BOARD OF DIRECTORS

BOARD RESOLUTION NO. 097/2022

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – APPROVAL OF THE INTERNAL REGULATIONS FOR OPERATIONS THROUGH THE ALADI RECIPROCAL PAYMENTS AND CREDITS AGREEMENT (CPCR-ALADI).

VIEWED:

• The Political Constitution of the State of February 7, 2009.
• Law No. 1670 of the Central Bank of Bolivia (BCB), of October 31, 1995, and its modifications.
• Law No. 393 of August 21, 2013, on Financial Services.
• The Statute of the Central Bank of Bolivia, approved by Board Resolution No. 095/2022 of October 6, 2022.
• The Reciprocal Payments and Credits Agreement currently in force between the Central Banks of the member countries of ALADI and the Central Bank of the Dominican Republic of August 25, 1982, as well as its Regulations.
• Report BCB-GOI-SOEXT-DOCC-INF-2022-25 of October 20, 2022, issued by the International Operations Management (GOI).
• Report BCB-GAL-SANO-INF-2022-217 of October 21, 2022, issued by the Legal Affairs Management (GAL).

CONSIDERING:

That Article 327 of the Political Constitution of the State establishes that the Central Bank of Bolivia 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 1 of Law 1670 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 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

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specialized normative powers of general application, in the manner and with the scope established in the Law.

That subsection b) of Article 38 of Law No. 1670 establishes that the BCB may carry out operations with banks and financial intermediation entities, such as creating and administering credit lines within the framework of international payment clearing systems.

That Articles 44 and subsections a) and o) 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 may be necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by the Law; 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.

That according to paragraph III of Article 5 of Law No. 393 of August 21, 2013, on Financial Services regarding the preferential application and scope of the Law, it establishes that the BCB will be governed by its own provisions and also in Article 118 on passive operations, it indicates that financial intermediation entities are empowered to carry out passive operations such as contracting credits or obligations with the BCB and with financial entities in the country and abroad.

That according to numeral 1) of Article 10 of the BCB Statute, the Board of Directors is empowered to approve general decisions and issue the norms that may be necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by the Law, as well as to approve, interpret, and modify the Statute and Regulations of the Institution by two-thirds of the votes of all its members, without the need for any additional administrative act.

That according to paragraph I of Article 26 of the BCB Statute, it establishes that the Board of Directors pronounces itself on matters within its competence through resolutions and can also do so through decisions that will be expressly recorded in the minutes, noting in its paragraph II that every draft Board resolution must be motivated and justified by a technical report from the Management or Managements to whom the subject matter of the resolution corresponds and by a report from the Legal Affairs Management.

That the Reciprocal Payments and Credits Agreement currently in force between the Central Banks of the member countries of ALADI establishes the mechanisms for credit lines in US dollars and the clearing of balances registered in the accounts through which payments are made between persons resident in the respective countries, relating to operations admitted for channeling through the Agreement.

That Report BCB-GOI-SOEXT-DOCC-INF-2022-25 of October 20, 2022 from the International Operations Management establishes in its conclusions that within the framework of new regulations issued subsequently to the current Regulations, such as the new BCB Statute approved by Board Resolution No. 095/2022 of October 6, 2022 (...), and in conformity with the (...) financial services regulatory framework established by Law No. 393 of August 21, 2013, it is necessary to update the Internal Regulations for Operations through the ALADI Reciprocal Payments and Credits Agreement, recommending to the BCB Board of Directors its approval.

That Report BCB-GAL-SANO-DLBCI-INF-2022-217 from the GAL concludes that the proposal for the new Internal Regulations for Operations through the ALADI Reciprocal Payments and Credits Agreement is legally appropriate and does not contravene the current legal order, as its object is to regulate the procedures for channeling payments by Authorized Institutions, with this regulation falling within the functions of the Issuing Entity in relation to the financial system, recommending to the BCB Board of Directors to consider its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1. Approve the Internal Regulations for operations through the ALADI Reciprocal Payments and Credits Agreement (CPCR-ALADI) in its nine (9) Chapters and twenty-nine (29) Articles, which forms part of the Annex to this Resolution.

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

Article 3. Repeal Board Resolutions No. 140/2011 of October 25, 2011, No. 147/2017 of October 17, 2017, and No. 106/2020 of October 13, 2020.

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

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La Paz, October 25, 2022

SIGNED. ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.

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ANNEX

INTERNAL REGULATIONS FOR OPERATIONS THROUGH THE ALADI RECIPROCAL PAYMENTS AND CREDITS AGREEMENT (CPCR-ALADI)

CHAPTER I

OBJECT AND DEFINITIONS

Article 1. (Object and Scope)

These Regulations have as their object to regulate the procedures for channeling payments through the Reciprocal Payments and Credits Agreement of the Latin American Integration Association (CPCR-ALADI), by financial entities enabled as Authorized Institutions.

Article 2. (Definitions)

For the purposes of these Regulations, the following definitions are established:

Term	Definition
ALADI:	Latin American Integration Association.
ASFI:	Financial System Supervision Authority
BCB:	Central Bank of Bolivia
Central Bank(s):	Central Banks signatories to the Agreement.
Agreement:	Provisions contained in the Reciprocal Payments and Credits Agreement, its Regulations, and the Resolutions of the CPCR - ALADI Council.
CPCR-ALADI:	Reciprocal Payments and Credits Agreement of the Latin American Integration Association.
Financial Entities:	Those Financial Entities of the State or with majority State participation and Private Financial Intermediation Entities.
Institution(s)

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Term	Definition
Authorized(s):	Financial entities expressly authorized by the BCB to channel payments through the Agreement.
Foreign Authorized Institutions:	Financial institutions resident in each of the countries of the Central Banks, that are expressly authorized by them to channel payments through the Agreement.
Instruments:	Payment modalities that are indicated as admissible to be channeled through the Agreement in these Internal Regulations.
Accounting Net Worth:	Accounting net worth reported by the Financial System Supervision Authority.

CHAPTER II

USE OF THE RECIPROCAL PAYMENTS AND CREDITS AGREEMENT CPCR - ALADI

Article 3. (Voluntary Nature)

The use of the Agreement mechanism for foreign trade operations with member countries is voluntary.

Article 4.- (Direct Channeling)

Authorized Institutions, in accordance with these Regulations, may issue, endorse, and receive the Instruments indicated in Article 8 and channel them directly through the Agreement via Foreign Authorized Institutions.

Article 5.- (Currency)

Records of operations carried out by the BCB with Authorized Institutions within the framework of the Agreement may be made in Bolivianos or in US dollars.

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CHAPTER III

PAYMENTS

Article 6. (Admissible Payments)

Payments corresponding to goods trade operations and their related services may be channeled through the Agreement, provided that the origin of the traded goods corresponds to member countries of the Agreement.

Article 7. (Prohibited Payments)

Channeling through the Agreement of payments for operations corresponding to other services other than those indicated in Article 6, capital movements, and other pure financial operations, which imply fund transfers not related to a trade operation, will not be admitted.

Additionally, Authorized Institutions are prohibited from making the following payments for operations:

a) Commercial triangulation, understood as exports of goods originating from a member country of the Agreement destined for another country of the Agreement, by a seller resident in a third country also member of the Agreement.

b) Discounting of payment instruments derived from commercial operations, understood as obtaining liquidity or loans on payment instruments applying a discount rate.

CHAPTER IV

INSTRUMENTS

Article 8. (Admissible Instruments)

The following Instruments will be admitted for channeling under the Agreement, which must correspond to goods trade operations with Bolivia and their related services:

a) Letters of Credit and/or Documentary Credits.

b) Payment Orders.

c) Bills of Exchange.

d) Promissory Notes issued or endorsed.

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Article 9. (Prohibited Instruments)

Letters of Credit and/or documentary credits with red clauses, revolving, Standby, nor those that contemplate financing for the importer for a period longer than that established for payment to the exporter, may not be processed through the Agreement.

Article 10.- (Underlying Commercial Operation)

Authorized Institutions must verify prior to the issuance of an admissible Instrument that it originates from the commercial transaction indicated in said document.

CHAPTER V

RESPONSIBILITY OF AUTHORIZED INSTITUTIONS

Article 11. (Enabling as Authorized Institution)

Financial entities to be enabled as Authorized Institutions must meet the following requirements:

a) Maintain the patrimonial sufficiency required by law.

b) Be up to date with obligations to the BCB.

c) Not have incurred fines from the ASFI for deficiencies in legal reserve for two consecutive biweekly periods in the last two months.

d) Not have a liquidity credit from the BCB, in accordance with Article 36 of Law 1670.

e) Have an age as a financial entity of at least 12 months.

f) Not have been intervened by the ASFI for forced sale.

g) Sign the Operation Contract within the ALADI Reciprocal Payments and Credits Agreement, which will represent the unconditional adherence of the Authorized Institution to the norms of these Regulations.

Article 12. (Prohibition of Re-shipping and Re-export of Goods)

Goods channeled through the Agreement that enter Customs Warehouse and/or Free Zone may not be re-shipped or re-exported to third countries.

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Article 13.- (Payment of Issued and/or Endorsed Instruments)

Authorized Institutions that are suspended or lose such status will continue to be responsible for payment to the BCB of Instruments issued and/or endorsed prior to the date of suspension.

Article 14.- (Controversies)

Controversies that may arise between Authorized Institutions and Foreign Authorized Institutions regarding the issuance, endorsement, notification, and payment of instruments, will be resolved directly between them. Therefore, the BCB assumes no responsibility for any controversy that may arise between them, their clients, or third parties or between Authorized Institutions and a foreign central bank.

Article 15.- (Debit Agreement)

Reimbursements and/or payments made by the BCB to Authorized Institutions will be conditioned on compliance with these Regulations and registration in the Agreement System.

CHAPTER VI

OBLIGATIONS OF AUTHORIZED INSTITUTIONS

Article 16.- (Authorization to BCB)

Authorized Institutions, by signing the Operation Contract, will instruct and authorize irrevocably and generally for amounts destined to cover all their obligations to be automatically debited from the current and reserve accounts they maintain at the BCB, in case they do not make the payment within the established deadlines.

Article 17.- (Payment of Instruments)

Authorized Institutions will pay the BCB the amount of the instruments they issue and/or endorse through the Agreement, on the date of debit that the foreign Central Bank sends to the BCB.

Article 18.- (Payment of Commissions)

Authorized Institutions will pay the BCB the commissions established in the current Commission Table for services.

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Article 19.- (Insufficiency of Funds)

The Authorized Institution that does not cover its obligations with the BCB will pay interest calculated on the basis of the unpaid amount, at the interest rate of the Agreement for ALADI operations plus four percentage points (400 basis points), calculated from the date of debit to the date of payment.

Article 20.- (Debit for Inadmissible Operations)

When operations are processed through the Agreement in violation of the provisions of Articles 6, 7, 8, and 9 of these Regulations, the BCB will debit the total amount of the same from the current and legal reserve account of the Authorized Institution, which will be restored when the violation is regularized, without prejudice to what is established in Article 25.

Article 21.- (Debit for Excess in Debt and Term Limits)

When Authorized Institutions issue and/or endorse instruments that represent obligations exceeding the limits established in Articles 23 and 24 of these Regulations, the BCB will debit the amount exceeding said limits, replenishing these funds when the limit is regularized, without prejudice to what is established in Article 25.

Article 22.- (Debit for Non-existence of Commercial Operation)

Operations issued by Authorized Institutions must be backed by documents detailed in accordance with General Management Circular. Also, at the request of the BCB, Authorized Institutions must provide additional documentation proving the existence of a commercial operation. Otherwise, the total amount of the operation will be debited from the current and legal reserve account of the Authorized Institution.

CHAPTER VII

LIMITS ON ISSUANCE AND/OR ENDORSEMENT OF INSTRUMENTS

Article 23.- (Maximum Debt Limit)

The maximum limit of the value of payment Instruments issued and pending payment by Authorized Institutions may not exceed ten percent (10%) of their Accounting Net Worth.

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Article 24.- (Maximum Term)

The maximum term of Instruments issued and/or endorsed by Authorized Institutions will adjust to the following table or its equivalents:

Long-Term Foreign Currency Local Credit Risk Rating	Maximum Term of Instruments
AAA, AA1, AA2, AA3	5 years
A1	3 years
A2	2 years
A3	1 year
BBB1, BBB2, BBB3	6 months

(*) According to the categories and nomenclature of credit risk rating established by the ASFI.

The credit risk ratings indicated in this article correspond to Risk Rating Agencies authorized and registered in the Securities Market Register (RMV) of the ASFI.

When an Authorized Institution has ratings from more than one Risk Rating Agency, the lower rating will be considered.

Credit risk ratings will be updated at the BCB, whenever the Risk Rating Agencies issue the rating for each of the Authorized Institutions.

CHAPTER VIII

SANCTIONS FOR NON-COMPLIANCE WITH THE REGULATIONS

Article 25.- (Sanctions)

Non-compliance by an Authorized Institution with any provision of these Regulations, in an annual management, will give rise to the following sanctions:

a) For the first time, written warning.

b) The second time, temporary suspension for 3 months.

c) The third time, definitive suspension when it reoffends with non-compliance with these Regulations

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Article 26.- (Loss of Right to Reimbursement)

If an export instrument is processed through the Agreement in violation of the provisions of these Regulations, the Authorized Institution will not have the right to request its reimbursement.

Article 27.- (Prohibition to Issue and/or Endorse or Receive Instruments)

An Authorized Institution is prohibited from issuing and/or endorsing Import Instruments and from receiving Export Instruments in the following cases:

a) When it is suspended according to subsections b) and c) of Article 25 of these Regulations.

b) When the BCB Board of Directors through an express Resolution defines its suspension to operate in the Agreement.

Article 28.- (Portfolio Transfer)

In the case of definitive suspension according to subsection c) of Article 25 or subsection b) of Article 27 of these Regulations, the Authorized Institution must transfer to the BCB, the total of the portfolio pending collection originated in operations through the Agreement, within the deadlines and conditions fixed by the BCB Board of Directors through an express Resolution.

CHAPTER IX

OPERATIONAL PROCEDURES

Article 29.- (Operational Procedures)

The General Management of the BCB through an express Circular, will regulate the operational procedures of operations under the ALADI Reciprocal Payments and Credits Agreement.