Exchange Agreement No. 20  issued by the Ministry of the People’s Power for Planning and Finance and the Central Bank of Venezuela

Exchange Agreement No. 20 issued by the Ministry of the People’s Power for Planning and Finance and the Central Bank of Venezuela (hereinafter referred-to as “the Agreement”) was published in Official Gazette of the Bolivarian Republic of Venezuela No. 39968 on July 19, 2012.

The most relevant items of this Agreement include:

·         Maintaining foreign currency funds from legal transactions through accounts with universal Banks governed by Decree-Law Partially Amending the Law of Bank Institutions (hereinafter referred-to as Authorized Banks) is authorized for: (i)  companies not domiciled in Venezuela involved in strategic public investment projects for the development of national economy and the promotion of productive supply, (ii) individuals of legal age residing in the national territory and companies domiciled in the country.

·         For the purposes of this Agreement, legal transactions are understood as 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 for Placement in Primary Market of Foreign Currency Securities (SICOTME, for its acronym in Spanish) and the system of transactions with foreign currency investment securities (SITME, for its acronym in Spanish).

·         Authorized Banks are empowered to receive funds through demand or futures accounts.

·         Such funds may be mobilized through (i) total or partial withdrawals in legal tender, at current exchange rate, (ii) transfers or checks of the Authorized Bank against its correspondents abroad, and (iii) debits instructed for payments of expenses for consumptions and withdrawals by suing cards abroad.

·         The Authorized Banks shall maintain the funds of individuals and companies domiciled in the country in foreign currency accounts with the Central Bank of Venezuela, in conformity with the related set of standards.

·         The Authorized Banks shall send to the Central Bank of Venezuela detailed information of funds kept in foreign currency on a monthly basis and according to the terms and conditions set forth in manuals, instructions and bulletins issued by this Institution in connection with the maintenance of authorized accounts.

·         State companies obtaining foreign currencies as a result of export activities may use up to five percent (5%) of the average monthly balance, upon prior authorization of the Board of Directors of the Central Bank of Venezuela, for the acquisition of bolivars through SITME.

The agreement is effective from the date of its publication in Official Gazette of the Bolivarian Republic of Venezuela.