Legal Alert: Decree with Force of Law National Foreign Trade Centre and Venezuelan Foreign Trade Corporation

2 December 2013

In the Official Gazette Extraordinary N° 6.116, dated November 29, 2013, Decree N° 601 (the “Decree Law”) was issued, under the Enabling Law, by which:

1. The National Foreign Trade Centre (Centro Nacional de Comercio Exterior -”CNCE”), and a Stateowned entity in the form of a corporation, called Venezuelan Foreign Trade Corporation (CorporaciónVenezolana de Comercio Exterior, S.A. – “VENECOM”), are created
2. The provisions of Decree Law are of public policy and take precedence over other laws thatcontradict or collide with it

I. THE NATIONAL FOREIGN TRADE CENTRE (CNCE)

1. The CNCE is a decentralized entity, ascribed to the Office of Vice President of the Council of Ministers to the Economic Area.
2. The purpose of the CNCE is to develop and implement national policies on:
   1. Foreign currency administration.
   2. Exports.
   3. Imports.
   4. Foreign investments.
   5. Investments abroad.
3. The main powers of the CNCE are:
   1. Ensuring and assuring the implementation of national policies on foreign currency administration,exports, domestic and foreign investment.
   2. Implementing the Foreign Exchange National Plan and the National Imports Plan, for its approvalby the Council of Ministers, with the support of the Ministries and other bodies of the NationalPower.
   3. Align the strategy of export incentives.
   4. Align the strategy of foreign investment incentives.
   5. Monitoring and controlling the Venezuelan programs of investments abroad oriented for theproductive integration.
   6. Creating, maintaining and updating the register of individuals and entities in need of access toforeign currency or performing foreign trade operations. This will be made through the issuance ofregulations.
   7. Centralizing the paperwork and permits related to exports and imports, guiding their processestowards simplification and automation.
   8. Establishing the criteria for VENECOM to qualify companies that form part of the Registry ofindividuals and entities in need of foreign currency or performing foreign trade operations, as well as the list of suppliers provided by them.
   9. Establishing a referential system for international prices of goods, supplies and products.
   10. Ensuring the creation of an integrated and automated platform between the various agencies and entities related to foreign exchange, fiscal and regulatory scopes.
4. The CNCE will centralize the approval, authorization, issuance and granting of permits, certificates,licenses or other documents required in operations related to international trade. The ministries of agriculture and land, food, environment, science and technology, commerce, finance, industry, oil and mining, health, labor and transportation will delegate the exercise of its powers and its personnel, who must dispatch from the offices of the CNCE.
5. The CNCE will have a Directory Board of five members, all appointed and removed by the President of the Bolivarian Republic of Venezuela.
6. The CNCE will have the following Administrative Units:
   1. Programming foreign exchange and imports.
   2. Exports and substitution of imports.
   3. Productive foreign investments.
   4. Venezuelan investments abroad.
   5. Tracking and monitoring the components of the foreign exchange administration system.

II. VENEZUELAN FOREIGN TRADE CORPORATION (“VENECOM”)

1. VENECOM will be ascribed to the Office of the Vice President of the Council of Ministers for the Economic Area, and the object will be:
   1. To organize and ensure imports to fulfill the country’s needs.
   2. Provide and ensure the best conditions in terms of quality and prices of products and goods for the country.
   3. Simplify and achieve maximum efficiency in the process of importing and exporting of the country.
   4. To centralize and facilitate the non-oil related exports.
2. Acting in its own name and for its own account or on behalf of third parties, or in coordination withother State-owned entities, will carry out the following activities:
   1. National and international procurement.
   2. Supply chain.
   3. Customs agency.
   4. Importation and provision of goods and supplies required for public and private productiveactivities.
   5. Exports.
   6. Development of engineering services.
   7. Contracting and provision of services and project development.
   8. Coordination of activities performed by decentralized Public Administration bodies related to procurement, provision of services, imports, supply, distribution and commercialization of all kinds of goods and services, especially goods and basic supplies for the existence and free development of the population.
   9. The directperformance of the activities described in the preceding paragraph.
3. Business Conglomerate:
   1. VENECOM is “leading a conglomerate of companies related to international trade, and in the performance of this function will coordinate, monitor and issue guidelines on the activities of these companies, whether public or private”
   2. The State-owned entities that form part of the conglomerate will maintain their current ascription and the relevant entitities will maintain the ownership of the shares.
   3. The following entities form part of the Conglomerate:
      1. Agropatria, S.A.
      2. Bariven, S.A.
      3. Corporación de Abastecimiento y Suministros Agrícolas, S.A. (CASA)
      4. CVG Internacional C.A.
      5. Suministros Industriales Venezolanos, C.A. (SUVINCA)
      6. Venezolana de Exportaciones e Importaciones, C.A. (VEXINCA)
      7. Any other State-owned entity, with the prior approval of the President of the BolivarianRepublic of Venezuela.
4. The capital stock of VENECOM is Bolivars Bs. 100,000,000.00, divided into one thousand nominative shares of Bs 100,000.00 each, to be subscribed and paid by the Republic.
5. VENECOM shall have a Board of Directors of seven directors appointed by the President of theRepublic, who will elect among them a Chairman and a CEO.
6. The Executive Vice-President will be responsible of the execution of the Decree Law, ensuring the fulfillment of the necessary legal acts.
7. Regarding the goods consigned to VENECOM in import and export operations the direct dispatch procedure provided in the Customs Law will be applicable for clearance. This privilege will be extended to the State-owned entities that form part of the conglomerate in the case of guidelines issued by the CNCE.
8. VENECOM has the authorization and other privileges to operate as a licensed warehouse and as acustoms agent.
9. CADIVI and SICAD are under the direct control of the CNCE.
10. The Decree that created the High Authority for the Foreign Exchange System and the Decree that created the National Export Council are abrogated.

Please contact María Cecilia Rachadell ([email protected]) or Manuel Pulido ([email protected]), in case of doubts and comments.