Effective as of the 20th of May of the current year, drawdowns of all foreign currency loans not registered with the Central Bank prior to such date will be subject and conditioned to a peso cash reserve or deposit with the Central Bank, equivalent to 30% of the value of the drawdown. Such deposit shall be made for a period of 18 months, during which no indexation will be recognized. The receipt issued by the Central Bank will not be negotiable and will be redeemed at its peso nominal value in Colombian currency, whether at maturity, or in advance, subject to a discount rate determined by the Central Bank.
The obligation of posting the deposit exists as well for foreign investments not registered within the term established by law, and for currency flows derived from guarantees granted by non residents, when the principal obligation is not subject to the posting of deposit.
The following foreign obligations are exempted from deposit:
Regarding foreign currency loans already registered with the Central Bank, the following measures were adopted by Resolution 7: (i) credits may be prepaid, in whole or in part, with the prior authorization of the Central Bank. If such authorization is not given, prepayment is permitted upon the posting of the deposit over the prepaid amount, (ii) deposit must be posted over undrawn amounts when the amount of the facility is modified, (iii) deposit must be posted over non prepaid amounts when the debtor is changed, unless prior authorization of the Central Bank is obtained, (iv) the term of the facility may be amended once without the posting of deposit. ( if there are undrawn amounts, deposit must be posted over such amount) , (v) registered and drawdown credits may be once substituted by another credit without the posting of deposit, (vi) amendments to the drawdown schedule give rise to the obligation of posting the deposit, unless prior authorization is given by the Central Bank for credits of more than 6 months, and (vii) payment in kind must be previously authorized by the Central Bank.
- credits in foreign currency with the purpose of financing Colombian investments abroad and payment of personal expenses discharged with international credit cards;
- credits to finance exports, granted in foreign currency by authorized intermediaries with resources of BANCOLDEX and with a term of less than one year;
- import financing operations with a period of less than six (6) months;
- financing of capital goods ("bienes de capital") defined by the Central Bank, which may comprise international leasing transactions;
- export financing operations through prepayments with a delivery period of less than four (4) months ;
- financing operations between intermediaries of the Exchange Market and financial foreign entities in order to carry out operations authorized to the former. In addition, External Resolution 7 of June 20, 1997, set forth another exception consisting in concessionaire credits granted by foreign governments.
Prepared by Monica Restrepo and German Villamil from Gomez Pinzon & Asociados.
These notes are intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
GOMEZ PINZON & ASOCIADOS Carrera 9 No. 73-24 Pisos 1,2,3 y 5 Santafe de Bogota, Colombia Telephone : 571- 3107055/ 5066 Facsimile : 571- 3106646/6657 http://ourworld.compuserve.com/homepages/GOMEZP_LAW