Organic Law of Amendment to the Law of the Venezuelan Central Bank

Contact: Travieso Evans Arria Rengel & Paz (Venezuela)

Decree No. 2.179 of December 30, 2015 was published in Official Gazette No.  6.211 Extraordinary of even date therewith. Through said Decree, the President of the Republic issued the Decree with the Staus, Value, and Force of Organic Law of Amendment to the Law of the Venezuelan Central Bank (the  “Decree-Law”).

Following are the most relevant changes contained in the Decree-Law in relation to the Law that formerly regulated this matter:

  1. The designation of the President of the Venezuelan Central Bank (“VCB”) made by the President of the Republic will no longer have to be ratified by the vote of the majority of the members of the National Assembly (“NA”).
  2. A new function of the President of the VCB is “…To exercise the powers delegated to him by the members of the Board of Directors, in the terms prescribed in the legal system in force …”
  3. With respect to the permanent absence of the President of the VCB, the President of the Republic will proceed to make a new designation in the terms prescribed in the Decree-Law, without submitting said designation to the consideration of the NA.
  4. The President of the Republic will designate the President and all of the Directors of the VCB. Formerly, the NA designated two (2) of the Directors of the VCB through the vote of the majority of its members.
  5. The President of the Republic must form the Committee of Evaluation of Merits and Credentials, which is in charge of verifying and evaluating the credentials and suitability requirements of the candidates for the Board of Directors of the VCB (this Committee was formerly formed by the NA). Said Committee will be composed of two (2) representatives elected by the NA,  two (2) representatives designated by the President of the Republic and one (1) representative designated by the Council of Vice-presidents of the Cabinet Council  (this last representative was formerly elected by the National Academy of Economic Sciences).
  6. The requirements to be met by the candidates for being members of the Board of Directors of the VCB include: “…To be a person with renowned capability in economic, financial, banking,  legal matters or matters related to the nature of the functions to be fulfilled, with at least ten years of experience…”
  7. The members of the Board of Directors of the VCB, as well as the First Managing Vice-president, may exercise functions different from those mentioned in article 19 of the Decree-Law, when they have been designated to that end by the President of the Republic, and always provided that the matters involved are directly related to the achievement of the purposes of the VCB..
  8. In the cases of removal of any of the members of the Board of Directors of the VCB, the request for removal will be sent to the Board of Directors, which, after complying with and taking the procedural steps of the procedure, and in a period not exceeding sixty (60) days, will send the acts to the President of the Republic  for decision. (Formerly, the acts were to be sent to the NA  for decision  and the removal was to be adopted by the vote of  2/3 of its members ).
  9. The removal of any of the Directors of the VCB for failure to comply, without due cause, with the purpose and goals of the VCB must be provided with sufficient grounds in a report that will be sent for consideration and decision of the President of the Republic, as mentioned above. 
  10. Should the removal of the Board of Directors or of any of its members be grounded, the President of the Republic must make a new designation in the terms prescribed in the Decree-Law; for the period of time still to elapse of the relevant term of office. The person(s) removed may not be designated to hold such positions during the next seven (7) years.
  11. With respect tú the Strategic System of Financial and Exchange Information and according to article 33 of the Decree-Law, the VCB may suspend all or any of its transactions with the institutions that violate the provision of said article.
  12. In spite of the fact that the VCB is expressly prohibited from granting direct credits to the National Government and from guaranteeing obligations of the Republic, states, municipalities autonomous institutes, State-owned companies, or any other entity of public or mixed character, the VCB may obtain, grant, or finance credits to the State and public or private entities when there objectively exists an internal or external threat against the security or another damage to public interest, which will be qualified by the President of the Republic through a confidential report, or in the cases in which there is an unanimous approval of the members of the Board of Directors  of the VCB, always provided that it does not conflict with the monetary validation or financing of shortfall fiscal policies.
  13. In relation to the power of the Board of Directors of the VCB to classify certain information as secret or confidential when required by the National Executive, the Board of Directors may use its powers in order to temporarily suspend  the publication of information for the period during which there exist internal or external situations representing a threat tú the National Security  and economic stability of the country. 
  14. The NA or its Committees may access information and documents that are categorized as secret or confidential, through a request timely presented to the President of the VCB, who  will assess the forwarding of such information or documents or the substitution of the same by a report that includes all of the aspects of interest for the entity making the request, when the nature or character of the informati9on compromises  the security or operation of the VCB.
  15. The VCB is entrusted with the monitoring and supervision of the payment systems operating in the country. Payment systems are understood as “… the group of rules, agreements, and procedures the principal purpose of which is to process and execute the orders of transfers of funds  and/or securities, among the participants in the same that have been recognized  and authorized  as such by the VCB…”
  16. The VCB will agree with the National Executive on a scheme for furnishing information during internal or external circumstances that threaten the National Security and economic stability of the Nation. 
  17. The importation, exportation or commerce of Venezuelan or foreign coins that are legal in their respective countries is subject to the regulations established by the VCB, including the authorization required in order for monetary species that are representative of the Bolivar to enter and leave the territory of the Bolivarian Republic of Venezuela.

The Temporary Provisions of the Decree-Law establish as follows: (i)  the rules contained in the same will be of immediate application as from their entry into force, but the administrative procedures in progress will continue their course up their final conclusion; (ii) the Personnel Statute and other provisions issued by the Board of Directors of the VCB in the ambit of its competence are ratified; (iii) The President and Directors of the VCB currently in the exercise of their functions will continue to perform them  until the end of the period for which they were designated.

The Decree-Law became effective on December 30, 2015.

In order to access the Decree-Law, please click here.