JPRM-2024-019-M — Reforming the Central Bank of Ecuador's Services Policy for Operations with the Exterior

RESOLUTION No. JPRM-2024-019-M
MONETARY POLICY AND REGULATION BOARD

CONSIDERING:

That, Article 226 of the Constitution of the Republic of Ecuador prescribes that public servants and persons acting under state authority shall exercise only the competencies and powers attributed to them in the Constitution and the Law;

That, Article 227 of the same states that the Public Administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, planning, among others;

That, the first paragraph of Article 303 determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Branch and shall be implemented through the Central Bank of Ecuador;

That, numeral 14 of Article 36 of the Organic Monetary and Financial Code, regarding the functions of the Central Bank of Ecuador, establishes: “14. Act as fiscal agent, financial agent, and depository of public resources and provide banking services to public sector entities and the national financial system, according to the market remuneration determined by the Monetary Policy and Regulation Board”;

That, Article 41 of the same Code, regarding financial operations of the non-financial public sector, provides: “Institutions, agencies, and companies of the non-financial public sector must carry out through the Central Bank of Ecuador, or its accounts, all payments they must make, as well as all financial operations and services they require, including foreign trade operations, in accordance with the regulations and exceptions issued by the Monetary Policy and Regulation Board.

Except for the body in charge of public finances, social security entities, Decentralized Autonomous Governments, and the Deposit Insurance Corporation, Liquidity Fund, and Private Insurance Fund, non-financial public sector entities may not carry out financial investments, unless expressly authorized by the body in charge of public finances.

Operations carried out by public institutions or companies through the Central Bank of Ecuador, as the financial agent of the State, whether in the country or

RESOLUTION No. JPRM-2024-019-M
_______________________________ abroad, are of a public nature.
The Central Bank of Ecuador shall sanction the non-observance or failure to comply with the provisions of this article as a serious infringement”;

That, Article 47.1 of the same Code created the Monetary Policy and Regulation Board as part of the Executive Branch, responsible for the formulation of monetary policy, the highest governing body of the Central Bank of Ecuador;

That, Article 47.6 of the same Code, regarding the functions of the Monetary Policy and Regulation Board, among others, establishes: “(…) 1. Formulate policy in the monetary sphere and observe its application by the Central Bank of Ecuador, to preserve the integrity and sustainability of the dollarization monetary system and the financial system, in accordance with the provisions of this Code; (…) 7. Formulate the policy for the operations of the Central Bank of Ecuador; (…) 26. Those others conferred by law”;

That, Article 47.7 of the same Code states that: “Acts of the Monetary Policy and Regulation Board enjoy the presumption of legality and shall be expressed through resolutions that shall have mandatory force (…)”;

That, through Resolution No. JPRM-2022-015-M, of April 16, 2022, the Monetary Policy and Regulation Board issued the “Central Bank of Ecuador Services Policy for Operating with the Exterior”;

That, considering the function of the Central Bank of Ecuador to act as fiscal agent, financial depository of public resources, and provider of banking services to public sector entities and the national financial system, it is necessary to regulate the international financial services required by non-financial public sector institutions, establishing that, if required, these must carry out through the Central Bank of Ecuador the opening and management of accounts abroad, with these institutions being responsible for the management and control of said accounts;

That, the Monetary Policy and Regulation Board, through Ordinary Session No. 010-2024, under in-person modalities, on October 1, 2024, reviewed the proposal sent via Memorandum No. BCE-BCE-2024-0194-M, of September 26, 2024, by the General Manager of the Central Bank of Ecuador to the President of the Monetary Policy and Regulation Board, as well as the technical report No. BCE-GISI-052-2024/BCE-SSFI-019-2024, of September 24, 2024, and the legal report No. BCE-GJ-028-2024, of September 25, 2024; and,

RESOLUTION No. JPRM-2024-019-M

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In exercise of its functions and in attention to Article 47.7 of the Organic Monetary and Financial Code, the Monetary Policy and Regulation Board resolves:

REFORM THE CENTRAL BANK OF ECUADOR SERVICES POLICY FOR OPERATING WITH THE EXTERIOR, CONTAINED IN RESOLUTION NO. JPRM-2022-015-M

Sole Article. - Incorporate, following Article 6 of Resolution No. JPRM-2022-015-M, of April 16, 2022, the following chapter; and, renumber the subsequent articles and chapters:

“CHAPTER III.- AUTHORIZATION FOR ACCOUNTS ABROAD FOR PURPOSES OTHER THAN DEBT SERVICE.-

Art. 7.- The Monetary Policy and Regulation Board may authorize non-financial public sector entities to open, maintain, and manage accounts abroad to receive donations granted by foreign governments, multilateral entities, or international organizations, prior to favorable reports from the public finance regulator and the Central Bank of Ecuador, within the scope of their attributions and competencies.

Art. 8.- The opening of accounts abroad shall be managed by the authorized non-financial public sector entities and must be issued in their name, under their absolute control and responsibility.

Art. 9.- It corresponds to non-financial public sector entities to manage, control, and fulfill the objectives of the donations received in the authorized accounts abroad.”

GENERAL PROVISION:
Entities authorized to open accounts abroad must administer and control the handling of the resources they receive in said accounts, in accordance with the procedure or guidelines issued by the body in charge of Public Finance regarding the matter.
Authorized entities must report to the Ministry of Economy and Finance and the Comptroller General of the State the opening and closing of accounts abroad.

RESOLUTION No. JPRM-2024-019-M

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FINAL PROVISION. - This resolution shall enter into force from its issuance, without prejudice to its publication in the Official Register.
Its publication on the institutional website is entrusted to the General Secretariat of the Central Bank of Ecuador.
NOTIFY AND PUBLISH. - Given in the city of Quito D.M., on October 1, 2024.
THE PRESIDENT
Dr. TATIANA MARIBEL RODRÍGUEZ CERÓN

The preceding resolution was signed by Dr. Tatiana Maribel Rodríguez Cerón - President of the Monetary Policy and Regulation Board, in the Metropolitan District of Quito, on October 1, 2024.- I CERTIFY.
ADMINISTRATIVE SECRETARY
Attorney MARÍA ALEXANDRA GUERRERO DEL POZO