Board Resolution No. 063/2014 Approving the Regulation for the Registration of Foreign Investment in the Plurinational State of Bolivia and Financial Operations with the Exterior

BOARD RESOLUTION NO. 063/2014
SUBJECT: ECONOMIC POLICY ADVISORY — APPROVES THE REGULATION FOR THE REGISTRATION OF FOREIGN INVESTMENT IN THE PLURINATIONAL STATE OF BOLIVIA AND FINANCIAL OPERATIONS WITH THE EXTERIOR.

VIEWED:
Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB).
Law No. 516 of April 4, 2014, on Investment Promotion.
Board Resolution No. 119/2008 of October 7, 2008, which approves the Regulation for the Registration of Private Foreign Capital in Bolivia, modified by Board Resolution No. 022/2009 of March 3, 2009.
Report from the Economic Policy Advisory BCB-APEC-SEXT-INF-2014-19 of June 20, 2014.
Report from the Legal Affairs Management BCB-GAL-SANO-INF-2014-219 of June 20, 2014.

CONSIDERING:
That Law No. 516 in its articles 9, 10, 11, and 12 establishes and defines the following concepts: investment mechanisms, investment contributions, conditions for investment, and nationals.

That Law No. 1670 in its articles 20, 21, and 43 establishes that the Central Bank of Bolivia is the institution responsible for regulating financial operations with foreign countries (external assets and liabilities), maintaining the register of Bolivia's private external debt, and periodically publishing statistical and economic information.

That Law 516 in its articles 13 and 15 establishes that the BCB is responsible for registering foreign investment and will issue a Certificate of Receipt of Investment Contributions in the Plurinational State of Bolivia, which will certify the entry of foreign resources into the country in specific formats that guarantee the capture of information regarding the origin, destination, contributions, and mechanisms of investment, as well as reinvestment. To this end, it will issue the necessary regulation for the implementation of the foreign investment register. Likewise, it will register the transfer abroad of foreign exchange that foreign investors carry out through the banking system.

That the Statute of the BCB in numerals 24 and 25 of article 11 determines that the Board will regulate financial operations with the exterior carried out by public and private persons and entities and approve regulations regarding the registration of public and private debt.

That the Economic Policy Advisory in its Report BCB-APEC-SEXT-INF-2014-19 recommends the approval of the "Regulation for the Registration of Foreign Investment in the Plurinational State of Bolivia and Financial Operations with the Exterior."

That according to the Report from the Legal Affairs Management BCB-GAL-SANO-INF-2014-219, the proposal for the "Regulation for the Registration of Foreign Investment in the Plurinational State of Bolivia and Financial Operations with the Exterior" does not contravene the current legal framework, and it is the competence of the Board of the Issuing Entity to consider its approval by two-thirds of the votes of all its members, in accordance with what is provided in subsection o) of article 54 of Law No. 1670 and article 24 of the Statute of the Central Bank of Bolivia.

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve the Regulation for the Registration of Foreign Investment in the Plurinational State of Bolivia and Financial Operations with the Exterior, which, as an annex, forms an integral part of this Resolution.

Article 2.- The aforementioned Regulation will enter into force from the date of its approval.

Article 3.- Repeal Board Resolution No. 119/2008 of October 7, 2008, and Board Resolution No. 022/2009 of March 3, 2009.

La Paz, June 24, 2014

Reynaldo Yujra Segales, Ronald Polo Rivero
Abiffiany Perez Alandia, Sergio Velarde Vera

ANNEX
REGULATION FOR THE REGISTRATION OF FOREIGN INVESTMENT IN THE PLURINATIONAL STATE OF BOLIVIA AND FINANCIAL OPERATIONS WITH THE EXTERIOR

CHAPTER I
GENERAL PROVISIONS

Article 1.- Object
Within the framework of what is provided by Law No. 1670 and Law No. 516, this Regulation aims to establish norms and procedures to carry out the Registration of Foreign Investment and Financial Operations with the Exterior.

Article 2.- Scope of Application
This Regulation applies to Commercial Companies, Sole Proprietorships, Public Enterprises, Mixed-Capital Enterprises, and Contracts or other joint investment instruments; All entities with foreign capital participation mentioned above are hereinafter referred to as Companies.

Article 3.- Required Information
Companies subject to the scope of application of this Regulation will provide the information required by the BCB according to Chapter II of the same.

Article 4.- Functions of the BCB
To fulfill the object of this Regulation, the BCB will perform the following functions:
a) Collect, compile, register, and officially publish data on Bolivia's private external debt; foreign direct investment, foreign portfolio investment, and other foreign investment in Bolivia; direct investment, portfolio investment, loans, and deposits abroad; income from investment received and paid; foreign trade in services (exports and imports), and other external assets and liabilities; b) Issue the Certificate of Receipt of Investment Contributions, which will certify the entry of foreign resources into the country for this purpose in Companies; c) Register the transfers of foreign exchange abroad carried out by foreign investors.

Article 5.- Responsible Area
The Economic Policy Advisory, on behalf of the BCB, will register and issue a certificate certifying the receipt of foreign investment contributions in the Plurinational State of Bolivia and will register the transfer of foreign exchange abroad that foreign investors carry out based on the information provided by Companies and/or investors. Likewise, it will capture the rest of the information detailed in Article 4.

CHAPTER II
FORM FOR THE REPORTING OF INFORMATION

Article 6.- Form for Information Reporting
Companies must report the information established in Article 4 of this Regulation in the form for the Registration of Foreign Investment in the Plurinational State of Bolivia and Financial Operations with the Exterior (RIOF). This information constitutes a sworn declaration by the Company, which is responsible for its truthfulness, consistency, and coherence. The RIOF form is found in Annex I of this Regulation and will be available in digital format on the BCB website.

Article 7.- Content of the RIOF Form
The RIOF Form consists of the following parts:
a) Company Identification
Refers to the general data of the declaring Company (RIOF — 1). b) Foreign Investment Contribution Refers to investment contributions by foreign investors (RIOF — 2), allowing the capture of the origin, destination, contribution, and mechanisms of investment, as well as reinvestment. The RIOF — 2 section incorporates the different modalities of contribution. The information from sections RIOF — 1 and RIOF — 2 are mandatory requirements for the issuance of the Certificate of Receipt of Investment Contributions. The complementary information on shareholding, equity, market value of the company, profits, and dividends must be filled in section RIOF-3. d) Private External Debt Report (DEXPRI) Refers to medium and long-term external obligations that Companies incur with non-residents in the country, without the guarantee of the Bolivian government. This debt comes from the Parent Company, Foreign Subsidiary, or other related entities, International Organizations, International Banking, suppliers, private financial and non-financial institutions, and foreign government agencies. For this purpose, private entities and natural persons that contract a credit or any other medium and long-term external debt must report this information to the BCB within 30 days from the signing of the contracts or the incurring of the obligation, in sections RIOF — 4 and RIOF — 5. The BCB will assign a control number to each registered external obligation. The information on short-term credits contracted with the parent company or foreign subsidiary and/or third parties must be reported to the BCB quarterly in section RIOF — 6 with information corresponding to the previous quarter, individually and specifying the type of instrument. e) External Assets Report Includes the following modalities:
e.1) Investment Abroad
Refers to the following types of investment:

• Shares and other equity participations and reinvested profits abroad
• Shareholding participation in the capital of companies abroad
• Reinvested profits
• Commercial and/or financial loans granted to parent companies and/or foreign subsidiaries
• Investment in equity and/or debt participation titles
• Participation quotas in foreign investment funds
• Long-term bonds and promissory notes traded in foreign markets
• Money market instruments (short-term and negotiable in organized markets) traded in foreign markets
  e.2) Loans Abroad
  Refers to short, medium, and long-term loans that Companies resident in the country grant to non-residents. This information must be declared in section RIOF — 7. e.3) Deposits Abroad Constitute funds of resident Companies deposited abroad. They are composed of current account deposits, savings accounts, time deposits, and others. This information must be declared in section RIOF — 8. f) Report of Transfers Abroad Refers to the outflow of foreign exchange abroad that foreign investors, prior to fulfilling tax obligations and others established in current regulations, can transfer abroad in freely convertible foreign exchange through the banking system for the following concepts:
• Capital resulting from the total or partial liquidation of companies in which foreign investment registered has been made, or from the sale of shares, participations, or rights acquired due to foreign investment.
• Net profits generated from the registered foreign investment.
• Income resulting from the resolution of disputes.
• Payments to suppliers or creditors domiciled abroad in the country directly linked to the investment, within the framework of current and applicable regulations.
• Other payments to which they might be entitled, within the framework of current regulations.
  This information must be declared in section RIOF — 9. g) International Trade in Services Report (CIS) The international trade in services section covers a set of products and intangible activities. It includes 6 categories: Royalties and License Fees, Construction and Installation Services, Computer and Information Services, Business Services, and Other Services. This information must be declared in section RIOF — 10. h) Foreign Investment Prospects Report (PIE) This information must be declared in sections RIOF — 7 and RIOF — 8.

Article 8.- Modification of the Form for Information Reporting
The General Management of the BCB will modify and/or approve the Form for the Registration of Foreign Investment in the Plurinational State of Bolivia and Financial Operations with the Exterior, at the request of the Economic Policy Advisory and communicating to the BCB Board the changes made.

Article 9.- Report of the RIOF Form
With the purpose of having reference information, Companies must send qualitative and quantitative information regarding their intention to make additional or new foreign investment in the following periods in Bolivia. This report alone does not have the character of a sworn declaration and must be declared in section RIOF — 11.

CHAPTER III
CERTIFICATION OF INVESTMENT RESOURCES AND REGISTRATION OF TRANSFER OF FOREIGN EXCHANGE ABROAD

Article 9.- Contribution Certificate
The BCB will assign a control code to each Investment Contribution and certify the statistical registration thereof by issuing a Certificate of Reporting of Information on Foreign Investment Contributions in the Plurinational State of Bolivia. For this purpose, the Company must expressly request the issuance of the Certificate via a note to which it must attach the RIOF form (necessarily sections RIOF — 1 and RIOF — 2) and, in the case of contributions in national or freely convertible foreign currency, additionally the proof of transfer from abroad issued by an entity of the national financial system. Since this is a sworn declaration, the aforementioned note, form, and proof must be sent to the BCB in physical and digital media. The BCB will issue the Certificate within five business days of receiving the indicated documentation. Without prejudice to the obligation to submit the RIOF form quarterly, as stated in Article 10, the Company may request the Certificate at any time.

CHAPTER IV
PERIODICITY OF INFORMATION SUBMITTED

Article 10.- Periodicity
Companies must submit the RIOF Form to the BCB quarterly, according to Chapter II of this Regulation, with information as of March, June, September, and December, within the fifteen business days of the following month, filling in the sections corresponding to the characteristics of their company. The duly filled RIOF form must be sent to the BCB in printed or digital format via email, web portal, or other means enabled by the BCB. Any initial or additional foreign investment contribution must be reported to the BCB in section RIOF-2. In this case, the BCB will issue the Certificate of Receipt of Investment Contributions. For this effect, the Company must proceed as stated in Article 9 of Chapter III.

Article 11.- Report of Medium and Long-Term Credits and Certification.
The Company that contracts a credit or any other medium and long-term external debt must report this information with a note to the BCB attaching the RIOF form (sections RIOF-4 and RIOF-5), within 30 days from the signing of the contracts or the incurring of the obligation. The BCB will assign a control code to each external obligation and certify the statistical registration of private external debt within 5 business days of receiving the indicated form. Since this is a sworn declaration, the aforementioned note and form must be sent to the BCB in physical media.

Article 12.- Short-Term Credit Report.
The report of short-term credits contracted by the Company will be sent to the BCB in the RIOF form (section RIOF-6), in the periodicity stated in Article 10 of this Regulation.

Article 13.- Financial Statements
With the objective of having additional information, companies must send their Financial Statements to the BCB once their accounting period has concluded and within five business days of having sent them to the National Tax Service.

CHAPTER V
TRANSFER OF FOREIGN EXCHANGE TO AND FROM THE EXTERIOR

Article 14.- Transfers of Capital from Abroad
The investments made in the Plurinational State of Bolivia must consider that the transfer of capital from abroad is channeled through the national financial system. The financial entity will issue a proof of receipt of foreign exchange from abroad at the request of the Companies, which must be attached to Form RIOF-2 to request the BCB to issue the Certificate of Receipt of Foreign Investment Contributions.

Article 15.- Transfer of Foreign Exchange Abroad through the Financial System
Foreign investors, prior to fulfilling tax obligations and others established in current regulations, may transfer abroad in freely convertible foreign exchange through the banking system the following:
a. Capital resulting from the total or partial liquidation of companies in which registered foreign investment has been made, or from the sale of shares, participations, or rights acquired due to foreign investment; b. Net profits generated from the registered foreign investment;
c. Income resulting from the resolution of disputes;
d. Payments to suppliers or creditors domiciled abroad in the country directly linked to the investment, within the framework of current and applicable regulations; e. Other payments to which they might be entitled, within the framework of current regulations. The Company must report such transfer abroad to the BCB through the RIOF Form (Section RIOF-9).

Article 16.- Transfers to and from the Exterior through the Financial System
With the objective of reconciling the information referred to in articles 14 and 15 of this Regulation, financial entities will report to the BCB transfer operations to and from the exterior according to a circular issued by the ASFI in coordination with the Issuing Entity.

CHAPTER VI
SAFEGUARDING, PUBLICATION, AND DISSEMINATION OF FOREIGN INVESTMENT AND PRIVATE FOREIGN CAPITAL STATISTICS IN BOLIVIA

Article 17.- Safeguarding of Information
The BCB is responsible for the safeguarding of foreign investment information statistics and financial operations with the exterior.
The Company is responsible for the truthfulness, consistency, and coherence of the information submitted to the BCB.

Article 18.- Responsibility for Information
(See Article 17 context regarding responsibility)

Article 19.- Complementary Information
Within the framework of regulations and based on information needs, the BCB may request complementary information from Companies.

Article 20.- Dissemination of Information on Foreign Investment and Financial Operations with the Exterior
The BCB will generate and publish official statistical information on foreign investment and financial operations with the exterior in an aggregated manner, through reports, bulletins, Institutional Annual Report, website, and other communication media. All information submitted by Companies, individually, is confidential and will be used within the framework of this Regulation.

CHAPTER VII
NON-COMPLIANCE WITH INFORMATION REPORTING

Article 21.- Non-Compliance with Information Reporting
In case of omission or late compliance by Companies, the BCB will inform the Authority for the Supervision and Social Control of Companies and the supervision body of the sector to which the Company belongs, for the purpose of taking corresponding sanctions.