Chapter

REPÚBLICA BOLIVARIANA DE VENEZUELA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: July 1, 1976.
Exchange Arrangement
CurrencyThe currency of República Bolivariana de Venezuela is the Venezuelan bolivar.
Other legal tenderVenezuelan gold coins are legal tender, but they do not circulate.
Exchange rate structureUnitary.
Classification
Crawling bandThe exchange rate is determined by supply and demand, but the Central Bank of República Bolivariana de Venezuela (CBV) intervenes in the market. The CBV determines the reference exchange rate daily. The level and monthly adjustments of the central rate are Bs 508.50 per $1 and Bs 7 per $1, respectively. The exchange rate band is ±7.5% around the central rate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketFutures on the bolivar-dollar exchange rate were established in 1997. However, the Venezuelan Chamber of Options and Futures Compensations suspended its operations on November 13,1998, because of low liquidity of the settled contracts and financial losses.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangements
Regional arrangementsPayments between República Bolivariana de Venezuela and the other LAIA countries, Jamaica, and Malaysia may be settled through the accounts maintained with each other at the CBV.
Clearing agreementsYes.
Administration of controlNo.
International security restrictionsNo.
Payment arrears
OfficialArrears are maintained on interest payments related to external public debt that is under litigation.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeThe exportation of nonmonetary gold (other than jewelry for personal use) and gold coins is subject to prior authorization from the CBV.
Controls on exports and imports of banknotesImports and exports of banknotes are subject to prior authorization from the CBV.
On exports
Domestic currencyYes.
Foreign currencyYes.
On imports
Domestic currencyYes.
Foreign currencyYes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyNo.
Blocked accountsThese apply only in cases of inheritance, preventive judicial measures, and narcotics traffic activities.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresSome imports are subject to licensing for environmental, health, or security reasons. There are minimum prices for certain imports.
Positive listImports of military arms must be authorized by the Defense Ministry. Imports of nonmilitary weapons must be authorized by the Ministry of Domestic Affairs and Justice.
Negative listImportation of used motor vehicles is prohibited, except for hearses, prison vans, and ambulances.
Licenses with quotasA small number of agricultural products are subject to tariff quotas.
Import taxes and/or tariffsThere are four basic ad valorem tariff rates on manufactured goods (5%, 10%, 15%, and 20%), except for motor vehicles, which are subject to a special regime under the Andean Community. The MEIV (Tariffs on Imported Components for Vehicles) on motor vehicles is 35% for passenger cars; 15% for cargo and commercial vehicles, except for vehicles under 4,500 kg, such as pickup trucks, for which the rate is 35%; and 3% for vehicle components. The industrial free zone of Paraguana and the free port of Margarita Island enjoy a special customs regime that includes exemptions from customs tariffs. Duty-free access is granted to imports from Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Paraguay, Peru, Uruguay, and CARICOM countries under trade agreements. There is a temporary surcharge of 15% over import duties on about 800 products and a customs handling fee of 2%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Surrender requirementsThe state petroleum company is required to surrender its export proceeds to the CBV.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesThere is an export tax on hydrocarbons.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsForeign investors are allowed to purchase corporate stocks in the Caracas Stock Exchange but must inform the Superintendency of Foreign Investment (SIEX) of such purchases at the end of each calendar year.
Sale or issue locally by nonresidentsAuthorization from the CBV is required.
Sale or issue abroad by residentsAuthorization from the CBV is required.
Bonds or other debt securities
Sale or issue locally by nonresidentsAuthorization from the CBV is required.
Sale or issue abroad by residentsAuthorization from the CBV is required.
On collective investment securities
Sale or issue locally by nonresidentsAuthorization by the CBV is required.
Controls on derivatives and other instrumentsThere are some regulations for market participants.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentMass media, communications, newspapers in Spanish, and security services are reserved for national ownership. New investments do not require prior authorization from the SIEX but must be registered with the SIEX after the fact, and approval is automatically granted if the new investment is consistent with national legislation. Foreign enterprises may establish subsidiaries in República Bolivariana de Venezuela without prior authorization as long as they are consistent with the commercial code. The SIEX must, however, be notified within 60 working days about newly established subsidiaries. Investment in the petroleum and iron sectors is subject to specific regulations.
Controls on liquidation of direct investmentOwners of direct investment have the right to reexport the proceeds of liquidation while SIEX checks the performance of the commitments of foreign investors in accordance with national legislation.
Controls on real estate transactionsNo.
Controls on personal capital movements
Transfer of assetsBanks must report to the Superintendancy of Banks on a monthly basis any transfer above $10,000, or its equivalent, to or from another country.
Provisions specific to commercial banks and other credit institutions
Purchase of locally issued securities denominated in foreign exchangeThere are limits regulated by the CBV in relation to foreign exchange position limits.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsReserve requirements of 17% apply to deposits, obligations, and debit operations.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsReserve requirements of 17% apply to deposits, obligations, and debit operations.
Investment regulationsCommercial banks are not allowed to invest in stocks in excess of 20% of paid-in capital.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limits
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 1999
No significant changes occurred in the exchange and trade system.

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