VZCZCXRO3738
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHMT
RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #1432 3131922
ZNR UUUUU ZZH
P 091922Z NOV 09
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC PRIORITY 3955
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEBAAA/DEPT OF ENERGY
RHEHNSC/NSC WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY

UNCLAS CARACAS 001432 
 
SENSITIVE 
SIPDIS 
 
ENERGY FOR CDAY AND ALOCKWOOD 
HQ SOUTHCOM ALSO FOR POLAD 
TREASURY FOR MKACZMAREK 
NSC FOR DRESTREPO AND LROSSELLO 
USDOC FOR 4332 MA/ITA/WH/JLAO 
 
E.O. 12958: N/A 
TAGS: ECON EFIN VE
SUBJECT: NEW CENTRAL BANK LAW IN EFFECT 
 
RF: CARACAS 1390 
 
¶1.  (U) The modified Central Bak (BCV) law we reported on 
previously (reftel) was published in the Official Gazette 
dated Novembe 5 and is now in effect.  There are several 
diffrences between the actual law and what we reported 
which was based on the draft approved by the Naional 
Assembly in first discussion.  (Note:  Draf laws can be 
modified during second discussion i the National Assembly, 
and perhaps even after te discussion and before printing. 
Access to infomation about modifications in these phases is 
liited.  End note.)  The most important difference isthat 
in the actual law, as opposed to the draft,bonds issued by 
Venezuelan state entities cannotcount as international 
reserves.  A provision inthe draft law that would have 
required Fonden totransfer hard currency back to the BCV if 
the BC's reserves fell below the "adequate level" was 
removed, as was another provision requiring PDVSA to seek an 
opinion from BCV and the Ministry of Economy and Finance 
before issuing bonds. 
 
¶2.  (SBU) Comment:  Our comments given in reftel still stand, 
with the exception that the actual law gives the BCV less 
scope for putting at risk the quality of its international 
reserves than the draft law did.  The proximate PDVSA bond 
issuance, which the Minister of Energy and Petroleum 
suggested will take place before year's end, will be a test 
of the extent to which the BCV and Venezuelan government 
intend to use the new BCV law to finance PDVSA (and other 
government entities) and to have the BCV intervene in the 
parallel foreign exchange market.  End comment. 
DUDDY