Governmental Relations

Decree of State of Emergency in Venezuela (including Economic Emergency)

Decree No. 2.452 was published in Official Gazette No. 6.256 Extraordinary of September 13, 2016 (the “Decree”). Through said Decree, the President of the Republic declared a State of Emergency (including Economic Emergency) in all of the national territory.

Find below the most significant aspects of the Decree:

The President of the Republic issued the Decree in the exercise of his constitutional power to declare states of emergency and restrict constitutional rights (garantías constitucionales). 

The purpose of the Decree is that the National Executive adopts urgent, compelling, exceptional, and necessary measures in order to assure to the population the full enjoyment of their rights, opportune access to goods, services, food, medicines, and other products that are essential for life, and to preserve internal order. 

As a consequence of the declaration of the State of Emergency, the guarantees for the exercise of the rights prescribed in the Constitution of the Bolivarian Republic of Venezuela may be restricted - except for those indicated in article 337 of the Constitution and those indicated in article 7 of the Organic Law on States of Emergency - in the cases of application of the exceptional measures indicated below.

(i)        [endif]To establish the necessary exceptional and temporary regulations in order to guarantee the incentive to the Agrifood, Production, and Distribution Engines defined in the public policy of the National Executive, with respect to the  products considered as strategic products for the satisfaction of the population’s needs.

(ii)        [endif]To design and execute exceptional mechanisms in order to guarantee the efficacious application of the national public policies oriented towards the development of production, the stable supply and fair distribution of food, raw material, products and consumables of the national agrifood, agriproductive and industrial sector, the medicine production and distribution sector, and the industry of personal hygiene and home cleaning products.

(iii)        [endif]To establish exceptional mechanisms of supervision, control and monitoring, national and international procurement, obtainment and supply of raw material, production of essential products, pricing, commercialization, and distribution of the strategic products that are necessary for agriproduction, nourishment, health, and personal hygiene. 

(iv)        [endif]To decree exceptional rules for the allocation of budgetary resources, maximum limits of expenditure authorizations, distribution of expenditures and financing transactions, with no offset among them, that will prevail for fiscal year 2017, in the event that it is not possible to timely process the 2017 Budget.   

(v)        [endif]To issue special rules for obtaining information about Venezuelan or foreign, natural and legal persons that develop economic activities in the country, in order to design, implement, load, and administer a system that allows for the determination of costs, return, and prices, as well as a system of international prices that allows to fight markups, charging of excessive prices (especulación), stockpiling, and usury.

(vi)        [endif]To order the execution of inspection, auditing, and control programs that allow to attack, eradicate, and penalize stockpiling, charging of excessive prices, and smuggling.   

(vii)        [endif]To implement integral policies that guarantee the evaluation, monitoring, control, and  protection of the products, goods, and services of the national agroindustrial system, and the system of production, warehousing, distribution, and commercialization of food, medicines, personal hygiene and home cleaning products.     

(viii)        [endif]To issue regulatory rules that allow to immediately implement productive measures of urban agriculture at public and private spaces located at urban centers, which are free, idle, underused or abandoned, in order for them to be utilized for cultivation and production of food.

(ix)        [endif]To approve  and execute contracts of public interest for the obtainment of financial resources, technical advice, or utilization of strategic resources for the economic development of the country, without being subject to authorizations or approvals of other Public Authorities.

(x)        [endif]To establish priority products for the purchases by the State or categories of the same and the direct allocation of foreign currency for their acquisition, for purposes of the satisfaction of the most urgent needs of the population and the reactivation of the national productive apparatus.

(xi)        [endif]To decide the temporary and exceptional suspension of the application of penalties of a political nature against the Government’s highest authorities and other top officials, when said penalties may obstruct the continuity of the implementation of economic measures for the urgent reactivation of national economy, the supply of essential services and goods for Venezuelan people, or damage the Nation’s security.

(xii)        [endif]To issue measures and execute special public security plans that guarantee the maintenance of public order in cases of actions of  destabilization of the economic order and  normal satisfaction of Venezuelan people’s basic needs, which seek to burst into the country’s internal life or international relationships.

The Decree establishes that the President of the Republic may issue such other measures of social, economic, political, and juridical nature as he deems convenient under the circumstances, with the purpose of solving the extraordinary and exceptional situation that constitutes the subject matter of the Decree.

The Ministry with competence over banking and finance may implement the necessary coordination with the Venezuelan Central Bank in order to establish the maximum limits of inflow or outflow of Venezuelan legal currency in cash, as well as restrictions on specific commercial or financial operations or transactions, and restrict such operations to the use of electronic means duly authorized in the country.

The Judiciary and the Prosecutor’s Office are in charge of carrying out the activities inherent in their jurisdiction, in order to guarantee the strict application of the Constitution and the Law, for purposes of strengthening fight against crime and increasing expeditious procedures; they will also exercise the powers corresponding to them in the performance of the Decree.

The Decree will be forwarded to the National Assembly pursuant to the provisions of the Constitution.  

Within a period of eight (8) days following its publication in the Official Gazette, the Decree will be forwarded to the Constitutional Chamber of the Supreme Tribunal of Justice in order for it to pronounce judgment on the constitutional nature  of the same.

The Decree will have a duration of sixty (60) days as from its publication in the Official Gazette, extendible for other sixty (60) days.

The Decree will enter into force as from the date of its publication in the Official Gazette.

In order to access the Decree, please click here.

Should you have any question or comment or require further information, please contact the partner in charge of your account via email.

Best regards,

TRAVIESO EVANS ARRIA RENGEL & PAZ
Avenida Andrés Bello
Edificio Atlantic, Piso 6
Los Palos Grandes
Caracas 1060 Venezuela
Teléfono: (58-212) 918-3333
Telefax: (58-212) 918-3334
Web: www.traviesoevans.com
E-mail: legal@traviesoevans.com

     

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