Board Resolution No. 099/97

BOARD RESOLUTION NO. 099/97 SUBJECT: FINANCIAL SYSTEM - SUGAR HARVEST FINANCING PROGRAM 1997.

VIEWED: Law No. 1670 of October 31, 1995. Board Resolution No. 154/95 of December 4, 1995, which approves the Regulations for the National Cane Fund Credit Line. Letters from the National Cane Council No. 034/97 and from the Federation of Cane Producers of Tarija No. 096/97. Letter U-AJ No. 041/97 from the Legal Affairs Unit dated April 11, 1997. Report No. 03/97 from the Financial System Management dated April 15, 1997.

CONSIDERING: That Law No. 1670 empowers the Board of Directors to issue norms and adopt general decisions so that the Central Bank of Bolivia (BCB) fulfills the functions, competencies, and powers assigned to it by said legal norm.

That to access the resources of the National Cane Fund (FONACA) Credit Line, in accordance with Article 4 of its Regulations, "the production of each Sub-borrower Group or group of producers must be greater than 10% of the total sugar production of all sub-borrowers as well as of the respective region."

That the report from the Financial System Management recommends reducing this percentage to 5%, due to the difficulty of grouping producers located in different zones of Santa Cruz and Bermejo to meet the quota set by the Regulations.

That according to Article 5 of the aforementioned Regulations, financial entities that intermediate these resources must be authorized as Intermediary Credit Institutions (ICIs).

That due to the delay by the ICIs in delivering information to the BCB, the programming of the FONACA Credit Line could not be carried out in a timely manner, an aspect that coincided, moreover, with the imminent start of the 1997 sugar harvest.

That the cane producer groups have requested that there be no change of ICIs in this management period, in order to avoid harm at the start of the 1997 sugar harvest.

Therefore,

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

Article 1.- Accept, exceptionally, due to the urgency of immediately starting the 1997 sugar harvest, that Banks La Paz S.A. and Internacional de Desarrollo S.A. may intermediate the resources of the National Cane Fund (FONACA) Credit Line to finance said harvest. This acceptance is conditioned on said Banks obtaining ICI status by November 30 of this year, without fail.

Authorize Bank Unión S.A., authorized as an ICI, to continue intermediating the resources of the FONACA.

Article 2.- To ensure that the resources of the National Cane Fund remain liquid, the sugar under warrant guarantee shall be released simultaneously with the sale of the sugar owned by the cane producer groups.

Article 3.- Require, for guarantee purposes, that the sugar backing these operations and held in warrant deposit as pledge securing the resources intermediated by the ICIs, be transferred within the next 30 days to other companies satisfactory to the BCB.

Article 4.- Modify, following the recommendation of the Financial System Management, the last paragraph of Article 4 of the Regulations for the Credit Line of the National Cane Fund, approved by Board Resolution No. 154/95 of December 4, 1995, in the following terms:

"To be able to access credit, the production of each Sub-borrower Group or group of producers must be greater than 5% of the total sugar production of all sub-borrowers as well as of the respective region (PAPC)."

Article 5.- The Presidency and General Management are charged with executing this Resolution.

15.IV.97

____________________ Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G. Juan Medinacelli V.

________________ Edgar Millares A.