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UNMIK/FR/033/01 Kosovo's money By the end of 2001, every household with substantial savings, or receiving payments from outside Kosovo (which will also be in euros in future), or where its members are in regular employment, is advised to establish an account with a Kosovo-based bank. All savings deposited in such accounts by 31 December 2001 will be automatically converted into euros at zero cost on 1 January 2002. After that date, fees will probably be levied on deposits made to accounts-albeit at lower levels than the charges for cash exchanges. Failure to set up an account at all will cost time and money. Time will be lost in the inevitable queues at bank outlets during the first few weeks of 2002. Money will be lost because we will only be allowed to exchange "household amounts", up to DM 1,000 (i511.29) for euros without paying a fee. The BPK and Kosovo banks will be entitled to charge fees in order to partially cover the relatively high costs incurred in shipping in cash in distributing it to the regions. Except on the household amounts, the fees on substantial amount exchanges will be higher, reflecting their requirement for BPK to both import euros and export Deutschmark notes and coins. BPK says the fees will only recover part of its own costs, but 1 or 2 per cent above the level of charges already made by banks and exchange offices for currency transactions is easily imaginable. More important if we want to exchange large amounts, neither the BPK nor the banks will provide euro cash in quantities worth more than DM 10,000 (i5,112.92). Deutschmarks above this amount will only be exchangeable by depositing them in an account, and the first weeks of January next year is not the ideal time to set one up. Not only will there be the queues to do this, there is also a perceptible risk that anyone clearly heading for a bank in the first few weeks of the year will become a possible target for mugging and theft. Also, no matter when a deposit is made, if it is over DM 30,000 (i15,338.76) it will be subject to UNMIK rules on money laundering. Thus, if the person is not already a known customer, banks will only accept larger amounts them in custody-only crediting his account later, after making sure that there are no money laundering suspicions. This is another good reason for households and small businesses to set up their bank savings accounts early in 2001: establishing a good working relationship with your banks manager will also establish what is normal for your cash flow. Using up all surplus marks before the end of February is also important. After that no-one will be compelled to accept them. Indeed, under the forthcoming legal framework for the introduction of the euro, those receiving compulsory payments will be compelled to refuse them. This means that only euros (and technically also the Yugoslav dinar with a 10 per cent surcharge) will be accepted for paying taxes, customs and excise duties at the international borders and the boundary with Serbia proper. Only euros and dinars will settle our electricity, water and telephone bills and any levies, fees, fines and other penalties. As a service, BPK will continue to accept marks within the established amounts after 1 March, but only in custody, and only until June 2002. After that, mark hoarders will only be able to exchange them with the Bundesbank in Germany. Wise households therefore, will make their arrangements before the
end of the year, depositing their savings in a bank account, and drawing it
down subsequently (directly in euros after 1 January 2002) according to
their needs, advises the BPK. They can also stock up on euros by paying for
goods and services in marks and receiving euros in change. Dual pricing Contact: P. Ellwood |