BOARD OF DIRECTORS

BOARD RESOLUTION NO. 006/2023

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – APPROVAL OF THE REGULATION ON FINANCIAL OPERATIONS WITH FOREIGN ENTITIES FOR CENTRAL GOVERNMENT PUBLIC ENTERPRISES AND COMPANIES IN WHICH THE STATE HOLDS A MAJORITY SHAREHOLDING.

VISTOS:

• The Political Constitution of the State of February 7, 2009.
• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB).
• The Statute of the Central Bank of Bolivia approved by Board Resolution No. 095/2022, of October 6, 2022.
• Law No. 331 of December 27, 2012, on Public Banking Entities.
• Law No. 393 of August 21, 2013, on Financial Services.
• Law No. 1493 of December 17, 2022, on the General State Budget - Management 2023.
• Supreme Decree No. 4755 of July 13, 2022, Regulation of the Administrative Sanctions Regime of Law No. 393 on Financial Services.
• Supreme Decree No. 1841 of December 18, 2013.
• Supreme Decree No. 4848 of December 28, 2022, Regulation for the application of Law No. 1493.
• Technical Report BCB-GOI-SRES-DNI-2023-1 of January 4, 2023, issued by the Treasury Management (GTES).
• Legal Report BCB-GAL-SANO-DLBCI-INF-2023-1 of January 4, 2023, issued by the Legal Affairs Management (GAL).

CONSIDERING:

That Article 326 of the Political Constitution of the State in paragraph II establishes that public transactions in the country shall be carried out in national currency.

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That Article 327 of the Political Constitution of the State establishes that the BCB is a public law institution, with legal personality and its own assets. Within the framework of the State's economic policy, it is the function of the BCB to maintain the stability of the internal purchasing power of the currency, to contribute to economic and social development.

That Article 328 of the Political Constitution of the State, points out as attributions of the Central Bank of Bolivia, among others, to execute exchange rate policy and administer international reserves.

That Article 332 of the Political Constitution of the State, establishes that financial entities are regulated and supervised by a Bank and Financial Entities institution of public law and jurisdiction within the national territory.

That Article 1 of Law No. 1670, establishes that the BCB is a State institution, of public law, of an autarkic nature, of indefinite duration, with legal personality and its own assets and with legal domicile in the city of La Paz. It is the sole monetary and exchange rate authority of the country, with administrative, technical and financial competence and specialized normative faculties of general application.

That Article 20 of Law No. 1670, establishes that the BCB is authorized to regulate financial operations with foreign entities, carried out by public and private persons or entities.

That Article 44 of Law No. 1670, establishes that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized regulations of general application and internal rules; as well as establishing administrative, operational and financial strategies of the BCB, approving their respective short and medium-term programs. For the follow-up and oversight of their execution, it will have independent information, analysis and audit services.

That subsections a), c) and o) of Article 54 of Law No. 1670, provide that the BCB Board has the attributions to issue the rules and adopt the general decisions that would be necessary for the BCB to fulfill the functions, competencies and faculties assigned to it by the Law; to follow up on the execution of monetary, exchange rate, credit, financial intermediation, international reserves administration policies and regulations and others that correspond to the BCB according to this Law.

That Article 5 of the BCB Statute, establishes that the Issuing Entity has normative competence, to issue specialized rules in the fields assigned to it by the Law; administrative, to establish its own ordering, organization and functions, in concordance with the specialized nature of the institution and within the framework of the

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national legislation; technical, for the formulation of policies and the application of instruments that allow it to fulfill its object and financial, to formulate, approve and execute its budget.

That subsections 1) and 30) of Article 10 of the BCB Statute, determines that the Board of the Issuing Entity has the attributions to approve general decisions and issue the rules that are necessary for the BCB to fulfill the functions, competencies and faculties assigned to it by the Law; as well as to approve, modify and interpret the Statute and Regulations of the BCB, by two-thirds of the votes of all its members, without the need for an additional administrative act.

That Article 4 paragraph I of Law No. 331 of December 27, 2012 and its Regulatory Decree, provides that the Public Banking Entity will have as its purpose to carry out the financial operations and services of the entire Public Administration at its different levels of government, administering the deposits of entities in the non-financial public sector on behalf of the Central Bank of Bolivia – BCB, for which all of them must keep their funds in fiscal accounts at the BCB.

That Section IV of Chapter IV of Title I of Law 393 and its Regulatory Decree, regulates the administrative sanctions regime.

That Final Provision Sixth of Law No. 1493 on the General State Budget - Management 2023, provides that the amount of exports carried out by central government public enterprises and companies in which the State holds a majority shareholding, must be settled through the BCB.

That Final Provision Ninth of Supreme Decree No. 4848 of December 28, 2022, establishes that central government public enterprises and those in which the State holds a majority shareholding, must be governed by the settlement regulation of the export amount issued by the BCB within the framework of its competencies.

That Article 6 of Supreme Decree No. 1841 establishes that all entities and companies in the public sector, at their different levels of government, must keep their funds at the BCB.

That through Report BCB-GOI-SRES-DNI-2023-1, the GOI concludes that there is a need to regulate the transfers received for the concept of exports carried out by central government public enterprises and companies in which the State holds a majority shareholding, therefore recommending to the BCB Board of Directors the approval of the Regulation on Financial Operations with Foreign Entities.

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That through Report BCB-GAL-SANO-DLBCI-INF-2023-1, the GAL concludes that the Regulation on Financial Operations with Foreign Entities, proposed by the GOI, does not contravene the current legal framework; therefore it is legally procedent, recommending to the BCB Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the Regulation on Financial Operations with Foreign Entities for Central Government Public Enterprises and Companies in which the State Holds a Majority Shareholding, in its ten (10) Articles, four (4) Chapters and two (2) Final Provisions, which forms part as an Annex to this Resolution.

Article 2.- The Regulation will enter into force from the publication of this Board Resolution.

Article 3.- Repeal Board Resolutions No. 039/2022 of May 10, 2022 and No. 050/2022 of July 07, 2022.

Article 4.- The Presidency and the General Management are charged with the compliance of this Board Resolution.

La Paz, January 4, 2023

SIGNED. ROGER EDWIN ROJAS ULO, Oscar Ferruño Morro, Gabriel Herbas Camacho, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.

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ANNEX

REGULATION ON FINANCIAL OPERATIONS WITH FOREIGN ENTITIES FOR CENTRAL GOVERNMENT PUBLIC ENTERPRISES AND COMPANIES IN WHICH THE STATE HOLDS A MAJORITY SHAREHOLDING

CHAPTER I

GENERAL PROVISIONS

Article 1.- (Object)

This Regulation aims to regulate the financial operations with foreign entities of central government public enterprises and companies in which the State holds a majority shareholding, their subsidiaries and affiliates, within the framework of Article 20 of Law No. 1670 of October 31, 1995 and Final Provision Sixth of Law No. 1493 of December 17, 2022.

Article 2.- (Scope of Application)

I. This Regulation applies to:

a) Financial operations with resources originating from exports, of central government public enterprises and companies in which the State holds a majority shareholding, their subsidiaries and affiliates.

b) Investments in Financial Instruments abroad, directly or through trusts and excess capital balances from operations, of public companies in which the State holds a majority shareholding, as well as their affiliates and subsidiaries constituted in national territory.

II. The application of this Regulation is exempt for Financial Entities of the State or with majority State participation, included in Law No. 393 on Financial Services, as well as their affiliates and subsidiaries.

CHAPTER II

FINANCIAL OPERATIONS WITH FOREIGN ENTITIES

Article 3.- (Transfers to and from Abroad)

I. The foreign exchange transfer operations of central government public enterprises and those in which the State holds a majority shareholding, their subsidiaries

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and affiliates, to and from abroad, must be carried out through the Central Bank of Bolivia (BCB).

II. The BCB will credit the equivalent in National Currency at the official buying exchange rate to the ownership account of central government public enterprises and those in which the State holds a majority shareholding, their subsidiaries and affiliates at the BCB, TGN or another account in the National Financial System, as applicable.

III. Transfers abroad by companies in which the State holds a majority shareholding, destined for payments of operational capital obligations, may be carried out through the National Financial System.

IV. Companies in which the State holds a majority shareholding, their affiliates and subsidiaries must be the orderer and beneficiary of the transfer.

Article 4.- (Financial Investments Abroad)

I. Central government public enterprises and those in which the State holds a majority shareholding, their subsidiaries and affiliates, may not maintain investments in Foreign Currency directly or through trusts, abroad.

II. Exceptionally, the operational capital balances of companies in which the State holds a majority shareholding, their subsidiaries and affiliates may maintain balances in accounts abroad (demand funds) up to an amount of USD 1,000,000.- (One Million 00/100 United States Dollars).

III. The balances kept in Foreign Currency accounts abroad or in trusts with resources originating from exports and the resources invested abroad through financial instruments, directly or via trusts, of central government public enterprises, companies in which the State holds a majority shareholding, their subsidiaries and affiliates, must be converted to National Currency through the BCB at the official buying exchange rate until January 13, 2023, as stated in Article 3 of this Regulation.

IV. The application of this article is exempt for corporate investments made by companies in which the State holds a majority shareholding in companies, subsidiaries and affiliates constituted abroad.

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CHAPTER III

EXPORT OPERATIONS

Article 5.- (Settlement of Export Operations)

The total amount originating from exports carried out by central government public enterprises and companies in which the State holds a majority shareholding, their subsidiaries and affiliates, will be settled through the BCB, by transferring said resources to BCB accounts abroad; in turn, the BCB will transfer those resources in National Currency at the official buying exchange rate, to the account indicated by the companies at the BCB, TGN or another account in the National Financial System, as applicable.

Article 6.- (Payments in National Currency)

Payments made by central government public enterprises and companies in which the State holds a majority shareholding to their subsidiaries and affiliates that are residents in national territory, for the concept of services or others related to their exports, must be processed in National Currency.

CHAPTER IV

FOLLOW-UP, SUSPENSIONS AND SANCTIONS

Article 7.- (Follow-up on Investments Abroad)

Companies in which the State holds a majority shareholding, their subsidiaries and affiliates, must report to the BCB quarterly, as a sworn declaration, the evolution of the balances in accounts they maintain abroad, as well as transfers to and from abroad carried out through the National Financial System, through the form established in Annex No. 1 of this Regulation until the 15th day of the month following each quarter.

Article 8.- (Suspensions)

I. The BCB will send the list of companies in which the State holds a majority shareholding, their subsidiaries and affiliates that fail to comply with what is stated in this Regulation to the Financial System Supervision Authority (ASFI) so that this instance instructs the entities of the national financial system with a license to operate, the suspension of currency operations with the aforementioned companies, their subsidiaries and affiliates, as follows:

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a) For the first non-compliance, suspension for 15 calendar days.

b) For the second and subsequent non-compliances, suspension for 30 calendar days.

Article 9.- (Sanctions)

I. The BCB will communicate to the ASFI, regarding the non-compliance of this Regulation, by entities of the National Financial System.

II. The ASFI, within the framework of the Regulation of the Administrative Sanctions Regime approved by Supreme Decree No. 4755 of July 13, 2022, will proceed to sanction entities of the National Financial System.

III. Once the entity of the National Financial System is sanctioned, the ASFI will communicate to the BCB the determination assumed.

Article 10.- (Area in Charge of Follow-up)

I. For the compliance of this Regulation, the International Operations Management of the BCB will carry out the follow-up based on the information received from companies in which the State holds a majority shareholding, their subsidiaries and affiliates and ASFI.

II. For the application of suspensions and sanctions for non-compliances provided for in the preceding article, the International Operations Management through the Financial Entities Management will communicate to the ASFI.

FINAL PROVISIONS

Final Provision First.-

Operations carried out by companies in which the State holds a majority shareholding, their subsidiaries and affiliates, within the framework of this Regulation, will not be subject to the collection of commissions by the BCB.

Final Provision Second.-

The General Management and the International Operations Management will regulate the operational aspects for the compliance of this Regulation through an express Circular.

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ANNEX No. 1

SWORN DECLARATION FORM OF BALANCES IN ACCOUNTS ABROAD AND TRANSFERS THROUGH THE NATIONAL FINANCIAL SYSTEM

Cut-off date:

1. INVESTMENTS ABROAD

The subscribing company declares that it has no resources invested abroad through financial instruments, directly or via trusts.

2. ACCOUNT BALANCE INFORMATION

No.	Country/Place	Bank	Currency	Account Balances
General Total

3. INFORMATION ON TRANSFERS TO AND FROM ABROAD THROUGH THE NATIONAL FINANCIAL SYSTEM

Month	Total transfers abroad In USD	Total transfers from abroad In USD

IV. SIGNATURES

SIGNATURE (CEO and/or Legal Representative) Note: A legalized copy of the appointment document or notarized power of attorney must be attached, as applicable.