BOARD OF DIRECTORS

BOARD RESOLUTION NO. 039/2022

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT - APPROVAL OF THE REGULATION OF FINANCIAL OPERATIONS WITH FOREIGN ENTITIES.

VIEWING:

The Political Constitution of the State dated 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. 128/2005 of October 21, 2005, and its modifications.
Report BCB-GOI-INF-2022-10 of April 13, 2022, from the International Operations Management (GOI).
Report BCB-GAL-SANO-DLBCI-INF-2022-68 of April 18, 2022, from the Legal Affairs Management (GAL).

CONSIDERING:

That paragraph II of Article 326 of the Political Constitution of the State establishes that public transactions in the country shall be carried out in national currency.
That Article 327 of the Political Constitution of the State states 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 Central Bank of Bolivia 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 provides that the attributions of the Central Bank of Bolivia, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by the Law, are to determine and execute monetary policy, execute exchange rate policy, regulate the payment system, authorize the issuance of currency, and administer international reserves.
That Article 1 of Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia, modified by Article 67, section A3, numeral 1 of Law No. 1864, of June 15, 1998, on Property and Popular Credit, determines that the BCB is a State institution, of public law, of an autarkic nature, of indefinite duration, with legal personality and its own assets; it is the sole monetary and exchange authority of the country, with administrative, technical, and financial competence and specialized normative faculties of general application, in the manner and scope established by law.
That Law No. 1670, in its Articles 2 and 20, establishes that the object of the BCB is to seek the stability of the internal purchasing power of the national currency; and empowers the BCB to regulate financial operations with foreign entities, carried out by public and private persons or entities.
That Article 44 and subsections a), c), o), and q) of Article 54 of Law No. 1670 of the BCB define that the Highest Authority of the Central Bank of Bolivia is its Board of Directors and that its attributions include issuing norms and adopting general decisions that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law, as well as monitoring the execution of monetary, exchange, credit, financial intermediation, and international reserve administration policies; and that the Board of Directors is empowered 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 any additional administrative act, and those others necessary for the fulfillment of its functions.
That numerales 1 and 29 of Article 11 of the Statute of the Central Bank of Bolivia establish that the Board of Directors has the attributions to approve decisions and issue norms, 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 any additional administrative act.
That Report BCB-GOI-INF-2022-10 from the GOI establishes that to strengthen the path of economic reactivation of the country, a Regulation of Financial Operations with Foreign Entities is required, which regulates the financial operations with foreign entities of Commercial Societies with Majority State Participation, their Branches and Subsidiaries, in order to strengthen international reserves and provide additional liquidity to the national economy; recommending its approval by the BCB Board of Directors.
That Report BCB-GAL-SANO-DLBCI-INF-2022-68 from the GAL concludes that the "Regulation of 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 of Financial Operations with Foreign Entities, in its 4 Chapters, 10 Articles, and Single Final Provision, which forms part as an Annex to this Board Resolution.

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

Article 3.- The Presidency and General Management are charged with the execution and compliance of this Board Resolution.

La Paz, May 10, 2022

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

ANNEX

REGULATION OF FINANCIAL OPERATIONS WITH FOREIGN ENTITIES

CHAPTER I

GENERAL PROVISIONS

Article 1.- Object

This Regulation aims to regulate financial operations with foreign entities, within the framework of Article 20 of Law No. 1670.

Article 2.- Scope of Application

I. This Regulation applies to financial operations with resources invested in financial instruments abroad, directly or through trusts, by Commercial Societies with Majority State Participation, their Branches and Subsidiaries, who hereinafter and for the purposes of this Regulation will be referred to as Societies.

II. Financial Entities of the State or with majority State participation, included in Law No. 393 on Financial Services and their subsidiaries, are exempt from the application of this Regulation.

CHAPTER II

TRANSFERS TO AND FROM FOREIGN ENTITIES

Article 3.- Transfer from Foreign Entities

Foreign exchange transfer operations by Societies, from abroad to national territory, must be carried out through the BCB, considering the following:

a) The Society, at least one (1) business day prior to the transfer from abroad, must present to the BCB, as a sworn declaration, the form established in Annex No. 1 of this Regulation, in order to communicate the credit to the account of the correspondent bank of the Issuing Entity abroad and the final destination account of the resources. This Society must be the orderer and beneficiary of the transfer.

b) On the date of the transfer, the BCB will verify and confirm with the SWIFT credit message that the orderer of the transfer corresponds to the Society holding the resources, for the corresponding registration.

c) The BCB will credit the equivalent in national currency at the official buying exchange rate to the Society's ownership account in the National Financial System.

Article 4.- Transfer to Foreign Entities

Foreign exchange transfer operations by Societies to abroad must be carried out through the BCB and credited to their ownership accounts, considering the following:

a) The Society, at least one (1) business day prior to the transfer to abroad, must request from the BCB, as a sworn declaration, the transfer of resources to abroad using the form established in Annex No. 2 of this Regulation. This Society must be the orderer and beneficiary of the transfer.

b) Through the National Financial System, the Society will credit the funds to the BCB in national currency at the official selling exchange rate; for this purpose, it must manage the provision of resources in the account of the Financial Entity where it holds said funds and the respective authorization for the debit of the current and reserve accounts of the same.

c) The operations indicated in subsection a) will not be subject to the collection of commissions by the BCB.

CHAPTER III

FINANCIAL INVESTMENTS ABROAD

Article 5.- Financial Investments Abroad

Societies that have resources invested abroad through financial instruments, directly or through trusts, must transfer them to national territory, in accordance with what is stated in Article 6 of this Regulation.

Article 6.- Transfer of Resources

I. Using the form indicated in Article 3 of this Regulation, Societies must transfer the resources through the BCB accounts at the correspondent banks it maintains abroad within a maximum period of sixty (60) calendar days, calculable from the publication of this Regulation.

II. The BCB will credit its equivalent in national currency to the National Financial System account indicated by the Society.

Article 7.- Financial Strategy

I. In order to avoid losses of capital invested abroad, Societies must elaborate and implement a financial strategy that considers in its calculation the coupons and interest charged and accrued, with the deadline for transfers to the BCB being the maturity of the investments.

II. For this effect, Societies will communicate to the BCB within ten (10) business days, from the publication of this Regulation and as a sworn declaration, the maturities of the referred investments using the form established in Annex No. 3 of this Regulation.

III. If during the implementation period of the financial strategy, any investment could be liquidated before its maturity without generating losses of the invested capital, it must be liquidated by the Society and the resources obtained must be transferred in accordance with the operational procedure provided in Article 6 of this Regulation.

CHAPTER IV

MONITORING AND COMPLIANCE

Article 8.- Monitoring of Investments Abroad

I. Societies must inform the BCB monthly, as a sworn declaration, the investments and balances they maintain in accounts abroad, through the form established in Annex No. 3 of this Regulation.

II. Societies that do not have investments and balances in accounts abroad must inform this situation to the BCB quarterly, as a sworn declaration.

Article 9.- Suspensions

I. The BCB will send the list of Societies that fail to comply with what is stated in this Regulation to the Financial System Supervision Authority (ASFI) so that said instance instructs financial entities with operating licenses to suspend exchange operations with the aforementioned Societies, as follows:

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

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

II. In case financial entities do not comply with the provisions of the preceding paragraph, ASFI will inform the BCB monthly about these non-compliances.

III. Once this information is received, the BCB will proceed to suspend operations with these financial entities as follows:

a) For the first non-compliance, suspension for 15 calendar days for exchange operations with the BCB.

b) For the second non-compliance, suspension for 15 calendar days for exchange operations and Open Market Operations with the BCB.

c) For the third and subsequent non-compliances, suspension for 30 calendar days for exchange operations and Open Market Operations with the BCB.

Article 10.- Area in charge of monitoring

I. For the compliance of this Regulation, the International Operations Management of the BCB will perform monitoring based on the information received from Societies and ASFI.

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

FINAL PROVISIONS

Single Final Provision.-

Societies may invest the resources indicated in paragraph II of Article 6 of this Regulation in the National Financial System in national currency, in accordance with their investment and treasury management policies or their equivalents.

ANNEX 1

SWORN DECLARATION FORM FOR TRANSFERS FROM FOREIGN ENTITIES

Date: | | |

I. ORDERER DATA (*)

1. Transfer Date
2. Currency
3. Amount
4. Orderer Name
5. Orderer Address
6. City and Country of Origin

II. BENEFICIARY DATA (*)

1. Bank Name
2. Account Holder
3. Account Number
4. Beneficiary Address

III. INTERMEDIARY BANK DATA (if applicable)

1. Bank Name
2. Bank BIC-SWIFT Code
3. Account Number

IV. SIGNATURES

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

(*) Mandatory fields.

ANNEX 2

SWORN DECLARATION FORM FOR TRANSFERS TO FOREIGN ENTITIES