|This article is outdated. (April 2012)|
The SUCRE (Spanish: Sistema Único de Compensación Regional, English: Unified System for Regional Compensation) is a proposed regional currency to be used in commercial exchanges between members of the regional trade bloc Bolivarian Alliance for the Americas (ALBA), which was created as an alternative to the Free Trade Agreement of the Americas (FTAA). The SUCRE is intended to replace the US dollar as a medium of exchange in order to decrease US control of Latin American economies and to increase stability of regional markets.
The SUCRE was first used as a virtual currency in 2010 in at least two transactions between Ecuador and Venezuela. International trade between member states in SUCRE exceeded $850 million in 2013. Eventually, the plan is for the SUCRE to become a hard currency.
The plan for the introduction of the SUCRE, initially as a virtual currency, parallels the European Union's introduction of the euro in 1999, which was preceded by the European Currency Unit in 1979. The SUCRE is the unit of account for all transactions in the clearinghouse. Its value derives from a basket of currencies from the member countries, weighted according to the relative size of the economies.
The treaty explicitly limits the backing assets of the basket of currencies to financial securities denominated in the respective currencies of the member states. Prohibition of alternative forms of currency backing (such as commodity backing) presents an inequity for Ecuador that, alone in the group, does not have its own national currency (it uses the US dollar).
In the case of ALBA members Dominica, Saint Vincent and the Grenadines, and Antigua and Barbuda, the new currency poses a dilemma as they are already a member of the Eastern Caribbean Currency Union and use the East Caribbean dollar, although none of them have signed on to the treaty establishing the SUCRE and the regional payments clearinghouse.
The SUCRE is named after Antonio José de Sucre, a leading figure in Latin America's independence struggle. Agreement in general terms for the currency was declared in Sucre's birthplace of Cumaná, capital of Venezuela's Sucre state, on April 16, 2009. The formal treaty establishing the regional payments clearinghouse was signed by the six Latin American presidents in Cochabamba, Bolivia, on October 17, 2009. (Ironically, the former currency of Ecuador, one of the SUCRE's users, was also called the sucre, but was abandoned in favour of the US dollar.)
The treaty constitutes a Regional Monetary Council, under Public international law, based in Caracas, Venezuela, charged with issuing and signing Sucres into circulation, and governing the payments clearinghouse. The two-tier council consists of an executive board and a secretariat; the former handling steering and strategy and the latter handling technical and administrative tasks. The Executive Director and the Executive Secretary each have three year terms. The Executive Director is appointed by the Board, which itself has twelve members; a Director and Deputy from each participating country.
The core operation of the SUCRE is a central payments clearinghouse handled by an Agent Bank selected by the Regional Monetary Council. Terms of payment operations through the clearinghouse are determined by bi-lateral and multi-lateral agreements between the Agent Bank and the Central Banks of the member six countries. Associated with the clearinghouse are reserve fund accounts of financial securities put forward by the member central banks, denominated in their respective currencies, to cover temporary payment shortfalls.
The "sucre" unit is distinct from existing national currencies and is created for the purpose of defending the monetary and financial sovereignty of the participating countries, towards a progressive decoupling from the US dollar. The medium term objective is strengthening of economic and social cohesion by integrating regional economic complementarities. Member governments consider their productive sectors to have been damaged by premature exposure to stronger, more advanced and better funded competition from foreign corporations.
Article 1 - 2
The first two articles state the reason for establishing the monetary unit. They also identify the unit as the "sucre".
Establishes the central control agency in Caracas, Venezuela under the title of Consejo Monetario Regional del SUCRE or SUCRE Regional Monetary Council in English.
States that a board of directors will be responsible for various action to influence how nations use the sucre to pay debt and how it is to be distributed to member nations for use. It ends by empowering the board of directors with the ability to remove member states from ALBA for non-compliance.
Entitles an Executive Secretariat to work with board regarding administrative tasks.
The board shall consist of one director and one assistant director from each member state. They shall elect a president of the board of directors who will serve three year terms and hold the title of executive chairman. Each director shall have one vote towards the matters delegated to the board under Article 4.
The Executive Secretariat will be appointed by the board of directors. It will include and executive secretary who will serve three year terms and an undefined amount of others to be appointed "considere necesarios para el desenvolvimiento de las actividades administrativas del mismo" or "who the board considers necessary to perform the administrative duties of the board".
The executive secretary will serve in board meetings and ad hoc committees "in voice only" and perform duties as delegated by the board.
Outlines in brief the basis of an annual report.
Establishes that there be a central payment system performed by a single bank acting as an agent assigned by the Consejo Monetario Regional del SUCRE. It also requires that all reports and payments be done using the sucre.
Establishes the requirement for a trust fund for the sucre and trade convergence fund.
Empowers the Consejo Monetario Regional del SUCRE to establish currency exchange rates at their own disclosure in a manner that ensures the stability of the sucre.
Establishes that all further mentions of immunities shall be endowed to all members of the council and those they deem necessary for immunity.
The property and assets of the Consejo Monetario Regional del SUCRE and its subsidies "shall enjoy" immunity from any measure of expropriation, search, requisition, confiscation, seizure, sequestration, attachment, garnishment or any other form of foreclosure by administrative action, judicial or legislative action. Only the Consejo Monetario Regional del SUCRE has the power to waive this immunity.
States that all documentation is to be considered sacred and never to be destroyed.
States that communique shall have the same protections and privileges as communique of official government business in all member states.
Provides complete tax exemption.
Provides legal and immigrations immunities to all members of Consejo Monetario Regional del SUCRE while performing duties retaining to Consejo Monetario Regional del SUCRE. It extends those rights to anyone doing business with the Consejo Monetario Regional del SUCRE as well.
Extends immunities to "complete immunity to judiciary powers" to all members of Consejo Monetario Regional del SUCRE.
All disputes regarding the immunities shall be handled by a single representative from each member state who will agree on a mutual third party to provide as judge. The hearings are to be held in a manner agreed by both parties within the parameter of UNCITRAL.
States that amendments may be made to this document. The Venezuelan Ministry of Foreign Affairs retains a veto to all amendments.
Outlines the timeline for establishing the document. This time has already passed and now only establishes that new members have 30 days to comply.
States that denunciation takes place 12 months after notice and that members may reenter the agreement freely.
Article 23 & 24
Outlines timelines for the transition and establishment of the Consejo Monetario Regional del SUCRE.
- Economic policy of the Hugo Chávez government
- Clearing House Automated Transfer System (CHATS)
- Currency Union
- Eastern Caribbean dollar - A regional currency of the Eastern Caribbean
- Fiat currency
- Bolivar Fuerte
- Steven Mather (July 7, 2010). "Venezuela Pays for First ALBA Trade with Ecuador in New Regional Currency". Venezuela Analysis.
- "Venezuela and Ecuador Make Trade Using New Virtual Currency".
- Michael Fox (2009-04-17). "ALBA Summit Ratifies Regional Currency, Prepares for Trinidad". Venezuela Analysis.
- ABN, 4 March 2009, (Spanish) El sucre y la independencia monetaria regional
- Proposed ALBA currency the sucre poses dilemma for Dominica government (TheDominican.net), 2009-04-17
- Agencia Latinoamericana de Información, 2009-10-19, Tratado Constitutivo del Sistema Unificado de Compensación Regional de Pagos (SUCRE)
- Gobierno de Bolivia, 2009-04-16, ACUERDO MARCO DEL SISTEMA ÚNICO DE COMPENSACIÓN REGIONAL DE PAGOS