1998 ACT 448

(July 21)

Official Journal No. 43,345 of 23 July 1998

By means of which measures are taken in relation to the management of the contingent obligations of state entities and other provisions on public debt are dictated.

COLOMBIA CONGRESS

DECRETA:

ARTICLE 1o. BUDGETARY MANAGEMENT OF CONTINGENCIES. In accordance with the provisions of the Organic Law of the Budget, the Nation, the Territorial Entities and the Decentralized Entities of any order shall include in their budgets debt service, the appropriations necessary to cover the possible losses of the contingent obligations under its responsibility.

The National Government will regulate the methodology on the terms for the inclusion of these obligations in the budgets of the entities referred to in the previous paragraph, and can distinguish in their treatment quotas that had been acquired prior to the entry into force of this law and the future ones.

Likewise, the government will regulate the events in which these resources are to be transferred to the fund that is created in accordance with the following article.

PARAGRAFO. For the purposes of this law, contingent obligations are defined as the pecuniary obligations subject to condition.

ARTICLE 2o. STATE ENTITIES CONTINGENCY FUND. Create the State Entities Contingency Fund as a special account without legal status administered by the Trustee La Previsora.

ARTICLE 3o. OBJECT OF THE FUND. The Contingency Fund of the State Entities shall be intended to meet the contingent obligations of the State Entities determined by the Government. The government will also determine the type of risks that may be covered by the Fund.

ARTICLE 4. BUDGET REGIME. For all budgetary purposes, the Fund shall be governed by the rules applicable to State Financial Entities.

The contributions made to the Fund shall be deemed to be executed once they have been transferred to the Fund and may only be reimbursed to the entities provided when the non-performance of the intended risks is definitively verified.

ARTICLE 5o. STATE ENTITY CONTINGENCY FUND RESOURCES. The resources of the State Entities Contingency Fund shall be as follows:

1. The contributions made by the State Entities.

2. The contributions of the National Budget.

3. The financial returns that generate your resources.

4. The portfolio recovery.

PARAGRAFO. Upon incorporation into the Fund's budget, the costs incurred by its administration may be covered by the income of the resources provided by the contributing entities.

ARTICLE 6o. APPROVAL AND MONITORING OF THE VALUATION OF THE CONTINGENCIES. The General Directorate of Public Credit of the Ministry of Finance and Public Credit will approve the assessments of the contingent obligations of the State Entities that make contributions to the Fund. Similarly, this Directorate shall carry out periodic monitoring of the development of the risks covered by the Fund and shall determine the increase or decrease in the contributions that are necessary, in accordance with the budgetary provisions.

ARTICLE 7o. SYSTEM FOR PLACING THE NATION ' S PUBLIC DEBT SECURITIES. For the purposes of the placement of its debt securities, the Nation may use credit institutions as securities intermediaries.

ARTICLE 8o. PROTECTION OF THE HOLDERS OF THE NATION ' S PUBLIC DEBT SECURITIES. 71 of the 1999 Act 510. The new text is as follows: > In accordance with the rules of the Code of Commerce on the movement of securities securities, in criminal proceedings in which the commission of punishable facts is investigated relating to securities entered in the National Registry of Securities and Intermediaries, the measures provided for in Article 14 of the Code of Criminal Procedure shall only be carried out against the authors or members of the punishable act or against any holder who is not in good faith without fault.

ARTICLE 9o. VALIDITY AND REPEAL. This law governs from the date of its promulgation and repeals the provisions that are contrary to it.

The President of the honorable Senate of the Republic,

Amylkar Acosta Medina.

The Secretary General of the honorable Senate of the Republic,

Pedro Pumarejo Vega.

The President of the honorable House of Representatives,

Carlos Ardila Ballesteros.

The Secretary General of the honorable House of Representatives,

Diego Vivas Tafur.

COLOMBIA-NATIONAL GOVERNMENT

PUBLISH AND EXECUTE.

Dada en Santa Fe de Bogota, D. C., on 21 July 1998.

ERNESTO SAMPER PIZANO

The Minister of Finance and Public Credit,

Antonio Jose Urdinola Uribe.