G/C/W/722  
 
5 April 2016  
(16-1914)  Page: 1/2  
Council for Trade in Goods  Original: English  
 
QUESTIONS FROM THE UNITED STATES TO ECUADOR REGARDING 
ITS NEW FORM OF PAYMENT FOR IMPORTS 
The following communication, dated 4 April 2016, is being circulated at the request of the 
delegation of the United States. 
 
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 1.1.  The United States recognizes the seriousness of the challenges to Ecuador's balance of payments situation. However, we are concerned that Ecuador has taken concrete steps to 
establish a new monetary policy instrument, or an alternate electronic currency, which traders will 
be required to use in order to pay customs duties on imports. We understand that Presidential Decree 943, issued on 2 March 2016, authorized the Ecuadorian government to accept the new 
instrument as an alternate means of payment for all public obligations. 
1.2.  The system of alternate means of payment, which has also been described as "Certificates of 
Trade" and by other names would, as we understand it, attempt to manage balance of payments 
by limiting imports into Ecuador. In general, it  appears that the program would require importers 
to pay import tariffs in an alternate electronic currency based on an existing electronic regime of Central Bank Notes. The government, through the Central Bank or the state-owned Bank of the Pacific, would make units of this alternate currency available to entities that bring long-term 
dollars into Ecuador – presumably including Ecuado rian exporters, based on the dollar value of 
their exports. These entities would be able to pay all public obligations (such as business taxes) in the new virtual currency. The entities could also sell the units of new currency, or whatever units 
remain if units are used to pay other obligations, to importers, who would be required to use them 
to pay tariffs. The net effect would appear to be that the government would control the level of imports and raise costs, by limiting the supply and value of the alternate electronic currency 
available to importers. In addition, the program could be discriminatory, because it appears that 
the requirement to pay duties in the new electronic currency would raise the costs and restrict the supply of only those products that are subject to import tariffs. 
1.3.  The United States submits the following questions to Ecuador regarding the new program. 
We request responses by the time of the 15 Ap ril 2016 meeting of the WTO Council for Trade in 
Goods. 
a. We understand that the new monetary policy instrument, or "alternate means of 
payment", is an electronic currency that would be made available on a one-to-one ratio 
to entities that bring long-term dollars into the economy. The entities may then sell this 
new currency to other parties that may be required to use it to pay obligations to the 
Ecuadorian government. Please confirm this understanding, or explain if it is not correct. 
b. Please clarify to which entities the instruments would be issued. Would they be issued to 
Ecuadorian exporters? 
c. Would they be issued to foreign companies with direct investments in Ecuador? 
d. Does Ecuador consider the issuance of these instruments a subsidy? Please explain. 
e. Please explain how frequently and in what amounts such instruments would be issued. G/C/W/722 
 
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  f. If Ecuadorian exporters pay their obligations to the government using the proposed 
instrument, as we understand they would be permitted to do, it appears that the supply of instruments available for sale in private transactions to importers so that they can pay tariff duties will be less than the amount originally issued, and limited to whatever 
supply is available after exporters pay their va rious obligations. What percentage of this 
new electronic currency does Ecuador think will be available (i.e. what will be the supply) for over-the-counter purchase and use by importers? For example, would it be 20% of 
the total foreign exchange brought in by Ecuadorian exporters, or some other figure? 
g. We have heard reports that this scheme would reduce imports by 80%. If Ecuador 
considers this scheme would not restrict imports, please explain. 
h. Please explain how the price of this new electronic currency relative to the dollar would 
be determined. Given that limited supply would appear to raise the price of the new 
currency relative to the dollar, would this limited supply effectively raise the dollar amount required to be paid to satisfy import duties? How would the price relate to 
Ecuador's WTO bound tariff rates? 
i. We understand that decisions on which obligations will be required to be paid using the 
"new means of payment" will be determined by the Central Bank Board of Governors on 
a n  o n g o i n g  b a s i s ,  t o  m e e t  m a c r o - e c o n o m i c  t a r g e t s .  W h a t  w i l l  t h i s  m e a n  i n  p r a c t i c e ?  
What factors will the Board of Governors consider in making its decisions? Will these decisions include differences in the supply of instruments relative to specific sectors (automobiles, for example)? How will the Board of Governors ensure that its decisions 
will be transparent? 
j. We understand that while Ecuador plans to permit various obligations to the state to be 
paid using the new instrument, it will require import duties to be paid using this 
instrument. Please explain the rationale for this distinction. 
k. Would the requirements to pay duties using the new means of payment apply to all 
imports, regardless of source? If not, please explain which imports will not be subject to 
this requirement, including how this requirement will apply to Members with which 
Ecuador has a free-trade agreement and those to which it does not. 
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