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Original Language Title: Código Orgánico de Planificación y Finanzas Públicas

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Year II -- Quito, Friday 22 October 2010 -- No. 306

NATIONAL ASSEMBLY

PLANNING AND FINANCE ORGANIC CODE

PUBLICATIONS

ING. HUGO ENRIQUE DEL POZO BARREZUETA DIRECTOR

Quito: Avenida 12 de Octubre N 16-114 y Pasaje Nicolás Jiménez Dirección: Telf. 2901-629 -- Offices and sales: Telf. 2234-540 Distribution (Warehouse): 2430-110 -- Manosca Nº 201 and Av. 10 August Branch Guayaquil: Malecon No. 1606 and Av. 10 August-Telf. 2527-107 Annual subscription: US$ 400 + VAT -- Printed on National Editor 1,600 copies -- 32 pages -- Value US$ 1.25 + VAT

Administration of Mr. Ec. Rafael Correa Delgado Constitutional President of the Repub lica

SECOND SUPPLEMENT

2 -- Second Supplement -- Official Record No. 306 -- Friday, October 22, 2010

REPUBLIC OF THE REPUBLIC

Office No. T. 5458-SNJ-10-1558 Quito, October 20, 2010 Engineer Hugo Enrique Del Pozo Barrezueta DIRECTOR OF THE OFFICIAL REGISTER In his office: From my consideration: At the disposal of the President of the Republic and, in accordance with the provisions of Articles 137 of the Constitution of the Republic and 63 of the Organic Law of the Legislative Function, refer to you the ORGANIC CODE OF PLANNING AND PUBLIC FINANCES, duly sanctioned in original and in certified copy, as well as the Certificate of discussion of the aforementioned Code in the National Assembly, in order to be published in the Official Register. After the respective publication, I would like to thank you for sending the original copy to the National Assembly for the relevant purposes. Intently, f.) Dr. Alexis Mera Giler, National Legal Secretary.

NATIONAL ASSEMBLY

CERTIFICATION In my capacity as Secretary General of the National Assembly, I allow myself to CERTIFY that the Bill of Law -ORGANIC CODE OF PLANNING AND PUBLIC FINANCES, was discussed and approved on the following dates: FIRST DEBATE: 27-Sept-2010 and 07-Oct-2010 SECOND DEBATE: 14-Oct-2010

Quito, October 15, 2010 f.) Francisco Vergara O., Secretary General.

NATIONAL ASSEMBLY

Considering:

What, Article 3 of the Constitution of the Republic establishes as the primary duty of the State to plan national development, eradicate poverty, promote sustainable development and the equitable redistribution of resources and wealth. to access the good living; that, article 85 of the Constitution of the Republic defines public policies as guarantees

constitutional rights, and therefore it is necessary to establish the roles that the different actors exercise public, social and citizen in the field of the formulation, implementation, evaluation and control; that it is necessary to regulate the processes, instruments and institutionality of the Decentralized National System of Participatory Planning established in Article 279 of the Constitution of the Republic and its relationship with the participation established in Article 100 of the Constitution of the Republic, in the Organic Law of Participation and in the Organic Code of Territorial Organization, Autonomy and Decentralization, in the framework of public policy processes and planning of all levels of government in the field of their constituencies Article 280 of the Constitution of the Republic establishes that the National Development Plan is the instrument to which public policies, programs and projects will be subject; programming and implementation of the State budget; and investment and allocation of public resources; and coordinating the exclusive competences between the Central State and the decentralised autonomous governments. Its observance will be binding on the public sector and is indicative of the other sectors. It is therefore necessary to regulate the application of the principles of coordination established constitutionally; that Article 283 of the Constitution of the Republic establishes that the economic system is social and solidarity; it recognizes the human as a subject and an end; it proposes a dynamic and balanced relationship between society, state and market, in harmony with nature; and aims to ensure the production and reproduction of material and immaterial conditions That, article 284 of the Constitution of the Republic establishes the The objectives of economic policy, among which are: to ensure adequate distribution of income and national wealth; to stimulate national production, productivity and systemic competitiveness, the accumulation of knowledge scientific and technological, the strategic insertion into the world economy and the complementary productive activities in regional integration; and, maintaining economic stability, understood as the maximum level of sustainable production and employment in the time; that, article 285 of the Constitution of the Republic establishes as specific objectives of the fiscal policy the financing of services, investment and public goods, the redistribution of income through adequate transfers, taxes and subsidies, the generation of incentives for investment in the different sectors of the economy and for the production of goods and services, socially desirable and environmentally acceptable; that, Article 286 of the Constitution of the Republic provides that public finances, at all levels of government, be conducted in a sustainable, responsible and transparent manner, and shall ensure stability That, for the procurement of public debt, the law must provide for authorization by a debt committee and

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financing, granting of debt guarantees by the State, the competent bodies that will conduct financial analysis, social and environmental factors prior to the impact of projects involving public debt, in order to determine their possible financing as provided for in Articles 289, 290 and 291 of the Constitution of the Republic; whereas Article 292 of the Constitution of the Republic establishes that the General Budget of the State is the instrument for the determination and management of the State's revenues and expenditures, with the exception of those belonging to social security, public banks, public enterprises, and decentralized autonomous governments. This implies the need to establish the instruments and instances of coordination that will ensure the sustainability of public finances, the efficient management of public savings and the preservation of national heritage and good public as the last end of the budget administration; that the decentralized autonomous governments will be subject to fiscal rules and internal indebtedness, analogous to those of the General Budget of the State, according to the Law, as the Article 293 of the Constitution of the Republic; That, in the field of finance The government has a profound reform to recover the functionality of these resources in order to facilitate the state's action, since the current regulations are designed to comply with the economic programs that have been implemented. priority in short-term fiscal stability and set aside medium and long-term development goals, citizen participation and good living guarantees;

What, the current legislation on public finances in the Ecuador is divided into several legal bodies, both organic and inferior. This dispersion of legislation causes its application to become confused, overlaid and fragmented, even sometimes contradictory. The evolution of these legal bodies has been subject to the economic and political events of the moment. This cyclical functionality of the laws has led to the regulation governing public finances losing its main objective: to facilitate the action of the State as a legitimate expression of the collective action of society;

83 of the Constitution of the Republic, in establishing the duties and responsibilities of Ecuadorians and Ecuadorians, precept as part of these, to promote the common good and to put the general interest before the particular interest, to administer honorably and with unrestricted attachment to the law the public patrimony, assume the public functions as a service to the community and to be accountable to society and to the authority, to preserve the cultural and natural heritage of the country and to care for and maintain public goods, to participate in the political, civic and community life of the country honest and transparent. Duties and responsibilities to be observed also in the relationship between the citizenry and the State for the administration of public finances; and,

In exercise of the powers laid down in Article 120, number 6 of the Constitution of the Republic, issue the following:

ORGANIC CODE OF PLANNING AND PUBLIC FINANCES

PRELIMINARY TITLE

OF THE PROVISIONS OF THE PROVISIONS IS TO THE

PLANNING AND PUBLIC FINANCES Art. 1.-Object.-This code aims to organize, normalize and link the System National Decentralized of Participatory Planning with the National System of Public Finance, and regulate its functioning in the different levels of the public sector, in the framework of the regime of development, of the regime of good living, guarantees and constitutional rights. The provisions of this Code govern the exercise of the planning powers and the exercise of public policy at all levels of government, the National Development Plan, the development plans and the territorial planning Decentralised Autonomous Governments, the four-year public sector budget programming, the General Budget of the State, the other budgets of public entities, and all public resources and other applicable instruments to the Planning and Public Finance. Art. 2.-Guidelines for development.- For the implementation of this code, through development planning and public finances, the following guidelines shall be considered: 1. Contribute to the exercise of the guarantee of rights of the

citizenship that this Code includes people, communities, peoples and nationalities through public policies, equitable allocation of public resources, and results management;

2. Promote citizen participation and social control in the formulation of public policy, which recognizes the diversity of identities; as well as the rights of communities, peoples and nationalities;

3. To contribute to the construction of a social, solidarity and sustainable economic system that recognizes the different forms of production and work, and promotes the transformation of the primary economic structure, the forms of accumulation of wealth and equitable distribution of development benefits;

4. Promote the territorial balance, within the framework of the unity of the State, that recognizes the social and environmental function of the property and ensures a fair distribution of the burdens and benefits of public and private interventions;

5. Strengthen the process of building the plurinational and intercultural state, and contribute to the exercise of the rights of peoples, nationalities and communities and their institutions;

6. Strengthen national sovereignty and Latin American integration through public policy decisions; and,

7. To promote through public policy, harmonious coexistence with nature, its recovery and conservation.

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Art. 3.- Objectives.- This code has the following objectives: 1. Normar the National Decentralized System of

Participatory Planning and the National System of Public Finance, as well as the linkage between them;

2. Articulate and coordinate national planning with the planning of the various levels of government and between them; and,

3. Define and regulate the integrated management of Public Finance for the various levels of government.

Art. 4.-Scope.- code shall be subject to all entities, institutions and bodies covered by Articles 225, 297 and 315 of the Constitution of the Republic. The faculty of autonomous management, political, administrative, economic, financial and budgetary management shall be respected that the Constitution of the Republic or the laws establish for the institutions of the public sector. For the purposes of the Decentralized National System of Participatory Planning, the institutions of central government and decentralized autonomous governments will apply the rules of this code with respect to: 1. The direction of public policy, exercised by the

central government and decentralized autonomous governments and the processes and instruments of the Decentralized National System of Participatory Planning, within the framework of their competencies;

2. The coordination of the planning processes of the

development and territorial planning, at all levels of government;

3. Coordination with participation instances

defined in the Constitution of the Republic and the Law; and,

4. The coordination of planning processes with

the other functions of the State, social security, public banking and public enterprises, in order to promote their articulation with the National Development Plan and the plans of development and territorial ordering, as appropriate.

Art. 5.-Common Principles.- For the application of the provisions contained in this code, the following principles shall be observed: 1. Subject to planning.- The programming, formulation, approval, allocation, implementation, monitoring and evaluation of the General Budget of the State, the other budgets of public entities and all public resources, will be subject to the guidelines for the planning of the development of all levels of government, in accordance with the provisions of Articles 280 and 293 of the Constitution of the Republic. 2. Fiscal sustainability.- It is understood by fiscal sustainability to the tax capacity of income generation, the execution of expenses, the management of financing, including indebtedness, and the proper management of assets, liabilities and " Public-character assets that allow

to ensure the execution of public policies in the short, medium and long term, in a responsible and timely manner, safeguarding the interests of present and future generations. Planning at all levels of government should be consistent with criteria and guidelines for fiscal sustainability, in accordance with the provisions of Article 286 of the Constitution of the Republic. 3. Coordination.- The entities that are responsible for development planning and public finances, and all the entities that are part of the planning and public finance systems, have a duty to coordinate actions for the cash fulfilment of its aims. 4. Transparency and access to information.- The information generated by the planning and public finance systems is freely available, in accordance with the Constitution of the Republic and this code. The competent authorities of these systems shall, in a permanent and timely manner, account and provide the means necessary for social control. 5. Citizen Participation.- The entities in charge of development planning and public finances, and all entities that are part of the planning and public finance systems, have a duty to coordinate the mechanisms to ensure participation in the operation of the systems. 6. Decentralization and Disconcentration.- In the operation of the planning and public finance systems, the necessary decentralization and deconcentration mechanisms will be established, which will allow efficient and close management of the population. Art. 6.- Joint Responsibilities.- The entities in charge of the national development planning and the public finances of the executive function, however the exercise of their powers, shall jointly carry out the following processes: 1. Assessment of fiscal sustainability.- In order to analyze the fiscal performance and its interrelations with the real, external, monetary and financial sectors, the evaluation of the sustainability of public finances in the framework will be carried out. of the economic programming, for which the annual and quadriannual fiscal programming, as well as the fiscal policy, will be analyzed. 2. Coordination.- The entities in charge of national planning, public finances and economic policy shall be subject to the coordination mechanisms established in the regulation of this code. 3. Public investment programming.- The programming of public investment is to coordinate the prioritization of public investment, the real capacity of the entities to execute, and the ability to cover investment expenditure, with the the purpose of optimising the performance of public investment. 4. Monitoring and evaluation of public finances and planning.- The monitoring and evaluation of the

Second Supplement -- Official Record No. 306 -- Friday, October 22, 2010 -- 5

planning and public finances consists of compiling, systematizing and analyzing information about what has been done in these subjects to provide objective elements for the adoption of corrective measures and to take further public action. For this purpose, the budgetary execution and performance of public sector entities, agencies and companies should be monitored and evaluated in line with the goals of the fiscal programming and the National Development Plan. In order to fulfil these responsibilities, institutions that are responsible for national development planning and public finances may request the assistance and participation of other public entities, in accordance with their needs. Such entities shall be required to meet the costs of such requirements. Art. 7.-Of the conditions for the management of Public Finance.- The entities in charge of national planning and public finances will agree and define the policy guidelines of a general nature, which will be mandatory for public finances, subject to the National Development Plan. These guidelines will not establish operational procedures. Art. 8.-Participatory budgets in government levels.- Each level of government will define the procedures for the formulation of participatory budgets, in accordance with the Law, within the framework of its competencies and priorities defined in the development and territorial order plans.

BOOK I

PARTICIPATORY PLANNING FOR DEVELOPMENT

TITLE I

OF DEVELOPMENT PLANNING AND

THE POLICY PUBLIC

FIRST CHAPTER

OF DEVELOPMENT PLANNING Art. 9.- Planning of development.- The planning of development is oriented towards the fulfilment of constitutional rights, the regime of development and the regime of good living, and guarantees the territorial order. The exercise of public powers should be framed in the planning of development that will incorporate the approaches of equity, plurinationality and interculturality. Art. 10.-National planning.- National planning is the responsibility and competence of the Central Government, and is exercised through the National Development Plan. For the exercise of this competence, the President or President of the Republic may have the way in which the executive function is organized institutionally and territorially. The central government is responsible for planning at national level, with respect to the territorial impact of its exclusive competences as defined in Article 261 of the Constitution of the Republic, the private sectors and sectors. strategic areas defined in article 313 of the Constitution of the Republic, as well as the definition of the

habitat and housing policy, the national system of heritage areas and the special economic development zones, and the other to be determined in the Law. To this end, a National Territorial Strategy will be developed as a complementary instrument of the National Development Plan, and procedures for coordination and harmonization between the central government and the decentralized autonomous governments. to allow the articulation of the territorial planning processes in the field of their competences. Art. 11.-From the unconcentrated exercise of national planning.- The executive function will formulate and implement national and sectoral planning with a territorial approach and in a deconcentrated manner. For this purpose, it will establish the appropriate instruments that will support the territorialized planning of public spending and will form spaces for coordination of executive function at regional, provincial, municipal and county levels. Furthermore, the relationship of the unconcentrated executive function with the decentralized autonomous governments, civil society and the citizenry will be promoted in the framework of the participation instances of each level of government in accordance with the Law. Art. 12.-Planning of Decentralized Autonomous Governments.- The planning of development and territorial planning is the responsibility of the autonomous decentralized governments in their territories. It will be carried out through its own plans and other instruments, in coordination and coordination with the different levels of government, in the field of the Decentralized National System of Participatory Planning. Art. 13.-Participatory planning.- The central government will establish the mechanisms of citizen participation that are required for the formulation of plans and policies, in accordance with the laws and regulations of this code. The Decentralized National System of Participatory Planning will host the mechanisms defined by the system of citizen participation of the autonomous decentralized governments, regulated by normative act of the corresponding level of government, and shall promote the guarantee of participation and democratization as defined in the Constitution of the Republic and the Law. Skills and ancestral knowledge will be used to define mechanisms for participation. Art. 14.-Approaches of equality.- In the exercise of planning and public policy coordination spaces will be established, in order to incorporate gender, ethnic-cultural, generational, disability and mobility approaches. In the definition of public actions, these approaches will be incorporated to achieve the reduction of socio-economic gaps and the guarantee of rights.

The policy proposals formulated by the National Councils of the Equality will be collected in intersectoral coordination agendas, which will be discussed and agreed upon in the Sectoral Councils of Policy for inclusion in the sectoral policy and subsequent implementation by the ministries of State and other implementing bodies.

6 -- Second Supplement -- Official Record No. 306 -- Friday, October 22, 2010

CHAPTER SECOND

OF PUBLIC POLICY

Art. 15.-From public policies.- The definition of national public policy corresponds to the executive function, within the scope of its competences. Ministries, secretariats and sectoral policy councils will formulate and implement sectoral policies and plans with a territorial approach, strictly subject to the objectives and goals of the National Development Plan. The decentralized autonomous governments will formulate and implement the local policies for the management of the territory in the field of their competences, the same ones that will be incorporated in their plans of development and territorial planning and in the regulatory instruments to be issued for the purpose. For the definition of the policies, the participatory mechanisms established in the Constitution of the Republic, the laws, in the normative instruments of the Autonomous Decentralized Governments and in the regulation of this code will be applied. Art. 16.-Articulation and complementarity of public policies.- In the processes of formulation and implementation of public policies, coordination mechanisms will be established to ensure coherence and complementarity between public policies.

this effect, the planning instruments of the decentralized autonomous governments will encourage the incorporation of the interventions that require the participation of the unconcentrated of the executive function; also the disconcentrated entities of the function They will incorporate into their planning instruments the interventions that will be implemented in a concerted manner with the decentralized autonomous governments. Art. 17.-methodological instructions.- The National Secretariat for Planning and Development will develop methodological instructions for the formulation, monitoring and evaluation of national and sectoral public policies.

The decentralized autonomous region will develop the methodological instructions necessary for the formulation, monitoring and evaluation of its development and territorial planning plans, in accordance with the guidelines issued by the National Council of Planning.

TITLE II

OF THE NATIONAL SYSTEM DECENTRALIZED

PARTICIPATORY PLANNING

FIRST CHAPTER

OF THE GENERALITIES Art. 18.- Decentralized National System of Participatory Planning.- Constitutes the set of processes, entities and instruments that allow the interaction of different actors, social and institutional, to organize and coordinate development planning at all levels of government.

Art. 19.-Principles of the System.- The Decentralized National System of Participatory Planning will be guided by the principles of compulsory, universality, solidarity, progressiveness, decentralization, deconcentration, participation, deliberation, subsidiarity, pluralism, equity, transparency, accountability and social control. The operation of the system will be geared towards achieving results. Art. 20.-System Objectives.- These are objectives of the Decentralized National System of Participatory Planning: 1. Contribute, through public policies, to the

progressive compliance with constitutional rights, the objectives of the development regime and provisions of the good living regime, in accordance with the provisions of the Constitution of the Republic;

2. Generate the mechanisms and instances of planning and public policy coordination at all levels of government; and,

3. Orient public management toward achieving results, which contemplates tangible and intangible impacts.

CHAPTER SECOND

OF THE ITEMS. 21.-National System Entities Participatory Planning Decentralized.- The central government and decentralized autonomous governments make up the Decentralized National System of Participatory Planning. Additionally, they are part of the Decentralized National System of Participatory Planning: 1. The National Planning Council;

2. The Technical Secretariat of the System;

3. The Planning Councils of the Decentralized Autonomous Governments;

4. The Executive Function Public Policy Sectoral Councils;

5. The National Councils of Equality; and,

6. The instances of participation defined in the Constitution of the Republic and the Law, such as the Citizens ' Councils, the Advisory Councils, the instances of participation of the Autonomous Decentralized Governments and special regimes and others that conform to the exercise of participatory planning.

FIRST SECTION

OF THE NATIONAL PLANNING COUNCIL

Art. 22.-National Planning Council.- It is the top body of the Decentralized National System of Participatory Planning, and will have legal status of public law.

Second Supplement -- Official Registration No. 306 -- Friday, October 22, 2010 -- 7

Its nature and conformation will respond to the constitutional principles of equity, plurinationality, interculturality and warranty of rights, within the framework of the provisions of the good-life regime and the development regime. The formation of the Council will ensure the intersectoral and territorial approach to public policy. To this end, the systems provided for in Article 275 of the Constitution of the Republic and the areas of coordination of national planning that are defined in the central government should be considered. Art. 23.-Conformation.- The National Planning Council shall be made up of the following members, who shall act with a voice and vote: 1. The President or President of the Republic, who

shall preside and have a vote of the right; 2. Four representatives of the Autonomous Governments

Decentralized, one for each level of government elected through polling stations at each level of government;

3. Seven executive function delegates, appointed

by the President or President of the Republic, from the areas listed in the previous article;

4. The National Secretary for Planning and Development; 5. Four representatives of civil society, elected from

compliance with the Law, seeking the application of the principles of interculturality, plurinationality and equity; and,

6. The President or President of the Board of Education

Superior. The official or official of the Council shall act as the Secretary of the Council of the Council of the President or President of the Republic. Their duties shall be defined in the Regulation of this Code. The Finance Minister will participate in the Council with a voice and no vote. The National Secretary for Planning and Development will act as Vice President of the Council. The operation of the National Planning Council shall be governed by this code and its rules of procedure. The decisions of the Council shall be expressed by binding resolutions for all the entities that make up the System, within the framework of the functions defined in this Code. Art. 24.-Functions.- The National Planning Council will perform the following functions: 1. Dictate the guidelines and policies that guide and

consolidate the Decentralized National System of Participatory Planning, incorporating the principles of equity, plurinationality, interculturality and guarantee of rights;

2. Know and approve the National Development Plan to

proposal of the President of the Republic;

3. Know the results of the National Development Plan's annual assessment;

4. Establish the corrective actions needed to optimize the

achievement of the goals of the National Development Plan; and,

5. The others that the Law or other normative instruments

assign to it. Art. 25.-Functions of the Council Presidency.- The President or Chairman of the National Planning Council will have the following functions: 1. Chair of the sessions of the National Council of

Planning. In his absence, delegate the presidency to the Vice-President of the Council with a voice and vote.

2. Convene ordinary and extraordinary sessions

of the Council, establishing the agenda; 3. Creating committees to facilitate the formulation and taking of

national public policy decisions, the same as those that will be part of the Tip; and,

4. The others that are inherent in their function, by virtue

of the Constitution of the Republic and the Law.

SECTION SECOND

OF THE COORDINATION OF THE NATIONAL DECENTRALIZED PLANNING SYSTEM

PARTICIPATIVE Art. 26.- The Technical Secretariat of the Decentralized National System of Participatory Planning will be carried out by the National Secretariat for Planning and Development. For the coordination of the Decentralized National System of Participatory Planning, the National Secretariat for Planning and Development will have the following attributions: 1. Prepare a proposal for a National Plan of

Development for the consideration of the President or President of the Republic, with the participation of the central government, the decentralized autonomous governments, the social and community organizations, the private sector and the citizenry;

2. Prepare a proposal for guidelines and policies

that guide the National Decentralized System of Participatory Planning for the knowledge and approval of the National Planning Council;

3. Integrate and coordinate national planning with the

decentralized sectoral and territorial planning; 4. To promote the coherence of national policies

, of their implementation mechanisms and of public investment the central government with the National Development Plan;

5. Provide ongoing technical advice and promote the

training of the entities that make up the Decentralized National System of Participatory Planning;

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6. Track and evaluate the

compliance with the National Development Plan and its instruments;

7. Ensure the articulation and complementarity of the

international non-reimbursable cooperation to the National Development Plan, with efficiency and coherence, promoting its territorialization;

8. Lead the National Information System to

reconcile and consolidate information related to the Decentralized National System of Participatory Planning;

9. Agree and define, in conjunction with the governing body of

public finances, policy guidelines of a general nature and mandatory compliance for public finances;

10. Technically assist the formulation processes of

development and territorial planning plans, when required by decentralized autonomous governments;

11. Agree on methodologies for the development of the cycle

general of decentralized national and territorial planning;

12. Coordinate with the public sector the processes of

decentralization of the State, in line with the policies of the National Development Plan;

13. Promote and conduct relevant studies for the

national planning; 14. Propose technical inputs for consideration of the

National Planning Council; and, 15. The others that determine the Constitution of the

Republic, the Law and other legal norms. Art. 27.-Duties of the National Secretary for Planning and Development.- The National Secretary for Planning and Development will have the following powers: 1. Represent legal, judicial and extra-judicial to the

National Secretariat for Planning and Development; 2. Call the members of the National Council of

Planning for technical meetings on issues related to the development planning;

3. Perform the acts and subscribe to the contracts and

conventions that are necessary for the exercise of their functions; and,

4. Delegate in writing the powers that you consider

convenient. The administrative acts performed by the officials, servants or special representatives or permanent delegates, for the purpose, shall have the same force and effect as if they have been made by the holder or the holder. of that Secretariat and the responsibility will be the responsibility of the delegate officer.

SECTION THIRD

OF THE PLANNING COUNCILS OF AUTONOMOUS GOVERNMENTS

DECENTRALIZED Art. 28. Planning Councils for Decentralized Autonomous Governments.- Planning will be constituted and organized by normative act of the respective Government Decentralized Autonomous; and, they will be integrated by: 1. The maximum authority of the local executive, who

will convene the Council, will preside and will have a dirtvote;

2. A representative of the local legislature; 3. La or the public servant in charge of the instance of

planning the decentralized autonomous government and three decentralized autonomous government officials appointed by the highest authority of the local executive;

4. Three representatives delegated by the instances of

participation, in accordance with the law and their respective regulatory acts; and,

5. A representative of the parish government level

rural in the case of the municipalities; municipal in the case of the provinces; and provincial in the case of the regions.

For the case of the rural parish governments the Council of Planning will be integrated as follows:

1. The Chair of the Parish Board; 2. A representative of the other members of the Board

Parish; 3. An ad honorem technician or server appointed by the

Chairman of the Parish Board; 4. Three representatives delegated by the instances of

participation, in accordance with the law and their respective regulatory acts.

Art. 29.-Functions.- They are the functions of the Planning Councils of the decentralized autonomous governments: 1. Participate in the process of formulating their plans

and issue favorable resolution on the strategic priorities of development, as a prerequisite for its approval to the relevant legislative body;

2. Ensure the consistency of the development plan and

territorial planning with the plans of the other levels of government and the National Development Plan;

3. Verify the consistency of the programming

quadriannual budget and the investment plans with the respective development plan and territorial planning;

Second Supplement -- Official Record No. 306 -- Friday, October 22, 2010 -- 9

4. Ensure the harmonization of the management of

international cooperation not reimbursable with the respective development plans and territorial planning;

5. Know the monitoring and evaluation reports of the

development plan and territorial order of the respective levels of government; and,

6. Delegate the technical representation to the Assembly

territorial.

THIRD CHAPTER

SYSTEM INSTRUMENTS

FIRST SECTION

OF THE INFORMATION FOR PLANNING

Art. 30.-Generalities.- The information for the planning, shall be official and public, shall be generated and administered according to the needs established in the planning instruments defined in this code. The National Secretariat for Planning and Development shall establish the mechanisms, methodologies and procedures applicable to the generation and administration of information for planning, as well as its quality and relevance standards. Additionally, it will define the official character of the data relevant to the national planning, and define the guidelines for the administration, lifting and processing of the information, which will be applicable for the entities that make up the system. Art. 31.-Free access to information.- Information for the construction of public policies will be free of access, both for natural persons and for public and private legal entities, except in cases that point to the Law. For this purpose, the National Secretariat for Planning and Development will be responsible for the National Information System. Art. 32.- National Statistical and Geographic System.- The National Statistical and Geographic System will be the source of information for economic, social, geographic and environmental analysis, which supports the construction and evaluation of the planning of public policy at different levels of government. The statistical and geographic information that complies with the procedures and regulations established by the Law of the Matter, will have the character of official and must be compulsorily delivered by the institutions members of the Statistical System National to the national statistical body for its use, custody and archive. The statistical and geographical information generated or updated by the Autonomous Decentralized Governments will be coordinated with the National Information System. Art. 33.-From the National Information System.- The National Information System constitutes the set

organized of elements that allow the interaction of actors in order to access, collect, store and transform data in information relevant to development planning and public finances. Its characteristics, functions, sources, rights and responsibilities associated with the provision and use of the information shall be regulated by this code, its regulations and the other applicable rules. The information generated by the National Information System shall be coordinated with the entity responsible for the data registry and the public finance entity, as appropriate.

SECTION SECOND

THE NATIONAL DEVELOPMENT PLAN AND THE GUIDELINES AND POLICIES

OF THE SYSTEM Art. 34.-National Development Plan.- The National Development Plan is the highest policy and administrative guideline for the design and implementation of public policy and all instruments, within the scope defined in this code. Their observance is mandatory for the public sector and indicative for other sectors. The National Development Plan articulates the short and medium term public action with a long-term vision, within the framework of the Development Regime and the Good Living Regime provided for in the Constitution of the Republic. The National Development Plan is subject to public actions, programs and projects, public debt, international cooperation, programming, formulation, approval and implementation of the General Budget of the State and the budgets of public banking, public companies at national level and social security. The budgets of the decentralized autonomous governments and their public enterprises will be subject to their own plans, within the framework of the National Development Plan and without undermining their powers and autonomy. The National Development Plan articulates the exercise of the competencies of each level of government. Art. 35.-Long-term policies.- The National Development Plan should incorporate national long-term public policy agreements that have been established by popular consultation. Art. 36.-Contents.- The National Development Plan must integrate, at least, the following elements: 1. Historical context and diagnosis of reality

current national; 2. Long term vision that allows to define perspectives

of medium and long terms; 3. Government policies, strategies, goals and their

compliance indicators; 4. Criteria for orienting the allocation of resources

public and public investment;

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5. Multiannual Investment Plan; 6. Territorial planning guidelines; and, 7. Complementary instruments. Art. 37.-Form of the Plan.-The National Development Plan will be formulated, by the National Secretariat for Planning and Development, for a period of four years, in coherence and correspondence with the President's or President-elect and will consider the general objectives of the plans of the other functions of the State and of the development plans of the Autonomous Decentralized Governments, in the field of their competences. During the process of formulating the Plan you will need to ensure participation instances.

Art. 38.-Approval of the Plan.-The President or President of the Republic, in the year of the beginning of his administration, must present the National Development Plan to the National Planning Council, which will analyze and approve it by resolution. As long as the National Development Plan is not approved, the four-year budgetary programming and the budgetary pro forma cannot be submitted. If the National Development Plan is not approved by the National Planning Council, until ninety days after the administration of the President or President of the Republic has begun, it will take effect under the mandate of this Law. Once approved, the National Development Plan will be referred to the National Assembly for due knowledge.

Art. 39.-Follow-up to the National Development Plan.- The National Secretariat of Planning and Development will coordinate the monitoring and evaluation mechanisms of the National Development Plan in accordance with the procedures defined in the regulation of this Code. The annual report on compliance with the National Development Plan will be presented by the President or President of the Republic to the National Assembly. In the event of any corrective or modification to the National Development Plan, the President or President of the Republic shall put to the consideration of the National Planning Council such a proposal, which shall be known and approved within a period of time. greater than ten days.

Art. 40.-Guidelines and policies of the Decentralized National System of Participatory Planning.- The National Planning Council will approve the guidelines and policies that will guide the National Decentralized Planning System. Participative, the same ones that will be presented by the National Secretariat of Planning and Development to the Council. These guidelines and policies will be mandatory for central government, decentralized and indicative autonomous governments for other public sector entities and other sectors.

SECTION THIRD

THE DEVELOPMENT AND territorial-ORDERING PLANS OF THE

DECENTRALIZED AUTONOMOUS GOVERNMENTS Art. 41.-Development Plans.- The development plans are the main guidelines of decentralized autonomous governments regarding strategic development decisions in the territory. These will have a long-term vision, and will be implemented through the exercise of their powers assigned by the Constitution of the Republic and the Laws, as well as those that are transferred to them as a result of the process of decentralisation. Art. 42.-Minimum content of development plans.- In accordance with the provisions of the Code of Territorial Organization, Autonomy and Decentralization (COOTAD), the development plans of the decentralized autonomous governments must be contain, at least, the following:

a) Diagnosis.- For the elaboration of the diagnosis, the decentralized autonomous governments must observe, at least, contents that describe the inequities and territorial territorial imbalances, potential and opportunities of its territory, the situation deficit, the existing projects in the territory, the relations of the territory with the surrounding areas, the possibility and the requirements of the territory articulated to the National Development Plan and, finally, the current territorial model;

b) Proposal.- For the elaboration of the proposal, the

decentralized autonomous governments will take into account the medium and long-term vision, objectives, policies, strategies, outcomes and goals desired, and the model territorial to be implemented to make the achievement of its objectives viable; and,

c) Management model.- For the elaboration of the management model

, the decentralized autonomous governments must specify at least the specific data of the programs and projects, estimated schedules and budgets, instances responsible for implementation, monitoring, evaluation and feedback system that facilitate accountability and social control.

The development plans of the decentralized autonomous governments will consider the objectives of the plans of the upper and lower levels of government. Art. 43.-Territorial Planning Plans.-Territorial planning plans are the instruments of development planning that aim to order, reconcile and harmonize strategic development decisions with respect to the development of the of human settlements, economic-productive activities and the management of natural resources according to the territorial qualities, through the definition of guidelines for the materialization of the long-term territorial model, established by the respective level of government.

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Territorial planning plans must articulate the territory's development policies and guidelines, within the framework of the competencies of each level of government and shall ensure that the social and environmental function of the property is respected. Rural parish governments will be able to formulate a single development plan and territorial arrangement. Regional, provincial and parochial territorial planning plans shall be linked to each other and must be required to observe, in a compulsory manner, the provisions of the cantonal and/or district territorial planning plans for the allocation and regulation of land use and occupation. The updating of the territorial management instruments should be consistent with the development planning instruments in force at each level of government. Art. 44.-General provisions on the plans of territorial planning of decentralized autonomous governments.- Without prejudice to the provisions of the Law and the provisions of the National Council of Competences, the plans of the territorial autonomous governments will observe the following criteria:

a) The regional and provincial territorial planning plans will define the productive and environmental economic model, infrastructure and connectivity, corresponding to its territorial level, the same as shall be considered as input for the allocation and regulation of land use and occupation in the cantonal and/or district territorial planning plans;

b) The cantonal territorial planning and/or

district

will define and regulate the use and occupation of the soil that contains the location of all the activities that settle in the territory and the normative dispositions that are defined for the effect.

It is exclusively for the municipal and metropolitan governments the regulation, control and sanction in respect of land use and occupation in the canton territory. Territorial planning decisions at this level will rationalize interventions in the territory of all decentralized autonomous governments.

The cantonal and/or district territorial planning plans do not confer rights but under the constant express provisions in the Law and in the regulations of the municipal and district decentralized autonomous governments.

Regarding the cantonal and/or district territorial planning plans apply, in addition, the relevant rules provided for in the Territorial Organisation Code; Autonomies and Decentralization (COOTAD); and,

c) The definitions relating to rural parish territory, formulated by rural parish boards, will be coordinated with the provincial, cantonal, territorial models and/or district.

Art. 45.-Mechanisms of coordination.- The Law will define the procedures for coordination and harmonization of the territorial planning of decentralized autonomous governments, and of these with the sectoral competences with territorial impact exercised by the central government. The central government may formulate special territorial planning instruments for national strategic projects. These instruments shall lay down general guidelines to be considered in the planning and territorial planning processes of the respective levels of government. Art. 46.-Participatory formulation.- The development and territorial planning plans of the decentralized autonomous governments will be formulated and updated with citizen participation, for which the participatory mechanisms will be applied established in the Constitution of the Republic, the Law and the regulations issued by the autonomous decentralized governments. Art. 47.-Approval.- For the approval of the development and territorial planning plans, the vote of the absolute majority of the members of the legislative body of each decentralized autonomous government will be counted. If this vote is not to be taken, a vote will be taken in a new session with the simple majority of the members present. Art. 48.-Vigency of the plans.- The plans for development and territorial planning shall enter into force on the basis of their issue by means of the relevant regulatory act. It is the obligation of each decentralized autonomous government to publish and disseminate their respective development plans and territorial planning, as well as to update them at the beginning of each management. Art. 49.-Subject to plans for development and territorial planning.- The development and territorial planning plans will be mandatory for the development of investment plans, budgets and other management instruments. each decentralised autonomous government. Art. 50.-Monitoring and Evaluation of the Development and Territorial Planning Plans.- Decentralized autonomous governments should conduct periodic monitoring of the proposed goals in their plans and evaluate their compliance with the

National Secretariat for Planning and Development, in conjunction with the decentralized autonomous governments, will formulate the general guidelines for the implementation of the this provision, which shall be approved by the National Council of Planning. Art. 51.-Information on the fulfillment of goals.- In order to optimize public interventions and to apply the numeral 3 of Art. 272 of the Constitution the autonomous decentralized governments will report annually to the National Secretariat of Planning and Development the fulfillment of the proposed goals in their respective plans.

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SECTION FOURTH

OF SYSTEM COMPLEMENTARY INSTRUMENTS

Art. 52.- Supplementary instruments.- The quadriannual budgetary programming and the budgets of public entities are complementary instruments of the National System of Participatory Planning. Art. 53.-National Territorial Strategy.- The National Territorial Strategy is the instrument of national planning that forms part of the National Development Plan and guides the decisions of territorial planning, of national scale,

their formulation, comprehensive policies will be proposed for border areas, the Amazon, and the special Galapagos regime. Art. 54.-Institutional plans.- The institutions subject to the scope of this code, excluding the Autonomous Decentralized Governments, will report to the National Secretariat for Planning and Development of their planning instruments. institutions, to verify that the proposals for actions, programs and projects correspond to the institutional competencies and objectives of the National Development Plan.

The National Secretariat for Planning and Development will define the reporting instrument. Technical regulations will establish the necessary methodologies, procedures, deadlines and instruments, which will be mandatory.

PARAGRAFO 1º

OF PUBLIC INVESTMENT AND ITS INSTRUMENTS

Art. 55.-Definition of public investment.- For the application of this code, public investment will be understood as the set of discharges and/or transactions that are made with public resources to maintain or increase the wealth and social capabilities and the State, in order to meet the objectives of the planning. Art. 56.- Viability of programs and public investment projects.- The implementers of public investment programs and projects must have the feasibility assessment and the studies that support them. Art. 57.-Investment Plans.- The investment plans are the technical and financial expression of the set of programs and investment projects, duly prioritized, programmed and territorialized, in accordance with the provisions of this code. These plans are aimed at achieving the objectives of the development regime and the plans of the central government and the autonomous decentralized governments. Art. 58.-The timing of the plans and their financial expression.-The investment plans will be four-yearly and annual. The financial expression of the four-year plans allows for multiannual budgetary certification, continuity of implementation of public investment, should be formulated and updated in line with budgetary programming.

The financial expression of each annual investment plan is the respective annual investment budget. Art. 59.-Scope of the investment plans.-The investment plans of the general budget of the State will be formulated by the National Secretariat for Planning and Development. In the field of Public Enterprises, Public Banking, Social Security and decentralized autonomous governments, each entity will formulate their respective investment plans. Art. 60.-Priority of programs and investment projects.- The programs and investment projects that the National Secretariat of Planning and Development include in the annual investment plan of the general budget of the State shall be prioritized. according to the National Development Plan, to the Quadrennial Budget Programming and in accordance with the requirements and procedures to be established in the regulation of this code. For institutions that are not part of the General Budget of the State, as well as for universities and polytechnic schools, the granting of such priority will be carried out as follows: 1. For the case of public enterprises, through of their

respective directories;

2. For the case of universities and polytechnic schools, by their highest authority;

3. For the case of the autonomous governments

decentralized, by the maximum executive authority of the decentralized autonomous government, in the framework of what establishes the Constitution of the Republic and the Law;

4. For the case of social security, by its highest authority; and,

5. For the case of public banking, in accordance with their respective legal frameworks; and, in the absence of express provision, will be carried out by each of their directories.

Only the programs and projects included in the Annual Plan of Investments may receive resources from the General Budget of the State. Art. 61.-Bank of projects.- The project bank is the official compendium that contains the programs and investment projects submitted to the National Secretariat for Planning and Development, in order to be considered eligible to receive public financing; and, provides the relevant and territorialized information for the monitoring and evaluation of public investment. The recording of information in the project bank does not imply the allocation or transfer of public resources. No program or project can receive public funding if it has not been properly registered with the project bank. The National Secretariat for Planning and Development shall exercise the management of the project bank, which shall be of a deconcentrated nature and shall establish the requirements and procedures for its operation.

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The project bank will integrate information from the programs and projects of the investment plans defined in this code, from compliance with the procedures laid down in the regulation of this legal body. Institutions which are not part of the general budget of the State shall administer their respective project banks, in accordance with the procedures laid down by their own rules. Art. 62.-Coordination of investment plans.- To promote the sectoral and territorial coordination of investment plans, defined in this code, the National Secretariat for Planning and Development will issue the relevant rules. Art. 63.-Coordination with private investment.- In order to ensure the complementarity between public investment in its different levels and private investment initiatives, the Decentralized National System of Participatory Planning may implement the necessary coordination mechanisms. Art. 64.-Preeminence of national production and incorporation of environmental and risk management approaches.- In the design and implementation of public investment programs and projects, the incorporation of favorable actions will be promoted. ecosystem, mitigation, adaptation to climate change and management of vulnerabilities and human and human risks. In the acquisition of goods and services, necessary for the execution of the programs and projects, it will be privileged to the national production.

PARAGRAFO 2nd

OF THE PLANNING OF THE COOPERATION

INTERNATIONAL REFUNDABLE

Art. 65.-International Non-Refundable Cooperation.- It is understood by international cooperation that the mechanism by which the Republic of Ecuador grants, receives, transfers or exchanges resources, goods, services, capital, is non-refundable. knowledge and/or technology, with the aim of contributing to or complementing national initiatives for the achievement of the objectives of the planning. Non-refundable international cooperation comes from external sources of public and/or private nature from entities and bodies carrying out such activities. International non-refundable cooperation is promoted, managed, implemented, monitored and evaluated through the entities established in this code. Art. 66.- Principles of international cooperation.- Are principles of international cooperation with the Republic of Ecuador sovereignty, independence, legal equality of states, peaceful coexistence, self-determination of peoples, as well as integration, solidarity, transparency, equity and respect for human rights. Art. 67.-National policy of non-refundable international cooperation.- The national policy of non-refundable international cooperation will be adapted to what

establishes the National Development Plan and the foreign policy of the State. Art. 68.- Management of non-refundable international cooperation.- The management of non-refundable international cooperation, exercised by the decentralized autonomous governments, will be guided by national and respective policies. development and territorial planning plans. Art. 69.-Approval, registration and control.-The approval of programs and projects of non-refundable international cooperation shall be carried out in accordance with the procedures for the prioritization of public investment programs and projects, and carry out the National Secretariat for Planning and Development, with the exception of those who receive and execute the universities, polytechnic schools, decentralized autonomous governments, and social security. In these cases, the programs and projects will be approved by the highest authorities of these entities, within the framework of the guidelines of the national policy for international cooperation. Entities in the public sector, covered by this code, which implement actions, programmes and projects with resources from international non-refundable cooperation, have an obligation to register them with the body. competent technician. The compulsory registration, for the purposes of information, of actions, programmes and projects of international cooperation implemented by the public sector, shall be made before the competent technical body. This body shall be responsible for the monitoring and evaluation of non-refundable international cooperation and for implementing the relevant information system. In the case of international non-financial cooperation, the cooperating person shall submit information in accordance with national law, at least semi-annually, to the competent technical body.

BOOK II

OF PUBLIC FINANCES

TITLE I

OF THE NATIONAL PUBLIC FINANCE SYSTEM

Art. 70.- National System of Public Finance (SINFIP).- The SINFIP comprises the set of rules, policies, instruments, processes, activities, registers and operations that the entities and agencies of the Public Sector, must carry out with the the purpose of managing public revenue, expenditure and financing, subject to the National Development Plan and the public policies established in this Law. All entities, institutions and bodies included in Articles 225, 297 and 315 of the Constitution of the Republic shall be subject to the SINFIP, as provided for in this code, without prejudice to the power of autonomous management of order. administrative, economic, financial, budgetary and organisational that the

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Constitution or laws set for certain entities. Art. 71.-Rectory of the SINFIP.- The rectory of the SINFIP corresponds to the President or President of the Republic, who will exercise it through the Ministry in charge of public finances, which will be the governing body of the SINFIP. Art. 72.-Specific objectives of the SINFIP.- The SINFIP will have as specific objectives the following: 1. Sustainability, stability and consistency of the

management of public finances; 2. The effectiveness of revenue collection

public; 3. The effectiveness, timeliness and equity of the

allocation and use of public resources; 4. Sustainability and legitimacy of indebtedness

published; 5. The effectiveness and integrated management of the liquidity of

public sector resources; 6. Effective and efficient results management; 7. Adequate complementarity in interrelations

between entities and agencies in the sector public and, between them and the private sector; and,

8. The transparency of information about finances

public. Art. 73.-Principles of SINFIP.- The principles of the SINFIP are: legality, universality, unity, pluriannuality, integrality, opportunity, effectiveness, sustainability, regulatory centralization, deconcentration and operational decentralization, participation, flexibility and transparency. Art. 74.-Duties and attributions of the governing body of SINFIP.- The governing body of the SINFIP, as a strategic entity for the country and its development, has the following powers and duties, to be met by the Minister (a) in charge of the finances 1. To formulate and propose, for the approval of the

President or President of the Republic, the fiscal policy guidelines inherent in income, expenditure and financing, in pursuit of the objectives of the SINFIP;

2. Execute the fiscal policy approved by the President or

President of the Republic; 3. To ensure compliance with the objectives of

fiscal policy provided for in the Constitution of the Republic and the laws, in the field of its competence;

4. Analyze the limitations, risks, potential and

fiscal consequences that may affect the sustainability of public finances and the consistency of fiscal performance and inform the relevant authorities of the executive function;

5. To agree and define with the governing body of the National Planning the guidelines of general policy, of mandatory compliance for public finances;

6. Dictate the rules, manuals, instructions, guidelines,

classifiers, catalogues, glossaries and other mandatory compliance instruments by public sector entities for the design, implementation and operation of the SINFIP and its components;

7. Organize the SINFIP and the financial management of the

public sector agencies, entities and agencies, to achieve effectiveness in the allocation and use of public resources;

8. Formulate and update the fiscal programming

multiannual and annual; 9. Formulate the pro forma of the General Budget of the

State, and put it under consideration by the President or President of the Republic, together with the Programming The annual budget and the debt limit, in the terms provided for in the Constitution of the Republic and in this code, after coordination with the established institutions for the effect;

10. Increase and decrease the revenues and expenses that

modify the levels set in the General Budget of the State up to a total of 15% of the figures approved by the National Assembly. In no case will this modification affect the resources that the Constitution of the Republic and the Law assign to the Autonomous Decentralized Governments;

11. Deprivatially dictate policies, rules and

guidelines for permanent expenditures and their management of the State General Budget;

12. Coordinate with other entities, institutions, and

national and international agencies for the development of studies, diagnostics, analyses, and evaluations related to the country's fiscal situation;

13. Require entities, institutions, agencies, and

persons in public and/or private law, information on the use of public resources; in coordination with the National Secretariat for Planning and Development;

14. Participate in and advise on the development of

bills or decrees that have an impact on Public Sector resources;

15. Rule in advance, binding and binding

on any draft law, decree, agreement, resolution, or any other legal or administrative instrument that has an impact on public resources or which generates obligations These are included in the non-financial public sector budgets, with the exception of decentralised autonomous governments. The Laws referenced by this number will be only those that come from

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the initiative of the Executive in which case the prior opinion will take place before the bill is sent to the National Assembly;

16. To celebrate, in the name of the Ecuadorian State, in

representation of the President or President of the Republic, the contracts or agreements inherent in public finances, except those that correspond to other entities and bodies of the State, within the scope of its competencies;

17. Make mandatory and binding rules

on the availability of sufficient financial resources to cover wage increases and other economic and social benefits that are intended to be agreed upon in the collective labor contracts and transactional minutes;

18. Invest the resources of the budget fiscal box

General of the State, as well as authorize and regulate the financial investment of non-financial Public Sector entities;

19. Assign public resources in favor of entities of

public law within the framework of the General Budget of the State, in accordance with the relevant regulations;

20. To rule in advance of the issuance of securities and

obligations on the part of the Central Bank; 21. Advise the entities and agencies of the sector

public, in matters related to the SINFIP; 22. Use financial instruments of the

national and/or international securities market to optimize the financial management of the State;

23. Determine financing mechanisms

public; 24. Normalise the processes of negotiation and contracting of

public borrowing operations; 25. Conduct negotiations and procurement of

public debt operations of the General Budget of the State, and designate (a) Negotiators, while maintaining proper coordination with the entities of the State to which the execution of the projects or programs financed with public debt will be carried out;

26. Participate in the name of the State, in processes of

negotiation of non-refundable international cooperation originating in the exchange or conversion of public debt for projects of public interest, to be agreed with the creditors;

27. Approve or reject the granting of guarantees from the

Republic of Ecuador, for debt to public sector entities and agencies;

28. Carry out the monitoring and evaluation of the management

State prosecutor; 29. Participate in resource cost commissions

for the transfer of competencies to Decentralized Autonomous Governments;

30. Prepare and prepare fiscal statistics and consolidate the budgetary, accounting, financial and public debt information of entities subject to this code;

31. Develop and maintain updated

public financial entities ' records and financial management records;

32. Harmonize, homogenize and consolidate accounting

in the public sector; 33. Develop the Consolidated Financial Statements of the

entities and agencies that are part of the Non-Financial Public Sector;

34. Develop and provide the tax information

required for the formulation of national accounts and tax accounts;

35. Safeguard the shares and securities that are generated

in public management, without prejudice to the legal privileges of other public sector entities;

36. Perform the transfers and payments of the obligations

requested by public sector entities and bodies contracted on the basis of the programming and the availability of cash; and,

37. The others that are assigned to you by the law or by

administrative acts of the Executive Function. Art. 75.-Delegation of powers.- The Minister (or) in charge of public finances may delegate in writing the powers she deems appropriate to do so. The administrative acts performed by the officials, servants or special representatives or permanent delegates to the effect by the Minister (a) in charge of the public finances shall have the same force and effect as if they have done so the holder or the holder of this State Portfolio and the responsibility shall be the responsibility of the delegated official. Art. 76.-Public Resources.-Public resources are defined in Art. 3 of the Law of the Comptroller General of the State. Advances corresponding to public procurement do not lose their quality of public resources, up to the time they are due; the rules applicable to the management of these resources will be the one that corresponds to the legal entities of law private, with the exception of the provisions of the third indent of Article 299 of the Constitution of the Republic the Republic of Mexico. 77.-General Budget of the State.- The General Budget of the State is the instrument for the determination and management of the income and expenditure of all the entities that constitute the different functions of the State. They are not considered as part of the General Budget of the State, income and expenditures pertaining to Social Security, public banks, public enterprises and decentralized autonomous governments. Art. 78.-Classification of Income.- Tax receipts are classified in permanent and non-permanent income, and may be classified in other categories for purposes of analysis, budgetary organization and statistics.

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Permanent Revenue: It is the revenue of public resources that the State through its entities, institutions and agencies The public receive on a continuous, regular and predictable basis. The generation of permanent income does not lead to a decline in national wealth. For this reason, permanent income cannot come from the disposal, degradation or sale of public assets of any kind or from public debt. Non-permanent income: It is the revenue of public resources that the State through its entities, institutions and agencies receive on a temporary basis, for a specific, exceptional or extraordinary situation. The generation of non-permanent income can cause a decline in national wealth. Therefore, non-permanent income may be derived, inter alia, from the sale of public assets or public debt. Art. 79.-Classification of discharges.- Tax returns are classified in permanent and non-permanent discharges, and these may be classified in other categories for purposes of analysis, budgetary organization and statistics. Permanent expenditures: It is the discharge of public resources that the State through its entities, institutions and agencies, make with operational character that require permanent repetition and allow the continuous provision of goods and public services to society. Permanent discharges do not directly generate capital accumulation or public assets. Non-permanent expenditures: It is the discharge of public resources that the State through its entities, institutions and agencies, perform on a temporary basis, for a specific, exceptional or extraordinary situation that does not require repetition permanent. Non-permanent expenditures can directly generate gross capital accumulation or public assets or decrease in liabilities. Therefore, non-permanent expenditures include maintenance expenses performed exclusively to replenish capital wear.

Art. 80.-Guarantee of resources of public entities.- For the transfer of the constitutional preassignments and in order to safeguard the interests of the public entities that generate resources for self-management, which they receive donations, as well as other income from financing; they are not considered part of the permanent and non-permanent income of the Central State, but if of the General Budget of the State, the following: financing; non-reimbursable grants and cooperation; self-management and other income pre-allocations . All income, either from the Central State or from the General Budget of the State and other Public Budgets, must comply with the restriction of Article 286 of the Constitution.

Art. 81.-Fiscal Rule.- To ensure the conduct of public finances in a sustainable, responsible, transparent manner and to ensure economic stability; permanent expenditures will be financed solely and exclusively with permanent income. However, permanent revenues may also fund non-permanent expenditures.

Permanent expenditures may be financed with non-permanent income in the exceptional situations provided for in the Constitution of the Republic, for health, education and justice; subject to the exceptional situation, carried out by the President or the President of the Republic. Compliance with these rules will be checked only on aggregates of: public budget proforms, approved budgets, and settled budgets, based on an annual verification.

TITLE II

SYSTEM COMPONENT

Art. 82.-Components of SINFIP.-It is understood by components of the SINFIP, to each set of processes necessary for the organization and management of the same. The components are: fiscal policy and programming, revenue, budget, public debt, government accounting and treasury. Art. 83.-Coordination.- The components of the SINFIP shall act in a coordinated manner and establish the channels of articulation with each other in order to ensure the integrated operation of the System.

CHAPTER I

FISCAL POLICY AND PROGRAMMING COMPONENT

Art. 84.-Content and purpose.-Comprises the analysis, monitoring and evaluation of fiscal policy, fiscal variables and the annual and multi-annual fiscal programming, in order to alert timely on fiscal impacts, for support economic and administrative elections and strengthen the sustainability of public finances. For this purpose, it will be framed in the institutionality established by the President of the Republic. Art. 85.-Fiscal Policy.- The fiscal policy dictated by the President of the Republic in the fields of income, expenses, financing, assets, liabilities and assets of the Public Sector Non-Financial, will be to the fulfillment of the National Plan of Development and objectives of the SINFIP. The governing body of public finances will recommend fiscal policy guidelines, in coordination with the entities involved. Art. 86.- Coordinated participation in the development of macroeconomic programming.-The governing body of public finances will participate in the elaboration and consolidation of macroeconomic programming in the field of macroeconomic programming. public finances, in the framework of the coordination of the institutionality established for the effect. Art. 87.-Multi-annual and annual fiscal programming.-Fiscal programming of the Non-Financial Public Sector will be multi-annual and annual and will serve as a mandatory framework for the formulation and implementation of the General Budget of the State and the Programming Quadriannual budget, and benchmark for other Public Sector budgets.

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Art. 88.-Phases of multi-annual and annual fiscal programming.- Fiscal programming will have the following phases: 1. Determination of the base fiscal scenario.

2. Articulation with the National Development Plan.

3. Formulation of guidelines for fiscal programming.

4. Determining the final fiscal scenario.

5. Approval. 6. Monitoring, evaluation and updating. Art. 89.-Fiscal studies.- The governing body of public finances will prepare the corresponding studies for the decision-making, the permanent monitoring of the fiscal situation, as well as to assess the impact of the policy proposals and legal reform projects that may affect fiscal performance and the economy, without prejudice to the privileges of the other public entities in relation to the development of studies.

CHAPTER II

OF THE COMPONENT OF REVENUE

Art. 90.-Content and purpose.- Comprises the projection and analysis for the recommendation of policies regarding public revenues and the creation of suitable mechanisms in order to rationalize and optimize the determination and collection. Art. 91.-Resources of business activities.- The resources from national public business activities will enter the General Budget of the State once the costs inherent in each activity and investments are discounted. reinvestment necessary for the purpose of each undertaking. The procedures and time limits for the liquidation and delivery of the resources will be determined in the regulations that the governing body of the public finances will dictate in coordination with the company concerned. The resources from public enterprise activities of the Autonomous Decentralized Governments will be entered into the respective budgets of each Autonomous Government Decentralized under the law. Art. 92.-Subject to fiscal policy.- The determination and collection of public revenues is subject to fiscal policy. The determination and collection of public revenues from the non-financial public sector, with the exception of the own revenues of the Autonomous Decentralized Governments, will be implemented in a delegated manner under the responsibility of the entities and agencies. Authorised by law. Art. 93.-Collection.- Public sector entities, institutions and agencies shall collect public revenue through financial institutions or other mechanisms or means to be established in the law or in technical standards. issued by the governing body of public finances, in coordination with those entities. Art. 94.-Renunciation of income from tax expense.- It is understood by tax expense the resources that the State, at all levels of government, ceases to perceive due to the

deduction, exemption, among other mechanisms, of direct taxes or indirect taxes laid down in the relevant legislation. For the tax expense of the national income, the national tax administration will estimate and deliver to the governing body of the public finances, the quantification of the same and will constitute an annex to the pro forma of the General Budget of the State. For the income tax expense of the decentralized autonomous governments, the unit responsible for the tax administration of each autonomous government will quantify and annex it to the corresponding budgetary pro forma.

CHAPTER III

OF THE BUDGET COMPONENT Art. 95.-Content and purpose.- Comprises the rules, techniques, methods and procedures linked to the forecast of revenue, expenditure and financing for the provision of goods and public services in order to meet the goals of the National Development Plan and policies public. Art. 96.-Stages of the budget cycle.- The budget cycle is mandatory for all public sector entities and bodies and comprises the following stages: 1. Budget programming. 2. Budget formulation.

3. Budget approval.

4. Budget implementation.

5. Budget assessment and monitoring.

6. Closure and budgetary clearance. In order to ensure adequate coordination of inter-institutional processes at all stages of the budget cycle, the governing body of public finances will issue guidelines to all public sector entities, except for Decentralized Autonomous Governments. These guidelines will be referential for Decentralized Autonomous Governments.

SECTION I

BUDGET PROGRAMMING

Art. 97.-Content and purpose.- Phase of the budget cycle in which, on the basis of the objectives determined by the planning and the budgetary availabilities consistent with the expected fiscal scenario, the programmes, projects and projects are defined activities to be incorporated in the budget, with the identification of the goals, the necessary resources, the expected impacts or results of their delivery to the society; and the deadlines for their implementation. The governing body of public finances shall establish, on the basis of the four-year programming, the maximum limits of

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resources to certify and commit for the entities and agencies that make up the General Budget of the State. If the programs and projects exceed the four-year deadline, the governing body will set the maximum limits, prior to the inclusion of the Project in the Investment Program, for which it will coordinate with the national planning authority. in the field of the multiannual programming of public investment. The entities that make up the General Budget of the State, on the basis of these limits, will be able to grant certification and establish multi-annual financial commitments. For entities outside the General Budget of the State, the multiannual limits shall be established on the basis of the assumptions of transfers, allocations and others to be established in the General Budget of the State and in the This Code. The entities subject to this code shall carry out the programming of their budgets in accordance with the provisions of the National Development Plan, budget guidelines and institutional planning.

SECTION II

BUDGET FORMULATION

Art. 98.-Content and purpose.- It is the phase of the budget cycle that consists of the elaboration of the pro-forms that express the results of the budgetary programming, under a standardized presentation according to the catalogues and classifiers budget, in order to facilitate their exposure, enable their easy management, understanding and allow aggregation and consolidation. Art. 99.-Universality of resources.- The resources that for any concept obtain, collect or receive the entities and agencies that make up the General Budget of the State are public resources, so their use cannot be determined directly by those entities or bodies, with the exception of the tax resources generated by the institutions, the same as having specific rules. The constitutional pre-allocations shall be made compulsory each year as expenditure allocations in the General Budget of the State. The State will ensure timely delivery of specific permanent and non-permanent income allocations for Decentralised Autonomous Governments. The governing body of Public Finance, in cases of force majeure, will be able to anticipate transfers to the Autonomous Decentralized Governments, within the same fiscal year, according to the regulation of this code. In the proposal of the General Budget of the State, the supporting documents for revenue and expenditure, as well as estimates of: tax expenditure, subsidies, pre-allocations, contingent liabilities, expenditure for closing the gaps in the equity, among others. In compliance with the Constitution of the Republic only the pre-allocations of such a rule will be able to receive resource allocation, prohibiting the creation of other budgetary preallocations.

Art. 100.-Forms of institutional proforms.- Each entity and body subject to the General Budget of the State will formulate the pro forma of the institutional budget, in which all the necessary expenditures for its management will be included. In the case of investment programmes and projects, only those that have been incorporated in the Annual Investment Plan (PAI), or which have obtained the priority of the Technical Secretariat of the Decentralised National System, will be included. Participatory planning during budget implementation. These pro-forms should be developed in accordance with the National Development Plan, fiscal programming and budget guidelines. The budgetary proforms of public enterprises, decentralized autonomous governments, public banking and social security will incorporate the programs, projects and activities that have been qualified and defined in accordance with the procedures and provisions laid down in this code and other laws. Art. 101.-Standards and Guidelines.- In the formulation of public sector budgetary proforms, including those of public enterprises, decentralised autonomous governments, public banking and social security, the technical standards, guidelines, classifiers and catalogues issued by the governing body of SINFIP. Art. 102.-Content and submission of institutional budgetary proforms.- The pro-forms shall include all the revenue and expenditure provided for in the tax year in which they are to be executed. No public sector entity will be able to exclude resources to cover expenses outside its budget. The authorities of the institutions, whose budgets make up the general budget of the State, will send to the president of the SINFIP the institutional proforms, within the time that the governing body of the public finances will point out in the guidelines budget. Art. 103.-Consolidation and elaboration of the budgetary pro forma.- The governing body of the SINFIP considering the budgetary guidelines issued and the actual availability of resources will review, reform the case, recommend and consolidate the institutional pro-forma, a basis on which it will draw up the pro forma of the General Budget of the State. As far as public investment is concerned, it will coordinate with the governing body of national planning. In the event that an institution or body fails to present its institutional pro forma in a timely manner, the governing body of public finances shall prepare the pro-forms of the entities and bodies that form part of the General Budget of the State, without prejudice to the of the responsibilities to which there should be. The governing body of public finances will also draw up the Quadriannual Budget Programming, so that in terms of public investment it will coordinate with the governing body of national planning. The pro forma of the General Budget of the State and the Quadriannual Budget Programming shall be forwarded to the President or President of the Republic, together with a general statement on their justification, content and limit.

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of indebtedness, for consideration and presentation to the National Assembly. In addition, it will be attached to the case, a proposal for General Budget Provisions directly and exclusively related to budgetary implementation. Art. 104.-Prohibition of donations.- Prohibited from public sector entities and agencies to make donations or non-reimbursable allowances, for any concept, to natural persons, bodies or legal persons governed by private law, with the exception of those that correspond to the cases regulated by the President of the Republic, established in the Regulation of this Code, provided that there is a budget item. Art. 105.-Resources allocated by transfer of new skills.- The resources corresponding to the new competences transferred to the decentralised autonomous governments will be included in the budgets of these, for which they will be perform the respective reduction in the budgets of the entities performing the transfer in accordance with the law.

SECTION III

BUDGET APPROVAL Art. 106.-Applicable legislation.- The approval of the General Budget of the State shall be carried out in the form and terms laid down in the Constitution of the Republic. In the case of a presidential reelection, the re-elected president will send the pro forma 30 days after the results of the second round are proclaimed. In the decentralized autonomous governments, the budget approval deadlines of the year in which the maximum authority is postponed will be the same as the Constitution for the General Budget of the State and this code. Each entity and body that is not part of the General Budget of the State shall approve its budget until the last day of the year before which it is issued. Art. 107.-Budgets carried over.- Until the General Budget of the State of the year in which the President or President of the Republic is postponed, the initial budget of the previous year shall be governed. This same rule will apply in all other public sector budgets. Art. 108.-Obligation to include resources.- Any flow of public resources must necessarily be included in the General Budget of the State or in the Budgets of the Autonomous Decentralized Governments, Public Enterprises, Public Banking and Social Security. Art. 109.-Vigencia and enforcement.- The budgets of the entities and bodies indicated in this code shall enter into force and shall be compulsory as from 1 January of each year, with the exception of the year in which the President of the Republic. Art. 110.-Budget year.- The fiscal year or fiscal year begins on the first day of January and ends on December 31 of each year.

Art. 111.-Consistency of the Budgets- Entities and agencies that do not belong to the General Budget of the State will not be able to approve budgets that involve: 1. Transfer of resources from the Budget

General of the State that does not have previously been considered in that quote.

2. Assumptions different from those used for the

formulation of the General Budget of the State; and, costs and investments incompatible with that budget, in the relevant cases.

Art. 112.-Approval of the budgetary proforms of the Autonomous Decentralized Governments, National Public Enterprises, Public Banking and Social Security.- The budgetary proforms of the entities subject to this code, which are not included in the General Budget of the State, shall be approved in accordance with applicable law and this code. Once the budgets have been approved, they will be sent for information to the governing body of the public finances within 30 days of their approval. National Public Enterprises and Public Banking will also have the same obligation to the National Assembly.

SECTION IV

BUDGET EXECUTION Art. 113.-Content and purpose.- Phase of the budget cycle comprising the set of actions for the optimal use of human talent, and the material and financial resources allocated in the budget for the purpose of obtaining the goods, services and works in the quantity, quality and opportunity provided for therein. Art. 114.-Applicable rules.- The provisions on the programming of implementation, modifications, establishment of commitments, accruals and payment of obligations shall be dictated by the governing body of public finances and shall have the the nature of the obligation for non-financial institutions and bodies in the public sector. Art. 115.-Budget Certification.- No public entity or body may enter into commitments, conclude contracts, or authorize or contract obligations, without the issuance of the respective budgetary certification. Art. 116.-Establishment of Commitments.- The budget appropriations shall be committed at the time when the competent authority, by means of an express administrative act, decides to carry out the expenditure, with or without consideration to comply with, and provided that there is, the respective budgetary certification. In no case shall commitments be acquired for a purpose other than that provided for in the respective budget. The commitment shall remain until the works are carried out, the goods are delivered or the services are provided. As long as the obligation for national and international acquisitions is not required, the commitment may be completely or partially annulled.

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Art. 117.-Obligations.- The obligation is generated and produces final budgetary affectation in the following cases: 1. When inescapably by exception they must

make payments without consideration, according to what the technical budget rules that the governing body of public finances dictate; and,

2. When receiving from third parties, goods or

services acquired by competent authority, by means of a valid administrative act, there has been or no prior commitment.

The record of obligations shall be justified for the numeral 1 and also checked for numeral 2 with the respective authentic documents. For these purposes, supporting documents shall mean those determining a budgetary commitment and, by proof of documents, those showing the delivery of the works, the goods or services contracted. Art. 118.-Modification of the Budget.- The governing body of public finances may increase or lower the revenue and expenditure which will change the levels set in the general budget of the State up to a total of 15% of the figures approved by the National Assembly. In no case will this modification affect the resources that the Constitution of the Republic and the Law assign to the Autonomous Decentralized Governments. These modifications will be brought to the attention of the Economic and Tax Regime Commission of its Regulation and Control of the National Assembly within 90 days of the end of each semester. In all cases and without any exception, any increase in the approved budgets must have the respective funding. These increases and reductions in income and expenditure will not be able to modify the debt limit approved by the National Assembly. The President or President of the Republic, on a proposal from the governing body, will order decreases in the budgets of the entities outside the General Budget of the State, with the exception of the Autonomous Decentralized Governments and the Social Security, where extraordinary and unforeseen situations arise that reduce the flow of income and funding from these budgets. These decrees will not be able to finance new discharges. During the implementation of the Annual Investment Plan of the State General Budget, only programs and/or investment projects that have been prioritized by the National Secretariat for Planning and Development can be incorporated. Only in the case of changes in the general budget of the State involving increases in the total investment budgets of an implementing entity or the inclusion of new programmes and/or investment projects, an opinion shall be required. Favorable to the National Secretariat for Planning and Development. In other cases, the modifications shall be made directly by each implementing entity. Entities and bodies that do not belong to the General Budget of the State will not be able to approve

budgets or modifications that involve transfers of resources from the General Budget of the State and that have not previously been considered in that budget. Only the governing body of public finances may set limitations on the management of sources of financing during budget implementation, compliance with Article 79, shall be checked only in the aggregates of: the pro-forms public budget, approved budgets, and settled budgets, based on an annual verification.

SECTION V

MONITORING AND EVALUATION OF THE

BUDGET EXECUTION Art. 119.-Content and purpose.- Phase of the budget cycle comprising the measurement of the physical and financial results obtained and the effects produced, the analysis of the variations observed, with the determination of their causes and the recommendation of corrective measures. The physical and financial assessment of the implementation of the budgets of the entities referred to in this Code shall be the responsibility of the holder of each entity or body and shall be carried out on a regular basis. The evaluation reports will be submitted to the governing body of public finances in coordination with the National Secretariat for Planning and Development and . The minister in charge of public finances will carry out the six-month global financial assessment of the General Budget of the State and will make it known to the President or President of the Republic and the National Assembly within 90 days of the finished every semester. For decentralised autonomous governments, it will apply a similar rule to its financial and planning units. Each Executive of the Autonomous Decentralized Governments shall present a report on the budgetary implementation to their respective legislative bodies. Art. 120.-Applicable rules.- The provisions on the monitoring and financial assessment of budgetary implementation shall be dictated by the governing body of public finances and shall be binding on the institutions and

SECTION VI

DECOMMISSIONING AND BUDGETARY CLEARANCE Art. 121.-Closing of the budget.- The annual budgets of the public sector will be closed on 31 December of each year. After that date, no commitments or obligations, or any actions or operations of any nature, affecting the closed budget may be entered into. Commitments in the annual budget which, on the last day of December of each year, have not been completely or partially transformed into obligations, shall be cancelled in respect of non-accrual values. The multiannual commitments for unclosed fiscal years are not cancelled, but

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may be eligible for rescheduling in accordance with the administrative acts determined by the entities. In the case of the General Budget of the State, it shall be the responsibility of the governing body for public finances to validate the commitments of previous fiscal years for the new fiscal year in the terms of the present Regulation. Code set. After the closure of the budget, the accounting and budgetary clearance shall be closed in accordance with the technical rules laid down by the governing body of public finances. Art. 122.-Settlement of the budget.- The liquidation of the General Budget of the State shall be issued by Agreement of the Governing Body of the Public Finance until 31 March of the following year, in accordance with the technical rules which it provides for the effect. The same deadline applies to the rest of the Public Sector.

CHAPTER IV

OF THE PUBLIC BORROWING COMPONENT

SECTION I

OF THE CONTENT AND OBJECTIVE Art. 123.-Content and purpose.- The public debt component has under its responsibility to regulate, program, establish financing mechanisms, budget, negotiate, contract, register, control, account and coordinate the approval of operations public debt, government debt management and related operations for efficient debt management. Public debt comprises the public debt of all public sector entities, institutions and bodies from contracts of mutual interest; bond placements and other securities, including securitisations and quotas. participation; agreements for the novation and/or consolidation of obligations; and, those obligations where there is substitution of debtor established by law. They also constitute public debt, the unpaid and registered obligations of the closed budgets. Any value less than 360 days is excluded. In the case of public undertakings, all contracts of mutual interest of the credit type with suppliers that do not require a sovereign guarantee are excluded. In the case of banks and public financial intermediation entities, all transactions that they perform to address their liquidity needs and those for financial intermediation that do not come from foreign debt are excluded. multilateral, supplier, government or banking that requires sovereign guarantee of the State. Contingent liabilities have their origin in specific facts that may or may not occur. The obligation becomes effective with the occurrence of one or more conditions foreseen in the legal instrument that generated it.

The contingent liabilities are not part of the public debt. A contingent liability shall be constituted only in public debt, in the amount corresponding to the part of the obligation that is payable. The contingent debt may originate: 1. When the State, in the name of the Republic of the

Ecuador, grants the sovereign guarantee in favor of public sector entities and agencies that contract public debt.

2. By issuing bonds and more securities securities whose

object is to guarantee taxpayers the return of their contributions.

3. By underwriting warranty contracts for

ensure the use of non-refundable contributions.

4. By contingents assumed by the Ecuadorian State, in accordance with the law, or other obligations assumed in the framework of agreements with international credit institutions.

The contracting of the contingent debt must follow the process of public borrowing, as relevant.

SECTION II

OF THE BORROWING LIMITS, DESTINATION OF RESOURCES AND

OF THE PROJECTS Art. 124.-Limit to public borrowing.- The total amount of the balance of the public debt carried out by all the public sector entities and bodies, in no case The case may exceed 40% (40%) of GDP. In exceptional cases, when debt is required for programs and/or public investment projects of national interest, and such indebtedness exceeds the limit set in this article, the approval of the National Assembly will be required with the absolute majority of its members. When the debt limit is reached, a fiscal strengthening and sustainability plan must be implemented. The governing body of public finances, based on the programming of four-year debt, will regulate the specific limits for entities subject to the scope of this code. On the basis of the four-year budgetary programming, the governing body of public finances will be able to subscribe to public borrowing operations prior to the beginning of the following fiscal years. There shall be no specific destination for indebtedness beyond the provisions of the Constitution and in this Code, for which the Ministry of Finance during budgetary implementation shall allocate these resources to programmes and projects which have the requirements laid down. Mechanisms will be established in the regulation of this Code to ensure that funding, within the constitutional framework and in this Code, can be redeployed in an agile manner between programs and projects. execution of the same.

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The pro forma of the General State Budget will include the annual net borrowing limit for consideration and approval of the National Assembly. Art. 125.-Limits to indebtedness for decentralized autonomous governments.- For the approval and execution of their budgets, each decentralized autonomous government must observe the following borrowing limits: 1. The percentage ratio calculated in each year between the

total balance of its public debt and its total annual revenues, not including indebtedness, shall not be greater than two hundred percent (200%); and,

2. The total amount of the annual debt service, which

will include the respective amortization and interest, must not exceed twenty-five percent (25%) of total annual revenues without including indebtedness.

public and private institutions to grant credits to decentralized autonomous governments that exceed these limits, with the latter having to submit to a plan of strengthening and fiscal sustainability that will be approved by the governing body of the public finances. Art. 126.-Destination of indebtedness.- Public sector entities that require public debt operations will do so exclusively to finance: 1. Programs.

2. Investment projects:

2.1 for infrastructure; and,

2.2 that have payment financial capacity.

3. Refinancing external public debt in more beneficial conditions for the country.

Indebtedness for permanent expenditure is prohibited. With the exception of those provided for in the Constitution of the Republic, for health, education and justice, after qualification of the exceptional situation, carried out by the President or the President of the Republic.

Art. 127.-Responsibility for implementation.-The contracting entity or public body of the debt shall be responsible for the implementation of the projects or programmes to be financed with those resources. In the case of the indebtedness of the General Budget of the State, the public entity responsible for the implementation shall be the one established in the resolution that for the effect dictates the governing body of the public finances.

SECTION III

GENERAL PROVISIONS

Art. 128.-Renunciation to diplomatic complaint.-Any contract or agreement of public debt, concluded by foreigners domiciled or not in the country, whether natural or legal persons, with the Republic of Ecuador or with other entities of the sector public, it implies the condition of renunciation of all claims through diplomatic channels, even if they subscribe outside the Ecuadorian territory.

Art. 129.-Prohibition of financing private sector entities and use of resources originating in debt for permanent expenditure.-All public sector entities are prohibited except public banks and public credit institutions. the carrying out of credit operations in favour of natural or legal persons governed by private law, with the exception of advances. Public banks may do so only in favour of public undertakings in which the State has the majority stake. Any exception to this rule may only be made prior to the authorization of the Debt and Financing Committee and the President or President of the Republic by executive decree. It is also prohibited to cover, with resources arising from public debt, expenditure of a permanent nature, with the exception of constitutional provisions. Art. 130.-Global income recording.-No contract or operation of public debt shall compromise income, assets or property, of a specific nature of the public sector. Except for this prohibition, projects that have a financial capacity for payment, which will be able to commit the future flows and assets generated by these projects. Art. 131.-Payment of debt securities obligations.-In no case shall public sector entities provide certificates, bonds and other bonds of public debt in payment of remuneration for work, which do not come from opinions or those established by law. For other obligations, in addition to the cash payment, payment, assets and securities-securities of the State may be granted on the basis of a fair price and by agreement of the parties. Art. 132.-Registration of debt transactions.-Public debt securities, whether these contracts, agreements or other instruments representative of the public debt transaction, must be registered in the financial governing body public. Art. 133.-Appropriations contracted by the State in favour of public enterprises and/or public financial institutions.-In the case of public companies and public financial institutions that have programs and investment projects in infrastructure or capacity As a priority for the National Secretariat for Planning and Development, the governing body of public finances may carry out credit operations to inject the respective resources to the public undertaking and/or entity. public financial, which will be the program or project executor. The governing body of public finances will establish, if necessary, the feasibility, mechanisms and terms for the restitution by the company or the financial institution, of the values inherent in the respective financing, of what is it shall state in the resolution authorising the relevant indebtedness. Art. 134.-Participation of companies of the lender country.-In the financing contracts, it will be possible to establish stipulations inherent to the participation of the companies of the country of the lender in the execution of the projects, in both the financing is entrusted in terms of profitable, advantageous or concessional to the borrower.

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In such a case, for selection, qualification and award, the procedure establishing the Organic Law of the System will be observed. National of Public Procurement, other laws and regulations.

Art. 135.-Registration on the holding of securities.-Public entities and bodies shall have the obligation to report to the governing body of public finances the holding of securities representing internal or external public debt, for their purposes.

Art. 136.-Modification of terms and conditions.-In the event of substantial modifications of the financial terms and conditions established in the legal instruments with which public debt operations of the State were carried out or of the entities and bodies of the public sector, or of the program or project of investment financed with the resources of the indebtedness, the procedure to be observed for the modification will be the current one to the date in which the modification is realized, in what is relevant. These cases will proceed as set out in the rules of this code.

Art. 137.-Contracts that contribute to the implementation of internal or external public debt operations.- In the case of negotiation, implementation, improvement of public debt operations, placement or repurchase of securities issued by the State, or the novation of debt, was required prior to or concurrent to the conclusion of contracts which, without being of public debt, were indispensable to contribute to the aforementioned purposes, such contracts, excepted from the procedure provided for by the Organic Law of the National System of Contracting Public; however, the governing body of public finances must, for the purpose, issue the procedures governing those contracts, including the selection, qualification and award of contracts. Where, at the discretion of the governing body of public finances, the disclosure of information contained in administrative acts, contracts, conventions or documents related to operations involving the novation of public debt transactions, placement or repurchase of State titles, may generate losses or conditions unfavorable to the interests of the State, the respective acts, contracts, conventions or documentation shall be declared secret and reserved by that Ministry, character which shall be maintained until the pre-auction information is provided or the respective transaction in the securities market in the case of placement and repurchase, or until the end of the respective transaction. Immediately thereafter, all information will be published. Any person who uses or benefits from the information and/or documentation relating to the acts, contracts or conventions referred to in the preceding paragraph shall be repressed as provided for in the Law. A loan agreement may be linked to other trade, export, import, work execution, service delivery, or financial contracts, including bank account management agreements.

SECTION IV OF THE DEBT AND FINANCING COMMITTEE Art. 138.-Debt and Financing Committee.-The Debt and Financing Committee shall be composed of the President (a) of the Republic or its delegate, who shall preside over it; the Minister (a) in charge of the public finances or its delegate and the Secretary (a) National Planning and Development or its delegate. The Under-Secretary (a) in charge of Public Debt shall act as Secretary of the Committee and, where required, shall provide technical advice. This Committee shall meet with the Minister in charge of public finances. The governing body of public finances, under the responsibility of the Secretary, shall keep a file of the minutes and decisions of the Committee. The internal organisation of the Committee and its functioning shall be laid down in the Regulation to be adopted by the Committee itself. Art. 139.-Attribution and authorization.-The Debt and Financing Committee, with observance of the Constitution of the Republic and the relevant legislation, prior to the analysis of the financial terms and stipulations contained in the instruments (a) shall be authorized by resolution, contracting or novation of public debt operations in the General Budget of the State, irrespective of the source of the debt, with the guarantee of the State, where appropriate. In addition, it will authorize the placement or repurchases of securities issued by the State. The Debt and Financing Committee shall regulate the borrowing procedures of the other entities outside the General Budget of the State, and may delegate some of the functions of the previous paragraph to other public entities. Each public sector entity having the status of a legal person governed by public law, with the prior authorisation of the Debt and Financing Committee, may decide definitively on the corresponding indebtedness, and shall assume the the responsibility of the respective indebtedness and the stipulations of contracts or agreements that are inherent, do not affect the sovereignty of the Republic of Ecuador. The Debt and Financing Committee shall be responsible for the financial conditions of the borrowing processes it approves. Art. 140.-Debt and Financing Committee Duties.-They are the duties of the Debt and Financing Committee, the following: 1. Dictar guidelines for the management of public debt. 2. Norse, analyze and approve the financial terms and conditions

of public debt operations. The contracts of mutual public debt of the Decentralized Autonomous Governments and the floating debt are excluded.

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In the case of public debt mutual contracts entered into with multilateral organizations, governments, commercial credits and contracts A supplier loan whose amount does not exceed 0.15% of the General Budget of the State, which does not require a sovereign guarantee, must not have the analysis and recommendation of the Debt and Financing Committee prior to the formal negotiation process with the lender.

3. Approve the financial terms and conditions for

the placement of state securities or the repurchase of public debt, in charge of the governing body of public finances.

4. Regulate the procurement of public debt. 5. Determine substantial modifications to the

public borrowing operations. 6. Set the maximum amount of debt contracting

public, by type, which does not require committee authorization, in cases not covered by this Code.

Art. 141.-Processing and requirements for credit operations.-Any processing of public debt transactions by public sector entities should observe the provisions of this code and be in charge of the financial institution The government will have to verify: 1. That the operation does not exceed the limit of

borrowing provided for in this Code or that set by the National Assembly, for the respective annual fiscal year.

2. That the public debt is sustainable and

convenient to the State in terms of the debt maturity profile and/or the interest rate of the debt and the conditionalities applicable to the indebtedness.

The entities, bodies and institutions of the State benefiting from public debt resources prior to their use shall verify that the project or programme has been declared a priority by the National Planning Secretariat and Development. In the case of indebtedness for national public companies, public financial institutions and decentralized autonomous governments or their companies, the priority will be issued by the board or the decentralized autonomous government, as the case may be. In accordance with the principles of sovereignty and the rights provided for in the Constitution of the Republic, in the operations of external public indebtedness, the legal conditions of the contracts negotiated under the law will be observed and applied. international law and jurisdiction.

SECTION V

ISSUANCE OF BONDS AND OTHER SECURITIES

Art. 142.-Emissions of bonds and other securities.-In consideration of the financing needs and the

market requirements, the governing body of public finances will approve, for consideration and authorization, where applicable, of the Debt and Financing Committee, the issuance of medium or long-term securities and the type of State securities to be issued, as well as their financial terms and conditions of placement. Securities issues including securitisations of other public, financial and non-financial institutions shall require the approval of the governing body of public finances. In the case of issues of securities securities issued by public banks whose annual amount exceeds 0.15% of the general budget of the State, it will have to have the analysis and recommendation of the governing body of public finances. Art. 143.-Deed of issuance.-legally authorized an issue of bonds or other securities, the respective public deed will be used, in which the Minister will intervene (a) in charge of public finances, dealing with emissions from the State or the legal representatives of the public sector entity carrying out the issue. The requirements for public writing and the bonds or securities to be issued shall be laid down in the technical rules issued by the governing body of public finances. Art. 144.-Negotiation of bonds and other securities.-The processing of the issuance of bonds or other securities, in the case of those issued within the General Budget of the State, will be negotiated by the governing body of public finances. Securities issued by other entities shall be negotiated by themselves prior to the authorization of the governing body of public finances, which does not imply a guarantee by the State. Any bond issue, in legal or foreign currency, will be traded on a universal basis through stock exchanges. The exception is the negotiations which are carried out directly between entities and bodies in the public sector. Art. 145.-Official agent.-The payment of capital and interest of the securities of the internal and external public debt, will be made through the Central Bank of Ecuador, as official agent of the State, according to the respective contracts. This provision shall not apply to the issuance obligations of the competent public banking entities.

SECTION VI

OF THE GUARANTEES Art. 146.-Sovereign Guarantees.-The Central State in the name of the Republic of Ecuador may grant sovereign guarantee in favor of public sector entities and agencies, which will contract public debt for the financing of projects and investment programs in infrastructure, or for projects, programs of investment that will generate the necessary profitability for the debt service. The State guarantee can only be provided by

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authorized, when the entity or body of the public sector, including companies of the State, its subsidiaries or subsidiaries, evidence that they have the capacity to pay the respective debt. No sovereign guarantees may be issued to the other entities, agencies and entities of the Public Sector, for debt transactions with a term of less than 360 days. For the granting of a sovereign guarantee, the necessary mechanisms must be established and implemented for the restitution of the values that the State can pay in its capacity as guarantor, in the event of the debtor's failure. In no case shall guarantees be granted by the State or its entities in favor of natural or legal persons governed by private law, including those that are not for profit, with the exception of public banks and those companies of law private with at least 70% of the State's shares. The guarantees granted shall be recorded as contingent debt, and shall only constitute guarantor debt, where the obligation, in the respective amount, is payable to the guarantor. Art. 147.-Dividends in arrears.-The obligations arising from public debt operations, guaranteed by the Ecuadorian State, which are not paid by the public sector entity guaranteed, will be cancelled by the governing body of the public finances in the form and opportunity provided for in relevant contracts or debt agreements. The governing body of public finances, with the account that the debtor or public sector body maintains in public financial institutions, shall take the corresponding resources, in payment of securities which it has cancelled, with the financial costs that have been agreed in the respective securities restitution agreement. If relevant, it shall take the immediate measures and actions necessary for the recovery of the subrogated securities as a guarantor, including through the co-active jurisdiction, of which it is vested, in the terms established in the Civil Procedure Code, for the recovery of obligations owed to the Ecuadorian State.

CHAPTER V

OF THE ACCOUNTING COMPONENT

GOVERNMENT Art. 148.-Content and purpose.- It constitutes the process of systematic, chronological and sequential recording of the economic and budgetary operations of the non-financial institutions and bodies of the Public Sector, expressed in terms of monetary, from the original entry to the accounting records to the presentation of the financial statements; centralization, consolidation and interpretation of the information; further comprises the principles, rules, methods and procedures corresponding to the subject. The purpose of the Government Accounting component is to establish, operate and maintain in each non-financial public sector entity

a single accounting system, which integrates operations, assets, budget and cost, to ensure the production of complete, reliable and timely financial information that allows accountability, decision making, control, adoption of corrective measures and the production of statistics. Public undertakings may have their own accounting systems in accordance with the law and regulation of this Code. For the purposes of consolidation of the accounting and other fiscal information of the Public Sector, non-financial institutions will be obliged to carry out and send accounting reports in the deadlines and formats issued by the governing body of public finances for the purpose. Art. 149.-Registration of financial and material resources.- The accounting component shall include the registration of all financial and material resources administered by public authorities even if they belong to third parties, in such a way that no resource is excluded from the financial reporting and registration process. Art. 150.-Accounting organization.- Each entity shall establish the unit responsible for the execution of the Government Accounting Component. Art. 151.-Financial institutions and implementing units responsible.- The financial entities and implementing units responsible for the administration of their budgets, will have individual accounting and budgetary information and information, with the details to be established for the purpose of the governing body of public finances. Art. 152.-Obligations of the servers of the entities.- The maximum authorities of each entity or body, will be responsible for ensuring the proper functioning of the governmental accounting component and the servers of the financial units, to observe the accounting rules. The holder of the entity's financial unit shall legalise the financial information and/or financial statements of their respective entities with their signature and/or their key. In addition, the maximum authorities of public sector entities and bodies shall send financial and budgetary information, as indicated in this code or in the technical standards and in accordance with them, within the time limits laid down in this Code. these instruments. In the event of non-compliance, the governing body of public finances will suspend the allocation of resources and/or transfers from the General Budget of the State, after 60 days of the end of the month of which the information has not been sent. The technical standards referred to in the previous paragraph cover only detail, methodology and content of the information. Art. 153.-Immediate accounting.- The economic facts will be counted on the date that they occur, within each monthly period; they will not anticipate or postpone the respective records. Art. 154.-Budget execution and cash transactions.- Accounting information contained in the operations

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financials will reflect both budget execution and cash transactions. For accounting purposes, in respect of the budgetary implementation generated in each financial year, all receivables shall be considered as revenue; and expenditure shall be the obligations arising from the receipt of goods and services acquired by the competent authority. The accounting record of the revenue and expenditure shall be effected in accordance with the accounting principle of the accrual. In cash terms, tax and non-tax collections that are collected in the course of the financial year shall be revenue, regardless of the date on which the right would have been generated. carry out during the financial year, irrespective of the date on which the obligation was born, including the outflows of money in the form of advances. Art. 155.-Obligations to be paid.- These are those that will be paid to the 31 December of each year. Art. 156.-Retention of documents and records.- The accounting units of public sector entities shall retain for seven years financial records together with the corresponding supporting documents, in digital means with signature electronic liability, and if the case is the physical supports. Art. 157.-Aggregation and consolidation of financial information.- The governing body of public finances will receive, validate, analyse, classify and process the data contained in the financial information prepared by each financial institution of the Non-Financial Public Sector, in order to obtain aggregated and consolidated financial statements, relating to predefined groupings and according to the requirements of the State administration. The policies, technical standards and accounting manuals shall establish the nature of the financial information as well as its classification and the manner in which it shall be presented. Art. 158.-Applicable legislation.- The governing body of public finances has the power to issue, update and disseminate principles, technical standards, manuals, procedures, instructions and more accounting provisions, which will be mandatory compliance by entities and bodies of the Public Sector Non-Financial Sector Art. 159.-Dissemination of consolidated financial information.- The governing body of public finances shall publish the consolidated information of the non-financial public sector, through its website or other means, semi-annually.

CHAPTER VI

OF THE

Art. 160.-Content and purpose.- Comprises the set of rules, principles and procedures used in obtaining, depositing and placing public financial resources; in the administration and custody of money and

securities that are generate for the timely payment of the legally enforceable obligations; and in the use of such resources according to the corresponding budgets, according to the liquidity of the tax box, through the National Treasury Account. The Treasury component will establish an efficient, effective and transparent administration of the public financial resources of the National Treasury's Single Account, in order to respond to the payment needs demanded by the General Budget of the State. The Cash Schedule determines the revenue and public expenditure operations that affect the national treasury's cash balance and the public debt movements to cover the obligations and liquidity required. Art. 161.-The Single System of Accounts.- The Single System of Accounts is made up of: the National Treasury Single Account; the sub-accounts of the decentralized autonomous governments; the Social Security accounts; the accounts of the companies public; and, the accounts of public banks. Its operability will be included in the regulation. With regard to the social security accounts, it is guaranteed that in all accounting, operational and management aspects, the National Treasury's Single Current Account is maintained autonomously, so these resources will be other than the fiscus. According to the Constitution of the Republic, no institution of the State will be able to intervene or have its funds and reserves. Art. 162.-Public Banking.- The public resources will be handled through the public bank, considering the relevant technical standards and the management capacities of the entities that make up the public banking system. The collection, payment or transfer of these resources may be made through other financial institutions. Art. 163.-Management and accreditation of public resources.- The General Budget of the State will be managed through the Single National Treasury Account opened in the official depositary that is the Central Bank of Ecuador, with the sub-accounts that the President.-The President of the Commission. For the management of the deposits and credits of the public companies, decentralized autonomous governments and the others that correspond, special accounts will be created in the Central Bank of Ecuador.

Non-Financial Public Sector, with or without economic and/or budgetary autonomy and/or financial autonomy, must credit the entire public financial resources that it obtains, collects or receives in any way the respective accounts opened in the Ecuador's Central Bank.

The outflow of resources from the National Treasury's Single Account is carry out on the basis of the provisions of the payment authorizers of the relevant entities and bodies and of the governing body of public finances. This outflow of resources shall be effected where there are legally enforceable payment obligations, duly determined by the responsible entities concerned, subject to budget or accounting records.

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Public sector entities and agencies are empowered to manage advances through multiple disbursements, to manage projects through funds to be held accountable, among other mechanisms; for which the governing body of public finances will issue the corresponding regulations. The banking system shall not apply to the resources of public sector entities, with the exception of loans granted by public banks in favour of legal persons governed by private law. The Treasury of the Nation will order the immediate reinstatement of the National Treasury's Single Account, of the resources of public entities that violate Article 299 (3) of the Constitution, without prejudice to the responsibilities of the National Treasury. administrative, civil and criminal proceedings, to be taken. The Republic of Ecuador, prior to the authorization of the Governing Body of Public Finance, may be able to maintain and maintain abroad, fixed deposit accounts or in sight, to manage, grant or make payments, indebtedness, investment and interest. security.

Art. 164.-Res.- The income generated from the investments of the National Treasury Account will be restored to that account in its entirety, except the relevant commissions authorized by the governing body of the public finances within of the financial operations. These resources will not be part of the income of the Central Bank of Ecuador. By its nature the transactions generated by the National Treasury's Single Account are exempt from all types of withholding taxes.

Art. 165.-Reorder funds.- Public sector entities and agencies may establish replenishment funds for urgent payment attention, in accordance with the technical standards that the governing body of public finances may issue. The settlement of these funds will take place within the corresponding fiscal year.

Art. 166.-Managing liquidity.- The governing body of public finances will manage and manage the liquidity surpluses of the National Treasury Single Account in accordance with the technical standards it issues for the effect.

Art. 167.-Surplus.- All surplus cash from the budgets of the entities of the General Budget of the State, at the end of the fiscal year will be constituted in cash income from the General Budget of the State of the following fiscal year The cash surpluses of the decentralized autonomous governments that are maintained at the end of the fiscal year will be in cash income from the next fiscal year.

Art. 168.-Investment of public financial resources abroad.- Any investment of public financial resources abroad can only be made prior to the authorization of the governing body of public finances.

Art. 169.-Valued species.- The governing body of public finances, is the only body that authorizes the

issue and fixes the price of passports and more valued species of the agencies, entities and dependencies of the Public Sector Financial, with the exception of those issued by decentralized autonomous governments, social security entities and public enterprises. The costs by issue and the income from the sale of the valued species must be included in the budgets. No body, entity or dependency in the public sector which is subject to the scope of this code may charge any fee for the sale of goods and services without the marketing of valued species. invoice, sales note or other authorised instruments for the purpose. Art. 170.-Sentences.- Public sector entities and bodies shall immediately comply with the executed and passed judgments in the authority of the res judicata, and if they involve the discharge of fiscal resources, this obligation shall be financed from the budgetary allocations of the respective entity or body, for which the respective reforms in the non-permanent expenditure will be carried out. The resources of the Treasury's Single Account are inembargable and cannot be the subject of any kind of award, preventive or precautionary measure. Art. 171.-Certificates of Treasury.- The governing body of public finances, in the event of presenting temporary deficiencies and/or for the optimization of liquidity in the economy, may issue Certificates of Treasury to finance expenditures permanent or non-permanent. Certificates of Treasury, by their nature, however constitute payment obligations, shall not be subject, for their issuance, to the processing and requirements for public debt operations, except for the public deed of issuance. content shall be laid down in the technical standards. In no case, the time limit for the effective payment of the certificates may exceed 360 days. Art. 172.-Liquidation and extinction of bonds between public sector entities.- When the governing body of public finances establishes that between two or more entities of the State, or the State with other entities, obligations may be extinguished If the payment has been made, the compensation or the cancellation of the debt will be agreed upon, in order to ensure that, within a specified period of time, an agreement on the extinction of obligations is mandatory. For the purposes noted, the institutions of the State shall comply with the rules issued by the governing body of public finances. Art. 173.-The liquidity of the Public Sector.- For the integrated management of the public sector liquidity, the Central Bank of Ecuador in coordination with the governing body of public finances, will be able to manage the liquidity of the accounts created in this sector. entity, in accordance with the Regulation of this Code. The availability of resources of all public sector entities and bodies and their immediate enforceability shall not be affected.

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TITLE III

TAX TRANSPARENCY

CHAPTER I

OF INFORMATION Art. 174.-Free access to information.- The State guarantees to the citizenry free access to all the budgetary and financial information generated by public entities, in accordance with the law. The business plans, business strategies and related documents, for Public Enterprises and Public Banking, are exempted from this provision. Art. 175.-Information systems.- The governing body of public finances must establish an official system of information and broad dissemination that will serve as a basis for the control of the Legislative Function, as well as the citizenship, which will include the information on compliance with the provisions of this Book and in the legislation in force. It shall also be reported in detail on the financial terms and conditions of any public borrowing operation, the novation of existing debt securities and the repurchase of public debt to comply with Article 289 of the Constitution of the Republic. Decentralized autonomous governments, entities in charge of social security, public enterprises and public banks will establish their own information mechanisms, for citizen control and remission for the purposes of sector consolidation. He published the governing body of public finances. These systems shall include information on the provisions of this code and the legislation in force. Art. 176.-Publication of financial statements.- Public companies and public financial institutions and, in general, the producers or traders of goods and services, shall publish their duly audited financial statements. The relevant control bodies shall issue the technical standards in this respect. Art. 177.-Financial, budgetary and management information for citizenship.- Public sector entities and bodies shall disclose to the public, financial, budgetary and management information, without prejudice to the present information to the respective audit and control bodies, in accordance with the law.

PRELIMINARY TITLE

OF RESPONSIBILITIES AND SANCTIONS

Art. 178.-Sanctions for committing public resources without budgetary certification.- No public entity or body may enter into commitments, enter into contracts, or authorize or contract obligations, without the certification of the respective certification budget. Officials responsible who have entered into commitments, concluded contracts or authorised or contracted obligations without the respective budgetary certification shall be removed from the post and shall be responsible for their staff and pecuniarily.

Art. 179.- The maximum authority of each entity and public body and the officials and servers

responsible for budget management, will be responsible for the management and fulfillment of the objectives and goals, as well as to observe strictly the approved allocations, applying the provisions contained in this code and the technical standards. Art. 180.- Failure to comply with the obligations laid down in this Code and/or in the technical standards, observing the procedure laid down in the legislation governing the public service, shall be punishable by a fine of up to two remuneration unified monthly of the respective official or responsible server, or with his dismissal if the breach is due to gross negligence, without prejudice to the civil and/or criminal responsibilities to which it occurs.

If the breach is a Minister (a) or Secretary (a) of State, the sanction referred to in the paragraph shall be imposed by the President or President of the Republic. Art. 181.- If the public servants or servants of the public sector entities and bodies do not send the information indicated in this code or in the technical standards and in accordance with them, within the time limits specified therein. instruments, the penalty of up to three remunerations that the official or servant of the shipment perceives will apply.

GENERAL PROVISIONS

FIRST.-Prohibition of creating accounts or funds.- origin of the resources, public sector entities and bodies may not create accounts, funds or other revenue and expenditure management mechanisms that are not authorized by the governing body of the Public Finance System. SECOND.-Prior procedures.- Any law, decree, agreement, resolution or any other legal or administrative instrument that commits public resources, will apply only if it has a source of funding. If the source is not clearly identified, the governing body shall request the source of funding from the competent authority, otherwise its implementation shall be carried out from the fiscal year in which it is considered in the budget. THIRD.-Request for audits.- The ministry in charge of public finances may request the Comptroller General of the State to carry out special audits or examinations of public sector entities and agencies. administer or receive public financial resources. FOURTH.-Establishment of fees.- Public sector entities and bodies, which form part of the General Budget of the State, may establish fees for the provision of quantifiable and immediate services, such as sponsorship, toll, control, inspections, authorizations, permits, licenses or other, in order to recover, among others, the costs incurred by the service provided, based on the regulation of this Code. QUINTA.-Prior Authorization.- Prior authorization by the State Attorney General, another jurisdiction and legislation may be accepted for the solution of divergences or

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disputes regarding contracts, concluded by the State and public sector entities and bodies with governments, entities public or foreign private. SIXTH.- The ministry in charge of public finances may require prior advice to administrative or legal acts or operations of any nature inherent in the SINFIP, which shall be provided or carried out in a manner mandatory by the Comptroller General of the State. SEVENTH.- Financial Sector entities and bodies may make bank lacy deposits by means of financial instruments issued by the Central State with repayment within a period of less than 360 days from their purchase, up to a maximum of 75% of total lace. Any public official shall be prohibited from exercising any kind of pressure to ensure that the entities and bodies of the Financial Sector perform the fitting in the instruments described in this Disposition. The Ministry of Finance shall redeem in advance the securities issued and which are part of the lacy under this article of a financial institution that enters into the process of regularization in accordance with the Law. EIGHTH.- In all the entities of the executive function, the officials in charge of the management of the planning areas and the public finances, respectively, will have to prove the approval of training programs in those areas. In case they do not have such accreditation, the institutions will give preference to the training and training offered at the Institute of Higher National Studies. NINTH.- The National Secretariat for Planning and Development and the governing body of public finances, within their institutional budgetary availability, will prioritize resource allocations for the training and training of their public servants. DECIMAL.- For the purpose of allocating public resources and the management of advances in public works, the legal entities of private law whose stock capital of the State is greater than 50%, will have the same treatment that they have published. TENTH FIRST.- The public resources of national public companies and public financial institutions may be managed through trusts, subject to the authorization of the governing body of public finances. The resources of legal persons governed by private law in public banks and public financial institutions shall not be subject to this limitation. In exceptional cases, public sector entities, which are not national public undertakings or public financial institutions, may be managed through trusts made up of public financial institutions, prior to authorization of the governing body of public finances. For the establishment of trusts with public resources by any public entity, it must be communicated to the governing body of public finances. TENTH SECOND.-Financial transactions between entities in the General Budget of the State will be made through the IT platform

of the financial management system, the same as they will allow perform all processes in digital media, without requiring additional physical media. For the purpose of the requests and transactions made with the keys granted in that System, they are valid and will have the same legal effect as if it had been done by means of a request signed with the olographer. Each institution shall keep all supporting documents duly filed and shall be responsible for administrative, civil and criminal proceedings for requests made on the basis of inaccurate, incomplete or false information supplied through the system. TENTH THIRD.- Public Sector entities may have their principal place of residence in the city which, by resolution, have their highest authorities, without prejudice to what is established by the special laws. TENTH FOURTH.- The permanent expenditures on education, health and justice that were financed by the tax collection for the activity of the oil sector, which are affected by the lower tax revenues generated as a result the renegotiation of the oil contracts made under the Law of the Reformatory to the Law of Hydrocarbons and to the Law of Internal Tax Regime, published in the Supplement of the R. O No. 244 of July 27, 2010, can be financed, from of the year 2011, with non-permanent revenues, in order to compensate for this gap by the deadline four fiscal years after the validity of this Code. TENTH FIFTH.- The Public Administration is empowered to participate in and acquire movable and immovable property in the process of remate in accordance with the Regulations of this Code, without requiring the 10% guarantee provided for in Article 466 of the Code. Code of Civil Procedure. TENTH SIXTH.- The entity in charge of the Public Administration in coordination with the governing body of public finances may dictate policies, rules and rules for the management, administration and use of public assets of the Administration. Central and Institutional included its public companies and public banks, without prejudice to the powers that other entities of the Executive and the Comptroller General of the State have for the effect. TENTH SEVENTH.- The Ministry of Transport and Public Works will have active action for the collection of credits and any kind of obligations that natural or legal persons may have in their favor, including those obligations provided for in the Law of Roads. The co-active shall be exercised subject to the provisions laid down in the Code of Civil Procedure. Except for this provision, the public procurement issues to be held under the Organic Law of the National System of Public Procurement, the same ones that will be governed by the provisions of the Law. The Minister of Transport and Public Works shall exercise the coercive jurisdiction throughout the Republic and may delegate, by trade to any official or employee of the Ministry, the knowledge and processing of the respective judgments. TENTH EIGHTH.- Prevalence Guarantee. The rules of this code may be repealed or

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reformed by express provisions of other laws of equal hierarchy, in accordance with Art. 425, third indent of the Constitution of the Republic. TENTH NINTH.- The Council of Planning of the Special Regime of the Galapagos will be exercised by the Governing Council. 20TH.- The transfers of resources that the Ecuadorian State will make to the organizations and institutions of integration in which it participates, will be realized according to the regulations that for the effect issue the governing body of the public finances.

TRANSITIONAL PROVISIONS AND REFORMS

FIRST.- The National Secretariat for Planning and Development within 30 days from the time of this Code shall create the Bank of Projects established in Art. 61. SECOND.- The National Secretariat for Planning and Development within 120 days from the time of this Code will have to dictate the tools and methodologies needed to prepare the planning processes. national, as well as its form of monitoring and evaluation. THIRD.- The National Secretariat for Planning and Development in coordination with the associative entities of the decentralized autonomous governments, will provide the necessary technical assistance for the formulation of instruments and methodologies required for development planning and territorial planning processes. FOURTH.- Until December 31, 2011, the decentralized autonomous governments must formulate the Development and Territorial Ordinance plans in accordance with the provisions of this standard, or adjust the content of the development and territorial planning in the instruments in force which they have in accordance with the provisions of this Code. If this deadline is met, the decentralised autonomous governments will not be able to approve budget pro forms if the respective development and territorial planning plans have not been approved. While the decentralized autonomous governments adapt the development and territorial planning plans in the terms and deadlines provided for in this code, they will govern the existing and approved plans. QUINTA.- While the Plurinational and Intercultural Citizens ' Assembly for Good Living is formed and the representatives of the Autonomous Decentralized Governments are elected, as established in Art. 23 of this Code, the National Council Planning may conform and operate with the representatives of the Executive Function, the associative entities of the decentralized autonomous governments, and a commissioner of the Council of Citizen Participation and Control, elected among its members. members, who will participate as a guest. SIXTH.- As of the validity of this code, all multi-annual projects with a multi-annual allocation in the General Budget of the State will form

part of the Annual Investment Plan; the National Secretariat of Planning and Development will assess the relevance of maintaining such projects in the Annual Investment Plan.

SEVENTH.-Temporary Vigency of the Financial Management System Regulations.- Until the President of the Republic issue the regulation of this code, which may not exceed 90 days, shall govern the technical standards for the purpose of issuing the governing body of public finances. The budgetary management rules laid down in this Code shall apply for the financial year 2010 onwards. In no case will this transitory affect the resources that the Constitution of the Republic and the Law assign to the Autonomous Autonomous Governments in the fiscal year 2010.

EIGHTH.-Revocation of data.- The President of the Republic may implement revokes of any such data granted by the entities and bodies that make up the central and institutional public administration, except for Decentralized Autonomous Governments and applying the principle of affirmative action in favor of priority care groups, regardless of their legal nature.

NINTH.-Private companies.-Until anonymous companies majority ownership of the State will be transformed into Public Enterprises, they will be able to receive State General Budget allocations.

DECIMAL.- Of the assets, rights and competencies of the former AGD transferred to the Ministry of Finance. The assets, rights and competences that were transferred to the Ministry of Finance in accordance with the Transitional Provision of the Financial Security Network Creation Act, will be passed on from the publication of this Law to the Public Law Enforcement and Management Unit of the AGD CFN Trust NO MORE IMPUNITY. The corresponding administrative act shall be issued for that purpose. The Superintendents, the registrars of the Property, Mercantil or responsible for any other public record, will proceed to register the new ownership of these goods on the basis of this Law and the trade or instrument that will be issued by the Ministry of Finance for this purpose. In all the trusts in which the ex-AGD was a constituent and/or beneficiary, the time-limits or conditions with a term value which are included in the escrow contracts established or maintained by the former AGD and which were transferred to the Ministry of Finance is declared defeated, and the Ministry of Finance will proceed to deliver the assets, assets and rights in these contracts to the management and execution unit of the AGD-CFN Trust NO MORE IMPUNITY. The AGD CFN NO MORE IMPUNITY Trust, with its own resources, will be able to carry out all the financial management acts necessary for the proper management of the companies under its control, and it will be able to have the utilities that are reported, for the capitalization of others, and can also authorize the delivery of resources between them in the mutual interest, subject to the guarantees and security provided.

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Also the AGD CFN Trust NO MORE IMPUNITY will recognize the liabilities legally guaranteed and which are on the balance sheets of the banks to the date of their finiquito

TENTH FIRST.- In all cases in which the entity or body responsible for the exercise of the powers and powers laid down in the Transitional Provision Fifth of the Law of Creation of the Network Financial Security, you know, be it from the Superintendence of Companies or other agency of control, either on the part of the current administrators or representatives of the companies seized, which in these companies exist glosas for tax determinations or insolute obligations of labor origin generated before the seizure; or that in the same period in their balance sheets appear records of obligations or liabilities for natural persons or domestic or foreign companies, of which there are currently no documentary supports or, existing ones, is not evidenced that in his opportunity happened a real income of money in the social accounts of the companies today seized, will terminate such obligations of the records of the same on the balance sheets of the corresponding companies, recording the amount of such obligations as an account receivable against the respective former administrators or shareholders of the banks in respect of which the corresponding seizure was carried out on the basis of the final article 29 of the Law of Reordering in Economic Matters in the Financial Tax Area, who will be personally and pecuniary responsible for such insolute obligations, and the entity or body in charge of the assets, the rights and powers of the former AGD will direct the management of the respective charge by the way that the Law empowers them, exclusively against the former administrators or shareholders of the banks with respect to which the seizure of the Deposit Insurance Agency. The same procedure must be applied to all the obligations that appear in the companies and which have as creditors persons linked by relationship to the fourth civil degree of consanguinity or second degree of affinity with the former shareholders or managers of the banks in respect of which the corresponding seizure was made, or of the former administrators of the companies that founded before the respective act of seizure.

TENTH SECOND.- Attaché, after the point current final, a final paragraph to the last paragraph of the First Transitional Provision of the Law Organic de Empresas Públicas, published in the Official Register Supplement Nro. 48, of 16 October 2009, which will say: " As long as the sale has not been made or until the companies or companies seized by the company become public companies AGD will not be subjected to the processes determined in the Organic Law of the National System of Public Procurement and neither will the legal entity that maintains the trust property and legal representation of the same. "

TENTH THIRD.- Include below the second paragraph of Article 39 of the Internal Tax Regime Act as follows "; except for financial returns originated in external public debt."

TENTH FOURTH.- Within 30 days of the issuance of this code, the Ministry of Finance and, where applicable and outside the case, the National Financial Corporation (CFN) or any other agency of the public sector, shall be subject to the regularisation of all accounting entries which are pending, originating in payment transactions or agreements made by the delivery of Certificates of Reprogrammed Deposits (CDR), and/or Certificates of Liabilities Guaranteed by the Deposit Insurance Agency (CPG), on the basis of what the Executive Decrees Nro. 1492, published in the Official Register of the Nro. 320 of 17 November 1999; Nro. 75 published in the Official Register of the Nro. 19 of 17 February 2000; and, Nro. 3052, published in the Official Register of the Official Register Nro.654 of 3 September 2002. In all cases, the accounting records shall be made at the face value, without this being the case, where appropriate, the extinction of the respective obligations in the terms of the Civil Code. The Ministry of Finance, the National Finance Corporation, or the Public Sector bodies that currently hold Certificates of Guaranteed Liabilities (CPG) in their portfolio, have the power to negotiate them on the market. use the product of the trading in the capitalization of the CFN or other financial institution in the public sector. In accordance with the provisions of the Board of the Extinction AGD, the AGD/CFN Trust NO MORE IMPUNITY or the other trusts created with the same object, or the Central Bank of Ecuador, may pay and/or compensate, without any distinction origin or source, the Certificates of Guaranteed Liabilities, CPG, issued in their opportunity by the administrators of the banks in sanitation, using to do so the resources obtained from the sale of the assets that were transferred to it. Once the process of selling the assets or assets of the AGD CFN Trust NO MORE IMPUNITY is completed, the immediate liquidation of the autonomous patrimony will proceed, and the obligations of payment of those CPGs that would not have been presented to the recovery or compensated within a maximum period of one year from the call for registration in the trust entity, shall be converted into purely natural obligations in the terms defined in Article 1.486 of the Civil Code. TENTH FIFTH.- The President, Members of the Board, the Legal Representative of the AGD-CFN Trust NO MORE IMPUNITY and the General Coordinator of the Administration of Assets and Rights of the former AGD, will enjoy the jurisdiction of the National Court of Justice. the acts, decisions and resolutions which they have adopted in the performance of their duties as from 1 January 2010. The Directors of the General Coordination of Assets and Rights ex AGD, the members of the Technical Secretariat of the AGD-CFN Trust NO MORE IMPUNITY; and, the administrators, managers or legal representatives of the companies seized by the AGD will be from the jurisdiction of the Provincial Court of Justice, for the acts and decisions adopted in the specific exercise of its functions since 1 January 2010.

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If, for the exercise of those functions, any legal action against officials and servers is brought in. The State, through the institution or entity to which it belongs, will assume the costs of hiring professionals who will sponsor the causes of the accident. be presented. TENTH SIXTH.- The governing body of public finances must review the agreements on transfers of resources to natural and/or legal persons governed by private law, and in the absence of adequate supporting documents, suspend them, while the rector of the branch issues such justification. TENTH SEVENTH.-In order to improve the management of the current Ministry of Finance, during the years 2010 and 2011 a restructuring process will be executed, which is why the Minister will be able to take any action, in accordance with the law, which aims to improve the human resource and to create the addresses or units that are necessary for the fulfillment of this code. The ministry in charge of the public finances, will preferably be integrated with the current officials and employees of the Ministry of Finance, prior to a selection process by a private firm specialized in the field, in which consider among other aspects, academic training, training courses, good repute and experience. This staff and the one who incorporates in addition must necessarily meet the stated requirements and comply with the provisions of the internal legal regulations that for the effect will be established. Officials and employees of the current Ministry of Finance who committed or committed serious misconduct in the performance of their duties or those who would present significant increases in their assets not justified and incompatible with their statements of income presented for tax purposes, shall be removed in their duties in accordance with the law and the internal rules of this ministry, guaranteeing due process, without prejudice to the other actions to which it has taken place. The officials and employees of the current Ministry of Finance who are not selected in the process will receive an amount equal to five unified basic wages of the private worker in general for each year of service and up to a maximum amount. totalize a value equivalent to 175 unified basic wages of the private worker in general. For the purposes of the selection of staff and their compensation all the servers of the Ministry of Finance will be taken into account. The ministry in charge of public finances shall compulsorily report to the competent judges, where it has knowledge that officials and former officials who have been employed for up to five years or whose spouses or relatives within the of the fourth degree of consanguinity and second degree of affinity, have obtained non-justified and incompatible property increases with their declarations of income submitted for tax purposes. For everything not contemplated in the present transitory applies the specific Law in the matter.

TENTH EIGHTH.- Include following the last paragraph of the article innumbered that follows Art. 156 of the Reform Law for Equity The following text: III) Similarly, the principal, interest, commissions, and other payments for the service of the public debt, the capital-exit tax, are excepted. TENTH NINTH.- As long as the crime set forth in the third paragraph of Art. 137 of this Law is not typified, in the Penal Code, the penalty to be applied will be equal to that established in Art. 257 of the Penal Code.

DEROGATIONS

Repeal all legal rules of equal or lesser hierarchy that are or are not in compliance with the provisions of this Code. In particular, please read the following laws: • Organic Law on Financial Management and

Control.

• Organic Law on Accountability, Stabilization and Fiscal Transparency.

• Organic Law for the Recovery of the Use of State Petroleum Resources and Administrative Rationalization of Debt Processes.

• Public Sector Budget Law.

• Chapter I of the Law on Economic Regulation and Public Expenditure Control.

FINAL DISPOSITION

The provisions of this Code and its derogations shall enter into force. effect from the date of its enactment in the Official Register. Given and signed at the headquarters of the National Assembly, located in the Metropolitan District of Quito, Pichincha Province, on the fourteen days of October of two thousand ten. f.) Fernando Cordero Cueva, President. f.) Dr. Francisco Vergara O., Secretary General. National Palace, in San Francisco de Quito, Metropolitan District, ten and nine October, two thousand ten. SANCTION AND ENACT. f.) Rafael Correa Delgado, Constitutional President of the Republic. It is a faithful copy of the original that consists of eighty-seven (87) useful fojas.-I certify it.-Quito, October 20, 2010. f.) Ab. Oscar Pico Solorzano, National Undersecretary of Public Administration.