Resolution Amending Articles 1, 2, 3, 6, 10, and 12, and Annexes 1 and 2 of the Standard on Control, Security, and Surveillance Measures for General Warehouses

Resolution No. CD-SIBOIF-855-1-SEP30-2014 Dated September 30, 2014

STANDARD AMENDING ARTICLES 1, 2, 3, 6, 10 AND 12, AND ANNEXES 1 AND 2 OF THE STANDARD ON CONTROL, SECURITY AND SURVEILLANCE MEASURES FOR GENERAL WAREHOUSES OF DEPOSIT

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I

That on May 6, 2011, the Standard on Control, Security and Surveillance Measures for General Warehouses of Deposit was approved, contained in Resolution No. CD-SIBOIF-675-1-MAY6-2011, published in La Gaceta, Official Journal No. 130, of July 13, 2011.

II

That it is necessary to amend Articles 1, 2, 3, 6, 10 and 12 of the aforementioned standard, for the following purposes: i) to add to the current responsibilities of General Warehouses of Deposit the obligation to guarantee the adequate administration and/or supervision of the storage conditions of goods received in deposit, as well as changes in the physical facilities of their authorized warehouses or premises; and ii) to regulate permissible situations under which the warehouse keeper, auditor, and/or guard may be absent from their workplace; as well as the measures that Warehouse Operators must adopt to remedy such absences.

III

That it is also necessary to unify Annexes 1 and 2 of the aforementioned standard, in order to simplify the format for presenting information required from General Warehouses of Deposit regarding their warehouse keepers or auditors, both active and terminated.

IV

That based on the authority conferred by Articles 2 and 139 of Law 734, Law of General Warehouses of Deposit; and Article 2, fourth paragraph, Article 3, item 13), and Article 10, item 2) of Law 316, Law of the Superintendence of Banks and Other Financial Institutions, and its amendments.

In exercise of its powers,

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-855-1-SEP30-2014 STANDARD AMENDING ARTICLES 1, 2, 3, 6, 10 AND 12, AND ANNEXES 1 AND 2 OF THE STANDARD ON CONTROL, SECURITY AND SURVEILLANCE MEASURES FOR GENERAL WAREHOUSES OF DEPOSIT

FIRST: Articles 1, 2, 3, 6, 10 and 12 of the Standard on Control, Security and Surveillance Measures for General Warehouses of Deposit, contained in Resolution No. CD-SIBOIF-675-1-MAY6-2011, published in La Gaceta, Official Journal No. 130, of July 13, 2011, are amended, which shall read as follows:

“Article 1. Definitions.- For the purposes of this standard, the terms indicated in this article, whether capitalized or lowercase, singular or plural, shall have the following meanings: a) Warehouse Operator: General Warehouse of Deposit. a) Warehouse Keeper: Natural person hired by the Warehouse Operator for the administration, handling, conservation, control and custody of the quantity, quality, conditions and characteristics of goods or merchandise received in deposit in warehouses or premises owned or directly leased by the operator; as well as for the permanent review of storage conditions and changes in facilities. b) Auditor: Natural person hired by the Warehouse Operator for the supervision of storage conditions and changes in facilities; as well as for the supervision of the handling, conservation, control and custody of the quantity, quality, conditions and characteristics of goods or merchandise received in deposit in authorized warehouses. c) Warehouse Law: Law 734, Law of General Warehouses of Deposit, published in La Gaceta, Official Journal, Numbers 201 and 202, of October 21 and 22, 2010, respectively. d) Merchandise: Goods or merchandise received in deposit in premises authorized by the Superintendence. e) Superintendence: Superintendence of Banks and Other Financial Institutions.

f) Superintendent: Superintendent of Banks and Other Financial Institutions. g) Guard or security services: Legal entities hired to protect and safeguard the premises of Warehouse Operators under the terms of Chapter III of this standard.

Article 2. Purpose and Scope.- This standard aims to establish minimum control, security and surveillance guidelines that Warehouse Operators must implement to guarantee the adequate administration and/or supervision of storage conditions and changes in facilities; as well as the handling, conservation, control and custody of the quantity, quality, conditions and characteristics of goods or merchandise received in deposit.

Article 3. Control, security and surveillance measures of Warehouse Operators.- To fulfill the purpose of this Standard, Warehouse Operators must implement the following minimum measures: a) Hire warehouse keepers or auditors, as appropriate, who shall be governed by the provisions established in Chapter II of this Standard. b) Hire security services in accordance with the minimum requirements provided in Chapter III of this Standard.

It is the obligation of Warehouse Operators, depending on the nature of the authorized premises, to have warehouse keepers or auditors during the applicable hours.

In the event of the absence of the warehouse keeper, auditor or guard due to fortuitous event or force majeure, it is the obligation of Warehouse Operators to take the necessary measures to remedy them and to notify the Superintendent of General Warehouses of Deposit via email and/or telephone as soon as they become aware of such absences. In their internal control manuals, they must designate the persons responsible for immediately informing the Warehouse Operator of such absences and the procedures to remedy these unforeseen events.

Article 6. Minimum functions of the Warehouse Keeper and the Auditor.- Without prejudice to the corporate governance policies approved by the Warehouse Operator regarding internal control, risk management, information flows, assignment of responsibilities, among others, the warehouse keeper or the auditor, respectively, shall have the following specific minimum functions:

1. Warehouse Keeper

a. The precise administration, handling and control of inventories of goods or merchandise under their responsibility and according to the assignments given by the Warehouse Operator. b. The permanent update of inventory controls, ensuring that merchandise is stored in a way that facilitates its location, counting and verification. c. Supervision and management for the adequate conservation of merchandise under their responsibility in terms of its characteristics, conditions, quantities and qualities. d. The conduct of selective physical inventories at least once a month, recording said inventories and their results in the corresponding incident log. e. Supervision and management for the conservation of adequate storage conditions for merchandise, which implies, among other aspects, the permanent review of physical facilities, ventilation, water supply, electrical supply and alternative means if necessary, changes in physical facilities, access and drainage, rounds as a means of mitigating fire risks, means for controlling the weight of merchandise, warehouse-merchandise or merchandise-merchandise compatibilities, internal and external contamination risks, security mechanisms on gates and doors or similar (locks, padlocks, chains or similar). f. The review of compliance with the basic conditions established in the insurance policy protecting merchandise regarding the safeguarding of controls, surveillance, boundaries, distances, extinguishers, among others, and, where applicable, physical facilities, and to immediately report any non-compliance to their hierarchical superior and to the management of the Warehouse Operator. g. To inform their hierarchical superior and the management of the Warehouse Operator about potential risks that could affect merchandise or physical works, which did not exist at the time of authorization and initial use of the premises. h. Coordination with the security service hired by the Warehouse Operator for the purpose of controlling the exit of merchandise received in support of Deposit Certificates with or without Pawn Bonds. i. The periodic report or communication to the management, vice-management or corresponding instance regarding the compliance with their functions and attributes, as demanded by said instance. j. Timely attention to delegates of the Superintendence, holders of Deposit Certificates with or without Pawn Bonds, and officials of Insurance Companies, all duly identified, providing them with the support required for the exercise of their functions. k. The control and supervision of the security agent hired by the Warehouse Operator, who shall be under their subordination and who must support them at all times. l. To immediately inform their hierarchical superior and the management of the Warehouse Operator about any situation that could put the deposited merchandise at risk or affect it.

2. Auditor

a. The supervision of the precise alternate or cross-control of inventories of goods or merchandise under their supervision and according to the assignments given by the Warehouse Operator. b. The permanent update of alternate or cross-inventory controls, ensuring that merchandise is stored in a way that facilitates its location, counting and verification. c. Supervision and management for the adequate conservation of merchandise under their supervision in terms of its characteristics, conditions, quantities and qualities. d. In addition to the functions mentioned above, the functions established in item 1), letters d, e, f, g, h, i, j, k, l, of this article are applicable to the auditor.

Article 10. Monthly Report.- Warehouse Operators are obligated to send to the Superintendent, by magnetic medium, in electronic spreadsheet format, within the first twelve (12) days of each month, the Report of Active and Terminated Warehouse Keepers and Auditors in accordance with the format established in Annex 1 of this standard, which forms an integral part of it.

Article 12. Minimum conditions of service contracts.- The following minimum conditions must be incorporated into security service contracts: a) The obligation of the security company to comply, at least, with the following requirements:

1. Equip its personnel with uniform, personal identification, regulated firearm, communication device, as well as with the necessary technical equipment for operation, depending on the specific requirements of the Warehouse Operator.
2. Guarantee that the security agent holds a License for Use of Firearm issued by the National Police.
3. Ensure that security agents comply with the measures, guidelines or internal regulations oriented by the Warehouse Operator.
4. Conduct field visits at the location where the service will be provided in order to prepare the corresponding security plan and provide the Warehouse Operator with pertinent recommendations on security matters.
5. Inform the Warehouse Operator, immediately and in writing, of any anomaly or incident related to the surveillance and protection of the premises where the service is provided.
6. Conduct supervision visits agreed upon with the Warehouse Operator to verify the compliance of the assigned security agent(s) with their functions.
7. Keep a log or memory record to systematically and chronologically register all daily incidents of the premises.
8. Guarantee the control of entry and exit of merchandise, requiring a dispatch or order authorized by the corresponding official.
9. Hire civil liability insurance for damages to self or third parties, caused to the detriment of persons, for a minimum amount of twenty-five thousand United States dollars (US$25,000.00) or its equivalent in cordobas, in which case the coverage for damage to goods or merchandise safeguarded cannot be less than twelve thousand five hundred United States dollars (US$12,500.00) or its equivalent in cordobas. b) The obligation of the Warehouse Operator to comply, at least, with the following requirements:
10. Implement in the premises where the service will be provided the security recommendations provided by the security company.
11. Make known to the contracted company the policies, standards, guidelines and other internal regulations that must be complied with by personnel working for the Warehouse Operator or its visitors, and which must be guaranteed by the assigned security agent.
12. Immediately communicate to the contracted company about damaged or stolen merchandise detected in order to adopt the corresponding measures.
13. Prohibit its personnel from assigning the security agent tasks other than those contemplated in the contract.”

SECOND: The information required in Annexes 1 and 2 of the aforementioned Standard on Control, Security and Surveillance Measures for General Warehouses of Deposit is unified into a single annex, which shall read as follows:

Cut-off Date: 1 2 3 4 5 6 Warehouse ID Number Full Name (according to ID card) Place of deposit assigned or where assigned, as applicable Address of the deposit place Reasons for termination 1 Warehouse Abbreviations 2 ID Number of warehouse keeper or auditor 3 Full name of warehouse keeper or auditor as it appears on the ID card 4 Name of the assigned deposit place or where assigned, as applicable 5 Address of the assigned deposit place or where assigned, as applicable 6 Reasons for termination: End of contract, Resignation, Dismissal, Change of Position.

ANNEX 1: REPORT OF ACTIVE OR TERMINATED WAREHOUSE KEEPERS OR AUDITORS

THIRD: This standard shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Official Journal. (f) S. Rosales (f) V. Urcuyo (f) illegible (Silvio Moisés Casco Marenco) (f) Fausto Reyes (f) illegible (Freddy José Blando Argeñal (f) U. Cerna URIEL CERNA BARQUERO Secretary of the Board of Directors SIBOIF