HomeReportsBureau of Economic and Business Affairs2023 Investment Climate Statements…Bolivia

# 					2023 Investment Climate Statements: Bolivia			

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													EXECUTIVE SUMMARY											

                -  EXECUTIVE SUMMARY 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Towards Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Other Investment Policy Reviews 
                  -  Business Facilitation 
                  -  Outward Investment 
                -  2. Bilateral Investment and Taxation Treaties 
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Anti-Trust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement                      -  ICSID Convention and New York Convention 
                    -  Investor-State Dispute Settlement 
                    -  International Commercial Arbitration and Foreign Courts 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances                      -  Foreign Exchange 
                    -  Remittance Policies 
                  -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises                    -  Privatization Program 
                -  8. Responsible Business Conduct                    -  Additional Resources 
                  -  Climate Issues 
                -  9. Corruption                    -  Resources to Report Corruption 
                -  10. Political and Security Environment 
                -  11. Labor Policies and Practices 
                -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs 
                -  13. Foreign Direct Investment Statistics 
                -  14. Contact for More Information: 

## EXECUTIVE SUMMARY

Bolivia’s 2009 constitution nationalized companies in “strategic” sectors, including extractive industries like fossil fuels and mining, telecommunications, and electricity.  The Movement Towards Socialism (MAS) government of President Luis Arce favors nationalization and an “import substitution model” for its statist economic model.   There is no significant foreign direct investment (FDI) from the United States in Bolivia, and there are no specific incentives to encourage U.S. investment.  Bolivia abrogated its Bilateral Investment Treaty (BIT) with the United States in 2012 and has not sought a positive bilateral economic and commercial relationship.

Enforcement of laws regarding dispute settlements, intellectual property, and real property are lacking, creating legal discrepancies and inconsistent enforcement, and therefore, an uncertain investment climate. Furthermore, Bolivia’s judicial system is increasingly compromised, making judicial recourse for investment disputes challenging. Bolivia’s weak judicial security, complicated regulatory systems, cumbersome bureaucratic procedures, and corruption adversely affect the private sector and impede investment in Bolivia.

Bolivia is a state-run economy focused on public spending. Many state-owned enterprises are inefficiently managed, and the economy is fragile and vulnerable to external shocks. Central bank reserves are low, and the public debt is high. Bolivia’s inflation rate is the lowest in the region at around 3 percent, but the economy is cushioned by a fixed exchange rate, government subsidies, and rampant contraband from Argentina, Brazil, Peru, and Chile. Multiple rating agencies downgraded Bolivia in March 2023 due to its low reserves and the government’s poor fiscal policies. As a result, speculation has led to dollar scarcity in the formal financial system, placing pressure on the foreign exchange rate. A black market has emerged for dollars at an exchange rate surpassing the legal peg. Banks are facing liquidity issues and have limited cash withdrawals.

Among the leading sectors in Bolivia are energy (mainly fossil fuels), which is Bolivia’s historical main revenue source. However, for the first time in 20 years, Bolivia has become a net importer of fuel and has struggled to meet its commitments for natural gas exports. Gas price increases, partly due to Russia’s war against Ukraine, and a decrease in Bolivia’s production and investment in exploration, are factors. Bolivia also maintains extremely high fuel subsidies which, along with certain food subsidies, help keep consumer prices low, but at a significant fiscal cost. In 2022, more than half of Bolivia’s fiscal deficit stemmed from fuel subsidies alone.

Other key sectors for investment include environmental technologies, automotive, healthcare technologies, and the food and agriculture value chain. Agriculture is a growing sector in Bolivia, with 2022 exports increasing by 27 percent from 2021 and more than doubling since 2020. Nonetheless, droughts, floods, and other climate phenomena in recent years have been devastating in Bolivia and advanced equipment and technology is limited. Manufacturing is also experiencing growth, particularly with foods, oilseeds, chemicals related to urea and lithium derivatives, and basic metals for tin production.Children in Bolivia are subjected to the worst forms of child labor particularly in mining and agricultural industries.  In 2021, Bolivia made minimal advancement in efforts to eliminate the worst forms of child labor, according to the U.S. Department of Labor.

							1. Openness To, and Restrictions Upon, Foreign Investment					

### Policies Towards Foreign Direct Investment

The 2014 Investment Law guarantees equal treatment for national and foreign firms, however public investment has priority over private investment (both national and foreign). The Bolivian government determines which sectors require private investment. Public policies promote internal consumption of products made in Bolivia. Foreign investment is not allowed in matters relating directly to national security.  There is no significant FDI from the United States in Bolivia, and there are no initiatives designed to specifically encourage U.S. investment.  Bolivia does not have an investment promotion agency to facilitate foreign investment. The government has not held a significant dialogue with the private sector since it came to power in 2020.

### Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have a right to establish and own business enterprises and engage in remunerative activity. Any investment will be monitored by the relevant ministry for a specific sector. What may limit private companies from investing, both foreign and national, are the government’s investment decisions, control, and prioritization of key strategic sectors including natural resources and broadcast licenses.

The constitution sets a “border security zone” of fifty kilometers into Bolivian territory from the border. No foreign entity may acquire property in this territory, except in the case of state necessity and approved by supermajority of the legislative assembly.  Non-compliance results in the property or possession being passed to the state, without any indemnity.

The state has complete control of Bolivia’s natural resources, including fossil energy and mining. Temporary authorizations to exploit natural resources may be granted, but no concessions or contracts may transfer its ownership to private interests.  Foreign individuals or companies may enter joint venture contracts on a service-contract basis with the state. However, foreign enterprises must submit to the sovereignty and laws of the state. No foreign court case or jurisdiction will be recognized, and foreign investors may not invoke any exceptional situation for international arbitration, nor appeal to diplomatic claims.

Foreign persons or entities cannot obtain licenses for radio broadcasts.  The share of total foreign investment in broadcasting associations cannot exceed 25 percent, unless approved by the state or by international treaties. Bolivia does not maintain an investment screening or approval mechanism.

### Other Investment Policy Reviews

Bolivia underwent a World Trade Organization (WTO) trade policy review in 2017.  In his concluding remarks, the WTO Chair noted several WTO members raised challenges impacting investor confidence in Bolivia, due primarily to Bolivia’s abrogation of 22 BITs following the passage of its 2009 constitution.  However, some WTO members also commended Bolivia for enacting a new investment promotion law in 2014 and a law on conciliation and arbitration, both of which increased legal certainty for investors, according to those members.

### Business Facilitation

Any new businesses must be registered and certified by the public entity Servicio Plurinacional de Registro de Comercio (SEPREC) at https://www.seprec.gob.bo. Foreign businesses report they are able to use the SEPREC website fto complete their online business registration needs. The process to register a new business takes about 30 days from start to finish.  The government has not made any specific efforts to facilitate business.

Companies must also register with the Bolivian Internal Revenue Service (Servicio de Impuestos Nacionales) and with the respective company’s municipality. If the company has employees, it must additionally register with the national health insurance service, the national retirement pension agency, and the Ministry of Labor.

### Outward Investment

The Bolivian government does not promote or incentivize outward investment, but they also do not restrict domestic investors from investing abroad.

							2. Bilateral Investment and Taxation Treaties					

In 2012, Bolivia abrogated its BITs with the United States and 21 other countries. The BIT with Bolivia was the first to be terminated by a U.S. treaty partner.  In October 2007, Bolivia became the first country to withdraw from the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).  Bolivia does not have a bilateral taxation treaty with the United States.  Bolivia has various agreements with other countries aimed at avoiding double taxation, including Argentina, France, Germany, Spain, Sweden, the United Kingdom, and Andean Community countries.

Bolivia is not a member of the Organization for Economic Co-operation and Development (OECD) Inclusive Framework on Base Erosion and Profit Shifting.

							3. Legal Regime					

### Transparency of the Regulatory System

Bolivia has no laws or policies that directly foster competition on a non-discriminatory basis.  The Commercial Code does state that unfair competition, such as maintaining an import, production, or distribution monopoly, should be penalized according to criminal law.  There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. Regulatory authority regarding investment lies solely at the national level in Bolivia.

The Commercial Code requires that all companies keep adequate accounting records and legal records for transparency.  However, there is a large informal sector, comprising over 60% of the economy, that does not follow these practices.  Most accounting regulations follow international principles, but the regulations do not always conform to international standards. Large private companies and some government institutions, such as the Central Bank and the Banking Supervision Authority, have transparent and consistent accounting systems.

There is no established public comment process allowing social, political, and economic interests to provide advice and comment on new laws and decrees.  However, the government generally, but not always, discusses proposed laws with the relevant sector.  Online regulatory disclosures by the government can be found in the Official Gazette at http://www.gacetaoficialdebolivia.gob.bo/**.**

The Business Auditing Authority (AEMP) is tasked with regulating the business activities of public, private, mixed, or cooperative entities across all business sectors.  AEMP’s decisions are legally reviewable through appeal.  However, should an entity wish to file a second appeal, the ultimate decision-making responsibility rests with the Bolivian government ministry with jurisdiction over that specific sector.  This has led to a perception that enforcement mechanisms are neither transparent nor independent. In addition, the laws to implement Bolivia’s 2009 Constitution are lacking. The legal discrepancies between constitutional guarantees and the dated policies currently enforced help foster an uncertain investment climate.

### International Regulatory Considerations

Bolivia is a full member of the Andean Community of Nations (CAN), which includes Colombia, Ecuador, and Peru.  The CAN’s norms are considered supranational in character and have automatic application in the regional economic block.  Bolivia is in the process of joining the Southern Common Market (MERCOSUR) as a full (rather than associate) member.  The government does notify the WTO Committee on Technical Barriers to Trade regarding draft technical regulations.

### Legal System and Judicial Independence

Property and contractual rights are enforced in Bolivian courts under a civil law system; however, the legal process is time consuming and has been subject to political influence and corruption.  Bolivia’s Commercial Code provides general guidance for commercial activities. The constitution has precedence over international law and treaties and stipulates that the state will be directly involved in resolving conflicts between employers and employees. Regulatory and enforcement actions are appealable.

### Laws and Regulations on Foreign Direct Investment

The 2014 Investment Law guarantees equal treatment for national and foreign firms, however public investment has priority over private investment (both national and foreign). The Bolivian government determines which sectors require private investment. There is no primary, central point-of-contact for investment that provides all the relevant information to investors.

### Competition and Anti-Trust Laws

Bolivia does not have a competition law, but the Constitution prohibits private monopolies. The AEMP oversees business activities, including the protection of free competition and antitrust. Cases related to unfair competition can be presented to AEMP. These cases are appealable.

### Expropriation and Compensation

The Bolivian Constitution allows the central government or local governments to expropriate property for the public good or when the property does not fulfill a “social purpose”, as defined under Article 57 of the Constitution.  In the case of land, the Constitution defines “Economic Social Purpose” as “sustainable land use to develop productive activities, according to its best use capacity, for the benefit of society, the collective interest and its owner.”  In cases where there is non-compliance in fulfilling this “economic social purpose,” the Bolivian government is not required to pay for the land and the land title reverts to the state. The Bolivian government has no official definition of “collective interest” and makes decisions on a case-by-case basis. In cases where the expropriation of land is deemed a necessity of the state or for the public good, just indemnification is required by law.The Bolivian government has nationalized entities related to hydrocarbons, electricity, mining, telecommunications, the pension fund, and others. To do so, the government forced private entities to sell shares to the government, often at below market prices.  All outsourcing and private contracts were canceled and assigned to public companies. Some companies affected by the nationalization efforts (including from the United States and several European countries) have cases pending with international arbitration bodies.

### Dispute Settlement

#### ICSID Convention and New York Convention

In November 2007, Bolivia became the first country to withdraw from the ICSID.

#### Investor-State Dispute Settlement

Conflicting Bolivian law has made international arbitration in some cases effectively impossible. The 2009 Constitution states international arbitration is not recognized in any case and cannot proceed under any diplomatic claim, and specifically limits foreign companies’ access to international arbitration in the case of conflicts with the government.  All bilateral investment treaties must be renegotiated to incorporate relevant provisions of the 2009 constitution. amended under Evo Morales. Under the 2015 Arbitration Law, international arbitration is not permitted when the dispute is against the government or a state-owned enterprise (SOE).In the past 10 years, there have been foreign investor disputes with the government of Bolivia, including claims arising from mining concessions and the nationalization of the pension fund and electricity companies. Some disputes are pending, including a claim the business community considers would have the effect of expropriating mining concessions. Other investment disputes have been settled, or decided in favor of the investor.

#### International Commercial Arbitration and Foreign Courts

Two Bolivian institutions have arbitration bodies: the National Chamber of Commerce (CNC) and the Chamber of Industry and Commerce of Santa Cruz (CAINCO).  To use these domestic arbitration bodies, private parties must include arbitration within their contracts.  Depending on the contract between the parties, the United Nations Commission on International Trade Law (UNCITRAL), or Bolivia’s Arbitration Law may be used.  Local courts recognize and enforce foreign arbitral awards and judgments.  There are no statistics available regarding SOE involvement in investment disputes.

### Bankruptcy Regulations

The Bolivian Commercial Code includes bankruptcy regulations. In general, the application of laws related to commercial disputes and bankruptcy has been perceived as inconsistent, and businesses have frequently complained of corruption.  Foreign creditors often have little redress beyond Bolivian courts, and judgments are generally more favorable to local claimants than international ones.  If a company declares bankruptcy, the company must pay employee benefits before other obligations.

							4. Industrial Policies					

### Investment Incentives

To attract more investment, each Ministry may provide sector-specific investment incentives of any type. In practice, however, implementation of the mechanisms to offer such incentives has not been established. The government can and does incentivize investment in certain sectors that contribute to the economic and social development of the country. The government does not offer business incentives for direct foreign investment, nor do they offer any direct green investment or clean energy incentives. The government has promoted investments in the exploration and exploitation of fossil fuels.

### Foreign Trade Zones/Free Ports/Trade Facilitation

Free industrial zones exist in the cities of El Alto, Patacamaya, Oruro, Puerto Suarez, Cobija, and Warnes.  Concessions within free industrial zones last 15 years and are renewable.  There are eased customs procedures for goods entering the zones and stronger government support for the promotion of productive investments within the zones.

### Performance and Data Localization Requirements

Bolivian labor law requires businesses to limit foreign employees to 15 percent of their total work force and requires foreign hires be technical staff. The 2014 investment law requires technology transfer from foreign companies operating in Bolivia to Bolivian workers and institutions.  The law also specifies that Bolivians should work in operational, administrative, and executive offices of foreign companies.  Companies investing in Bolivia should donate equipment and machinery to universities and technical schools in the same area as the investment and conduct research activities that will find solutions that contribute to public welfare.

							5. Protection of Property Rights					

### Real Property

Property rights are legally protected and registered in the corresponding jurisdiction’s Real Estate Office, where titles or deeds are recorded, and mortgages/liens are registered.  These Real Estate Offices are administered by the Council of the Magistracy of the Judicial Branch. . Bureaucratic delays, especially in rural areas, and an absence of a reliable dispute resolution process does create risk and uncertainty in real property acquisition.The Bolivian Constitution grants citizens and foreigners the right to private property but stipulates that the property must serve a social or economic function.  If the government determines that a given property is not sufficiently useful (according to its own criteria), the constitution allows the government to expropriate. The government will not grant public lands to foreigners, non-indigenous people, or agriculture companies.

According to Bolivia’s Agrarian Reform Institute (INRA), 12 percent of all land in Bolivia lacks a clear title. As a result, squatting and land grabbing is a problem.  In some cases, squatters can make a legal claim to the land.  While the Criminal Code criminalizes illegal occupation, the judicial system is slow and ineffective in its enforcement of the law.  The INRA plans to complete the process of clearing titles for all lands in 2024.

### Intellectual Property Rights

Bolivia is not named in the 2021 Review of Notorious Markets for Counterfeiting and Piracy. However, Bolivia is on the Watch List of the U.S. Trade Representative’s 2022 Special 301 Report. According to the 301 Report, Bolivia has not acceded to the WIPO Internet Treaties, relies on antiquated laws, and lacks the resources to protect and enforce IP adequately or effectively. The report states that “Video, music, literature, and software piracy rates are among the highest in Latin America, and rampant counterfeiting persists.” In addition, although Bolivian Customs has the authority to pursue criminal prosecutions of visual works, the necessary regulations are not implemented, and overall communications between Bolivian Customs and SENAPI is lacking.

Bolivia is a signatory of the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) and of the Andean Community (CAN) Decision 486.  The Bolivian Intellectual Property Service (SENAPI) protects and enforces IPR. Although copyright laws recognize copyright infringement as a public offense, criminal charges and prosecutions are rare. Civil suits, if pursued, face long delays.  SENAPI does offer a conciliation process to resolve IPR controversies without trial, which is the preferred procedure to settle disputes.

The issue with counterfeit goods is exacerbated by Bolivia’s predominantly informal economy. According to the International Labor Organization, about 90 percent of Bolivians have informal jobs. Unregulated sales of counterfeit goods are common and many importers believe the payment of customs fees will “legalize” the sale of these products. Large quantities of counterfeit electrical appliances from China are available in local markets. There is also a flourishing market of Bolivian textile products marketed with counterfeit labels of major U.S. brands.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

							6. Financial Sector					

### Capital Markets and Portfolio Investment

The government’s general attitude toward foreign portfolio investment is neutral.  The government and central bank respect their obligations under IMF Article VIII, as the exchange system is free of restrictions on payments and transfers for international transactions. The stock exchange is small and is highly concentrated in bonds and debt instruments. Established Bolivian firms may issue short or medium-term debt in local capital markets, which act primarily as secondary markets for fixed-return securities. Foreign investors legally established in Bolivia can get credits on the local market.  However, due to the size of the market, large credits are rare and may require operations involving several banks. Credit access through other financial instruments is limited to bond issuances in the capital market.

Liquidity issues starting in February 2023 have disrupted Bolivia’s stock market. According to Bolivia’s stock exchange data, Bolivia’s stock market transactions were valued at $14.7 billion in 2022 (an estimated 33% of the GDP), of which $9.8 billion were in the market for repurchasing agreements (REPOS), which account for 22% of GDP. This year, Bolivia saw defaults for the first time in 35 years, which sharply increased interest rates in this market.

### Money and Banking System

The Bolivian banking system is small, including a dozen major banks (one state-run), and 30 savings and credit cooperatives. In 2022, the banking sector accounted for 80 percent of all personal deposits ($32 billion) and 80 percent of total loans and credits to private individuals ($31 billion). Foreigners can establish bank accounts in Bolivia, but only with residency status.

Bolivian banks have the capacity to adjudicate credit risk and evaluate expected rates of return in line with international norms.  The financial sector is regulated by the Supervising Authority of Financial Institutions (ASFI).  The Central Bank of Bolivia (BCB) oversees all financial institutions, provides liquidity when necessary, and acts as lender of last resort.  The BCB also manages the payment system, international reserves, and the exchange rate.State-owned Banco Union is the largest bank in Bolivia, with over $6.6 billion in total assets, followed by Banco Mercantil Santa Cruz. Banco Union’s principal activities include managing public sector accounts. The only commercial foreign bank present in Bolivia is the Banco de Credito del Perú.

On February 8, 2023, the Central Bank reported its foreign reserves totaled $3.5 billion, with $376 million in cash, $2.6 billion in gold, and $573 million in the International Monetary Fund’s (IMF) Special Drawing Rights (SDRs). On February 27, the Central Bank reduced the reserve requirement for foreign currency to meet the growing demand for dollars, while increasing the reserve requirement for Bolivianos, resulting in further liquidity issues.

On March 15, Standard and Poor’s maintained Bolivia’s B rating, while placing Bolivia “under surveillance” due to concerns over Bolivia’s falling foreign reserves.  On March 16, Fitch Ratings downgraded Bolivia’s sovereign debt risk to B minus with a “negative outlook.” The report also publicized that the Bolivian government used its IMF SDRs, which the Economic Minister confirmed. On March 24, Moody’s Investors Service downgraded Bolivia’s foreign currency credit rating to “Caa1.” On March 15, JP Morgan increased Bolivia’s country risk in the Emerging Markets Bond Index, and Bolivia’s sovereign bonds have dropped in value by 42 percent since their issuance in 2021 (a 19 percent drop in 2023). Most of Bolivia’s sovereign bonds are held by Bolivian companies, banks, and by Bolivia’s pension funds (AFPs), which are transitioning from private ownership to the Bolivian government. In March, private bank Banco Fassil suffered a bank run and temporarily halted electronic transactions.

### Foreign Exchange and Remittances

#### Foreign Exchange

Bolivian law allows repatriation of profits, with a 12.5 percent withholding tax.  All bank transfers in U.S. dollars within the financial system and leaving the country must pay a Financial Transaction Tax (ITF) of 0.3 percent.  This tax applies to foreign transactions for U.S. dollars leaving Bolivia, not to money transferred internally. The BCB also charges fees for various international transactions related to banking and trade.Currency is freely convertible at Bolivian banks and exchange houses.  The Bolivian government describes its official exchange system as an “incomplete crawling peg.” The Boliviano (BOB) has remained fixed at BOB 6.96 /$1 for selling and BOB 6.86 /$1 for buying since 2011 but undergoes micro-readjustments not pre-announced to the public.  To avoid distortions in the exchange rate market, the BCB es at the official rate ±1 basis point. Nevertheless, dollar scarcity in Bolivia’s financial system that began in early 2023 has resulted in a black market for dollars, with an exchange rate that surpasses the official peg.

#### Remittance Policies

Each remittance transaction from Bolivia to other countries has a $2,500 limit per transaction, but there is no limit to the number of transactions that an individual can remit. Business travelers may bring up to $10,000 in cash into the country and any amount higher must be declared.

### Sovereign Wealth Funds

Neither the Bolivian government nor any government-affiliated entity maintains a sovereign wealth fund.

							7. State-Owned Enterprises					

The Bolivian government focuses and spends heavily on SOE’s, owning and operating more than 60 businesses, including energy and mining companies, a telecommunications company, a satellite company, the nation’s second largest bank, and Bolivia’s main airline. Total profits from Bolivia’s state-owned enterprises have declined by 94% from 2014 to 2021 (from $7.1 billion to $413 million).  Many of these companies have been operating at a loss, constituting a burden on government’s finances.  In 2022 Bolivia created a coca leaf derivatives manufacturing company and an ecological oils industrial company to promote domestic biodiesel and pharmaceutical production. This is in line with Bolivia’s push to become less reliant on other nations by shifting towards an import-substitution model. The resources and infrastructure are not yet in place, however, to make this a feasible short-term goal.

The largest SOEs can acquire credit from the Central Bank at very low interest rates and convenient terms.  Some private companies complain that it is impossible for them to compete with this financial subsidy.  Moreover, SOEs appear to benefit from easier access to licenses, supplies, materials, and land; however, there is no law specifically providing SOEs with preferential treatment in this regard.  In many cases, government entities are directed to do business with SOEs, placing other private companies and investors at a competitive disadvantage.

### Privatization Program

There are currently no privatization programs in Bolivia.

							8. Responsible Business Conduct					

Per the Constitution, economic activity cannot damage the collective good. The Mother Earth Law, rooted in indigenous principles, also promotes elements of responsible business conduct (RBC), such as collective good, harmony, respect, and defense of rights.  However, the government gives no advantage to businesses that implement RBC practices. Both producers and consumers in Bolivia are generally aware of RBC, but consumer decisions are ultimately based on price and quality. The Bolivian government does require financial entities to allocate six percent of profits to RBC-related projects.

Bolivia is not part of the OECD and does not use the OECD Guidelines for RBC.  Bolivian companies and organizations focus on the UN’s Millennium Development Goals, and they use the Global Reporting Initiative (GRI) methodology to show economic, social, and environmental results.  However, only a few private companies and NGOs follow the UN standard ISO 26000 guidelines and methodologies.  A widely accepted methodology in Bolivia, developed by the ETHOS Institute, provides measurable indicators accepted by PLARSE (Programa Latinoamericano de Responsabilidad Social Corporativa), the Latin American Program for RBC.

The government created the Authorities of Supervision and Social Control to oversee and audit telecommunications and transportation, water and sanitation, forests and land, pensions, electricity, and enterprises.  These authorities can request public disclosure of information, ranging from financial disclosures to investigation of management decisions. In support of consumer protection rights, the government also established the Ministry of Justice and Transparency, and the Consumer Protection Law to manage customer complaints.

### Additional Resources

**Department of State

Country Reports on Human Rights Practices (https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/)

Trafficking in Persons Report (https://www.state.gov/trafficking-in-persons-report/)

Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities (https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/)

U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises (https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/)

Xinjiang Supply Chain Business Advisory (https://www.state.gov/xinjiang-supply-chain-business-advisory/)

Department of the Treasury

OFAC Recent Actions (https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions)

Department of Labor

Findings on the Worst Forms of Child Labor Report (https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings )

List of Goods Produced by Child Labor or Forced Labor (https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods)

Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World (https://www.dol.gov/general/apps/ilab)

Comply Chain (https://www.dol.gov/ilab/complychain/)

### Climate Issues

Under the Mother Earth Law, the Ministry of Environment and Water oversees climate change mitigation. Bolivia’s Nationally Determined Contributions (NDCs) include increasing water, energy, forest, and agriculture capacities. Bolivian land laws, however, indirectly promote deforestation since all unproductive lands must be reverted to the government, and forests are deemed unproductive. Property owners either convert these lands to a more productive use, such as for agriculture, or risk having the government take that property away.

In its NDCs, Bolivia commits to increase renewable energy use to 81 percent by 2030. However, Bolivia does not have a fossil-fuel phase out policy nor does it offer regulatory incentives to achieve policy outcomes that preserve biodiversity or other ecological benefits. Public procurement policies do not include environmental and green growth considerations. Although too early to determine, the current administration’s push for import-substitution, with increased local biofuel production, could result in more environmentally friendly methods of consumption in the future.

							9. Corruption					

Bolivian law stipulates criminal penalties for corruption by officials. Bribery of public officials is a criminal offense. Laws also exist that provide protection for citizens filing complaints against corruption. In 2022, the UN special rep for judicial affairs issued a report on Bolivia stating corruption was identified as “a serious problem” and a “national challenge.”  Corruption cases against pro-government public officials are rarely allowed to proceed.

In August 2021, the Interdisciplinary Group of Independent Experts (GIEI) stated the Bolivian government needs to implement profound reforms in its justice system to: guarantee that the judiciary and attorney general’s office are not used for political purposes by the government in power; guarantee due process; and ensure preventive detention is only used as a last resort in criminal proceedings. In 2023, the Inter-American Commission on Human Rights (IACHR) of the Organization of American States (OAS) will observe Bolivia’s compliance with GIEI recommendations.

Bolivia ratified the UN Anticorruption Convention in 2005.  Bolivia is also party to the OAS Inter-American Convention against Corruption.  Bolivia is not a signatory of the OECD Convention on Combating Bribery of Foreign Public Officials.**

### Resources to Report Corruption

Contact at government agency or agencies responsible for combating corruption:

Susana RiosVice Minister of Transparency and the Fight Against CorruptionMinistry of Justice and Institutional TransparencyCalle Capitan Ravelo Esq. Montevideo N. 2101 Piso 8, La Paz+591-2-2158900ministeriodetransparencia@gmail.com

There are no international, regional, local, or nongovernmental organizations operating in the country that monitor corruption. Transparency International, a leading global indicator of public sector corruption, ranked Bolivia 126 out of 180 countries in its 2022 Corruption Perceptions Index.

							10. Political and Security Environment					

Bolivia is prone to social unrest and protests, which can include violence.  Given the country’s reliance on a few key thoroughfares, conflict often disrupts transportation and distribution networks. Political tensions in Bolivia are high, with opposition to the ruling MAS party protesting political persecution, police regression, and judicial bias. Civil disturbances related to domestic issues are common: usually workers pressuring the government for concessions by marching or closing major transportation arteries.

While Bolivia has low levels of personal crime, with a homicide rate well below the regional average, there is a growing concern about increased criminality, especially a recent increase in femicides. Production of coca leaf is legal in Bolivia for traditional consumption, but the country is a known source and transit country for cocaine and other illicit drugs mostly destined for Brazil and Europe, but that may also find their way to the United States.

							11. Labor Policies and Practices					

Approximately two-thirds of Bolivia’s population is considered “economically active.”  Between 60 and 80 percent of workers participate in the informal economy, where no contractual employer-employee relationship exists.  Relatively low education and literacy levels limit labor productivity, a fact reflected in wage rates.  Unskilled labor is readily available, but skilled workers are often harder to find. The government encourages hiring of nationals by limiting the number of foreign nationals employed by any business to 15 percent.

Bolivia has no unemployment insurance or employment-related social, safety net programs.  However, if an employee is laid off due to economic or technical reasons, employers are required to pay three months of salary as compensation.  Employees generally have more negotiating leverage in Bolivia than employers, and many employers choose to pay additional compensation to avoid retaliation.

Labor laws provide for the freedom of association, the right to strike, and the right to organize and bargain collectively. The Ministry of Labor has labor-related conflict resolution mechanisms, but these processes are skewed towards employees.  If parties cannot reach an agreement, employees are able to initiate legal proceedings. The National Labor Court handles complaints of antiunion discrimination, but rulings generally take a year or more.

							12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs					

The DFC is not currently active in Bolivia.

							13. Foreign Direct Investment Statistics					

* Source for Host Country Data:

							14. Contact for More Information:					

CommerceLapaz@state.gov

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### On This Page

                    -  EXECUTIVE SUMMARY 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment                        -  Policies Towards Foreign Direct Investment 
                      -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                      -  Other Investment Policy Reviews 
                      -  Business Facilitation 
                      -  Outward Investment 
                    -  2. Bilateral Investment and Taxation Treaties 
                    -  3. Legal Regime                        -  Transparency of the Regulatory System 
                      -  International Regulatory Considerations 
                      -  Legal System and Judicial Independence 
                      -  Laws and Regulations on Foreign Direct Investment 
                      -  Competition and Anti-Trust Laws 
                      -  Expropriation and Compensation 
                      -  Dispute Settlement                          -  ICSID Convention and New York Convention 
                        -  Investor-State Dispute Settlement 
                        -  International Commercial Arbitration and Foreign Courts 
                      -  Bankruptcy Regulations 
                    -  4. Industrial Policies                        -  Investment Incentives 
                      -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                      -  Performance and Data Localization Requirements 
                    -  5. Protection of Property Rights                        -  Real Property 
                      -  Intellectual Property Rights 
                    -  6. Financial Sector                        -  Capital Markets and Portfolio Investment 
                      -  Money and Banking System 
                      -  Foreign Exchange and Remittances                          -  Foreign Exchange 
                        -  Remittance Policies 
                      -  Sovereign Wealth Funds 
                    -  7. State-Owned Enterprises                        -  Privatization Program 
                    -  8. Responsible Business Conduct                        -  Additional Resources 
                      -  Climate Issues 
                    -  9. Corruption                        -  Resources to Report Corruption 
                    -  10. Political and Security Environment 
                    -  11. Labor Policies and Practices 
                    -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs 
                    -  13. Foreign Direct Investment Statistics 
                    -  14. Contact for More Information: 

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#### The Lessons of 1989: Freedom and Our Future