Accounts of Czech citizens abroad without CNB permission in future

The CNB will propose to the Government that as from 1 January 2001 Czech citizens may open bank accounts abroad without the central bank's permission. The CNB Bank Board decided on this at its meeting today. It found no significant arguments in the monetary area which would prevent this further liberalisation measure for capital movement. The CNB, together with the Ministry of Finance, will therefore submit a proposal to the Government enabling this step. The obligation to acquire a "foreign exchange permit" from the CNB as the foreign exchange authority will be abolished, although the reporting obligation will remain in effect.

"The process of deregulating the foreign exchange regime will thus in principle be complete. For the central bank this entails an enormous requirement to further increase the credibility and transparency of monetary policy," stated the CNB Governor Josef Tošovský. He added that regulation in the area of capital movement now involves only some sector restrictions, which should be removed no later than on the day the Czech Republic enters the EU, and the acquisition of selected types of real property within the territory of the Czech Republic by non-residents, where the Czech Republic is asking the EU for a transitional period. "However, this is no longer the central bank's responsibility, it is more a political decision," added the Governor. " The obligation arising from our harmonisation duties towards the EU and from membership of the OECD has thus been met entirely."

If approved by the Cabinet, a Government regulation will de facto abolish the transfer obligation for money held on a resident's account abroad pursuant to Article 6(1) of the current Foreign Exchange Act. The biggest liberalisation step in the foreign exchange area occurred on 1 October 1995 with the entry into force of the Foreign Exchange Act No. 219/95 Coll., which completely liberalised all items of the current account and some items of the capital account. A further significant step was taken by Government Regulation No.129/98 Coll., which removed most of the remaining regulated items.

Milan Tománek
CNB spokesman