Amendment to the Organic Law of the Financial Administration of the Public Sector
The Organic Law of the Financial Administration of the Public Sector (the Law) was modified in Official Gazette N° 39.893 of March 28, 2012. Such modification was made by the president of the Republic himself, under the Enabling Law.
The most relevant modification in this latest reform is that the Executive will be able to assume debt that exceeds the limits established by the National Indebtedness Law. The modified Law establishes that additional liabilities may be acquired in circumstances that are unexpected, unforeseen or difficult to foresee, and that the amount of the operations will be assigned against the maximum indebtedness of the following fiscal year.
Moreover, the modified Law enables the Executive to directly approve operations and additional credits and to spend such resources according to the Law. The Executive will no longer require the National Assembly’s or the Central Bank of Venezuela’s authorization to approve such credits.
Temporary Measures for the Promotion, Development, Stimulus and Inclusion of National Industry, Producers of Goods, Service Providers and Works Constructors
The Temporary Measures for the Promotion, Development, Stimulus and Inclusion of National Industry, Producers of Goods, Service Providers and Works Constructors, (the Measures) were published in Official Gazette N° 39.892 of March 27, 2012.
The purpose of the Measures is to establish preferential percentage margins that benefit small and medium-sized industries and socio-productive organizations that produce goods, render services or execute works and are domiciled in Venezuela. In this regard, companies will benefit from contracting schemes that imply the incorporation of goods with National Added Value, transfer of technology and the employment of national human resources. The National Added Value is the sum of the percentage contributions in the structure of the final price of each component of national origin used to produce goods, render services or execute works.
Furthermore, the purpose of the Measures will be to guarantee economic resources for small and medium-sized industries and socio-productive organizations located in the country through advanced and prompt payment mechanisms, provided they are selected by the different public administration agencies and organizations for contracts whose end purpose is the acquisition of goods, rendering of services or execution of works. Finally, it should be noted that the Measures will be in force for three years starting as of the date of their publication in the Official Gazette.
Temporary Measures for Establishing Amounts and Categories of Preferential Contracts for Small and Medium-Sized Industries and the Direct Communal Socially Owned Companies that Manufacture Goods, Render Services and Execute Works
Finally, the purpose of these measures (the Temporary Measures) is to protect small and medium-sized industries and direct communal socially owned companies that manufacture goods, render services and execute works by means of contracts reserved by amounts and categories. These small and medium-sized industries and direct communal socially-owned companies must be domiciled in the location where they supply the goods, render the services or execute the works, and also be in the regions where the agencies and organizations subject to the Law of Partial Reform of the Public Contracting Law so require.
The Temporary Measures will apply to small industries with an average annual payroll of up to 50 workers and annual invoicing of up to 100,000 Tax Units, and to medium-sized industries with an average annual payroll of up to 100 workers and annual invoicing of up to 250,000 Tax Units. Finally, it should be noted that the Temporary Measures will be in force for three years starting as of the date of their publication in the Official Gazette.
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