The governmental practice of limiting the holding and purchasing of foreign currency within a country's borders (a common way of supporting the value of the country's currency) has become more prevalent and more strictly enforced, particularly in developing countries. It has led to a substantial increase in the amount of funds being "blocked". Such blocked funds prevent international companies from deploying their capital where it would earn the highest returns. Some companies are forced to either sell the blocked assets at a loss; or wait until they are freed, with the risk that even greater losses will then be inevitable.
[Developing countries] Unless there is a complete absence of exchange control, with freedom to buy and sell foreign exchange at will, companies investing in major natural resource projects or making other investments based wholly, or in part, on export potential invariably require a commitment from Government to permit them to retain offshore the proceeds in foreign exchange from the sale of mine products or petroleum. The commitment is, of course always subject to a requirement that the foreign investor will bring in foreign exchange to meet tax and other local obligations as they arise in the host country.