Ley N.º 1670, de 31 de octubre de 1995 — Ley del Banco Central de Bolivia (Law of the Central Bank of Bolivia)

English translation of the Spanish text from bcb.gob.bo (the Spanish text is the official one). Retrieved 2026-10-26.

LAW N° 1670 LAW OF 31 OCTOBER 1995 GONZALO SANCHEZ DE LOZADA CONSTITUTIONAL PRESIDENT OF THE REPUBLIC Whereas, the Honorable National Congress has enacted the following Law:

THE HONORABLE NATIONAL CONGRESS, D E C R E E S:

LAW OF THE CENTRAL BANK OF BOLIVIA

TITLE I

SOLE CHAPTER NATURE, OBJECT AND GENERAL FUNCTION

Article 1. The Central Bank of Bolivia (the BCB) is an institution of the State, of public law, of an autonomous character, 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 and therefore the governing body of the national financial intermediation system, with administrative, technical and financial competence and specialized regulatory powers of general application, in the form and with the scope established in this Law.

Article 2. The object of the BCB is to seek the stability of the internal purchasing power of the national currency.

Article 3. The BCB, within the framework of this Law, shall formulate policies of general application in monetary, exchange and financial intermediation matters, which comprise credit and banking matters, for the fulfillment of its object.

Article 4. The BCB shall take into account the economic policy of the Government, within the framework of this Law, when formulating its policies.

The relationship of the BCB with the Government shall be carried out through the Minister who holds the portfolio of Finance.

Article 5. The BCB shall recommend to the Government the adoption of the measures it deems appropriate to make possible the fulfillment of its object.

TITLE II SPECIFIC FUNCTIONS OF THE CENTRAL BANK OF BOLIVIA

CHAPTER I FUNCTIONS AS MONETARY AUTHORITY

Article 6. The BCB shall execute monetary policy and regulate the quantity of money and the volume of credit in accordance with its monetary program. For this purpose, it may issue, place and acquire securities and carry out other open market operations.

Article 7. The BCB may establish legal reserve requirements of mandatory compliance by Banks and financial intermediation entities. Their composition, amount, form of calculation, characteristics and remuneration shall be established by the Board of Directors of the Bank, by absolute majority of votes.

The control and supervision of the legal reserve requirement shall correspond to the Superintendency of Banks and Financial Entities.

Article 8. The reserve requirement and the deposits constituted in the BCB by banks and financial entities shall not be subject to any type of embargo or judicial retention by third parties.

Article 9. The BCB may discount and rediscount bills of exchange, promissory notes or other securities, with banks and financial intermediation entities, only for purposes of monetary regulation. The securities shall be registered with the National Securities Commission, when applicable.

Article 10. The BCB shall exercise exclusively and non-delegably the function of issuing the monetary unit of Bolivia, which is the “Boliviano”, in the form of banknotes and metallic coins.

Article 11. The banknotes and coins issued by the BCB are means of payment of legal tender throughout the territory of the Republic, with unlimited liberatory power. They shall have the denominations, dimensions, designs and colors determined by its Board of Directors, which must make their characteristics public. The banknotes must bear the signatures of the President and the General Manager of the BCB and the serial number on both halves thereof.

Article 12. The BCB shall contract the printing of banknotes and the minting of coins, including those issued for commemorative or numismatic purposes, subject to the general rules for the contracting of goods and services for the State.

Article 13. The BCB, the banks and every financial intermediation institution are obliged to exchange deteriorated or mutilated banknotes, provided that they clearly preserve their two signatures and a serial number.

CHAPTER II

FUNCTIONS IN RELATION TO INTERNATIONAL RESERVES

Article 14. The BCB shall ensure the strengthening of the International Reserves so that they permit the normal functioning of Bolivia's international payments.

Article 15. The International Reserves of the BCB are constituted by one or several of the following assets, in accordance with norms of international order:

a. Physical gold.

b. Foreign currencies deposited in the BCB itself or in financial institutions outside the country to the order of the Central Bank of Bolivia, which must be first-rate according to internationally accepted criteria.

c. Any internationally recognized reserve asset.

d. Bills of exchange and promissory notes in favor of the BCB, denominated in foreign currencies of general acceptance in international transactions and payable abroad.

e. Public securities and other negotiable securities issued by foreign governments, international entities and organizations or first-rate financial institutions abroad, duly qualified as eligible by the Board of Directors of the BCB.

f. Own contributions to international financial organizations when such contributions are internationally reputed as reserve assets.

Article 16. The BCB shall administer and manage its International Reserves, and may invest and deposit them in custody, as well as dispose of and pledge them, in the manner it considers most appropriate for the fulfillment of its object and its functions and for their adequate safekeeping and security. It may also purchase exchange hedging instruments in order to reduce risks. In the case of the pledging of gold, this must have Legislative approval.

Article 17. The International Reserves are unattachable and may not be subject to precautionary, administrative or judicial measures. Nor may they be subject to any state tax or contribution, except for the fees to the Superintendency of Banks and Financial Entities in accordance with this Law.

Article 18. The BCB may contract credits intended to strengthen the level of international monetary reserves, without compromising the resources of the National Treasury.

CHAPTER III FUNCTIONS IN EXCHANGE MATTERS

Article 19. The BCB shall establish the exchange regime and execute exchange policy, regulating the conversion of the Boliviano in relation to the currencies of other countries and the procedures for determining the exchange rates of the national currency. The latter shall be published daily.

Article 20. The BCB is empowered to regulate financial operations with foreign countries, carried out by public and private persons or entities.

Article 21. The BCB shall keep the registry of public and private external debt.

CHAPTER IV FUNCTIONS IN RELATION TO THE PUBLIC SECTOR

Article 22. The BCB may not grant credit to the Public Sector nor incur contingent liabilities in its favor. Exceptionally it may do so in favor of the National Treasury, with a favorable vote of two thirds of the members present at a meeting of its Board of Directors, in the following cases:

a. To attend to urgent needs arising from public calamities, internal or international unrest, declared by Supreme Decree.

b. To attend to transitory liquidity needs, within the limits of the monetary program.

Article 23. The operations provided for in the preceding Article shall be documented in all cases by negotiable securities of public debt issued by the National Treasury, which, in the case provided for in subsection b), shall have a maximum term of one year.

Article 24. All entities of the Public Sector shall deposit their funds in fiscal accounts of the BCB. The BCB may delegate, through competitive mechanisms, the administration of these deposits to other banks and financial entities, except for the deposits of autonomous institutions that process the respective authorization before the Ministry of Finance.

Article 25. The BCB is empowered to debit or instruct the debit of the accounts of the National Treasury to cancel the matured obligations of the latter.

Article 26. The BCB's fee to the Superintendency of Banks and Financial Entities shall be established annually by Supreme Resolution.

Article 27. The BCB may assume the representation of the State before international and multilateral monetary organizations.

CHAPTER V FUNCTIONS AS FINANCIAL AGENT OF THE GOVERNMENT

Article 28. The entities of the Non-Financial Public Sector shall carry out their operations with the BCB through the National Treasury.

Article 29. The BCB shall exercise the following functions as Financial Agent of the Government:

a. Provide services related to the contracting of external credits.

b. Act in all matters relating to the service of external public debt, for which the National Treasury must previously provide the BCB with the necessary funds, without prejudice to the provisions of Article 75.

c. Receive securities from the State in custody, in the cases and under the conditions indicated by the BCB, and may delegate this function to other banks and entities of the financial system.

d. Make, on behalf of the State, capital contributions to the corresponding international financial organizations, after depositing said funds in the BCB.

e. Participate in the issuance, placement and administration of public debt securities.

f. Carry out trust and administration operations. When the trust and administration mandate contemplates the granting of subordinated credits to financial entities, said credits shall not be subject to the limit established in Article 48 of Law No. 1488 of 14 April 1993.

g. Contract, through competitive mechanisms, authorized entities of the financial system for the provision of financial services, at the request and on behalf of institutions of the Public Sector.

h. Carry out other activities and operations that may be requested by the Government, provided they are compatible with the object and nature of the BCB.

i. Participate in all renegotiation and conversion of external public debt.

j. Others that may be necessary to fulfill its function as Agent

Financial Agent of the Government.

CHAPTER VI FUNCTIONS IN RELATION TO THE FINANCIAL SYSTEM

Article 30. All entities of the financial intermediation and financial services system, whose operation is authorized by the Superintendency of Banks and Financial Entities, are subject to the regulatory competence of the BCB established in this Chapter.

Article 31. The BCB shall issue generally applicable rules, through Resolutions of its Board of Directors, in relation to:

a. The raising and placement of resources and other financial services.

b. The opening of entities of the financial intermediation system, their branches, agencies, subsidiaries and representations, taking into account the personal qualifications of the managers, principal shareholders, directors and executives, as to their experience and suitability.

c. The merger, transformation and liquidation of financial intermediation entities.

d. Starting from the amounts established by law, in force until the date of promulgation of this law, the BCB may raise but not lower the amounts of minimum capital of general compliance and establish the other characteristics of the minimum capitals necessary for the creation and operation of entities of the financial intermediation system.

The new minimum capital necessary for the creation and operation of banks may not be greater than the average net worth of all these entities, at the time of its determination.

e. The creation and operation of types of entities of the financial intermediation system not provided for by Law.

f. The creation and operation of credit card issuing or operating companies.

g. The transfer of resources for the constitution of financial intermediation entities and the opening and operation abroad of branches, agencies, subsidiaries and representation offices. In all cases the operations shall be consolidated in the financial statements of the parent company.

h. The authorization of representation offices in Bolivia of entities

constituted abroad. In no case may these representations carry out passive operations in the national territory.

i. The activities of Second-Tier Financial Entities whose sole purpose shall be the intermediation of funds, exclusively toward private financial entities that are legally established in the country.

In these entities: I) The limit of loans to a private financial entity may not exceed 0.75 times the net equity of the lending entity; II) These entities must maintain, at all times, a net equity equivalent to at least 10% of the total of their assets and contingents weighted according to their risks;

III) The loans made by these entities shall not be counted for the purposes contemplated in Article 53 of the Law of Banks and Financial Entities.

Article 32. In relation to the placement of resources referred to in subparagraph a) of

Article 31 above, the following must be complied with:

a. Financial entities may not grant credits to borrowers or borrower groups linked to them.

b. Any borrower or borrower group that meets one or more of the following characteristics shall be considered linked to a financial entity:

1. Holds a participation greater than ten percent (10%) in the capital of the financial entity, directly, or indirectly through third parties, whether natural or legal persons.

2. Performs in the financial entity directive, executive, internal control functions, or provides permanent advisory services to the higher instances of its administration. Any legal person for profit in which the same persons participate shall likewise be considered a linked borrower.

3. Being a legal person constituted in Bolivia or abroad, the financial entity does not have updated information and identification of its owners. Companies whose shares or those of their owners are regularly traded on a stock exchange are excepted.

4. Does not demonstrate a commercial or productive purpose sufficient to justify the financing received, nor a net equity or net flow of resources sufficient to back it.

c. Credits granted to natural and/or legal persons that maintain among themselves some relationship of ownership, administration, guarantees, activity or

destination of the credit shall be considered credits granted to a borrower group, when said relationship determines that such credits represent the same credit risk.

d. Any group, whether linked or not, that is qualified as such by the Superintendency of Banks and Financial Entities, on the basis of reasonable and sufficient indications that lead it to presume "juris tantum" the existence of binding relationships between natural and legal persons of a nature similar to those indicated in the preceding subparagraphs, shall also be considered a borrower group.

Article 33. The rules that the BCB issues in relation to the equity of financial entities must be based on the following provisions:

a. Financial entities must maintain a net equity equivalent to at least ten percent (10%) of the total of their assets and contingents, weighted according to their risks b. The following coefficients for weighting assets and contingents are established:

1.

1. Of zero percent (0%) for cash in vault, deposits in the BCB and investments in securities issued by the BCB and the National Treasury, credits from Central Banks of other countries, pre-paid contingent credits and credits guaranteed by cash deposits constituted in the bank itself.

1.

2. Of ten percent (10%) for credits guaranteed by the National Treasury.

1.

3. Of twenty percent (20%) for credits guaranteed by national banks and foreign banks qualified as first-tier by an internationally prestigious firm, as well as credits that the financial entity grants to said banks and cash items in the process of collection.

1.

4. Of fifty percent (50%) for credits guaranteed by mortgage on a house, dwelling, urban or rural, occupied or rented by the debtor, up to the amount of the mortgage value.

1.

5. Of one hundred percent (100%) for all other assets, operations and services that, regardless of their legal form of instrumentation, entail a risk or any kind of financial commitment for the financial entity.

These coefficients shall apply as of 1 July 1998. In the meantime, the current regulation that complies with Article 47 of the Law of Banks and Financial Entities No. 1488 of 14 April 1993 shall apply.

c) Operations that generate assets not contemplated in the preceding subparagraph shall have weighting coefficients determined by absolute majority of the BCB's Board of Directors.

Article 34. The supervision and control of compliance with the foregoing rules shall correspond to the Superintendency of Banks and Financial Entities and for its execution it may carry out non-binding consultations with the BCB.

Article 35. For the formulation of the rules comprised in this Chapter, the BCB may also carry out non-binding consultations with the Superintendency of Banks and Financial Entities.

Article 36. To address liquidity needs, in cases duly justified and qualified by its Board of Directors, by absolute majority of votes, the BCB may grant banks and financial intermediation entities credits for terms of ninety days, renewable. The limits of these credits and their guarantees shall be established by the BCB's Board of Directors, by absolute majority.

In order to consider the applications for these credits, the BCB shall carry out non-binding consultations with the Superintendency of Banks and Financial Entities.

Article 37. The BCB shall be depositary of the liquid reserves intended to cover the legal reserve requirement and to serve the payment system and other operations with the BCB of financial intermediation entities subject to the authorization and control of the Superintendency of Banks and Financial Entities. The BCB may delegate the custody of these deposits to the same or other financial entities, in accordance with regulations.

Article 38. In addition to the provisions of the preceding articles, the BCB may carry out the following operations with banks and financial intermediation entities:

a. Receive demand and time deposits in national and foreign currency.

b. Create and administer credit lines within the framework of international payment compensation systems.

c. Accept the custody of securities.

d. Purchase, discount or guarantee assets; capitalize receivables, dispose of the resulting shares and carry out assignments of credit for cash or on a term basis, for the purpose of preserving a stable and competitive intermediation system.

e. Subrogate itself totally or partially to the rights of the depositors of financial intermediation entities, acquiring these rights for cash or on a term basis, in cases duly qualified by its Board of Directors.

The rights of the BCB thus acquired shall enjoy preference over any other creditor. The recovery of the committed resources must be carried out in accordance with a specific plan.

f. Other new operations that are compatible with the purpose of the BCB.

Article 39. The matured obligations of banks and financial entities with the BCB may be collected by means of debits to the reserve requirement account and others that the debtor entity maintains at the BCB, without prejudice to using other forms of recovery of such obligations.

Article 40. The Superintendency of Banks and Financial Entities shall have the obligation to furnish the BCB with all the periodic information that it receives from the banks and other entities of the financial system.

At the request of the President of the BCB, the Superintendent shall provide him with detailed information on the financial and equity situation of a given financial entity, including the inspection reports that may have been prepared on it.

The banks and other financial intermediation entities are obliged to furnish directly to the BCB the information of a monetary nature that it requires and in its capacity as creditor, as well as any other information requested directly by the President of the BCB on the financial situation of an entity.

The reserve contemplated in Article 80 of this Law applies to this information.

CHAPTER VII REPORTS AND PUBLICITY OF ITS ACTS

Article 41. The BCB, as an institution of the Executive Branch, shall periodically and when requested, submit reports to the President of the Republic on the evolution of the monetary, exchange, credit and banking situation of the country.

It shall annually present to the President of the Republic the results of the application of its monetary, exchange, credit and banking policies, as well as the guidelines of

the policies to be applied in the following management period.

Article 42. Within the first one hundred twenty days of each year, the BCB shall present to the President of the Republic, to the competent Commissions of the Legislative Chambers and to the General Comptroller of the Republic, the Annual Report of the institution corresponding to the previous management period, which shall include the results of the application of its policies and its financial statements. At the same time, it shall publish in a newspaper of national circulation an extract of said statements.

Article 43. The BCB shall periodically publish statistical and economic information on the economic and financial variables comprised within the scope of its competence.

TITLE III DIRECTION AND ADMINISTRATION OF THE BANK

CHAPTER I THE BOARD OF DIRECTORS

Article 44. 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 for establishing administrative, operational and financial strategies of the BCB, approving their respective short- and medium-term programs. For the monitoring and oversight of its execution, it shall have information, analysis services and independent auditing.

Article 45. The Board of Directors shall be composed of the President of the BCB and five Directors.

The President of the BCB shall be appointed by the President of the Republic from a list of three candidates approved by two thirds of the votes of the members present at a session of the Chamber of Deputies. He shall serve in his functions for six years and may not be reappointed until a period equal to that during which he served his functions has elapsed.

The Directors shall be appointed by the President of the Republic from lists of three candidates approved by two thirds of the votes of the members present at a session of the Chamber of Deputies. Each Director shall serve in his functions for five years and may not be reappointed until a period equal to that during which he served his functions has elapsed. They shall be replaced periodically at the rate of one per year.

Article 46. The President and the Directors must have Bolivian nationality by origin and have extensive experience in banking, economic, legal, administrative or financial matters. The President must have a university degree.

Article 47. The following may not be members of the Board of Directors:

a. Persons who are relatives of one another within the third degree of consanguinity and second degree of affinity, according to civil computation.

b. Public officials who hold a remunerated position, except upon express resignation.

c. The directors, syndics, executives, administrators, shareholders, legal agents, advisors and employees or dependents of companies or entities engaged in activities subject to the competence of the BCB, unless they resign from their position in the cases that apply.

d. Those who are disqualified from holding bank current accounts.

e. Those who have a final conviction sentence, with a custodial sentence for the commission of common crimes.

f. Those responsible, with a final conviction sentence, for bankruptcies, whether negligent or fraudulent, of entities of the financial system and of companies in general.

g. Those who have final convictions against them derived from debts with banks and financial entities, or from civil or criminal liability in the exercise of public functions.

h. Those who have overdue or in-execution obligations with entities of the country's financial intermediation system.

Article 48. In the event of resignation, disqualification or death of the President or any Director, their replacement shall be appointed in the manner provided in Article 45. The replacement shall exercise their functions until the conclusion of the period of the replaced person.

Article 49. The President and the Directors, upon expiration of their term or in the event of resignation, shall continue in their functions until they are replaced, except in cases of legal incompatibility. In the event of expiration of the term, the delay in the taking of office of the replacement shall be deducted from their period of functions

Article 50. The President of the Republic may remove the President and the Directors of the BCB from their positions before the conclusion of the corresponding period, only in the case of any of the following grounds arising:

a. Physical impediment for a period exceeding three months or judicially declared interdiction.

b. Any of the situations provided in Article 47, in the event of not

submitting resignation within 48 hours of the occurrence of the event

c. Unjustified absence from Board meetings for more than one month.

d. Ruling of executive responsibility against them, issued by the Comptroller General and accepted by the President of the Republic.

Article 51. The remuneration of the President and the remunerations or per diems of the Directors shall be set by Supreme Resolution every two years.

Article 52. The President and the Directors shall be personally and jointly liable for the resolutions adopted in the Board, unless they have recorded their disagreement in the minutes.

Article 53. The quorum for Board meetings shall be half plus one of its members, including the President. The Board minutes shall have full evidentiary value for all legal purposes.

Article 54. The Board of the BCB has the following attributions:

a. Issue the rules and adopt the general decisions necessary for the BCB to fulfill the functions, competences and faculties assigned to it by this Law.

b. Regulate the administration of payment systems between authorized financial entities.

c. Monitor the execution of monetary, exchange, credit, financial intermediation, international reserves management policies and regulations and others corresponding to the BCB in accordance with this Law.

d. Issue the rules for open market operations carried out by the BCB.

e. Define the organizational structure of the BCB.

f. Approve the Annual Monetary Program and its modifications.

g. Approve the Budget of the BCB, for its incorporation into the General Budget of the Nation.

h. Approve the financial statements and annual report of the BCB and the reports provided in Title II Chapter VII of this Law, prepared by the administration of the BCB.

i. Set and regulate the administration of the legal reserve to which banks and other financial entities must adhere, providing the measures for its compliance.

j. Set and modify the interest rates on credits granted by the BCB, taking into account market rates for similar operations and establish its other terms and conditions.

k. Authorize the creation and regulate the operation of Clearing Houses.

l. Decree bank holidays.

m. Authorize and supervise the printing, issuance and destruction of banknotes and the minting and withdrawal of coins, within the rules of this Law.

n. Formulate policies related to the internal management of the BCB, supervising their execution.

o. Approve, modify and interpret the Statute and Regulations of the BCB, by two-thirds of votes of all its members, without the need for any additional administrative act.

p. Authorize the requirements for acquisition, disposal and leasing of movable and immovable property owned by the BCB, so that the General Management carries out the bidding, contracting and corresponding supervision processes subject to current legal rules and internal regulations of the BCB.

q. The others indicated in this Law and those necessary for the fulfillment of its functions.

Article 55. The resolutions of the Board of the BCB may be challenged by any natural or legal person or competent organ of the State, by filing a motion for revocation with devolutive effect, before the same Board, within a period of thirty (30) days from the date on which the BCB had made the Resolution known to the interested or affected persons.

The Board shall rule within the twenty (20) days following the filing of the motion for revocation. If the Board does not rule within the period, the challenge shall be deemed denied as of the expiration date of the period.

The resolution denying the appeal shall exhaust the administrative procedure, leaving the contentious-administrative jurisdictional route open in accordance with Article 118 (I), clause 7 of the Political Constitution of the State, within which the action shall be directed against the President of the BCB in his capacity as legal representative.

When the challenge refers to a resolution that harms the rights of the appellant and the dispute refers to the exercise of the BCB's competence in the cases provided for in Articles 7, 20, 31, 37 and 54 incs. b) and i) of this Law, the affected party may file an appeal for reversal against the denial by the BCB Board, submitting it to the BCB Board, which shall forward the case file within 72 hours and ex officio to the Minister of the Finance Portfolio.

The Minister of the Finance Portfolio shall issue a resolution within five days following receipt thereof. This resolution is final and exhausts the administrative route, leaving the appellant entitled to resort to the contentious jurisdictional route in accordance with law, within which the action shall be directed against the Minister of the Finance Portfolio.

The resolution of the Minister of the Finance Portfolio shall be limited to confirming or revoking the resolution appealed, with effect only with respect to the appellant.

Article 56. Administrative acts of a general or particular nature, which do not refer to the internal labor regime, whether of the President or of the General Manager of the BCB, which do not observe the legal formalities and requirements or which exceed their own competences and when they harm the rights of the appellant, may be challenged by means of appeals for revocation, for reversal and hierarchical.

The appeal for revocation shall be filed with and resolved by the authority whose act is challenged in accordance with the provisions for the appeal for revocation in Article 55 above.

Against the resolution denying the appeal by the BCB Board, provided that it harms the rights of the appellant, the affected party may file an appeal for reversal before the Minister of the Finance Portfolio, in the same manner, subject to the deadlines and with the effects provided for the appeal for reversal in Article 55 above. The resolution of the Minister exhausts the administrative route.

CHAPTER II THE PRESIDENT OF THE BANK

Article 57. The President is the first executive authority of the Institution. Therefore, he is responsible for directing and supervising the work leading to the formulation of policies and specialized rules of general application and the definition of administrative, operational and financial strategies of the BCB, including their respective medium- and long-term programs, supervising and evaluating their execution.

He shall provide the Board with the information and analysis and audit services necessary for the performance of its functions and shall act in representation of the Board and preside over its meetings. He shall have a casting vote in the event of a tie.

Article 58. The President is a full-time official and may not hold any other public or private position, except university teaching.

Article 59. The President has the following powers:

a. Direct and supervise the actions leading to compliance with this Law, the Statute and any other legal provision whose execution corresponds to the BCB.

b. Propose the policies that the Board should consider in accordance with this Law and the measures and resolutions that he deems pertinent for the better fulfillment of the purpose, policies and functions of the BCB.

c. Order, supervise and control the execution of the policies, rules, resolutions and decisions approved by the Board, as well as supervise their compliance by the competent instances of the BCB.

d. Supervise the operations and administration of the BCB and supervise and evaluate the performance of the General Manager and of the other Managers of the BCB.

e. Exercise the legal representation of the BCB, without prejudice to his powers of delegation in accordance with this Law.

f. Submit to the consideration of the Board the Annual Report, the duly audited Financial Statements, the BCB Budget and the short- and medium-term operational, financial and administrative programs, as well as the reports provided for in Chapter VII of Title II of this Law.

g. Grant special powers of attorney to third parties.

h. Those that are necessary for the performance of his functions as first executive authority of the BCB and those assigned to him by this Law.

Article 60. In duly justified emergency cases, when it is not possible to convene the Board, by way of exception the President may adopt, for a period of 48 hours, decisions that correspond to said body. The President shall inform the Board at its next session of the decisions adopted, without liability for the Directors.

Article 61. The President shall represent the BCB in court together with the General Manager, and may delegate this representation to third parties by means of special powers of attorney.

CHAPTER III THE VICE PRESIDENT OF THE BOARD

Article 62. At the beginning of each year, by majority vote of all its

members, the Board shall proceed to elect one of its Directors as Vice President.

Article 63. In the event of temporary absence or impediment of the President, the Vice President shall substitute him temporarily with all the powers that this Law confers on the President.

Article 64. The Board shall designate one of its members to substitute the Vice President in the event of temporary absence or impediment.

CHAPTER IV THE GENERAL MANAGER

Article 65. The General Manager shall be designated by the President of the BCB, with the approval of the absolute majority of all the members of the Board. The General Manager is the first operational authority of the BCB, reporting directly to the President, and is therefore responsible for the internal management and administration of the BCB, in the manner and with the powers assigned to him by this Law, the Statute and the Regulations of the institution.

Article 66. The General Manager must meet the requirements established in Article 46 and is included within the prohibitions established in Article 47. He must hold a university degree. The General Manager may be removed for the grounds indicated in Article 50, or by absolute majority of the totality of the members of the Board of Directors.

Article 67. The powers of the General Manager are:

a. To exercise, without prejudice to the provisions of Article 61, the representation of the BCB in acts and contracts relating to internal administration.

b. To administer the operations of the BCB, in accordance with the policies established by the Board of Directors and the instructions given by the President.

c. To attend the meetings of the Board of Directors, with the right to speak but not to vote.

d. To execute the bidding, contracting and their respective supervision processes for the acquisitions, disposals and leasing of movable and immovable property owned by the BCB.

e. All those that are necessary for the fulfillment of its responsibilities within the framework of this Law.

TITLE IV

INTERNAL REGIME

CHAPTER I PERSONNEL REGIME

Article 68. Within the framework of the general labor laws and norms, the internal legal labor regime of the BCB shall be established by its Board of Directors through the respective personnel regulations.

The employment conditions at the BCB shall be based on a personnel administration system that will seek the continuous improvement of the capacity and performance of the public servant, in order to procure their timely promotion, following competitive procedures. Remunerations shall recognize this continuous improvement.

Article 69. Due to the public nature of the services provided by the BCB, its activities may not be interrupted except on holidays established by Law or those designated by the Board of Directors of the BCB.

Article 70. The employees of the BCB shall receive annually twelve monthly salaries and one year-end bonus. In addition to these emoluments, they shall receive the equivalent of two additional months' salary as an Annual Bonus, and may not receive any other gratuity or extraordinary remuneration.

The only mandatory salary increases shall be those established by law for the public administration.

CHAPTER II FINANCIAL AND ACCOUNTING REGIME

Article 71. The capital of the BCB is Bs. 500,000,000 (FIVE HUNDRED MILLION BOLIVIANOS). It is non-transferable and may not be given as collateral. Its assets are unseizable.

Article 72. The State may increase the capital of the BCB through specific contributions with funds consigned in the National Budget. It may also be increased through the capitalization of profits and free reserves, by agreement of the majority of the total members of the Board of Directors of the BCB.

Article 73. The BCB shall constitute a Legal Reserve equivalent to one time its capital, destined to cover eventual losses. For the constitution of the Legal Reserve, the BCB shall allocate a sum equal to or greater than 25% of the net profits of each fiscal year, according to the criteria of the Board of Directors, until reaching the foreseen amount. The Board of Directors of the BCB may create other reserves and determine the form of their constitution.

Article 74. Changes in the valuation of international reserve assets and in the obligations of the BCB denominated in foreign currency, due to fluctuations in exchange parities or in their international quotations, shall be recorded in a special reserve account. The gains and losses from exchange differences, arising from transactions carried out during each financial year, must be charged to the results of the fiscal year in which they are incurred.

Article 75. Once the charges to the Legal Reserve account have been made, the respective provisions have been constituted and the contributions to the other reserves have been made, the remainder of the net profits of the fiscal year shall be destined to increase the capital of the BCB or to the amortization of the public debt, upon resolution of the Board of Directors.

Article 76. The annual fiscal year of the BCB begins on 1 January and concludes on 31 December of each year. The Financial Statements must conform to the specific accounting manual of the BCB, taking into account generally accepted accounting principles and the accounting norms issued by the Superintendency of Banks and Financial Entities.

CHAPTER III AUDIT AND CONTROL

Article 77. The internal audit of the operations and accounts of the BCB shall be in charge of an Internal Auditor who shall be appointed by the Board of Directors of the BCB, by absolute majority of the totality of its members, to which he shall respond. He must hold a university degree and have experience in the field of his competence.

Article 78. The Internal Auditor shall serve in his functions for four years and his appointment may be renewed, after a period equal to that during which he held the position. During this time he may perform other functions of equal rank in the BCB. He is included within the prohibitions of Article 47 and may be removed for the grounds indicated in Article 50 or by decision of the absolute majority of the total members of the Board of Directors.

Article 79. The external governmental control of the BCB shall be in charge of the Commissions of the legislative Chambers, of the General Comptroller of the Republic, in accordance with Law. The Superintendency of Banks and Financial Entities shall exercise oversight over the financial intermediation activities carried out by the BCB, in accordance with Law.

TITLE V

SOLE CHAPTER REGIME OF ADMINISTRATIVE OFFENSES

Article 80. The Directors, officials and employees of the BCB are obligated to

keep secret the affairs and operations of the BCB, of financial institutions and their operations, as well as the documents or reports related to these that come to their knowledge in the exercise of their functions. The Directors, officials and employees of the BCB who use any information of a confidential nature, belonging to the BCB and the financial intermediation system, for private benefit or to the detriment of the Nation, the BCB or third parties, shall incur liability. Such obligations and responsibilities shall extend even after they have ceased their functions or have left the BCB. The Director, official or employee who violates this prohibition shall be removed from their position, without prejudice to the corresponding civil or criminal liabilities. In the event of having ceased their functions or having left the BCB, the sanctions determined by Law shall be applied.

The foregoing does not apply in relation to periodic publications on all operations of the BCB of a monetary, exchange and credit nature that the BCB carries out for general informational purposes. Nor does it apply to the administrative information of the BCB or to statements requested by a competent Judge, within judicial proceedings.

TITLE VI TRANSFER OF FUNCTIONS

CHAPTER I.

CULTURAL FOUNDATION OF THE CENTRAL BANK OF BOLIVIA

Article 81. The CULTURAL FOUNDATION OF THE CENTRAL BANK OF BOLIVIA is created as a state collective person of public law, under the trusteeship of the BCB, with its own legal personality and assets, with administrative, technical and financial competence, whose operation shall be governed by the cultural policies issued by the Executive Branch and by its statutes that shall be approved by the Board of Directors of the BCB.

The FOUNDATION shall have as its purpose to maintain, protect, conserve, promote and administer the National Repositories indicated in Article 82 below.

It shall be directed by a Board of Administration composed of seven councilors of recognized prestige in the cultural and historical field: four designated by the Board of Directors of the BCB and three by the Ministry of Human Development. They shall serve in their functions for five years and may be re-elected.

Article 82. The FOUNDATION shall have the trusteeship and administration of the following National Repositories: National Mint House (Potosí), House of Liberty (Sucre), National Archives and Libraries of Bolivia (Sucre) and National Museum of Ethnography and Folklore (La Paz), without losing their status as cultural and historical heritage of the Nation.

The BCB shall incorporate in its annual Budget a financial support destined to the FOUNDATION, which may not be less than the budgetary item executed in the

previous fiscal year for current expenses. It may also assign in benefit of the FOUNDATION, by resolution of its Board of Directors, other rights and securities that support the financial sustenance of said institution.

Article 83. The National Repositories, dependent on the FOUNDATION, shall continue to enjoy the same rights and shall fulfill the functions and services assigned to them by the legal norms in force.

The personnel currently providing services in the aforementioned National Repositories may become dependent on the FOUNDATION upon prior settlement of their social benefits.

The legal acts of transfer, assignment and conveyance of real estate, personal property and property rights of the BCB in favor of the FOUNDATION shall be exempt from the payment of taxes.

CHAPTER II.

NACIONAL FINANCIERA BOLIVIANA S.A.M.

Article 84. In order to continue with the functions of the current Development Management of the BCB, the Agreement signed in La Paz on 24 November 1994, between the Republic of Bolivia, represented by the Ministry of Finance, and the Andean Development Corporation for the constitution of the “Nacional Financiera Boliviana Sociedad Anónima Mixta” (NAFIBO S.A.M.) is approved and authorized in all its parts, which shall operate within the framework of the provisions of Article 31, subsection i) of this Law.

Also approved is the contribution with which the State shall participate in the aforementioned Company, amounting to Two Hundred Seventy million bolivianos (Bs270,000,000.-), in accordance with the provisions of Article 430 of the Code of Commerce.

Article 85. The BCB is authorized to transfer in favor of the Nacional Financiera Boliviana S.A.M., with prior consent of the latter, the assets generated with the resources administered by the Development Management of the Issuing Institute. The liabilities that are transferred from the BCB to the Nacional Financiera Boliviana S.A.M. shall maintain the terms and conditions originally agreed in the respective contracts. The BCB is also authorized to negotiate with the creditors of the resources administered by its Development Management, the modifications, clarifications and complements of the loan contracts in force, in order to transfer the rights and obligations of the Issuing Institute and of the aforementioned Management to the Nacional Financiera Boliviana S.A.M.

The Board of Directors of the BCB shall determine the dates and amounts in which the transfers indicated above shall be made, and shall agree with the Nacional Financiera Boliviana S.A.M. the value and forms of payment of the assets that shall be transferred to it.

TITLE VII

OTHER PROVISIONS

CHAPTER I GENERAL PROVISIONS

Article 86. The BCB may not acquire or maintain participations in the capital of private, public or mixed companies, financial or non-financial, except in international financial entities of public law.

In those cases in which the shares or participations of the BCB, in any type of company or entity, have as their origin the payment of debts, capitalization of receivables or judicial award, their disposal shall be proceeded with, for consideration, within one year of their acquisition, except in cases of duly justified impossibility.

Article 87. Except as provided in Title II, Chapter VII of this Law, the BCB may not make loans to private individuals or legal entities, including its Board of Directors, officials and dependent personnel, nor accept deposits from them.

CHAPTER II TRANSITIONAL PROVISIONS

Article 88. The term of office of the first Directors shall be determined by lot, so that they are replaced at the rate of one per year in the manner established in Article 45. Directors who, as a result of this drawing of lots, serve terms of less than five years may be re-elected for a subsequent term.

Article 89. Entities constituted as of the date hereof have a maximum period until 30 June 1998 to progressively comply, in half-yearly periods, with the provisions relating to related-party loans prescribed in this Law.

New financial entities must comply with Articles 32 and 33 of this Law from their creation.

CHAPTER III FINAL PROVISIONS

Article 90. Decree Law 14791 of 1 August 1977 is repealed.

The following are repealed:

1. Law No. 1178 of 20 July 1990, in its Article 24.

2. Law No. 1488 of 14 April 1993, in its Articles: 21, in its

second paragraph, 40, 46, 47, 48 (subparagraph 1), 49, 50, 71 in its second paragraph, 76 in its first paragraph, 82, 83, 119, in its second paragraph, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, numeral 5) of Article 154

3. All other provisions contrary to this Law.

The following are amended:

1. Law 901 of 28 November 1986, as applicable.

2. Law No. 1488 of 14 April 1993, in its Articles 118, eliminating the phrase “with the agreement of the Central Bank of Bolivia”, 120 eliminating the phrase “with a favorable opinion of the Central Bank of Bolivia”, 128, eliminating “up to one per thousand of the net worth of the financial entity”.

3. Law No. 1493 of 17 September 1993 in its Article 18, subparagraph b).

4. Supreme Decree No. 23660 of 12 October 1993, in its Article 44, subparagraph a) eliminating the phrase “and participate in the formulation of monetary and financial policies” from said Article.

5. It is clarified that Law No. 1178 of 20 July 1990, in its article 26, regarding the power conferred on the Superintendency of Banks to opine on the effectiveness of the rules and regulations issued by the BCB, is not binding on the latter.

Forward to the Executive Branch, for constitutional purposes.

Given in the Session Hall of the Honorable National Congress, on the thirtieth day of the month of October of the year one thousand nine hundred and ninety-five.

Signed. Juan Carlos Durán Saucedo, Guillermo Bedregal Gutiérrez, Walter Zuleta Roncal, Horacio Torres Guzmán, Miguel Antoraz Chalup, Luis Sanabria Taboada.

Therefore, I promulgate it so that it be held and complied with as Law of the Republic.

Government Palace of the city of La Paz, on the thirty-first day of the month of October of the year one thousand nine hundred and ninety-five.

SIGNED. GONZALO SANCHEZ DE LOZADA, Constitutional President of Bolivia, Fernando Candia Castillo, Minister of Finance.

ERRATUM

In the first printing of Official Gazette No. 1910 of 31 October 1995, it was omitted by involuntary transcription error, which is corrected in this edition as follows:

Article 11.- Last line says: deberá con aprobación legislativa, should say:

in both halves thereof

Article 16.- Last line says: deberá con aprobación legislativa, should say:

It must have legislative approval.

Article 33.- Subparagraph c) in the first and second line says: in the previous categories, should say: in the preceding subparagraph.

Article 89.- In the second line it says 30 June 1989, it should say 30 June 1998.

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