LAW OF TURKMENISTAN

of October 1, 2011 No. 230-IV

About currency control and currency exchange control in the external economic relations

This Law establishes the legal basis and the principles of currency control and currency exchange control in the external economic relations, is directed to carrying out single state monetarist policies in Turkmenistan, ensuring stability of national currency, stability of the foreign exchange market of Turkmenistan, determines competence of bodies of currency control, right and obligation of residents and nonresidents, body and agents of currency exchange control.

Section I. General provisions

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) currency:

a) the bank notes in the form of banknotes, treasury notes and coins including made of precious metals, accepted in the state (group of the states) as legal means of payment and which are in circulation (including withdrawn or withdrawn from circulation, but subject to exchange on the bank notes which are in circulation);

b) means on bank accounts (deposits) in the monetary units accepted in the state (group of the states) and also in international cash or units of account;

2) national currency - the currency of Turkmenistan emitted by the Central bank of Turkmenistan for its use during the calculating and payments;

3) foreign currency - currency of foreign state, and also international cash or units of account;

4) the currency rate - the price of monetary unit of one state (group of the states) expressed in monetary units of other state (group of the states) including:

a) the official exchange rate established by the Central bank of Turkmenistan;

b) the market currency rate established by members of the foreign exchange market on the basis of the demand and supply;

5) reserve currency - main type (main types) of the freely convertible currency (exchanged in the international transactions without restrictions), applied by Turkmenistan in foreign trade activity;

6) currency values:

a) national currency, securities and payment documents which nominal is expressed in national currency, in case of making of transactions with them between residents and nonresidents, and also between nonresidents;

b) foreign currency;

c) securities (shares, bonds and other), and also payment documents (checks, bills of exchange, letters of credit and other) in foreign currency;

7) the currency account - the account (contribution) in authorized credit institute opened for physical person (including to physical person entrepreneur without formation of legal entity) or to the legal entity (branch, representation), intended for accounting and storage of currency values and implementation of currency transactions;

8) currency transactions:

a) the transactions connected with transition of the property right and other rights to currency values, and also use of currency values as instrument of payment;

b) import to customs area of Turkmenistan and export from customs area of Turkmenistan of currency values;

c) transfer of currency values from the account (contribution) opened outside the territory of Turkmenistan into the account (contribution) of the same person opened in the territory of Turkmenistan and from the account (contribution) opened in the territory of Turkmenistan into the account (contribution) of the same person opened outside the territory of Turkmenistan;

9) residents:

a) the physical persons citizens of Turkmenistan (including physical persons entrepreneurs without formation of legal entity) who are constantly living in the territory of Turkmenistan or temporarily being outside Turkmenistan, except for the citizens of Turkmenistan having the document on residence right in foreign state issued according to the legislation of this state;

b) physical persons - the foreign citizens and stateless persons (including physical persons entrepreneurs without formation of legal entity) having the document on residence right in the territory of Turkmenistan issued according to the legislation of Turkmenistan;

c) the legal entities created according to the legislation of Turkmenistan (their branches, representations) which are in the territory of Turkmenistan and beyond its limits;

d) the diplomatic representations, consular establishments of Turkmenistan and other official representations of Turkmenistan which are outside Turkmenistan and also permanent missions of Turkmenistan under the interstate, intergovernmental, international organizations;

10) nonresidents:

a) the physical persons which are not residents according to subitems "an" and "b" of Item 9 of this part;

b) the legal entities created according to the legislation of foreign states, who are outside Turkmenistan;

c) the organizations, not being legal entities, created according to the legislation of foreign states, being outside Turkmenistan;

d) the branches, representations and other separate divisions of the nonresidents specified in subitems "b" and "v" of this Item, which are in the territory of Turkmenistan;

e) the diplomatic representations, consular establishments of foreign states accredited in Turkmenistan and permanent missions of these states under the interstate, intergovernmental, international organizations;

e) foreign states, their administrative and territorial units;

g) interstate, intergovernmental, international organizations, their branches and permanent missions in Turkmenistan;

h) the other persons who are not specified in Item 9 of this part;

11) authorized non-bank credit institutes - the non-bank credit institutes having the right according to the legislation of Turkmenistan to perform separate types of banking activities with currency values based on the license of the Central bank of Turkmenistan;

12) authorized credit institutes:

a) banks and non-bank credit institutes - the residents created according to the legislation of Turkmenistan and having the right based on the license of the Central bank of Turkmenistan to perform any or separate kinds of banking activities with currency values;

b) the branches of banks and other financial nonresident institutes registered and operating in the territory of Turkmenistan according to the license of the Central bank of Turkmenistan created according to the legislation of foreign states having the right to perform any or separate kinds of banking activities with currency values;

13) foreign credit institutes:

a) the banks, and also other financial institutions created outside Turkmenistan and having the right to banking operations by the legislation of the states in which they are registered;

b) branches, representative offices of authorized credit institutes of Turkmenistan registered and which are operating outside Turkmenistan according to the legislation of foreign states, having the right to perform any or separate kinds of banking activities;

14) authorized banks - the banks having the right based on the license of the Central bank of Turkmenistan to perform banking activities and transactions with currency values;

15) the currency exchange - the legal entity or his separate division created according to the legislation of Turkmenistan which core activity is the organization of the exchange biddings by foreign currency according to the procedure and on conditions, established by the legislation of Turkmenistan;

16) exchange transactions - exchange of one currency for another, that is purchase and sale of foreign currency for national currency (converting) and other foreign currencies (conversion) on which proportions of exchange are established through the quotation or the currency rate;

17) exchange point - specially equipped place for carrying out exchange transactions with cash foreign currency;

18) the authorized broker - the credit institute participating in commercial transactions of purchase and sale of currency on its own behalf on behalf and at the expense of the client according to the license granted to it;

19) the authorized dealer - the credit institute participating in commercial transactions of purchase and sale of currency on its own behalf and at own expense according to the license granted to it;

20) foreign exchange position - ratio of requirements (the amount of the purchased and (or) obtained currency) and obligations (the amount of the sold and (or) spent currency) of the dealer in foreign currency including its off-balance transactions which in case of equality of requirements and obligations for specific currency is considered closed, and in case of their discrepancy - open, from which:

a) open short foreign exchange position - excess of liabilities and obligations on the sold and (or) spent currency over assets and requirements in it (emergence of shortcoming on this currency);

b) open long foreign exchange position - excess of assets and requirements for the purchased and (or) obtained currency over liabilities and obligations (excess of currency inflow over its outflow, excess of purchase and (or) the obtained currency over its sale and (or) expenditure);

21) limit of foreign exchange position - the standard rate of extremely open short or long foreign exchange position of authorized dealers for the end of banking day;

22) trade credits - payment deferral on export, the advance payment (advance payment) on import or advancing (excess) of export over import in case of mutual contract supplies of exchange performed directly between suppliers (sellers) and receivers (buyers) of goods (works, services);

23) direct investments:

a) ownership, acquisition by the investor at least ten percent of shares (shares, contribution) in the authorized capital of the created or again created legal entity;

b) capital investments in fixed assets of the created branch of the legal entity;

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