Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 157/2018

SUBJECT: TREASURY MANAGEMENT – REPEALS REGULATIONS APPROVED BY BOARD RESOLUTIONS NO. 216/2012 AND NO. 051/2016.

VISTOS:

• The Political Constitution of the State of the Plurinational State of Bolivia.
• Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995.
• Law No. 291 of September 22, 2012, modifying the General State Budget (PGE-2012).
• Supreme Decree No. 1423 of December 5, 2012.
• Supreme Decree No. 1756 of October 9, 2013.
• The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005, and its amendments.
• Board Resolution No. 216/2012 of December 18, 2012, approving the Regulation for the Sale of United States Dollars through BCB Windows and/or Financial Intermediation Entities with Majority State Participation.
• Board Resolution No. 051/2016 of March 22, 2016, approving the Regulation for the Sale of United States Dollars Through BCB Treasury Windows.
• Report BCB-GTES-SAMM-DAMM-INF-2018-131 of October 23, 2018, from the Treasury and International Operations Managerships.
• Report BCB-GAL-SANO-INF-2018-377 of October 23, 2018, from the Legal Affairs Managership.

CONSIDERING:

The Political Constitution of the State in paragraph I of article 328 establishes that it is an attribution of the BCB, in coordination with the Executive Branch, to determine and execute monetary policy and execute exchange rate policy.

Law No. 1670 in its articles 1 and 3 provides that the BCB has administrative, technical, financial competence and specialized normative powers of general application, within whose framework it has the power to formulate policies of general application in monetary and exchange rate matters.

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That said Law in its article 19 determines that the BCB will establish the exchange regime and execute exchange rate policy, regulating the conversion of the Bolivian in relation to the currencies of other countries and the procedures to determine the exchange rates of the national currency. These latter must be published daily.

That in its article 44 it determines 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 rules; as well as establishing administrative, operational and financial strategies of the BCB, approving their respective short and medium-term programs. For the monitoring and oversight of their execution, it will have independent information, analysis and audit services.

That likewise in letters a), c) and o) of article 54, Law No. 1670 establishes that the BCB Board of Directors in its capacity as the highest authority of the Institution, is responsible for defining its policies, specialized norms of general application and internal rules; to this effect, it is empowered, among others, to issue the norms and adopt the general decisions that would be necessary for the BCB to fulfill the functions, competence and powers assigned to it by the Law; to carry out the monitoring of the execution of monetary, exchange rate, (...) and other policies and regulations corresponding to the BCB; 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 Law No. 291, through its ninth additional provision, determines the creation throughout the national territory of the Tax on the Sale of Foreign Currency (IVME), which will apply on a transitional basis for thirty-six months to the sale of foreign currency, with banking and non-banking financial entities and exchange houses being the taxpayers. The tax base consists of the amount of the sale of foreign currency. The tax rate is zero point seventy percent (0.70%) applied to the tax base. It also determines that the sale of foreign currency carried out by the BCB and the sale of foreign currency by the taxpayers of the BCB are exempt from payment of said tax, and that it will enter into force from the day following the publication of the Regulatory Supreme Decree.

That said Law in the second paragraph of its tenth additional provision establishes that in order to guarantee the liquidity of United States dollars demanded by the national economy, the BCB must sell said foreign currency to the general public, through its own windows and/or through regulated financial institutions.

That Supreme Decree No. 1423, regulatory of the IVME in its article 11 establishes that the sale of foreign currency carried out by the BCB is exempt from payment of the IVME and that the sale of foreign currency carried out by the taxpayer of the tax to the BCB is also exempt from payment of the IVME, without the need to formalize the exemption before the Tax Administration.

That said Supreme Decree in its article 12 determines that the BCB in order to guarantee

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the liquidity of United States dollars demanded by the national economy, must sell United States dollars to the general public, through BCB's own windows and/or through financial intermediation entities with majority state participation. For this purpose, the Monetary Authority will issue a specific regulatory norm.

That in its article 13 it establishes that the IVME will enter into force for a period of 36 months from the day following the publication of the Regulatory Decree.

That Supreme Decree No. 1756, through paragraph II of its sole article, modifies paragraph II of article 12 of Supreme Decree No. 1423, establishing that the sale of dollars will be carried out through BCB's own windows and/or State financial entities or with majority state participation, exceptionally it may be carried out through private financial intermediation entities, with prior express authorization from the Ministry of Economy and Public Finances. In both cases, the procedure for the sale of United States dollars will be established according to a regulatory norm issued by the Monetary Authority.

CONSIDERING:

That the BCB Board of Directors through Board Resolution No. 216/2012, approves the Regulation for the Sale of United States Dollars through BCB Windows and/or Financial Intermediation Entities with Majority State Participation which in its article 2 provides that its object is to regulate the procedure applicable to the sale of United States dollars through BCB windows and/or through financial intermediation entities with majority state participation.

That through Board Resolution No. 051/2016, the Regulation for the Sale of United States Dollars Through BCB Treasury Windows is approved, which in its article 1 provides that its object is to regulate the procedure applicable to the sale of United States dollars through BCB windows.

That according to article 26 of the BCB Statute, the Board of Directors pronounces itself on matters within its competence through resolutions. It may also do so through decisions that will be expressly recorded in the minutes. In this sense, this Board Resolution has the respective technical and legal reports that motivate and justify this Resolution.

That the BCB Statute determines in items 1) and 29) of its article 11 that the Board of Directors has the authority to approve general decisions and issue the norms that would be necessary for the BCB to fulfill the functions, competence and powers assigned to it by the Law and 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 an additional administrative act.

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That through Report BCB-GTES-SAMM-DAMM-INF-2018-131, the GTES and GOI state that on December 5, 2015, the validity of Supreme Decree No. 1423 of December 5, 2012, which established that the BCB had the obligation to sell dollars through its windows, concluded. Likewise, they point out that the amount sold and the number of operations carried out through the BCB windows represent a very small percentage (between 2% and 4%) of the USD sales carried out by financial entities that attend the USD requirements of the entire population at the national level, therefore they recommend that Board Resolutions No. 216/2012 and No. 051/2016 of December 18, 2012 and March 22, 2016 respectively, which approve the Regulation for the Sale of United States Dollars through BCB Windows and/or Financial Intermediation Entities with Majority State Participation approved and the Regulation for the Sale of United States Dollars Through BCB Treasury Windows, be repealed.

That through Report BCB-GAL-SANO-INF-2018-377, the Legal Affairs Managership states that since the IVME created through the ninth additional provision of Law No. 291 and what is established in article 13 of Supreme Decree No. 1423, is no longer in force as of today, it corresponds for the BCB Board of Directors, under the protection of Law No. 1670 and the BCB Statute, to determine the repeal of the Regulations approved through Board Resolutions No. 216/2012 and No. 051/2016, since the aforementioned tax is no longer applicable according to the current legal framework.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Repeal, effective November 1, 2018, Board Resolutions No. 216/2012 of December 18, 2012 and No. 051/2016 of March 22, 2016, which approve the Regulation for the Sale of United States Dollars through BCB Windows and/or Financial Intermediation Entities with Majority State Participation and the Regulation for the Sale of United States Dollars Through BCB Treasury Windows, respectively.

Article 2.- The Presidency and the General Management are charged with the compliance of this Resolution.

La Paz, October 23, 2018

Pablo Ramos Sánchez

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Abraham Pérez Alandia
Gabriel Herbas Camacho
Luis Baudoin Olea
Ronald Polo Rivero
Sergio Velarde Vera