Venezuela announced the devaluation of its currency and adopted a sealed-bid auction as a new mechanism to substitute SITME. The new mechanism is now in force from March 19, 2013, and is known as Complementary System of Currency Administration. The new system follows a devaluation of 46.5%, with an adjusted VEF (Venezuelan bolivar fuerte) from 4.30/USD to VEF 6.30/USD for selling and from VEF 4.29/USD to VEF 6.28/USD for purchasing transactions.
This new sealed-bid auction, together with the recent devaluation of currency is expected to have an impact from a transfer pricing perspective for multinational corporations doing business in Venezuela. Impact is expected on valuation of inventories of imported goods and services; and consequently, on its related cost of sales.