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Regime of validation of contracts signed by PDVSA, its Affiliates, and Mixed Companies

Resolution No. 164 of December 6, 2017, issued by the Ministry of the Popular Power for Petroleum, was published in Official Gazette No. 41.294 of the same date (the “Resolution”). The purpose of the Resolution is to establish a Regime of Review and Validation of national and/or international contracts signed by PDVSA, its affiliates, and mixed companies in which PDVSA holds shares (the “Regime”).

 

The Resolution establishes as follows:

 

1.- The Regime  will be directed to the  contracts signed, currently in effect, and to the contracts to be signed.

2.- All national and international contracts, currently in effect, signed by PDVSA, its affiliates, and mixed companies in which PDVSA holds shares will be subject to review and validation by PDVSA’s Presidency during the 30 calendar days following the entry into force of the Resolution, in order to evaluate that they have met the legal, financial, budgetary and technical requirements that allow to have an opinion on their existence, validity, and convenience for the company. In the event of the alleged inexistence of any requirement of validity and/or impact on the company’s patrimony, the necessary corrective measures will be taken according to the law and without prejudice to the determination of any relevant civil, administrative and/or criminal liability and reference to the competent administrative and judicial entities.

3. All national and international contracts to be signed by PDVSA, its affiliates, and mixed companies in which PDVSA holds shares will be subject to previous review and validation by PDVSA’s Presidency, in order to evaluate compliance with the legal, budgetary, financial, and technical requirements that allow to judge their  existence and validity and  the convenience of signing the same for the company.

4. The absence of review and validation by PDVSA’s Presidency will affect the existence and/or validity of any contract to be signed that is subject to the Resolution and, therefore, the performance of the obligations contained in the same.

5. No administrative and/or financial authority of PDVSA, affiliates or mixed company in which PDVSA holds shares may validly consent to the contracts subject matter of the Resolution.  

6. In the event of breach of the provisions of the Resolution, the liable persons will be subject to the penalties established in the Decree with the Status, Value, and Force of Law of Amendment to the Law against Corruption and other applicable legal provisions.

7. The legal regime of internal delegation of PDVSA, its affiliates, and mixed companies is revoked.

8. Public services and employment agreements signed with public or private companies, as well as all those signed with the Venezuelan public sector, are excluded from the scope of application of the Resolution. 

9. PDVSA’s Presidency is in charge of issuing the operating guidelines for compliance with the Resolution.

10. Any consultation relating to the content of the Resolution will be solved by the Ministry’s Office.  

 

In order to access Resolution No. 164, 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.”