Acquisition of foreign currency intended for International Air Transport companies
Ruling No. 124, issued by the Foreign Currency Administration Commission (“CADIVI”), was published in Special Official Gazette No. 6,122 of January 23, 2014. The Ruling establishes the requirements and formalities of the request for Authorization for Acquisition of Foreign Currency (Autorización de Adquisición de Divisas - “AAD”) intended for foreign companies engaged in international air transportation of passengers, cargo, and mail (the “Ruling”).
According to the Ruling, the foreign companies that provide the public service of international air transportation of passengers, cargo, and mail, duly authorized by the National Institute of Civil Aeronautics (Instituto Nacional de Aeronáutica Civil – “INAC”), from and to the national territory, will be subject to scope of application of the Ruling when they wish to remit to the parent company of their country of origin the net balance resulting from discounting (i) the income from airfreight rates and mail transportation rates and from the sale of air tickets solely to persons legally residing in the national territory, obtained by each of the points, offices, branches, or sales agencies, and (ii) all costs, expenses, and taxes to be paid in the country.
The Ruling establishes that in order for the AAD to be granted, CADIVI will evaluate the availability of foreign currency established by the Venezuelan Central Bank and the agreement between what is requested and the guidelines approved by the National Executive. The Ruling provides that the rate of exchange applicable to the operations established in the Ruling will be the one resulting from the latest awarding of foreign currency made through the Complementary System of Foreign Currency Administration (Sistema Complementario de Administración de Divisas - “SICAD”) at the time of the Authorization for Payment of Foreign Currency (Autorización de Liquidación de Divisas - “ALD”).
CADIVI will have the broadest powers to inspect and supervise both users and authorized exchange operators. In this connection, CADIVI will verify the data provided by the user in the request for authorization, as well as the conditions of the authorization granted, in order to confirm the correct use of the authorizations granted. In the event of breach of any of the obligations established in the Ruling or in the exchange rules, CADIVI may suspend, as a preventive measure, the user’s access to the Automated System of Foreign Currency Administration and commence the relevant proceedings and inquiries.
The Ruling repealed Administrative Ruling No. 023, published in Official Gazette No. 37,667 of April 7, 2003. However, the Ruling prescribes that the AAD requests with the status “Received by CADIVI” (“Recibida por CADIVI”) will be governed by the provisions of the aforesaid Ruling No. 023.
The Ruling became effective as from January 24, 2014.
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.”