New exchange controls affect trademark licences

To deal with the current economic crisis, the Venezuelan government has prohibited financial institutions from selling foreign currency. This has had the knock-on effect of making it difficult for local trademark licensees to pay royalties in foreign currency to foreign licensors.

To deal with this problem, the Exchange Administration Commission, the official body in charge of foreign exchange sales in Venezuela, has stated that local companies that must acquire foreign exchange to comply with their licence obligations should provide proof that their licence agreements have been duly registered pursuant to Decree 2095.

Under this decree, it is recommended (ie, it is not obligatory) that licence agreements between foreign company owners of Venezuelan registered marks and Venezuelan companies be registered with the Superintendency of Foreign Investments. There are two exceptions: (i) trademarks relating to the petroleum sector should be registered with the Ministry of Energy and Mines, and (ii) trademarks relating to the financial sector should be registered with the Superintendency of Banks.

Thus, while it has never been mandatory for licence agreements to be registered pursuant to Decree 2095, failure to register now will result in the inability to obtain foreign currency.

The Exchange Administration Commission has not yet established a procedure by which local licensees that have registered their trademark licences, and proved such registration, may actually acquire foreign currency. This procedure is eagerly awaited.

Richard Brown and José Gutiérrez, De Sola & Pate, Caracas