Resolution 018/2000

BOARD RESOLUTION NO. 018/2000
SUBJECT: INTERNATIONAL OPERATIONS MANAGEMENT – APPROVES MODIFICATION OF ARTICLE 10 OF THE INTERNAL REGULATION FOR CHANNELING OPERATIONS THROUGH THE ALADI RECIPROCAL PAYMENTS AND CREDITS AGREEMENT.

HAVING SEEN:
Law No. 1670 of October 31, 1995.
Board Resolution No. 099/99 of November 23, 1999, which approves the new Internal Regulation for Operations through the ALADI Reciprocal Payments and Credits Agreement.
Report SCP No. 002/00 from the International Operations Management dated March 14, 2000.
Report GAL No. 082/2000 from the Legal Affairs Management dated March 16, 2000.

CONSIDERING:
That Article 10 of the Internal Regulation for Operations through the ALADI Reciprocal Payments and Credits Agreement (CPCR) establishes that banking system entities authorized as EFAs may be included in the list of institutions authorized to channel operations through the Agreement.

That the International Operations Management has identified a mechanism that allows banking system entities not authorized as EFAs to be included in the list of institutions authorized to operate with the CPCR-ALADI, by delivering in advance and in favor of the Central Bank of Bolivia (BCB) a Stand By Letter of Credit issued by a first-line financial institution, as it is an adequate and sufficient guarantee instrument for the stated purpose, based on which it suggests modifying Article 10 of the aforementioned Internal Regulation.

//2. B.R. No. 018/2000

That in the opinion of the Legal Affairs Management, there is no legal impediment for the BCB Board of Directors to approve the proposed modification to Article 10 of the Internal Regulation for operations through the ALADI Reciprocal Payments and Credits Agreement.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Modify Article 10 of the Internal Regulation for Operations through the ALADI Reciprocal Payments and Credits Agreement, in the following terms:

SAYS:
Article 10 (Authorization as Authorized Institution).
Banking system entities that are authorized as EFAs, in accordance with the provisions of BCB Board Resolutions No. 117/97 of July 10, 1997, and No. 056/99 of July 6, 1999, must request the express authorization of the Bank, through the International Operations Management, in order to be included in the list of institutions authorized to channel operations through the Agreement.

MUST SAY:
“Banking system entities that are authorized as EFAs, in accordance with the provisions of BCB Board Resolutions No. 117/97 of July 10, 1997, and No. 056/99 of July 6, 1999, must request the express authorization of the Bank, through the International Operations Management, in order to be included in the list of institutions authorized to channel operations through the Agreement.

Those entities that are not authorized as EFAs may request their inclusion in the list of institutions authorized to channel operations through the Agreement, within the limits of this Regulation. To do so, they must deliver in advance and in favor of the Central Bank of Bolivia a Stand By Letter of Credit, issued by a financial institution with a rating of at least Aa3 according to Moody’s Investors Services and from a country with a similar or higher rating for its sovereign debt, for an amount equivalent to 60% of the entity's Book Equity as of the date of issuance of the letter of credit. In the event that the entity does not have sufficient funds in its bank accounts to meet its obligations under this Regulation, the Stand By Letter of Credit shall be immediately enforced for the amount of the pending payment obligation, including interest calculated at the LIBOR rate plus four percentage points.”

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

La Paz, March 21, 2000

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Juan Antonio Morales A.

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Armando Pinell S. Juan Medinaceli V.

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Fernando Campero P. Armando Méndez M.