Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 118/2021

SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES REGULATION FOR THE TRANSFER OF FAMILY REMITTANCES.

VISTOS (SEEING):

• The Political Constitution of the State of February 7, 2009.
• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB).
• The Statute of the BCB approved by Board Resolution No. 128/2005 of October 21, 2005, and its subsequent modifications.
• Law No. 393 of August 21, 2013, on Financial Services.
• The Regulation for the Transfer of International Remittances approved by Board Resolution No. 071/2012 of June 19, 2012, and modified on August 28, 2012, by Board Resolution No. 154/2012.
• The Regulation for Money Transfer and Remittance Companies approved by ASFI Resolution No. 597/2012 of November 13, 2012, and modified by ASFI Resolution 627/2020 of November 9, 2020.
• The Regulation on Payment Services, Electronic Payment Instruments, Compensation and Settlement (RSPIEPCL) approved by Board Resolution No. 069/2021 of April 27, 2021.
• The Report from the Financial Entities Management BCB-GEF-SSPFS-DVSP-INF-2021-19 of July 7, 2021.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2021-144 of July 15, 2021.
• The Report from the Financial Entities Management BCB-GEF-SSPFS-DVSP-INF-2021-24 of September 10, 2021.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2021-187 of September 20, 2021.

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CONSIDERING:

• That the Political Constitution of the State, in its article 327, establishes 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 BCB to maintain the stability of the internal purchasing power of the currency, to contribute to economic and social development.
• That numeral 3 of article 328 of the Constitutional Text establishes that it is an attribution of the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, to regulate the payment system.
• That according to article 331 of the Political Constitution of the State, financial intermediation activities, the provision of financial services, and any other activity related to the management, use, and investment of savings, are of public interest and can only be exercised with prior authorization from the State, in accordance with the Law.
• That Law No. 1670 of the BCB, in its article 1, establishes that the BCB is the sole monetary and exchange authority of the country, with administrative, technical, and financial competence and specialized normative powers of general application; in its article 2, it states that the object of the BCB is to seek the stability of the internal purchasing power of the national currency; in its article 3, it refers to formulating policies of general application in monetary, exchange, and payment system matters for the fulfillment of its object.
• That Law No. 1670 of the BCB, in its article 30, establishes that all entities of the financial intermediation and financial services system, with authorized operation, are subject to the competence of the Superintendency of Banks and Financial Entities, currently the Financial System Supervisory Authority (ASFI), an entity that will exercise supervision and control of compliance with norms and for its execution may make non-binding consultations with the BCB, as indicated in article 34; on its part, article 37 establishes that the BCB will be the depository of liquid reserves intended to cover the legal reserve and attend the payment system and other operations.
• That Law No. 1670 of the BCB, in its article 44, provides 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 norms; as well as establishing administrative, operational, and financial strategies of the BCB.
• That Law No. 1670 of the BCB, in its article 54, establishes that the Board of Directors of the BCB has the following attributions: subsection a) issue norms and adopt general decisions that are necessary for the BCB to fulfill functions, competencies, and powers assigned to it by Law; subsection b) regulate the administration of payment systems among authorized financial entities; subsection o) approve, modify, and interpret the Statute and

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Regulations of the BCB, by two-thirds of the votes of all its members, without the need for any additional administrative act.

• That the Statute of the Central Bank of Bolivia and its subsequent modifications, in numerals 1, 24, and 29 of article 11, establish that the Board of Directors of the BCB has the attribution to approve general decisions and issue norms that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by law; it also refers that it has the attribution to regulate financial operations with the exterior carried out by public and private persons or entities; and it can approve and modify the Statute and Regulations of the BCB, by two-thirds of the votes of its members, without the need for an additional administrative act.
• That on its part, article 26, of the Statute of the Central Bank of Bolivia establishes that the Board pronounces itself on matters within its competence through resolutions. It can also do so through decisions that will be expressly recorded in the minutes. 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.
• That Law No. 393, establishes that the ASFI will issue specific regulation and supervise its compliance within the framework of the norms issued by the BCB in the scope of the payment system as indicated in paragraph III of article 8; on its part, subsection j) paragraph I of article 123 establishes that complementary financial services are those offered by complementary financial services companies, authorized by the ASFI, among them those of transfers and remittances; in paragraph I of article 124, it establishes that operations carried out within the framework of the services provided by financial entities may be carried out through electronic means, which necessarily must comply with security measures that guarantee integrity, confidentiality, authentication, and non-repudiation.
• That the BCB Regulation for the Transfer of International Remittances has the object of regulating the operations of Transfer of International Remittances that enter or leave Bolivian territory.
• That the ASFI Regulation for Money Transfer and Remittance Companies has the object of regulating the process of constitution and operation of Money Transfer and Remittance Companies, as well as the continuity of the adaptation process of companies within the framework of Law No. 393 on Financial Services.
• That the BCB Regulation on Payment Services, Electronic Payment Instruments, Compensation and Settlement (RSPIEPCL) regulates the services and Electronic Payment Instruments, the compensation and settlement of these instruments within the scope of the national payment system, as well as the creation, constitution, and operation of Compensation and Settlement Chambers and Payment Service Companies (ESP). Likewise, it establishes definitions, terms, and clarifications referred to international remittances and family remittances, as well as the general framework for the operation of Payment Service Companies that include Money Transfer and Remittance Companies.

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• That the Financial Entities Management through Report BCB-GEF-SSPFS-DVSP-INF-2021-24 concludes by stating that the evaluation carried out on the RTRI evidenced that it is necessary to replace it with a new Regulation for the Transfer of Family Remittances where the scope of regulation is specified, taking into account the concepts of specialized international organizations on the subject and definitions, references, terms, and other clarifications contained in current regulations. As part of the development of the national payment system, the new Regulation incorporates the possibility of providing family remittance transfer services through electronic payment instruments; likewise, it includes aspects such as the obligation to send information and compliance with provisions issued by the Financial Investigations Unit (UIF) on Money Laundering and Terrorist Financing, in addition to considering the comments and suggestions of the ASFI, the UIF, and the areas of the BCB.
• That according to Report BCB-GAL-SANO-DLBCI-INF-2021-xxx, the Legal Affairs Management concludes that the draft Regulation for Family Remittance Transfers (RTRF), presented by the SSPSF dependent on the GEF through Reports BCB-GEF-SSPSF-DVSP-INF-2021-19 of July 7, 2021, and BCB-GEF-SSPSF-DVSP-INF-2021-24 of September 10, 2021, issued after coordination with the ASFI, UIF, GEF, APEC, GOM, GTES, and with the COASIF, is legally procedent, as it does not contravene the current legal order, being an attribution of the Board of Directors of the BCB its approval, by two-thirds of the votes of all its members, in accordance with what is established in subsections a) and o) of article 54 of Law No. 1670 and numerals 1) and 29) of article 11 of the Statute of the BCB.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the Regulation for the Transfer of Family Remittances, in its IV chapters and 15 articles, which in the annex forms an integral part of this Resolution.

Article 2.- Repeal Board Resolution No. 071/2012 of June 19, 2012, which approves the Regulation for the Transfer of International Remittances and its subsequent modifications.

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Article 3.- This Regulation 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, October 12, 2021

Edwin Rojas Ulo PRESIDENT a.i.

Oscar Ferrufino Morro DIRECTOR a.i.

Bismarck Arevilca Vásquez DIRECTOR a.i.

Gabriel Herbas Camacho DIRECTOR a.i.

Héctor Pino Guzmán DIRECTOR a.i.

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ANNEX

REGULATION FOR THE TRANSFER OF FAMILY REMITTANCES

CHAPTER I

PRELIMINARY PROVISIONS

Article 1.- (Object). The object of this regulation is to regulate the operations of Transfer of Family Remittances (TRF) that enter or leave Bolivian territory.

Article 2.- (Scope). This regulation is applicable to supervised entities that have an operating license granted by the Financial System Supervisory Authority (ASFI) that authorizes them to provide the TRF service.

Article 3.- (Definitions). For the purposes of interpretation and application of this regulation, the following definitions are established:

a) Beneficiary. Natural person in favor of whom the funds sent by the originator are remitted.

b) Payable. Characteristic by which payment orders originated and accepted must be settled or paid.

c) Payment Instrument. Physical or electronic forms or modalities that money takes and that allow a holder and/or user to transfer funds or execute payment orders.

d) Electronic Payment Instrument. Electronic device or document that can be used physically or virtually and allows the holder and/or user to originate payment orders and/or make account queries associated with the instrument. Electronic payment instruments are:

i. Mobile money,
ii. Electronic Fund Transfer Order,
iii. Electronic cards,
iv. Others authorized by the BCB.

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e) Irrevocable or definitive. Condition or state by which accepted payment orders cannot be repudiated, denied, reversed, or annulled by the one who generated them or by the one who received them.

f) Payment Order. Instruction or message by which an originator requests the assignment and/or transfer of funds through the use of payment instruments, in favor of a beneficiary that, by way of example and not limitation, considers:

i. Electronic transfers between natural persons;
ii. Deposit or withdrawal of cash, loading, and cashing of electronic money.

g) Originator. Natural person who requests the sending of money, initiating the transfer of funds to a specific beneficiary.

h) Family remittance. Modality of international remittance corresponding to the sending of money as family aid.

i) International remittance. Electronic transfer of funds from/to the exterior, with the particularities that the originator and/or the beneficiary do not maintain an account associated with the electronic payment instrument.

j) Validity. Characteristic by which payment orders originated by family remittances have full legal effect between the one who issued them and the one who received them.

Article 4.- (Validity and irrevocability of payment orders originated by TRF). Payment orders originated by TRF are irrevocable, valid, and payable. No norm or practice may challenge, annul, or reverse them. In case of a need for amendment, correction, or rectification due to disagreements or errors regarding a payment order, it may be amended only with a new payment order.

CHAPTER II

COMPANIES PROVIDING THE TRF SERVICE

Article 5.- (Type of service and provision). The TRF service is part of the complementary financial services and may be provided in accordance with what is stipulated in Law No. 393 on Financial Services, the RSPiEPCL, and the specific norm issued by the ASFI.

Article 6.- (Authorization for the provision of the TRF service). The ASFI will determine the requirements for constitution and obtaining an operating license as well as for authorizing the provision of the TRF service within the framework of what is established in paragraph I of Article 19 of Law No. 393 on Financial Services and according to the specific regulation it issues for this effect.

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Article 7.- (Electronic payment instruments). The TRF service may be provided with the use of electronic payment instruments prior to compliance with the Minimum Operational Security Requirements for said instruments issued by the BCB.

Article 8.- (Internal Operations Regulation - RIO). The RIO of entities that provide the TRF service must contemplate at least the following:

a) Detailed description of the stages and procedures inherent to TRF operations;

b) In the case of banks: the characteristics of the contracts signed with companies constituted abroad.

c) Procedures and tasks carried out for risk management that consider all authorized operations;

d) Identification of the conditions, characteristics, and procedures for the payment of TRF.

CHAPTER III

INSTITUTIONAL RESPONSIBILITIES AND COMPETENCIES

Article 9.- (Surveillance and supervision).

I. The BCB, within the framework of the attributions granted by numeral 3 of Article 328 of the Political Constitution of the State and Articles 3° and 20° of Law No. 1670, constitutes itself as the regulator of the national payment system and will carry out the surveillance of TRFs in compliance with what is established in the RSPiEPCL.

II. The ASFI, within the framework of the attributions granted by Law No. 393 on Financial Services, constitutes itself as the supervisory authority of TRF.

Article 10.- (Application of Norms on Money Laundering and Terrorist Financing). Entities that provide the TRF service must comply, in all their services related to TRF, with the norms issued by the Financial Investigations Unit (UIF) on Money Laundering and Terrorist Financing.

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Article 11.- (Financial consumer protection).

I. The ASFI, within the framework of its competencies, will determine the specific instances and procedures for financial consumer protection that use the TRF service and will verify compliance with the established tariffs and/or commissions.

II. Entities that provide the TRF service must adopt user protection measures establishing procedures for the attention of claims, which allow the registration, response, and administration of them to guarantee compliance with the offered service.

Article 12.- (Exchange rate, tariffs, and commissions applicable to TRF).

I. The exchange rate applicable for TRF must comply with the norms established by the BCB for foreign currency purchase and sale operations.

II. The criteria for the determination of tariffs and commissions applicable to TRF will be subject to what is established in the RSPiEPCL, which contemplates the sending of information to the BCB and the ASFI, as well as the technical support of tariffs when interconnection and interoperability is carried out with other payment service companies under fair, reciprocal, and consensual conditions.

CHAPTER IV

COMPLEMENTARY CONDITIONS RELATED TO TRF OPERATIONS

Article 13.- (Information to the public). Entities that provide the TRF service are obliged to inform the public about:

a) The detail of costs, exchange rate, tariffs, and other charges associated with the processing of TRF, which must be expressed in bolivianos;

b) The currency in which the TRF will be effective;

c) The availability period of TRF resources for the beneficiary from their receipt, within the framework of what is established in the RSPiEPCL.

d) Other terms that are considered pertinent.

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Article 14.- (Publication of information). Entities that provide the TRF service must obligatorily expose to the public the information described in Article 13 of this Regulation, on boards located in visible places on their Websites and applications, as appropriate.

Article 15.- (Sending of information). Entities that provide the TRF service are obliged to provide information, according to the requirements and periodicity indicated by the BCB and the ASFI.