Travieso Evans Arria Rengel & Paz

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Exchange Agreement N° 20

In the Official Gazette N° 39,968 of July 19, 2012, the Exchange Agreement N° 20 of the Venezuelan Central Bank (“VCB”) was published, which establishes as follows:

 

Corporations that are not domiciled in the national territory and that participate in the execution of strategic public investment projects for the development of the national economy and of the stimulation of the manufacturing offer, may maintain funds in foreign currency, in current accounts or in term accounts, in universal banks governed by the Decree with Rank, Value and Force o Law of Partial Amendment of the Law of the Institutions of the Banking Sector (“LIBS”).  Said deposits may be operated by total or partial withdrawals, in local currency at the current rate of exchange, or by transference or bank check drawn against their corresponding accounts abroad.

 

Additionally, it is established that individuals of legal age, living in the national territory and corporations domiciled in the country, may maintain current accounts or term accounts in universal banks governed by the LIBS, in foreign currency arising, among others of legal nature, from the settlement of securities denominated in foreign currency, issued by the Bolivarian Republic of Venezuela, and its decentralized entities, or by any other entity, acquired through the System of Primary Placement of Securities in Foreign Currency (“SICOTME”) or through the System of Transactions with Securities in Foreign Currency (“SITME”), administrated by the VCB.  Said deposits in foreign currency may be operated by total or partial withdrawals in local currency at the current rate of exchange, or by transferences or bank checks drawn against their corresponding accounts abroad, as well as by debit instructions for payment of consumption goods and withdrawals made with bank cards abroad.

 

Those banking institutions that are authorized to receive such deposits must maintain the same in accounts in foreign currency at the VCB, in accordance with the current provisions.  The said institutions must deliver to the VCB on a monthly basis the detailed information of the funds that they maintain in foreign currency.

 

Finally, Agreement N° 20 establishes that those State companies that obtain currency from export activities may use up to five percent (5%) of the monthly average balance that they maintain in foreign currency, authorized by the Director of the VCB, for the purchase of securities issued in foreign currency by the Republic, or its decentralized entities, for purposes of being negotiated in Bolivars through the SITME.

 

To access Exchange Agreement N° 20, 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.”