Sin ttulo de diapositiva

1
Main features of the Exchange Controls system in
vigour in Venezuela
Miami, April 2007.
2
Latin America

• Argentina - B
• Brazil - BB
• Colombia - BB
• Chile - A
• Mexico - BBB
• Peru BB
• Venezuela BB-

• Bolivia B-
• Paraguay - NR
• Haiti - NR
• Nicaragua - NR
• Ecuador CCC -

3
Participants.
Participants in the process of procuring and
obtaining hard currency in Venezuela.
COMISIÓN DE ADMINISTRACIÓN DE DIVISAS
(Hard Currency Administration Commission)
Authorised Forex Operator
CENTRAL BANK OF VENEZUELA
The CADIVI regulates, centralises and coordinates
all exchange control transactions originated by
customers through Authorised Forex Operators
(AFOs).
Institutions through which customers conduct
their ForEx transactions (normally, banks).
Responsible for actually disbursing hard currency
amounts, approved by the CADIVI, to customers
through their respective AFOs.
A company or an individual
Diap. 3
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4
Participants rôles.
2. AUTHORISED FOREX OPERATOR AFO
- Document verification.
- AAD approval (AADs for imports, registered
users only).
3. CADIVI
1. APPLICANT
- Document analysis.
- Registers via web http//www.cadivi.gov.ve
Rôles
- Final approval (AADs-ALDs)
- Submits requested documents through AFO.
4. CB of V
- AAD ALD certification.
- Funds transfer to AFO as per applicants
instructions.
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System scope.
Exchange Controls enacted on 5th February 2003
...
... a comprehensive system, encompassing
IMPORTS
STUDENTS
SPECIAL CASES
EXPORTS
INSURANCE REINSURANCE
through specific RULINGS Providencias
AIR LINES
REMITTANCES
FOREIGN DEBT
TELECOMMS
FOREIGN INVESTMENT
CREDIT CARDS
GENERAL SERVICES
SPECIAL CUSTOMS RÉGIMES
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General issues.
GENERAL
Legal framework ...
Forex Agreement N 1 (5 Feb 03) establishes
general outline
Central Bank disburses foreign currency according
to availability
A single exchange rate, established and
periodically revised by CB of V
No legal free or parallel market except debt
swaps or ADR plans already in vigour
Obligation to sell to the CB of V all foreign
currency earned from exports
General obligation to sell to the CB of V all
foreign currency entering the country
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General issues.
GENERAL (contd.)
Legal framework (contd.) ...
Special treatment for companies operating in the
Oil Gas sector
Special treatment to imports exports from / to
ALADI member countries
Special treatment to Bancoex funding
AAD the CADIVI sets apart foreign currency
amount for a given transaction
ALD the CADIVI authorises actual liquidation of
foreign currency amount for a given transaction
Import-related AADs expire after 6 months from
date of issuance (4 otherwise) all ALDs expire
concurrently with relative AAD.
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General issues.
GENERAL (end)
Points common to all rulings ...
Registry of users (RUSAD)
All transactions applicant-generated over the
internet
All transactions to be completed and conducted
through AFOs
Users must be solvent with workers and with
Inland Revenue and other Govt. entities
AAD validity may be extended at the CADIVIs
discretion
Removal from system RUSAD revoked if caught
cheating
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9
Ruling highlights.
IMPORTS
HIGHLIGHTS
RULING 66 Goods
No letters of credit may be issued without valid
AAD
Automated AAD issuance by AFO
Applicable only to items in lists published by
Trade, Food or Heavy Industry Ministries.
No shipment of merchandise may be ordered without
valid AAD
Discretionary, Customs on-site inspection of
goods by CADIVI staff
Applies to new and traditional importers
ALD may be requested only after merchandise has
cleared customs
Regulates Special Customs Régimes
On-sight transactions permitted to imports from
ALADI countries only
Applies to Private Sector only (Specific Ruling
for public sector, N 46)
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10
Imports cycle diagram.
Applicant (Importer) downloads form from CADIVI
website
II
IIIa
Conveys to CADIVI ()
CADIVI-issued AAD ()
I
Submits documents
AAD Application
Checks file
III
Pro-forma invoice, services offer

• G.C.C (HQ)
• Authorised branches

Automated AAD
IV
V
AAD por parte de Cadivi
Importer orders despatch and consigns goods C
ustom-clearing documents
AAD por parte de Cadivi
Documents verified
Documents submitted to the CADIVI
Client issues payment instructions letter
CADIVI-issued ALD (Client copy / B.M copy)
VIII
VI
VII
Hard currency usage registry
Two working days later
Next working day
G.C.C. requests from CB of V
Actual disbursement
() first-time users and exceptional cases only.
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11
Ruling highlights.
IMPORTS
HIGHLIGHTS
RULING 63 Services ()
Usage of commercial trade marks, patents,
licences franchises
ruling applies to Telecomms and to
Venezuelan-owned companies only foreign-owned
companies must follow Rulings 47 and 56.
Technology transfer or assistance
Machinery or equipment repair maintenance
services
Payments for software licences and usage (f. ex.
SWIFT, SAP)
Leasing of goods of foreign provenance
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Ruling highlights.
EXPORTS
HIGHLIGHTS
RULING 71
Billing of exports only in USD or destination
countrys lawful currency
Applies to both goods services
Hard currency proceedings to be sold to CB of V
no later than 180 days from export date
Three control stages
or 5 days after collection, whichever occurs first
1. Export Intent Advice (prior to shipment).
10 of export bill may be withheld for pertinent
expenses
2. Export Fulfilment Advice (post-shipment).
3. Sale of Hard Currency Demonstration
(AFO-issued).
Special conditions for exports to ALADI member
countries
Allows for merchandise returns or advances
Oil Gas sector companies enjoy special régime
Concurrent with SENIATs (Inland Revenue) Ruling
345.
Diap. 12
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13
Exports cycle diagram.
Applicant (Exporter) downloads form from CADIVI
website
II
I
Exporter despatches goods and collects shippin
g documents
Export Intent Advice
Submits documents
Checks file
Confirmation with CADIVI
Inland Revenue
Proforma invoice, other if also relevant
Adds Exp. Intent Adv. (copy).

Shipping Documents
IV
V
AAD por parte de Cadivi
Exporter downloads form from CADIVI website
Conveys to the CADIVI
Export Fulfilment Advice
Issues Demonstration of sale no longer than
5
days later
VIII
VII
VI
Two working days later
Exporter collects, arranges sale to CB of V
through BM
Actual funds transfer to CB of V
Conveys to the CADIVI
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14
Ruling highlights.
FOREIGN INVESTMENT
HIGHLIGHTS
RULING 56
Profit remittances
Royalty payments, technology transfer contracts,
technical assistance
Usage of commercial trade marks, patents,
licences franchises
Indemnity to international investors in case of
expropriation
Sale or liquidation of an investment
Principal repatriation
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15
Ruling highlights.
FOREIGN DEBT (prior to 5/2/03)
HIGHLIGHTS
RULING 34
Debt recognised upon obligors, not lenders
Obligor HAD to be Venezuelan, lender HAD to be
foreign
Debt recognised on obligors net foreign currency
balances only
Right to register expired October 2003
Commercial and financial debts accepted in
registry
Applied to Mid- to long-term lending
Allowed for modifications in original conditions
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Ruling highlights.
FOREIGN DEBT (new)
HIGHLIGHTS
RULING 58
Regulates foreign currency lending to private
companies Capital goods investment projects
only!
Obligor MUST be Venezuelan, lender MUST be foreign
Project must conform to Govt. development
guidelines
Project must be approved by relevant Ministry
Project must be approved by the CADIVI
Mid- to long-term lending
Allows for modifications in original conditions
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17
The ALADI Agreement on Reciprocal Debits
Credits.

• HIGHLIGHTS
• An optional, multilateral settlement mechanism of
  bilateral balances between the Central Banks of
  the Agreements signatory countries Mexico, the
  Dominican Republic and all the South American
  nations save for the three Guianas.
• To be used only in trade dealings and their
  directly related expenses.
  
• Permissible instruments commercial letters of
  credit (but not SBLCs), trade-related
  documentary collections, avalised drafts or
  promissory notes and documentary payment
  orders.
• Exporters and Importers receive / pay in local
  currencies, Central Banks exchange dollars among
  themselves.
  
• Encompasses on-sight transactions or term
  transactions that dont exceed 180 days.

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The ALADI Agreement on Reciprocal Debits
Credits.

• HIGHLIGHTS (contd.)
• All deals processed through duly Authorised
  Banks but require Central Bank registering and
  approval .
  
• Specific rules may change from one country to
  the other, as Central Banks may regulate and
  adapt the Agreement in their own country
  
• Permissible instruments
• Currency of Reimbursement to Exporters.
• Costs.
• Exporters / Importers are reimbursed / pay in
  real time, Central Banks settle their balances
  3 times a year (April / August / December).
  
• Both Exporter and Importer must be in an
  Agreement signatory country deal must be billed
  from an Agreement signatory country.

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The ALADI Agreement on Reciprocal Debits
Credits.

• ADVANTAGES
• Central Banks guarantee each other
  Transferability, Convertibility and Payment of
  registered and approved transactions these
  guarantees extended to authorised banks network.
• Significant improvement in risk profile, as
  Central Banks assume guarantor rôle.
  
• Venezuela with the exception of foodstuffs,
  Authorised goods lists dont apply as long as
  product to be imported qualifies for the issuance
  of a Certificate of Origin.
• Venezuela On-sight import transactions
  permitted.
  
• Venezuela all imports will still require a
  valid AAD but no ALD is required faster
  payment.
  

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Mercantil Services.
Services rendered to customers by Banco Mercantil
at the Exchange Control Unit (GCC)

• Counsel
• - Mainstream Imports Exports
• - Imports and Exports as per ALADI Agreement
  conditions
  
• - Foreign Debt (prior to 5/2/03 or new)
• - Foreign Investment
• - Special cases
• - Payments abroad (Insurance, Licences,
  Franchises, etc.)
  
• File conveyance to CADIVI for RUSAD
  identification number procuring
  
• File conveyance to CADIVI for AAD authorisation
  procuring (1st time importers and special
  transactions)
  
• Automated generation of AAD (mainstream ALADI
  imports, established importers)
  
• File conveyance to CADIVI for ALD authorisation
  procuring
  
• Foreign currency disbursement requests to Central
  Bank of Venezuela
  
• File conveyance to CADIVI for new foreign debt
  requests

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Título de la sección
Commercebank Services.
Services rendered to Commercebank customers
exporting to Venezuela
Título del capítulo a presentar

• Counsel
• - Mainstream Imports Exports.
• - Debt regulations (prior to 5 Feb 03 or new).
• - Investment regulations.
• - Non-trade Payments reception (Dividends,
  Licences, Franchises, etc.).
  
• Discounting of Venezuelan trade-related
  Receivables
  
• - Underlying transactions assessed on a
  case-by-case basis, must be fully
  CADIVI-compliant and must have been channelled
  through Banco Mercantil in Venezuela.
• - Venezuelan importers and US exporters to be
  duly screened as per Commercebanks credit policy
  standards and risk methodology.
  
• - Exporter must designate its Commercebank
  account as the one to be credited at the time of
  payment once the Central Bank of Venezuela (CBV)
  disburses to Banco Mercantil the hard currency
  payment(s) pertinent to the underlying
  transaction. This account will be pledged by the
  Exporter to Commercebank.
• - Receivables discounted on a non-recourse or
  limited recourse basis, as chosen by the US
  exporter.

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Título de la sección
What else we can do for you.
Título del capítulo a presentar
Commercebanks Trade Finance Services Unit is
geared towards the generation of business deals
related to import and export financing, through
the design of financial solutions structured in
the terms and scope that best fit the interests
and needs of the customer. Our pricing is compe
titive and advantageous. The history of our Gro
up of related and affiliated financial services
companies dates back to 1925 We have accrued a d
ecades-long expertise in international trade
financing our customers can rely upon for
accurate and personalised counselling.
We put at our customers service a long-time pre
sence in Latin American markets and a wealth of
experience and knowledge of their particulars,
with offices in the subcontinents key countries
and principal markets for Florida-based
companies. The right size of bank with the inte
rnational presence for the kind of service our
customers need.
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Título de la sección
What else we can do for you (end).
Título del capítulo a presentar
Our product base is the creative structuring of
trade finance transactions tailored to the
U.S.-based customers needs, through the
effective use of traditional trade financing
instruments and services Letters of credit
(on-sight, deferred payment or negotiable by
acceptance). Short-term import financing.
Short-term pre-export financing for existing
exporters. Medium-term financing to foster the
export capacity of companies.
Post-export financing, Forfaiting, Factoring
(with or without recourse, short term).
Documentary collections, financed or not
(short term). Longerterm Trade Financing proj
ects, making use, where pertinent, of facilities
provided by Export Credit, Export Insurance
and/or Export Development entities within the USA
and Canada, be they public or private.
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Some relevant figures.
Why, if you export to Venezuela or import
from that country, the Mercantil Organization
(Commercebank in the USA) is the cleverest choice
for you Because were the countrys largest
bank with a network of 280 branches.
Because weve been around for 80 years now, wh
ich gives us a thorough knowledge of how to do
business in Venezuela and in a strongly regulated
environment. Because as of 31st Dec 06 Merca
ntil had captured a 21 market share in import
transactions under exchange control conditions,
measured in actual dollars disbursed by the
Central Bank of Venezuela. Because, if you ha
ve subsidiaries or affiliates in the Region that
do business with Venezuela, Mercantil allows you
to deal through the ALADI Agreement mechanisms,
for which we have the largest capacity and market
share in Venezuela.
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Título de la sección
Who we are.
Título del capítulo a presentar
Commercebank is the US component of a solid
conglomerate specialised in financial services w
ith a combined equity of 1,2 billion US dollars
and over 14 Bn in assets, as of 31st December
2006.
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Título de la sección
Who we are (contd.).
Continental dimensions, global reach.
Título del capítulo a presentar
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Título de la sección
Who we are (end).
Título del capítulo a presentar
Extensive international network, in addition
to Commercebanks own branches in Florida, plus
one in New York City and another one in Houston,
TX

• 5 affiliate banks Banco Mercantil C.A.
  (Venezuela), BMS (Banco Mercantil Schweiz) AG,
  Banco del Centro (Panama), Banco Mercantil
  Venezolano NV (Curacao, Netherlands Antilles) and
  BMC Bank Trust (Grand Cayman).
• 5 Representative Offices Mexico City, Bogotá
  (Colombia), Lima (Peru), Sâo Paulo (Brazil) and
  London (UK).
  
• 2 Banco Mercantil Agencies in the USA (New York
  and Miami) plus another in Curacao, Netherlands
  Antilles.
  
• Our network of Correspondent Banks spans the
  world over and assure the customer prompt and
  accurate servicing.

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Título de la sección
Commercebanks reliability and relevance.
Título del capítulo a presentar
n
ATM system affiliated to Cirrus, Honors and other
networks.
Call Centre (36 stations).
n
Internet Banking for Commercebank and CIS.
n
Rated by Fitch in December 2004
Long Term BBB- Long-term Deposits BBB Sh
ort Term F3 Short Term Deposit F3 Outlook
Stable Individual B/C Support 5
n
n
Recipient, alongside some of its related and
affiliate institutions, of several awards and
recognitions from leading world publications such
as The Banker, Forbes, Global Finance,
Emerging Markets, PC News Report, for its
expertise in trade finance in Latin American
markets.
Member, BAFT (Bankers Association for Finance of
Trade).
n
Board of Directors member, Enterprise Florida.
n
Praised by the OCC as leader in rendering
community development services in the Miami
Metropolitan Area.
n
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Título de la sección
Trade Services at Commercebank.
Título del capítulo a presentar
Fernando Mesia Vice President
220 Alhambra Circle, 11th floor,
Coral Gables, FL 33134. [phone] fmesia_at_co
mmercebankfl.com Marcelino Plaza (Caracas, Vene
zuela). (58.212) 503.1.041, fax [phone]
.02. mplaza_at_bancomercantil.com
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IMPORTANT The Debt Certification Letter.
Beginning January this year, the CADIVI will
authorize payment on any invoice past due for 45
days or more, only if the Venezuelan importer
submits an exporter-issued Debt Certification
Letter, duly translated into Spanish if
originally written in another language and
apostil led or legalized by the nearest
Venezuelan Consulate. In this letter, the
exporter must declare that amount(s) as per the
relevant invoice(s) is(are) effectively owed him
by the venezuelan importer. THIS REQUISITE IS T
O BE WAIVED WHENEVER LETTERS OF CREDIT HAVE BEEN
USED, OR IF THE TRANSACTION HAS BEEN CHANNELED
THROUGH THE ALADI AGREEMENT.
Diap. 30
May 09