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Wednesday, 02 November 2011 00:00 |
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| | | | | | | | Forex, Derivatives and Structured Finance
| | | | News Flash Number: 133 | | | | | | | | Liberalization of the Colombian foreign exchange regime regarding foreign loans | | | | | | | | On October 28, 2011, the Board of Directors of the Colombian Central Bank amended the External Regulation DCIN-83 to eliminate the restriction pursuant to which foreign residents were required to be organized as foreign financial institutions recognized by the Colombian Central Bank for purposes of granting loans in foreign currency to Colombian residents. As a result, any foreign resident are now entitled to grant loans to Colombian residents.
Notwithstanding, in the case of loans entered into with foreign residents who have not been granted an identification number by the Colombian Central Bank, the Colombian debtor must send a written notice to the Foreign Exchange Department of the Colombian Central Bank, indicating the type of creditor (e.g. Foreign exchange intermediary, subsidiary or branch of the Colombian bank, foreign financial institution, foreign corporation, etc.), and stating the name and country code of the creditor, prior to the filing of the foreign indebtedness report (Form No. 6).
In addition, the Central Bank determined that exporters may (i) borrow funds from any foreign resident for purposes of pre-financing its exports, including those involving capital goods and (ii) sell, with or without recourse, to any foreign resident, payment instruments in foreign currency received from the foreign buyer of its exports.
In any event, the abovementioned transactions must still be made through the formal so called foreign exchange market by filing the respective exchange declaration form.
| | | | | | | | For further information, please contact: Carlos Fradique-Méndez
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Ana María Rodríguez
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