VENEZUELA

On April 30, the Executive Branch published the Official Gazette corresponding to April 26, which contains the Rules for the Management of Risks related to the Crimes of Money Laundering, Financing of Terrorism, Financing of the Proliferation of Weapons of Mass Destruction and Other Illicit Activities (AML/CFT/FPADM and Other Illicit Activities), applicable to the entities regulated by the National Superintendence of Securities (SUNAVAL, in Spanish). The rules are already in force and regulated entities will have 60 days as from April 26 to make the necessary adjustments. On the other hand, the Central Bank of Venezuela (BCV, in Spanish) issued a circular modifying the methodology for the determination of the discount applicable to the reserve requirements. The measure is in force and will remain in effect until May 31, 2021.

Below you will find some of the most relevant points of the document:

• The norm establishes the regulatory framework that unifies the policies, mechanisms, instruments, measures and continuous and permanent procedures that must be adopted and implemented by natural and legal persons participating in the Venezuelan securities market to identify, evaluate, prevent and take effective actions to manage risks, through a risk-based approach.

• The regulated entities must design, plan, structure and execute policies and strategies, as well as implement risk management systems made up of internal procedures, measures, mechanisms and instruments to manage AML/CFT/FPADM and other illicit activities. In this sense, they must also involve, motivate, raise awareness and increase the responsibility of shareholders, board of directors, employees, workers, contractors and others related to the activity they carry out, who must be informed, induced, trained and motivated with regard to the identification of risks arising from non-compliance with these regulatory provisions.

• Furthermore, regulated entities must formulate, adapt, implement and develop an Integral Risk Management System Related to ML/FT/FPADM and Other Illicit Activities (SIAR LC/FT/FPADM y Otros Ilícitos, in Spanish) in accordance with their organizational structure, their investors, participants, businesses, suppliers, products or services, volume of operations, distribution channels, technologies used, markets and regions where they operate, in order to guide, identify, evaluate, monitor and manage risks, so that they are not used to hide the origin, purpose and destination of illicit capital, or to divert funds of any nature.

Regarding the circular issued by the BCV, it indicates that the discount applicable to the reserve requirements will be calculated daily and will be determined by the sum of the interest paid to the issuing institution for reserve requirements deficit since January 4, 2021 and until the banking business day prior to the evaluation of the compliance with the reserve requirements.