BOARD RESOLUTION NO. 014/2024

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – MODIFY THE GOLD PURCHASE REGULATION FOR STRENGTHENING INTERNATIONAL RESERVES, UNDER LAW NO. 1503 OF MAY 5, 2023.

VISTOS:

The Political Constitution of the State, dated February 7, 2009 (CPE).

Law No. 1670, dated October 31, 1995, of the Central Bank of Bolivia (BCB) and its modifications.

Law No. 1503 of May 5, 2023, on the Purchase of Gold for Strengthening International Reserves.

The BCB Statute approved by Board Resolution No. 095/2022 of October 6, 2022.

The Regulation on Gold Purchase in the Internal Market for Strengthening International Reserves, approved by Board Resolution No. 096/2023 of July 3, 2023, and its modifications.

The Technical Report BCB-GOI-SRES-DOI-INF-2024-21 of January 29, 2024, issued by the International Operations Management (GOI).

The Legal Report BCB-GAL-SANO-DLBCI-INF-2024-32 of January 29, 2024, issued by the Legal Affairs Management (GAL).

CONSIDERING:

That Article 327 of the Political Constitution of the State determines that the Central Bank of Bolivia (BCB) is a public law institution, with legal personality and its own assets, which, within the framework of the State's economic policy, has the function of maintaining the stability of the internal purchasing power of the currency, to contribute to economic and social development.

That numeral 5) of paragraph I of Article 328 of the Political Constitution of the State establishes that the BCB has the authority to Administer international reserves.

That Article 1 of Law No. 1670, modified by Article 64, section A3, numeral 1) of Law No. 1864 of June 15, 1998, on Property and Popular Credit, 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 authority of the country, with administrative, technical, and financial competence and specialized normative faculties of general application.

That Article 14 of Law No. 1670 establishes that the BCB will ensure the strengthening of International Reserves so as to allow the normal functioning of Bolivia's international payments.

That Article 15 of Law No. 1670 provides that the BCB's International Reserves are constituted, among other things, by physical gold.

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 norms of general application, and internal rules; as well as establishing administrative, operational, and financial strategies for the BCB, approving their respective short and medium-term programs. For the monitoring and oversight of their execution, it will have access to independent information, analysis, and audit services.

That subsections a), c), and o) of Article 54 of Law No. 1670 indicate the following attributions of the Board of Directors: Issue norms and adopt general decisions that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by Law; Monitor the execution of monetary, exchange, credit, financial intermediation, international reserve administration, and other policies and regulations corresponding to the BCB in accordance with Law No. 1670; and 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 any additional administrative act.

That Articles 3, 4, and 5 of Law No. 1503 authorize the BCB to buy gold as one more participant in the internal market of individuals and legal entities, public and private, that participate in the commercialization of gold, these not being obliged to offer or sell their gold production to the Issuing Entity, which will pay in national currency, taking as a base the price of the international gold quotation, under competitive conditions, and will establish the conditions, characteristics, periodicity, limits, and procedures for the acquisition of gold from the internal market, in accordance with regulations issued by the BCB.

That Article 7 of Law No. 1503 provides that once the gold purchase process is concluded and total settlement is made in the internal market, the BCB may refine the gold abroad to obtain the quality of good delivery bars and, in accordance with regulations, approve the exit from the national customs territory.

That numerales 1) and 3) of Article 5 and Article 6 of the BCB Statute provide that its Board of Directors has normative competence to issue specialized norms in the fields assigned by Law and technical competence for the formulation of policies and the application of instruments that allow it to fulfill its object. In this sense, the norms issued by the BCB will be approved by Board Resolution.

That numerales 1), 6), and 30) of Article 10 of the BCB Statute provide that the Board of Directors has the attributions to approve general decisions and issue the norms that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by Law, approve the policy and norms for the administration of International Reserves, as well as monitor their execution, as well as 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 paragraph I of Article 24 of said norm provides that resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of its members present in a meeting, except in cases where Law No. 1670 or the BCB Statute require qualified majorities.

That paragraphs I and II of Article 26 of the BCB Statute stipulate that the Board of Directors pronounces itself on matters within its competence through Resolutions. It may also

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do so through decisions that will be expressly recorded in the Minutes. Likewise, every draft Board Resolution must be motivated and justified by a technical report from the Management or Managements to which the subject matter of the Resolution corresponds and by a report from the Legal Affairs Management. These reports must be submitted to the Board of Directors by the General Management with its recommendation.

That Articles 1, 2, and 3 of the Regulation on Gold Purchase in the Internal Market for Strengthening International Reserves approved by Board Resolution No. 096/2023 establish as its object the regulation of Law No. 1503 and the requirements for the purchase of gold in any of its forms and states, in the internal market by the BCB, intended for the strengthening of international reserves, with the scope of application being all individuals and legal entities, public and private, legally established, registered, and authorized by competent entities, who voluntarily commercialize gold to the BCB. It also provides that the purpose of the regulation is to regulate and establish the mechanisms and formalities for the purchase of gold within the internal market destined to strengthen international reserves and to define the requirements to commercialize gold with the BCB.

That the Technical Report BCB-GOI-SRES-DOI-INF-2024-21 concludes and submits to the Board of Directors the approval of the modification of the Regulation on Gold Purchase in the Internal Market for Strengthening International Reserves, whose proposed modifications are considered technically viable.

That the Legal Report BCB-GAL-SANO-DLBCI-INF-2024-32 concludes that the modification to the Regulation on Gold Purchase in the Internal Market for Strengthening International Reserves and its Annex I proposed by the GOI is legally appropriate, recommending to the BCB Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Incorporate Articles 25 and 26 into the Regulation on Gold Purchase in the Internal Market for Strengthening International Reserves and its modifications, with the following text:

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"ARTICLE 25.- (APPROVAL OF EXIT FROM NATIONAL CUSTOMS TERRITORY)

The exit of gold from the national customs territory for the purpose of refining abroad will be approved by Board Resolution.

ARTICLE 26.- (EXIT FROM NATIONAL CUSTOMS TERRITORY)

I. The General Management, through the International Operations Management, will process the Ministerial Resolution that authorizes the exit of gold from the national customs territory before the Ministry of Economy and Public Finances.

II. The International Operations Management and the Treasury Management, in coordination with the General Management, are responsible for the execution of technical, operational, and administrative activities for the exit of gold from BCB vaults, complying with all security measures.

III. The International Operations Management will be responsible for coordinating the receipt of gold with the custodian bank and will inform the BCB Board of Directors semi-annually on the execution of exits from the national customs territory."**

Article 2.- Modify Annex I of the Regulation on Gold Purchase in the Internal Market for Strengthening International Reserves and its modifications, which forms an integral part of this Resolution as an Annex.

Article 3.- This Resolution will enter into force from its publication.

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

La Paz, January 29, 2024

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

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ANNEX I - Calculation Methodology

1. Calculation Methodology for BCB Gold Purchases

a) Fine Weight

Fine Weight (g) = Net Weight (g) x Gold Purity (%)

b) Purchase Price (USD/TOZ)

Purchase Price $\left(\frac{USD}{TOZ}\right)$ = International market quotation $\left(\frac{USD}{TOZ}\right)$ × [1 + %premium or discount]

c) Purchase Price (Bs/g)

Purchase Price $\left(\frac{Bs}{g}\right)$ = $\left[\left(\frac{\text{Purchase Price}\left(\frac{USD}{TOZ}\right)}{31.1035 \left(\frac{g}{TOZ}\right)}\right) \times \text{Exchange Rate} \left(\frac{Bs}{USD}\right)\right]$

d) Market Sale Value

Market Sale Value (Bs) = Fine Weight (g) × Purchase Price $\left(\frac{Bs}{g}\right)$

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2. Percentage of Premium or Discount per Operation

Ranges by quantity of gold grams	%Premium or Discount*
Lower	Upper
500	2,000
2,001	3,000
3,001	4,000
4,001	5,000
5,001	6,000
6,001	7,000
7,001	8,000
8,001	9,000
9,001	10,000
10,001	20,000
20,001	30,000
30,001	40,000
40,001	50,000
50,001	60,000
60,001	70,000
70,001	80,000
80,001	90,000
90,001	Onwards

3. Percentage of Premium or Discount for Periodic Sales

The seller may present a commitment note in accordance with Annex IV, committing to sell to the BCB a quantity equal to or greater than 50,001 grams within a maximum period of fifteen (15) calendar days. In case the commitment is fulfilled, the premium indicated according to the total quantity effectively delivered in the committed period will be applied, taking into account the international quotation on the last business day of the period, according to the range established in the Table in point 2.

The 90% advance and the 10% settlement of each operation carried out during the committed period will only be effected based on the international quotation, without including the premium in each delivery of gold sold to the BCB.

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In the event that the seller does not fulfill the sales commitment, on the last day of the committed period, the premium will be applied to each of the gold sales that had been made, according to the range established in the Table in point 2, as applicable.