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Faithful Performance Bond Contract (Exchange Transactions)

Ruling No. 002, issued by the National Center of Foreign Trade (Centro Nacional de Comercio Exterior – “CENCOEX”), was published in Official Gazette No. 40,349 of February 5, 2014 (the “Ruling”). Said Ruling authorizes the standard faithful performance bond contract that will be required, before effective payment of the foreign currency, of any legal person that has access to foreign currency granted in the frame of the General Plan of Foreign Currency of the Nation.

 

The Ruling prescribes that after the Authorization for Acquisition of Foreign Currency (Autorización de Adquisición de Divisas - “AAD”) is available to the applicant, the applicant must present a Faithful Performance Bond to the competent authorities, in the terms established in the Ruling.  For purposes of the presentation of the Bond, one (1) counterpart of the Faithful Performance Bond Contract duly authenticated before a Notary Public’s Office authorized to that end by CENCOEX must be filed by the applicant with its Exchange Operator.

 

The most significant aspects of the Faithful Performance Bond Contract are the following:

 

- The applicant binds itself to: (i) use the foreign currency granted solely and exclusively for the importation made by it, originating in the country where the goods to be imported are produced; (ii) use the foreign currency solely and exclusively for the purposes that gave rise to the request; (iii) indemnify the Venezuelan State for the incorrect use of the foreign currency granted for up to double the equivalent amount in Dollars of the United States of America, after its liability has been determined; (iv) refund the foreign currency granted in the event of breach of the obligations derived from the contract; and (v) accept that it may be audited by CENCOEX or by the entity designated by it in order to verify all the aspects regulating the goods.

 

- The bond will be presented for one hundred percent (100%) of the value in Dollars of the United States of America.

 

- All requests made before the entry into force of the Ruling that are at the stage of Authorization for Payment of Foreign Currency (Autorización de Liquidación de Divisas - “ALD”) will require CENCOEX’s previous evaluation in order to determine the applicability of the procedure established in the Ruling, to which end a detailed call schedule will be published.

 

The Ruling became effective upon its publication in the Official Gazette.

 

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.”