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Sale of a Production Percentage for Purposes of Opportune Supply to CLAP

The Superior Entity of the Head Office of the Sovereign Supply Command (Jefatura del Comando para el Abastecimiento Soberano) issued Resolution No. 010/16 (the “Resolution”), published in Official Gazette of October 7, 2016. Said Resolution establishes the rules to regulate the mechanisms, terms, and conditions of sale to public companies or other public entities of a specific percentage of the total production of a public or private company or of a productive sector, in order to stabilize the opportune supply  to the Local Supply and Production Committees (Comités Locales de Abastecimiento y Producción  - CLAP).

 

The Resolution imposes on the public and private companies engaged in the production of consumable supplies or goods of the agrifood, personal hygiene, and home cleaning sectors  the obligation to sell up to fifty percent (50%)  of their production to the Public Entities determined by the entity responsible for the Construction and Consolidation Apex of a New Distribution and Commercialization System of the Gran Misión Abastecimiento Soberano, according to the requirements of specific products in specific regions of the country.  

 

The following public and private establishments of the agrifood, personal hygiene, and home cleaning sectors are subject to the application of the Resolution: (i) productive units, corporations, sugar factories, factories,  agroindustries, farms,  manufacturing, processing plants,  industrial or non-industrial slaughterhouses and (ii) importing establishments, wholesale and retail distributors.

 

The goods capable of being subject to prioritized sale are those established in Resolution No. 006 of September  16, 2016,  issued by the Head Office of the Sovereign Supply Command, published in Official Gazette  No.  40.994 of September 22, 2016 (See Official Gazette).

 

The CLAPs will identify their needs and the requests will be made through the Staff of the Construction and Consolidation Apex of a New Distribution and Commercialization System of the Gran Misión Abastecimiento Soberano.

 

After a national, regional or local need has been identified, the National Superintendence for the Defense of Economic Rights (SUNDDE), through a ruling, will notify the relevant establishment of its designation as “Entity bound by the prioritized sale to the Venezuelan people” (“Sujeto obligado a la venta priorizada al pueblo venezolano”). Said notice may be given directly through the SUNDDE or through  the public entity or company  designated to make such purchase. Among other information, said ruling will contain the following:   

 

  • Identification of the establishment.

  • Indication and description of the product subject to prioritized sale.

  • Quantity or percentage of the products that must be sold to the companies or entities of the designated state.

  • State companies or entities designated for making the purchase.

  • Price of the product, in the case of products with regulated prices; or price determined by the SUNDDE, in the case of products the prices of which have not been fixed by the National Executive.

  • Payment term and conditions.

 

 The Resolution designates the following public companies and entities as entities responsible for  the purchases of the products subject to prioritized sales: (i) Corporación Única de Servicios Productivos y Alimentarios, (ii) Mercados de Alimentos, C.A. (MERCAL, C.A.), (iii) Productora y Distribuidora de Alimentos, S.A. (PDVAL, S.A.), (iv) Venezolana de Alimentos la Casa, S.A. (VENALCASA), (v) Red de Abastos Bicentenarios, S.A. (RABSA), (vi) Lácteos Los Andes, C.A., (vii) Corporación de Desarrollo para la Región Zuliana (CORPOZULIA), (viii) Corporación de Desarrollo de la Cuenca del Río Tuy (CORPOMIRANDA), (ix) Corporación de Desarrollo Jacinto Lara (CORPOLARA). Also, the Chief of the Superior Entity of the Sovereign Supply Command may designate for such purpose other public companies or entities with distribution capacity in order to authorize them at a regional or municipal level, which must be published in the Official Gazette.

 

The public or private production companies that refuse, delay, or fail to place the percentage of products required from them will be penalized as per the provisions of the Decree with the Status, Value, and Force of Organic Law of Agrifood Security and Sovereignty.   

 

The Resolution will become effective upon its publication in the Official Gazette.

 

In order to access the Resolution, 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.”