Venezuela - Banking & Finance Lawyers & Law Firms - Latin America - Chambers and Partners
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Latin-America Guide

Banking & Finance — Venezuela

Overview

2017 has seen virtually no new material regulations in the banking sector. Moreover, the comprehensive overhaul that started in 2010 took a breather in 2017 that allowed the sector to come to terms with the new regulatory and economic reality. The banking sector has been surprisingly resilient in the face of a very challenging economic environment. The banking industry continues to be considered as a public utility, and the mandatory requirements that financial institutions allocate portions of their portfolios to pivotal economic areas are still in place. The Financial Institutions Law continues to restrict the cross-ownership and common-ownership of banks, insurers and brokers. In spite of the increased regulatory pressure, including the imposition of fines to those banks failing to comply with minimum mandatory portfolios, the banking sector remains open to both local and international private investment.

High-ranking government officials have publicly declared that they would like to see more developed and liquid local capital markets and that they plan to have the government and its instrumentalities issue securities to shore up the system's excess liquidity. The government-controlled pension funds and cajas de ahorro have shown increased appetite for debt securities and, in practice, have a right of first offer to buy debt securities that are being offered by private issuers in the local market. The government-controlled Bolsa Pública de Valores has taken a renewed interest in helping to relaunch local capital markets to enable government-run savings plans and pensions funds to invest in income-generating securities.

The Venezuelan banking sector continues to be small compared to its regional peers and there appears to be ample room for revamping the sector well beyond consumer credit. Government-owned institutions are now taking in the lion’s share of aggregate deposits.

The relevant laws and regulations applicable to the Venezuelan financial sector are: (i) the Organic Law on the National Financial System, which contains general framework provisions on banking, capital markets and insurance, (ii) the Banking Sector Institutions Law, and regulations thereunder promulgated by the banking superintendent ("Sudeban") and (iii) the Securities Market Law, and regulations issued by the securities commission ("SNV").

The public sector continues to be the most important player in the Venezuelan financial markets. For example, the Republic and PDVSA are by far the most important issuers of local and international debt securities. Market participants have started to voice their views in relation to the possibility of re-profiling part of Venezuela's and PDVSA's international indebtedness, given the share of the country's foreign currency cash flows that are required to service the debt, especially during the fiscal years of 2017 and 2018.

Government-owned institutions like the Banco Nacional de Desarrollo also play an important role in financing projects. Luckily, the government made it clear that it wishes to see more private sector financing, as well as private issuers of securities. The SNV's staff is perceived as being considerably more business-friendly than their recent predecessors. There appears to be a renewed interest in revamping the local capital markets.

The creation of banks is subject to a license granted by Sudeban. The bank must originally be chartered as a sociedad anónima. After its incorporation, all amendments to a bank's articles of incorporation and bylaws, including capital increases and reductions, must be previously approved by Sudeban.

The merger of a bank with and into another bank, in addition to requiring approval from Sudeban, requires a shareholder vote in a shareholders' meeting with a quorum of 75% of the bank's outstanding shares and the favourable vote of 66% of the shares present at the shareholders' meeting.

The acquisition of shares in a bank must be reported to Sudeban, either by the SNV if the bank's shares are listed in a stock exchange or by the bank's president if the bank is not listed. The direct or indirect acquisition of shares representing more than 10% of a bank's capital stock requires Sudeban’s prior approval.

Banks are required to hold a "legal reserve" in cash equivalent to 50% of their paid-in capital. This reserve must initially be funded via semi-annual contributions of 20% of retained earnings before taxes. Once the aforesaid 50% threshold is met, banks must annually continue to fund this reserve via annual contributions of 10% of retained earnings up until the legal reserve equals 100% of the bank's paid-in capital. Reductions of paid-in capital or of the legal reserve are subject to Sudeban's approval.

Banks are currently required to surrender 5% of their pre-tax profit for communal council projects. Banks must also keep the equivalent of 10% of their capital in a restricted fund to pay for labour obligations in case the bank has to be liquidated. Banks are restricted in the amount of funds that they may loan (so-called legal lending limit) in order to reduce credit risk. The law limits the amount of credit that can be made available by banks to individuals or private entities to a maximum of 10% of the bank's equity. Such percentage may be increased to up to 20% if the extra 10% is guaranteed by a high-grade domestic or foreign bank.

The capital adequacy ratio applicable to Venezuelan banks is legally set at 12% of a bank's risk-weighted assets. The methodology to calculate a bank's tier one and tier two capital are set by Sudeban, as well as the risk weightings applicable to different types of assets.

The Central Bank limits the ability of Venezuelan banking institutions to hold foreign currency-denominated assets. This limitation is calculated on a bank's "net foreign currency position" (i.e. a bank's total foreign currency-denominated assets minus its foreign currency-denominated liabilities) and is set as a percentage of the bank's own funds. The current limitation on net foreign currency position was set at 30% of a bank's own funds but there are a specific series of securities that are excluded from this limit.

Lending rates and deposit rates are set by the Central Bank, which is also in charge of capping bank and credit card fees.

The maximum lending rate in Bolivars (including credit cards) is currently set at 5.5 percentage points below the Central Bank's repo rate, which is a floating rate. The maximum lending rate is currently capped at 24% p.a.

Compounded interest in lending transactions is not permissible unless the interest is capitalised via a separate agreement. Credit card interest may only accrue on the calendar month following the transaction.

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D'Empaire - Banking & Finance Department

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Band 1

第一等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Heads of department: Fulvio Italiani and Carlos Omaña
- 4 partners
- 4 other qualified lawyers

What the team is known for Market-leading practice group with a consolidated presence in the banking and finance field. Team is frequently sought out by a range of notable international financial institutions to advise on lending deals, and routinely renders advice on corporate and sovereign bond issuances, high-value cross-border loans and regulatory matters.

Strengths Market commentators note the firm's recent growth, as well as the "quality of their legal services."

Work highlights Acted on behalf of Haitong Bank's Spanish subsidiary as dealer manager in the context of its USD5 billion bond issuance by the Venezuelan state.

Significant clients Banco Sabadell, BNP Paribas, Credit Suisse, RBS, Banco Santander Totta.

Notable practitioners

Clients hold partner Fulvio Italiani in high regard, stating: "He really goes to the point when providing advice – you ask him a question and he gives you a straightforward answer." He acted as joint lead partner on the aforementioned sovereign bond issuance to Haitong Bank and garners praise from peers for his leading position in this practice area.

Carlos Omaña co-heads the firm's banking & finance practice. Market sources comment that he is a "very good lawyer." He recently advised Credit Suisse on a bond exchange offer by PDVSA for newly issued debt securities maturing in 2020.

About the Team (content provided by D'Empaire)

D’Empairehas participated in the largest debt restructurings of Venezuelan companies,and advises Venezuelan companies and banks in connection with financings.  D’Empaire is representing or has represented several top tier national and international financial institutions.

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Hogan Lovells US LLP - Banking & Finance Department

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Band 1

第一等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Heads of department: Bruno Ciuffetelli and Gonzalo Rodríguez-Matos
- 3 partners
- 7 other qualified lawyers

What the team is known for International full-service firm garnering widespread recognition for its leading role in the banking and finance sphere. Fields a team of highly regarded lawyers active in advising public companies on financing transactions. Further areas of expertise include debt securities offerings and the restructuring of existing debt, alongside asset and project finance mandates.

Strengths A market source praises the firm, underlining the "high volume of sophisticated work" that the team handles.

Work highlights Advised PDVSA on obtaining a USD1 billion loan from Gazprombank to be received through an oil-backed prepayment facility.

Significant clients PDVSA, Petroquímica de Venezuela.

Notable practitioners

Department co-head Gonzalo Rodríguez-Matos is described by sources as a "great lawyer" who is a "specialist in contractual matters." His practice extends to advising clients from the oil and gas, pharmaceutical and chemical sectors on financing transactions.

Bruno Ciuffetelli is noted by interviewees for "doing a lot of great work in banking." He recently led the team on the above USD1 billion loan agreement with Gazprombank. He is additionally active in bond issuances and international capital markets transactions.

About the Team (content provided by Hogan Lovells US LLP)

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Leĝa Abogados - Banking & Finance Department

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Band 2

第二等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Heads of department: Jorge Acedo-Prato and Miguel Rivero
- 5 partners
- 6 other qualified lawyers

What the team is known for Well-regarded banking and finance department routinely called upon to represent several Middle Eastern and Asian banks, as well as players from the local market. Advises clients on the negotiation of credit facilities, the securitisation of loans and project finance agreements in the energy industry. Also counsels clients on exchange control regulatory matters.

Strengths Clients praise the team's "professional prestige" and make particular reference to the lawyers' professionalism.

Work highlights Continued to act as counsel to Scotiabank in its capacity as one of the principal shareholders of Venezuelan bank Bancaribe Banco Universal.

Significant clients Bank Hapoalim, Bank Leumi, Bank of Tokyo-Mitsubishi, Evolvere Capital Venezuela, Banesco Seguros.

Notable practitioners

Jorge Acedo Prato co-heads the firms practice. He is regarded by market commentators as a "good lawyer" with "specialist knowledge." He leads the team counselling several foreign banks on the regulatory framework of the Venezuelan banking sector.

Miguel Rivero Betancourt is a recognised lawyer in the practice area, with specialised expertise of financing transactions in the energy sector. He regularly assists influential international banks with negotiating loan agreements.

Senior statesman Francisco Castillo-García remains a reference point at the firm for banking matters. With 40 years' experience, he is held in high esteem as a banking expert.

Up-and-coming partner José Alberto Ramírez León assists Evolvere Capital Venezuela with all sector-relevant regulatory matters. Clients note that he is "efficient."

About the Team (content provided by Leĝa Abogados)

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Mendoza, Palacios, Acedo, Borjas, Páez Pumar & Cía - Banking & Finance Department

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Band 2

第二等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Heads of department: Manuel Acedo Sucre and Carlos Eduardo Acedo
- 7 partners
- 15 other qualified lawyers

What the team is known for Well-regarded firm with a sizeable banking and finance team. Represents notable banks and insurance companies in regulatory and transactional matters, including high-value project finance and the structuring of securities trusts. Particularly active in analysing and providing advice regarding exchange controls regulations.

Strengths Market sources comment that this is a "very good firm" with "great individuals."

Work highlights Advised Citibank on their day-to-day operations concerning their Venezuelan clients.

Significant clients Zurich Venezuela, Banco Mercantil, Banco Nacional de Crédito, Tokio Marine, Banco San Juan Internacional.

Notable practitioners

Department co-head Carlos Eduardo Acedo Sucre is revered by market commentators for the excellence of his work and his considerable experience in the field. He principally works on insurance cases and project finance.

Partner Luisa Acedo de Lepervanche is seen as a "very high-level lawyer" who is "diligent and reliable." She is active in project finance, acting as counsel to a range of international clients.

About the Team (content provided by Mendoza, Palacios, Acedo, Borjas, Páez Pumar & Cía)

We are one of the leading law firms regarding banking and finance in general. Insurance practice, and project finance and debt restructuring are part of our strongest areas. Our clients include top international and national banks and insurance companies.

Our advice regards legal and business matters, including corporate, regulatory and contractual issues, as well as financial documents, consumer law, exchange controls, capital markets and the placement in Venezuela of banking, insurance and investment products.

We are recognized experts in insurance and reinsurance, assisting major international and national players.

We counsel syndicated international banks regarding project financing and debt restructuring –having advised the lenders in major projects such as the Orinoco Oil Belt projects, Petrozuata and Hamaca; Digitel, in telecommunications; Sidor, in metals— and in matters regarding their Venezuelan interests. We also counsel international and national banks regarding their local issues.

Our assistance includes litigation. We represent our clients before local courts, including the Supreme Tribunal and arbitration courts, regarding local insurance and banking law.

We assist clients in their relations with their supervising authorities. Our clients value the transparency with which we represent them in all administrative and judicial procedures.

We counsel key actors and clients regarding emerging subject matters, such as the Petro and cryptocurrency issues.

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Norton Rose Fulbright - Banking & Finance Department

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Band 2

第二等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Head of department: Rubén Eduardo Luján
- 5 partners
- 3 other qualified lawyers

What the team is known for Respected full-service international firm advising on a range of relevant mandates in this field. Areas of expertise include debt capital markets transactions such as bond issuances and securitisation, as well as project finance mandates. The team advises clients from a range of sectors including oil and gas, insurance and healthcare.

Strengths Clients praise the firm for its service, commenting that the lawyers are "thorough and responsive."

Significant clients AIG, Bank of Montreal, AXA, Bupa, China Development Bank.

Notable practitioners

Rubén Eduardo Luján is noted by clients for the "balanced commercial judgement" that he offers when providing legal opinions. He counsels clients on significant asset-based financing deals and is involved in assisting with complex cross-border financing structures, particularly in the oil and gas sector.

Partner Natalija Vojvodic is recognised by market commentators as a "very good" practitioner. She regularly offers advice to international organisations regarding domestic project financing transactions, particularly in the energy space.

About the Team (content provided by Norton Rose Fulbright)

Department profile not yet provided by Norton Rose Fulbright. Please see their firm profile.

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Rodner Martínez & Asociados - Banking & Finance Department

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Band 2

第二等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- 2 partners

What the team is known for Well-respected and experienced boutique firm advising domestic and international clients from the banking sector. Team is active counselling clients on the regulatory and fiscal implications of international financial transactions. Expertise extends to handling leasing agreements, loans and swaps.

Strengths Sources identify the practice as "academically and practically experienced."

Notable practitioners

Leading figure Jaime Martínez Estévez is lauded by market commentators as an "absolutely outstanding lawyer" who "acts as counsel to a range of clients." He advises on debt restructuring and on obtaining export finance.

Senior statesman James-Otis Rodner is singled out as a lawyer with "impressive knowledge." He has significant experience handling financial transactions and maintains prominence in academia.

About the Team (content provided by Rodner Martínez & Asociados)

Department profile not yet provided by Rodner Martínez & Asociados. Please see their firm profile.

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Rodríguez & Mendoza - Banking & Finance Department

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Band 2

第二等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- 3 partners
- 5 other qualified lawyers

What the team is known for Highly regarded practice group advising on both capital markets and banking and finance transactions. Firm's expertise encompasses project finance, debt issuances and securitisations. Continues to provide counsel regarding debt restructurings and maintains an active role in advising clients on related tax issues.

Strengths Interviewees endorse the firm, commenting that it has "good lawyers and a very active profile."

Notable practitioners

Reinaldo Hellmund heads the firms banking and finance practice. He is highlighted as a market leader in this sector by sources. He mainly focuses on capital markets transactions, and is additionally active in advising on project finance and regulatory issues. He continues to advise local and cross-border financial institutions, as well as noteworthy global oil companies.

Miguel Velutini maintains an active presence in the banking and finance sector, advising on debt restructuring and refinancing, domestic and international finance transactions and securities issuances. Sources note his capabilities in this sphere.

About the Team (content provided by Rodríguez & Mendoza)

Department profile not yet provided by Rodríguez & Mendoza. Please see their firm profile.

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AraqueReyna - Banking & Finance Department

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Band 3

第三等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Head of department: Pedro Luis Plachart Pocaterra
- 3 partners
- 2 other qualified lawyers

What the team is known for Established compact practice group with strong capabilities in the provision of transactional and regulatory advice. Regularly assists with regulations affecting capital markets transactions, anti-money laundering and securities trading, also counselling on related matters such as tax and exchange controls. Gustavo Reyna joined the team this year.

Strengths Interviewees praise the firm's client-oriented focus, commenting that "the service is very comprehensive and tailored to our needs."

Significant clients Banco del Caribe, Banco Santander International, Chubb Insurance, JPMorgan Chase, UBS.

Notable practitioners

Pedro Luis Planchart Pocaterra earns plaudits from clients, who comment: "He is very instructive and clear in his manner and knowledgeable about the law. He is an authority on financial matters and exchange control issues which are central to a lot of banking work in Venezuela currently." He advises a stellar list of domestic and international clients on project finance and capital markets transactions.

Clients are full of praise for new hire and seasoned practitioner Gustavo Reyna, whom they describe as "a person of great professional quality and experience." He acts in an advisory role to a range of significant clients in the banking and finance sector.

About the Team (content provided by AraqueReyna)

ARAQUEREYNA´s Banking & Finance team chaired by Pedro Planchart is widely sought after by some of the most important banking and finance players in the local and global spheres.
The team has been further strengthened with the addition of Gustavo Reyna, one of the most respected banking and corporate lawyers in the country. With more than 40 years of experience (most of them at D’Empaire Reyna Abogados, the firm he founded in 1972), Gustavo Reyna is not only regarded as a trusted advisor by a stellar list of loyal clients, but is considered a friend, teacher, and mentor to generations of corporate lawyers in Venezuela and abroad.
Following Gustavo Reyna’s arrival, two of the firm’s recent panel wins include Banco del Caribe, one of the most important private banks in Venezuela, and Chubb Insurance, an important insurance and reinsurance company in the United States.
They add to an impressive portfolio that includes JP Morgan Chase Bank, Banco Santander International (based in Miami) and UBS AG. Furthermore, the team frequently acts alongside global law firms such as Simmons & Simmons (London, Amsterdam and Paris offices) and Debevoise & Plimpton.

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InterJuris Abogados, S.C. - Banking & Finance Department

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Band 3

第三等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Heads of department: Juan José Delgado and María Cecilia Rachadell
- 8 partners
- 6 other qualified

What the team is known for Noteworthy practice group active in assisting with project finance matters, particularly in the oil and gas sector. Team regularly counsels private companies and financial institutions on the structuring, negotiation and drafting of loan agreements. Offers additional expertise in securities financings including sovereign debt issuances.

Work highlights Acted as counsel to DP Delta Finance regarding the structuring and negotiation of a USD1.3 billion financing for an energy project being carried out by Petrodelta.

Significant clients Accenture, Enerset Power Solutions, Otepi, Rosneft, Arca International Bank.

Notable practitioners

Practice co-head Juan José Delgado is described by interviewees as a "great negotiator." His recent work highlights include co-leading the team providing counsel to Enerset Power Solutions regarding the financing of a contract to construct a power plant in Venezuela.

María Cecilia Rachadell is endorsed by peers, who say that "she is very intelligent." She recently acted as lead partner advising Rosneft on the implications of developing an offshore gas and condensate joint venture with a Venezuelan state-owned entity.

About the Team (content provided by InterJuris Abogados, S.C.)

  • InterJuris Abogados provides legal and strategic advice in banking and finance matters. The team has participated in project financings, debt financings, securities financing, syndicated loans and sovereign debt, in all major industries in Venezuela.
  • InterJuris Abogados has also participated in the incorporation and licensing of financial institutions in Venezuela and abroad, as well as the acquisition and merger of financial institutions.
  • InterJuris Abogados’ team has advised public and private financial institutions, export credit agencies, multilateral agencies, and financial service providers.
  • InterJuris Abogados has also participated in creation of funds between Venezuela and other sovereigns for the financing of infrastructure and other projects in Venezuela.

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Palacios Ortega y Asociados - Banking & Finance Department

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Band 3

第三等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- 1 partner
- 3 other qualified lawyers

What the team is known for Compact banking and finance team offering expertise to corporate clients on a range of matters such as investment protection and banking regulation. Team also has experience in advising on corporate and labour mandates.

Notable practitioners

Seasoned practitioner Luis Esteban Palacios continues to provide counsel to clients on banking and finance matters, particularly in the area of investment protection, with additional expertise in regulatory work.

About the Team (content provided by Palacios Ortega y Asociados)

Department profile not yet provided by Palacios Ortega y Asociados. Please see their firm profile.

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Raffalli de Lemos Halvorssen Ortega y Ortiz - Banking & Finance Department

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Band 3

第三等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Heads of department: Rafael de Lemos Matheus and José Manuel Ortega Sosa
- 2 partners
- 5 other qualified lawyers

What the team is known for Established firm with a practice group principally dedicated to assisting insurance companies and banks with the regulatory aspects of their operations, as well as with related tax and corporate matters. Also counsels clients on exchange controls.

Strengths Clients praise the team's abilities and client service, mentioning the lawyers' excellent "experience, knowledge and responsiveness."

Work highlights Acted for AIG on the local law aspects of a global transaction valued at USD720 million in which the organisation's Latin American, Central and Eastern European businesses were acquired by Fairfax.

Significant clients Abbott Laboratories, Bancaribe, CNA Financial, North International Bank, Seguros Venezuela.

Notable practitioners

Partner Rafael de Lemos Matheus is commended by clients, who say that "he is very active in the market and is a response lawyer who always takes our call." He is particularly involved in advising on exchange controls and capital markets transactions.

Department co-head José Manuel Ortega Sosa receives strong praise from sources, who note the quality of his legal services. He led the team advising AIG on the aforementioned work highlight. His expertise covers capital markets and exchange controls.

About the Team (content provided by Raffalli de Lemos Halvorssen Ortega y Ortiz)

Department profile not yet provided by Raffalli de Lemos Halvorssen Ortega y Ortiz. Please see their firm profile.

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Tinoco Travieso Planchart & Núñez - Banking & Finance Department

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Band 3

第三等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- Head of department: Gustavo Enrique Planchart Pocaterra
- 6 partners
- 4 other qualified lawyers

What the team is known for Noteworthy practice group advising banks and financial institutions on regulatory matters and financings. Firm is also active assisting clients with related dispute resolution and corporate matters.

Strengths A market source identifies this as a "well-consolidated firm."

Significant clients Avila Capital Markets, Banco Santander Totta, BRP Bizzozero & Partners, Banco Mercantil, Banco de la Nación Argentina.

Notable practitioners

Partner Gustavo Enrique Planchart Pocaterra leads the firm's department and is recognised by interviewees as a "very impressive lawyer." He specialises in matters pertaining to trusts and has a strong command of banking regulations.

Senior statesman Alfredo Travieso Passios has considerable experience advising clients on banking and finance matters. He provides counsel to international banks and their representative offices in Venezuela.

About the Team (content provided by Tinoco Travieso Planchart & Núñez)

Department profile not yet provided by Tinoco Travieso Planchart & Núñez. Please see their firm profile.

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Travieso Evans Arria Rengel & Paz - Banking & Finance Department

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Band 3

第三等

Chambers Commentary (based on the Chambers research)

Basic facts about the department
- 4 partners
- 5 other qualified lawyers

What the team is known for Active practice group with offices in several locations in Venezuela. Assists high-end local banks with regulatory matters and lending transactions, as well as international banks and companies on exchange control issues.

Strengths Clients highlight the firm's "excellent response time and very good, practical lawyers."

Work highlights Continued to act as counsel to Banco Occidental de Descuento on regulatory issues, structuring and guarantees of loans, as well as exchange controls-related matters.

Significant clients Banco Activo, American Express, Banco Mercantil, Banco Occidental de Descuento.

Notable practitioners

Pedro Rengel Núñez is described by a commentator as a "very knowledgeable" practitioner. His expertise encompasses project finance and dispute resolution, garnering further recognition for his knowledge of tax law.

About the Team (content provided by Travieso Evans Arria Rengel & Paz)

Department profile not yet provided by Travieso Evans Arria Rengel & Paz. Please see their firm profile.

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Overview

2017 has seen virtually no new material regulations in the banking sector. Moreover, the comprehensive overhaul that started in 2010 took a breather in 2017 that allowed the sector to come to terms with the new regulatory and economic reality. The banking sector has been surprisingly resilient in the face of a very challenging economic environment. The banking industry continues to be considered as a public utility, and the mandatory requirements that financial institutions allocate portions of their portfolios to pivotal economic areas are still in place. The Financial Institutions Law continues to restrict the cross-ownership and common-ownership of banks, insurers and brokers. In spite of the increased regulatory pressure, including the imposition of fines to those banks failing to comply with minimum mandatory portfolios, the banking sector remains open to both local and international private investment.

High-ranking government officials have publicly declared that they would like to see more developed and liquid local capital markets and that they plan to have the government and its instrumentalities issue securities to shore up the system's excess liquidity. The government-controlled pension funds and cajas de ahorro have shown increased appetite for debt securities and, in practice, have a right of first offer to buy debt securities that are being offered by private issuers in the local market. The government-controlled Bolsa Pública de Valores has taken a renewed interest in helping to relaunch local capital markets to enable government-run savings plans and pensions funds to invest in income-generating securities.

The Venezuelan banking sector continues to be small compared to its regional peers and there appears to be ample room for revamping the sector well beyond consumer credit. Government-owned institutions are now taking in the lion’s share of aggregate deposits.

The relevant laws and regulations applicable to the Venezuelan financial sector are: (i) the Organic Law on the National Financial System, which contains general framework provisions on banking, capital markets and insurance, (ii) the Banking Sector Institutions Law, and regulations thereunder promulgated by the banking superintendent ("Sudeban") and (iii) the Securities Market Law, and regulations issued by the securities commission ("SNV").

The public sector continues to be the most important player in the Venezuelan financial markets. For example, the Republic and PDVSA are by far the most important issuers of local and international debt securities. Market participants have started to voice their views in relation to the possibility of re-profiling part of Venezuela's and PDVSA's international indebtedness, given the share of the country's foreign currency cash flows that are required to service the debt, especially during the fiscal years of 2017 and 2018.

Government-owned institutions like the Banco Nacional de Desarrollo also play an important role in financing projects. Luckily, the government made it clear that it wishes to see more private sector financing, as well as private issuers of securities. The SNV's staff is perceived as being considerably more business-friendly than their recent predecessors. There appears to be a renewed interest in revamping the local capital markets.

The creation of banks is subject to a license granted by Sudeban. The bank must originally be chartered as a sociedad anónima. After its incorporation, all amendments to a bank's articles of incorporation and bylaws, including capital increases and reductions, must be previously approved by Sudeban.

The merger of a bank with and into another bank, in addition to requiring approval from Sudeban, requires a shareholder vote in a shareholders' meeting with a quorum of 75% of the bank's outstanding shares and the favourable vote of 66% of the shares present at the shareholders' meeting.

The acquisition of shares in a bank must be reported to Sudeban, either by the SNV if the bank's shares are listed in a stock exchange or by the bank's president if the bank is not listed. The direct or indirect acquisition of shares representing more than 10% of a bank's capital stock requires Sudeban’s prior approval.

Banks are required to hold a "legal reserve" in cash equivalent to 50% of their paid-in capital. This reserve must initially be funded via semi-annual contributions of 20% of retained earnings before taxes. Once the aforesaid 50% threshold is met, banks must annually continue to fund this reserve via annual contributions of 10% of retained earnings up until the legal reserve equals 100% of the bank's paid-in capital. Reductions of paid-in capital or of the legal reserve are subject to Sudeban's approval.

Banks are currently required to surrender 5% of their pre-tax profit for communal council projects. Banks must also keep the equivalent of 10% of their capital in a restricted fund to pay for labour obligations in case the bank has to be liquidated. Banks are restricted in the amount of funds that they may loan (so-called legal lending limit) in order to reduce credit risk. The law limits the amount of credit that can be made available by banks to individuals or private entities to a maximum of 10% of the bank's equity. Such percentage may be increased to up to 20% if the extra 10% is guaranteed by a high-grade domestic or foreign bank.

The capital adequacy ratio applicable to Venezuelan banks is legally set at 12% of a bank's risk-weighted assets. The methodology to calculate a bank's tier one and tier two capital are set by Sudeban, as well as the risk weightings applicable to different types of assets.

The Central Bank limits the ability of Venezuelan banking institutions to hold foreign currency-denominated assets. This limitation is calculated on a bank's "net foreign currency position" (i.e. a bank's total foreign currency-denominated assets minus its foreign currency-denominated liabilities) and is set as a percentage of the bank's own funds. The current limitation on net foreign currency position was set at 30% of a bank's own funds but there are a specific series of securities that are excluded from this limit.

Lending rates and deposit rates are set by the Central Bank, which is also in charge of capping bank and credit card fees.

The maximum lending rate in Bolivars (including credit cards) is currently set at 5.5 percentage points below the Central Bank's repo rate, which is a floating rate. The maximum lending rate is currently capped at 24% p.a.

Compounded interest in lending transactions is not permissible unless the interest is capitalised via a separate agreement. Credit card interest may only accrue on the calendar month following the transaction.

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Senior Statesperson

Francisco Castillo-García

Leĝa Abogados

From the Chambers Latin America guide

Senior statesman Francisco Castillo-García remains a reference point at the firm for banking matters. With 40 years' experience, he is held in high esteem as a banking expert.

^ See whole ranking table

Senior Statesperson

Luis Esteban Palacios

Palacios Ortega y Asociados

From the Chambers Latin America guide

Seasoned practitioner Luis Esteban Palacios continues to provide counsel to clients on banking and finance matters, particularly in the area of investment protection, with additional expertise in regulatory work.

^ See whole ranking table

Senior Statesperson

AraqueReyna

From the Chambers Latin America guide

Clients are full of praise for new hire and seasoned practitioner Gustavo Reyna, whom they describe as "a person of great professional quality and experience." He acts in an advisory role to a range of significant clients in the banking and finance sector.

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Senior Statesperson

James-Otis Rodner

Rodner Martínez & Asociados

From the Chambers Latin America guide

Senior statesman James-Otis Rodner is singled out as a lawyer with "impressive knowledge." He has significant experience handling financial transactions and maintains prominence in academia.

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Senior Statesperson

Alfredo Travieso Passios

Tinoco Travieso Planchart & Núñez

From the Chambers Latin America guide

Senior statesman Alfredo Travieso Passios has considerable experience advising clients on banking and finance matters. He provides counsel to international banks and their representative offices in Venezuela.

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Band 1

Carlos Eduardo Acedo Sucre

Mendoza, Palacios, Acedo, Borjas, Páez Pumar & Cía

From the Chambers Latin America guide

Department co-head Carlos Eduardo Acedo Sucre is revered by market commentators for the excellence of his work and his considerable experience in the field. He principally works on insurance cases and project finance.

^ See whole ranking table

Band 1

Reinaldo Hellmund

Rodríguez & Mendoza

From the Chambers Latin America guide

Reinaldo Hellmund heads the firms banking and finance practice. He is highlighted as a market leader in this sector by sources. He mainly focuses on capital markets transactions, and is additionally active in advising on project finance and regulatory issues. He continues to advise local and cross-border financial institutions, as well as noteworthy global oil companies.

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Band 1

D'Empaire

From the Chambers Latin America guide

Clients hold partner Fulvio Italiani in high regard, stating: "He really goes to the point when providing advice – you ask him a question and he gives you a straightforward answer." He acted as joint lead partner on the aforementioned sovereign bond issuance to Haitong Bank and garners praise from peers for his leading position in this practice area.

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Band 1

Jaime Martínez Estévez

Rodner Martínez & Asociados

From the Chambers Latin America guide

Leading figure Jaime Martínez Estévez is lauded by market commentators as an "absolutely outstanding lawyer" who "acts as counsel to a range of clients." He advises on debt restructuring and on obtaining export finance.

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Band 1

Maritza Mészáros

MCZ Legal Consultants

From the Chambers Latin America guide

Maritza Mészáros of MCZ Legal Consultants is described by a client as "an excellent and versatile lawyer who offers a comprehensive service." She advises notable international and domestic financial institutions in connection with their Venezuelan investments and has extensive experience obtaining finance for Venezuelan companies to fund their corporate transactions.

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Band 1

D'Empaire

From the Chambers Latin America guide

Carlos Omaña co-heads the firm's banking & finance practice. Market sources comment that he is a "very good lawyer." He recently advised Credit Suisse on a bond exchange offer by PDVSA for newly issued debt securities maturing in 2020.

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Band 1

Altum Abogados

From the Chambers Latin America guide

Alvaro Posada of Altum Abogados maintains an active practice and advises several major corporations on the structuring of bond issuances on the Venezuelan stock market. He is also knowledgeable about matters pertaining to currency exchange controls and remains active in financial transactions, M&A and debt restructuring.

^ See whole ranking table

Band 2

Bruno Ciuffetelli

Hogan Lovells US LLP

From the Chambers Latin America guide

Bruno Ciuffetelli is noted by interviewees for "doing a lot of great work in banking." He recently led the team on the above USD1 billion loan agreement with Gazprombank. He is additionally active in bond issuances and international capital markets transactions.

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Band 2

Rubén Eduardo Luján

Norton Rose Fulbright

From the Chambers Latin America guide

Rubén Eduardo Luján is noted by clients for the "balanced commercial judgement" that he offers when providing legal opinions. He counsels clients on significant asset-based financing deals and is involved in assisting with complex cross-border financing structures, particularly in the oil and gas sector.

^ See whole ranking table

Band 2

Pedro Luis Planchart Pocaterra

AraqueReyna

From the Chambers Latin America guide

Pedro Luis Planchart Pocaterra earns plaudits from clients, who comment: "He is very instructive and clear in his manner and knowledgeable about the law. He is an authority on financial matters and exchange control issues which are central to a lot of banking work in Venezuela currently." He advises a stellar list of domestic and international clients on project finance and capital markets transactions.

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Band 2

Gonzalo Rodríguez-Matos

Hogan Lovells US LLP

From the Chambers Latin America guide

Department co-head Gonzalo Rodríguez-Matos is described by sources as a "great lawyer" who is a "specialist in contractual matters." His practice extends to advising clients from the oil and gas, pharmaceutical and chemical sectors on financing transactions.

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Band 3

Luisa Acedo de Lepervanche

Mendoza, Palacios, Acedo, Borjas, Páez Pumar & Cía

From the Chambers Latin America guide

Partner Luisa Acedo de Lepervanche is seen as a "very high-level lawyer" who is "diligent and reliable." She is active in project finance, acting as counsel to a range of international clients.

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Band 3

Jorge Acedo-Prato

Leĝa Abogados

From the Chambers Latin America guide

Jorge Acedo Prato co-heads the firms practice. He is regarded by market commentators as a "good lawyer" with "specialist knowledge." He leads the team counselling several foreign banks on the regulatory framework of the Venezuelan banking sector.

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Band 3

MCZ Legal Consultants

From the Chambers Latin America guide

Pedro Crisafulli of MCZ Legal Consultants offers significant experience in both finance and capital markets transactions. He is also involved in assisting financial institutions with matters relating to currency exchange controls regulations.

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Band 3

Rafael de Lemos Matheus

Raffalli de Lemos Halvorssen Ortega y Ortiz

From the Chambers Latin America guide

Partner Rafael de Lemos Matheus is commended by clients, who say that "he is very active in the market and is a response lawyer who always takes our call." He is particularly involved in advising on exchange controls and capital markets transactions.

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Band 3

Juan José Delgado

InterJuris Abogados, S.C.

From the Chambers Latin America guide

Practice co-head Juan José Delgado is described by interviewees as a "great negotiator." His recent work highlights include co-leading the team providing counsel to Enerset Power Solutions regarding the financing of a contract to construct a power plant in Venezuela.

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Band 3

José Manuel Ortega Sosa

Raffalli de Lemos Halvorssen Ortega y Ortiz

From the Chambers Latin America guide

Department co-head José Manuel Ortega Sosa receives strong praise from sources, who note the quality of his legal services. He led the team advising AIG on the aforementioned work highlight. His expertise covers capital markets and exchange controls.

^ See whole ranking table

Band 3

Gustavo Enrique Planchart Pocaterra

Tinoco Travieso Planchart & Núñez

From the Chambers Latin America guide

Partner Gustavo Enrique Planchart Pocaterra leads the firm's department and is recognised by interviewees as a "very impressive lawyer." He specialises in matters pertaining to trusts and has a strong command of banking regulations.

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Band 3

Altum Abogados

From the Chambers Latin America guide

Alfonso Porras of Altum Abogados advises clients on public transactions such as the structuring and issuing of structured notes programmes, as well as on private placements and derivatives matters.

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Band 3

María Cecilia Rachadell

InterJuris Abogados, S.C.

From the Chambers Latin America guide

María Cecilia Rachadell is endorsed by peers, who say that "she is very intelligent." She recently acted as lead partner advising Rosneft on the implications of developing an offshore gas and condensate joint venture with a Venezuelan state-owned entity.

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Band 3

Pedro A Rengel Núñez

Travieso Evans Arria Rengel & Paz

From the Chambers Latin America guide

Pedro Rengel Núñez is described by a commentator as a "very knowledgeable" practitioner. His expertise encompasses project finance and dispute resolution, garnering further recognition for his knowledge of tax law.

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Band 3

Miguel Rivero Betancourt

Leĝa Abogados

From the Chambers Latin America guide

Miguel Rivero Betancourt is a recognised lawyer in the practice area, with specialised expertise of financing transactions in the energy sector. He regularly assists influential international banks with negotiating loan agreements.

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Band 3

Rodríguez & Mendoza

From the Chambers Latin America guide

Miguel Velutini maintains an active presence in the banking and finance sector, advising on debt restructuring and refinancing, domestic and international finance transactions and securities issuances. Sources note his capabilities in this sphere.

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Band 3

Natalija Vojvodic

Norton Rose Fulbright

From the Chambers Latin America guide

Partner Natalija Vojvodic is recognised by market commentators as a "very good" practitioner. She regularly offers advice to international organisations regarding domestic project financing transactions, particularly in the energy space.

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Up and Coming

José Alberto Ramírez León

Leĝa Abogados

From the Chambers Latin America guide

Up-and-coming partner José Alberto Ramírez León assists Evolvere Capital Venezuela with all sector-relevant regulatory matters. Clients note that he is "efficient."

^ See whole ranking table