Derogation of the Exchange Regime and its illicit

On August 02, 2018, it was published in Gazette with number 41,452, the by which the National Constituent Assembly, agreed in the hemicycle the repeal of illicit exchange. There are several points that could be addressed around this decree; however, we will limit ourselves to giving a brief analysis of the aspects that we consider the most relevant.

The purpose of this is to serve as an incentive for foreign currency investments, and to facilitate exchange transactions between individuals, whether natural, legal entities, national or foreign, and participation in the socio-economic model of the country.

Previously, the investment in foreign currency was very limited, because, the Decree with Status and Force of of the Exchange Regime and its illicit, established punitive conducts to those who carried out trades in foreign currency. For this reason, the current ordinance repeals the typical behavior, according to what is established in Article 2:

Article 2: “As this Constituent Decree entered into force and without prejudice to the provisions of Article 3 ejusdem, the Decree with Statute and Force of Law of the Regime and its illicit is repealed; Article 138 of the Decree on the Statute and Force of Law of the Central Bank of Venezuela in relation exclusively to the crime of trade and currency exchange in the country, and all the normative provisions to the extent that they coincide with that established in this Constituent Decree”.

Avenida Luis Roche de Altamira, edificio Helena, oficina 16, Caracas, Venezuela. Teléfonos: +58 212 283.9390 Fax +58 212 285.4535. ALDANAYABOGADOS.COM / Correo-E: [email protected]

From the above quote it can be seen that, by means of this decree, it seeks to develop and promote foreign currency investments and we can also deduce that the

Venezuelan State has had a broader and less rigid vision in commercial operations with foreign currencies. Additionally about that decree can be stated that the

Venezuelan State is preparing the ground for a new economic model.

On the other hand, the aforementioned article refers to illicit activities related to commercial activities, such as (i) dissemination of false information about the exchange rate, (ii) use of the unofficial type to establish a price, (iii) promotion of illicit exchange rates, so that the other crimes established in the Decree with Status and Force of Law of the Exchange Regime and its illicit remain in force.

Another aspect to highlight of the decree is Article 3, which establishes that on the basis of harmful acts to the public heritage, the retroactivity of the law in cases that favor those who have been convicted for the commission of punishable acts won’t be applied.

Finally, we have the subsistence of civil liability, that is to say that that person will be liable for the pecuniary damage to property In accordance with the provisions of article 5, it also establishes that the State prosecutor’s office may proceed judicially in order to guarantee the restitution and compensation of the damages and prejudices committed to the detriment of public property.

Avenida Luis Roche de Altamira, edificio Helena, oficina 16, Caracas, Venezuela. Teléfonos: +58 212 283.9390 Fax +58 212 285.4535. ALDANAYABOGADOS.COM / Correo-E: [email protected]