulated by the foreign exchange legislation of the Republic of Tajikistan.
• non-residents: a) legal entities and organizations not being legal entities, established in accordance with the legislation of foreign states, located outside the Republic of Tajikistan; b) branches and representative offices of legal entities and organizations not being legal entities of the Republic of Tajikistan, located outside the Republic of Tajikistan and conducting business activities outside the Republic of Tajikistan; c) diplomatic and other official representations, consular institutions of foreign states located in the Republic of Tajikistan and outside it; d) individuals, citizens of foreign states residing outside the Republic of Tajikistan; citizens of foreign states residing in the Republic of Tajikistan for less than 12 months; citizens of foreign states located in the Republic of Tajikistan for study, treatment, and work in diplomatic and consular institutions of foreign states in the Republic of Tajikistan, regardless of the duration of stay; e) individuals, citizens of the Republic of Tajikistan residing outside the Republic of Tajikistan for 12 months or more, except for citizens of the Republic of Tajikistan located outside the Republic of Tajikistan for study, treatment, and work in diplomatic and consular institutions of the Republic of Tajikistan in foreign states; f) international organizations, their branches and representative offices; g) foreign states, their administrative-territorial units participating in relations regulated by the foreign exchange legislation of the Republic of Tajikistan;
• investment – capital investment aimed at generating profit;
• financial asset – any claim corresponding to a liability. Financial assets consist of claims and the "gold bullions" component within monetary gold;
• classification of financial assets and liabilities – applied to balances of financial assets and liabilities, related transactions, as well as other changes related to financial assets and liabilities. The main types of classification are by type of financial instruments, functional categories, and maturity terms;
• types of financial instruments – three common categories of financial assets and liabilities are used in foreign economic accounts:
  1. equity instruments and shares/units of investment funds;
  2. credit instruments;
  3. other financial assets and liabilities.
• equity instruments and shares/units of investment funds – financial instruments granting ownership rights in economic units, which may be represented by shares, units, certificates of equity participation, depositary receipts, or similar documents;
• credit instruments – instruments requiring repayment of principal and/or interest/profit at a specified future time. Functional categories constitute the main classification used for all financial operations, balances, and income in foreign economic statistics. Five functional categories of investments are distinguished:
  • direct investments;
  • portfolio investments;
  • financial derivatives (excluding reserves) and employee stock options;
  • other investments;
  • reserve assets.
• direct investments – a category of cross-border investments where a resident of one country exercises control or has significant influence over the management of a resident of another country. Direct investment relationships arise when the direct investor directly owns 10 percent or more of the share capital of the direct investment enterprise;
• portfolio investments – defined as transactions between residents and non-residents and their balances, related to credit securities or equity securities, except those included in direct investments or reserve assets. Foreign portfolio investments are monetary and material investments in credit securities and equity shares, providing the investor with less than 10 percent participation in the share capital of the enterprise;
• financial derivatives (financial derivative instruments) – financial assets and liabilities providing for risk transfer. A financial derivative contract is a financial instrument linked to another specified financial instrument, indicator, or exchange commodity, through which specific financial risks can be traded on financial markets, independent of assets. There are two broad categories of financial derivatives – options and forward-type contracts. Classification of financial derivatives is also carried out by asset categories: currency, interest rate, equity instruments, commodity, credit, and other derivatives;
• other investments – a residual category including balances and transactions between residents and non-residents apart from those related to direct investments, portfolio investments, financial derivatives, and reserve assets;
• debt/Islamic credit (Islamic financing) refinancing/restructuring – a bilateral agreement between borrower and lender regarding the official deferral of credit/Islamic credit (Islamic financing) servicing payments, establishment of new and usually longer maturity terms, or replacement of existing debt instrument(s), including overdue liabilities, with a new debt instrument(s). Debt/Islamic credit (Islamic financing) refinancing also implies changing terms while maintaining the same instrument type, same principal amount, and same lender as in the case of old debt;
• debt/Islamic credit (Islamic financing) reorganization – an agreement to modify established terms of debt/Islamic credit (Islamic financing) servicing, involving both lender and borrower (and sometimes third parties). One of the participants in the credit/Islamic financing reorganization process is usually the government acting as borrower, lender, and guarantor; however, credit/Islamic financing reorganization may also involve the private sector, for example, in cases of debt obligation exchange. Debt/Islamic credit (Islamic financing) reorganization usually implies easing originally established terms of the debt obligation/credit/Islamic credit (Islamic financing) concluded by the borrower. This may be related to liquidity problems, i.e., the borrower's lack of funds necessary for an upcoming debt servicing payment, or sustainability problems, resulting in the borrower unlikely being able to repay its debt obligations/credit/Islamic financing (Islamic financing) in the medium term;
• debt/Islamic credit (Islamic financing) forgiveness – partial or full voluntary cancellation of a debt obligation/credit/Islamic credit (Islamic financing) by the lender in accordance with an agreement concluded between the lender and borrower;
• debt/Islamic credit (Islamic financing) assignment – a tripartite agreement between the lender, former borrower, and new borrower, according to which the new borrower assumes the unpaid obligations of the former borrower to the lender and bears responsibility for repaying the debt/Islamic credit (Islamic financing).
• Islamic deposit or savings – monetary funds and other valuables of individuals and legal entities deposited in an Islamic financial institution on terms of full repayment with or without profit to the depositor or their representative upon demand or at agreed terms, in compliance with Islamic financing principles:
• interest – investment income to be received by lenders on certain types of financial assets – deposits, debt securities, loans and borrowings, and other receivables, for providing financial assets to another economic unit. The amount of accrued interest may be determined as a rate expressed in percent of the outstanding debt amount, or as a predetermined fixed or variable monetary sum. Interest is reflected on an accrual basis, i.e., as continuously accruing over time;
• income or profit – relative to definitions of "Islamic credit", "investment account" and "Islamic deposit or savings" includes various forms of profit, dividend or benefit, rent (markup), as well as commissions or gifts to be paid to or from an Islamic financial institution;
• dividends – distributed income allocated to equity holders. They represent profit paid by economic units to their shareholders or owners;
• Islamic credit/Islamic financing – an amount provided to a client by an Islamic financial institution in accordance with the principles of Islamic banking and may or may not include terms for repayment of principal, profit, rent, or services;
• capitalization (reinvestment) of income – undistributed profit of an economic unit showing net income from production and primary/secondary income operations before allocating reinvested income. Allocation of undistributed profit to the accounts of their owners. Reinvested income represents profit not distributed as dividends. Reinvestment of income is a conditional accrual financial operation. In balance data, reinvestment of income is not shown separately but included in the total value of principal debt/equity;
• loan (borrowing) – financial assets created by the direct provision of funds to a borrower by a lender on terms of term, cost, and repayment;
• economic unit (corporation) – an organization of a legal entity or public organization, the existence of which is recognized by law and society, possessing property rights, engaging in economic activities, making economic decisions, assuming obligations, and concluding contracts;
• non-financial organizations – manufacturing and non-manufacturing enterprises, organizations whose purpose is not profit generation (non-governmental organizations, charitable funds, etc., non-financial organizations);
• non-bank credit institutions – financial institutions having the right to conduct specific operations. The list of banking operations for non-bank credit institutions is established by the National Bank of Tajikistan;
• creditor's liability – credit/Islamic credit (Islamic financing) arising from deferred payment for imported goods and services;
• debtor's liability – debt arising from deferred payment for exported goods and services;
• option – a contract under which the option buyer acquires from the seller the right to buy or sell a specified underlying asset at an agreed exercise price on or before a set date. The buyer pays a premium to the option issuer, which represents the price of the option;
• forward-type contracts – an unconditional contract under which two parties agree to exchange underlying assets (real or financial) in a specified quantity at an agreed price (exercise price) on a set date. Forward-type contracts include futures and swaps. A transaction with a derivative instrument is evaluated as the difference multiplied by quantity, between the market price of the underlying asset and the exercise price established in the contract;
• futures – forward-type contracts traded on organized exchanges;
• swap – a forward-type contract providing for the exchange of cash flows by parties based on reference prices under pre-established terms for underlying assets. At the calculation moment, the difference in value of swap-involved underlying assets, measured at market price, is attributed to financial derivatives operations, while exchanged values are reflected under corresponding real or financial assets;
• REPO – an agreement (financial operation) for the repurchase of securities, under which securities are sold for cash with an obligation to buy back these or similar securities at a fixed price either on a specified future date;
• short-term financial assets/liabilities – defined as payable on demand or with a maturity of one year or less;
• long-term financial assets/liabilities – defined as having a maturity of more than one year or without a set maturity;
• annuity – equal-volume payments made at equal intervals over a dated time period;
• grace period – the period between the agreement signing date and the schedule-specified first principal repayment payment date for a credit/Islamic credit (Islamic financing);
• securities – debt instruments and equity instruments possessing the characteristic of negotiability. Securities are specifically intended for trading on organized exchange or over-the-counter markets;
• debt securities – represent negotiable instruments serving as evidence of debt. They cover bills, bonds, notes, negotiable deposit certificates, commercial paper, and others;
• trade credits and advances – acquisition and provision of goods and services on credit/Islamic financing, providing for payment of their value and interest in the near future, as well as advance payments for subsequent deliveries of goods and services;
• grant – funds transferred gratuitously by a donor (fund, corporation, government agency, or private individual) to either commercial or non-commercial organizations or private individuals for performing specific work. Unlike a credit/Islamic financing, a grant does not need to be returned;
• overdue debt – defined as amounts still unpaid although the agreed payment deadline has passed;
• creditor – a participant in credit/Islamic financing relations, providing monetary funds or goods and services for loan on a specified term and conditions, having the right to demand repayment of credit/Islamic financing (Islamic financing) or fulfillment of other obligations from the debtor. The creditor may be a state, bank/Islamic bank, enterprise, or individual;
• debtor (borrower) – a legal or physical entity having a debt (monetary or property) obligation to the creditor;
• reinvested income from direct investments – a direct investor's share (proportional to their equity stake) in the income of foreign subsidiaries and associated enterprises, which is not distributed as dividends but usually directed to enterprise development. Undistributed profit of enterprises is also considered reinvested income;
• balances – the level of assets or liabilities at a specific point in time. Balance data are usually provided for the beginning and end of the reporting period. Operations and other changes occurring during this period serve as the link between balances for two different periods, since the cause of balance changes are operations or other changes (revaluation, exchange rate fluctuations, etc.);
• transaction – an interaction between two institutional units carried out by mutual agreement or by law and accompanied by the exchange of economic values or transfer. In transactions accounted for in foreign economic accounts, one institutional unit is a resident of the Republic of Tajikistan, and the other is its non-resident;
• market price – the price at which financial assets are or can be exchanged. In case of transactions, market price is defined as the sum of money a voluntary buyer pays to acquire something from a voluntary seller. Balances of financial assets and liabilities should be reflected as if acquired through market transactions on the balance sheet date;
• revaluation – price revaluation of a financial asset or liability arising from changes in their prices and/or exchange rates. In practice, the revaluation amount is usually calculated over a period between two points in time at which the corresponding assets and liabilities are valued;
• accounting currency – the currency in which foreign economic activity accounts are kept. The accounting currency for foreign economic activity accounts of the Republic of Tajikistan (balance of payments, international investment position, and external debt of RT) is the US dollar;
• original currency – the currency in which the value of transactions and balances specified in a contract between two parties is expressed;
• payment currency – the currency used for settlements under a given contract. The payment currency may differ from the original currency. In such cases, the transaction value must be recalculated into the original currency at the actual exchange rate applicable to that transaction;
• rent – income to be received for providing natural resources to another institutional unit. Examples of rent include payments for land use, extraction of mineral and other underground resources, as well as rights to fish catching, forest use, and pastures;
• subsidies – (from Latin subsidium - aid, support) – payments to consumers provided from the state or local budget, as well as special funds, to legal and physical entities, and local government bodies. A subsidy is aid to a consumer, i.e., an entity lacking sufficient funds for self-financing. Two types of subsidies should be distinguished: a) subsidy – an inter-budget transfer provided for co-financing the expenditure obligations of lower-level budgets; b) subsidy – monetary funds provided from budgets and off-budget funds to legal entities (not being budgetary institutions) and physical persons. Main properties of a subsidy:
  • gratuitous, non-repayable transfer (with subvention, return of funds is possible if the funds were used for another purpose);
  • targeted nature;
  • co-financing (on a proportional financing basis). Direct subsidies are used to fund fundamental scientific research and experimental design work (grants), implementation of new technology into production, and personnel retraining. On the one hand, subsidies can encourage the development of promising industries; on the other – support [them].