Decree No. 2009-048 of January 12, 2009, Establishing the Implementation Modalities of Law No. 2006-008 of August 2, 2006, on the Foreign Exchange Code

DECREE N° 2009-048 of January 12, 2009 setting the implementation modalities of Law No. 2006-008 of August 2, 2006 carrying the Foreign Exchange Code

THE PRIME MINISTER, HEAD OF GOVERNMENT

Having regard to the Constitution,
Having regard to Law No. 91-014 of August 12, 1991 modified by Law No. 94-020 of December 14, 1994 regarding the repatriation of assets held abroad by residents; Having regard to Law No. 94-004 of June 10, 1994 modified by Law No. 95-030 of February 22, 1996, Law No. 2003-004 of July 7, 2003 and Law No. 2005-036 of February 20, 2006 carrying the statutes of the Central Bank of Madagascar; Having regard to Law No. 2006-008 of August 2, 2006 carrying the Foreign Exchange Code

D E C R E E S:

Article 1 – This Decree sets out the modalities and conditions for the application of Law No. 2006-008 of August 2, 2008 carrying the Foreign Exchange Code.

Chapter I: General Provisions

Article 2 – Payments related to current operations between persons resident in the Republic of Madagascar and those resident abroad or non-resident in Madagascar are free but can only be carried out through approved intermediaries.

Article 3 – The following capital transactions and financial operations are free but must be declared to the Ministry responsible for Finance: the transfer of shares, partnership interests, business assets or assets, portions of liquidation surplus, expropriation indemnities for foreign investors.

Other capital transactions and financial operations between persons resident in the Republic of Madagascar and those resident abroad or non-resident in Madagascar not provided for in the above paragraph remain subject to prior authorization from the Minister responsible for Finance.

Article 4 – Capital contributions, within the framework of direct foreign investments in Madagascar on the national economic territory, are free and can be carried out without conditions of approval or investment authorization by any natural or legal person in compliance with existing legislation and regulations.

Article 5 – The opening of an account abroad by a resident, natural or legal person, is subject to prior authorization from the Minister responsible for Finance.

Article 6 – Foreign securities and all titles representing a claim against abroad, held in Madagascar by a resident, must be deposited with an approved intermediary.

Residents are authorized to hold payment instruments abroad. The modalities of this holding will be specified by order of the Ministry responsible for Finance.

Article 7 – Approved intermediaries may be authorized to hold foreign currency assets under the conditions and limits set by order of the Ministry responsible for Finance.

Article 8 – Exchange bureaus do not have the status of approved intermediaries. Consequently, they cannot hold foreign currency accounts except with local primary banks.

Chapter II: Modalities

Article 9 – Natural or legal persons making settlements between the Republic of Madagascar and abroad or a non-resident in Madagascar are required to indicate the nature of the transaction to the approved intermediary responsible for the settlement.

Article 10 – Importers and exporters of goods are required to domicile their import and/or export operations with approved intermediaries.

Article 11 – Residents are required to repatriate all claims held abroad or against a non-resident arising from the export of goods, remuneration for services, and, generally, all income and products arising from financial relations with abroad or a non-resident in Madagascar, in respect of their activities in Madagascar.

The modalities and deadlines for repatriation will be fixed by order of the Ministry responsible for Finance.

Article 12 – Approved intermediaries are charged with ensuring, under their responsibility, compliance with the provisions issued by this Decree and the texts taken for its application for operations carried out through their intermediation or placed under their control.

Chapter III: Foreign Exchange Market

Article 13 – The Foreign Exchange Market continuously processes spot foreign exchange operations and forward foreign exchange operations.

Article 14 – The exchange system relies on the floating of the national currency whose rate is freely determined by the Foreign Exchange Market.

Article 15 – The functioning of the Foreign Exchange Market is governed by the Place Convention concluded between Participants and by the Code of Ethics of the Foreign Exchange Market.

Article 16 – The Central Bank of Madagascar is the Authority responsible for the supervision and proper functioning of the Foreign Exchange Market. It may fix by instruction the organization of the Market.

The Central Bank is the only body authorized to admit new participants and to impose sanctions for breaches of the Place Convention rules, sanctions which may go up to exclusion from the market.

Article 17 – The Central Bank intervenes in the Foreign Exchange Market.

Chapter IV: Foreign Currency Accounts

Article 18 – Any natural or legal person, having the status of resident or non-resident, is authorized to open a foreign currency account on the books of local primary banks.

Article 19 – A foreign currency account can be funded either by transfers received directly from abroad, or by deposits in travel checks or bank checks. Cash deposits are made in compliance with existing legislation and regulations.

The currencies deposited must be convertible and acceptable by the Banks. Foreign currency accounts must not be credited with Ariary.

Article 20 – Any holder of a foreign currency account is authorized to carry out exchange, settlement, transfer or arbitrage operations as well as withdrawals in the form of travel checks or bank checks, for current operations and within the framework of delegations granted to approved intermediaries. Cash withdrawals are authorized within the framework of travel allowances in conformity with the rules established for this purpose.

Article 21 – Capital transactions and financial operations between persons resident in the Republic of Madagascar and those resident abroad carried out by holders of foreign currency accounts subscribed in the name of residents remain subject to prior authorization from the Ministry responsible for Finance.

In addition to the required authorizations, capital transactions carried out by holders of foreign currency accounts both on the debit and credit side will be subject to a declaration to be submitted to approved intermediaries with mandatory mention of the nature of the operations.

Article 22 – Transfers from one foreign currency account to another foreign currency account are not authorized between residents except in the following exhaustive cases:

• Transfer operations for any payment made by an Industrial Free Zone enterprise or a free enterprise to the benefit of another Industrial Free Zone enterprise or another free enterprise.
• Transfer operations for the payment of purchases or service provision that Industrial Free Zone enterprises or free enterprises carry out on the national customs territory.
• Transfer operations for payment that international organizations or embassies make to the benefit of foreign international consultants having the status of resident.
• Operations whose settlement modalities are governed by particular conventions signed by the State.

Transfers from resident accounts to non-resident accounts are authorized within the framework of current operations.

Transfers from account to account between non-residents are authorized.

Article 23 – Banks are authorized to remunerate foreign currency accounts opened on their books under the conditions they determine freely and which they communicate regularly to the holders of these accounts. The rate of this remuneration must be brought to the permanent knowledge of the Public.

Chapter V: Diverse Provisions

Article 24 – Orders or instructions fix, as necessary, the implementation modalities of this Decree.

Article 25 – All previous provisions contrary to those of this Decree are and remain repealed, notably those:

• of Decree No. 72-446 of November 25, 1972 setting the implementation modalities of Law No. 67-028 of December 18, 1967 regarding the financial relations of the Republic of Madagascar with abroad;
• of Decree No. 2004-694 of July 6, 2004 completed by Decree No. 2004-815 of September 9, 2004 carrying the regulation of foreign currency accounts;
• of Decree No. 2004-731 of July 27, 2004 creating the Continuous Interbank Foreign Exchange Market;
• of Order No. 2972/95 of June 13, 1995 fixing the new exchange system;
• of Order No. 2973/95 of June 13, 1995 modified by Order No. 5951/96 of September 16, 1996 regarding the opening of exchange bureaus.

Article 26 – The Minister of Finance and Budget as well as the Governor of the Central Bank of Madagascar are charged, each in what concerns him, with the execution of this Decree which will be published in the Official Journal of the Republic of Madagascar.

Done in Antananarivo, on January 12, 2009

The Prime Minister,
Head of Government Charles RABEMANANJARA

The Minister of Finance and Budget,
Haja Nirina RAZAFINJATOVO

;

Having regard to Decree No. 2007-022 of January 20, 2007 carrying the nomination of the Prime Minister, Head of Government; Having regard to Decree No. 2008-427 of April 30, 2008 modified by Decree No. 2008-596 of June 23, 2008, Decree No. 2008-766 of July 25, 2008 and Decree No. 2009-001 of January 4, 2009 carrying the nomination of the members of the Government; Having regard to Decree No. 2007-185 of February 27, 2007 fixing the attributions of the Minister of Finance and Budget as well as the general organization of his Ministry.

On proposal of the Minister of Finance and Budget,

IN COUNCIL OF GOVERNMENT,