The regime of validation of contracts is given in order to have them fulfilled the corresponding requirements and sanction in case of non-compliance.
In the Official Gazette of the Bolivarian Republic of Venezuela N° 41,294 dated December 06, 2017, was published the Resolution N° 164 (hereinafter the “Resolution”) issued by the Ministry of the People’s Power for Petroleum, in which it was enacted the Regime for the Review and Validation of National and/or International Contracts executed by PDVSA, its Affiliates and Mixed Companies, where PDVSA holds shares (hereinafter the “Regime”).
- The contracts executed, currently in force, and the contracts to be executed by PDVSA, its Affiliates and Mixed Companies, where PDVSA holds shares are subject to the Regime.
- The contracts that are currently in force and are subject to the Regime shall be subject to review and validation by PDVSA’s Presidency within 30 days from the publication of the Resolution.
- If any irregularity is detected appropriate remedies shall be taken, regardless of the determination of civil, administrative and/or criminal liability.
- The contracts to be executed that are subject to the Regime shall be subject to the prior review and validation by PDVSA’s Presidency, to determine compliance with legal requirements, budgetary requirements, financial and technical requirements.
- Lack of compliance with the requirements set forth in the Resolution pertaining to its formalities will affect the existence and/or validity of the contract subject to the Regime; thus, the performance of the obligation therein.
- Neither any Administrative Authority nor Financial Authority from PDVSA, its Affiliates and Mixed Companies, where PDVSA holds shares, can validly grant its consent to the purpose of contracts regulated by the Resolution.
- In case of any breach to the provisions of the Resolution, the breaching party shall be subject to the sanctions provided in the Law Against Corruption, Comptroller General and the National System of Fiscal Control Law, the Law of Organized Crime and Financing of Terrorism, the Criminal Code, the Civil Code, Ethics Code of Public Officers, and any other regulation applicable.
- The Resolution annuls PDVSA’s, its Affiliates’ and Mixed Companies’ internal legal regime of delegation, and PDVSA’s Presidency is empowered to enact a new regime pertaining to the administrative authorities and financial levels.
- Labor contracts, public services contracts executed with public or private companies and any other contract executed with the Venezuelan public sector are executed from the scope of the Resolution.
- PDVSA’s Presidency is empowered to oversee the compliance and enforcement of the Resolution, as well as dictate the operative guidelines for the performance of the Resolution.
- PDVSA’s, its Affiliates’ and Mixed Companies’ Internal Auditing Offices shall ensure compliance with the Regime.
- Any consultation pertaining to the Resolution shall be decided by the Minister.
This Legal Report represents an overview of the relevant aspects of the Resolution No 164 and does not constitute a legal opinion to address a specific situation. In case of questions, comments or if you require more information, please contact Gabriela Rachadell de Delgado (email@example.com) and/or María Cecilia Rachadell (firstname.lastname@example.org).
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