Exchange Agreement No. 34
Exchange Agreement No. 34, entered into by the National Executive and the Venezuelan Central Bank (VCB) and related to the mandatory sale of foreign currency deriving from exportation, was published in Official Gazette No. 40.985 of September 9, 2016. This Agreement repeals former Exchange Agreement No. 34 of February 18, 2016.
The new Exchange Agreement No. 34 ratifies what was established in the former Agreement to the effect that private natural and legal persons engaged in the activity of exportation of goods and services may withhold and freely administer up to sixty percent (60%) of the income received in foreign currency by reason of the exportation made, in order to cover expenses, payments, and any other disbursement to be made because of their activities, but it eliminates the exclusion of the payments of financial debt established in the former Agreement. It also ratifies that the rest of the foreign currency will be sold to the VCB at the complementary floating rate of exchange in effect on the date of the relevant transaction, reduced by 0.25%. Also, Exchange Agreement No. 34 provides that the sale of foreign currency must be made within a period of five (5) bank business days following the end of the period of time established in the payment conditions agreed in the commercial or contractual relationship involved, which in no case may exceed 180 days; it does not refer to the period of five (5) bank business days following that when payment of the export is made, as the repealed Exchange Agreement did.
The new Exchange Agreement No. 34 also ratifies that payment for the exporting activity must be received exclusively in foreign currency, except for the transactions processed through the Convenio de Pagos y Créditos Recíprocos de la Asociación Latinoamericana de Integración (ALADI) (ALADI Reciprocal Payment and Credit Agreement) and the Sistema Unitario de Compensacion Regional de Pagos (SUCRE) (Unitary System of Regional Payment Setoff).
A new element in this Exchange Agreement No. 34 is that it allows to deduct from the foreign currency subject to mandatory sale to the VCB the amount equivalent to the contribution in foreign currency of the exporter’s positions for the acquisition of raw material, consumable supplies, fixed assets, and other goods that are essential for the productive activity intended for exportation; the Ministry of Foreign Trade and International Investment must be informed of the contributions required to be considered for this deduction. The foreign currency derived from commercial debt or financing granted by financial institutions of the public sector will not be considered as deductible contribution. The exporter may not request foreign currency through the mechanisms of the foreign currency controlled regime during the period of time used for the deduction of its contributions of its own foreign currency.
Exchange Agreement No. 34 became effective upon publication in the Official Gazette
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