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Q & A
The new Law for foreign exchange transactions and how it reflects upon the NGO work?
The questions: which changes does the new Law for foreign exchange transactions bring and how does it reflect upon the NGO work are of great interest for the NGOs from Macedonia and the answers are given by Aleksandar Buzarovski, manager of the administrative-financial department of the Macedonian Centre for International Cooperation (MCIC).
“Before we start with the news which the new Law for foreign trade transactions and the new Law for foreign exchange transactions should bring, we should mention that they were supposed to change the condition introduced by the old Law for foreign trade transactions and the old Law for foreign exchange transactions. They restrictively influenced the NGO work. The restriction of the old foreign exchange law resulted in impossibility to keep donations received from abroad, that is, foreign means of payment, to keep them on the current account of the organization longer than the legally fixed term, that is four days. Also, in accordance with the old law for foreign trade transactions, for each foreign trade transaction it was necessary to obtain a permit from the Ministry of Economy, which contributed to bigger administration and problems for the NGOs, increasing the costs for that procedure, that is paying administrative taxes for receiving appropriate approvals from the Ministry of Economy. The new Law was supposed to overcome that condition and to contribute to decreasing the pressure and restriction towards the non-governmental organizations.
In 2001 the new Law for foreign trade transactions was passed and it can be found in the Official Gazette of the Republic of Macedonia number 34 from 2001, with the appropriate changes which can be found in the official gazettes number 49 from 2001, number 103 from 2001 and number 54 from 2002. In the subject of this law the current and capital transactions are regulated and the payments liberalization and transfers between residents and non-residents. Further on, the Law for foreign trade transactions discusses the terms residents and non-residents. It is relevant for the NGOs that they have been included in the term residents. The following are defined to be residents: trade companies, trade individuals, which is relevant for the non-governmental organizations, except for their branches abroad. For the first time, with this Law, in this article, there is equalizing between the non-governmental organizations and the other participants, like the trade companies. Further advantage of this law can be seen in the item 2.1, that is act 3, where it says that the transactions between the residents and non-residents are free, only if with this law it has not been established differently. It means that all transactions, all payments abroad by residents of the Republic of Macedonia are free, that is, there is not any limitation for them. This article is in slight collision with the article 3 from the Law for foreign trade transactions, according to which it is strictly emphasized that foreign trade turnover and economic activities can be carried out only by trade companies and other legal entities which carry out trade activities and they get this right by entry in the trade register. In the beginning, citing the articles 3 and 4 of the Law for foreign trade transactions resulted in slight confusion in the business banks and it was considered that the NGOs were left out from the foreign trade turnover and they asked for an additional explanation by the National bank of Macedonia, which, unfortunately, has not been received yet. The overall foreign trade turnover is carried out on the basis of accordance and the regulations of the Law for foreign exchange transactions which states that residents and non-residents can freely carry out one-sided transfers of assets from and to the Republic of Macedonia, only if by this Law it is not differently stated. The current transactions between residents and non-residents are free.
With the new Law for foreign exchange transactions the NGOs got the possibility to keep their donations from foreign assets of payment in a foreign exchange account in every business bank in the Republic of Macedonia and if they are not satisfied with the services of that bank, they can transfer it to any other bank. Also, with this Law, the non-governmental organizations can use the possibility to convert their foreign currencies into denars when it is necessary, or in accordance with the contracts with the foreign donators. This law was put into force on 15 October 2002. One of the decisions, which influence the Law for foreign exchange transactions, is certainly the decision on the way of carrying out the payment operations abroad. In this decision the way is stated how each resident or owner of foreign assets on his account can pay abroad and how he can provide denars for carrying our payment operations in the country. Several foreign exchange accounts can be open in all banks authorized for payment operations abroad and if the buying and selling rate is not convenient for them, they can either transfer or sell their money, with no limitations, to the stock exchange in some other bank.
The new Law for foreign exchange transactions is quite restrictive towards the payment operations in the country that would be carried out in foreign effective financial resources. It is possible only under certain conditions stated in the separate decision under which circumstances it can happen. The NGOs within their activity and contracts with their donators can make payment abroad without a problem. Payment is exclusively allowed for the competence of their work and in accordance with the contracts with the foreign partners”.
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