2022-02-22 | RESOLUCIONES DE DIRECTORIO N° 018/2022

Added · Updated

Board Resolutions No. 018/2022

The Board of Directors of the Central Bank of Bolivia approves the purchase of up to 240 kilograms of gold bars from COMIBOL-EBO for the 2022 fiscal year. It authorizes the Presidency and General Management to request an inter-institutional budget transfer of Bs15,028,103.12 from the Ministry of Economy and Public Finance to cover the purchase price and associated VAT. The resolution mandates the issuance of Fiscal Credit Notes to facilitate this transaction and enters into force upon approval.

Banco Central de Bolivia logo

Bolivia

Banco Central de Bolivia

Click to view thumbnail

BOARD OF DIRECTORS

BOARD RESOLUTION NO. 018/2022

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – APPROVAL OF GOLD PURCHASE FOR THE 2022 MANAGEMENT PERIOD.

VIEWING:

  • The Political Constitution of the State of February 7, 2009.
  • Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB).
  • Law No. 2042 of December 21, 1999, on Budgetary Administration.
  • Law No. 175 of October 11, 2011, for the Purchase of Gold Intended for International Reserves.
  • Law No. 466 of December 27, 2013, on Public Enterprises.
  • Supreme Decree No. 1167 of March 14, 2012, which partially regulates Law No. 175.
  • Supreme Decree No. 3607 of June 27, 2018, which approves the Regulation of Budgetary Modifications.
  • Board Resolution No. 046/2012 of April 17, 2012, which approves the Regulation for the purchase of Gold from State Mining Enterprises intended for International Reserves and its modification.
  • Board Resolution No. 97/2018 of July 31, 2018, which approves the Regulation for the Administration of International Reserves and its modifications.
  • Board Resolution No. 128/2005 of October 21, 2005, which approves the Statute of the BCB and its modifications.
  • The Report from the International Operations Management BCB-GOI-SRES-DOI-INF-2022-2 of February 2, 2022.
  • The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2022-27 of February 16, 2022.

CONSIDERING:

That Article 327 of the Political Constitution of the State establishes that the Central Bank of Bolivia (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.

//2. B.R. No. 018/2022

That numeral 5 of Article 328 of the Political Constitution of the State states that the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, has the authority to administer international reserves.

That Article 14 of Law No. 1670 of the BCB provides that the Central Bank of Bolivia will ensure the strengthening of international reserves so as to allow the normal functioning of Bolivia's international payments.

That subsection a) of Article 15 of Law No. 1670 of the BCB establishes that the BCB's international reserves are constituted, among others, by physical gold.

That Article 44 of Law No. 1670 establishes that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized regulations 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.

That subsections a) and c) of Article 54 of Law No. 1670 provide as attributions of the BCB Board of Directors to issue regulations and adopt general decisions that are necessary for the Issuing Entity to fulfill the functions, competencies, and powers assigned to it by Law; as well as to carry out follow-up on the execution of monetary, exchange, credit, financial intermediation, international reserve administration, and other policies and regulations corresponding to the BCB in accordance with the Law.

That Article 4 of Law No. 2042 provides that the budgetary expenditure allocations approved by the Budget Law of each year constitute maximum expenditure limits, and their execution will be subject to the legal procedures applicable to each item. Any modification within these limits must be carried out as established in the budgetary modification regulation, which will be approved by Supreme Decree.

That Article 1 of Law No. 175 authorizes the Central Bank of Bolivia – BCB to purchase gold bars from State Mining Enterprises and from the Integral Commercialization Center of Minerals of Mining Cooperatives Ltd. (COMERMIN), which will be destined exclusively to the increase of Gold International Reserves.

That Article 2 of Law No. 175 provides that the BCB will pay for the purchase of gold the price determined based on its international quotation, minus the corresponding deductions, to which amount the effective rate of the Value Added Tax – VAT will be applied, which will ultimately be assumed by the BCB.

That paragraph I of the First Transitory Provision of Law No. 466 establishes that the following public enterprises and national strategic public enterprises will adopt the typology of state enterprise, among which is the Mining Corporation of Bolivia – COMIBOL.

//3. B.R. No. 018/2022

That Supreme Decree No. 1167 of May 14, 2012 aims to partially regulate Law No. 175 of October 11, 2011, establishing the conditions, requirements, and procedures necessary for the purchase of gold by the BCB from State Mining Enterprises, destined to the increase of International Reserves.

That Article 7 of Supreme Decree No. 1167 establishes that the BCB, within the framework of Article 3 of Law No. 175, through a resolution of its Board of Directors, will regulate the operational procedures for the purchase of gold, including the location of purchase operations, the percentage of guarantee, the admissible error margin in the degree of purity of the gold, security and custody conditions for the gold bars; it also states that the BCB will establish a schedule and volumes for gold purchases.

That Article 8 of Supreme Decree No. 1167 authorizes the Ministry of Economy and Public Finance to issue fractionable and negotiable Fiscal Credit Notes charged to the General State Budget of each management period in favor of the BCB, so that the Issuing Entity assumes the effective VAT rate for the purchase of gold bars from State Mining Enterprises, destined for International Reserves; it also states that the BCB will request the Ministry of Economy and Public Finance, in advance of the payment of the final price of the gold purchase, the delivery of the Fiscal Credit Notes for the amount equivalent to the effective VAT rate, which will be delivered within a period not exceeding five (5) business days from the request.

That subsection a), paragraph II of Article 11 of Supreme Decree No. 3607 establishes that budgetary modifications requiring approval by resolution of the Ministry of Economy and Public Finance include budgetary modifications, after technical and legal evaluation, for inter-institutional budget transfers of resources from the General Treasury of the Nation to other public entities destined for current expenditure and/or public investment, in accordance with current regulations.

That the Regulation for the purchase of gold from State Mining Enterprises destined for International Reserves, approved by Board Resolution No. 046/2012 of April 17, 2012, aims to establish the characteristics, conditions, and procedures for the purchase of gold bars destined for international reserves.

That the Regulation for the Administration of International Reserves, approved by Board Resolution No. 97/2018 of July 31, 2018, aims to establish the policies and rules for the administration of the BCB's international reserves.

That Article 14 of the Regulation for the Administration of International Reserves provides that gold reserves are constituted by investments in fixed-term deposits,

//4. B.R. No. 018/2022

bonds denominated in gold, balances in allocated (physically) or unallocated (book entry) accounts, and gold bars that possess the quality of London Good Delivery Bars. It also states that the limit for gold investment abroad is 100% and the amount of gold bars purchased locally that may remain in the BCB vault will be up to 500 Kilos, and the purchase of gold required to buy London Good Delivery Bars, resulting from the refining of locally purchased gold, is authorized.

That numerales 1) and 5) of Article 11 of the BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005, and its modifications, establish that the Board of Directors of the Issuing Entity has the authority to approve general decisions and issue regulations that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law; in addition to approving the policy and rules for the administration of International Reserves, as well as carrying out follow-up on their execution.

That Article 24 of the BCB Statute provides that resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of the members present in the meeting.

That Article 26 of the BCB Statute establishes that the Board of Directors pronounces on matters within its competence through resolutions. Likewise, 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 through Report BCB-GOI-SRES-DOI-INF-2022-2, the International Operations Management recommends approving the purchase of up to 240 kilos of gold from COMIBOL – EBO in the 2022 management period and authorizing the Presidency and General Management to carry out the corresponding procedures so that the MEFP issues Fiscal Credit Notes (NOCRES) for an amount of Bs15,028,103.12 (Fifteen Million Twenty-Eight Thousand One Hundred Three 12/100 Bolivianos) for the purchase of gold, as well as the corresponding modifications in the BCB's income and expenditure budget for the 2022 management period, through the inter-institutional budget transfer from the MEF in favor of the BCB.

That through Report BCB-GAL-SANO-DLBCI-INF-2021-27, the Legal Affairs Management concludes that the purchase of 240 kilos of gold from COMIBOL-EBO in the current management period is legally appropriate as it does not contravene the current legal framework, recommending to the BCB Board of Directors to approve the gold purchase and authorize the Presidency and General Management to carry out the necessary procedures so that the MEFP carries out an inter-institutional transfer to the BCB for Bs15,028,103.12.- (Fifteen Million Twenty-Eight Thousand One Hundred Three 12/100 Bolivianos) to request the issuance of NOCRES charged to the

//5. B.R. No. 018/2022

General State Budget – 2022 Management Period, within the framework of what is established in Supreme Decree No. 1167.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the purchase of up to 240 kilos of gold bars in the 2022 management period from COMIBOL - EBO.

Article 2.- Authorize the Presidency and General Management of the BCB to carry out the corresponding procedures so that the Ministry of Economy and Public Finance carries out an inter-institutional budget transfer in favor of the BCB for Bs15,028,103.12.- (Fifteen Million Twenty-Eight Thousand One Hundred Three 12/100 Bolivianos) to request the issuance of Fiscal Credit Notes charged to the General State Budget – 2022 Management Period, within the framework of what is established in Supreme Decree No. 1167, corresponding to the purchase of 240 kilos of gold in the current management period.

Article 3.- This Resolution will enter into force from the date of its approval.

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

La Paz, February 22, 2022

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

More like this from BCB

BCB published 5 documents in the last 30 days. We email you each new one the day it's published.

Share