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Ruling for Expediting and Improving Export Operations

Ruling No. 014 was issued by the Ministry of the Popular Power for Banking and Finance (Ministerio del Poder Popular para la Banca y Finanzas – MINBANCA), the National Center of Foreign Trade (Centro Nacional de Comercio Exterior - CENCOEX), and the Venezuelan Central Bank (Banco Central de Venezuela - BCV) and published in Official Gazette No. 40.956 of August 1, 2016 (The Ruling).

 

Purpose.-

The purpose of The Ruling is to facilitate, encourage, and improve export operations, or the exit of goods, services or technology, tangible and intangible, the sale to the BCV of foreign currency resulting from such activities, including any other activity of natural or legal persons subject to the application of The Ruling that generates the entry of foreign currency (art. 1).

This provision extends the subject matter of the Ruling beyond actual export operations and reaches any other activity that generates income in foreign currency.

 

Scope of application.-

The Ruling will be applied to the natural or legal persons domiciled in the Venezuelan territory that carry out operations of export, re-exit, extraction, lease of personal and real property, services, use, and exploitation of patents, marks, licenses, and franchises or other rights generated by their goods abroad (art. 2).

It is also noted that The Ruling does not limit itself to export operations, but it includes lease of  personal or real property abroad, as well as other rights generated by goods abroad.

It is also applicable to goods under a regime of temporary export (exportación temporal - ET) or temporary export for passive assembly (exportación temporal para perfeccionamiento pasivo - ETPP), when after the elapsing of the period of time allowed by the customs authority, the goods are not reintroduced, representing an entry of foreign currency in favor of the exporter.

The Ruling defines Exporter as the natural or legal person domiciled in the national territory that carries out export operations and Sender as the natural or legal person domiciled in the national territory that carries out the other operations within the scope of application of The Ruling.

 

Obligation to sell foreign currency to the BCV.-

The following foreign currency is subject to mandatory sale to the BCV: (Art. 16)

1.  Foreign currency derived from exportation of goods, services, or technologies, paid in favor of the exporter or sender.

2. Foreign currency derived from operations of lease of personal and real property, use, and exploitation of patents, marks, licenses, franchises, services and rights generated by goods under ET regime or other rights generated by goods abroad when the beneficiary of said income is subject to The Ruling.

3. Foreign currency derived from Temporary Export (Exportación Temporal - ET) or Temporary Export for Passive Assembly (Exportación Temporal para el Perfeccionamiento Pasivo - ETPP) of goods,  when the goods are not reintroduced in the authorized period of time.

4. Foreign currency derived from real or collective rights of any type whatsoever generated abroad and originating income payable in foreign currency in favor of the user indicated in The Ruling.

Unlike former Rulings regulating export activities, this number is so broad that it seems to encompass any income in foreign currency, beyond the foreign currency resulting from export operations.

 

 Period of time for sale of foreign currency.-

The exporter will be under the obligation to sell the foreign currency to the BCV, through the authorized exchange operators, in a period of time not exceeding 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 (art. 19).

 

Right to retain and administer foreign currency.-

The users, exporters, and senders may retain and administer the percentage of the income received in foreign currency by reason of the exports made, according to the relevant Exchange Agreements (art. 18).

At present, Exchange Agreement No. 34 is the only one that makes reference to the percentage of income in foreign currency that may be retained and administered without being subject to mandatory sale to the BCV and it refers solely to the foreign currency derived from exports; then, there are doubts about the retention percentage applicable to foreign currency derived from the rest of the activities prescribed in The Ruling. 

 

Duty to inform.-

The persons subject to the Ruling must inform once, through CENCOEX automated system, their intention to make operations within the scope of application of The Ruling, for purposes of their insertion as user (art.4).

The user must also inform CENCOEX, five (5) calendar days after the export is made, that the export took place and must keep and preserve for ten (10) years all of the documents and records related to the customs, commercial, and other types of operations, as well as those related to the sale of foreign currency to the BCV (arts. 13 and 5).   

In the event of breach of the obligations established in The Ruling or in the event of existence of founded indications that the user, exporter, or sender provided false or erroneous information, CENCOEX may suspend them, on a preventive basis, from the foreign currency administration system, thereby commencing the relevant administrative proceedings (art. 22).

 

Entry into force and repealing provision.-

The Ruling became effective upon its publication in the Official Gazette on August 1, 2016. It repealed Ruling No. 113 (Official Gazette No. 40.128 of 03-13-2013), which establishes the Requirements and Formalities for Export Operations.  

 

In order to access the Ruling, 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.”