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Organic Law of Fair Prices

Decree No. 1,467 of November 18, 2014, was published in Official Gazette Extraordinary No. 6,156 of November 19, 2014. Through said Decree, the President of the Republic issued the Decree with the Status, Value, and Force of Law of Partial Amendment to the Decree with the Status, Value, and Force of Organic Law of Fair Prices (the “Decree-Law”).  Below are the most significant changes made:

 

  1. The Decree-Law recognizes a group of individual rights with respect to goods or services declared or not as essential goods.  In this sense, the persons are entitled to: (i) be offered competitive goods and services of optimum quality by the public and private suppliers and to choose them freely; (ii) receive basic services of optimum quality; (iii) adequate, true, clear, timely, and complete information about goods and services offered in the market, as well as about the prices, characteristics, quality, contracting conditions, and other relevant aspects of the same, including the risks that may arise from their use or consumption; (iv) protection against false, misleading or abusive advertising and coercive or unfaithful commercial methods; (v) reparation and indemnification for damages due to deficiency and poor quality of goods and services; (vi) protection in contracts of adhesion that are disadvantageous or impair their rights or interests; (vii) protection in credit transactions; (viii) disposal and enjoyment of the goods and services in a continuous, regular, efficient, and uninterrupted manner, among other rights.

  2. The persons who acquire goods or services by telephone, catalogue, television, electronic means, or by delivery service will be entitled to return the product and to receive immediate reimbursement of the price.  The right to return and reimbursement must be exercised within 15 days after receipt of the good or service, provided that their nature so permits and that the goods are in the same state as when received.  In case of services, the right to return will be exercised through the immediate termination of the service provision agreement.

  3. The Decree-Law establishes the regime of guarantee, indicating that vehicles, machinery, equipment or artifacts and other goods of a durable nature and that have mechanical, electric, or electronic systems capable of having faults or malfunctions will be obligatorily guaranteed by the supplier in order to cover manufacturing and operating deficiencies. The words “guaranteed”, “guarantee” or any other equivalent term may only be used when they clearly indicate the scope of such guarantee; as well as the conditions, manner, period of time, and place for the individual subject to its protection to enforce the guarantee.  All guarantees must individualize the natural or legal person granting the same, as well as the establishments where and conditions in which the guarantee will operate.

  4. Within the structure of the National Superintendence for the Defense of Socioeconomic Rights (Superintendencia Nacional para la Defensa de los Derechos Socio-económicos - “SUNDDE”), the Decree-Law created the National Intendancy for the Protection of Laborers’ Salary (the “Intendancy”). The Intendancy will be in charge of: (i) receiving and processing the denunciations and petitions of the laborers, unionized or not, about industrial or commercial practices that affect supply of or access to the goods or services developed by the persons/entities subject to the application of the Decree-Law; (ii) coordinating the early actions of the SUNDDE with the laborers’ sector and unions, within the productive processes, in order to avoid distortions in the economic system; (iii) accompanying the SUNDDE at the audits requested by the blue collar workers, among other functions.

  5. The prices of all the goods produced, imported or commercialized by the persons/entities subject to the application of the Decree-Law will be calculated in accordance with the System of Continuous Adjustment of Fair Prices (the “System”) which will have the technical, scientific, and human elements required.

  6. The System will include the establishment of fair prices in all of the chain of production, distribution, importation, transportation, and commercialization of goods and services by all the persons/entities subject to the application of the Decree-Law.

  7. The SUNDDE will request from the competent entity the temporary or definitive suspension of the persons/entities subject to the application of the Decree-Law from any system of awarding of foreign currency by the State, when it can be evidenced that they are liable for any of the unlawful acts established in the Decree-Law.

  8. Should the SUNDDE issue preventive measures of seizure of the merchandise, the SUNDDE will immediately resolve the disposition of the same for social purposes. The proceeds of the disposition of the merchandise will be kept as guarantee in a bank account opened to such end.  The ruling terminating the procedure will indicate the use to be given to the proceeds of the disposition of the merchandise.

  9. As to the administrative penalties that the SUNDDE may apply, the Decree-Law maintains those indicated in the amended Organic Law of Fair Prices, includes the penalty of seizure of the goods subject matter of the infringement or of the means with which said infringement was committed, and removes the confiscation of goods from the chapter relating to administrative penalties. With respect to the penalty of revocation of licenses, permits or authorizations, the Decree-Law clarifies that they refer to the licenses, permits or authorizations issued by all bodies or entities of the National Government.

  10. With respect to charging of excessive prices (especulación), the Decree-Law establishes that the persons/entities that dispose of goods or render services at prices or with profit margins in excess of those fixed or determined by the competent authority, by directly fixing them or through self-regulation according to the rules issued by SUNDDE to that end, will be penalized with imprisonment ranging from 8 to 10 years.  They may also be subject to measures of temporary occupation of the warehouse, storehouse, productive unit or establishment for a period of up to 180 days, which may be extended, and a fine ranging from 1,000 to 50,000 tax units. The same penalty is applicable to the persons/entities that sell goods or render services at prices in excess of those informed by them to the competent authority.

  11. With respect to stockpiling (acaparamiento), the Decree-Law establishes that the persons/entities subject to its application that restrict the offer, circulation or distribution of goods regulated by the competent administrative authority, retain the same with or without concealment, will be penalized by judicial means with imprisonment ranging from 8 to 10 years. Also, a fine ranging from 1,000 to 50,000 tax units will be imposed, as well as the temporary occupation of the establishment for up to 180 days. This period may be extended.

  12. In both cases, charging of excessive prices and stockpiling, if the crime is committed with goods or products from the supplying system of the State or obtained with foreign currency provided by the State, the penalty of imprisonment will be applied at the maximum allowed.  Likewise, the fines will be imposed at double the amount established and the property of the violator will be subject to confiscation, pursuant to the provisions of the Constitution.

  13. With respect to boycott, the Decree-Law establishes that any persons/entities that jointly or separately develop or perform actions, or are liable for omissions, that directly or indirectly impede the production, manufacture, importation, storage, transportation, distribution, and commercialization of goods and the rendering of services will be penalized by judicial means with imprisonment ranging from 10 to 12 years. When said actions or omissions have been committed to the detriment of public property, the goods will be also confiscated according to the provisions of the Constitution.  Likewise, they will be imposed a fine ranging from 1,000 to 5,000 tax units and temporary occupation of the storehouses, warehouses, commercial establishments, or means of transportation for 180 days, which period may be extended.

  14. With respect to the resale of essential products, the Decree-Law establishes that the persons/entities that purchase products declared to be essential products for profitable purposes, in order to resell them at prices in excess of those established by the State, through direct regulation or through guidelines for the establishment of fair prices, will be penalized with imprisonment ranging from 1 to 3 years, fine ranging from 200 to 10,000 tax units, and seizure of the merchandise.

  15. With respect to smuggling for carrying products abroad, the Decree-Law establishes that a penalty of imprisonment ranging from 14 to 18 years will be imposed on the persons/entities that through actions or omissions deviate the goods, products or merchandise of any type from the original destination authorized by the competent body or entity, as well as on the persons/entities that extract or try to extract from the national territory goods intended for national supply of any type, without complying with the exportation rules. Likewise, a fine equivalent to double the amount of the value of the goods or merchandise subject matter of the crime will be imposed, which fine will in no case be lower than 500 tax units. Smuggling will be penalized with its maximum penalty and the fine will be doubled when the extracted merchandise is considered a priority merchandise for the consumption of the population, whether it comes from the supply system of the State or is intended for exclusive distribution in the national territory.

  16. No benefits in the judicial processes or in the compliance with the penalty will be allowed for the crimes of charging of excessive prices, stockpiling, boycott, and smuggling.

 

The Decree-Law became effective on November 19, 2014.

 

In order to access the Decree-Law, please click here.

 

 

“NOTE: THIS INFORMATION SHOULD NOT BE CONSTRUED AS LEGAL ADVICE ON ANY SPECIFIC MATTER AND ITS CONTENT ARE INTENDED AS A MANAGEMENT ALERT AS TO CURRENT DEVELOPMENTS IN VENEZUELA, ANY SPECIFIC LEGAL QUESTIONS REGARDING THE POSSIBLE APPLICATION OF NEW OR PROPOSED LEGISLATION TO PARTICULAR SITUATIONS SHOULD BE ADDRESSED TO TRAVIESO EVANS ARRIA RENGEL & PAZ.