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5. Financial Transparency
5.1 Market Stability
5.2 Independent Asset Valuers
5.3 Data Standards
In-Country Assessment Information

5. Financial Transparency

Goal – A well developed and transparent financial system that includes strong supporting institutions and highly trained and ethical professionals that contribute to effective financial intermediation and deep and broad access to capital and financial services

 

5.1 Market Stability

Core Question:  Are market risks sufficiently transparent and diversified so that efficient capital allocation can occur? No, Venezuela lacks the transparency to allow efficient capital allocation.

5.1.1 Financial Reporting

What is the strength of the country’s auditing and reporting standards? Weak, Venezuela ranks 97th and has a score of 4.22 out of 7.

5.1.2 Financial Services

Does the financial sector provide a wide variety of financial services to businesses? Financial sector does not provide a wide variety of services to businesses in Venezuela. Venezuela ranks 123 with a score of 3.66 out of 7. Very weak.

Source: The Global Competitiveness Report 2012-2013, World Economic Forum
http://www.weforum.org/issues/competitiveness-0/gci2012-data-platform/

5.1.3 Insolvency Process

Very Weak, Venezuela ranks 165 (out of 189) as of 2014. In 2013 Venezuela ranked 162. Trend ↓. The bankruptcy proceedings in Venezuela are very outdated and take an extremely unusual length of time to complete. The average amount of time for Latin American countries is 2.9 years. Venezuela has an average length of time of 4 years.

5.1.3.1 What is the average time to complete bankruptcy proceedings? 4.0 Years (unchanged from 2013).

5.1.3.2 What is the cost of bankruptcy proceedings as a percentage of the estate? 38% (Unchanged from 2013).

5.1.3.3  What is the recovery rate of bankruptcy proceedings?  6.5 cents on the dollar (6.4 cents on the dollar in 2013).

Source: Doing Business 2014, Economy Profile: Venezuela
http://www.doingbusiness.org/data/exploreeconomies/venezuela?topic=resolving-insolvency

 

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5.2 Independent Asset Valuers

Core Question: Do trained, independent and ethical asset valuers exist for all types of assets?  Yes – Mediocre. All valuers must be certified. Their certification number also must be present on all the appraisals they conduct, leaving a paper trail, and thus deterring them for conducting unethical practices.

Source: Interview with Vilma Diaz (Brokerage Service Director) of CBRE Venezuela, July 21, 2014.

Survey Questions

5.2.1 Standards

SQ 17  How easy is it to find a valuer who implements International Valuation Standards? Weak, but getting stronger. Venezuela just recently adopted International Accounting Standards and International Financial Reporting Standards and all companies must abide. However, inflation has been an extremely large issue.

Source: Santander Trade, Venezuela
https://en.santandertrade.com/establish-overseas/venezuela/business-environment

Source: Deloitte-IAS Plus, Financial Reporting Framework in Venezuela
http://www.iasplus.com/en/jurisdictions/americas/venezuela

5.2.2 Training

SQ 18  What is the level of training of valuers? Very strong. In order to become a valuer in Venezuela, a person must have a college degree in engineering, architecture or urban planning. Only following that degree can the person study and obtain their certification. The certification is provided by SOITAVE.

Source: Interview with Vilma Diaz (Brokerage Service Director) of CBRE Venezuela, July 9, 2014.

5.2.3 Ethics

SQ 19  Are opinions offered by valuers free of influence from parties to the transaction? Yes, and all appraisers are held accountable for their opinions.

Source: Interview with Vilma Diaz (Brokerage Service Director) of CBRE Venezuela, July 21, 2014.

 

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5.3 Data Standards

Core Question: Is accurate property information available electronically in formats that are consistent with international standards? No, Venezuela lacks reliable and “real time” property information online. There are some non-reliable sites that offer property information, but none are comparable to high international standards.

Source: International Property Listings, Viviun
http://www.viviun.com/Real_Estate/Venezuela/
Source: Venezuela Real Estate Listings, Point 2 Homes
http://www.point2homes.com/VE/Real-Estate-Listings.html

Survey Questions

5.3.1 Sales & Operating Data

SQ 20  A multiple listing service is an electronic exchange system where brokers and agents can widely share contracted real estate listings of properties that are for sale. Do multiple listing type services exist? No reliable sites exist like the private MRIS (Metropolitan Regional Information Systems) that offer real time information to brokers and their clients on home sales and for sale units. Additionally, no public site offers substantial real estate listings as well. Some non-reliable international websites do have a few listings, but none of which can be relied on for accurate and up-to-date information.

Source: International Property Listings, Viviun
http://www.viviun.com/Real_Estate/Venezuela/
Source: Venezuela Real Estate Listings, Point 2 Homes
http://www.point2homes.com/VE/Real-Estate-Listings.html

SQ 21  Do resources exist for obtaining building income and expense estimates? No, Very Weak. Information on particular buildings needs to be gathered through ownership contacts and property managers or operators. No public records exist for such information. The availability of operating expenses and data in the market is very much “closed book”.

Source: Interview with Vilma Diaz (Brokerage Service Director) of CBRE Venezuela, July 21, 2014.

5.3.2 Interchange Formats

SQ 22  Do electronic data interchange formats conform to international standards (ebXML – electronic business using extensive markup language)?  Yes, Electronic Data Exchange has been present in Venezuela since the early 1990s. Weak, however, because though the technology has been present, the majority of real estate transactions seem to be paper based. Documents must be presented at the registry when purchasing a property.

Source: Republica Bolivariana De Venezuela Universidad Catolica, Andres Bello 2005, El Futuro De Edi “Electronic Data Exchange” En Venezuela
http://biblioteca2.ucab.edu.ve/anexos/biblioteca/marc/texto/AAQ4444.pdf
Source: Doing Business 2014 – Registering Property, World Bank
http://www.doingbusiness.org/data/exploreeconomies/venezuela/registering-property/

5.3.3 Technical Standards

SQ 23  Do building codes and office building measurement standards (ANSI/BOMA Z65.1) conform to international standards? No. Building codes do exist and are enforced, but are not up to international standards.

Source: Earthquake Spectra 2004, Earthquake Engineering Research Institute
http://earthquakespectra.org/doi/abs/10.1193/1.1806831?journalCode=eqsa
Source: Association of Caribbean States (ACS), Venezuela
http://www.eird.org/cd/acs/English/AboutACS.pdf

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In-Country Assessment

Valuation Profession

FQ 19 How many independent valuers exist in the market? Can small businesses obtain fair valuations for property they want to buy or sell?

FQ20 What are the valuation standards and do they conform to international and regional standards?

FQ21 What valuation methods and techniques are used in the market?

Data Availability

FQ22 How available is information for commercial properties that are for sale or that have been sold?

Source: