Law of Bancoex

 

LAW OF THE BANCO DE COMERCIO EXTERIOR (BANCOEX)

 

Official Gazette N° 37,330, dated November 22, 2001

RECITALS

OF THE DECREE IN FULL FORCE AND EFFECT OF THE PARTIAL REFORM

OF THE BANCO DE COMERCIO EXTERIOR

This reform of the Law of the Foreign Trade Bank is aimed at fitting the purpose of said institution in the country current development needs, particularly production areas for foreign trade. Therefore, a new definition should take into account the character of development bank. Whereas: the Foreign Trade Bank is a state-run agency with specific objectives enshrined in the Constitution of the Republic, namely: foster production of goods and services and facilitate an appropriate trade with foreign nations inside or outside regional integration schemes along with Venezuela, now more than ever the nation should count on a dedicated first-class financial organization. Said financial organization should be attached to the Ministry of Production and Trade, in keeping with the development guidelines, policies and plans dictated by the National Executive Office.

For the aforementioned reasons and in order to define the status of development bank, the incorporation in the enabling law of the reform of the Law that establishes the Foreign Trade Bank has been deemed as appropriate. That is, the activity of the Bank shall go beyond mere foreign trade financing to encompass non-oil production. Note that the new direction of the Bank, set forth in the first provision of the reform, encompasses the main purpose of the restated text.

By the same token, the financing term shall be extended to twelve (12) years, in view of the importance for the Bank, as an institution engaged in development of the exporting sector, of affording globally competitive financing terms for the development of export-related projects. Likewise, in relation to the bank operations, there is the possibility of granting loans to domestic or foreign investors, both for foreign trade operations and development of production projects for export of goods or services of national origin, a characteristic feature of development banks.

Furthermore, whereas the Foreign Trade Bank is a strategic state agency different from private financial institutions that need to entrust third banks with safekeeping of certain assets, the authority to safeguard investments in securities in order to prevent additional operating costs has been included, as well as the possibility of issuing secured bonds and liens for a portion of the credit or securities portfolio, if the needs arises to increase the Bank’s liquidity.

The same provision on the Bank’s operations includes the potential involvement in the establishment of syndicates for export by productive sectors. This enables Bancoex to play a more dynamic role in funding and promotion of the national development. Additionally, in furtherance of business development, this provision stipulates the Bank’s shareholding along with third investors in new businesses for a maximum term of five years and no more than thirty percent (30%) of the corporate capital stock.

The regulation related to monitoring and oversight of the Bank by the Superintendence of Banks and Other Financial Institutions has been extended, in line with the Bank’s status of development financial institution and grantor of US dollar-denominated loans.

In extending borrowing facilities, an emphasis has been made for recipient banks and financial institutions, as debtors of the Bank, to back any loans issued by them.

Additional powers for the Bank include dealing with and issuing certificates of origin. Such an activity has been carried out since 1998, pursuant to a convention executed together with the Ministry of Industry and Trade.

Whereas the special operations conducted by Bancoex are not covered in the General Law of Banks and Other Financial Institutions, a chapter has been added in relation to prohibitions and sanctions in the event of infringing the provisions on the Bank’s operations.

An amendment has been made whereby the exports to be financed by Bancoex may have other sureties in addition to export risk coverage, in order to expand the exporters’ endorsement of the funding granted by the Bank and get full coverage of the relevant risks.

Two new powers related to autonomous funds have been added to the activities of the board of directors. Such change fills a legal void as administrators are empowered to submit for the consideration of the board of directors the agreements reached by committees. This will help fulfill the specific tasks entrusted to the said autonomous funds in the areas of export and investment promotion and coverage of political and extraordinary risks that may affect the export of goods and services.

The attendance of the Vice-Chairperson of Export and Investment Promotion at the Committee for Export and Investment Promotion and Export Services has been regulated; the duties and responsibilities of said Committee have been specified.

A provision has been added to set the rules on disposal of the Bank’s assets. Disposal will be governed by the General Law of Banks and Other Financial Institutions, except for the authority of the board of directors to set the method under certain circumstances. This will afford the Bank flexible operations and remove the stiffness characteristic of public agencies.

New articles have been added on the exception of compliance with any general rule aimed at banks and other financial institutions that imposes any duties different from promotion and funding of exports of goods and services and exporter services.

Two articles have been added on the rendering of free services by courts, registrars, notaries and other public servants on behalf of the Foreign Trade Bank by reason of the operations linked with its functions and obligations to small and medium-sized enterprises.

Finally, several changes have been made in the current legal instrument with regard to the establishment of business representation offices, shareholding of the Republic, stockholders’ regular meetings, and potential adherence to the exchange agreements entered into by and between the Executive Office and the Central Bank of Venezuela, or the possibility of executing particular agreements with the Central Bank of Venezuela so as to preserve Bancoex equity in foreign currency.

Decree N° 1,455 of September 20, 2001

HUGO CHAVEZ FRIAS

PRESIDENT OF THE REPUBLIC

 

Acting by virtue of the authority vested in him by number 8, article 236 of the Constitution, as set forth in Law N° 4 which empowers the President of the Republic to issue decrees in full force and effect in the delegated matters, published in the Official Gazette, Bolivarian Republic of Venezuela, N° 37,076, dated November 13, 2000, in Ministerial Council,

HEREBY ISSUES

this

DECREE IN FULL FORCE AND EFFECT OF THE BANCO DE COMERCIO EXTERIOR (BANCOEX).

 

 

 

TITLE I

 

GENERAL PROVISIONS

Chapter I

Incorporation, legal status, duration and purpose

Article 1°. The Foreign Trade Bank has been established as a development bank, as a joint venture, and in the form of limited company, attached to the Ministry of Production and Trade.

Article 2°. The Foreign Trade Bank shall last fifty (50) years as of the entry into force of this decree-law. Said term shall be automatically extended for equal periods, unless the merging, liquidation or winding up of the Foreign Trade Bank shall be agreed.

Article 3°. The Foreign Trade Bank shall be based in the city of Caracas and may set up or close, with the prior consent of the Superintendence of Banks and Other Financial Institutions, branch offices in or out of the Republic, as deemed appropriate for the good working order.

In performing the function of export and investment promotion, the Foreign Trade Bank may set up or shut down business offices abroad, upon the decision of the stockholders’ meeting.

Article 4°. The Foreign Trade Bank is aimed at funding and promoting exports of goods and services of national origin, under the plans and policies for socioeconomic development set by the Executive Office. In performing the function of export promotion, the Foreign Trade Bank shall render technical assistance and provide training. Likewise, the Foreign Trade Bank shall bolster partnership of small enterprises in order to secure them a niche in foreign markets. The Foreign Trade Bank is further aimed at fostering investments intended to cement production units for export.

 

Chapter II

Capital stock and shares

Article 5°. The subscribed share capital of the Foreign Trade Bank is tantamount in bolivars to two hundred million US dollars (US$ 200,000,000.00). The paid-in capital to date totals seventy-nine billion five hundred thirty-three million seven hundred thousand bolivars (Bs. 79,533,700,000.00). Said sum is tantamount to one hundred sixty-five million four hundred thirty-two thousand US dollars (US$ 165,432,000.00). The exchange rate, for the sole purposes of the subscribed, paid-in capital to date is the exchange rate in force on the date of the incorporation of the Foreign Trade Bank.

The capital stock of the Foreign Trade Bank may be increased by decision of the stockholders’ meeting. In any case, the amount of the capital stock and reserves of the Foreign Trade Bank shall be represented in terms of a percentage aggregate of the currency of the five (5) major countries with the largest shareholding in the global trade, which amount shall be revised regularly, as approved by the Central Bank of Venezuela. For such purpose, every time the bolivar suffers a significant depreciation, the stockholders’ meeting shall endorse the respective capital increase and any related decisions on the reserves, as proposed by the board of directors.

The Republic shall keep the controlling interest in the capital stock.

Article 6°. The capital stock of the Foreign Trade Bank shall be divided into registered, non-convertible, bearer shares, each of which for one thousand bolivars (Bs. 100,000.00). Where there are several holders of one single share, only one of them shall be acknowledged for the purpose of representation. Each share shall be entitled to one vote and similar dividends or benefits arisen from the net profit gained by the Bank.

The possibility of issuing debenture stocks has been excepted, as resolved by the stockholders’ meeting; in this case, said debenture stocks shall bear the rights agreed by the stockholders’ meeting which approves the issue thereof.

The owner share of the Foreign Trade Bank, relative to assets, may not be lower than the percentage set by the Superintendence of Banks and Other Financial Institutions, taking into consideration the characteristic features of the Bank.

Article 7°. Shares may be bought by:

  1. The Republic and other agencies referred to in Article 6 of the Organic Law of Public Sector Financial Management.
  2. Foreign corporations with the Venezuelan State as a shareholder.
  3. Venezuelan individuals or corporations.
  4. Venezuelan individuals or corporations, pursuant to the Common System on Treatment of Foreign Capital and on Trademarks, Patents, Licenses and Royalties, and in the Venezuelan regulations related to said common system.
  5. Foreign investors, as expressly resolved by the stockholders’ meeting.

Chapter III

Management and administration

First section

Stockholders’ meeting

Article 8°. The stockholders’ meeting is the top authority of the Bank; it represents all of the stockholders; its decisions, within their powers, are binding upon all stockholders, including absentees.

Article 9°. The regular stockholders’ meeting shall meet within the first three (3) months of each six-month term, upon the call of the board of directors, which call shall be posted on one of the newspapers with the largest readership in the city of Caracas, at least fifteen (15) days in advance to the regular stockholders’ meeting.

In the absence of the necessary representation to declare a regular shareholders’ meeting as validly established for deliberation, under article 12 of this decree-law, it shall be assumed that stockholders have been called for an adjourned stockholders’ meeting at the same time on the next bank working day. On this opportunity, the adjourned regular stockholders’ meeting shall be validly established regardless of the number of attending stockholders.

Article 10. The stockholders’ meeting has the following duties and responsibilities:

1. Hear the annual report of the board of directors and approve or reject the financial statements, six-month accounts and the report of trustees.

2. Ponder, as proposed by the board of directors, on capital increases.

3. Deal with and resolve on the six-month reports submitted by the board of directors on the status of the businesses where the Bank has an interest, and any reports submitted by the board of directors on the setup of reserves and other provisions for risk coverage, particularly exchange-related risks.

4. Approve or reject the six-month reports submitted by the Committee of the Fund for Export Political and Extraordinary Contingencies, in relation to the status of the investment of the Fund resources for risk coverage.

5. Ponder on the six-month reports submitted by the Committee of the Fund for Export and Investment Promotion and Exporter Service with regard to the status of the investments of the Fund resources.

6. Deal with and resolve on the distribution of profits, as per the recommendation of the board of directors.

7. Endorse the draft annual budget of income and expenditure of the Foreign Trade Bank.

8. Elect two (2) trustees and their deputies, pursuant to the Code of Commerce.

9. Appoint external auditors and set their remuneration.

10. Appoint the internal comptroller and approve his/her duties and responsibilities.

11. Set the salary of the chairperson and the remuneration of directors and trustees.

12. Endorse the issue of debenture stocks and the privileges afforded thereby.

13. Approve the setup and shutdown of branch offices, offices and commercial offices overseas.

14. Discuss and resolve any other matter included in the call.

Article 11. The special stockholders’ meeting shall meet wherever the Bank is interested, upon the call of the board of directors, which call shall be posted on one of the newspapers with the largest readership in the city of Caracas, at least fifteen (15) days in advance. The call may be also made by stockholders who represent at least ten percent (10%) of the paid-in capital of the Bank and by the chairperson of the board of directors.

In the absence of the necessary representation to declare a special shareholders’ meeting as validly established for deliberation, pursuant to article 12 of this decree-law, the procedure established in the last item of article 9 shall be followed.

Article 12. The stockholders’ meeting shall be declared as validly established for deliberation if at least half plus one of the stocks accounting for the paid-in capital of the Bank is represented.

Article 13. The call for regular or special stockholders’ meetings shall specify the purpose of the meeting; any discussion on any matter that has not been expressed in the call shall be null and void.

Article 14. Stockholders’ meeting shall be headed by the chairperson of the Bank, or, instead, by the executive vice-chairperson.

Article 15. Resolutions of the stockholders’ meetings shall be passed by absolute majority of votes.

Second section

Board of directors

Article 16. The Bank shall be managed by a board of directors composed of the chairperson, the executive vice- chairperson and five (5) directors, who shall be freely appointed and removed by the President of the Republic. The five (5) directors shall be chosen from shortlists submitted by the Ministry of Foreign Affairs, the Ministry of Finance, the Ministry of Production and Trade, the Economic and Social Development Bank of Venezuela, and the private sector. To that end, a representative per institution shall be designated.

Each director shall have a deputy, who shall be appointed in the same way and for the same term.

Article 17. The members of the board of directors shall be honest people in good standing and with proven experience in the area of banking, finances and foreign trade. Members of the board of directors may not be:

  1. Declared in bankruptcy, legally unable, or subject to a criminal sentence involving imprisonment.
  2. Spouses or relatives up to the fourth degree of consanguinity and second degree of kinship of the President of the Republic; ministers of competent jurisdiction in matters related to the activities of the Bank; the minister of Production and Trade; the chairperson of the Economic and Social Development Bank of Venezuela, or any other member of the board of directors.
  3. Bad debtors of bank or tax liens. 

Article 18. Minor stockholders are entitled to be represented at the board of directors of the Bank, under the terms set forth in the General Law of Banks and Other Financial Institutions.

Article 19. Members of the board of directors shall perform their functions for two (2) years, and may be reelected for equal terms.

Article 20. The board of directors shall be in session at least once in a week. The meetings of the board of directors may be held with the attendance of the chairperson or the executive vice- chairperson and three (3) directors. Decisions shall be made by absolute majority.

Article 21. Any members of the board of directors who fail to attend the meetings three (3) consecutive times without a justified reason shall be finally replaced by their deputies.

Article 22. The board of directors shall have the following duties and responsibilities:

1. Ensure the net worth of the Bank; the appropriate financial good standing and appropriate control of any risk faced by the Bank, particularly with regard to operations in foreign currency.

2. Endorse the programs, operations and agreements of the Bank, and select banks and financial institutions as the recipients of the funds in line with the purpose of the Bank.

3. Deal with and approve the agreements reached by the Committee of the Fund for Export and Investment Promotion in relation to the destination of the resources of the Fund of Export and Investment Promotion and Exporter Service, where said agreements exceed the amount set in the delegation of authority approved by the board of directors.

4. Deal with and approve the agreements reached by the Committee of the Fund for Export Political and Extraordinary Contingencies in relation to the destination of the resources of the Fund of Export Political and Extraordinary Contingencies, where said agreements exceed the amount set in the delegation of authority approved by the board of directors.

5. Prepare the draft reform of the bylaws of the Bank, which draft shall be submitted to the approval of the stockholders’ meeting.

6. Pass the operating and administrative standards of the Bank, including internal regulations and appropriate rules on delegation.

7. Appoint attorneys and any other high-ranking officers of the Bank and set their remuneration.

8. Appoint and remove any other officers and employees of the Bank, except for those cases entrusted to the chairperson of the board of directors.

9. Bring forward the annual budget and investment plans of the Bank for the consideration and approval of the stockholders’ meeting.

10. Submit to the regular stockholders’ meeting the annual report, financial statements, six-month accounts and reports of trustees of the Bank. Likewise, propose the distribution of profits and capital increase.

11. Submit to the regular stockholders’ meeting six-month progress reports of the businesses where the Bank has an interest, as well as the reports on the establishment of reserves and other allocations for risk coverage, particularly exchange related risks.

12. Submit to the regular stockholders’ meeting six-month progress reports on the activities carried out by the Bank with regard to export promotion, investment promotion and exporter service.

13. Approve the setup and shutdown of offices in the province.

14. Appoint correspondents in and out of Venezuela.

15. Name and appoint court or out-of-courts attorneys; set their duties and responsibilities, and appoint representatives of the Bank in meetings, councils or any other events of institutions or businesses where the Bank has an interest.

16. Discharge any other duty that may be entrusted as per this decree-law, the bylaws or the stockholders’ meeting.

Third section

Authorities of the Bank

Article 23. The immediate management and administration of the business of the Bank falls to the chairperson, who shall also act as the legal representative of the Bank, notwithstanding the powers of attorneys. The chairperson and the executive vice- chairperson of the Bank shall be appointed by the President of the Bolivarian Republic of Venezuela.

The chairperson of the Bank shall have the following rights and duties:

1. Enforce the decisions of the board of directors.

2. Chair the meetings of the board of directors and the stockholders’ meetings.

3. Convene special meetings of the board of directors, on his/her own or at the request of three (3) members of the board of directors.

4. Resolve any matter that is not expressly reserved to the stockholders’ meeting or the board of directors, but brief on this matter at the next meeting of the board of directors.

5. Engage in the activities of the Bank.

6. Discharge any other duty that may be entrusted as per this decree-law, the bylaws or the stockholders’ meeting.

 

Article 24. The executive vice- chairperson shall stand in for the chairperson in the event of temporary absence of the chairperson. The executive vice- chairperson shall devote himself/herself to the activities of the Bank and have all the rights and duties appointed in this decree-law, the regulations hereof, the bylaws, the stockholders’ meeting, the board of directors, or any other right and duty entitled or entrusted by the chairperson.

Article 25. The Foreign Trade Bank shall have one or more legal counsels, who shall be freely appointed and removed by the board of directors and remain in office as long as they are not replaced with the persons appointed for such purpose. The legal counsel shall be the only official, except for duly appointed attorneys, empowered to legally represent the Bank; therefore, any summons and subpoenas that may be addressed to the Bank shall be served in any of the incumbents.

The legal counsel shall require the express authorization of the chairperson to compromise and settle or desist from any legal action.

TITLE II

OPERATIONS AND PROHIBITIONS

Chapter I

Operations of the Bank

Article 26. The Foreign Trade Bank may, based on the programs approved by the board of directors, shall:

1. Receive sight or term deposits, in bolivars or foreign currency, from public or private, Venezuelan or foreign individuals or corporations, and return them in the same currency they were received.

2. Extend loans to banks and other financial institutions chosen by the board of directors to fund foreign trade operations or development of production projects for the export of goods and services of national origin.

3. Provide or underwrite credits to exporters of goods and services of national origin up to a term of twelve (12) years, and to the importers of foreign countries that may ask for financing to procure goods and services of national origin under the terms and upon the conditions set by the board of directors, in conformity with the guidelines of the plans and policies for economic and social development issued by the Executive Office.

4. Deposit provisionally, in market conditions; in safe, cost-effective and easily marketable investments, the uncommitted quick assets in the operations listed in the above-mentioned items of this article.

5. Safeguard investments in securities.

6. Issue secured bonds and obligations of a percentage of its credit portfolio or owned assets in order to expand the financial capacity for credit granting.

7. Embolden informational exchange and financial aid with national and international organizations.

8. Open up standing communication channels on foreign trade policy with the Ministry of Production and Trade and the Ministry of Foreign Affairs.

9. Take part, directly, jointly or separately, with third parties in the capital stock of developing businesses up to a term of five (5) years and in a percentage of no more than thirty percent (30%) of its interest in the business, the purpose of which shall be production and marketing of goods or services of national origin for export, as per the guidelines approved by the stockholders’ meeting.

10. Sponsor and offer technical assistance to the incorporation of consortiums by production sectors dedicated to export of goods and services of national origin.

11. Advance and expedite Venezuelan and foreign investments in businesses and consortiums engaged in export of goods and services of national origin.

12. Conduct any other operations that serve the purpose of the Bank and deemed by the board of directors are consistent with the nature of the Bank.

The Central Bank of Venezuela may set the terms, conditions and methods of the obligations undertaken in foreign currency by the Foreign Trade Bank. To that end, the Foreign Trade Bank shall abide by the appropriate exchange agreements entered into by and between the Executive Office and the Central Bank of Venezuela or execute with the Central Bank of Venezuela specific agreements allowing to protect its capital in foreign currency.

The Superintendence of Banks and Other Financial Institutions, as appropriate and bearing in mind the status of the Foreign Trade Bank as a development financial institution set to extend loans in foreign currency, shall set the standards of monitoring and oversight under which the Bank shall perform its functions.

Article 27. In the event that the funds of the Bank shall be used to provide banks and other financial institutions with the necessary assets to fund the activities stipulated herein, the banks and other financial institutions shall take on all the risk arisen from said funding, regardless of the legal method used for such funding. The funding shall strictly consider the economic and social development policies that govern the Foreign Trade Bank, and the Foreign Trade Bank shall set the buy-sell spread for the loans granted with the funds and track their compliance.

Article 28. The Foreign Trade Bank may perform banking or loan-related operations, namely: transfer funds inside Venezuela; accept the custody of funds, securities and valuable items; act as trustee and carry out orders, tasks and other fiduciary assignments, even the management of programs on incentives to exports; draw and transfer funds abroad, and buy and sell foreign currency, notwithstanding the provisions set in the Law of the Central Bank of Venezuela and any other current regulations.

Article 29. The Foreign Trade Bank may, further:

1. Supply information and give technical and financial assistance to individuals and corporations with regard to foreign trade operations, particularly export of goods and services of national origin.

2. Take part, at the request of the authorities of competent jurisdiction, in the discussion of reciprocal credit agreements or other methods to facilitate foreign payment.

3. Act as advisor to the authorities of competent jurisdiction in the field of foreign trade funding.

4. Arrange and issue certificates of origin.

5. Act as a mediator and arbiter, at the request of the parties, in any disputes that may arise between importers and exporters based in Venezuela.

6. Open a technical office to arrange a data system as input for the board of directors for decision making as to investment projects.

Chapter II

Prohibitions

Article 30. The Foreign Trade Bank may not:

1. Extend, directly or indirectly, any loans whatsoever to the owners of shares tantamount to, or higher than, ten percent (10%) of the capital stock of the Bank.

2. Grant any kind of loan to one single borrower for a total amount higher than fifteen percent (15%) of the paid-in capital and reserves where said loans are granted to banks and other financial institutions, and ten percent (10%) of the paid-in capital and reserves where said loans are granted to exporters of goods and services of national origin.

3. Buy assets and private obligations for a total amount higher than twenty percent (20%) of the paid-in capital and reserves, except for the bonds issued by banks and other financial institutions in the event of placement of surplus in treasury operations.

4. Invest in securities that are not registered at the Securities National Registry Office or a foreign counterpart.

5. Transfer funds from the own net worth of the Bank or from the regular management of the Bank to the fund referred to herein to pay export political and extraordinary contingencies.

6. Incur any expenses different from the regular course of business of financial institutions in order to pay goods and services received by the Nation or other public agencies.

The Bank shall be subject to the general and particular constraints and prohibitions contained in the General Law of Banks and Other Financial Institutions, as appropriate.

The prohibitions referred to in numbers 4 and 5 of this article shall not apply to the treasury investments contemplated in number 4, article 26 of this decree-law.

Foreign offices, branch offices or agencies of the Bank shall be subject to the constraints and prohibitions set by the Executive Office, after hearing the opinion of the Central Bank of Venezuela and the Superintendence of Banks and Other Financial Institutions.

TITLE III

EXPORT CREDIT INSURANCE

Article 31. The Foreign Trade Bank may, within the limits set herein, establish or sponsor the incorporation of export credit underwriters; take part in the capital stock of such existing companies; hire their services, or fund the service users. Likewise, the Foreign Trade Bank may give, or help give, technical assistance to said companies.

Article 32. The Bolivarian Republic of Venezuela shall be responsible for paying the indemnity resulting from any occurrences connected with coverage of exports of goods and services of national origin, against political and extraordinary risks. For such purpose, a Fund for Export Political and Extraordinary Contingences has been established as an autonomous fund, without legal status, attached to and managed by the Foreign Trade Bank. The Fund for Export Political and Extraordinary Contingences shall be made up of the following resources:

1. Budget allocations from the Executive Office under the Budget Law.

2. Donations, bequests, credits or any other transfers intended to increase the resources of the Fund for Export Political and Extraordinary Contingences.

3. Premiums paid to insurance companies for coverage of political and extraordinary risks, or part of the premium of the blanket coverage of political and extraordinary risks.

4. Profits and other income from investments made with the resources of the Fund for Export Political and Extraordinary Contingences.

5. Any other assets entitled to the Fund for Export Political and Extraordinary Contingences.

The value of the resources of the Fund for Export Political and Extraordinary Contingences shall be represented by a percentage of the aggregate value of the currencies of the five (5) countries with the largest share in global trade. Said value shall be regularly revised and approved by the Central Bank of Venezuela.

In order to prepare the draft National Budget Law, the Committee of the Fund for Export Political and Extraordinary Contingences, mentioned in article 34 hereunder, shall bring forward to the Executive Office an estimated amount of the resources that could be addressed to the Fund for Export Political and Extraordinary Contingences, based on the indemnities needed to secure with the resources of said Fund for Export Political and Extraordinary Contingences.

Article 33. The resources of the Fund for Export Political and Extraordinary Contingences shall be deposited in the Foreign Trade Bank. The Foreign Trade Bank shall manage said resources under the guidelines set in number 4, article 26 of this decree-law, taking into account the need to address any requests for payment of indemnity.

Article 34. The Fund for Export Political and Extraordinary Contingences shall have a committee composed of the chairperson of the Foreign Trade Bank, the minister of Finance or an appointee, a representative of the Chamber of Insurance Companies, and a representative of the Insurance Superintendence.

The Committee of the Fund for Export Political and Extraordinary Contingences shall be headed by the chairperson of the Foreign Trade Bank. Decisions shall be made by majority of votes. The members of the Committee of the Fund for Export Political and Extraordinary Contingences shall perform their functions for two (2) years and may be reelected for equal terms.

The election of the members of the Committee of the Fund for Export Political and Extraordinary Contingences shall be in accordance with the current governing scheme for each organization represented therein.

Each member of the Committee of the Fund for Export Political and Extraordinary Contingences shall have a deputy, who shall be appointed in the same way and for the same term.

Article 35. The Committee of the Fund for Export Political and Extraordinary Contingences shall have the following duties and responsibilities:

1. Approve, notwithstanding the powers of the Insurance Superintendence, the general guidelines on the issue of export credit insurance policies as to political and extraordinary risks, or blanket coverage for export. In the latter case, the approval of the Fund for Export Political and Extraordinary Contingences shall be required only to insure political and extraordinary risks.

2. Endorse the annual budget of the Fund for Export Political and Extraordinary Contingences.

3. Hear and make comments, as appropriate, about the investments made by the Foreign Trade Bank with the resources of the Fund for Export Political and Extraordinary Contingences.

4. Approve the applications for resources from the Fund for Export Political and Extraordinary Contingences, pursuant to article 32 of this decree-law.

5. Endorse the payment of indemnity to the account of the resources of the Fund for Export Political and Extraordinary Contingences.

6. Pass the hiring of export credit insurance companies for the management of the political and extraordinary risk coverage. This contract includes the remuneration to be received by said companies for the services rendered to the Fund for Export Political and Extraordinary Contingences.

7. Submit on an annual basis to the stockholders’ meeting of the Foreign Trade Bank, through the chairperson of the Foreign Trade Bank, any remarks deemed as appropriate, towards the good management of the Fund for Export Political and Extraordinary Contingences.

8. Submit reports to the stockholders’ meeting of the Foreign Trade Bank on the status of the investments of the resources of the Fund for Export Political and Extraordinary Contingences.

9. Discharge any other duty that may be entrusted in this decree-law or regulations hereof.

Article 36. Limits and conditions to pay the indemnity referred to herein shall be set in the contractual guidelines approved by the Committee of the Fund for Export Political and Extraordinary Contingences, under number 1 of article 35, herein above.

Article 37. Exports funded by the Foreign Trade Bank shall be covered by export credit insurance or any guarantees deemed as appropriate by the board of directors or the committee of the Foreign Trade Bank entrusted with such task.

Article 38. Terms, conditions, and procedures of the export credit insurance and the Fund for Export Political and Extraordinary Contingences which are not contained in this decree-law shall be set in the regulations hereof, notwithstanding the enforcement, as appropriate, of the Law of Insurance and Reinsurance Companies.

TITLE IV

EXPORT AND INVESTMENT PROMOTION AND EXPORTER SERVICE

Article 39. With a view to performing the functions of export and investment promotion and exporter service, the Fund for Export and Investment Promotion and Exporter Service has been established as an autonomous fund, attached to and managed by the Foreign Trade Bank. The Fund for Export and Investment Promotion and Exporter Service, with its own net worth, shall be made up of the following resources:

1. Any provision afforded from the outset by the Law of Budget of Public Income and Expenditure.

2. Any allocation made by the shareholders’ meeting from the net profit of the Foreign Trade Bank.

3. Net profit from the operations conducted with the use of the resources of the Fund for Export and Investment Promotion and Exporter Service, and from rent, investment or disposal of the property which forms part of its net worth.

4. Special contributions agreed by the Executive Office at any time and any assets bought by the Fund for Export and Investment Promotion and Exporter Service.

5. Special contributions agreed by the private sector at any time and any assets donated to the Fund for Export and Investment Promotion and Exporter Service.

 

6. A one percent (1%) contribution, estimated on the FOB value of the import activities designated by the regulations hereof. Said contribution shall be paid by the respective importers at the time of payment of the import duty in an account of the Foreign Trade Bank, in conformity with the procedure set by the aforementioned regulations.

The aforementioned contribution shall be for a term of five (5) years from the entry into force of the regulations of this decree-law.

7. The income from the activities of export and investment promotion and rendering of services to the exporters of goods and services of national origin.

8. The income from the provision of services related to the issue of certificates of origin.

The value of the resources of the autonomous fund referred to herein shall be represented in terms of a basket composed of hard currency, upon the approval of the Central Bank of Venezuela.

Article 40. The Foreign Trade Bank may invest the resources of the fund referred to in article 39 herein above, under the guidelines set forth in number 4, article 26, bearing in mind the need to honor the commitments arisen from the export and investment promotion and exporter services hereunder.

Article 41. The Fund for Export and Investment Promotion and Exporter Service referred to in article 39 hereof shall have a committee composed of the chairperson and the executive vice-chairperson of the Foreign Trade Bank, a representative of the Ministry of Foreign Affairs, a representative of the Ministry of Production and Trade, a representative of the Economic and Social Development Bank of Venezuela, a representative of the Venezuelan Exporters’ Association, and a representative of the Venezuelan Industrial Association. The vice-chairperson of Export and Investment Promotion shall attend the meeting of the committee with speaking privileges but without the right to vote.

The committee shall be headed by the chairperson of the Foreign Trade Bank; decisions shall be made by majority of votes. The members of the committee shall hold their incumbencies for two (2) years and may be reelected for equal terms.

Each member of the Committee of the Fund for Export and Investment Promotion and Exporter Service shall have a deputy, who shall be appointed in the same way and for the same term.

Article 42. With a view to enforcing the policies set by the Executive Office pursuant to article 4 of this decree-law, the Fund for Export and Investment Promotion and Exporter Service shall have, inter alia, the following duties and responsibilities:

1. Encourage the involvement of Venezuelan businesses in events aimed at increasing and strengthen the export of goods and services of national origin.

2. Spur the involvement of Venezuelan businesses in trade shows and fairs.

3. Sponsor foreign trade missions of Venezuelan businesses.

4. Further trade missions in Venezuela of foreign buyers.

5. Stimulate exporter service in any and all areas that facilitate export development.

6. Collect and disseminate information about the Venezuelan export supply.

7. Spread by means of publications or by any other informational or audiovisual means the potential of marketing and placement of Venezuelan products in foreign markets.

8. Discharge any other duties that may be entrusted in this decree-law or regulations hereof.

Article 43. The Committee shall:

1. Pass the annual budget of the Fund for Export and Investment Promotion and Exporter Service in advance to the final approval by the board of directors.

2. Hear and make remarks, as appropriate, about the investments made by the Foreign Trade Bank with the resources of the Fund for Export and Investment Promotion and Exporter Service.

3. Endorse the annual schedule of activities expected to be carried out with the resources of the Fund for Export and Investment Promotion and Exporter Service and suggest the board of directors the necessary quick assets to conduct said activities.

4. Make on an annual basis to the stockholders’ meeting of the Foreign Trade Bank, through the chairperson of the Foreign Trade Bank, any remarks as appropriate, aimed at improving the management of the Fund for Export and Investment Promotion and Exporter Service.

5. Produce six-month reports at the stockholders’ meeting of the Foreign Trade Bank about the use and destination of the resources of the Fund for Export and Investment Promotion and Exporter Service and the status of the investments made with the resources of the Fund for Export and Investment Promotion and Exporter Service.

Article 44. The commercial attaches accredited at the respective embassies of Venezuela and other officials engaged in related activities shall cooperate, under the guidelines of the Ministry of Production and Trade, with the Foreign Trade Bank in attaining its goals connected with investment and export promotion of goods and services of national origin. By virtue thereof, the commercial attaches shall be allowed to:

1. Supply or collect trade information for export promotion.

2. Offer exporters services of trade information and marketing support for their products.

3. Help organize trade fairs and missions.

4. Seek from the regulatory authorities of the respective country anything related to export and investment promotion.

5. Carry out any other activity in the interest of the Foreign Trade Bank and inherent in their functions.

TITLE V

SANCTIONS

Article 45. The Superintendence of Banks and Other Financial Institutions may fine from 0.1% through 0.5% of the paid-in capital stock for any breach of the provisions contained in articles 26 and 30 of this decree-law. The procedure set forth in the General Law of Banks and Other Financial Institutions shall be followed in imposing the sanctions stipulated herein.

TITLE VI

FINAL PROVISIONS

Article 46. Disposal of the assets requisite and necessary to be bought by the Foreign Trade Bank so as to protect its rights from the settlement of loans and other liens shall be exclusively governed by the same standards contained in the General Law of Banks and Other Financial Institutions with regard to the allowable length of time to preserve such assets. Said assets shall be exempted from the enforcement of the Organic Law that regulates the disposal of assets of the public sectors not attached to basic industries, as set forth in article 1 of said Organic Law. The procedures to be followed by the Foreign Trade Bank for the disposal of its assets shall be subject to the rules issued by the board of directors of the Foreign Trade Bank aimed at governing the expected takeover bid in each case, or justifiable award by private contract according to the nature of the disposable assets, or exhaustion of the takeover bid.

Article 47. The Foreign Trade Bank shall be exempted from compliance with any general rule aimed at banks and other financial institutions which may impose on it the obligation of using a portion of their credit resources to finance any areas different from promotion and funding of exports of goods and services of national origin and exporter service.

Article 48. Courts, registrars, notaries and any and all officials and authorities of the Republic that comprise the central and decentralized public administration shall render for free the legal services of their ministries on behalf of the Foreign Trade Bank for any act or arrangement involving them by reason of their functions and obligations. Applications, proceedings, documents and copies that may be necessary in these cases, in the interest of the Foreign Trade Bank, shall be issued in ordinary paper, without stamps, and shall be exempted from the payment of duties, charges or taxes of any kind whatsoever, except for the duties of states.

Article 49. Any guarantees or acts to secure payment of the credits granted or obligations taken on by small and medium-sized enterprises on behalf of the Foreign Trade Bank shall be exempted from the payment of taxes, duties, rates or charges of any kind whatsoever.  The Foreign Trade Bank shall implement a rating mechanism for said enterprises. Registrars, notaries and any other officials who, by reason of their duties and responsibilities, should take part in the issue of documents related to the Foreign Trade Bank may not charge any taxes, duties, rates or charges whatsoever for said issue, except for the duties of states.

Article 50. Any matter that has not been covered herein shall be governed by the provisions of the General Law of Banks and Other Financial Institutions and the Code of Commerce.

Article 51. Officials and employees of the Foreign Trade Bank shall not have the status of public servants and abide by the Labor Organic Law.

Article 52. This decree-law shall enter into force as from the date of publication hereof in the Official Gazette of the Bolivarian Republic of Venezuela.

Done in Caracas, this twentieth day of September, year two thousand and one. Year 191 of Independence; 142 since Federation.

(L.S.)

HUGO CHAVEZ FRIAS

Countersigned

Signatures follow

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