Exchange Agreement No. 24
Exchange Agreement No. 24 (the “Exchange Agreement”), issued by the Venezuelan Central Bank (“VCB”) jointly with the Ministry of the Peoples’ Power of Finance, was published in Official Gazette No. 40,324 of December 30, 2013. It establishes that the rate of exchange for purchase applicable to Petróleos de Venezuela, S.A. (“PDVSA”) and its affiliates and to the mixed companies created under the Organic Hydrocarbons Law, for the sale of foreign currency derived from activities or operations other than exportation and/or sale of hydrocarbons, will be equal to the rate of exchange resulting from the latest awarding of foreign currency made through the Complementary System of Foreign Currency Administration (Sistema Complementario de Administración de Divisas – “SICAD”), which will be published in the Web page of the VCB, reduced by zero point twenty-five percent (0,25%).
Likewise, the Exchange Agreement establishes that the aforementioned rate of exchange for purchase will also be applied to the transactions of sale of foreign currency generated by the services companies that are part of the National Industrial Petroleum Conglomerate (Conglomerado Nacional Industrial Petrolero) and to that derived from mining exports, as well as to the foreign currency managed or received by the Popular Savings Fund referred to in the Decree with the Status, Value, and Force of Organic Law Relating to the National Savings Fund of the Working Class and the Popular Savings Fund.
The Exchange Agreement sets forth that the rate of exchange for sale applicable to PDVSA, its affiliates, mixed companies, and to the services companies that are part of the National Industrial Petroleum Conglomerate (Conglomerado Nacional Industrial Petrolero), as well as to the gold purchase transactions executed by the VCB, will be equal to the rate of exchange resulting from the latest awarding of foreign currency made through the SICAD, which will be published in the Web page of the VCB.
The assets denominated in foreign currency represented by the exploitation rights referred to in Decree No. 9,368, published in Official Gazette No. 40,109 of February 13, 2013, through which the National Executive transferred to PDVSA the right to develop directly or through a State entity the activities prescribed in article 1 of the Decree with the Status, Value, and Force of Law that reserves to the State the Activities of Gold Exploration and Exploitation, as well as their Connected and Ancillary Activities, in the areas delimited by Resolution No. 177, published in Special Official Gazette No. 6,094 of December 28, 2012, and other intangibles in foreign currency of the operating companies by reason of such activities, as well as the liabilities denominated in foreign currency of such operating companies in the gold sector, will be recorded in the accounts at the rate of exchange resulting from the latest awarding of foreign currency made through the SICAD, which will be published in the VCB’s Web page.
The Exchange Agreement entered into force on December 30, 2013.
In order to access the Exchange Agreement, 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.”