Venezuela Declares State of Economic Emergency

Contact: Travieso Evans Arria Rengel & Paz (Venezuela)

Decree No. 2.184 was published in Official Gazette No. 6.214 Extraordinary, dated January 14, 2016. Through said Decree, the President of the Republic declared the State of Economic Emergency in all of the national territory, for a period of sixty (60) days (the “Decree”).

Following are the most significant points of the Decree:  

  1. The President of the Republic issued the Decree in the exercise of his constitutional power to declare states of emergency and decree restrictions on constitutional rights (garantías constitucionales).
  2. The purpose of the Decree is that the National Executive be able to adopt opportune measures allowing efficacious attention to the exceptional, extraordinary, and circumstantial situation that Venezuelan economy is facing.
  3. The National Executive may issue the measures that it deems convenient, particularly in relation to the following aspects:  
    1. To have available the resources from the budgetary economies of the economic financial year 2015, with the purpose of bearing the investment that assures the continuity of the social missions, the  financing of the recovery of the investment in productive agricultural and industrial infrastructure, and the opportune supply of food and other products. 
    2. To assign extraordinary resources for projects included or not included in the Budget Law to the agencies and entities of the Public Administration, in order to optimize the attention to Venezuelans in sectors such as health, education, food, and dwelling units.
    3. To design and implement special measures, for immediate application, in order to reduce tax evasion and avoidance.
    4. To exempt the contracting agencies and entities of specific sectors from the methods and requirements of the public contracting regime, in order to expedite urgent purchases by the State.
    5. To allow exemptions from the formalities, procedures, and requirements for importation and inward customs clearance of goods, in compliance with the relevant phytosanitary requirements. 
    6. To implement special measures for expediting the transit of goods through the ports and airports of the country, being able to temporarily fail to apply legal rules in order to render possible such expediting. 
    7. To allow exemptions from the foreign exchange formalities established by CENCOEX and by the Venezuelan Central Bank to agencies and entities of the public or private sector, in order to expedite and guarantee the importation of goods or consumable supplies that are essential for national supply, the productive reactivation of the country, or the increase in the productive technological capacity.   
    8. To require that the companies of the public and private sector increase their production levels, as well as the supply of specific consumable supplies to the centers of production of food or essential goods.
    9. To adopt all the necessary measures to assure people’s opportune access to food, medicines, and other essential goods, as well as to all the necessary services. The National Executive may require from natural or legal persons, owners or possessors, the transportation facilities, distribution channels, collection centers, processors (beneficiadoras), slaughterhouses, and other establishments, personal property, and goods that are necessary in order to assure the opportune supply of food to Venezuelans, as well as of other essential goods.  
    10. To adopt the necessary measures in order to encourage foreign investments for the benefit of the development of the national productive apparatus, as well as the exportation of non-traditional products, as a mechanism for generating new job opportunities, sources of foreign currency and income.  
    11. To develop, strengthen, and protect the system of Misiones y Grandes Misiones Socialistas.
  4. The Decree provides that the President of the Republic may issue such other measures of social, economic or political order as he deems convenient for the circumstances, in order to solve the extraordinary and exceptional situation that constitutes the purpose of the Decree.
  5. The Ministries with competence over economy and finance may carry out the coordination with the Venezuelan Central Bank in order to establish maximum limits of inflow or outflow of national legal currency in cash, as well as restrictions on specific commercial or financial operations and transactions, restrict said operations to the use of electronic means duly authorized in the country, in order to protect the national currency. 
  6. Within a period of eight (8) days following its publication in the Official Gazette, the Decree will be forwarded to (i) the National Assembly for its consideration and approval and (ii) the Constitutional Chamber of the Supreme Tribunal of Justice in order for it to pronounce judgment on the constitutionality of the same, all in accordance with the Organic Law on States of Emergency (Ley Orgánica sobre Estados de Excepción).
  7. The Decree will have a duration of sixty (60) days after its publication in the Official Gazette. Said period may be extended for sixty (60) days. 
  8. The Decree will become effective as from the date of its publication in the Official Gazette.

In order to access the Decree, please click here.