BOARD

BOARD RESOLUTION NO. 081/2024

SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – MODIFY THE REGULATION ON GOLD PURCHASE IN THE DOMESTIC MARKET FOR THE STRENGTHENING OF INTERNATIONAL RESERVES, UNDER LAW NO. 1503 OF MAY 5, 2023.

VIEWED:

• The Political Constitution of the State of February 7, 2009.
• Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB) and its modifications.
• Law No. 1503 of May 5, 2023, Law on the Purchase of Gold Destined to the Strengthening of International Reserves.
• Supreme Decree No. 5134 of March 13, 2024.
• The BCB Statute, approved by Board Resolution No. 95/2022 of October 6, 2022.
• The Regulation on Gold Purchase in the Domestic Market Destined to the Strengthening of International Reserves, under Law No. 1503 of May 5, 2023, approved by B.R. No. 066/2024 of May 28, 2024.
• The Report from the International Operations Management BCB-GOI-SRES-DOI-INF-2024-112 of June 24, 2024.
• The Report BCB-GAL-SANO-DLBCI-INF-2024-244 of June 24, 2024, issued by the Legal Affairs Management (GAL).

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CONSIDERING:

• That Article 327 of the Political Constitution of the State determines that the Central Bank of Bolivia (BCB) is a public law institution, with legal personality and its own assets, which, within the framework of the State's economic policy, has the function of maintaining the stability of the internal purchasing power of the currency, to contribute to economic and social development.

• That numeral 5 of Paragraph I of Article 328 of the Political Constitution of the State establishes that it is an attribute of the Central Bank of Bolivia, in coordination with the economic policy determined by the Executive Branch, to administer International Reserves.

• That Paragraph I of Article 349 of the Political Constitution of the State provides that natural resources are the direct, indivisible, and imprescriptible property and domain of the Bolivian people, and their administration will correspond to the State based on the collective interest.

• That Article 1 of Law No. 1670, modified by Article 64, section A3, numeral 1) of Law No. 1864 of June 15, 1998 on Property and Popular Credit, establishes that the BCB is a State institution, of public law, autarkic in nature, of indefinite duration, with its own legal personality and 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 specialized normative faculties of general application.

• That Articles 14 and 15 of Law No. 1670 establish that the BCB will ensure the strengthening of International Reserves so as to allow the normal functioning of Bolivia's international payments and that these Reserves are constituted by one or more of the assets, among which is 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 norms of general application, and internal rules.

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• That subsections a), c), and o) of Article 54 of Law No. 1670 indicate as attributes of the Board of Directors the following: Issue norms and adopt general decisions that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law; carry out follow-up on the execution of monetary, exchange, credit, financial intermediation, and International Reserves administration policies and regulations; and 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 Article 1 of Law No. 1503 aims to authorize the Central Bank of Bolivia to purchase gold from the domestic market for the strengthening of International Reserves and to carry out financial operations with International Reserves in gold in international markets.

• That Article 2 of Law No. 1503 states that the scope of application of the Law includes individual and legal persons, public and private, legally established, registered, and authorized by competent entities, that participate in the commercialization of gold.

• That Article 5 of Law No. 1503 establishes that the Central Bank of Bolivia will set the conditions, characteristics, periodicity, limits, and procedures for the acquisition of gold from the domestic market, in accordance with regulations.

• That Article 9 of the aforementioned Law No. 1503 provides that the BCB will carry out operations in international markets with gold reserves, being able to buy, invest, deposit in custody, use in hedging instruments, transform, and convert them into foreign exchange, in order to optimize the liquidity and/or return of International Reserves. As well, it must maintain a minimum of twenty-two (22) tons of gold reserves of the International Reserves, computable semi-annually from the approval of this Law and based on market conditions and foreign exchange liquidity of the International Reserves; the BCB will take the necessary actions for the replenishment of gold reserves.

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• That the Final Provision of Law No. 1503 determines that within the framework of Articles 327 and 328 of the Political Constitution of the State, the BCB, with the objective of complying with its constitutional mandate, is authorized to apply what is provided in Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia and its modifications, being this sufficient for the development of its functions, without requiring greater provisions than said Law.

• That Supreme Decree No. 5134 of March 13, 2024 creates the State Enterprise for Gold Production and Commercialization, whose acronym is EPCORO; as a State Subsidiary Enterprise of the Bolivian Mining Corporation - COMIBOL, with legal personality and its own assets, indefinite duration, autonomy in technical, financial, administrative, legal, and commercial management; whose main business and activity is the production and commercialization of gold throughout the mining productive chain, within the framework of Law No. 535 of May 28, 2014, on Mining and Metallurgy, to strengthen International Reserves.

• That numerales 1) and 3) of Article 5 of the BCB Statute provide that its Board of Directors has normative competence to issue specialized norms in the fields assigned by Law and technical competence for the formulation of policies and the application of instruments that allow it to fulfill its object.

• That Article 6 and numerales 1), 6), and 30) of Article 10 of the BCB Statute provide that the Board of Directors has the attributes to approve general decisions and issue norms that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law; approve the policy and norms for the administration of International Reserves; carry out follow-up on their execution; and 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.

• That Paragraph I of Article 24 of the aforementioned BCB Statute provides that Resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of its members present in a meeting, except in cases where Law No. 1670 or the BCB Statute require qualified majorities.

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• That Paragraphs I and II of Article 26 of the BCB Statute stipulate that 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. 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 GAL. These reports must be sent to the Board of Directors by the General Management with its recommendation.

• That the Report from the International Operations Management BCB-GOI-SRES-DOI-INF-2024-112 concludes that it is necessary to modify the Regulation on Gold Purchase in the Domestic Market Destined to the Strengthening of International Reserves, under Law No. 1503, in order to assist in the acquisition of gold, ensuring that it meets Responsible Gold standards; in this sense, the proposal for modification to the Regulation is technically viable, therefore recommending to the BCB Board of Directors the modification.

• That Report BCB-GAL-SANO-DLBCI-INF-2024-244 concludes that in accordance with Report BCB-GOI-SRES-DOI-INF-2024-112, the modification proposal from the GOI is legally viable as it does not contravene any legal provision and falls within the attributes of the BCB; recommending to the BCB Board of Directors to approve the modifications to the Regulation on Gold Purchase Destined to the Strengthening of International Reserves.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.-

Modify subsection q) of Article 4 of the Regulation on Gold Purchase in the Domestic Market Destined to the Strengthening of International Reserves, under Law No. 1503 of May 5, 2023, approved by Board Resolution No. 066/2024 of May 28, 2024, with the following text:

q) Public Legal Entities: They are designated as State Enterprises for Gold Production and Commercialization, State Mining Enterprises, and State Trading Enterprises.

Article 2.-

Modify Article 15 of the Regulation on Gold Purchase in the Domestic Market Destined to the Strengthening of International Reserves, under Law No. 1503 of May 5, 2023, approved by Board Resolution No. 066/2024 of May 28, 2024, with the following text:

ARTICLE 15.- (REQUEST FOR THE SALE OF GOLD - PRIVATE AND PUBLIC LEGAL ENTITIES)

I. Private legal persons, registered as gold sellers to the BCB, will submit their sales request through formal communication means (institutional email, official note, or others accepted by the BCB). The BCB will review the sales requests in accordance with the requirements established in Annex III. In the event that there are no observations, the Issuing Entity will communicate to the gold seller the confirmation regarding the logistics for the physical delivery of the gold and subsequent smelting. If there are observations, the BCB will communicate them to the gold seller so that they may be remedied.

II. Public legal persons, registered as gold sellers to the BCB, will submit their sales request through formal communication means (institutional email, official note, or others accepted by the BCB). The BCB will review the sales requests in accordance with the requirements established in Annex III.

In the event that there are no observations, the International Operations Management and the Legal Affairs Management, through the General Management, will present to the BCB Board of Directors the technical and legal reports,

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which will contain the proposal for conditions for the acquisition of gold and the request for authorization to sign a contract, with the Public Legal Entity.

The BCB Board of Directors will approve, through Minutes, the conditions for the acquisition of gold and the authorization to the President of the BCB for the signing of a Contract with the Public Legal Entity.

If there are observations, the BCB will communicate them to the gold seller so that they may be remedied.

Article 3.-

This Resolution will enter into force from its publication.

Article 4.-

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

La Paz, June 25, 2024

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