Foreign Exchange Crimes Bill to be passed in Venezuela
16.11.04 | Another coercive piece of legislation awaits Venezuelans in 2005. The Foreign Exchange Crimes Bill is pending its second discussion in the National Assembly. If this bill passed, as mandated by Miraflores and Cadivi, this would be yet another case of the government using a “legal” instrument to violate the Constitution of the Bolivarian Republic.
Article 7 of the bill delegates to the Executive responsibilities for organizational and “sublegal” regulatory matters having to do with foreign exchange, despite a prior decision by the Constitutional Chamber of the Supreme Tribunal of Justice that expressly forbids the Legislature to delegate such responsibilities. If passed, the authorities could go after businessmen with a vengeance. The government benches have not ruled out the possibility of including it in the National Assembly’s agenda for the extraordinary sessions, in the event that an extension is declared. According to the government deputies, this law will “protect” honest businessmen and punish those who commit this type of crime. The biggest problem with this bill is that all the so-called crimes are already provided for in existing laws, but with the difference that sanctions provided for in the bill are much harsher than those provided for in the other laws. What is more, many of the so-called crimes lack clear definition in the bill, which would give the Executive far too much discretion when it comes to interpreting the law.
The idea is for the bill to provide a means of sanctioning those who engages in “under billing and over billing imports and exports, simulating imports, consigning false documents, buying and selling dollars on the illegal market, false customs code declarations, and altering freight costs.”
This would make sense and would not be controversial if the bill were to distinguish between errors made in good faith and deliberate attempts to defraud and between violations involving small amounts and those involving large sums, and if it were to explicitly state that the law would cease to have effect once the exchange control regime is lifted. It should be remembered that the government has threatened with a permanent exchange control. Moreover, there are serious arbitrary aspects of the sanctions provided for in the bill, among them the sanctioning of companies for exchange crimes committed by their managers, administrators and dependents.
Besides, transactions involving amounts in excess of $5,000 (for private individuals) and $10,000 (for companies) will have to be reported to the Executive, with full, detailed explanations regarding how the funds were acquired and where they came from; failure to do so will be a crime. On that point they are inflexible.
To sum up, this is an unnecessary piece of legislation that will create further confusion and opportunities for taking arbitrary measures without helping to improve the administration of the foreign exchange control.
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