Instruction No. 223 on the Procedure for Notifying Foreign Exchange Operations Related to Capital Movements

"Registered" by the Ministry of Justice of the Republic of Tajikistan under No. 634 “a”, dated July 17, 2017; “Approved” by the Board of Directors of the National Bank of Tajikistan under No. 64, dated June 2, 2017.

Instruction No. 223 “On the Procedure for Notifying Foreign Exchange Operations Related to Capital Movements”

Instruction No. 223 “On the Procedure for Notifying Foreign Exchange Operations Related to Capital Movements” is developed in accordance with Part 5 of Article 11, Article 15, and Part 1 of Article 16 of the Law of the Republic of Tajikistan “On Foreign Exchange Regulation and Control”, and establishes the procedure and procedures for notification by legal and natural person residents of the Republic of Tajikistan, including authorized banks, to the National Bank of Tajikistan regarding the implementation of foreign exchange operations related to capital movements.

1. General Provisions

1. Regarding foreign exchange operations related to capital movements (hereinafter – capital movement operations), residents of the Republic of Tajikistan are required to provide all supporting documents, reports, information, and other necessary data to their servicing authorized bank prior to the commencement of payments and settlements related to such operations.
2. The following operations are classified as foreign exchange operations related to capital movements: a) direct investments by residents of the Republic of Tajikistan in foreign countries – cross-border investments (a resident of the Republic of Tajikistan controls an enterprise of another country's resident or has significant influence over its management). Direct investment relationships by residents in foreign countries are established when the resident acquires 10 percent or more of the authorized capital of the invested legal entity (including, upon formation of a legal entity, joint venture, purchase/acquisition of a non-resident legal entity of the Republic of Tajikistan, or at least 10 percent or more of its share/increase in the resident's share); b) portfolio investments by residents of the Republic of Tajikistan in foreign countries – monetary investments and material investments in securities, including debt securities, shares of foreign companies providing less than 10% investor participation in the capital of a legal entity (including, purchase/acquisition of securities, participation in forming authorized capital, investments in securities of international organizations and foreign states, shares of investment funds); c) operations by residents of the Republic of Tajikistan with derivative securities of foreign states – securities, the issuance and circulation mechanism of which involves the right to repurchase or sell securities, financial and material assets within contractually established periods (forward contracts, futures transactions, options, savings certificates, etc.); d) obtaining loans from non-residents of the Republic of Tajikistan or providing them with loans in foreign currency, including extension of payment terms for exported goods, works, and services and repayment terms for prepayments for imported goods, works, and services or their importation, for a period exceeding 1 (one) year; e) opening of bank accounts (savings, deposit, current, etc.) by residents of the Republic of Tajikistan (excluding authorized banks) in foreign banks; f) other operations recognized under international standards as capital movement-related operations, including residents obtaining or acquiring real estate abroad, providing commercial loans to non-residents, etc.
3. Residents of the Republic of Tajikistan, in accordance with the Law of the Republic of Tajikistan “On Foreign Exchange Regulation and Control” and this Instruction, have the right to freely conduct foreign exchange operations related to capital movements, including without limitation on quantity and purpose opening foreign currency bank accounts in non-resident banks, subject to compliance with the anti-money laundering (AML), counter-terrorist financing (CFT) system requirements, and non-proliferation of weapons of mass destruction (WMD) financing requirements.

2. Procedure for Notifying Foreign Exchange Operations Related to Capital Movements 4. Foreign exchange operations related to capital movements, as stipulated in paragraph 2 of this Instruction, are conducted by residents of the Republic of Tajikistan subject to notification to the National Bank of Tajikistan. The notification contains the following detailed information: a) details of the resident of the Republic of Tajikistan; b) features of the capital movement operation, including type, essence, amount, currency, interest rates, start and end dates of the operation, payment and settlement procedures related to this operation; c) name and details of the other party to the operation; d) bank account details and the authorized servicing bank for this operation; e) paid or received foreign currency funds related to this operation; f) details of the bank account opened in a foreign currency at a foreign bank, including: type, currency, purpose, date of opening, payment and settlement conditions through this account, name and other data identifying the foreign bank; g) copies of supporting documents and acts depending on the type of foreign exchange operations related to capital movements, including copies of technical and economic justifications for joint projects, formation or participation in a foreign legal entity, loan procurement, and copies of loan agreements. 5. Residents of the Republic of Tajikistan, in compliance with legislative requirements and business practice, commence a capital movement operation and notify the National Bank of Tajikistan within no later than 5 working days from its start date, and in case of opening a bank account at a foreign bank within no later than 10 working days from its opening date, using the forms in Appendices 1 and 2. 6. Residents of the Republic of Tajikistan, in case of opening a bank account at a foreign bank, also notify the tax authorities at their place of registration within no later than 10 working days from the account opening date. 7. Residents of the Republic of Tajikistan may also notify the National Bank of Tajikistan about their opened bank account at a foreign bank through the “Notification Window” located on the National Bank of Tajikistan website (www.nbt.tj). 8. The notification sent by a resident of the Republic of Tajikistan to the National Bank of Tajikistan serves as the basis for the servicing authorized bank to provide banking services related to such foreign exchange operations, related to capital movements. 9. The National Bank of Tajikistan, within no later than 5 working days from the date of receiving the notification, issues residents of the Republic of Tajikistan a confirming document in the form of an “Advice/Notification”.

3. Final Provisions 10. Servicing authorized banks shall refuse to process payments and settlements concerning the relevant foreign exchange operation related to capital movements if residents of the Republic of Tajikistan fail to submit a notification meeting the conditions stipulated in paragraph 4 of Chapter 2 of this Instruction (document, information, or data). 11. Residents of the Republic of Tajikistan (including authorized banks) submit quarterly reports to the National Bank of Tajikistan on foreign exchange operations related to capital movements in accordance with Instruction No. 205 “On Filling out the Statistical Reporting Form No. 1-AM ‘External Financial Operations of Foreign Economic Activity Entities’” (approved by the Board of Directors of the National Bank of Tajikistan No. 69 dated April 22, 2014), by the 20th day of the first month following the reporting quarter. 12. Servicing authorized banks are obligated to bring the requirements of this Instruction to the attention of their clients and ensure its implementation during banking services. 13. Residents of the Republic of Tajikistan, including servicing authorized banks, shall be held liable for non-compliance with the provisions of this Instruction in accordance with the requirements of regulatory legal acts of the Republic of Tajikistan.