Second Quarter Report 2018 7 Maritime Newsletter


This section highlights excerpts of relevant press releases and brief comments on our views regarding such 

“The Venezuelan Central Bank authorized private banks to hold foreign currency” The VCB is allowing the private banks to receive and retain deposits in foreign currency. Any other operation in foreign currency is prohibited. The authorization was supposed to be valid until June 30 2018, and it was based on the fact that the VCB has no official correspondent.  


“INEA announces process of re-registration”

The Venezuelan Maritime Authority (INEA) announced a mandatory re-registration of all the vessels under Venezuelan flag, starting on June 4 until November 1, 2018. INEA stated that the purpose of this process is to update the files for each vessel. 

Owners, or interested parties, must file the required documents before the corresponding offices within the time set for it. All certificates must be re-issued and all payments must be executed under the new tariffs in foreign currency, calculated at the DICOM rate. 


“The creation of the Ministry of Waters was announced”

President Nicolas Maduro created the Ministry of Waters, which joins his cabinet of 31 Ministries. The goal of this Ministry is to protect and preserve the important resource. 


“An exempt from VAT payment and the 2% or 0% ad valorem rate will be applied to final import of goods, in accordance to article 40 of the Customs Tariffs” 

 By Presidential Decree N° 3.446 import of goods, including movable capital property, computers and telecommunication assets, their parts, spare parts and accessories, which are not produced or insufficiently produced in the national territory are exempt from VAT and will be subject to the rate of 0% or 2% ad valorem. 

http://www.legis.com.ve/BancoConocimiento/N/nota_ 06-06-2018-3/nota_06-06-20183.asp?Miga=1&CodSeccion=25 


DVSA is considering arguing force majeure on its export contracts”

PDVSA might be considering arguing force majeure in their supply contract of June, unless a reduction of volume is accepted by their clients. Among the parties affected are Lukoil and CNPC, who might have to restructure their supply contracts. 


“Jamaica expects to conclude the purchase of the shares from PDVSA”

It is urgent for Jamaica to complete the purchase of 49% of the shares in PETROJAM Limited from PDVSA, since they have been having difficulties operating their business because of the recent economic sanctions imposed by the United States.  


“Reuters: The Courts of Aruba lifted the Conoco embargoes against CITGO”

Lawyers of both parties met in Curacao and reached an agreement on the debt of 2 billion Dollars owed by Venezuela to Conoco. As a result of the agreement, the embargoes executed over two tankers of Citgo were suspended. 


“10 vessels are stranded in the Caribbean awaiting for payments from PDVSA”

A group of 10 vessel tankers are stranded in Port of the Caribbean awaiting payments from the Stateowned company. Their cargo includes about 3.124 million barrels of refined products, which presumably are destined for Venezuela’s internal market. 


“The Government announces the intervention of Banesco for 90 days”

The government detained some high members of the directive of Banesco, one of the largest private banks in Venezuela. 

Following these actions, the intervention of the Bank was decreed for 90 days assigning a management board headed by the Vice-ministry of Finance, Yomana Koteich.  


“The relations and flights between Panama and Venezuela have been re-established since April 27th” 

The Presidents of both Nations agreed to reestablished diplomatic relations between both countries. The flights of the eight airlines suspended were re-initiated. 

Last March when the government of Varela (Panamá) published a warning to limit economic and financial operations with a list of individuals and companies from Venezuela, as these were considered of high risk in terms of money laundering, finance to terrorism and involving weapons of mass destruction, including among these individuals President Nicolas Maduro. The Government of Venezuela do not hesitate to raise their voice on April 5 by freezing relations with a list of companies and individuals from Panama. 


“Starting Friday, Zulia will have an Export Office”

This office aims to help large and small companies to expedite their export permits.  It will be led by the regional government with authorization of the Ministry of Commerce. 

http://www.elmundo.com.ve/noticias/economia/politica s-publicas/zulia-contara-desde-este-viernes-oficinaexportacion/

“The Mining Ark has delivered 6,5 tons of gold to the Venezuelan Central Bank”

The Mining Ark in the Orinoco has delivered this year 6.500 kilograms of gold to the Venezuelan Central Bank, which amounts to 340 million Euros as stated by the Ministry of Mining Developments. 

The Mining Ark located in the north of the State of Bolivar includes four blocks: gold, diamonds, coltan and bauxite. 

http://www.elmundo.com.ve/noticias/economia/banca/ arco-minero-ha-entregado-65-toneladas-oro-al-bcv-lova-ano/ 


This section comments on relevant case law during the corresponding quarter and our brief comments to it. 

Decision by the Political and Administrative Chamber of the Supreme Court of Justice dated June 12, 2018 in the matter of Taurel & Cía. SUCRS., C.A vs. SENIAT.

The Chamber of the Supreme Court of Justice stated that a container can never be classified as merchandise and be object to the sanctions provided in article 118 of the amended Customs Organic Law, presently article 175. 

 A container is temporarily entered into a territory to transport imported goods. Therefore, the container itself cannot be recognized as merchandise and is not subject to definitive importation or temporary admissions. 

 In addition, the sanctions provided in article 118 were not applicable to shipping agencies but to consignees, being the correct applicable disposition that provided in article 121 – article 161 in the current legislation

Decision by the Constitutional Chamber of the Supreme Court of Justice dated May 10, 2018 in the matter of Marshall y Asociados C.A. vs. Aseguradora Nacional Unida Uniseguros, S.A. 

The Constitutional Chamber partially voided articles 320, 322 and 522 of the Civil Procedure Code and completely voided article 323 due to unconstitutionality. This modification to the Civil Procedure creates a new instance cassation, without remand and without remand due to errors of form. The arguments are based in the principles of celerity, procedural economy and the prohibition of useless remands.  

The Chamber may now declare with merits the cassation and proceed to rule on the matters in controversy avoiding remand

Decision by the Civil Chamber of the Supreme Court of Justice dated May 10, 2018 in the matter of Dianet Alicia Noureddine Gómez vs. Oswaldo Bruces and Enelda del Carmen Viloria de Bruces.

The judgment makes a profound review on the nature of pre-agreements and their difference with final agreements, particularly that of a sales contract.

In this case, the Chamber recognized the criteria that a preliminary agreement is only a preparatory agreement to the final sales contract and nothing more, being this the criteria set by the Supreme Court of Justice in 2010, valid at the time of the claim. 

 Later the Supreme Court of Justice in 2013, and once more in 2015, agreed that if the preliminary agreements demonstrate will, purpose and price, then it can be indeed recognized as a final sale agreement. 


This section expands on National and International Legislation adopted in the country and relevant to the industry 

National Decree N° 3.490 dated June 26, 2018. 

 Mr. Jackson Arcangel Rivas Velazco was appointed as President of the National Institute of Canalizations. 

National Decree N° 3.440 dated June 26, 2018.

The President created a Special Economic Zone in Guarenas-Guatire; a manufacture satellite city nearby Caracas.  

 The purpose of the project is to encourage, promote and benefit production, manufacture and commercial activities in the area in order to boost the Nation’s economy under their strategic view.  

 Among the most relevant benefits included, the application of important tax exemptions for the companies involved highlights. 

 Nonetheless, these entities will be bound to file reports to a Special Committee, to comply with bank and foreign exchange regulations, as with many other guidelines provided in the project.

Special Provision N° SNAT/2018/0120 by the Tax Authority (SENIAT) dated June 20, 2018.

The Tax Unit was increased once more from Bs. 850,00 to Bs. 1.200,00. The same had already been readjusted at the beginning of May, from Bs. 500,00 to the current Bs. 850,00. 

National Decree N° 3.478 dated June 20, 2018.

The President has declared an increase of the minimum monthly salary, mandatory in all the national territory, starting on June the 16, 2018 for both public and private sectors. The minimum wage was set in the amount of Bs. 3.000.000.

On April 30, 2018 the monthly salary had been increased to the amount of Bs. 1.000.000. 

National Decree N° 3.459 dated June 12, 2018.

The new Board of Directors of the State-owned Company Petroleos de Venezuela S.A. was appointed as follows:

National Decree N° 3.445 dated June 4, 2018.

The Decree postponed for 60 days the restructuring of the Venezuelan local currency supposed to be starting on June 4, 2018 to August 4, 2018. 

Resolution of the Ministry of Oil N° 050 dated May 17, 2018.

This Resolution regulates the sale of Diluted Crude Oil (DCO) and aims to set a fair price for the same. Such dispositions will be applicable to PDVSA Petroleo S.A., its subsidiaries and mixed companies in operations.  

Article 4 of the Resolution provides a formula to calculate the fair price of the DCO.

National Decree N° 3.415 dated May 10, 2018.

PDVSA Industrial S.A. is authorized to commerce with and export the ferrous scrap coming from Petroleos de Venezuela, S.A. (PDVSA), its subsidiaries and mixed companies.

Resolution of the Ministry of Transport N° 030 dated May 3, 2018.

Modifies the tariff rates paid for the services provided by the Authorities, to be now calculated in Euros and (if applicable) paid in Bolivars at DICOM rate.  

Among the services included in the Resolution, are: registration of companies, flagging of vessels, pilotage, tugging, service boats, etc. 

Resolution of the Venezuelan Central Bank N° 1803-01 dated April 30, 2018.

States the rules to be be used for the restructuring of the Venezuelan currency. 

Any amount expressed today in national currency must be divided by 1.000 to obtain the new equivalent currency. This new currency will be called “Bolivar Soberano”, as opposed to the “Bolivar Fuerte” from the restructuration of 2008 and the traditional “Bolivar” before that. 

Starting May 1, 2018, all prices of goods and services must be stated in both Bolivar Soberano (Bs.S) and the dying Bolivar Fuerte. 

The rules provide for the guidelines to prepare for the restructuring of the Venezuelan currency, including how to produce financial statements, the issuance of checks, technology updates, etc.

National Decree N° 3.383 dated April 20, 2018.

Mr. Reinaldo Antonio Castañeda Rivas was appointed as President of the State Company Bolivariana de Puertos (Bolipuertos).

National Decree N° 3.367 dated April 13, 2018.

Provides for the regulations of the Law on waters. 

National Decree N° 3.368 dated April 12, 2018.

The Decree provides for a special temporary regime for the operations and administration of the National Oil Industry, with the purpose of increasing the production. The Decree will be valid until December 31, 2018. 

Resolution of the Ministry of Tourism N° 019 dated April 6, 2018.

The legal instrument modifies the technical and legal requirements for the grant of loans in the tourism sector.

  The Resolution modifies the classification of the beneficiaries of the loans and the limits of the credits that can be granted. 



This section lists draft regulations/bills being proposed to and/or discussed in Congress. 

The Maritime Authority has prepared a draft of regulations on the Law of Ports, which includes among others:

•   Instructions on offshore platforms. 

•   A procedure to attempt the temporary use of private ports if required by the State and the procedure for the intervention of public ports.

•   The procedures to obtain a permit or concession to build, operate, manage or maintain a port, wharf, dock or pier; and the percentage for such activities.

•   Creates local commissions to improve international maritime traffic. 

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